<PAGE> 1
Filed Pursuant to Rule 424(b)(3)
Registration No. 33-56269
[UNION PLANTERS CORPORATION LETTERHEAD]
November 10, 1994
Dear Fellow Shareholder:
You are cordially invited to attend a Special Meeting of Shareholders
(the "UPC Special Meeting") of Union Planters Corporation ("UPC") on Wednesday,
December 28, 1994. The UPC Special Meeting will be held at the Union Planters
Administrative Center, 7130 Goodlett Farms Parkway, Memphis, Tennessee 38018,
commencing at 1:00 p.m., Central Standard Time.
At the UPC Special Meeting, shareholders will be asked to approve and
adopt an Agreement and Plan of Reorganization and related Plan of Merger
(collectively, the "Reorganization Agreement"), pursuant to which UPC would
acquire Grenada Sunburst System Corporation ("GSSC") through the merger of a
wholly owned subsidiary of UPC with and into GSSC (the "Merger"). Upon
consummation of the Merger, each outstanding share of GSSC Common Stock would
be converted exclusively into the right to receive 1.4530 shares of UPC Common
Stock (the "Exchange Ratio"). A cash payment would be made in settlement of a
GSSC stockholder's remaining fractional share (if any) of UPC Common Stock.
Approval of the Reorganization Agreement requires the affirmative votes of the
holders of at least a majority of the outstanding shares of UPC Common Stock
present in person or by proxy and entitled to vote at the UPC Special Meeting.
THE BOARD OF DIRECTORS OF UNION PLANTERS CORPORATION HAS CAREFULLY
CONSIDERED AND UNANIMOUSLY APPROVED THE TERMS OF THE REORGANIZATION AGREEMENT
AS BEING IN THE BEST INTEREST OF UNION PLANTERS CORPORATION AND ITS
SHAREHOLDERS. THE BOARD OF DIRECTORS OF UNION PLANTERS CORPORATION RECOMMENDS
THAT THE SHAREHOLDERS VOTE FOR THE PROPOSAL TO APPROVE THE REORGANIZATION
AGREEMENT.
The accompanying Joint Proxy Statement/Prospectus and related proxy
materials set forth, or incorporate by reference, information, including
financial data, relating to GSSC and UPC and describe the terms and conditions
of the proposed Merger. The Board of Directors of UPC requests that the
shareholders carefully review these materials before completing the enclosed
proxy card.
APPROVAL OF THE REORGANIZATION AGREEMENT IS A CONDITION TO THE
CONSUMMATION OF THE MERGER. Accordingly, it is important that your shares be
represented at the UPC Special Meeting, whether or not you plan to attend the
UPC Special Meeting in person. Please complete, date and sign the enclosed
proxy card and return it in the accompanying envelope which requires no postage
if mailed in the United States. If you later decide to attend the UPC Special
Meeting and vote in person, or if you wish to revoke your proxy for any reason
prior to the vote at the UPC Special Meeting, you may do so and your proxy will
have no further effect.
<PAGE> 2
Should you require assistance in completing your proxy card or if you
have questions about the voting procedure or the accompanying Joint Proxy
Statement/Prospectus, please feel free to contact Gary A. Simanson, Assistant
Secretary of UPC, at (901) 383-6590.
Sincerely,
BENJAMIN W. RAWLINS, JR.
Chairman of the Board and Chief Executive Officer
November 10, 1994
Memphis, Tennessee
2
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UNION PLANTERS CORPORATION
7130 GOODLETT FARMS PARKWAY
MEMPHIS, TENNESSEE 38018
______________________________________
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD
DECEMBER 28, 1994
______________________________________
TO THE SHAREHOLDERS OF UNION PLANTERS CORPORATION
NOTICE IS HEREBY GIVEN that a Special Meeting of the Shareholders (the
"UPC Special Meeting") of Union Planters Corporation ("UPC") will be held at
the Union Planters Administrative Center, 7130 Goodlett Farms Parkway, Memphis,
Tennessee 38018, on Wednesday, December 28, 1994, at 1:00 p.m., Central
Standard Time, for the following purposes:
(1) To consider and vote upon a proposal to approve an Agreement
and Plan of Reorganization and the related Plan of Merger (collectively, the
"Reorganization Agreement") providing for the acquisition of Grenada Sunburst
System Corporation ("GSSC") by UPC through the merger of a wholly owned
subsidiary of UPC with and into GSSC (the "Merger") whereby, upon consummation
of the Merger, each share of GSSC Common Stock would be converted exclusively
into the right to receive 1.4530 shares of UPC Common Stock (the "Exchange
Ratio"). A cash payment would be made in settlement of a GSSC stockholder's
remaining fractional share (if any) of UPC Common Stock.
(2) To transact such other business as may properly come before
the UPC Special Meeting or any adjournments or postponements thereof.
Pursuant to the Bylaws of UPC, the UPC Board of Directors has fixed
the close of business on October 27, 1994, as the record date for determination
of shareholders entitled to notice of and to vote at the UPC Special Meeting
and at any adjournments or postponements thereof.
The affirmative votes of the holders of a majority of the outstanding
shares of UPC Common Stock present in person or by proxy and entitled to vote
at the UPC Special Meeting are required to approve the proposal to adopt the
Reorganization Agreement. Accordingly, each shareholder is urged to sign the
enclosed proxy card and return it promptly to UPC.
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WHETHER OR NOT YOU EXPECT TO ATTEND THE UPC SPECIAL MEETING, PLEASE
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT IN THE
ACCOMPANYING ENVELOPE. THE PROXY MAY BE REVOKED AT ANY TIME PRIOR TO THE VOTE
AT THE UPC SPECIAL MEETING BY FOLLOWING THE PROCEDURES SET FORTH IN THE
ACCOMPANYING JOINT PROXY STATEMENT/PROSPECTUS.
BY ORDER OF THE BOARD OF DIRECTORS
J. F. Springfield
Secretary
November 10, 1994
Memphis, Tennessee
<PAGE> 5
UNION PLANTERS CORPORATION
PROXY STATEMENT
FOR
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 28, 1994
AND
PROSPECTUS
UP TO 14,750,000 SHARES OF COMMON STOCK HAVING A PAR VALUE OF $5.00 PER SHARE
______________________________
GRENADA SUNBURST SYSTEM CORPORATION
PROXY STATEMENT
FOR
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 28, 1994
_______________________________
This Prospectus of Union Planters Corporation ("UPC") relates to up to
14,750,000 shares of Common Stock, $5.00 par value, of UPC (the "UPC Common
Stock") to be issued to the stockholders of Grenada Sunburst System Corporation
("GSSC") upon consummation of the proposed merger (the "Merger") of GSSC
Acquisition Company, Inc., a newly organized, wholly owned subsidiary of UPC
("INTERIM"), with and into GSSC. The Merger would be consummated pursuant to
the terms of the Agreement and Plan of Reorganization dated July 1, 1994 (the
"Agreement and Plan of Reorganization"), by and between UPC, INTERIM, GSSC and
two wholly owned subsidiaries of GSSC, Sunburst Bank, Mississippi and Sunburst
Bank, Louisiana (collectively, the "Banks"), and the related Plan of Merger
annexed thereto as Exhibit A (the Agreement and Plan of Reorganization and the
Plan of Merger being collectively referred to herein as the "Reorganization
Agreement"). This Prospectus also serves as the Joint Proxy Statement of UPC
and of GSSC for use in connection with the separate special meetings of
shareholders or stockholders, as the case may be, of each of UPC and GSSC
(individually, such meetings are referred to herein as the "UPC Special
Meeting" and the "GSSC Special Meeting" and, collectively, as the "Special
Meetings"). The UPC Special Meeting and the GSSC Special Meeting will both be
held on December 28, 1994, and each such meeting will be held at the time and
the place and for the purposes stated in the Notice of Special Meeting of
Shareholders and the Notice of Special Meeting of Stockholders, respectively,
accompanying this Joint Proxy Statement/Prospectus.
Following consummation of the Merger, GSSC would be liquidated and
dissolved and the business and operations of the Banks would be continued as
direct wholly owned subsidiaries of UPC. Upon consummation of the Merger, each
outstanding share of GSSC Common Stock, $1.00 par value (the "GSSC Common
Stock"), would be converted exclusively into the right to receive 1.4530
shares of UPC Common Stock (the "Exchange Ratio"). A cash payment would be
made by UPC in settlement of a GSSC stockholder's remaining fractional share
(if any) of UPC Common Stock. Pursuant to the terms of the Reorganization
Agreement, the computation of the Exchange Ratio was based on the Current
Market Price Per Share (as defined below) of UPC Common Stock being within a
certain range of prices as set forth in Section 3.1(e) of the Agreement and Plan
of Reorganization. The Current Market Price Per Share of UPC Common Stock was
based on the average of the closing prices of UPC Common Stock on the New York
Stock Exchange ("NYSE") for the twenty (20) trading days next preceding the
issuance of all necessary regulatory approvals. The last necessary regulatory
approval was issued on November 7, 1994, and the Current Market Price Per Share
of UPC Common Stock was determined to be $23.462 based on the average of the
closing prices of UPC Common Stock from October 10, 1994 through November 4,
1994. See "THE MERGER -- Terms of the Merger."
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The transaction is intended to qualify as a tax-free reorganization
under the Internal Revenue Code of 1986, as amended (the "Code") (except to the
extent of the cash payment that each GSSC stockholder would receive in lieu of
such stockholder's fractional share, if any). See "THE MERGER - Certain
Federal Income Tax Consequences."
Shares of the outstanding UPC Common Stock are now, and the UPC Common
Stock to be issued in connection with the Merger will be, listed for trading on
the NYSE under the symbol "UPC." The last reported sale price of UPC Common
Stock on the NYSE on November 8, 1994, was $22.13 per share. Shares of the
outstanding GSSC Common Stock are traded on the National Association of
Securities Dealers Automated Quotation System/National Market System
("NASDAQ/NMS") under the symbol "GSSC." The last reported sale price of GSSC
Common Stock on the NASDAQ/NMS on November 8, 1994 was $30.50 per share.
All information contained in this Joint Proxy Statement/Prospectus
pertaining to UPC and its subsidiaries has been supplied by UPC, and all
information pertaining to GSSC and its subsidiaries has been supplied by GSSC.
Neither UPC nor GSSC warrants the accuracy of the information provided by the
other.
This Joint Proxy Statement/Prospectus and the accompanying proxy cards
are first being mailed to the shareholders of UPC and the stockholders of GSSC
on or about November 10, 1994.
_________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS JOINT PROXY STATEMENT/PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SECURITIES OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OBLIGATIONS
OF A BANK OR SAVINGS ASSOCIATION AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
_________________________
THE DATE OF THIS JOINT PROXY STATEMENT/PROSPECTUS IS NOVEMBER 10, 1994
<PAGE> 7
AVAILABLE INFORMATION
Both UPC and GSSC are subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith file reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at regional offices
of the Commission located at Room 1228, 75 Park Place, New York, New York 10007
and 500 West Madison Street, Chicago, Illinois 60661-2511. Copies of such
materials can be obtained by mail from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. In addition, such reports, proxy statements and other information
concerning UPC can be inspected at the offices of the NYSE, 20 Broad Street,
New York, New York 10005. Reports, proxy statements and other information
concerning GSSC can be inspected at the offices of the National Association of
Securities Dealers, Inc., 1735 K Street, Washington, D.C. 20006. UPC has filed
with the Commission a Registration Statement (No. 33-56269) on Form S-4
(together with any amendments thereto, the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act") with respect to the
shares of UPC Common Stock to be issued pursuant to the Reorganization
Agreement. This Joint Proxy Statement/Prospectus does not contain all of the
information set forth in the Registration Statement and the exhibits thereto.
Certain items were omitted in accordance with the rules and regulations of the
Commission.
For further information regarding UPC and the UPC Common Stock offered
by this Joint Proxy Statement/Prospectus, reference is made to the complete
Registration Statement, including all amendments thereto and the schedules and
exhibits and other documents filed or deemed filed as a part thereof.
Statements contained herein concerning provisions of documents are necessarily
summaries of the documents, and each statement is qualified in its entirety by
reference to the copy of the applicable document filed with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by UPC (Commission File No.
1-10160) and GSSC (Commission File No. 0-15003) with the Commission pursuant to
the Exchange Act are hereby incorporated by reference in this Joint Proxy
Statement/Prospectus:
1. UPC's Annual Report on Form 10-K for the year ended December
31, 1993;
2. UPC's Quarterly Reports on Form 10-Q dated March 31, 1994 and
June 30, 1994;
3. UPC's Current Report on Form 8-K dated October 20, 1994, which
includes preliminary third quarter 1994 operating results
(unaudited) and consolidated financial statements of UPC for
the three years ended December 31, 1993 (audited) and for the
six-month periods ended June 30, 1994 and 1993 (unaudited)
presenting the restatement of UPC's historical consolidated
financial statements to reflect consummation of recently
completed acquisitions by UPC (these financial statements
constitute the historical consolidated financial statements
of UPC effective October 20, 1994);
ii
<PAGE> 8
4. UPC's Current Report on Form 8-K dated January 19, 1989, filed
on February 1, 1989 (Commission File No. 0-6919), in
connection with UPC's designation and authorization
of its Series A Preferred Stock;
5. UPC's Current Reports on Form 8-K dated January 11, 1994,
January 20, 1994, February 8, 1994 (as amended February 23,
1994), April 14, 1994, April 15, 1994, April 28, 1994,
May 18, 1994, May 19, 1994 (as amended July 26, 1994), July 1,
1994, July 21, 1994, July 26, 1994, August 18, 1994, August
19, 1994, September 1, 1994, September 19, 1994 and September
28, 1994;
6. The description of the UPC Common Stock contained in UPC's
Registration Statement under Section 12(b) of the Exchange
Act, and any amendment or report filed for the purpose of
updating such description;
7. GSSC's Annual Report on Form 10-K for the year ended December
31, 1993;
8. GSSC's Quarterly Reports on Form 10-Q for the periods ended
March 31, 1994 and June 30, 1994;
9. GSSC's Current Reports on Form 8-K dated July 11, 1994 (as
amended August 1, 1994), September 28, 1994 and October 20,
1994; and
10. The description of GSSC Common Stock set forth in GSSC's
Post-Effective Amendment No. 1 of the Registration Statement
on Form S-1 (File No. 33-63312), including any amendment or
report filed for the purpose of updating such description.
