EXHIBIT 99.1
Published on September 6, 1996
Exhibit 99.1
_______________________________________________________________
AGREEMENT AND PLAN OF MERGER
by and between
Boatmen's Bancshares, Inc.
and
NationsBank Corporation
Dated as of August 29, 1996
_______________________________________________________________
TABLE OF CONTENTS
Page
ARTICLE I CERTAIN DEFINITIONS........................... 1
1.01. Certain Definitions............................ 1
ARTICLE II THE MERGER; EFFECTS OF THE MERGER............ 8
2.01. The Merger..................................... 8
2.02. Effective Date And Effective Time.............. 9
2.03. Amendment Of Parent Articles................... 9
2.04. Tax Consequences............................... 9
ARTICLE III MERGER CONSIDERATION; EXCHANGE PROCEDURES... 10
3.01. Merger Consideration........................... 10
3.02. Optional Cash Election......................... 11
3.03. Rights As Stockholders; Stock Transfers........ 14
3.04. Fractional Shares.............................. 14
3.05. Exchange Procedures............................ 14
3.06. Dissenting Stockholders........................ 15
3.07. Anti-Dilution Provisions....................... 16
3.08. Treasury Shares................................ 16
3.09. Options........................................ 16
ARTICLE IV ACTIONS PENDING MERGER....................... 17
4.01. Ordinary Course................................ 17
4.02. Capital Stock.................................. 18
4.03. Dividends, Etc................................. 18
4.04. Compensation; Employment Agreements; Etc....... 19
4.05. Benefit Plans.................................. 19
4.06. Acquisitions And Dispositions.................. 19
4.07. Amendments..................................... 20
4.08. Accounting Methods............................. 20
4.09. Adverse Actions................................ 20
4.10. Agreements..................................... 20
ARTICLE V REPRESENTATIONS AND WARRANTIES................ 20
5.01. Disclosure Schedules........................... 20
5.02. Standard....................................... 21
5.03. Representations And Warranties................. 21
ARTICLE VI COVENANTS.................................... 31
6.01. Best Efforts................................... 31
6.02. Stockholder Approvals.......................... 31
6.03. Registration Statement......................... 32
6.04. Press Releases................................. 33
6.05. Access; Information............................ 33
6.06. Acquisition Proposals.......................... 34
6.07. Affiliate Agreements........................... 34
6.08. Takeover Laws.................................. 34
6.09. No Rights Triggered............................ 35
6.10. Shares Listed.................................. 35
6.11. Regulatory Applications........................ 35
6.12. Indemnification................................ 36
6.13. Benefit Plans.................................. 37
6.14. Certain Director And Officer Positions......... 38
6.15. Notification Of Certain Matters................ 39
ARTICLE VII CONDITIONS TO CONSUMMATION OF THE MERGER.... 39
7.01. Shareholder Vote............................... 39
7.02. Regulatory Approvals........................... 39
7.03. Third Party Consents........................... 40
7.04. No Injunction, Etc............................. 40
7.05. Representations, Warranties And Covenants
Of Parent...................................... 40
7.06. Representations, Warranties And Covenants
Of The Company................................. 40
7.07. Effective Registration Statement............... 41
7.08. Tax Opinion.................................... 41
7.09. Articles Of Amendment.......................... 42
7.10. NYSE Listing................................... 42
7.11. Company Rights Agreement....................... 42
ARTICLE VIII TERMINATION................................ 42
8.01. Termination.................................... 42
8.02. Effect Of Termination And Abandonment.......... 45
ARTICLE IX MISCELLANEOUS................................ 46
9.01. Survival....................................... 46
9.02. Waiver; Amendment.............................. 46
9.03. Counterparts................................... 46
9.04. Governing Law.................................. 46
9.05. Expenses....................................... 46
9.06. Confidentiality................................ 47
9.07. Notices........................................ 47
9.08. Entire Understanding; No Third Party
Beneficiaries.................................. 48
9.09. Headings....................................... 48
AGREEMENT AND PLAN OF MERGER, dated as of August 29,
1996 (this "Agreement"), by and between Boatmen's Bancshares,
Inc. (the "Company") and NationsBank Corporation ("Parent").
WITNESSETH:
WHEREAS, the Boards of Directors of the Company and
Parent have determined that it is in the best interests of
their respective companies and their stockholders to consummate
the strategic business combination transaction provided for
herein in which the Company will, subject to the terms and
conditions set forth herein, merge (the "Merger") with and into
a wholly-owned direct or indirect subsidiary of Parent ("Merger
Sub"), so that Merger Sub is the surviving corporation in the
Merger;
WHEREAS, in connection with the execution of this
Agreement, the Company and Parent will enter into a stock
option agreement (the "Stock Option Agreement") in the form
attached hereto as Exhibit A; and
WHEREAS, the parties desire to make certain
representations, warranties and agreements in connection with
the Merger and also to prescribe certain conditions to the
Merger;
NOW, THEREFORE, in consideration of the mutual
covenants, representations, warranties and agreements contained
herein, and intending to be legally bound hereby, the parties
agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.01. Certain Definitions. As used in this
Agreement, the following terms shall have the meanings set
forth below:
"Affiliate" shall have the meaning set forth in
Section 6.07(a).
"Agreement" shall have the meaning set forth in the
recitals to this Agreement.
"Articles of Amendment" shall have the meaning set
forth in Section 2.03.
"Average Closing Price" shall have the meaning set
"Average Index Price" shall have the meaning set
forth in Section 8.01(e).
"Cash Amount" shall have the meaning set forth in
Section 3.02.
"Cash Election Shares" shall have the meaning set
forth in Section 3.02.
"Certificate of Merger" shall have the meaning set
forth in Section 2.01(b).
"Code" shall mean the Internal Revenue Code of 1986,
as amended.
"Company" shall have the meaning set forth in the
recitals to this Agreement.
"Company Common Stock" shall have the meaning set
forth in Section 3.01(a).
"Company Directors" shall have the meaning set forth
in Section 6.14.
"Company Meeting" shall have the meaning set forth in
Section 6.02.
"Company Preferred Stock" shall mean Company Series A
Preferred Stock and Company Series B Preferred Stock.
"Company Right" shall have the meaning set forth in
Section 3.01(a).
"Company Rights Agreement" shall have the meaning set
forth in Section 3.01(a).
"Company Series A Preferred Stock" shall have the
meaning set forth in Section 3.01(b).
"Company Series B Preferred Stock" shall have the
meaning set forth in Section 3.01(b).
"Company Stock" shall mean Company Common Stock and
Company Preferred Stock.
"Company Stock Option" shall have the meaning set
forth in Section 3.09.
"Company Stock Option Plans" shall have the meaning
set forth in Section 3.09.
"Compensation and Benefit Plans" shall have the
meaning set forth in Section 5.03(l).
"Confidentiality Agreement" shall mean the
Confidentiality Agreement, dated August 13, 1996, between
the Company and Parent.
"Costs" shall have the meaning set forth in
Section 6.12(a).
"Determination Date" shall have the meaning set forth
in Section 8.01(e).
"Disclosure Schedule" shall have the meaning set
forth in Section 5.01.
"Dissenting Shares" shall have the meaning set forth
in Section 3.06.
"Effective Date" shall have the meaning set forth in
Section 2.02.
"Effective Time" shall have the meaning set forth in
Section 2.02.
"Election Deadline" shall have the meaning set forth
in Section 3.02.
"Election Form" shall have the meaning set forth in
Section 3.02.
"Election Form Record Date" shall have the meaning
set forth in Section 3.02.
"Employee Benefit Plans" shall have the meaning set
forth in Section 6.13.
"Environmental Laws" shall have the meaning set forth
in Section 5.03(o).
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
"ERISA Affiliate" shall have the meaning set forth in
Section 5.03(l).
"ESOP Preferred Stock" shall have the meaning set
forth in Section 4.03(1).
"Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended, and the rules and regulations
thereunder.
"Exchange Agent" shall have the meaning set forth in
Section 3.02.
"Exchange Fund" shall have the meaning set forth in
Section 3.05(a).
"Exchange Ratio" shall have the meaning set forth in
Section 3.01(a).
"FDIC" shall mean the Federal Deposit Insurance
Corporation.
"Federal Reserve Board" shall mean the Board of
Governors of the Federal Reserve System.
"GBCL" shall have the meaning set forth in
Section 2.01(b).
"Indemnified Party" shall have the meaning set forth
in Section 6.12(a).
"Index Group" shall have the meaning set forth in
Section 8.01(e).
"Index Price" shall have the meaning set forth in
Section 8.01(e).
"Index Ratio" shall have the meaning set forth in
Section 8.01(e).
"Joint Proxy Statement" shall have the meaning set
forth in Section 6.03.
"Liens" shall mean any charge, mortgage, pledge,
security interest, restriction, claim, lien, or
encumbrance.
"Mailing Date" shall have the meaning set forth in
Section 3.02.
"Material Adverse Effect" shall mean with respect to
the Company or Parent, respectively, any effect that (i)
is material and adverse to the financial position, results
of operations or business of the Company and its
Subsidiaries taken as a whole, or Parent and its
Subsidiaries taken as a whole, respectively, or (ii) would
materially impair the ability of the Company or Parent,
respectively, to perform its obligations under this
Agreement or otherwise materially threaten or materially
impede the consummation of the Merger and the other
transactions contemplated by this Agreement; provided,
however, 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 generally accepted accounting principles or regulatory
accounting requirements applicable to banks or savings
associations and their holding companies generally, (c)
actions or omissions of the Company, Parent or Merger Sub
taken with the prior written consent of the Company or
Parent, as applicable, in contemplation of the
transactions contemplated hereby, (d) circumstances
affecting banks or savings associations and their holding
companies generally, and (e) the effects of the Merger and
compliance with the provisions of this Agreement on the
operating performance of such party and its Subsidiaries.
"Meeting" shall have the meaning set forth in
Section 6.02.
"Merger" shall have the meaning set forth in the
recitals to this Agreement and in Section 2.01(a).
"Merger Consideration" shall have the meaning set
forth in Section 2.01.
"Merger Sub" shall have the meaning set forth in the
recitals to this Agreement.
"Merger Sub Common Stock" shall have the meaning set
forth in Section 3.01(c).
"Multiemployer Plans" shall have the meaning set
forth in Section 5.03(l).
"NASDAQ" shall mean the Nasdaq Stock Market, Inc.'s
National Market.
"New Certificates" shall have the meaning set forth
in Section 3.05(a).
"No Election Shares" shall have the meaning set forth
in Section 3.02.
"NYSE" shall mean the New York Stock Exchange.
"OCC" shall mean the Office of the Comptroller of the
Currency.
"Old Certificates" shall have the meaning set forth
in Section 3.02.
"OTS" shall mean the Office of Thrift Supervision.
"Parent" shall have the meaning set forth in the
recitals to this Agreement.
"Parent Common Stock" shall have the meaning set
forth in Section 3.01(a).
"Parent Meeting" shall have the meaning set forth in
Section 6.02.
"Parent Preferred Stock" shall mean Parent Series A
Preferred Stock and Parent Series B Preferred Stock.
"Parent Ratio" shall have the meaning set forth in
Section 8.01(e).
"Parent Series A Preferred Stock" shall have the
meaning set forth in Section 3.01(b).
"Parent Series B Preferred Stock" shall have the
meaning set forth in Section 3.01(b).
"Parent Stock" shall mean Parent Common Stock and
Parent Preferred Stock.
"Pension Plan" shall have the meaning set forth in
Section 5.03(l).
"Per Share Cash Consideration" shall have the meaning
set forth in Section 3.02.
"Per Share Stock Consideration" shall have the
meaning set forth in Section 3.01(a).
"Person" or "person" shall mean any individual, bank,
corporation, partnership, association, joint-stock
company, business trust or unincorporated organization.
"Plans" shall have the meaning set forth in
Section 5.03(l).
"Previously Disclosed" by a party shall mean
information set forth in its Disclosure Schedule.
"Registration Statement" shall have the meaning set
forth in Section 6.03.