The fact that a report has been listed above does not mean that it has
not been superseded or amended, in whole or in part, by a subsequent report.
All documents filed by UPC and GSSC with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Joint Proxy Statement/Prospectus and prior to the dates of the Special Meetings
or any adjournments or postponements thereof shall be deemed to be incorporated
by reference in this Joint Proxy Statement/Prospectus and to be a part hereof
from the dates of filing of such documents or reports. Any statement contained
in a document incorporated or deemed to be incorporated herein by reference
shall be deemed to be modified or superseded for purposes of this Joint Proxy
Statement/Prospectus to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Joint Proxy Statement/Prospectus.
THIS JOINT PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY
REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. SUCH DOCUMENTS
(OTHER THAN EXHIBITS TO SUCH DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY
INCORPORATED BY REFERENCE) ARE AVAILABLE, WITHOUT CHARGE, TO ANY PERSON,
INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS JOINT PROXY STATEMENT/PROSPECTUS
IS DELIVERED, ON WRITTEN OR ORAL REQUEST, IN THE CASE OF DOCUMENTS RELATING TO
UPC, TO UNION PLANTERS CORPORATION, P.O. BOX 387, MEMPHIS, TENNESSEE 38147
(TELEPHONE NUMBER (901) 383-6590), ATTENTION: GARY A. SIMANSON, ASSISTANT
SECRETARY AND ASSOCIATE GENERAL COUNSEL, OR, IN THE CASE OF DOCUMENTS RELATING
TO GSSC, TO GRENADA SUNBURST SYSTEM CORPORATION, 2000 GATEWAY, GRENADA,
MISSISSIPPI 38901 (TELEPHONE NUMBER (601) 226-1100), ATTENTION: EDWIN T.
COFER, SECRETARY AND
iii
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GENERAL COUNSEL. IN ORDER TO ENSURE DELIVERY OF THE DOCUMENTS PRIOR TO THE
APPLICABLE SHAREHOLDER OR STOCKHOLDER MEETING, AS THE CASE MAY BE, REQUESTS
SHOULD BE RECEIVED PRIOR TO DECEMBER 1, 1994.
UPC's Annual Report on Form 10-K for the year ended December 31, 1993
incorporates by reference specific portions of UPC's Annual Report to
Shareholders for that year (the "UPC Annual Report to Shareholders"), but does
not incorporate other portions of the UPC Annual Report to Shareholders. The
portion of the UPC Annual Report to Shareholders captioned "Letter to
Shareholders" and other portions of the UPC Annual Report to Shareholders not
specifically incorporated into UPC's Annual Report on Form 10-K are not
incorporated herein and are not a part of the Registration Statement.
GSSC's Annual Report on Form 10-K for the year ended December 31, 1993
incorporates by reference specific portions of GSSC's Annual Report to
Stockholders for that year (the "GSSC Annual Report to Stockholders"), but does
not incorporate other portions of the GSSC Annual Report to Stockholders. The
portion of the GSSC Annual Report to Stockholders captioned "Letter to
Shareholders" and other portions of the GSSC Annual Report to Stockholders not
specifically incorporated into GSSC's Annual Report on Form 10-K are not
incorporated herein and are not a part of the Registration Statement.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED HEREIN, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY
ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION. NEITHER THE DELIVERY OF THIS DOCUMENT NOR ANY DISTRIBUTION OF
SECURITIES MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF UPC OR GSSC SINCE THE DATE
HEREOF OR THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE HEREOF.
iv
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
AVAILABLE INFORMATION ii
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE ii
SUMMARY 1
Parties to the Transaction 1
The Merger 3
The Special Meetings 3
Reasons for the Merger and Recommendations of the UPC Board of Directors 4
Fairness Opinion of Stifel Nicholas 5
Reasons for the Merger and Recommendations of the GSSC Board of Directors 5
Fairness Opinion of Robinson-Humphrey 5
Effective Time of the Merger 6
Conditions; Regulatory Approvals 6
Waiver and Amendment; Termination 6
Limitation on Negotiations 7
Management After the Merger 7
Interests of Certain Persons in the Merger 7
Comparison of Shareholder's and Stockholder's Rights 8
Provisions That May Have an Anti-Takeover Effect 8
Certain Federal Income Tax Consequences 8
Accounting Treatment 8
No Shareholder's or Stockholder's Appraisal Rights 8
Market Prices of Common Stock; Dividends 9
Selected Consolidated Financial Data 11
Recent Developments Affecting UPC 18
Recent Developments Affecting GSSC 23
Equivalent and Pro Forma Per Share Data 25
Pro Forma Condensed Consolidated Financial Information 27
THE SPECIAL MEETINGS 33
The UPC Special Meeting 33
Date, Time and Place 33
Matters to be Considered at the UPC Special Meeting 33
Record Date; Vote Required 33
Voting and Revocation of Proxies 33
Solicitation of Proxies 34
The GSSC Special Meeting 34
Date, Time and Place 34
Matters to be Considered at the GSSC Special Meeting 35
Record Date; Vote Required 35
Voting and Revocation of Proxies 35
Solicitation of Proxies 36
No Shareholder's or Stockholder's Appraisal Rights 37
Reasons and Recommendations of the Boards of Directors of UPC and GSSC 37
Other Matters 37
THE MERGER 38
Background of the Merger 38
</TABLE>
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<TABLE>
<S> <C>
Reasons for the Merger and Recommendations of the Boards of Directors of UPC and GSSC 43
Reasons and Recommendations of UPC Board of Directors 43
Fairness Opinion of Stifel Nicolaus 44
Reasons and Recommendations of GSSC Board of Directors 49
Fairness Opinion of Robinson-Humphrey 51
Terms of the Merger 54
Effective Date and Effective Time of the Merger 57
Surrender of Certificates 57
Interests of Certain Persons in the Merger 58
Voting Securities and Principal Holders Thereof 59
Transactions with Management of GSSC 60
Conditions to Consummation of the Merger 60
Regulatory Approvals 63
Conduct of Business Pending the Merger 64
Payment of Dividends 65
Waiver and Amendment; Termination 65
Limitation on Negotiations 67
Management After the Merger 67
Accounting Treatment 68
Expenses 68
Certain Federal Income tax Consequences 68
Resales of UPC Common Stock 70
Comparison of Shareholder's and Stockholder's Rights 71
CERTAIN REGULATORY CONSIDERATIONS 75
General 75
Capital Adequacy 76
Prompt Corrective Action 77
Dividend Restrictions 78
Support of Subsidiary Banks 79
Transactions with Affiliates 80
FDIC Insurance Assessments 80
Other Banking Legislation 81
Regulation of GSSC and the Banks 83
DESCRIPTION OF UPC COMMON AND PREFERRED STOCK 84
UPC Common Stock 84
Preferred Stock of UPC 85
Certain Provisions That May Have an Anti-Takeover Effect 87
MANAGEMENT AND ADDITIONAL INFORMATION 89
VALIDITY OF UPC COMMON STOCK 89
EXPERTS 89
Index to Appendices
Appendix A -- Agreement and Plan of Reorganization, along with the Plan of Merger
annexed thereto as Exhibit A A-1
Appendix B -- Fairness Opinion of The Robinson-Humphrey Company, Inc. B-1
Appendix C -- Fairness Opinion of Stifel, Nicolaus & Company, Incorporated C-1
</TABLE>
vi
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SUMMARY
The following summary is not intended to be a complete description of
all material facts regarding UPC, GSSC and the matters to be considered at the
Special Meetings and is qualified in all respects by the information appearing
elsewhere or incorporated by reference in this Joint Proxy
Statement/Prospectus, the Appendices hereto and the documents referred to
herein.
PARTIES TO THE TRANSACTION
UPC. UPC is a multi-state bank holding company and savings and loan
holding company headquartered in Memphis, Tennessee. At June 30, 1994 (after
restatement for Recently Completed Acquisitions (as defined below), see
"-- Recent Developments Affecting UPC -- Recently Completed Acquisitions and
- -- Restatement of UPC Financial Data"), UPC had total consolidated assets of
approximately $7.5 billion, loans of approximately $3.6 billion, deposits of
approximately $6.0 billion and shareholders' equity of approximately $576
million. As of that date, UPC was the second largest independent bank holding
company headquartered in Tennessee as measured by consolidated deposits.
Management's emphasis in recent years has been to improve asset quality and
maintain capital well in excess of regulatory minimums. At June 30, 1994
(after restatement for Recently Completed Acquisitions), UPC's ratio of
nonperforming loans to total loans was .53% and nonperforming assets to loans
and foreclosed property was .64%. UPC's allowance for losses on loans to
total loans ratio at such date was 2.43% and UPC's allowance for losses on
loans to nonperforming loans ratio was 462.40%. Also at such date, UPC's Tier
1 risk-based capital, total risk-based capital and leverage ratios were 15.11%,
18.39% and 7.49%, respectively.
UPC conducts its business activities through its principal bank
subsidiary, Union Planters National Bank ("UPNB"), four Tennessee regional bank
subsidiaries (the "Regional Banks"), and through 34 community banks and five
savings and loan subsidiaries (collectively, the "Community Banks") located in
Tennessee, Arkansas, Mississippi, Alabama and Kentucky. UPNB was founded in
1869 and operates 34 branches throughout West Tennessee. The Regional Banks
resulted from a corporate division of UPNB effective on July 1, 1994 as part of
UPC's effort to emphasize community management. Those subsidiaries operate 31,
13, five and 10 branches in Middle Tennessee, East Tennessee, Chattanooga, and
Jackson, Tennessee, respectively. At June 30, 1994, UPNB had total
consolidated assets of approximately $3.7 billion (total assets of
approximately $2.4 billion after the corporate division effective July 1,
1994). For information with respect to the split off of the Regional Banks and
recent changes to UPNB, see "-- Recent Developments Affecting UPC." UPNB, the
Regional Banks and the Community Banks provide a diversified range of financial
services in the communities in which they operate, including consumer,
commercial and corporate lending, retail banking and mortgage banking. To
enhance fee income, UPNB also is engaged in mortgage servicing, investment
management and trust services, the issuance and servicing of credit and debit
cards and the origination, packaging and securitization of the
government-guaranteed portions of Small Business Administration (SBA) loans.
In addition to UPNB and the Regional Banks, UPC, through the Community
Banks, operates 157 branches. At June 30, 1994 (after restatement for Recently
Completed Acquisitions), the Community Banks had total combined assets of
approximately $3.8 billion ($2.4 billion in Tennessee, $503 million in
Mississippi, $546 million in Arkansas, $109 million in Kentucky and $305
million in Alabama). All of the Community Banks have been acquired by UPC
since 1986, generally are located in nonmetropolitan towns and communities and
provide banking services and loan products to such communities, with an
emphasis on one-to-four-family residential mortgages and consumer and small
commercial lending. Of the 34 Community Banks, 21 have the largest deposit
share and nine have the
<PAGE> 13
second largest deposit share in their respective markets based on June 30, 1993
information, providing UPC with a strong competitive position in those markets.
UPC believes that the Regional Banks and Community Banks provide
additional diversification of the funding and revenue sources for UPC, and UPC
intends to continue expansion of the Community Banks and Regional Banks. UPC
believes that its strategy of permitting, where practicable, the Community
Banks and Regional Banks substantial autonomy in their day-to-day operations
enables UPC to be an attractive acquiror of community banking organizations and
permits such institutions to continue to grow within their markets without
disruption. UPC controls risk through centralized loan review and audit
functions as well as close monitoring of the financial performance of each
Community Bank. UPC also implements its asset and liability management strategy
on a consolidated basis and effects all trades for the investment portfolios of
the Community Banks and Regional Banks. UPC seeks economies in the Community
Banks and Regional Banks through consolidation of administrative and
operational processes and is currently in the process of converting all of the
Community Banks and Regional Banks to a common data processing system. This
system conversion should be completed by mid-year 1995 and should permit UPC to
realize significant cost savings upon full implementation.
UPC expects to continue to take advantage of the consolidation of the
financial services industry by further developing its franchise through the
acquisition of financial institutions in the major markets of Tennessee and
through the acquisition of community banks that have a significant local market
share, primarily in communities located in Tennessee and contiguous states.
Future acquisitions may entail the payment by UPC of consideration in excess of
the book value of the underlying assets being acquired, may result in the
issuance of additional shares of UPC capital stock or the incurrence of
additional indebtedness by UPC, and could have a dilutive effect on the per
share earnings or book value of the UPC Common Stock. For information with
respect to acquisitions that have been consummated recently or that are
currently pending, see "-- Recent Developments Affecting UPC."
UPC's corporate office is located at 7130 Goodlett Farms Parkway,
Memphis, Tennessee 38018, and its telephone number is (901) 383-6000.
GSSC. GSSC, a Delaware corporation, was organized on January 10, 1986
and is registered as a bank holding company under the Bank Holding Company Act
of 1956, as amended (the "BHCA"). GSSC currently owns all of the capital stock
of two state-chartered banks, Sunburst Bank, Mississippi and Sunburst Bank,
Louisiana (collectively, the "Banks"), which operate from 124 community banking
locations serving Mississippi and Louisiana. GSSC also owns Sunburst Financial
Group, Inc., which offers full service brokerage to its customers.
As of September 30, 1994, GSSC had 9,492,975 shares of its common
stock issued and outstanding. As of June 30, 1994, GSSC reported, on a
consolidated basis, assets of $2.5 billion, loans net of unearned income of
$1.7 billion, deposits of $2.2 billion and stockholders' equity of $183
million. GSSC reported net earnings of $25.4 million for the year 1993 and
$13.2 million for the first six months of 1994. See "-- Recent Developments
Affecting GSSC."
The principal executive offices of GSSC are located at 2000 Gateway,
Grenada, Mississippi 38901 and its telephone number is (601) 226-1100.
Sunburst Bank, Mississippi. Sunburst Bank, Mississippi, a
Mississippi-chartered state bank, was organized in 1890. Sunburst Bank,
Mississippi has its headquarters in Grenada, Mississippi and currently
2
<PAGE> 14
operates from 108 locations throughout Mississippi. As of June 30, 1994,
Sunburst Bank, Mississippi reported total assets of $2.0 billion, total loans
of $1.4 billion, total deposits of $1.8 billion and stockholder's equity of
$140 million.
Sunburst Bank, Louisiana. Sunburst Bank, Louisiana, a
Louisiana-chartered state bank, was acquired by GSSC in May 1988. Sunburst
Bank, Louisiana has its headquarters in Baton Rouge, Louisiana and has 16
locations in the Baton Rouge metropolitan area. As of June 30, 1994, Sunburst
Bank, Louisiana reported total assets of $507 million, total loans of $308
million, total deposits of $446 million and stockholder's equity of $38
million.
INTERIM. INTERIM was organized by UPC solely to effectuate the
Merger. At the Effective Time of the Merger (as defined below), INTERIM will,
pursuant to the terms of the Reorganization Agreement, merge with and into
GSSC, with GSSC surviving the Merger and immediately thereafter being
liquidated and dissolved by UPC with the Banks thereafter operating as direct
wholly-owned subsidiaries of UPC.
Additional Information. For additional information regarding the
business of UPC, GSSC and their respective subsidiaries, see "THE MERGER
- -- Background of the Merger and -- Reasons for the Merger and Recommendations of
the Boards of Directors of UPC and GSSC," "-- Recent Developments Affecting
UPC," "-- Recent Developments Affecting GSSC" and the documents incorporated by
reference in this Joint Proxy Statement/Prospectus (see "INCORPORATION OF
CERTAIN DOCUMENTS BY REFERENCE").
THE MERGER
The Reorganization Agreement provides for the merger of INTERIM with
and into GSSC, with GSSC surviving the Merger. It is contemplated by the
parties that immediately subsequent to the Effective Time of the Merger GSSC
would be liquidated and dissolved by UPC whereupon the Banks would become
direct, wholly-owned subsidiaries of UPC. Upon consummation of the Merger,
each outstanding share of GSSC Common Stock would be converted exclusively into
the right to receive 1.4530 shares of UPC Common Stock. Each outstanding
share of UPC Common Stock would remain outstanding. A holder of shares of GSSC
Common Stock would receive cash (without interest) in lieu of any fractional
share of UPC Common Stock. See "THE MERGER -- Terms of the Merger."
THE SPECIAL MEETINGS
UPC Special Meeting. The UPC Special Meeting will be held on
Wednesday, December 28, 1994, at 1:00 p.m., Central Standard Time, at the
offices of UPC, Union Planters Administrative Center, 7130 Goodlett Farms
Parkway, Memphis, Tennessee 38018. Only holders of record of UPC Common Stock
at the close of business on October 27, 1994 will be entitled to notice of, and
to vote at, the UPC Special Meeting. As of the close of business on October
27, 1994, there were 25,431,252 shares of UPC Common Stock outstanding and
entitled to vote.
UPC Votes Required. The affirmative votes of the holders of at least
a majority of the outstanding shares of UPC Common Stock present in person or
by proxy and entitled to vote at the UPC Special Meeting are required for UPC's
Merger. Each share of UPC Common Stock outstanding at the close of business on
the record date and to vote at the UPC Special Meeting is entitled to one vote
on each matter to be considered at the
3
<PAGE> 15
UPC Special Meeting. UPC's directors and executive officers
and their affiliates, are expected to vote substantially all of the 1,061,014
shares, or 4.17%, of the outstanding UPC Common Stock beneficially owned by
them as of the record date and entitled to vote at the UPC Special
Meeting "FOR" approval of the Reorganization Agreement and the Merger.
GSSC Special Meeting. The GSSC Special Meeting will be held on
Wednesday, December 28, 1994, at 1:00 p.m., Central Standard Time, at the
offices of GSSC, Corporate Administration Building, 2000 Gateway, Grenada,
Mississippi 38901. Only holders of record of GSSC Common Stock at the close of
business on October 31, 1994 will be entitled to notice of, and to vote at, the
GSSC Special Meeting. At the close of business on October 31, 1994, there were
9,492,975 shares of GSSC Common Stock outstanding and entitled to vote.
GSSC Votes Required. The affirmative votes of the holders of at least
a majority of the outstanding shares of GSSC Common Stock entitled to vote at
the GSSC Special Meeting are required for GSSC's stockholders to adopt the
Reorganization Agreement and thereby approve the Merger. Each share of GSSC
Common Stock outstanding at the close of business on the record date and
entitled to vote at the GSSC Special Meeting is entitled to one vote on each
matter to be considered at the GSSC Special Meeting. GSSC's directors and
executive officers, and their affiliates, are expected to vote substantially
all of the 618,647 shares, or approximately 6.5%, of the outstanding GSSC
Common Stock beneficially owned by them as of the record date and entitled to
vote at the GSSC Special Meeting "FOR" the proposal to adopt the Reorganization
Agreement.
REASONS FOR THE MERGER AND RECOMMENDATIONS OF THE UPC BOARD OF DIRECTORS
The UPC Board of Directors believes that the Merger is fair to and in
the best interests of UPC and its shareholders. The conclusion of the UPC Board
of Directors is based upon a number of factors, including the substantial
benefits expected to result from the combination of certain operations of GSSC
into UPC; information concerning the financial condition, results of operations
and prospects of UPC and GSSC on a stand-alone and combined basis; the market
price of UPC Common Stock; and the fairness opinion of the financial advisor to
UPC. The UPC Board of Directors believes that the consolidation of resources
brought about by the Merger would enable UPC to realize certain economies of
scale, to provide a wider and improved array of financial services to customers
and to achieve greater geographic and market diversity, which would give UPC
added flexibility in dealing with the changing competitive environment. The
UPC Board of Directors also believes that the Merger would provide UPC with
greater market position and financial resources to meet the competitive
challenges arising from further changes in the banking and financial services
industry. The UPC Board of Directors believes for the reasons set forth
herein, without assigning any relative weights to these factors, that the
Merger would be in the best interests of the shareholders of UPC. See "THE
MERGER -- Reasons for the Merger and Recommendations of the Boards of
Directors of GSSC and UPC -- Reasons and Recommendations of UPC Board of
Directors."
THE UPC BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED AND ADOPTED THE
REORGANIZATION AGREEMENT AND RECOMMENDS THAT THE UPC SHAREHOLDERS VOTE "FOR"
THE PROPOSAL TO APPROVE THE REORGANIZATION AGREEMENT.
4
<PAGE> 16
FAIRNESS OPINION OF STIFEL NICOLAUS
UPC retained Stifel, Nicolaus & Company, Incorporated ("Stifel
Nicolaus") as its financial advisor in connection with the Merger. Stifel
Nicolaus has rendered its written opinion dated October 20, 1994 to the UPC
Board of Directors, stating that on the date of such opinion, and based upon
the procedures and subject to the assumptions described in such opinion, the
Consideration (as defined below) to be received by the stockholders of GSSC
upon consummation of the Merger is fair, from a financial point of view, to the
holders of UPC Common Stock. The opinion of Stifel Nicolaus is attached as
Appendix C to this Joint Proxy Statement/Prospectus and shareholders of UPC are
urged to read the opinion in its entirety. It is a condition to the Closing
(as defined below) that such fairness opinion not be withdrawn prior to the
Closing and that UPC receive an updated fairness opinion from Stifel Nicolaus
dated within five days prior to the Closing Date. See "THE MERGER -- Reasons
for the Merger and Recommendations of the Boards of Directors of UPC and GSSC
- -- Fairness Opinion of Stifel Nicolaus."
REASONS FOR THE MERGER AND RECOMMENDATIONS OF THE GSSC BOARD OF DIRECTORS
The GSSC Board of Directors believes that the Merger is in the best
interests of GSSC and GSSC's stockholders. The GSSC Board of Directors has
carefully considered and unanimously approved the terms of the Reorganization
Agreement as being in the best interests of GSSC and its stockholders and
unanimously recommends its adoption. The recommendation of the GSSC Board of
Directors is based upon a number of factors including, but not limited to, the
value of the UPC Common Stock to be received in exchange for GSSC Common Stock
and other terms of the Reorganization Agreement, the tax-free nature of the
Merger for GSSC's stockholders, the benefits expected to result from the
combination of UPC and GSSC, information concerning the financial condition,
results of operations and prospects of UPC and GSSC on a combined basis, the
dividend policies with respect to UPC Common Stock and GSSC Common Stock,
recent developments in the financial institutions industry and the fairness
opinion of The Robinson-Humphrey Company, Inc. ("Robinson-Humphrey"). See "THE
MERGER -- Reasons for the Merger and Recommendations of the Boards of Directors
of GSSC and UPC -- Reasons and Recommendations of GSSC Board of Directors" and
"--Fairness Opinion of Robinson-Humphrey."
THE GSSC BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE
REORGANIZATION AGREEMENT AND RECOMMENDS THAT THE GSSC STOCKHOLDERS VOTE "FOR"
THE PROPOSAL TO ADOPT THE REORGANIZATION AGREEMENT.
FAIRNESS OPINION OF ROBINSON-HUMPHREY
GSSC retained Robinson-Humphrey as its financial advisor in connection
with the Merger. Robinson-Humphrey has rendered its written opinion to the
GSSC Board of Directors, stating that on the date of such opinion, and based
upon the procedures and subject to the assumptions described in such opinion,
the Consideration to be received by the stockholders of GSSC upon consummation
of the Merger is fair, from a financial point of view, to the holders of the
GSSC Common Stock. The opinion of Robinson-Humphrey is attached as Appendix B
to this Joint Proxy Statement/Prospectus and the GSSC stockholders are urged to
read the opinion in its entirety. It is a condition to the Closing that such
fairness opinion not be withdrawn prior to the Closing and that GSSC receive
an updated fairness opinion from Robinson-Humphrey dated within five days prior
to the Closing Date. See "THE MERGER -- Reasons for the Merger and
Recommendations of the Boards of Directors of UPC and GSSC -- Fairness Opinion
of Robinson-Humphrey."
5
<PAGE> 17
EFFECTIVE TIME OF THE MERGER
The Merger will become effective at the time a Certificate of Merger
along with the executed Plan of Merger are filed with the Delaware Secretary of
State in accordance with the Delaware General Corporation Law, as amended (the
"DGCL"), or on such later date and at such later time as the Certificate of
Merger and the Plan of Merger may specify (the "Effective Time of the Merger").
Assuming the expiration of all statutory waiting periods and the satisfaction
or waiver of all conditions to the Closing in the Reorganization Agreement, it
is intended by the parties to the Reorganization Agreement that the Certificate
of Merger along with the Plan of Merger will be filed so as to become effective
on December 31, 1994. The effective date of the Merger will be the day on
which the Effective Time of the Merger occurs (the "Effective Date of the
Merger"). The parties to the Reorganization Agreement intend to close the
transactions contemplated therein (the "Closing") approximately one day prior
to the Effective Date of the Merger (the "Closing Date"). Holders of record of
GSSC Common Stock immediately prior to the Effective Time of the Merger (the
"GSSC Record Holders") will be entitled to receive the Consideration for the
Merger pursuant to the Reorganization Agreement.
CONDITIONS; REGULATORY APPROVALS
Consummation of the Merger is subject to various conditions, including
receipt of the approval of GSSC's stockholders and UPC's shareholders, receipt
of all necessary regulatory approvals and satisfaction of customary contractual
closing conditions. The regulatory approvals and consents necessary to
consummate the transactions contemplated by the Reorganization Agreement
include the prior approvals of the Board of Governors of the Federal Reserve
System (the "Federal Reserve"), the Mississippi Department of Banking and
Consumer Finance (the "MSBD") and the State of Louisiana Office of Financial
Institutions (the "LOFI"). Applications for such approvals have been submitted
to each of the respective regulatory agencies. Approval was issued by the
MSBD on September 7, 1994 and by both the Federal Reserve and the LOFI on
November 7, 1994. See "THE MERGER -- Conditions to Consummation of the Merger;
- -- Regulatory Approvals; and -- Conduct of Business Pending the Merger" and
"CERTAIN REGULATORY CONSIDERATIONS."
WAIVER AND AMENDMENT; TERMINATION
Prior to the Effective Date of the Merger, any condition to
consummation of the Merger (to the extent permitted by law) may be amended,
modified or waived by the party benefitted by the provision by an agreement in
writing which is approved by the Boards of Directors of UPC and GSSC; provided,
however, that no such amendment may be effected after approval by the UPC
shareholders and adoption by the GSSC stockholders of the Reorganization
Agreement without such shareholders' and stockholders' approval or adoption, as
the case may be, if the effect of such amendment would be to change the amount
or type of Consideration to be paid in the Merger to the GSSC Record Holders
at the Effective Time of the Merger.
The Reorganization Agreement is subject to termination by UPC and/or
GSSC at any time prior to the Effective Date of the Merger upon the occurrence
of certain events. See "THE MERGER --Waiver and Amendment; Termination."
6
<PAGE> 18
LIMITATION ON NEGOTIATIONS
GSSC is prohibited from instituting, soliciting or knowingly
encouraging individuals or entities concerning any "Acquisition Proposal"
(defined generally as any agreement or proposal pursuant to which any entity
other than UPC would acquire, directly or indirectly, GSSC ownership or the
right to vote ten percent (10%) of the outstanding GSSC Common Stock, or a
significant portion of the assets or earnings power of GSSC). In the event
GSSC were to enter into a letter of intent or agreement with respect to an
Acquisition Proposal not solicited by the GSSC Board of Directors, or in the
event such Acquisition Proposal were the result of a hostile takeover of GSSC,
GSSC or the acquiror would be required to pay liquidated damages to UPC upon
consummation of the transaction contemplated by such Acquisition Proposal in
the amount of $12,000,000. Such sum would be payable immediately in the event
that GSSC were to enter into a letter of intent or agreement with respect to an
Acquisition Proposal solicited by the GSSC Board of Directors. The limitation
will remain in effect until October 1, 1995 unless before that date either the
Merger shall have been consummated or the Reorganization Agreement shall have
been terminated, or if the Merger should not be consummated under specified
circumstances. See "THE MERGER -- Limitation on Negotiations."