"Regulatory Authorities" shall have the meaning set
forth in Section 5.03(h).
"Rights" shall mean, with respect to any person,
securities or obligations convertible into or exchangeable
for, or giving any person any right to subscribe for or
acquire, or any options, calls or commitments relating to,
shares of capital stock of such person.
"SEC" shall mean the Securities and Exchange
Commission.
"SEC Documents" shall have the meaning set forth in
Section 5.03(g).
"Securities Act" shall mean the Securities Act of
1933, as amended, and the rules and regulations
thereunder.
"Starting Date" shall have the meaning set forth in
Section 8.01(e).
"Starting Price" shall have the meaning set forth in
Section 8.01(e).
"Stock Designees" shall have the meaning set forth in
Section 3.02.
"Stock Option Agreement" shall have the meaning set
forth in the recitals to this Agreement.
"Subsidiary" and "Significant Subsidiary" shall have
the meanings ascribed to them in Rule 1-02 of Regulation
S-X of the SEC; provided that for purposes of Article V,
Merger Sub shall be deemed a Significant Subsidiary of
Parent.
"Surviving Corporation" shall have the meaning set
forth in Section 2.01(a).
"Takeover Laws" shall have the meaning set forth in
Section 5.03(n).
"Takeover Proposal" shall mean, with respect to any
person, any tender or exchange offer, proposal for a
merger, consolidation or other business combination
involving the Company or any of its Significant
Subsidiaries or any proposal or offer to acquire in any
manner a substantial equity interest in, or a substantial
portion of the assets of, the Company or any of its
Significant Subsidiaries other than the transactions
contemplated or permitted by this Agreement.
"Tax Returns" shall have the meaning set forth in
Section 5.03(p).
"Taxes" shall mean all taxes, charges, fees, levies
or other assessments, including, without limitation, all
net income, gross income, gross receipts, sales, use, ad
valorem, goods and services, capital, transfer, franchise,
profits, license, withholding, payroll, employment,
employer health, excise, estimated, severance, stamp,
occupation, property or other taxes, custom duties, fees,
assessments or charges of any kind whatsoever, together
with any interest and any penalties, additions to tax or
additional amounts imposed by any taxing authority.
"Treasury Shares" shall have the meaning set forth in
Section 3.01(a).
"Valuation Period" shall have the meaning set forth
in Section 3.02.
"Valuation Period Market Value" shall have the
meaning set forth in Section 3.02.
ARTICLE II
THE MERGER; EFFECTS OF THE MERGER
2.01. The Merger. (a) The Surviving Corporation.
At the Effective Time, the Company shall merge with and into
Merger Sub (the "Merger"), the separate corporate existence of
the Company shall cease and Merger Sub shall survive and
continue to exist as a Missouri corporation (Merger Sub, as the
surviving corporation in the Merger, sometimes being referred
to herein as the "Surviving Corporation"). Parent may at any
time change the method of effecting the combination with the
Company (including without limitation the provisions of this
Article II) if and to the extent it deems such change to be
desirable, including without limitation to provide for a merger
of the Company directly into Parent, in which Parent is the
surviving corporation; provided, however, that no such change
shall (A) alter or change the amount or kind of consideration
to be issued to holders of Company Stock as provided for in
this Agreement (the "Merger Consideration"), (B) adversely
affect the tax treatment of the Company's stockholders as a
result of receiving the Merger Consideration or (C) materially
impede or delay consummation of the transactions contemplated
by this Agreement.
(b) Effectiveness And Effects Of The Merger.
Subject to the satisfaction or waiver of the conditions set
forth in Article VII in accordance with this Agreement, the
Merger shall become effective upon the filing in the office of
the Secretary of State of Missouri of a certificate of merger
(the "Certificate of Merger"), or such later date and time as
may be set forth in the Certificate of Merger, in accordance
with Section 440 of the General and Business Corporation Law of
Missouri (the "GBCL"). The Merger shall have the effects
prescribed in Section 450 of the GBCL.
(c) Certificate Of Incorporation And By-Laws. The
certificate of incorporation and by-laws of the Surviving
Corporation shall be those of Merger Sub, as in effect
immediately prior to the Effective Time.
2.02. Effective Date And Effective Time. Subject to
the satisfaction or waiver of the conditions as set forth in
Article VII in accordance with this Agreement, the parties
shall cause the effective date of the Merger (the "Effective
Date") to occur on (1) the third business day to occur after
the last of the conditions set forth in Sections 7.01, 7.02,
7.03 and 7.10 shall have been satisfied or waived in accordance
with the terms of this Agreement or (2) such other date to
which the parties may agree in writing. The time on the
Effective Date when the Merger shall become effective is
referred to as the "Effective Time."
2.03. Amendment Of Parent Articles. At the
Effective Time, the articles of incorporation of Parent shall
be amended to fix the preferences, limitations and relative
rights of the series of Parent Preferred Stock, shares of which
are to be issued in the Merger pursuant to Section 3.01(b). At
or prior to the Effective Time, Parent shall deliver to the
Secretary of State of North Carolina for filing, pursuant to
Section 6-02 of the North Carolina Business Corporation Act,
articles of amendment, in a form mutually acceptable to Parent
and the Company, giving effect to the foregoing and containing
any other provisions with respect to the aforementioned series
of Parent Preferred Stock necessary to permit consummation of
the Merger in accordance with the terms of this Agreement (the
"Articles of Amendment").
2.04. Tax Consequences. It is intended that the
Merger shall qualify as a reorganization under Section 368(a)
of the Code.
ARTICLE III
MERGER CONSIDERATION; EXCHANGE PROCEDURES
3.01. Merger Consideration. Subject to the
provisions of this Agreement, at the Effective Time,
automatically by virtue of the Merger and without any action on
the part of any party or stockholder:
(a) Outstanding Company Common Stock. Each share
(excluding (i) shares held by the Company or any of its
Subsidiaries or by Parent or any of its Subsidiaries, in each
case other than in a fiduciary capacity or as a result of debts
previously contracted ("Treasury Shares") and (ii) Dissenting
Shares) of the common stock, par value $1.00 per share, of the
Company, including each attached right (a "Company Right")
issued pursuant to the Rights Agreement, dated August 14, 1990,
as amended (the "Company Rights Agreement"), between the
Company and the Rights Agent named therein (the "Company Common
Stock"), issued and outstanding immediately prior to the
Effective Time shall become and be converted into the right to
receive 0.6525 share (subject to adjustment as set forth
herein, the "Exchange Ratio") of common stock (the "Parent
Common Stock") of Parent (the "Per Share Stock Consideration"),
subject to the election rights set forth in Section 3.02.
(b) Outstanding Company Preferred Stock. (i) Each
share of the Company's Cumulative Convertible Preferred Stock,
Series A, stated value $100 per share, liquidation preference
$400 per share ("Company Series A Preferred Stock"), excluding
any Treasury Shares, issued and outstanding immediately prior
to the Effective Time, shall become and be converted into the
right to receive one share of newly created preferred stock of
Parent ("Parent Series A Preferred Stock") having terms (to be
set forth in the Articles of Amendment) substantially identical
to those of the Company Series A Preferred Stock.
(ii) Each share of the Company's 7% Cumulative
Redeemable Preferred Stock, Series B, stated value $100 per
share, liquidation preference $100 per share ("Company Series B
Preferred Stock"), excluding any Treasury Shares, issued and
outstanding immediately prior to the Effective Time, shall
become and be converted into the right to receive one share of
newly created preferred stock of Parent ("Parent Series B
Preferred Stock") having terms (to be set forth in the Articles
of Amendment) substantially identical to those of the Company
Series B Preferred Stock.
(iii) At the Effective Time, any deposit agreements
pursuant to which shares of Company Preferred Stock are held
subject to depositary receipts shall automatically, and without
further action on the part of Parent or the Surviving
Corporation, be assumed by Parent.
(c) Outstanding Merger Sub Common Stock. Each share
of the common stock of Merger Sub ("Merger Sub Common Stock")
issued and outstanding immediately prior to the Effective Time
shall be unchanged and shall remain issued and outstanding as
common stock of the Surviving Corporation.
Section 3.02. Optional Cash Election. Holders of
the Company Common Stock shall be provided with an opportunity
to elect to receive cash consideration in lieu of receiving
Parent Common Stock in the Merger, in accordance with the
election procedures set forth below in this Section 3.02.
Holders who are to receive cash in lieu of exchanging their
shares of Company Common Stock for Parent Common Stock as
specified below shall receive an amount in cash (the "Per Share
Cash Consideration") in respect of each share of Company Common
Stock that is so converted equal to the Exchange Ratio times
the Valuation Period Market Value. The aggregate amount of
cash that shall be issued in the Merger to satisfy such
elections shall not exceed 40% of the aggregate consideration
paid in exchange for shares of Company Common Stock in the
Merger (the "Cash Amount"). For purposes of this Section 3.02:
(i) "Valuation Period Market Value" shall mean the
average of the closing sales prices for Parent Common
Stock as reported on the NYSE Composite Transactions
reporting system (as reported in The Wall Street Journal
or, in the absence thereof, by another authoritative
source) during the Valuation Period; and
(ii) "Valuation Period" shall mean the ten (10)
consecutive trading day period during which the shares of
Parent Common Stock are traded on the NYSE ending on the
tenth calendar day immediately prior to the anticipated
Effective Time.
An election form and other appropriate and customary
transmittal materials (which shall specify that delivery shall
be effected, and risk of loss and title to the certificates
theretofore representing Company Common Stock ("Old
Certificates") shall pass, only upon proper delivery of such
Old Certificates to an exchange agent designated by Parent (the
"Exchange Agent")) in such form as Parent and the Company shall
mutually agree ("Election Form") shall be mailed 25 days prior
to the anticipated Effective Time or on such other date as the
Company and Parent shall mutually agree ("Mailing Date") to
each holder of record of Company Common Stock as of five
business days prior to the Mailing Date ("Election Form Record
Date").
Each Election Form shall permit a holder (or the
beneficial owner through appropriate and customary
documentation and instructions) of Company Common Stock to
elect to receive cash with respect to all or a portion of such
holder's Company Common Stock (shares as to which the election
is made being "Cash Election Shares").
Any shares of Company Common Stock with respect to
which the holder (or the beneficial owner, as the case may be)
shall not have submitted to the Exchange Agent an effective,
properly completed Election Form on or before 5:00 p.m. on the
20th day following the Mailing Date (or such other time and
date as Parent and the Company may mutually agree) (the
"Election Deadline") shall be converted into Parent Common
Stock at the Exchange Ratio (such shares being "No Election
Shares").
Parent shall make available one or more Election
Forms as may be reasonably requested by all persons who become
holders (or beneficial owners) of Company Common Stock between
the Election Form Record Date and the close of business on the
business day prior to the Election Deadline, and the Company
shall provide to the Exchange Agent all information reasonably
necessary for it to perform as specified herein.
Any such election shall have been properly made only
if the Exchange Agent shall have actually received a properly
completed Election Form by the Election Deadline. An Election
Form shall be deemed properly completed only if accompanied by
one or more certificates (or customary affidavits and
indemnification regarding the loss or destruction of such
certificates or the guaranteed delivery of such certificates)
representing all shares of the Company Common Stock covered by
such Election Form, together with duly executed transmittal
materials included in the Election Form. Any Election Form may
be revoked or changed by the person submitting such Election
Form at or prior to the Election Deadline. In the event an
Election Form is revoked prior to the Election Deadline, the
shares of Company Common Stock represented by such Election
Form shall become No Election Shares and Parent shall cause the
certificates representing Company Common Stock to be promptly
returned without charge to the person submitting the Election
Form upon written request to that effect from the person who
submitted the Election Form. Subject to the terms of this
Agreement and of the Election Form, the Exchange Agent shall
have reasonable discretion to determine whether any election,
revocation or change has been properly or timely made and to
disregard immaterial defects in the Election Forms, and any
good faith decisions of the Exchange Agent regarding such
matters shall be binding and conclusive. Neither Parent nor
the Exchange Agent shall be under any obligation to notify any
person of any defect in an Election Form. Any Dissenting
Shares (as defined below) shall be treated as Cash Election
Shares for the purposes of the determinations set forth below
(but shall not be converted into the right to receive the Per
Share Cash Consideration and shall instead be treated as set
forth in Section 3.06).