MANAGEMENT AFTER THE MERGER
The majority of the persons who are serving as directors and officers
of the Banks immediately prior to the Effective Time of the Merger are expected
to continue to be the directors and officers of the Banks and will hold office
thereafter as provided in the Charter and Bylaws of the Banks unless and until
their successors shall have been duly elected or appointed and qualified. The
persons who are serving as directors and officers of UPC immediately prior to
the Effective Time of the Merger are expected to continue to be the directors
and officers of UPC and will hold office as provided in the Charter and Bylaws
of UPC unless and until their successors shall have been duly elected or
appointed and qualified. It is also expected that Mr. J.T. Boone, Chairman and
Chief Executive Officer of GSSC will, at the Effective Time of the Merger,
leave the employ of GSSC to serve as the Athletic Director of the University of
Mississippi. Subsequent to Mr. Boone's decision to accept such position, UPC
determined that an invitation would be extended to Mr. Boone to join the UPC
Board of Directors in the first quarter of 1995. It is the present intention
of UPC to extend invitations to one or two additional members of the GSSC
Board of Directors to be appointed to the UPC Board of Directors in 1995.
However, such selections have not been made as of the date of this Joint Proxy
Statement/Prospectus. See "THE MERGER -- Management After the Merger; and
- -- Interests of Certain Persons in the Merger."
INTERESTS OF CERTAIN PERSONS IN THE MERGER
In connection with the Merger, Messrs. J.T. Boone, Chairman and Chief
Executive Officer of GSSC; Don W. Ayres, Senior Executive Vice President and
Chief Operating Officer of Sunburst Bank, Mississippi; James A. Baker,
Executive Vice President of Sunburst Bank, Mississippi; John L. Bomar,
Executive Vice President of Sunburst Bank, Mississippi; D. L. Holland,
Treasurer and Chief Financial Officer of GSSC; Jerry A. Pegg, Executive Vice
President of Sunburst Bank, Mississippi; J. Daniel Garrick, III, Senior
Executive Vice President of Sunburst Bank, Mississippi; Frank W. Smith, Jr.,
Senior Executive Vice President of Sunburst Bank, Mississippi; and A. Jackson
Huff, President and Chief Executive Officer of Sunburst Bank, Louisiana, would
each be eligible to receive certain payments in settlement of the terms of each
such officer's respective agreement with GSSC in the event such officer's
employment were terminated within two years subsequent to the Effective Time of
the Merger. See "THE MERGER -- Interests of Certain Persons in the Merger."
7
<PAGE> 19
COMPARISON OF SHAREHOLDER'S AND STOCKHOLDER'S RIGHTS
Upon consummation of the Merger, holders of GSSC's Common Stock, whose
rights are presently governed by Delaware corporate law and GSSC's Certificate
of Incorporation and Bylaws, would become shareholders of UPC, a Tennessee
corporation. Accordingly, their rights would be governed by Tennessee
corporate law and the Charter and Bylaws of UPC. Certain differences arise
from differences between the Charter and Bylaws of UPC and the Certificate of
Incorporation and Bylaws of GSSC. See "THE MERGER -- Comparison of
Shareholder's and Stockholder's Rights."
PROVISIONS THAT MAY HAVE AN ANTI-TAKEOVER EFFECT
Certain provisions of UPC's Charter and Bylaws, and certain provisions
of Tennessee law, may have an anti-takeover effect in that they could prevent,
discourage or delay a change in control of UPC. See "DESCRIPTION OF UPC COMMON
AND PREFERRED STOCK -- Certain Provisions That May Have an Anti-Takeover
Effect."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
McDonnell Dyer, a professional limited company, UPC's legal counsel,
has delivered its opinion to UPC and GSSC to the effect that, assuming the
Merger occurs in accordance with the terms of the Reorganization Agreement and
conditioned on the accuracy of certain representations and the performance of
certain undertakings made by UPC and GSSC, the Merger will constitute a
"reorganization" for federal income tax purposes and that, accordingly, no gain
or loss would be recognized by GSSC stockholders who exchange their shares of
GSSC Common Stock solely for shares of UPC Common Stock in the Merger.
However, cash received in lieu of fractional shares may give rise to taxable
income or loss. EACH GSSC STOCKHOLDER IS URGED TO CONSULT THEIR OWN TAX
ADVISOR TO DETERMINE THE SPECIFIC TAX CONSEQUENCES OF THE MERGER TO THEM,
INCLUDING THE APPLICABILITY OF VARIOUS STATE, LOCAL AND FOREIGN TAX LAWS. See
"THE MERGER -- Certain Federal Income Tax Consequences."
ACCOUNTING TREATMENT
The Merger is expected to be accounted for as a "pooling of interests"
under generally accepted accounting principles ("GAAP") as described in
Accounting Principles Board Opinion No. 16 and the interpretations thereof. It
is a condition to the consummation of the Merger that UPC receive an opinion
from Price Waterhouse LLP to the effect that the Merger should be accounted for
as a "pooling of interests." See "THE MERGER -- Accounting Treatment."
NO SHAREHOLDER'S OR STOCKHOLDER'S APPRAISAL RIGHTS
Neither holders of UPC Common Stock nor holders of GSSC Common Stock
will have any dissenters' or appraisal rights as a result of the matters to be
voted upon at the Special Meetings. See "THE SPECIAL MEETINGS -- No
Shareholder's or Stockholder's Appraisal Rights."
8
<PAGE> 20
MARKET PRICES OF COMMON STOCK; DIVIDENDS
UPC Common Stock. The UPC Common Stock is listed and traded on the
NYSE (symbol: UPC). The following table sets forth for the periods indicated
the high and low closing sale prices of UPC Common Stock on the NYSE and the
cash dividends declared per share for the periods indicated:
<TABLE>
<CAPTION>
CASH
PRICE RANGE DIVIDENDS
------------------------------- DECLARED
HIGH LOW PER SHARE
---- --- ---------
<S> <C> <C> <C>
1994
First Quarter $26.25 $23.13 $.21
Second Quarter 28.75 24.75 .21
Third Quarter 26.00 23.50 .23
Fourth Quarter through
November 8, 1994 24.50 22.13 .23
----
Total $.88
====
1993
First Quarter $29.13 $22.50 $.18
Second Quarter 29.25 22.63 .18
Third Quarter 30.00 25.00 .18
Fourth Quarter 28.75 23.63 .18
----
Total $.72
====
1992
First Quarter $15.50 $13.75 $.15
Second Quarter 20.13 14.63 .15
Third Quarter 20.75 17.50 .15
Fourth Quarter 24.75 17.75 .15
----
Total $.60
====
</TABLE>
The last reported sale price of UPC Common Stock on the NYSE as of
November 8, 1994, which was the last practicable date prior to the mailing of
this Joint Proxy Statement/Prospectus, was $22.13 per share.
9
<PAGE> 21
GSSC Common Stock. The GSSC Common Stock is listed and traded through
the NASDAQ/NMS (symbol: GSSC). The following table sets forth for the periods
indicated the high and low closing sale prices of GSSC Common Stock as reported
by the NASDAQ/NMS and the cash dividends declared per share for the periods
indicated:
<TABLE>
<CAPTION>
CASH
PRICE RANGE DIVIDENDS
---------------------------------- DECLARED
HIGH LOW PER SHARE
---- ---- ---------
<S> <C> <C> <C>
1994
First Quarter $25.00 $21.25 $.20
Second Quarter 27.25 21.00 .20
Third Quarter 36.00 30.75 .20
Fourth Quarter through
November 8, 1994 33.50 30.50 .20
----
Total $.80
====
1993
First Quarter $25.00 $19.75 $.15
Second Quarter 25.25 19.88 .17
Third Quarter 24.75 22.75 .20
Fourth Quarter 26.75 23.00 .20
----
Total $.72
====
1992
First Quarter $22.00 $15.00 $.15
Second Quarter 16.50 14.75 .15
Third Quarter 17.75 15.25 .15
Fourth Quarter 20.50 15.50 .15
----
Total $.60
====
</TABLE>
The last reported sale price of GSSC Common Stock on the NASDAQ/NMS as
of November 8, 1994, which was the last practicable date prior to the mailing
of this Joint Proxy Statement/Prospectus, was $30.50 per share.
GSSC STOCKHOLDERS AND UPC SHAREHOLDERS ARE ADVISED TO OBTAIN CURRENT
MARKET QUOTATIONS FOR THE UPC COMMON STOCK AND THE GSSC COMMON STOCK. No
assurance can be given as to the market price of UPC Common Stock or GSSC
Common Stock at the Effective Time of the Merger or, in the case of UPC Common
Stock, after the Effective Time of the Merger.
10
<PAGE> 22
SELECTED CONSOLIDATED FINANCIAL DATA
The following tables present for UPC, GSSC and UPC on a proforma basis,
selected consolidated financial data. The information for UPC has been derived
from the consolidated financial statements of UPC (restated for the consummation
of the Recently Completed Acquisitions; see "-- Recent Developments Affecting
UPC -- Restatement of UPC Financial Data"), including the consolidated financial
statements of UPC incorporated by reference in this Joint Proxy
Statement/Prospectus, and should be read in conjunction therewith and with the
notes thereto. The information for GSSC has been derived from the consolidated
financial statements of GSSC, including the consolidated financial statements of
GSSC incorporated by reference in this Joint Proxy Statement/Prospectus and
should be read in conjunction therewith and with the notes thereto. See
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE." Historical results are not
necessarily indicative of results to be expected for any future period. In the
opinion of the managements of UPC and GSSC, all adjustments necessary to arrive
at a fair statement of results of operations of the respective companies have
been included.
11
<PAGE> 23
UPC Selected Consolidated Financial Data
<TABLE>
<CAPTION>
Six Months Ended
June 30, (1) Years Ended December 31,
------------------- ----------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
-------- -------- -------- -------- -------- -------- --------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data
Net interest income $131,656 $122,486 $243,843 $200,554 $160,473 $139,984 $127,834
Provision for losses on loans -- 7,544 9,743 19,194 25,281 19,262 49,270
Profits and commissions from trading
activities 2,841 3,803 8,720 10,168 14,707 24,268 36,700
Investment securities gains (losses) 210 3,438 4,732 13,363 3,391 (349) (1,047)
Other noninterest income 37,469 36,717 74,464 62,581 53,983 48,160 41,553
Noninterest expense 117,586 114,125 230,319 204,838 169,601 165,479 179,876
-------- -------- -------- -------- -------- -------- --------
Earnings (loss) before income taxes,
extraordinary item and accounting changes 54,590 44,775 91,697 62,634 37,672 27,322 (24,106)
Applicable income taxes (benefit) 16,769 14,660 26,333 17,611 7,538 2,666 (3,298)
-------- -------- -------- -------- -------- -------- --------
Earnings (loss) before extraordinary item and
accounting changes 37,821 30,115 65,364 45,023 30,134 24,656 (20,808)
Extraordinary item-defeasance of debt, net of
taxes -- -- (3,206) -- -- -- --
Accounting changes, net of taxes -- 5,001 5,001 -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Net earnings (loss) $ 37,821 $ 35,116 $ 67,159 $ 45,023 $ 30,134 $ 24,656 $(20,808)
======== ======== ======== ======== ======== ======== ========
Per Common Share Data
Primary
Earnings (loss) before extraordinary item
and accounting changes $ 1.31 $ 1.22 $ 2.63 $ 2.07 $ 1.56 $ 1.18 $ (1.00)
Extraordinary item-defeasance of debt, net
of taxes -- -- (0.15) -- -- -- --
Accounting changes, net of taxes -- 0.23 0.23 -- -- -- --
Net earnings (loss) 1.31 1.45 2.71 2.07 1.56 1.18 (1.00)
Fully diluted
Earnings (loss) before extraordinary item
and accounting changes 1.23 1.15 2.46 2.00 1.55 1.18 (1.00)
Extraordinary item-defeasance of debt, net
of taxes -- -- (0.12) -- -- -- --
Accounting changes, net of taxes -- 0.20 0.19 -- -- -- --
Net earnings (loss) 1.23 1.35 2.53 2.00 1.55 1.18 (1.00)
Cash dividends 0.42 0.36 0.72 0.60 0.48 0.48 0.48
Book value 18.58 17.69 18.63 16.07 14.72 13.39 12.31
Book value assuming conversion of convertible
preferred stock 18.72 18.00 18.77 16.56 14.68 13.38 12.32
</TABLE>
(Continued on following page)
12
<PAGE> 24
UPC Selected Consolidated Financial Data (Continued)
<TABLE>
<CAPTION>
Six Months Ended
June 30, (1) Years Ended December 31,
----------------------- --------------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ---------- ---------- ----------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance Sheet Data (at period end)
Total assets $7,467,906 $6,587,251 $6,593,695 $5,522,388 $4,031,361 $4,232,047 $4,234,874
Loans, net of unearned income 3,639,444 2,940,230 3,092,828 2,383,830 2,053,490 2,270,229 2,138,159
Allowance for losses on loans 88,476 81,237 81,604 65,415 48,442 51,181 47,105
Investment securities 3,036,137 2,771,368 2,720,066 2,294,565 1,242,188 1,230,047 1,091,904
Deposits 5,989,878 5,587,842 5,471,814 4,665,420 3,423,299 3,544,531 3,336,806
Long-term debt
Parent company 114,764 74,292 114,729 74,292 38,163 44,662 34,500
Subsidiary banks 195,684 144,767 182,501 17,864 9,922 4,103 39,021
Total shareholders' equity 575,740 485,782 507,930 383,758 294,309 260,060 262,235
Average assets 7,349,083 6,457,617 6,518,448 5,001,228 4,077,078 4,279,867 4,223,075
Average shareholders' equity (2) 577,061 455,137 476,655 356,003 271,941 266,214 287,127
Average shares outstanding (in
thousands)
Primary 25,449 21,459 21,622 18,765 18,632 20,641 20,761
Fully diluted 29,931 25,426 25,852 21,609 18,986 20,981 20,761
Profitability and Capital Ratios
Before extraordinary item and
accounting changes
Return on average assets 1.04% 0.94% 1.00% 0.90% 0.74% 0.58% NM%
Return on average common equity
(2) 14.25 14.55 15.07 13.64 11.16 9.28 NM
Net earnings
Return on average assets 1.04 1.10 1.03 0.90 0.74 0.58 NM
Return on average common equity
(2) 14.25 17.34 15.55 13.64 11.16 9.28 NM
Net interest income
(taxable-equivalent) to average
earning assets (2) 4.14 4.38 4.52 4.84 4.58 3.96 3.73
Loans/deposits 60.76 52.62 56.52 51.10 59.99 64.05 64.08
Common and preferred dividend
payout ratio 38.24 29.86 33.66 38.13 32.77 39.96 NM
Equity/assets (period end) 7.71 7.37 7.70 6.95 7.30 6.15 6.19
Average shareholders'
equity/average total assets (2) 7.85 7.05 7.31 7.12 6.67 6.22 6.80
Tier 1 capital to risk-weighted
assets (3) 15.11 13.80 15.11 14.49 12.59 10.03 NA
Total capital to risk-weighted
assets (3) 18.39 16.04 18.74 15.77 15.33 12.56 NA
Leverage ratio (3) 7.49 6.86 7.28 7.03 7.14 5.95 5.95
Asset Quality Ratios
Allowance/period end loans 2.43 2.76 2.64 2.74 2.36 2.25 2.20
Nonperforming loans/total loans (4) 0.53 0.88 0.72 1.60 1.28 0.92 0.82
Allowance/nonperforming loans (4) 462.40 312.41 368.07 171.92 184.91 246.02 268.99
Nonperforming assets/loans and
foreclosed property (5) 0.64 1.15 0.87 1.88 1.82 1.52 1.19
Provision/average loans NM 0.53 0.33 0.83 1.17 0.87 2.33
Net charge-offs/average loans 0.07 0.51 0.35 0.77 1.30 1.03 2.10
</TABLE>
(1) Interim period ratios have been annualized where applicable.
(2) Average balances and calculations do not include the impact of the net
unrealized gain or loss on available for sale investment securities.
(3) The risk-based capital ratios are based upon capital guidelines prescribed
by federal bank regulatory authorities. Under those guidelines, the required
minimum Tier 1 and total capital to risk-weighted assets ratios are 4% and
8%, respectively. The required minimum leverage ratio of Tier 1 capital to
total adjusted assets is 3% to 5% (5% for bank holding companies effecting
acquisitions).
(4) Nonperforming loans include loans on nonaccrual status and restructured
loans.
(5) Nonperforming assets include nonperforming loans and foreclosed properties.
NA -- Not Available NM -- Not Meaningful
13
<PAGE> 25
GSSC Selected Consolidated Financial Data
<TABLE>
<CAPTION>
Six Months
Ended
June 30, (1) Years Ended December 31,
----------------- ------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
------- ------- -------- ------- ------- ------- -------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data
Net Interest income $53,758 $48,744 $101,041 $81,756 $74,549 $67,781 $63,484
Provision for losses on loans 1,775 3,940 6,815 7,988 8,922 7,042 11,592
Profits and commissions from trading activities -- 169 269 -- (33) (126) 312
Investment securities gains (losses) (101) (302) (237) 656 (767) 432 (250)
Other noninterest income 15,185 14,727 30,803 24,679 20,808 18,539 17,968
Noninterest expense 48,095 43,367 89,362 74,626 68,874 66,255 63,174
------- ------- -------- ------- ------- ------- -------
Earnings before income taxes and accounting changes 18,972 16,031 35,699 24,477 16,761 13,329 6,748
Applicable income taxes 5,821 4,814 11,087 6,250 3,999 2,742 1,148
------- ------- -------- ------- ------- ------- -------
Earnings before accounting changes 13,151 11,217 24,612 18,227 12,762 10,587 5,600
Accounting changes, net of taxes -- 781 781 -- -- -- --
------- ------- -------- ------- ------- ------- -------
Net earnings $13,151 $11,998 $ 25,393 $18,227 $12,762 $10,587 $ 5,600
======= ======= ======== ======= ======= ======= =======
Per Common Share Data
Primary
Earnings before accounting changes $ 1.39 $ 1.20 $ 2.62 $ 2.01 $ 1.41 $ 1.17 $ 0.62
Accounting changes, net of taxes -- 0.08 0.08 -- -- -- --
Net earnings 1.39 1.28 2.70 2.01 1.41 1.17 0.62
Cash dividends 0.40 0.32 0.72 0.60 0.60 0.60 0.60
Book value 19.28 17.31 18.34 16.11 14.55 13.68 13.16
</TABLE>
(continued on following page)
14
<PAGE> 26
GSSC Selected Consolidated Financial Data (Continued)
<TABLE>
<CAPTION>
Six Months Ended
June 30, (1) Years Ended December 31,
----------------------- --------------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ---------- ---------- ----------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance Sheet Data (at period end)
Total assets $2,466,209 $2,434,596 $2,436,198 $1,970,616 $1,897,135 $1,863,484 $1,782,500
Loans, net of unearned income 1,657,756 1,491,328 1,560,540 1,201,939 1,079,434 1,106,206 1,045,806
Allowance for losses on loans 33,132 31,849 32,749 24,412 19,547 16,324 15,003
Investment securities 588,638 659,672 575,578 499,385 535,566 543,461 525,227
Deposits 2,210,705 2,181,007 2,199,807 1,776,571 1,721,882 1,637,848 1,559,677
Long-term debt
Parent company -- -- -- -- -- -- --
Subsidiary banks 25,071 13,347 12,941 3,892 161 366 408
Total stockholders' equity 183,046 164,369 174,072 145,738 131,661 123,289 118,617
Average assets 2,456,924 2,265,833 2,338,768 1,933,490 1,851,849 1,816,941 1,731,553
Average stockholders' equity (2) 179,137 156,595 163,219 138,526 126,710 120,586 119,689
Average shares outstanding (in
thousands) 9,493 9,348 9,421 9,047 9,029 9,014 9,017
Profitability and Capital Ratios
Before accounting changes
Return on average assets 1.08% 1.00% 1.05% 0.94% 0.69% 0.58% 0.32%
Return on average common equity
(2) 14.80 14.44 15.08 13.16 10.07 8.78 4.68
Net earnings
Return on average assets 1.08 1.07 1.09 0.94 0.69 0.58 0.32
Return on average common equity
(2) 14.80 15.45 15.56 13.16 10.07 8.78 4.68
Net interest income
(taxable-equivalent) to average
earning assets (2) 4.95 4.89 4.87 4.83 4.63 4.33 4.28
Loans/deposits 74.99 68.38 70.94 67.65 62.69 67.54 67.05
Common and preferred dividend
payout ratio 28.87 25.32 26.92 29.78 42.48 50.37 94.82
Equity/assets (period end) 7.42 6.75 7.15 7.40 6.94 6.62 6.65
Average stockholders'
equity/average total assets (2) 7.29 6.91 6.98 7.16 6.84 6.64 6.91
Tier 1 capital to risk-weighted
assets (3) 10.69 10.29 10.52 10.98 10.58 9.84 9.50
Total capital to risk-weighted
assets (3) 11.95 11.55 11.78 12.24 11.83 11.09 10.73
Leverage ratio (3) 7.31 6.76 7.11 7.33 7.01 6.70 6.67
Asset Quality Ratios
Allowance/period end loans 2.00 2.14 2.10 2.03 1.81 1.48 1.43
Nonperforming loans/total loans (4) 0.30 0.59 0.35 0.76 0.73 1.39 1.30
Allowance/nonperforming loans (4) 674.65 359.47 600.57 266.16 249.07 106.35 110.16
Nonperforming assets/loans and
foreclosed property (5) 0.51 1.04 0.61 1.33 1.68 2.42 1.81
Provision/average loans 0.11 0.29 0.47 0.71 0.84 0.65 1.17
Net charge-offs/average loans 0.09 0.10 0.24 0.28 0.53 0.53 0.98
</TABLE>
(1) Interim period ratios have been annualized where applicable.
(2) Average balances and calculations do not include the impact of the net
unrealized gain or loss on available for sale investment securities.
(3) The risk-based capital ratios are based upon capital guidelines prescribed
by federal bank regulatory authorities. Under those guidelines, the required
minimum Tier 1 and total capital to risk-weighted assets ratios are 4% and
8%, respectively. The required minimum leverage ratio of Tier 1 capital to
total adjusted assets is 3% to 5%.
(4) Nonperforming loans include loans on nonaccrual status and restructured
loans.
(5) Nonperforming assets include nonperforming loans and foreclosed properties.
15
<PAGE> 27
UPC Selected Proforma Consolidated Financial Data
<TABLE>
<CAPTION>
Six Months Ended
June 30, (1) Years Ended December 31,
------------------- ----------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
-------- -------- -------- -------- -------- -------- --------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data
Net interest income $185,414 $171,230 $344,884 $282,310 $235,022 $207,765 $191,318
Provision for losses on loans 1,775 11,484 16,558 27,182 34,203 26,304 60,862
Profits and commissions from
trading activities 2,841 3,972 8,989 10,168 14,674 24,142 37,012
Investment securities gains
(losses) 109 3,136 4,495 14,019 2,624 83 (1,297)
Other noninterest income 52,654 51,444 105,267 87,260 74,791 66,699 59,521
Noninterest expense 165,681 157,492 319,681 279,464 238,475 231,734 243,050
-------- -------- -------- -------- -------- -------- --------
Earnings (loss) before income
taxes, extraordinary item and
accounting changes 73,562 60,806 127,396 87,111 54,433 40,651 (17,358)
Applicable income taxes (benefit) 22,590 19,474 37,420 23,861 11,537 5,408 (2,150)
-------- -------- -------- -------- -------- -------- --------
Earnings (loss) before
extraordinary item and
accounting changes 50,972 41,332 89,976 63,250 42,896 35,243 (15,208)
Extraordinary item-defeasance of
debt, net of taxes -- -- (3,206) -- -- -- --
Accounting changes, net of taxes -- 5,782 5,782 -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Net earnings (loss) $ 50,972 $ 47,114 $ 92,552 $ 63,250 $ 42,896 $ 35,243 $(15,208)
========= ========= ========= ========= ========= ========= =========
Per Common Share Data
Primary
Earnings (loss) before
extraordinary item and
accounting changes $ 1.20 $ 1.07 $ 2.32 $ 1.77 $ 1.30 $ 1.02 $ (0.44)
Extraordinary item-defeasance
of debt, net of taxes -- -- (0.08) -- -- -- --
Accounting changes, net of
taxes -- 0.16 0.16 -- -- -- --
Net earnings (loss) 1.20 1.23 2.40 1.77 1.30 1.02 (0.44)
Fully diluted
Earnings (loss) before
extraordinary item and
accounting changes 1.15 1.04 2.24 1.75 1.30 1.02 (0.44)
Extraordinary item-defeasance
of debt, net of taxes -- -- (0.08) -- -- -- --
Accounting changes, net of
taxes -- 0.15 0.15 -- -- -- --
Net earnings (loss) 1.15 1.19 2.31 1.75 1.30 1.02 (0.44)
Cash dividends 0.42 0.36 0.72 0.60 0.48 0.48 0.48
Book value 16.84 15.57 16.43 13.87 12.63 11.63 10.93
Book value assuming conversion of
convertible preferred stock 17.12 16.02 16.78 14.38 12.63 11.65 10.95
</TABLE>
(continued on following page)
16
<PAGE> 28
UPC Selected Proforma Consolidated Financial Data (Continued)
<TABLE>
<CAPTION>
Six Months Ended
June 30, (1) Years Ended December 31,
----------------------- --------------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ---------- ---------- ----------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance Sheet Data (at period end)
Total assets $9,934,115 $9,021,847 $9,029,893 $7,493,004 $5,928,496 $6,095,531 $6,017,374
Loans, net of unearned income 5,297,200 4,431,558 4,673,368 3,585,769 3,132,924 3,376,435 3,183,965
Allowance for losses on loans 121,608 113,086 114,353 89,827 67,989 67,505 62,108
Investment securities 3,624,775 3,431,040 3,295,644 2,793,950 1,777,754 1,773,508 1,617,131
Deposits 8,200,583 7,768,849 7,671,621 6,441,991 5,145,181 5,182,379 4,896,483
Long-term debt
Parent company 114,764 74,292 114,729 74,292 38,163 44,662 34,500
Subsidiary banks 220,755 158,114 195,442 21,756 10,083 4,469 39,429
Total shareholders' equity 758,786 650,151 682,002 529,496 425,970 383,349 380,852
Average assets 9,806,007 8,723,450 8,857,216 6,934,718 5,928,927 6,096,808 5,954,628
Average shareholders' equity (2) 756,198 611,732 639,874 494,529 398,651 386,800 406,816
Average shares outstanding (in
thousands)
Primary 38,935 34,944 35,108 32,251 32,118 34,127 34,247
Fully diluted 43,417 38,912 39,338 35,095 32,472 34,467 34,247
Profitability and Capital Ratios
Before extraordinary item and
accounting changes
Return on average assets 1.05% 0.96% 1.02% 0.91% 0.72% 0.58% NM%
Return on average common equity
(2) 14.40 14.52 15.08 13.48 10.80 9.12 NM
Net earnings
Return on average assets 1.05 1.09 1.04 0.91 0.72 0.58 NM
Return on average common equity
(2) 14.40 16.77 15.55 13.48 10.80 9.12 NM
Net interest income
(taxable-equivalent) to average
earning assets (2) 4.35 4.52 4.61 4.84 4.59 4.07 3.89
Loans/deposits 64.60 57.04 60.92 55.66 60.89 65.15 65.03
Common and preferred dividend
payout ratio 35.83 28.70 31.81 35.72 35.66 43.08 NM
Equity/assets (period end) 7.64 7.21 7.55 7.07 7.19 6.29 6.33
Average shareholders'
equity/average total assets (2) 7.71 7.01 7.22 7.13 6.72 6.34 6.83
Tier 1 capital to risk-weighted
assets (3) 13.75 12.69 13.58 13.35 11.91 9.98 NA
Total capital to risk-weighted
assets (3) 16.39 14.62 16.40 14.62 14.13 12.09 NA
Leverage ratio (3) 7.45 6.83 7.23 7.11 7.10 6.18 6.16
Asset Quality Ratios
Allowance/period end loans 2.30 2.55 2.45 2.51 2.17 2.00 1.95
Nonperforming loans/total loans(4) 0.45 0.79 0.59 1.32 1.09 1.07 0.98
Allowance/nonperforming loans (4) 505.75 324.37 413.96 190.23 199.70 186.72 199.51
Nonperforming assets/loans and
foreclosed property (5) 0.60 1.12 0.78 1.69 1.77 1.82 1.39
Provision/average loans 0.07 0.54 0.38 0.79 1.06 0.80 1.96
Net charge-offs/average loans 0.11 0.42 0.31 0.61 1.05 0.87 1.74
</TABLE>
(1) Interim period ratios have been annualized where applicable.