Within five business days after the Election
Deadline, unless the Effective Time has not yet occurred, in
which case as soon thereafter as practicable, Parent shall
cause the Exchange Agent to effect the allocation among the
holders of Company Common Stock in accordance with the Election
Forms as follows:
(i) Cash Elections Less Than or Equal To the Cash
Amount. If the amount of cash that would be issued upon
conversion in the Merger of the Cash Election Shares is
less than or equal to the Cash Amount, then:
(1) all Cash Election Shares shall be converted into
the right to receive the Per Share Cash
Consideration, and
(2) the No Election Shares shall be converted into
the right to receive the Per Share Stock
Consideration.
(ii) Cash Elections More Than the Cash Amount. If
the amount of cash that would be issued upon the
conversion of the Cash Election Shares is greater than the
Cash Amount, then:
(1) all No Election Shares shall be converted into
the right to receive the Per Share Stock
Consideration,
(2) the Exchange Agent shall select from among the
holders of Cash Election Shares (other than
Dissenting Shares), by random selection (as described
below), a sufficient number of such holders ("Stock
Designees") such that the amount of cash that will be
issued in the Merger equals as closely as practicable
the Cash Amount, and all shares held by the Stock
Designees shall be converted into the right to
receive the Per Share Stock Consideration, and
(3) the Cash Election Shares not held by Stock
Designees shall be converted into the right to
receive the Per Share Cash Consideration.
The random selection process to be used by the
Exchange Agent shall consist of such processes as shall be
mutually determined by Parent and the Company.
3.03. Rights As Stockholders; Stock Transfers. At
the Effective Time, holders of Company Stock shall cease to be,
and shall have no rights as, stockholders of the Company, other
than to receive any dividend or other distribution with respect
to such Company Stock with a record date occurring prior to the
Effective Time and the consideration provided under this
Article III. After the Effective Time, there shall be no
transfers on the stock transfer books of the Company or the
Surviving Corporation of shares of Company Stock.
3.04. Fractional Shares. Notwithstanding any other
provision hereof, no fractional shares of Parent Common Stock
and no certificates or scrip therefor, or other evidence of
ownership thereof, will be issued in the Merger; instead,
Parent shall pay to each holder of Company Common Stock who
would otherwise be entitled to a fractional share of Parent
Common Stock (after taking into account all Old Certificates
delivered by such holder) an amount in cash (without interest)
determined by multiplying such fraction by the average of the
last sale prices of Parent Common Stock, as reported by the
NYSE Composite Transactions reporting system (as reported in
The Wall Street Journal or, if not reported therein, in another
authoritative source), for the five NYSE trading days
immediately preceding the Effective Date.
3.05. Exchange Procedures. (a) At or prior to the
Effective Time, Parent shall deposit, or shall cause to be
deposited, with the Exchange Agent, for the benefit of the
holders of Old Certificates (which for purposes of this Section
3.05 shall include certificates formerly representing shares of
Company Preferred Stock), for exchange in accordance with this
Article III, certificates representing the shares of Parent
Stock ("New Certificates") and an estimated amount of cash
(such cash and New Certificates, together with any dividends or
distributions with respect thereto (without any interest
thereon), being hereinafter referred to as the "Exchange Fund")
to be paid pursuant to this Article III in exchange for
outstanding shares of Company Stock.
(b) As promptly as practicable after the Effective
Date, Parent shall send or cause to be sent to each former
holder of record of shares (other than Cash Election Shares,
Treasury Shares or Dissenting Shares) of Company Stock
immediately prior to the Effective Time transmittal materials
for use in exchanging such stockholder's Old Certificates for
the consideration set forth in this Article III. Parent shall
cause the New Certificates into which shares of a stockholder's
Company Stock are converted on the Effective Date and/or any
check in respect of the Per Share Cash Consideration and any
fractional share interests or dividends or distributions which
such person shall be entitled to receive to be delivered to
such stockholder upon delivery to the Exchange Agent of Old
Certificates representing such shares of Company Stock (or
indemnity reasonably satisfactory to Parent and the Exchange
Agent, if any of such certificates are lost, stolen or
destroyed) owned by such stockholder. No interest will be paid
on any such cash to be paid pursuant to this Article III upon
such delivery.
(c) Notwithstanding the foregoing, neither the
Exchange Agent nor any party hereto shall be liable to any
former holder of Company Stock for any amount properly
delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws.
(d) No dividends or other distributions with respect
to Parent Stock with a record date occurring after the
Effective Time shall be paid to the holder of any unsurrendered
Old Certificate representing shares of Company Stock converted
in the Merger into shares of such Parent Stock until the holder
thereof shall surrender such Old Certificate in accordance with
this Article III. After the surrender of an Old Certificate in
accordance with this Article III, the record holder thereof
shall be entitled to receive any such dividends or other
distributions, without any interest thereon, which theretofore
had become payable with respect to shares of Parent Stock
represented by such Old Certificate.
(e) Any portion of the Exchange Fund that remains
unclaimed by the stockholders of the Company for twelve months
after the Effective Time shall be paid to Parent. Any
stockholders of the Company who have not theretofore complied
with this Article III shall thereafter look only to Parent for
payment of the shares of Parent Stock, cash in lieu of any
fractional shares and unpaid dividends and distributions on the
Parent Stock deliverable in respect of each share of Company
Stock such stockholder holds as determined pursuant to this
Agreement, in each case, without any interest thereon.
3.06. Dissenting Stockholders. Notwithstanding
anything in this Agreement to the contrary, shares of Company
Stock which are issued and outstanding immediately prior to the
Effective Time and which are held by stockholders who did not
vote in favor of the adoption of this Agreement, who are
entitled to demand the fair value of such shares of Company
Stock under Section 455 of the GBCL, and who comply with all of
the relevant provisions of such Section (the "Dissenting
Shares") shall not be converted into or be exchangeable for the
right to receive Parent Common Stock or Parent Preferred Stock,
as applicable (unless and until such holders shall have failed
to perfect or shall have effectively withdrawn or lost their
dissenters' rights under the GBCL), but shall instead be
entitled to all applicable dissenters' rights as are prescribed
by the GBCL. If any such holder shall have failed to perfect
or shall have effectivelywithdrawn or lost such dissenters'
rights, such holder's shares of Company Stock shall thereupon
be converted into and become exchangeable for the right to
receive, as of the Effective Time, Parent Common Stock or
Parent Preferred Stock, as applicable, without any interest
thereon. The Company shall give Parent (i) prompt notice of
any written demands for payment for any Company Stock under
Section 455 of the GBCL, attempted withdrawals of such demands,
and any other instruments served pursuant to the GBCL and
received by the Company relating to dissenters' rights, and
(ii) the opportunity to participate in all negotiations and
proceedings with respect to the exercise of dissenters' rights
under the GBCL. The Company shall not, except with the prior
written consent of the Parent, voluntarily make any payment
with respect to any demands for payment for Company Stock under
Section 455 of the GBCL, offer to settle or settle any such
demands or approve any withdrawal of any such demands.
3.07. Anti-Dilution Provisions. In the event Parent
changes (or establishes a record date for changing) the number
of shares of Parent Common Stock issued and outstanding prior
to the Effective Date as a result of a stock split, stock
dividend, recapitalization or similar transaction with respect
to the outstanding Parent Common Stock and the record date
therefor shall be prior to the Effective Date, the Exchange
Ratio shall be proportionately adjusted.
3.08. Treasury Shares. Each of the shares of
Company Stock held as Treasury Shares immediately prior to the
Effective Time shall be canceled and retired at the Effective
Time and no consideration shall be issued in exchange therefor.
3.09. Options. At the Effective Time, all employee
and director stock options to purchase shares of Company Common
Stock (each, a "Company Stock Option"), which are then
outstanding and unexercised, shall cease to represent a right
to acquire shares of Company Stock and shall be converted
automatically into options to purchase shares of Parent Common
Stock, and Parent shall assume each such Company Stock Option
subject to the terms of any of the stock option plans listed
under "Stock Option Plans" in Exhibit 5.03(l)(i) of the
Company's Disclosure Schedule (collectively, the "Company Stock
Option Plans"), and the agreements evidencing grants
thereunder, including but not limited to the accelerated
vesting of such options which shall occur in connection with
and by virtue of the Merger as and to the extent required by
such plans and agreements; provided, however, that from and
after the Effective Time, (i) the number of shares of Parent
Common Stock purchasable upon exercise of such Company Stock
Option shall be equal to the number of shares of Company Common
Stock that were purchasable under such Company Stock Option
immediately prior to the Effective Time multiplied by the
Exchange Ratio, and rounding to the nearest whole share, and
(ii) the per share exercise price under each such Company Stock
Option shall be adjusted by dividing the per share exercise
price of each such Company Stock Option by the Exchange Ratio,
and rounding down to the nearest cent. The terms of each
Company Stock Option shall, in accordance with its terms, be
subject to further adjustment as appropriate to reflect any
stock split, stock dividend, recapitalization or other similar
transaction with respect to Parent Common Stock on or
subsequent to the Effective Date. Notwithstanding the
foregoing, each Company Stock Option which is intended to be an
"incentive stock option" (as defined in Section 422 of the
Code) shall be adjusted in accordance with the requirements of
Section 424 of the Code. Accordingly, with respect to any
incentive stock options, fractional shares shall be rounded
down to the nearest whole number of shares and where necessary
the per share exercise price shall be rounded down to the
nearest cent.
ARTICLE IV
ACTIONS PENDING MERGER
From the date hereof until the Effective Time, except
as expressly contemplated by this Agreement, (i) without the
prior written consent of Parent (which consent shall not be
unreasonably withheld or delayed) the Company will not, and
will cause each of its Subsidiaries not to, and (ii) without
the prior written consent of the Company (which consent shall
not be unreasonably withheld or delayed) Parent will not, and
will cause each of its Subsidiaries not to:
4.01. Ordinary Course. Conduct the business of it
and its Subsidiaries other than in the ordinary and usual
course or, to the extent consistent therewith, fail to use
reasonable efforts to preserve intact their business
organizations and assets and maintain their rights, franchises
and existing relations with customers, suppliers, employees and
business associates, or take any action that would (i)
adversely affect the ability of any party to obtain any
necessary approvals of any Regulatory Authorities required for
the transactions contemplated hereby without the imposition of
a condition or restriction of the type referred to in the
second sentence of Section 7.02 or (ii) adversely affect its
ability to perform any of its material obligations under this
Agreement.
4.02. Capital Stock. In the case of the Company,
other than (i) pursuant to Rights or other stock options
Previously Disclosed in its Disclosure Schedule and currently
outstanding as of the date hereof, or (ii) upon conversion of
shares of Company Preferred Stock pursuant to the terms
thereof, (x) issue, sell or otherwise permit to become
outstanding, or authorize the creation of, any additional
shares of capital stock, any stock appreciation rights or any
Rights, (y) enter into any agreement with respect to the
foregoing, or (z) permit any additional shares of capital stock
to become subject to new grants of employee stock options,
stock appreciation rights, or similar stock-based employee
rights.