(2) Average balances and calculations do not include the impact of the net
unrealized gain or loss on available for sale investment securities.
(3) The risk-based capital ratios are based upon capital guidelines prescribed
by federal bank regulatory authorities. Under those guidelines, the required
minimum Tier 1 and total capital to risk-weighted assets ratios are 4% and
8%, respectively. The required minimum leverage ratio of Tier 1 capital to
total adjusted assets is 3% to 5% (5% for bank holding companies effecting
acquisitions).
(4) Nonperforming loans include loans on nonaccrual status and restructured
loans.
(5) Nonperforming assets include nonperforming loans and foreclosed properties.
NA -- Not Available NM -- Not Meaningful
17
<PAGE> 29
RECENT DEVELOPMENTS AFFECTING UPC
1994 Third Quarter UPC Operating Results. The following table presents
certain information for the three and nine months ended September 30, 1994 and
1993. Reference is made to UPC's press release dated October 20, 1994, which is
included as an exhibit to UPC's Current Report on Form 8-K dated October 20,
1994. For additional information, see "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE."
<TABLE>
<CAPTION>
Three Months Ended
Nine Months Ended
September 30, (1) September 30, (1)
------------------- -------------------------
1994 1993 1994 1993
------- ------- ---------- ----------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C>
Income statement amounts
Net interest income $69,081 $61,382 $ 200,737 $ 183,868
Provision for losses on loans -- 1,489 -- 9,033
Investment securities gains (losses) (8,099) 514 (7,889) 3,952
Other noninterest income 21,698 21,731 62,008 62,251
Noninterest expense 60,751 59,676 178,337 173,801
Earnings before accounting changes 15,778 18,007 53,599 48,122
Accounting changes, net of taxes -- -- -- 5,001
Net earnings 15,778 18,007 53,599 53,123
Earnings before investment securities gains (losses) and accounting
changes 20,718 17,693 58,419 45,712
Per common share data
Earnings before investment securities gains (losses) and accounting
changes -- primary $ .73 $ .71 $ 2.03 $ 1.83
-- fully diluted .68 .66 1.91 1.73
Earnings before accounting changes -- primary .53 .72 1.84 1.94
-- fully diluted .51 .67 1.74 1.82
Net earnings -- primary .53 .72 1.84 2.17
-- fully diluted .51 .67 1.74 2.01
Cash dividends .23 .18 .65 .54
Book value 18.93 18.25
Profitability ratios
Return on average assets
Earnings before investment securities gains (losses) and
accounting changes 1.10% 1.07% 1.06% .94%
Earnings before accounting changes .84 1.09 .97 .99
Net earnings .84 1.09 .97 1.09
Return on average common equity (3)
Earnings before investment securities gains (losses) and
accounting changes 15.03 15.90 14.53 14.27
Earnings before accounting changes 11.02 16.22 13.18 15.14
Net earnings 11.02 16.22 13.18 16.95
Net interest income (taxable-equivalent) as a percentage of average
earning assets 4.15 4.29 4.15 4.35
Asset quality data
Allowance for losses on loans $ 88,870 $ 84,559
Nonperforming loans 16,566 24,137
Nonperforming assets 19,863 29,506
Loans 90 days or more past due 3,982 5,581
Allowance for losses on loans to loans 2.36% 2.85%
Nonperforming loans to loans .44 .81
Nonperforming assets to loans and foreclosed properties .53 .99
Allowance/nonperforming loans 536.46 350.33
Balance sheet data (at period end)
Total assets $7,495,154 $6,491,529
Loans, net of unearned income 3,759,681 2,966,004
Investment securities
Amortized cost 2,919,617 2,657,612
Fair value 2,893,805 2,723,473
Total deposits 5,905,589 5,470,363
Long-term debt (2) 307,082 248,073
Total shareholders' equity 585,828 498,728
Capital ratios
Equity/assets 7.82% 7.68%
Leverage (3) 7.51 7.13
</TABLE>
(1) Interim period ratios are annualized.
(2) Includes subsidiary banks' long-term debt (primarily Federal Home Loan Bank
advances) of $192.3 million and $173.8 million at September 30, 1994 and
1993, respectively.
(3) Excludes the impact of the fair value adjustment for available for sale
securities.
18
<PAGE> 30
Reorganization of UPNB. UPC's four Regional Banks, which were split off
from UPNB as of July 1, 1994, consist of Union Planters Bank of East Tennessee,
National Association ("Knoxville"), Union Planters Bank of Middle Tennessee,
National Association ("Nashville"), Union Planters Bank of Chattanooga, National
Association ("Chattanooga") and Union Planters Bank of Jackson, National
Association ("Jackson"). UPC injected equity of $101.7 million into the four
Regional Banks, a majority of the funds ($98 million) having been provided by a
special dividend from UPNB. Each of the Regional Banks acquired from UPNB, at
book value, substantially all of the assets and assumed the liabilities of the
UPNB branches located in its region. While the separation of the branches
previously held by UPNB had no material impact on the consolidated financial
condition of UPC, it is expected to promote the identification of individual
branch operations within their local communities. UPNB continues to operate
branches located in Memphis and West Tennessee.
Earnings Considerations Related to Pending Acquisitions and
Reorganization. In connection with UPC's pending acquisition of GSSC and as
part of both companies' continuing efforts to reduce expenses, both UPC and
GSSC have retained the services of Alex Sheshunoff Management Services, Inc., a
nationally recognized consulting firm, to make recommendations for improving
the financial performance of each organization and to facilitate the
consolidation of the two organizations. Through its study of each organization,
individually and collectively, certain opportunities to reduce costs and
reengineer operations in order to become more efficient have already been, and
more are expected to be, identified. Management of UPC and GSSC expect that
there will be a reduction in the number of employees and branches in each
organization regardless of whether the Merger is consummated.
Whether or not the Merger is consummated, UPC and GSSC will each offer
voluntary early retirement and voluntary separation programs in the fourth
quarter of 1994 to facilitate staff reductions. Charges associated with the
early retirement and separation programs, along with other acquisition- and
consolidation-related expenses have been preliminarily estimated to be between
$18 million to $27 million after tax. Management of UPC estimates that charges
associated with these items of between $3 million to $6 million after tax would
be incurred by UPC in the fourth quarter of 1994 regardless of the status of the
Merger. The remaining charges are expected to be incurred in the quarter in
which the Merger is actually consummated. The ranges of charges are based on
currently available information as well as preliminary estimates and are subject
to change. The ranges are provided as a preliminary estimate of the significance
of the charges which may be required and should be viewed accordingly. The
actual charges required may vary substantially from these estimates.
Additional Fourth Quarter 1994 Earnings Considerations. In addition to the
above charges, UPC has undertaken a marketing program in the fourth quarter of
1994 with a view to increasing the number of account relationships and the
related dollar amount of loans in a segment of its consumer loan portfolio. A
substantial part of the marketing- and acquisition-related cost of this program
is expected to be incurred during the fourth quarter of 1994 and is expected to
result in a significant increase in loan volume, interest income and fee income
in 1995 and future periods. Based on current estimates, the cost of this
marketing program would be between $7 million and $9 million after tax. This
range is provided as a preliminary estimate of the significance of the charges
which may be required and should be viewed accordingly. The actual charges
required may vary substantially from these estimates.
19
<PAGE> 31
Recently Completed Acquisitions. Since June 30, 1994, UPC has completed
the acquisitions of the following institutions (collectively, the "Recently
Completed Acquisitions"). UPC's Current Report on Form 8-K, dated October 20,
1994 includes audited consolidated financial statements for the years ended
December 31, 1993, 1992 and 1991, which have been restated to reflect
consummation of the BNF BANCORP, Inc. acquisition, and interim unaudited
consolidated financial statements for June 30, 1994, which have been restated
for all of the Recently Completed Acquisitions:
<TABLE>
<CAPTION>
Asset Size
------------- Method of
Institution Consideration Accounting
- -------------------------------- (In millions) -------------------------------- ------------
<S> <C> <C> <C>
Liberty Bancshares, Inc. and its
subsidiary, Liberty Federal
Savings Bank, Paris, Henry 1,223,353 Shares Pooling of
County, Tennessee $ 181 UPC Common Stock Interests
Earle Bankshares, Inc. and its
subsidiary, First Southern
Bank, Earle, Crittenden Pooling of
County, Arkansas 43 320,112 Shares UPC Common Stock Interests
BNF BANCORP, Inc. and its
subsidiary, BANKFIRST, a
federal savings bank, Decatur, 2,000,329 Shares Pooling of
Morgan County, Alabama 278 UPC Common Stock Interests
------
Total $ 502
===========
</TABLE>
20
<PAGE> 32
Pending Acquisitions. Consistent with UPC's acquisition strategy, UPC has
entered into definitive agreements to acquire the following financial
institutions in addition to GSSC (collectively, the "Pending Acquisitions")
which management considers probable of consummation and which are expected to
close by the end of 1994:
<TABLE>
<CAPTION>
Consideration
-------------------------------------
Approximate
Institution Asset Size Value Type
- ---------------------------------------- ---------- ----------- ---------------------
(In millions)
<S> <C> <C> <C>
Commercial Bancorp, Inc. and its UPC Common Stock
subsidiary, The Commercial Bank, (Approximately
Obion, Obion County, Tennessee (1) $ 29 $ 4.6 189,442 shares)
Mid South Bancshares, Inc. and its
subsidiaries, Security Bank,
Paragould, Greene County, and Farmers UPC Common Stock
& Merchants Bank, Reyno, Randolph (Approximately
County, Arkansas 130 13.0 567,000 shares) (2)
---------- -----------
Totals $159 $17.6
========= ===========
</TABLE>
(1) This transaction closed effective November 1, 1994, but has not been
included in Recently Completed Acquisitions due to its immateriality to the
financial results of UPC.
(2) The number of shares of UPC Common Stock to be issued in connection with
this acquisition is subject to change depending on the market price of the
UPC Common Stock during the stipulated pricing period. The number of shares
reflected above is based upon an assumed current market price of $22.13,
the closing price of UPC Common Stock on the NYSE on November 8, 1994.
21
<PAGE> 33
If the Merger, the Pending Acquisitions and the Recently Completed
Acquisitions had been consummated at June 30, 1994, UPC's consolidated total
assets would have increased by approximately $2.6 billion to approximately $10.1
billion, UPC's consolidated total loans would have increased by approximately
$1.8 billion to approximately $5.4 billion and UPC's consolidated total deposits
would have increased by approximately $2.3 billion to approximately $8.3
billion, based upon June 30, 1994, pro forma financial information. See " -- Pro
Forma Condensed Consolidated Financial Information" and the related pro forma
financial information in UPC's Current Report on Form 8-K dated August 18, 1994
and the consolidated financial statements included in UPC's Current Report on
Form 8-K dated October 20, 1994, incorporated by reference. See "INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE."
Restatement of UPC Financial Data. Effective September 1, 1994, UPC
consummated the acquisition of BNF BANCORP, Inc., which was a significant
acquisition for UPC and has been accounted for by UPC using the pooling of
interests method of accounting. UPC has, consistent with this method of
accounting and in accordance with GAAP, filed restated historical consolidated
financial statements as of and for the three years ended December 31, 1993, and
as of and for the six months ended June 30, 1994, in a Current Report on Form
8-K dated October 20, 1994, reflecting consummation of the Recently Completed
Acquisitions.
22
<PAGE> 34
RECENT DEVELOPMENTS AFFECTING GSSC
1994 Third Quarter GSSC Operating Results. The following table presents
certain information for the three and nine months ended September 30, 1994 and
1993. Reference is made to GSSC's press release dated October 20, 1994, which is
included in GSSC's Current Report on Form 8-K dated October 20, 1994. For
additional information, see "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
<TABLE>
<CAPTION>
Three Months Ended
Nine Months Ended
September 30, (1) September 30, (1)
------------------- -------------------------
1994 1993 1994 1993
------- ------- ---------- ----------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C>
Income statement amounts
Net interest income $28,825 $25,980 $ 82,583 $ 74,724
Provision for losses on loans 990 1,560 2,765 5,500
Investment securities gains (losses) (44) 170 (145) (131)
Other noninterest income 7,710 8,189 22,896 23,084
Noninterest expense 24,286 22,888 72,381 66,255
Earnings before accounting changes 7,740 6,720 20,891 17,937
Accounting changes, net of taxes -- -- -- 781
Net earnings 7,740 6,720 20,891 18,718
Per common share data
Earnings before accounting changes .82 .71 2.20 1.91
Net earnings .82 .71 2.20 1.99
Cash dividends .20 .20 .60 .52
Book value 19.88 17.84
Profitability ratios
Return on average assets
Earnings before accounting changes 1.23% 1.11% 1.13% 1.04%
Net earnings 1.23 1.11 1.13 1.07
Return on average common equity (3)
Earnings before accounting changes 16.43 15.95 15.38 14.97
Net earnings 16.43 15.95 15.38 15.46
Net interest income (taxable-equivalent) as a
percentage of average earning assets (3) 5.17 4.83 5.03 4.88
Asset quality data
Allowance for losses on loans $ 32,898 $ 32,142
Nonperforming loans 2,902 6,278
Nonperforming assets 6,846 12,992
Loans 90 days or more past due 2,591 3,138
Allowance for losses on loans to loans 1.94% 2.10%
Nonperforming loans to loans .17 .41
Nonperforming assets to loans and foreclosed properties .40 .85
Allowance/nonperforming loans 1,133.63 511.98
Balance sheet data (at period end)
Total assets $2,510,895 $2,393,800
Loans, net of unearned income 1,695,765 1,530,709
Investment securities
Amortized cost 575,761 586,105
Fair value 573,803 609,859
Total deposits 2,222,374 2,164,425
Long-term debt (2) 24,355 13,117
Total stockholders' equity 188,743 169,350
Capital ratios
Equity/assets 7.52% 7.07%
Leverage (3) 7.50 6.97
</TABLE>
(1) Interim period ratios are annualized.
(2) Subsidiary banks' long-term debt (primarily Federal Home Loan Bank
advances).
(3) Excludes the impact of the fair value adjustment for available for sale
securities.