4.03. Dividends, Etc. (1) Make, declare or pay any
dividend (other than (i) in the case of the Company, (A)
quarterly cash dividends on Company Common Stock in an amount
not to exceed the greater of (I) $0.42 per share and (II) the
productof the Exchange Ratio multiplied by Parent's then-
effective quarterly dividend, dividends payable on Company
Preferred Stock at a rate not exceeding the rate provided for
in the terms thereof, and (B) dividends from greater than 95%-
owned Subsidiaries to the Company or another greater than 95%-
owned Subsidiary of the Company, as applicable, and (ii) in the
case of Parent, quarterly cash dividends on Parent Common Stock
not in excess of $0.66 per share, semi-annual cash dividends on
the ESOP Convertible Preferred Stock, Series C (the "ESOP
Preferred Stock"), not in excess of $3.30 per share and cash
dividends on any other outstanding issues of preferred stock in
accordance with the terms thereof and dividends from
Subsidiaries to Parent or another Subsidiary of Parent, as
applicable) on or in respect of, or declare or make any
distribution on any shares of its capital stock, or (2) other
than (A) as Previously Disclosed in its Disclosure Schedule,
(B) in the case of the Company, pursuant to the terms of the
Company Preferred Stock, (C) in the ordinary course pursuant to
employee benefit plans, directly or indirectly combine, redeem,
reclassify, purchase or otherwise acquire, any shares of its
capital stock, or (D) in the case of Parent, repurchases of
Parent Stock in the ordinary course. After the date of this
Agreement, each of Parent and the Company shall coordinate with
the other the declaration of any dividends in respect of Parent
Common Stock and Company Common Stock and the record dates and
payment dates relating thereto, it being the intention of the
parties hereto that holders of Parent Common Stock or Company
Common Stock shall not receive two dividends, or fail to
receive one dividend, for any single calendar quarter with
respect to their shares of Parent Common Stock and/or Company
Common Stock and any shares of Parent Common Stock any such
holder receives in exchange therefor in the Merger.
4.04. Compensation; Employment Agreements; Etc. In
the case of the Company and its Subsidiaries, enter into or
amend any written employment, severance or similar agreements
or arrangements with any of its directors, officers or
employees, or grant any salary or wage increase or increase any
employee benefit (including incentive or bonus payments),
except for (i) normal individual increases in compensation to
employees in the ordinary course of business consistent with
past practice or (ii) other changes as are provided for herein
or as may be required by law or to satisfy contractual
obligations existing as of the date hereof or additional grants
of awards to newly hired employees consistent with past
practice or such changes that, either individually or in the
aggregate, would not reasonably be expected to result in a
material liability to the Company or its Subsidiaries or such
changes that, either individually or in the aggregate, would
not reasonably be expected to result in a material liability to
the Company or its Subsidiaries.
4.05. Benefit Plans. In the case of the Company and
its Subsidiaries, enter into or amend (except as may be
required by applicable law, to satisfy contractual obligations
existing as of the date hereof or amendments which, either
individually or in the aggregate, would not reasonably be
expected to result in a material liability to the Company or
its Subsidiaries) any pension, retirement, stock option, stock
purchase, savings, profit sharing, deferred compensation,
consulting, bonus, group insurance or other employee benefit,
incentive or welfare contract, plan or arrangement, or any
trust agreement related thereto, in respect of any of its
directors, officers or other employees, including without
limitation taking any action that accelerates the vesting or
exercise of any benefits payable thereunder.
4.06. Acquisitions And Dispositions. In the case of
the Company, except as Previously Disclosed in its Disclosure
Schedule, dispose of or discontinue any portion of its assets,
business or properties, which is material to it and its
Subsidiaries taken as a whole, or acquire (other than by way of
foreclosures or acquisitions of control in a bona fide
fiduciary capacity or in satisfaction of debts previously
contracted in good faith, in each case in the ordinary and
usual course of business consistent with past practice) all or
any portion of, the business or property of any other entity
which is material to it and its Subsidiaries taken as a whole.
Parent will not, and will cause its Subsidiaries not to, make
any acquisition or take any other action which would materially
adversely affect its ability to consummate the transactions
contemplated by this Agreement.
4.07. Amendments. In the case of the Company, amend
its Articles of Incorporation or By-laws or amend or waive any
rights under the Company Rights Agreement.
4.08. Accounting Methods. Implement or adopt any
change in its accounting principles, practices or methods,
other than as may be required by generally accepted accounting
principles.
4.09. Adverse Actions. (1) Take any action while
knowing that such action would, or is reasonably likely to,
prevent or impede the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the
Code; or (2) knowingly take any action that is intended or is
reasonably likely to result in (x) any of its representations
and warranties set forth in this Agreement being or becoming
untrue in any material respect at any time prior to the
Effective Time, (y) any of the conditions to the Merger set
forth in Article VII not being satisfied or (z) a material
violation of any provision of this Agreement except, in each
case, as may be required by applicable law.
4.10. Agreements. Agree or commit to do anything
prohibited by Sections 4.01 through 4.09.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01. Disclosure Schedules. On or prior to the date
hereof, Parent has delivered to the Company and the Company has
delivered to Parent a schedule (respectively, its "Disclosure
Schedule") setting forth, among other things, items the
disclosure of which is necessary or appropriate in relation to
any or all of its representations and warranties; provided,
that (i) no such item is required to be set forth in a
Disclosure Schedule as an exception to a representation or
warranty if its absence is not reasonably likely to result in
the related representation or warranty being deemed untrue or
incorrect under the standard established by Section 5.02, and
(ii) the mere inclusion of an item in a Disclosure Schedule
shall not be deemed an admission by a party that such item
represents a material exception or fact, event or circumstance
or that such item is reasonably likely to result in a Material
Adverse Effect.
5.02. Standard. No representation or warranty of
Parent or the Company contained in Section 5.03 shall be deemed
untrue or incorrect, and no party hereto shall be deemed to
have breached a representation or warranty, as a consequence of
the existence of any fact, circumstance or event unless such
fact, circumstance or event, individually or taken together
with allother facts, circumstances or events inconsistent with
any paragraph of Section 5.03 has had or is expected to have a
Material Adverse Effect.
5.03. Representations And Warranties. Subject to
Sections 5.01 and 5.02 and except as Previously Disclosed in
its Disclosure Schedule, the Company hereby represents and
warrants to Parent, and Parent hereby represents and warrants
to the Company, to the extent applicable, in each case with
respect to itself and its Subsidiaries, as follows:
(a) Organization, Standing and Authority. Such
party is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its
organization. Such party is duly qualified to do business and
is in good standing in the states of the United States and
foreign jurisdictions where its ownership or leasing of
property or the conduct of its business requires it to be so
qualified. It has in effect all federal, state, local, and
foreign governmental authorizations necessary for it to own or
lease its properties and assets and to carry on its business as
it is now conducted.
(b) Shares. (i) As of the date hereof, the
authorized capital stock of the Company consists solely of
250,000,000 shares of Company Common Stock, of which, as of
July 31, 1996, 156,741,130 shares were outstanding, 10,300,000
shares of Company Preferred Stock, of which 250,000 shares have
been designated as Company Series A Preferred Stock, of which,
as of July 31, 1996, 247,729 shares were outstanding, and
35,045 shares have been designated as Company Series B
Preferred Stock, of which, as of July 31, 1996, 9,487 shares
were outstanding. As of the date hereof, the authorized
capital stock of Parent consists solely of 800,000,000 shares
of Parent Common Stock, of which, as of July 31, 1996,
291,169,674 shares were outstanding, and 45,000,000 shares of
Parent Preferred Stock, of which, as of July 31, 1996,
2,445,143 shares of ESOP Preferred Stock were outstanding. As
of July 31, 1996, 1,659,226 shares of Company Common Stock and
no shares of Parent Common Stock were held in treasury. The
outstanding shares of such party's capital stock are validly
issued and outstanding, fully paid and nonassessable, and
subject to no preemptive rights (and were not issued in
violation of any preemptive rights). As of the date hereof,
there are no shares of such party's capital stock authorized
and reserved for issuance, such party does not have any Rights
issued or outstanding with respect to its capital stock, and
such party does not have any commitment to authorize, issue or
sell any such shares or Rights, except pursuant to this
Agreement and the Company Rights Agreement, as the case may be.
Since July 31, 1996, the Company has issued no shares of its
capital stock or rights in respect thereof or reserved any
shares for such purposes except pursuant to plans or
commitments Previously Disclosed in its Disclosure Schedule.
(ii) The number of shares of Company Common Stock
which are issuable and reserved for issuance upon exercise of
Company Stock Options as of the date hereof are Previously
Disclosed in the Company's Disclosure Schedule, and the number
of shares of Parent Common Stock which are issuable and
reserved for issuance upon exercise of any employee or director
stock options to purchase shares of Parent Common Stock as of
the date hereof are Previously Disclosed in Parent's Disclosure
Schedule.
(iii) In the case of the representations and
warranties of Parent: (i) the outstanding shares of Merger Sub
Common Stock are validly issued and outstanding, fully paid and
nonassessable, and subject to no preemptive rights; and (ii)
the shares of Parent Stock to be issued in exchange for shares
of Company Stock in the Merger, when issued in accordance with
the terms of this Agreement, will be duly authorized, validly
issued, fully paid and nonassessable.
(c) Subsidiaries. (i) (A) Such party has
Previously Disclosed in its Disclosure Schedule a list of all
of its Subsidiaries together with the jurisdiction of
organization of each such Subsidiary, (B) it owns, directly or
indirectly at least 99% of the issued and outstanding shares of
each of its Significant Subsidiaries, (C) no equity securities
of any of its Significant Subsidiaries are or may become
required to be issued (other than to it or a Subsidiary of it)
by reason of any Rights, (D) there are no contracts,
commitments, understandings or arrangements by which any of
such Significant Subsidiaries is or may be bound to sell or
otherwise transfer any shares of the capital stock of any such
Significant Subsidiaries (other than to it or a Subsidiary of
it), (E) there are no contracts, commitments, understandings,
or arrangements relating to its rights to vote or to dispose of
such shares (other than to it or a Subsidiary of it), and (F)
all of the shares of capital stock of each such Significant
Subsidiary held by it or its Subsidiaries are fully paid and
(except pursuant to 12 U.S.C. Section 55 or equivalent state
statutes in the case of bank Subsidiaries) nonassessable and
are owned by it or its Subsidiaries free and clear of any
Liens.
(ii) In the case of the representations and
warranties of the Company, the Company does not own (other than
in a bona fide fiduciary capacity or in satisfaction of a debt
previously contracted) beneficially, directly or indirectly,
any shares of any equity securities or similar interests of any
person, or any interest in a partnership or joint venture of
any kind.
(iii) Each of such party's Significant Subsidiaries
has been duly organized and is validly existing in good
standing under the laws of the jurisdiction of its
organization, and is duly qualified to do business and in good
standing in the jurisdictions where its ownership or leasing of
property or the conduct of its business requires it to be so
qualified. Each of such Significant Subsidiaries has in effect
all federal, state, local, and foreign governmental
authorizations necessary for it to own or lease its properties
and assets and to carry on its business as it is now conducted.
(d) Corporate Power. Such party and each of its
Significant Subsidiaries has the corporate power and authority
to carry on its business as it is now being conducted and to
own all its properties and assets; and it has (and, in the case
of the representations and warranties of Parent, Merger Sub
will have as of the Effective Time) the corporate power and
authority to execute, deliver and perform its obligations under
this Agreement and to consummate the transactions contemplated
hereby.
(e) Corporate Authority. Subject to receipt of the
requisite approval by the holders of two-thirds of the
outstanding Company Common Stock (in the case of the Company)
and by the holders of a majority of a quorum of Parent Common
Stock (in the case of Parent), this Agreement and the
transactions contemplated hereby have been authorized by all
necessary corporate action of it, and this Agreement is a
legal, valid and binding agreement of it, enforceable in
accordance with its terms (except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors' rights or by
general equity principles).
(f) No Defaults. Subject to receipt of the
regulatory approvals, and expiration of the waiting periods,
referred to in Section 7.02 and the required filings under
federal and state securities laws, the execution, delivery and
performance of this Agreement and the consummation of the
transactions contemplated hereby by it do not and will not (i)
constitute a breach or violation of, or a default under, any
law, rule or regulation or any judgment, decree, order,
governmental permit or license, or agreement, indenture or
instrument of it or of any of its Significant Subsidiaries or
to which it or any of its Significant Subsidiaries or
properties is subject or bound, (ii) constitute a breach or
violation of, or a default under, its articles or certificate
of incorporation or by-laws, or (iii) require any consent or
approval under any such law, rule, regulation, judgment,
decree, order, governmental permit or license agreement,
indenture or instrument.