23
<PAGE> 35
EQUIVALENT AND PRO FORMA PER SHARE DATA
The following table presents selected, comparative, unaudited per share
data for (i) the UPC Common Stock and the GSSC Common Stock on an historical
basis; (ii) the UPC Common Stock on a pro forma basis for GSSC only and for
GSSC, the Recently Completed Acquisitions and the Pending Acquisitions; and
(iii) the GSSC Common Stock on an equivalent pro forma basis for GSSC only and
for GSSC, the Recently Completed Acquisitions and the Pending Acquisitions, for
the periods indicated. These data are not necessarily indicative of the results
of the future operations of either entity or the actual results that would have
occurred had the Merger been consummated January 1, 1989. The information as of
and for the six months ended June 30, 1994, and as of and for the year ended
December 31, 1993, reflects on a pro forma basis the Recently Completed
Acquisitions and the Pending Acquisitions accounted for using either the pooling
of interests or purchase method of accounting in accordance with the accounting
requirements of each respective acquisition. The information as of and for the
four years ended December 31, 1992 presents only UPC and GSSC on an historical
basis using the pooling of interests method of accounting. The information is
derived from, and should be read in conjunction with, the historical
consolidated financial statements of UPC (including related notes thereto) which
are incorporated by reference, the historical consolidated financial statements
of GSSC (including related notes thereto) which are incorporated by reference
and the unaudited pro forma consolidated financial statements and related notes
in UPC's Current Report on Form 8-K dated August 18, 1994, incorporated by
reference. See "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
24
<PAGE> 36
Union Planters Corporation
Historical and Pro Forma Comparative Per Share Data
<TABLE>
<CAPTION>
Six Months As of and for the Years Ended December 31,
Ended (1)
June 30, ------------------------------------------
1994 (1) 1993 1992 1991 1990 1989
---------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Book value per common share
UPC $18.58 $18.63 $16.07 $14.72 $13.39 $12.31
UPC pro forma (GSSC only) 16.84 16.43 13.87 12.63 11.63 10.93
UPC pro forma (all recently completed and pending
acquisitions, including GSSC) (2) 16.82 16.29 NA NA NA NA
GSSC 19.28 18.34 16.11 14.55 13.68 13.16
GSSC equivalent pro forma (GSSC only) 24.47 23.87 20.15 18.35 16.90 15.88
GSSC equivalent pro forma (all recently completed
and pending acquisitions, including GSSC) (2) 24.44 23.67 NA NA NA NA
Cash dividends per share
UPC 0.42 0.72 0.60 0.48 0.48 0.48
UPC pro forma 0.42 0.72 0.60 0.48 0.48 0.48
GSSC 0.40 0.72 0.60 0.60 0.60 0.60
GSSC equivalent pro forma 0.61 1.05 0.87 0.70 0.70 0.70
Earnings before extraordinary items and accounting
changes
UPC
Primary 1.31 2.63 2.07 1.56 1.18 (1.00)
Fully diluted 1.23 2.46 2.00 1.55 1.18 (1.00)
UPC pro forma (GSSC only)
Primary 1.20 2.32 1.77 1.30 1.02 (0.44)
Fully diluted 1.15 2.24 1.75 1.30 1.02 (0.44)
UPC pro forma (all recently completed and pending
acquisitions, including GSSC) (2)
Primary 1.17 2.13 NA NA NA NA
Fully diluted 1.13 2.07 NA NA NA NA
GSSC
Primary 1.39 2.62 2.01 1.41 1.17 0.62
Fully diluted 1.39 2.62 2.01 1.41 1.17 0.62
GSSC equivalent pro forma (GSSC only)
Primary 1.74 3.37 2.57 1.89 1.48 (0.64)
Fully diluted 1.67 3.25 2.54 1.89 1.48 (0.64)
GSSC equivalent pro forma (all recently completed
and pending acquisitions, including GSSC) (2)
Primary 1.70 3.09 NA NA NA NA
Fully diluted 1.64 3.01 NA NA NA NA
</TABLE>
NA = Not Applicable
(1) The equivalent pro forma per share data for GSSC are computed by multiplying
UPC's pro forma information by 1.4530, the Exchange Ratio.
(2) See also, "-- Recent Developments Affecting UPC; -- Recently Completed
Acquisitions" and "-- Pending Acquisitions."
25
<PAGE> 37
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following tables contain unaudited consolidated pro forma condensed
financial information showing a balance sheet at June 30, 1994 and statements of
earnings for the six months ended June 30, 1994, and for the years ended
December 31, 1993, 1992 and 1991, for (i) UPC; (ii) UPC and GSSC; and (iii) UPC,
the Recently Completed Acquisitions and the pro forma impact of acquisitions by
UPC accounted for as purchases in 1993 and through June 30, 1994, the Pending
Acquisitions and GSSC. The unaudited pro forma financial information reflects
each acquisition using either the pooling of interests or purchase method of
accounting in accordance with the accounting requirements applicable to each
respective transaction. The unaudited pro forma financial information should be
read in conjunction with the historical consolidated financial statements and
notes thereto of UPC and GSSC, respectively, and in conjunction with the
information presented in UPC's Current Reports on Form 8-K dated February 8,
1994, April 14, 1994, May 18, 1994, July 1, 1994, July 26, 1994, August 18,
1994, August 19, 1994, September 1, 1994 and October 20, 1994. Pro forma results
are not necessarily indicative of future operating results. See "INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE." Certain nonrecurring charges as discussed in
"-- Recent Developments Affecting UPC -- Earnings Considerations Relating to
Pending Acquisitions and Reorganization" and "-- Additional Fourth Quarter 1994
Earnings Considerations" have not been included in the proforma condensed
consolidated financial information.
26
<PAGE> 38
UNION PLANTERS CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED PRO FORMA BALANCE SHEET
(Dollars in thousands)
<TABLE>
<CAPTION>
June 30, 1994
-----------------------------------------
UPC,
All Pending
UPC and Acquisitions
UPC GSSC and GSSC
---------- ---------- -----------
<S> <C> <C> <C>
Assets
Cash and due from banks $ 294,565 $ 414,270 $ 420,690
Interest-bearing deposits at financial institutions 10,689 11,832 17,994
Federal funds sold and securities purchased under
agreements to resell 42,128 42,128 41,223
Trading account securities, at market 148,204 148,204 148,204
Loans held for resale 9,974 40,937 40,937
Investment securities
Available for sale 2,465,523 2,592,940 2,584,600
Held to maturity 570,614 1,031,835 1,087,717
Loans, net of unearned income 3,639,444 5,297,200 5,387,472
Less:
Allowance for losses on loans (88,476) (121,608) (122,445)
---------- ---------- -----------
Net loans 3,550,968 5,175,592 5,265,027
Premises and equipment 158,553 208,097 212,960
Accrued interest receivable 62,415 81,817 82,702
Goodwill and other intangibles 45,193 45,193 46,467
Other assets 109,080 141,270 143,547
---------- ---------- -----------
Total assets $7,467,906 $9,934,115 $10,092,068
========= ========= ==========
Liabilities and shareholders' equity
Deposits
Noninterest-bearing $ 832,603 $1,229,668 $ 1,242,535
Other interest-bearing 5,157,275 6,970,915 7,096,443
---------- ---------- -----------
Total deposits 5,989,878 8,200,583 8,338,978
Short-term borrowings 506,516 534,101 534,914
Federal Home Loan Bank advances 193,399 218,420 218,420
Long-term debt 117,049 117,099 118,664
Accrued interest, expenses and taxes 49,392 59,335 63,092
Other liabilities 35,932 45,791 48,098
---------- ---------- -----------
Total liabilities 6,892,166 9,175,329 9,322,166
---------- ---------- -----------
Shareholders' equity
Preferred stock
Convertible 87,298 87,298 87,298
Nonconvertible 17,250 17,250 17,250
Common stock 126,788 194,217 198,030
Additional paid-in capital 92,369 92,369 92,570
Net unrealized loss -- available for sale
securities (13,760) (14,229) (14,050)
Retained earnings 265,795 381,881 388,804
---------- ---------- -----------
Total shareholders' equity 575,740 758,786 769,902
---------- ---------- -----------
Total liabilities and shareholders' equity $7,467,906 $9,934,115 $10,092,068
========= ========= ==========
</TABLE>
27
<PAGE> 39
UNION PLANTERS CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED PRO FORMA STATEMENT OF EARNINGS
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Six Months Ended June 30, 1994
---------------------------------------
UPC, Recently
Completed
Acquisitions,
All Pending
UPC and Acquisitions
UPC GSSC and GSSC
-------- -------- -------------
<S> <C> <C> <C>
Interest income
Interest and fees on loans $145,416 $211,466 $ 213,463
Interest on investment securities 75,180 90,987 92,797
Interest on deposits at financial institutions 229 240 368
Interest on federal funds sold and securities
purchased under agreements to resell 1,715 1,978 1,849
Interest on trading account securities 3,978 3,978 3,978
Interest on loans held for resale 878 2,638 2,638
-------- -------- -------------
Total interest income 227,396 311,287 315,093
-------- -------- -------------
Interest expense
Interest on deposits 81,570 110,497 112,022
Interest on short-term borrowings 6,270 6,792 6,792
Interest on Federal Home Loan Bank advances and
long-term debt 7,900 8,584 8,681
-------- -------- -------------
Total interest expense 95,740 125,873 127,495
-------- -------- -------------
Net interest income 131,656 185,414 187,598
Provision for losses on loans -- 1,775 1,974
-------- -------- -------------
Net interest income after provision for losses on
loans 131,656 183,639 185,624
-------- -------- -------------
Noninterest income
Service charges on deposit accounts 15,989 24,583 24,783
Profits and commissions from trading activities 2,841 2,841 2,841
Investment securities gains 210 109 266
Other income 21,480 28,071 28,534
-------- -------- -------------
Total noninterest income 40,520 55,604 56,424
-------- -------- -------------
Noninterest expense
Salaries and employee benefits 52,591 78,505 80,036
Net occupancy expense 9,029 12,644 12,733
Equipment expense 9,173 13,063 13,460
Other expense 46,793 61,469 62,153
-------- -------- -------------
Total noninterest expense 117,586 165,681 168,382
-------- -------- -------------
Earnings before income taxes, extraordinary item
and accounting changes 54,590 73,562 73,666
Applicable income taxes 16,769 22,590 22,632
-------- -------- -------------
Earnings before extraordinary item and accounting
changes $ 37,821 $ 50,972 $ 51,034
======== ======== =============
Earnings per common share
Primary $ 1.31 $ 1.20 $ 1.17
Fully diluted 1.23 1.15 1.13
Average common shares outstanding (in thousands)
Primary 25,449 38,935 39,697
Fully diluted 29,931 43,417 44,179
</TABLE>
28
<PAGE> 40
UNION PLANTERS CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED PRO FORMA STATEMENT OF EARNINGS
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Year Ended December 31, 1993
---------------------------------------
UPC, Recently
Completed
Acquisitions,
All Pending
UPC Acquisitions
UPC and GSSC and GSSC
-------- -------- -------------
<S> <C> <C> <C>
Interest income
Interest and fees on loans $254,259 $376,741 $ 426,496
Interest on investment securities 146,950 181,363 197,984
Interest on deposits at financial institutions 1,634 1,742 2,288
Interest on federal funds sold and securities
purchased under agreements to resell 4,602 5,092 5,730
Interest on trading account securities 6,194 6,194 6,194
Interest on loans held for resale 3,336 7,432 7,432
-------- -------- -------------
Total interest income 416,975 578,564 646,124
-------- -------- -------------
Interest expense
Interest on deposits 154,487 213,197 242,640
Interest on short-term borrowings 6,287 7,230 7,520
Interest on Federal Home Loan Bank advances and
long-term debt 12,358 13,253 13,771
-------- -------- -------------
Total interest expense 173,132 233,680 263,931
-------- -------- -------------
Net interest income 243,843 344,884 382,193
Provision for losses on loans 9,743 16,558 21,262
-------- -------- -------------
Net interest income after provision for losses on
loans 234,100 328,326 360,931
-------- -------- -------------
Noninterest income
Service charges on deposit accounts 29,274 46,532 50,401
Profits and commissions from trading activities 8,720 8,989 9,040
Investment securities gains 4,732 4,495 4,892
Other income 45,190 58,735 61,307
-------- -------- -------------
Total noninterest income 87,916 118,751 125,640
-------- -------- -------------
Noninterest expense
Salaries and employee benefits 101,650 150,383 164,915
Net occupancy expense 16,256 23,356 24,552
Equipment expense 16,679 23,986 24,366
Other expense 95,734 121,956 138,834
-------- -------- -------------
Total noninterest expense 230,319 319,681 352,667
-------- -------- -------------
Earnings before income taxes, extraordinary item
and accounting changes 91,697 127,396 133,904
Applicable income taxes 26,333 37,420 40,591
-------- -------- -------------
Earnings before extraordinary item and accounting
changes $ 65,364 $ 89,976 $ 93,313
======== ======== =============
Earnings per common share
Primary $ 2.63 $ 2.32 $ 2.13
Fully diluted 2.46 2.24 2.07
Average common shares outstanding (in thousands)
Primary 21,622 35,108 39,630
Fully diluted 25,852 39,338 44,228
</TABLE>
29
<PAGE> 41
UNION PLANTERS CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED PRO FORMA STATEMENT OF EARNINGS
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Year Ended
December 31, 1992
-------------------------
UPC UPC AND GSSC
-------- ------------
<S> <C> <C>
Interest income
Interest and fees on loans $212,225 $315,976
Interest on investment securities 129,404 165,005
Interest on deposits at financial institutions 3,999 4,915
Interest on federal funds sold and securities purchased
under agreements to resell 4,280 5,250
Interest on trading account securities 6,648 6,648
Interest on loans held for resale 3,561 7,146
-------- ------------
Total interest income 360,117 504,940
-------- ------------
Interest expense
Interest on deposits 147,132 209,035
Interest on short-term borrowings 6,942 8,040
Interest on Federal Home Loan Bank advances and long-term
debt 5,489 5,555
-------- ------------
Total interest expense 159,563 222,630
-------- ------------
Net interest income 200,554 282,310
Provision for losses on loans 19,194 27,182
-------- ------------
Net interest income after provision for losses on loans 181,360 255,128
-------- ------------
Noninterest income
Service charges on deposit accounts 21,335 35,590
Profits and commissions from trading activities 10,168 10,168
Investment securities gains 13,363 14,019
Other income 41,246 51,670
-------- ------------
Total noninterest income 86,112 111,447
-------- ------------
Noninterest expense
Salaries and employee benefits 77,245 116,764
Net occupancy expense 13,509 19,989
Equipment expense 12,875 18,186
Other expense 101,209 124,525
-------- ------------
Total noninterest expense 204,838 279,464
-------- ------------
Earnings before income taxes, extraordinary item and
accounting changes 62,634 87,111
Applicable income taxes 17,611 23,861
-------- ------------
Earnings before extraordinary item and accounting changes $ 45,023 $ 63,250
======== ================
Earnings per common share
Primary $ 2.07 $ 1.77
Fully diluted 2.00 1.75
Average common shares outstanding (in thousands)
Primary 18,765 32,251
Fully diluted 21,609 35,095
</TABLE>
30
<PAGE> 42
UNION PLANTERS CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED PRO FORMA STATEMENT OF EARNINGS
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Year Ended
December 31, 1991
-------------------------
UPC UPC and GSSC
-------- ------------
<S> <C> <C>
Interest income
Interest and fees on loans $227,667 $341,936
Interest on investment securities 99,580 141,925
Interest on deposits at financial institutions 7,525 9,898
Interest on federal funds sold and securities purchased under
agreements to resell 6,606 8,791
Interest on trading account securities 5,419 5,419
Interest on loans held for resale 4,784 6,150
-------- ------------
Total interest income 351,581 514,119
-------- ------------
Interest expense
Interest on deposits 173,295 259,518
Interest on short-term borrowings 12,809 14,383
Interest on Federal Home Loan Bank advances and long-term debt 5,004 5,196
-------- ------------
Total interest expense 191,108 279,097
-------- ------------
Net interest income 160,473 235,022
Provision for losses on loans 25,281 34,203
-------- ------------
Net interest income after provision for losses on loans 135,192 200,819
-------- ------------
Noninterest income
Service charges on deposit accounts 19,868 33,626
Profits and commissions from trading activities 14,707 14,674
Investment securities gains 3,391 2,624
Other income 34,115 41,165
-------- ------------
Total noninterest income 72,081 92,089
-------- ------------
Noninterest expense
Salaries and employee benefits 71,953 108,490
Net occupancy expense 10,901 17,414
Equipment expense 11,346 16,077
Other expense 75,401 96,494
-------- ------------
Total noninterest expense 169,601 238,475
-------- ------------
Earnings before income taxes, extraordinary item and
accounting changes 37,672 54,433
Applicable income taxes 7,538 11,537
-------- ------------
Earnings before extraordinary item and accounting changes $ 30,134 $ 42,896
======== ==============
Earnings per common share
Primary $ 1.56 $ 1.30
Fully diluted 1.55 1.30
Average common shares outstanding (in thousands)
Primary 18,632 32,118
Fully diluted 18,986 32,472
</TABLE>
31
<PAGE> 43
THE SPECIAL MEETINGS
THE UPC SPECIAL MEETING
Date, Time and Place. This Joint Proxy Statement/Prospectus is being
furnished to the shareholders of UPC in connection with the solicitation of
proxies by the UPC Board of Directors for use at the UPC Special Meeting to be
held at the offices of UPC, Union Planters Administrative Center, 7130 Goodlett
Farms Parkway, Memphis, Tennessee 38018, on Wednesday, December 28, 1994, at
1:00 p.m., Central Standard Time.