(g) Financial Reports And SEC Documents. Its Annual
Report on Form 10-K for the fiscal year ended December 31,
1995, and all other reports, registration statements,
definitive proxy statements or information statements filed or
to be filed by it or any of its Subsidiaries subsequent to
December 31, 1995 under the Securities Act, or under Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, in the form
filed, or to be filed (collectively, its "SEC Documents"), with
the SEC (i) complied or will comply in all material respects as
to form with the applicable requirements under the Securities
Act or the Exchange Act, as the case may be, and (ii) did not
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 to make the statements made therein, in light of the
circumstances under which they were made, not misleading; and
each of the balance sheets contained in or incorporated by
reference into any such SEC Document (including the related
notes and schedules thereto) fairly presents and will fairly
present the financial position of the entity or entities to
which it relates as of its date, and each of the statements of
income and changes in stockholders' equity and cash flows or
equivalent statements in such SEC Documents (including any
related notes and schedules thereto) fairly presents and will
fairly present the results of operations, changes in
stockholders' equity and changes in cash flows, as the case may
be, of the entity or entities to which it relates for the
periods to which they relate, in each case in accordance with
generally accepted accounting principles consistently applied
during the periods involved, except in each case as may be
noted therein, subject to normal year-end audit adjustments in
the case of unaudited statements.
(h) Litigation; Regulatory Action. (i) No
litigation, claim or other proceeding before any court or
governmental agency is pending against it or any of its
Subsidiaries and, to the best of its knowledge, no such
litigation, claim or other proceeding has been threatened.
(ii) Neither it nor any of its Subsidiaries or
properties is a party to or is subject to any order, decree,
agreement, memorandum of understanding or similar arrangement
with, or a commitment letter or similar submission to, any
federal or state governmental agency or authority charged with
the supervision or regulation of financial institutions or
issuers of securities or engaged in the insurance of deposits
(including, without limitation, the OCC, the Federal Reserve
Board, the FDIC and the OTS) or the supervision or regulation
of it or any of its Subsidiaries (collectively, the "Regulatory
Authorities").
(iii) Neither it nor any of its Subsidiaries has
been advised by any Regulatory Authority that such Regulatory
Authority is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any
such order, decree, agreement, memorandum of understanding,
commitment letter or similar submission.
(i) Compliance With Laws. It and each of its
Subsidiaries:
(i) in the conduct of its business, is in compliance
with all applicable federal, state, local and foreign statutes,
laws, regulations, ordinances, rules, judgments, orders or
decrees applicable thereto or to the employees conducting such
businesses, including, without limitation, the Equal Credit
Opportunity Act, the Fair Housing Act, the Community
Reinvestment Act, the Home Mortgage Disclosure Act and all
other applicable fair lending laws and other laws relating to
discriminatory business practices;
(ii) has all permits, licenses, authorizations,
orders and approvals of, and have made all filings,
applications andregistrations with, all Regulatory Authorities
that are required in order to permit them to conduct their
businesses substantially as presently conducted; all such
permits, licenses, certificates of authority, orders and
approvals are in full force and effect and, to the best of its
knowledge, no suspension or cancellation of any of them is
threatened; and
(iii) has received, since December 31, 1995, no
notification or communication from any Regulatory Authority (A)
asserting that it or any of its Subsidiaries is not in
compliance with any of the statutes, regulations, or ordinances
which such Regulatory Authority enforces, (B) threatening to
revoke any license, franchise, permit, or governmental
authorization, (C) threatening or contemplating revocation or
limitation of, or which would have the effect of revoking or
limiting, federal deposit insurance (nor, to its knowledge, do
any grounds for any of the foregoing exist) or (D) failing to
approve any proposed acquisition, or stating its intention not
to approve acquisitions proposed to be effected by it within a
certain time period or indefinitely.
(j) Defaults. Neither it nor any of its
Subsidiaries is in default under any contract, agreement,
commitment, arrangement, lease, insurance policy, or other
instrument to which it is a party, by which its respective
assets, business, or operations may be bound or affected, or
under which it or its respective assets, business, or
operations receives benefits, and there has not occurred any
event that, with the lapse of time or the giving of notice or
both, would constitute such a default.
(k) No Brokers. No action has been taken by it that
would give rise to any valid claim against any party hereto for
a brokerage commission, finder's fee or other like payment with
respect to the transactions contemplated by this Agreement,
excluding, in the case of the Company, a fee to be paid to
Goldman, Sachs & Co., and, in the case of Parent, a fee to be
paid to Stephens, Inc., which, in each case, has been
heretofore disclosed to the other party.
(l) Employee Benefit Plans. (i) Such Party's
Disclosure Schedule contains a complete list of all written
bonus, vacation, deferred compensation, pension, retirement,
profit-sharing, thrift, savings, employee stock ownership,
stock bonus, stock purchase, restricted stock and stock option
plans,all employment or severance contracts, all medical,
dental, disability, health and life insurance plans, all other
employee benefit and fringe benefit plans, contracts or
arrangements and any applicable "change of control" or similar
provisions in any plan, contract or arrangement maintained or
contributed to by it or any of its Subsidiaries for the benefit
of officers, former officers, employees, former employees,
directors, former directors, or the beneficiaries of any of the
foregoing (collectively, "Compensation and Benefit Plans").
(ii) True and complete copies of its Compensation
and Benefit Plans, including, but not limited to, any trust
instruments and/or insurance contracts, if any, forming a part
thereof, and all amendments thereto have been supplied to the
other party.
(iii) Each of its Compensation and Benefit Plans has
been administered in all material respects in accordance with
the terms thereof. All "employee benefit plans" within the
meaning of Section 3(3) of ERISA, other than "multiemployer
plans" within the meaning of Section 3(37) of ERISA
("Multiemployer Plans"), covering employees or former employees
of it and its Subsidiaries (its "Plans"), to the extent subject
to ERISA, are in material compliance with ERISA, the Code, the
Age Discrimination in Employment Act and other applicable laws.
Each Compensation and Benefit Plan of it or its Subsidiaries
which is an "employee pension benefit plan" within the meaning
of Section 3(2) of ERISA ("Pension Plan") and which is intended
to be qualified under Section 401(a) of the Code has received a
favorable determination letter from the Internal Revenue
Service, and it is not aware of any circumstances reasonably
likely to result in the revocation or denial of any such
favorable determination letter. There is no pending or, to its
knowledge, threatened litigation or governmental audit,
examination or investigation relating to the Plans.
(iv) No material liability under Title IV of ERISA
has been or is expected to be incurred by it or any of its
Subsidiaries with respect to any ongoing, frozen or terminated
"single-employer plan", within the meaning of Section
4001(a)(15) of ERISA, currently or formerly maintained by any
of them, or the single-employer plan of any entity which is
considered one employer with it under Section 4001(a)(15) of
ERISA or Section 414 of the Code (an "ERISA Affiliate").
Neither it nor any of its Subsidiaries presently contributes to
a Multiemployer Plan, nor have they contributed to such a plan
within the past five calendar years. No notice of a
"reportable event", within the meaning of Section 4043 of ERISA
for which the 30-day reporting requirement has not been waived,
has been required to be filed for any Pension Plan of it or any
of its Subsidiaries or by any ERISA Affiliate within the past
12 months.
(v) All contributions, premiums and payments
required to be made under the terms of any Compensation and
Benefit Plan of it or any of its Subsidiaries have been made.
Neither any Pension Plan of it or any of its Subsidiaries nor
any single-employer plan of an ERISA Affiliate of it or any of
its Subsidiaries has an "accumulated funding deficiency"
(whether or not waived) within the meaning of Section 412 of
the Code or Section 302 of ERISA. Neither it nor any of its
Subsidiaries has provided, or is required to provide, security
to any Pension Plan or to any single-employer plan of an ERISA
Affiliate pursuant to Section 401(a)(29) of the Code.
(vi) Under each Pension Plan of it or any of its
Subsidiaries which is a single-employer plan, as of the last
day of the most recent plan year ended prior to the date
hereof, the actuarially determined present value of all
"benefit liabilities", within the meaning of Section
4001(a)(16) of ERISA (as determined on the basis of the
actuarial assumptions contained in the Plan's most recent
actuarial valuation) did not exceed the then current value of
the assets of such Plan, and there has been no adverse change
in the financial condition of such Plan (with respect to either
assets or benefits) since the last day of the most recent Plan
year.
(vii) Neither it nor any of its Subsidiaries has any
obligations under any Compensation and Benefit Plans to provide
benefits, including death or medical benefits, with respect to
employees of it or its Subsidiaries beyond their retirement or
other termination of service other than (i) coverage mandated
by Part 6 of Title I of ERISA or Section 4980B of the Code,
(ii) retirement or death benefits under any employee pension
benefit plan (as defined under Section 3(2) of ERISA), (iii)
disability benefits under any employee welfare plan that have
been fully provided for by insurance or otherwise, or (iv)
benefits in the nature of severance pay.
(viii) Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated
hereby will (i) result in any payment (including, without
limitation, severance, unemployment compensation, golden
parachute or otherwise) becoming due to any director or any
employee of it or any of its Subsidiaries under any
Compensation and Benefit Plan or otherwise from it or any of
its Subsidiaries, (ii) increase any benefits otherwise payable
under any Compensation and Benefit Plan or (iii) result in any
acceleration of the time of payment or vesting of any such
benefit.
(m) Labor Matters. Neither it nor any of its
Subsidiaries is a party to, or is bound by any collective
bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization, nor is
it or any of its Subsidiaries the subject of a proceeding
asserting that it or any such Subsidiaries has committed an
unfair labor practice (within the meaning of the National Labor
Relations Act) or seeking to compel it or such Subsidiaries to
bargain with any labor organization as to wages and conditions
of employment.
(n) Takeover Laws; Rights Plans. (i) It has taken
all action required to be taken by it in order to exempt this
Agreement and the transactions contemplated hereby from, and
this Agreement and the transactions contemplated hereby are
exempt from, the requirements of any "moratorium", "control
share", "fair price" or other antitakeover laws and regulations
(collectively, "Takeover Laws") of the State of Missouri in the
case of the representations and warranties of the Company,
including Section 459 of the GBCL. In the case of the
representations and warranties of the Company, the transactions
contemplated by this Agreement have been approved for purposes
of Article XI of the Company's Restated Articles of
Incorporation.
(ii) In the case of the representations and
warranties of the Company, it has (A) duly entered into an
amendment to the Company Rights Agreement in substantially the
form of Exhibit B hereto and (B) taken all other action
necessary or appropriate so that, the entering into of this
Agreement, and the consummation of the transactions
contemplated hereby (including, without limitation, the Merger)
do not and will not result in the ability of any person to
exercise any Rights under the Company Rights Agreement or
enable or require the Company Rights to separate from the
shares of Company Common Stock to which they are attached or to
be triggered or become exercisable.
(iii) In the case of the representations and
warranties of the Company, no "Distribution Date" or "Shares
Acquisition Date" (as such terms are defined in the Company
Rights Plan) has occurred.
(o) Environmental Matters. (i) As used in this
Plan, "Environmental Laws" means all applicable local, state
and federal environmental, health and safety laws and
regulations, including, without limitation, the Resource
Conversation and Recovery Act, the Comprehensive Environmental
Response, Compensation, and Liability Act, the Clean Water Act,
the Federal Clean Air Act, and the Occupational Safety and
Health Act, each as amended, regulations promulgated
thereunder, and state counterparts.
(ii) Neither the conduct nor operation of such party
or its Subsidiaries nor any condition of any property presently
or previously owned, leased or operated by any of them violates
or violated Environmental Laws and no condition has existed or
event has occurred with respect to any of them or any such
property that, with notice or the passage of time, or both, is
reasonably likely to result in liability under Environmental
Laws. Neither such party nor any of its Subsidiaries has
received any notice from any person or entity that it or its
Subsidiaries or the operation or condition of any property ever
owned, leased, operated, held as collateral or held as a
fiduciary by any of them are or were in violation of or
otherwise are alleged to have liability under any Environmental
Law, including but not limited to responsibility (or potential
responsibility) for the cleanup or other remediation of any
pollutants, contaminants, or hazardous or toxic wastes,
substances or materials at, on, beneath, or originating from
any such property.
(p) Tax Matters. (i) (A) All returns,
declarations, reports, estimates, information returns and
statements required to be filed under federal, state, local or
any foreign tax laws ("Tax Returns") with respect to it or any
of its Subsidiaries, have been timely filed, or requests for
extensions have been timely filed and have not expired; (B) all
material Tax Returns filed by it are complete and accurate; (C)
all Taxes shown to be due on such Tax Returns have been paid or
adequate reserves have been established for the payment of such
Taxes; and (D) no material (1) audit or examination or (2)
refund litigation with respect to any Tax Return is pending.
(ii) It has no reason to believe that any conditions
exist that might prevent or impede the Merger from qualifying
as a reorganization within the meaning of Section 368(a) of the
Code.
(q) Tax Treatment. As of the date hereof, it is
aware of no reason why the Merger will fail to qualify as a
reorganization under Section 368(a) of the Code.
(r) Regulatory Approvals. The approval of the
following regulatory authorities is necessary to consummate the
Merger: the Federal Reserve Board and the regulatory
authorities of the States in which the Company and its
Subsidiaries operate. As of the date hereof, neither of the
Company nor Parent is aware of any reason why the approvals of
such regulatory authorities will not be received without the
imposition of a condition or requirement described in the
second sentence of Section 7.02.
(s) No Material Adverse Effect. Since December 31,
1995, except as disclosed in its SEC Documents filed with the
SEC on or before the date hereof, (i) it and its Subsidiaries
have conducted their respective businesses in the ordinary and
usual course (excluding the incurrence of expenses related to
this Agreement and the transactions contemplated hereby) and
(ii) no event has occurred or circumstance arisen that,
individually or taken together with all other facts,
circumstances and events (described in any paragraph of Section
5.03 or otherwise), is reasonably likely to have a Material
Adverse Effect with respect to it.
ARTICLE VI
COVENANTS
The Company hereby covenants to and agrees with
Parent, and Parent hereby covenants to and agrees with the
Company, that:
6.01. Best Efforts. Subject to the terms and
conditions of this Agreement, it shall use its best efforts in
good faith to take, or cause to be taken, all actions, and to
do, or cause to be done, all things necessary, proper or
desirable, or advisable under applicable laws, so as to permit
consummation of the Merger as promptly as practicable and
otherwise to enable consummation of the transactions
contemplated hereby and shall cooperate fully with the other
parties hereto to that end.
6.02. Stockholder Approvals. Each of them shall
take, in accordance with applicable law, applicable stock
exchange or NASDAQ rules and its respective articles or
certificate of incorporation and by-laws, all action necessary
to convene, respectively, an appropriate meeting of
stockholders of Parent to consider and vote upon the issuance
of the shares of Parent Stock to be issued in the Merger
pursuant to this Agreement and any other matters required to be
approved by Parent stockholders for consummation of the Merger
(including any adjournment or postponement, the "Parent
Meeting"), and an appropriate meeting of stockholders of the
Company to consider and vote upon the approval of this
Agreement and any other matters required to be approved by the
Company's stockholders for consummation of the Merger
(including any adjournment or postponement, the "Company
Meeting"; and each of the Parent Meeting and the Company
Meeting, a "Meeting"), respectively, as promptly as practicable
after the Registration Statement is declared effective. The
Board of Directors of each of Parent and the Company shall
(subject in the case of the Company to compliance with its
fiduciary duties as advised by counsel) recommend such
approval, and each of Parent and the Company shall take all
reasonable lawful action to solicit such approval by its
respective stockholders.
6.03. Registration Statement. (a) Each of Parent
and the Company agrees to cooperate in the preparation of a
registration statement on Form S-4 (the "Registration
Statement") to be filed by Parent with the SEC in connection
with the issuance of Parent Stock in the Merger (including the
joint proxy statement and prospectus and other proxy
solicitation materials of Parent and the Company constituting a
part thereof (the "Joint Proxy Statement") and all related
documents). Provided the Company has cooperated as required
above, Parent agrees to file the Registration Statement with
the SEC as promptly as practicable, but in no event later than
45 days after the date of this Agreement. Each of the Company
and Parent agrees to use all reasonable efforts to cause the
Registration Statement to be declared effective under the
Securities Act as promptly as reasonably practicable after
filing thereof. Parent also agrees to use all reasonable
efforts to obtain all necessary state securities law or "Blue
Sky" permits and approvals required to carry out the
transactions contemplated by this Agreement. The Company
agrees to furnish to Parent all information concerning the
Company, its Subsidiaries, officers, directors and stockholders
as may be reasonably requested in connection with the
foregoing.
(b) Each of the Company and Parent agrees, as to
itself and its Subsidiaries, that none of the information
supplied or to be supplied by it for inclusion or incorporation
by reference in (i) the Registration Statement will, at the
time the Registration Statement and each amendment or
supplement thereto, if any, becomes effective under the
Securities Act, contain any untrue statement of a material fact
or omit to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading, and (ii) the Joint Proxy Statement and any
amendment or supplement thereto will, at the date of mailing to
stockholders and at the times of the Parent Meeting and the
Company Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading or any statement which, in the light of the
circumstances under which such statement is made, will be false
or misleading with respect to any material fact, or which will
omit to state any material fact necessary in order to make the
statements therein not false or misleading or necessary to
correct any statement in any earlier statement in the Joint
Proxy Statement or any amendment or supplement thereto. Each
of the Company and Parent further agrees that if it shall
become aware prior to the Effective Date of any information
that would cause any of the statements in the Joint Proxy
Statement to be false or misleading with respect to any
material fact, or to omit to state any material fact necessary
to make the statements therein not false or misleading, to
promptly inform the other party thereof and to take the
necessary steps to correct the Joint Proxy Statement.
(c) In the case of Parent, Parent will advise the
Company, promptly after Parent receives notice thereof, of the
time when the Registration Statement has become effective or
any supplement or amendment has been filed, of the issuance of
any stop order or the suspension of the qualification of the
Parent Stock for offering or sale in any jurisdiction, of the
initiation or threat of any proceeding for any such purpose, or
of any request by the SEC for the amendment or supplement of
the Registration Statement or for additional information.
6.04. Press Releases. It will not, without the
prior approval of the other parties, issue any press release or
written statement for general circulation relating to the
transactions contemplated hereby, except as otherwise required
by applicable law or regulation.
6.05. Access; Information. (a) Upon reasonable
notice and subject to applicable laws relating to the exchange
of information, it shall afford the other parties and their
officers, employees, counsel, accountants and other authorized
representatives, access, during normal business hours
throughout the period prior to the Effective Date, to all of
its properties, books, contracts, commitments and records and,
during such period, it shall furnish promptly to such other
parties and representatives (i) a copy of each material report,
schedule and other document filed by it pursuant to the
requirements of federal or state securities or banking laws,
and (ii) all other information concerning the business,
properties and personnel of it as the other may reasonably
request.
(b) It will not use any information obtained
pursuant to this Section 6.05 for any purpose unrelated to the
consummation of the transactions contemplated by this Agreement
and, if this Agreement is terminated, will hold all information
and documents obtained pursuant to this paragraph in confidence
(as provided in, and subject to the provisions of, the
Confidentiality Agreement). No investigation by either party
of the business and affairs of another shall affect or be
deemed to modify or waive any representation, warranty,
covenant or agreement in this Agreement, or the conditions to
either party's obligation to consummate the transactions
contemplated by this Agreement.
6.06. Acquisition Proposals. Without the prior
written consent of Parent, the Company shall not, and shall
cause its Subsidiaries and its and its Subsidiaries' officers,
directors, agents, advisors and affiliates not to, solicit or
encourage inquiries or proposals with respect to, or engage in
any negotiations concerning, or provide any confidential
information to, or have any discussions with, any such person
relating to, any tender offer or exchange offer for, or any
proposal for the acquisition of a substantial equity interest
in, or a substantial portion of the assets of, or any merger or
consolidation with, the Company or any of its Significant
Subsidiaries; provided, however, that the Board of Directors of
the Company, on behalf of the Company, may furnish or cause to
be furnished information and may participate in such
discussions and negotiations directly or through its
representatives if such Board of Directors, after having
consulted with and considered the advice of outside counsel
reasonably acceptable to Parent, has determined that the
failure to provide such information or participate in such
negotiations and discussions would cause the members of such
Board of Directors to breach their fiduciary duties under
applicable laws. The Company shall promptly (within 24 hours)
advise Parent of its receipt of any such proposal or inquiry,
of the substance thereof, and of the identity of the person
making such proposal or inquiry.
6.07. Affiliate Agreements. (a) Not later than the
15th day prior to the mailing of the Joint Proxy Statement, the
Company shall deliver to Parent, a schedule of each person
that, to the best of its knowledge, is or is reasonably likely
to be, as of the date of the relevant Meeting, deemed to be an
"affiliate" of it (each, an "Affiliate") as that term is used
in Rule 145 under the Securities Act.
(b) The Company shall use its best efforts to cause
each person who may be deemed to be an Affiliate of the Company
to execute and deliver to the Company and Parent on or before
the date of mailing of the Joint Proxy Statement an agreement
in the form attached hereto as Exhibit C.
6.08. Takeover Laws. No party shall take any action
that would cause the transactions contemplated by this
Agreement to be subject to requirements imposed by any Takeover
Law and each of them shall take all necessary steps within its
control to exempt (or ensure the continued exemption of) the
transactions contemplated by this Agreement from, or if
necessary challenge the validity or applicability of, any
applicable Takeover Law, as now or hereafter in effect,
including, without limitation, Section 459 of the GBCL and
Takeover Laws of any other State that purport to apply to this
Agreement or the transactions contemplated hereby or thereby.
6.09. No Rights Triggered. Each of Company and
Parent shall take all steps necessary to ensure that the
entering into of this Agreement and the consummation of the
transactions contemplated hereby and any other action or
combination of actions, or any other transactions contemplated
hereby, do not and will not result in the grant of any rights
to any person (i) under its articles or certificate of
incorporation or by-laws, (ii) under any material agreement to
which it or any of its Subsidiaries is a party (including
without limitation, in the case of the Company, the Company
Rights Agreement) or (iii) in the case of the Company, to
exercise or receive certificates for Rights, or acquire any
property in respect of Rights, under the Company Rights
Agreement.
6.10. Shares Listed. In the case of Parent, Parent
shall use its best efforts to list, prior to the Effective
Date, on the NYSE (or, in the case of Company Preferred Stock,
NASDAQ), upon official notice of issuance, the shares of Parent
Stock to be issued to the holders of Company Stock in the
Merger (but only to the extent that the corresponding class or
series of Company Stock were listed on NASDAQ immediately prior
to the Effective Time).
6.11. Regulatory Applications. Parent and the
Company and their respective Subsidiaries shall cooperate and
use their respective best efforts (i) to prepare all
documentation, to effect all filings and to obtain all permits,
consents, approvals and authorizations of all third parties and
Regulatory Authorities necessary to consummate the transactions
contemplated by this Agreement, including, without limitation,
any such approvals or authorizations required by the Federal
Reserve Board and the regulatory authorities of the States in
which the Company and its Subsidiaries operate, and (ii) to
cause the Merger to be consummated as expeditiously as
practicable. Provided the Company has cooperated as required
above, Parent agrees to file the requisite applications to be
filed by it with the Federal Reserve Board and the regulatory
authorities of the States in which the Company and its
Subsidiaries operate as promptly as practicable, but in no
event later than 45 days after the date of this Agreement.
Each of Parent and the Company shall have the right to review
in advance, and to the extent practicable each will consult
with the other, in each case subject to applicable laws
relating to the exchange of information, with respect to, all
material written information submitted to any third party or
any Regulatory Authorities in connection with the transactions
contemplated by this Agreement. In exercising the foregoing
right, each of the parties hereto agrees to act reasonably and
as promptly as practicable. Each party hereto agrees that it
will consult with the other parties hereto with respect to the
obtaining of all material permits, consents, approvals and
authorizations of all third parties and Regulatory Authorities
necessary or advisable to consummate the transactions
contemplated by this Agreement and each party will keep the
other parties apprised of the status of material matters
relating to completion of the transactions contemplated hereby.
(2) Each party agrees, upon request, to furnish the
other parties with all information concerning itself, its
Subsidiaries, directors, officers and stockholders and such
other matters as may be reasonably necessary or advisable in
connection with any filing, notice or application made by or on
behalf of such other party or any of its Subsidiaries to any
Regulatory Authority.
6.12. Indemnification. (a) Following the Effective
Date and without limitation as to time, Parent shall indemnify,
defend and hold harmless the present and former directors,
officers and employees of the Company and its Subsidiaries
(each, an "Indemnified Party") against all costs or expenses
(including reasonable attorneys' fees), judgments, fines,
losses, claims, damages or liabilities (collectively, "Costs")
incurred in connection with any claim, action, suit, proceeding
or investigation, whether civil, criminal, administrative or
investigative, arising out of actions or omissions occurring at
or prior to the Effective Time (including, without limitation,
the transactions contemplated by this Agreement) to the fullest
extent that the Company is permitted to indemnify such persons
under the laws of the State of Missouri and the Company's
Restated Articles of Incorporation and By-laws as in effect on
the date hereof (and Parent shall also advance expenses
(including expenses constituting Costs described in Section
6.12(e)) as incurred to the fullest extent permitted under
applicable law; provided that any determination required to be
made with respect to whether an officer's or director's conduct
complies with the standards set forth under Missouri law and
such articles of incorporation and by-laws shall be made by
independent counsel (which shall not be counsel that provides
material services to Parent) selected by Parent and reasonably
acceptable to such officer or director; and provided, further,
that in the absence of applicable Missouri judicial precedent
to the contrary, such counsel, in making such determination,
shall presume such officer's or director's conduct complied
with such standard and Parent shall have the burden to
demonstrate that such officer's or director's conduct failed to
comply with such standard.
(b) Parent shall maintain the Company's existing
directors' and officers' liability insurance policy (or a
policy providing comparable coverage amount on terms no less
favorable to the covered persons, including Parent's existing
policy if it meets the foregoing standard) covering persons who
are currently covered by such insurance for a period of six
years after the Effective Date.
(c) Any Indemnified Party wishing to claim
indemnification under Section 6.12(a), upon learning of any
claim, action, suit, proceeding or investigation described
above, shall promptly notify Parent thereof; provided that the
failure so to notify shall not affect the obligations of Parent
under Section 6.12(a) unless and to the extent such failure
materially increases Parent's liability under such subsection
(a).
(d) If Parent or any of its successors or assigns
shall consolidate with or merge into any other entity and shall
not be the continuing or surviving entity of such consolidation
or merger or shall transfer all or substantially all of its
assets to any entity, then and in each case, proper provision
shall be made so that the successors and assigns of Parent
shall assume the obligations set forth in this Section 6.12.
(e) Parent shall pay all reasonable Costs, including
attorneys' fees, that may be incurred by any Indemnified Party
in enforcing the indemnity and other obligations provided for
in this Section 6.12. The rights of each Indemnified Party
hereunder shall be in addition to any other rights such
Indemnified Party may have under applicable law.
6.13. Benefit Plans. (i) Until the transition to
Parent's benefit plans as set forth below, Parent shall cause
the Surviving Corporation and its Subsidiaries to provide
employees of the Company and its Subsidiaries who become
employees of the Surviving Corporation and its Subsidiaries
with compensation and employee benefit plans, programs,
arrangements and other perquisites (including, but not limited
to, "employee benefit plans" within the meaning of section 3(3)
of ERISA) ("Employee Benefit Plans") that are, in the
aggregate, substantially the same as the compensation and
Employee Benefit Plans provided to such individuals by the
Company immediately prior to the Effective Date; provided,
however, that for at least a one-year period, Parent shall
cause the Surviving Corporation and its Subsidiaries to
continue the Company's severance benefits, as disclosed in the
Company's Disclosure Schedule, with respect to all employees of
the Company and its Subsidiaries who become employees of the
Surviving Corporation or its Subsidiaries. Promptly following
the Effective Time, Parent shall cause the Surviving
Corporation and its Subsidiaries to provide Company employees
who are employees thereof with compensation and Employee
Benefit Plans that are substantially the same as the
compensation and Employee Benefit Plans provided to similarly
situated employees of the Surviving Corporation or its
Subsidiaries who were not employees of the Company; provided,
however, that employees of the Company shall not be required to
satisfy any additional copayment or other eligibility
requirements in connection with such transition of Employee
Benefit Plans. For the purpose of determining eligibility to
participate in Employee Benefit Plans, eligibility for benefit
forms and subsidies and the vesting of benefits under such
Employee Benefit Plans (including, but not limited to, any
pension, severance, 401(k), vacation and sick pay), and for
purposes of accrual of benefits under any severance, sick
leave, vacation and other similar Employee Benefit Plans,
Parent shall give effect to years of service (and for purposes
of qualified and nonqualified pension plans, prior earnings)
with the Company or its Subsidiaries, as the case may be, as if
they were with Parent or its Subsidiaries. For a period of one
year after the Effective Date, Parent shall cause the Surviving
Corporation and its Subsidiaries to continue substantially the
same retiree benefits to all retirees of the Company and its
Subsidiaries as well as all employees of the Company and its
Subsidiaries who become retirees during the one-year period.
Parent also shall cause the Surviving Corporation and its
Subsidiaries to assume and agree to perform the Company's
obligations under all employment, severance, consulting and
other compensation contracts as disclosed in the Company
Disclosure Schedule, including without limitation the Company
Change in Control Severance Plan, between the Company or any of
its Subsidiaries and any current or former director, officer or
employee thereof. Parent shall give fair consideration to the
promotion, retention, firing, and other terms and conditions of
employment of all employees of the Company and its Subsidiaries
who become employees thereof. Furthermore, Parent will offer
to enter into executive compensation arrangements with certain
Company executives on terms to be set forth in separate letter
agreements.
6.14. Certain Director And Officer Positions. (a)
Parent agrees to cause five (5) persons designated by the
Company willing so to serve and reasonably satisfactory to
Parent ("Company Directors"), which shall include Mr. Andrew B.
Craig, III, to be elected or appointed as directors of Parent
at, or as promptly as practicable after, the Effective Time.
At the first annual meeting of stockholders of Parent
subsequent to the Effective Time, Parent shall take all
corporate action necessary to, and shall, renominate each such
person, including Mr. Andrew B. Craig, III, for election as
directors of Parent and shall recommend that the Parent
stockholders vote for the election of such individuals as
directors.
(b) Parent agrees to cause Mr. Andrew B. Craig, III
to be elected or appointed as a member of the Executive
Committee of the Board of Directors of Parent at, or as
promptly as practicable after, the Effective Time.
(c) At the Effective Time, Mr. Andrew B. Craig, III
shall be Chairman of the Board of Directors of Parent for a
term extending through one year from the Effective Date.
6.15. Notification Of Certain Matters. Each of the
Company and Parent shall give prompt notice to the other of any
fact, event or circumstance known to it that (i) is reasonably
likely, individually or taken together with all other facts,
events and circumstances known to it, to result in any Material
Adverse Effect with respect to it or (ii) would cause or
constitute a material breach of any of its representations,
warranties, covenants or agreements contained herein.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
The obligations of each of the parties to consummate
the Merger is conditioned upon the satisfaction at or prior to
the Effective Time of each of the following:
7.01. Shareholder Vote. Approval of the Plan of
Merger contained in this Agreement by the requisite vote of the
stockholders of the Company and of Parent, respectively.
7.02. Regulatory Approvals. All regulatory
approvals required to consummate the transactions contemplated
hereby, including, without limitation, those specified in
Section 5.03(r), shall have been obtained and shall remain in
full force and effect and all statutory waiting periods in
respect thereof shall have expired. No such approvals shall
contain any conditions or restrictions which the Board of
Directors of either Parent or the Company reasonably determines
in good faith will have a Material Adverse Effect on Parent and
its Subsidiaries (including the Surviving Corporation and its
Subsidiaries) taken as a whole. For purposes of this
paragraph, a divestiture required as a condition to any
regulatory approval shall not be deemed to have a Material
Adverse Effect if such divestiture is consistent with
Department of Justice and Federal Reserve Board guidelines,
policies and practices regarding mergers of bank holding
companies that have been utilized in transactions that have
recently been reviewed prior to the date of this Agreement.
7.03. Third Party Consents. All consents or
approvals of all persons (other than Regulatory Authorities)
required for the consummation of the Merger shall have been
obtained and shall be in full force and effect, unless the
failure to obtain any such consent or approval is not
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on the Company or Parent.
7.04. No Injunction, Etc. No order, decree or
injunction of any court or agency of competent jurisdiction
shall be in effect, and no law, statute or regulation shall
have been enacted or adopted, that enjoins, prohibits or makes
illegal consummation of any of the transactions contemplated
hereby.
7.05. Representations, Warranties And Covenants Of
Parent. In the case of the Company's obligations: (i) each of
the representations and warranties contained herein of Parent
shall be true and correct as of the date of this Agreement and
upon the Effective Date with the same effect as though all such
representations and warranties had been made on the Effective
Date, except for any such representations and warranties made
as of a specified date, which shall be true and correct as of
such date, in any case subject to the standard set forth in
Section 5.02, (ii) each and all of the agreements and covenants
of Parent to be performed and complied with pursuant to this
Agreement on or prior to the Effective Date shall have been
duly performed and complied with in all material respects, and
(iii) the Company shall have received a certificate signed by
the Chief Financial Officer of Parent, dated the Effective
Date, to the effect set forth in clauses (i) and (ii) of this
Section 7.05.
7.06. Representations, Warranties And Covenants Of
The Company. In the case of Parent's obligations: (i) each of
the representations and warranties contained herein of the
Company shall be true and correct as of the date of this
Agreement and upon the Effective Date with the same effect as
though all such representations and warranties had been made on
the Effective Date, except for any such representations and
warranties made as of a specified date, which shall be true and
correct as of such date, in any case subject to the standard
set forth in Section 5.02, (ii) each and all of the agreements
and covenants of the Company to be performed and complied with
pursuant to this Agreement on or prior to the Effective Date
shall have been duly performed and complied with in all
material respects, and (iii) Parent shall have received a
certificate signed by the Chief Financial Officer of the
Company, dated the Effective Date, to the effect set forth in
clauses (i) and (ii) of this Section 7.06.
7.07. Effective Registration Statement. The
Registration Statement shall have become effective and no stop
order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that
purpose shall have been initiated or threatened by the SEC or
any other Regulatory Authority.
7.08. Tax Opinion. Parent and the Company shall
have received an opinion from Wachtell, Lipton, Rosen & Katz,
Cleary, Gottlieb, Steen & Hamilton or such other tax counsel as
is reasonably acceptable to the Company and Parent, dated as of
the Effective Time, substantially to the effect that, on the
basis of the facts, representations and assumptions set forth
in such opinions which are consistent with the state of facts
existing at the Effective Time, the Merger will be treated for
Federal income tax purposes as a reorganization within the
meaning of Section 368(a) of the Code and that accordingly:
(i) No gain or loss will be recognized by Parent,
the Company or Merger Sub as a result of the Merger;
(ii) No gain or loss will be recognized by the
stockholders of the Company who exchange their Company
Stock solely for Parent Stock pursuant to the Merger
(except with respect to cash received in lieu of a
fractional share interest in Parent Stock); and
(iii) The tax basis of the Parent Stock received by
stockholders who exchange all of their Company Stock
solely for Parent Stock in the Merger will be the same as
the tax basis of the Company Stock surrendered in exchange
therefor (reduced by any amount allocable to a fractional
share interest for which cash is received).
In rendering such opinion, such counsel may require
and rely upon representations and covenants including those
contained in certificates of officers of Parent, the Company
and Merger Sub and others.
7.09. Articles Of Amendment. The Articles of
Amendment shall have become effective in accordance with the
North Carolina Business Corporation Act.
7.10. NYSE Listing. The shares of Parent Stock
issuable pursuant to this Agreement shall have been approved
for listing on the NYSE (or, in the case of Company Preferred
Stock, NASDAQ) (but only to the extent that the corresponding
class or series of Company Stock were listed on NASDAQ
immediately prior to the Effective Time), subject to official
notice of issuance.
7.11. Company Rights Agreement. There shall exist
no "Shares Acquisition Date" or "Distribution Date" (as each of
such terms is defined in the Company Rights Agreement).
It is specifically provided, however, that a failure to satisfy
any of the conditions set forth in Section 7.06 or 7.11 shall
only constitute conditions if asserted by Parent, and a failure
to satisfy the condition set forth in Section 7.05 shall only
constitute a condition if asserted by the Company.
ARTICLE VIII
TERMINATION
8.01. Termination. This Agreement may be
terminated, and the Merger may be abandoned:
(a) Mutual Consent. At any time prior to the
Effective Time, by the mutual consent of Parent and the
Company, if the Board of Directors of each so determines by
vote of a majority of the members of its entire Board.
(b) Breach. At any time prior to the Effective
Time, by Parent or the Company, if its Board of Directors so
determines by vote of a majority of the members of its entire
Board, in the event of either: (i) a breach by the other party
of any representation or warranty contained herein (subject to
the standard set forth in Section 5.02), which breach cannot be
or has not been cured within 30 days after the giving of
written notice to the breaching party of such breach; or (ii) a
material breach by the other party of any of the covenants or
agreements contained herein, which breach cannot be or has not
been cured within 30 days after the giving of written notice to
the breaching party of such breach.
(c) Delay. At any time prior to the Effective Time,
by Parent or the Company, if its Board of Directors so
determines by vote of a majority of the members of its entire
Board, in the event that the Merger is not consummated by
September 1, 1997, except to the extent that the failure of the
Merger then to be consummated arises out of or results from the
knowing action or inaction of the party seeking to terminate
pursuant to this Section 8.01(c).
(d) No Approval. By the Company or Parent, if its
Board of Directors so determines by a vote of a majority of the
members of its entire Board, in the event (i) the approval of
the Federal Reserve Board required for consummation of the
Merger and the other transactions contemplated by the Merger
shall have been denied by final nonappealable action of such
Regulatory Authority or (ii) any stockholder approval required
by Section 7.01 herein is not obtained at the Company Meeting
or the Parent Meeting.
(e) Possible Adjustment. By the Company, if its
Board of Directors so determines by a vote of a majority of the
members of its entire Board, at any time during the ten-day
period commencing two days after the Determination Date, if
either (x) both of the following conditions are satisfied:
(i) the Average Closing Price shall be less than
$79.26; and
(ii) (A) the number obtained by dividing the
Average Closing Price by the Starting Price (such number being
referred to herein as the "Parent Ratio") shall be less than
(B) the number obtained by dividing the Average Index Price by
the Index Price on the Starting Date and subtracting .15 from
the quotient in this clause (x)(ii)(B) (such number being
referred to herein as the "Index Ratio");
or (y) the Average Closing Price shall be less than $74.60;
subject, however, to the following four sentences. If the
Company elects to exercise its termination right pursuant to
the immediately preceding sentence, it shall give prompt
written notice to Parent which notice shall specify which of
clause (x) or (y) is applicable (or if both would be
applicable, which clause is being invoked); provided that such
notice of election to terminate may be withdrawn at any time
within the aforementioned ten-day period. During the five-day
period commencing with its receipt of such notice, Parent shall
have the option in the case of a failure to satisfy the
condition in clause (x), of adjusting the Exchange Ratio to
equal the lesser of (i) a number equal to a quotient (rounded
to the nearest one-thousandth), the numerator of which is the
product of $79.26 and the Exchange Ratio (as then in effect)
and the denominator of which is the Average Closing Price, and
(ii) a number equal to a quotient (rounded to the nearest one-
thousandth), the numerator of which is the Index Ratio
multiplied by the Exchange Ratio (as then in effect) and the
denominator of which is the Parent Ratio. During such five-day
period, Parent shall have the option, in the case of a failure
to satisfy the condition in clause (y), to elect to increase
the Exchange Ratio to equal a number equal to a quotient
(rounded to the nearest one-thousandth), the numerator of which
is the product of $74.60 and the Exchange Ratio (as then in
effect) and the denominator of which is the Average Closing
Price. If Parent makes an election contemplated by either of
the two preceding sentences within such five-day period, it
shall give prompt written notice to the Company of such
election and the revised Exchange Ratio, whereupon no
termination shall have occurred pursuant to this Section
8.01(e) 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 8.01(e).
For purposes of this Section 8.01(e), the following
terms shall have the meanings indicated:
"Average Closing Price" means the average of the
daily last sale prices of Parent Common Stock as reported on
the NYSE Composite Transactions reporting system (as reported
in The Wall Street Journal or, if not reported therein, in
another mutually agreed upon authoritative source) for the ten
consecutive full trading days in which such shares are traded
on the NYSE ending at the close of trading on the Determination
Date.
"Average Index Price" means the average of the Index
Prices for the ten consecutive full NYSE trading days ending at
the close of trading on the Determination Date.
"Determination Date" means the date on which the
approval of the Federal Reserve Board required for consummation
of the Merger shall be received.
"Index Group" means the group of each of the 15 bank
holding companies listed below, the common stock of all of
which shall be publicly traded and as to which there shall not
have been, since the Starting Date and before the Determination
Date, any public announcement of a proposal for such company to
be acquired or for such company to acquire another company or
companies in transactions with a value exceeding 25% of the
acquiror's market capitalization. In the event that the common
stock of any such company ceases to be publicly traded or such
an announcement is made, such company will be removed from the
Index Group, and the weights (which have been determined based
on the number of outstanding shares of common stock)
redistributed proportionately for purposes of determining the
Index Price. The 15 bank holding companies and the weights
attributed to them are as follows:
Bank Holding Company Weighting
Citicorp 15.8%
Chase Manhattan Corp. 13.2
BankAmerica Corporation 11.3
Wells Fargo & Company 9.4
First Union Corporation 7.2
Banc One Corporation 6.5
Norwest Corporation 5.5
First Chicago NBD Corporation 5.4
Fleet Financial Group, Inc. 4.4
PNC Bank Corp. 4.2
Bank of New York Company, Inc. 4.2
KeyCorp 3.6
SunTrust Banks, Inc. 3.4
Wachovia Corporation 3.0
Mellon Bank Corporation 2.9
Total 100.0%
"Index Price" on a given date means the weighted
average (weighted in accordance with the factors listed above)
of the closing prices on such date of the companies composing
the Index Group.
"Starting Date" means the last full day on which the
NYSE was open for trading prior to the execution of this
Agreement.
"Starting Price" shall mean the last sale price per
share of Parent Common Stock on the Starting Date, as reported
by the NYSE Composite Transactions reporting system (as
reported in The Wall Street Journal or, if not reported
therein, in another mutually agreed upon authoritative source).
If any company belonging to the Index Group or Parent
declares or effects a stock dividend, reclassification,
recapitalization, split-up, combination, exchange of shares or
similar transaction between the Starting Date and the
Determination Date, the prices for the common stock of such
company or Parent shall be appropriately adjusted for the
purposes of applying this Section 8.01(e).
8.02. Effect Of Termination And Abandonment. In the
event of termination of this Agreement and the abandonment of
the Merger pursuant to this Article VIII, no party to this
Agreement shall have any liability or further obligation to any
other party hereunder except (i) as set forth in Section 9.01
and (ii) that termination will not relieve a breaching party
from liability for any willful breach of this Agreement giving
rise to such termination.
ARTICLE IX
MISCELLANEOUS
9.01. Survival. All representations, warranties,
agreements and covenants contained in this Agreement shall not
survive the Effective Time or termination of this Agreement if
this Agreement is terminated prior to the Effective Time;
provided, however, if the Effective Time occurs, the agreements
of the parties in Sections 6.12, 6.13, 6.14, 9.01, 9.04 and
9.08 shall survive the Effective Time, and if this Agreement is
terminated prior to the Effective Time, the agreements of the
parties in Sections 6.05(b), 8.02, 9.01, 9.02, 9.04, 9.05,
9.06, 9.07 and 9.08, shall survive such termination.
9.02. Waiver; Amendment. Prior to the Effective
Time, any provision of this Agreement may be (i) waived by the
party benefited by the provision, or (ii) amended or modified
at any time, by an agreement in writing among the parties
hereto approved by their respective Boards of Directors and
executed in the same manner as this Agreement, except that,
after the Company Meeting the consideration to be received by
the stockholders of the Company for each share of Company Stock
shall not thereby be decreased. Prior to submission of this
Agreement for approval by the stockholders of the Company,
Parent shall supplement this Agreement by specifying the name
of Merger Sub and may make such amendments as are permitted by
Section 2.01 and the Company's Board of Directors shall approve
the supplements and amendments specified in this sentence.
9.03. Counterparts. This Agreement may be executed
in one or more counterparts, each of which shall be deemed to
constitute an original.
9.04. Governing Law. This Agreement shall be
governed by, and interpreted in accordance with, the laws of
the State of Missouri, without regard to the conflict of law
principles thereof (except to the extent that mandatory
provisions of Federal law govern).
9.05. Expenses. Each party hereto will bear all
expenses incurred by it in connection with this Agreement and
the transactions contemplated hereby, except that printing
expenses and SEC registration fees shall be shared equally
between the Company and Parent.
9.06. Confidentiality. Each of the parties hereto
and their respective agents, attorneys and accountants will
maintain the confidentiality of all information provided in
connection herewith in accordance, and subject to the
limitations of, the Confidentiality Agreement.
9.07. Notices. All notices, requests and other
communications hereunder to a party shall be in writing and
shall be deemed given if personally delivered, telecopied (with
confirmation) or mailed by registered or certified mail (return
receipt requested) to such party at its address set forth below
or such other address as such party may specify by notice to
the parties hereto.
If to Parent, to:
NationsBank Corporation
NationsBank Corporate Center
100 North Tryon Center
Charlotte, North Carolina 28255
Attention: Hugh L. McColl, Jr.
Chairman and Chief Executive Officer
With copies to:
Paul J. Polking, Esq.
Executive Vice President and General Counsel
NationsBank Corporation
NationsBank Corporate Center
Legal Department
100 North Tryon Center
Charlotte, North Carolina 28255
and:
Edward D. Herlihy, Esq.
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
If to the Company, to:
Boatmen's Bancshares, Inc.
One Boatmen's Plaza
800 Market Street
P.O. Box 236
St. Louis, Missouri 63166-0236
Attention: Andrew B. Craig, III
Chairman and Chief Executive Officer
With copies to:
John C. Murphy, Jr., Esq.
Cleary, Gottlieb, Steen & Hamilton
1752 N Street, N.W.
Washington, D.C. 20036
and:
Thomas C. Erb, Esq.
Lewis, Rice & Fingersh
500 N. Broadway, Suite 2000
St. Louis, Missouri 63102-2147
9.08. Entire Understanding; No Third Party
Beneficiaries. Except for the Confidentiality Agreement, which
shall remain in effect, this Agreement represents the entire
understanding of the parties hereto with reference to the
transactions contemplated hereby and thereby and supersede any
and all other oral or written agreements heretofore made.
Except for Sections 6.12 and 6.14, nothing in this Agreement
expressed or implied, is intended to confer upon any person,
other than the parties hereto or their respective successors,
any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
9.09. Headings. The headings contained in this
Agreement are for reference purposes only and are not part of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused
this instrument to be executed in counterparts by their duly
authorized officers, all as of the day and year first above
written.
BOATMEN'S BANCSHARES, INC.
By: /s/ Andrew B. Craig, III
Andrew B. Craig, III
Chairman and Chief
Executive Officer
NATIONSBANK CORPORATION
By: /s/ Hugh L. McColl, Jr.
Hugh L. McColl, Jr.
Chairman and Chief
Executive Officer
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