This Joint Proxy Statement/Prospectus is first being sent to the
shareholders of UPC on or about November 10, 1994.
Matters to be Considered at the UPC Special Meeting. At the UPC
Special Meeting, holders of record of UPC Common Stock on the UPC Record Date
(as defined below) will consider and vote upon the approval of the
Reorganization Agreement providing for the acquisition of GSSC by UPC through
the merger of INTERIM with and into GSSC. Upon consummation of the Merger,
GSSC would immediately thereafter be liquidated and dissolved by UPC,
whereupon the Banks would become direct wholly owned subsidiaries of UPC.
Other than procedural matters, no other business may properly come before the
UPC Special Meeting or any adjournments or postponements thereof.
Record Date; Vote Required. The UPC Board of Directors has fixed the
close of business on October 27, 1994, as the record date (the "UPC Record
Date") for the determination of shareholders of UPC entitled to receive
notice of and to vote at the UPC Special Meeting. On the UPC Record Date there
were 25,431,252 shares of UPC Common Stock outstanding and entitled to vote at
the UPC Special Meeting. Only holders of record of UPC Common Stock on the UPC
Record Date are entitled to vote at the UPC Special Meeting. No shares of UPC
Common Stock can be voted at the UPC Special Meeting unless the record holder
is present in person or represented by proxy at the UPC Special Meeting.
The affirmative votes of the holders of a majority of the outstanding
shares of UPC Common Stock present in person or by proxy and entitled to vote
at the UPC Special Meeting are required to approve the Reorganization
Agreement.
As of the UPC Record Date, the directors and executive officers of
UPC and their affiliates owned beneficially an aggregate of 1,061,014 shares of
UPC Common Stock (excluding shares which may be received upon the exercise of
options), or approximately 4.17% of the shares entitled to vote at the UPC
Special Meeting. All such directors and executive officers and their
affiliates have indicated their intention to vote substantially all of their
shares for the approval of the Reorganization Agreement.
Voting and Revocation of Proxies. If the recipient of this Joint
Proxy Statement/Prospectus should be a UPC shareholder, a proxy for use at the
UPC Special Meeting
32
<PAGE> 44
will accompany this Joint Proxy Statement/Prospectus. A UPC
shareholder may use the proxy if they should be unable to attend the UPC
Special Meeting in person or should wish to have their shares voted by proxy
even if the UPC shareholder should attend the UPC Special Meeting. Shares of
UPC Common Stock represented by a proxy properly signed and returned to UPC
at, or prior to, the UPC Special Meeting, unless subsequently revoked, will be
voted at the UPC Special Meeting in accordance with the instructions thereon.
If a proxy is properly signed and returned and the manner of voting is not
indicated on the proxy, any shares of UPC Common Stock represented by such
proxy will be voted "FOR" approval of the Reorganization Agreement.
Proxies marked to abstain from voting will be treated as shares that
are present at the UPC Special Meeting for purposes of determining the presence
of a quorum but as unvoted for purposes of determining the number of shares
voting on the proposal. If a broker or other nominee holder should indicate on
the proxy card that it does not have discretionary authority to vote the shares
it holds of record on the proposal, those shares will not be considered as
voted for purposes of determining the approval of the proposal by the
shareholders of UPC.
Any proxy given pursuant to this solicitation may be revoked at any
time prior to the voting thereof by filing with the Secretary of UPC a written
revocation or a duly executed proxy bearing a later date. A holder of UPC
Common Stock may withdraw their proxy at the UPC Special Meeting at any time
before it is exercised by electing to vote in person, however attendance at the
UPC Special Meeting will not in and of itself constitute a revocation of the
proxy.
Solicitation of Proxies. In addition to solicitation of proxies from
shareholders of UPC Common Stock by use of the mail, proxies also may be
solicited by personal interview, telephone or facsimile by directors, officers,
employees and agents of UPC, who will not be specifically compensated for such
services. It is expected that banks, brokerage houses and other institutions,
nominees or fiduciaries will be requested to forward the soliciting materials
to their principals and to obtain authorization for the execution of proxies.
All costs of soliciting proxies for the UPC Special Meeting, assembling and
mailing the Joint Proxy Statement/Prospectus to the UPC shareholders and all
papers which now accompany or hereafter may supplement the same, as well as
reasonable out-of-pocket expenses incurred by such banks, brokerage houses and
other institutions, nominees or fiduciaries for forwarding proxy materials to
and obtaining proxies from their principals will be borne by UPC.
SHAREHOLDERS OF UPC COMMON STOCK ARE REQUESTED TO COMPLETE, DATE AND SIGN THE
ACCOMPANYING PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE-PREPAID
ENVELOPE.
THE GSSC SPECIAL MEETING
Date, Time and Place. This Joint Proxy Statement/Prospectus is being
furnished to the stockholders of GSSC in connection with the solicitation of
proxies by the GSSC Board of
33
<PAGE> 45
Directors for use at the GSSC Special Meeting to be held at the offices
of GSSC, Corporate Administration Building, 2000 Gateway, Grenada, Mississippi
38901, on Wednesday, December 28, 1994, at 1:00 p.m., Central Standard Time.
This Joint Proxy Statement/Prospectus is first being sent to the
stockholders of GSSC on or about November 10, 1994.
Matters to be Considered at the GSSC Special Meeting. At the GSSC
Special Meeting, holders of record of GSSC Common Stock on the GSSC Record Date
(as defined below) will consider and vote upon the adoption of the
Reorganization Agreement providing for the acquisition of GSSC by UPC through
the merger of INTERIM with and into GSSC. Upon consummation of the Merger,
GSSC would immediately thereafter be liquidated and dissolved by UPC,
whereupon the Banks would become direct wholly owned subsidiaries of UPC.
Other than procedural matters, no other business may properly come before the
GSSC Special Meeting or any adjournments or postponements thereof.
Record Date; Vote Required. The GSSC Board of Directors has fixed
the close of business on October 31, 1994, as the record date (the "GSSC
Record Date") for the determination of stockholders of GSSC entitled to
receive notice of and to vote at the GSSC Special Meeting. On the GSSC Record
Date there were 9,492,975 shares of GSSC Common Stock outstanding and entitled
to vote at the GSSC Special Meeting. Only holders of record of GSSC Common
Stock on the GSSC Record Date are entitled to vote at the GSSC Special Meeting.
No shares of GSSC Common Stock can be voted at the GSSC Special Meeting unless
the record holder is present in person or represented by proxy at the GSSC
Special Meeting.
The affirmative votes of the holders of a majority of the outstanding
shares of GSSC Common Stock entitled to vote at the GSSC Special Meeting are
required to adopt the Reorganization Agreement. Therefore, a failure to
return a properly executed proxy or, alternatively, to vote in person at the
GSSC Special Meeting in favor of the proposal, will have the same effect as a
vote against adoption of the Reorganization Agreement.
As of the GSSC Record Date, the directors and executive officers of
GSSC and their affiliates owned beneficially an aggregate of 618,647 shares of
GSSC Common Stock (excluding shares which may be received upon the exercise of
options), or approximately 6.5% of the shares entitled to vote at the GSSC
Special Meeting. All such directors and executive officers and their
affiliates have indicated their intention to vote substantially all of their
shares for the proposal to adopt the Reorganization Agreement.
Voting and Revocation of Proxies. If the recipient of this Joint
Proxy Statement/Prospectus should be a GSSC stockholder, a proxy for use at the
GSSC Special Meeting will accompany this Joint Proxy Statement/Prospectus. A
GSSC stockholder may use the proxy if they should be unable to attend the GSSC
Special Meeting in person or should wish to have their shares voted by proxy
even if the GSSC stockholder should attend the GSSC Special Meeting. Shares of
GSSC Common Stock represented by a proxy properly signed and
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<PAGE> 46
returned to GSSC at, or prior to, the GSSC Special Meeting, unless subsequently
revoked, will be voted at the GSSC
Special Meeting in accordance with the instructions thereon. If a proxy is
properly signed and returned and the manner of voting is notindicated on the
proxy, any shares of GSSC Common Stock represented by such proxy will be voted
"FOR" the proposal to adopt the Reorganization Agreement.
Proxies marked to abstain from voting will be treated as shares that
are present at the GSSC Special Meeting for purposes of determining the
presence of a quorum but as unvoted for purposes of determining the number of
shares voting on the proposal. If a broker or other nominee holder should
indicate on the proxy card that it does not have discretionary authority to
vote the shares it holds of record on the proposal, those shares will not be
considered as voted for purposes of determining the adoption of the proposal by
the stockholders of GSSC.
Any proxy given pursuant to this solicitation may be revoked at any
time prior to the voting thereof by filing with the Secretary of GSSC a written
revocation or a duly executed proxy bearing a later date. A holder of GSSC
Common Stock may withdraw their proxy at the GSSC Special Meeting at any time
before it is exercised by electing to vote in person; however, attendance at
the GSSC Special Meeting will not in and of itself constitute a revocation of
the proxy.
Solicitation of Proxies. In addition to solicitation of proxies from
stockholders of GSSC Common Stock by use of the mail, proxies also may be
solicited by personal interview, telephone and facsimile by directors,
officers, employees and agents of GSSC, who will not be specifically
compensated for such services. It is expected that banks, brokerage houses
and other institutions, nominees or fiduciaries will be requested to forward
the soliciting materials to their principals and to obtain authorization for
the execution of proxies. All costs of soliciting proxies for the GSSC Special
Meeting, assembling and mailing the Joint Proxy Statement/Prospectus to the
GSSC stockholders and all papers which now accompany or hereafter may
supplement the same, as well as reasonable out-of-pocket expenses incurred by
such banks, brokerage houses and other institutions, nominees or fiduciaries
for forwarding proxy materials to and obtaining proxies from their principals
will be borne by GSSC.
GSSC and UPC will each bear its own expenses in connection with
soliciting proxies for its respective Special Meeting, except that UPC shall
pay all Commission and other regulatory filing fees incurred in connection with
the Merger.
STOCKHOLDERS OF GSSC ARE REQUESTED TO COMPLETE, DATE AND SIGN THE ACCOMPANYING
PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE.
FAILURE TO RETURN YOUR PROPERLY EXECUTED PROXY CARD OR FAILURE TO VOTE AT THE
GSSC SPECIAL MEETING WILL HAVE THE SAME EFFECT AS A VOTE AGAINST THE ADOPTION
OF THE REORGANIZATION AGREEMENT. GSSC STOCKHOLDERS SHOULD NOT FORWARD ANY STOCK
CERTIFICATES WITH THEIR PROXY CARDS.
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NO SHAREHOLDER'S OR STOCKHOLDER'S APPRAISAL RIGHTS
No dissenters' or appraisal rights will be available to the
shareholders of UPC entitled to receive notice of and to vote at the UPC
Special Meeting or the stockholders of GSSC Common Stock entitled to receive
notice of and to vote at the GSSC Special Meeting, since the UPC Common Stock
is listed on the NYSE and the GSSC Common Stock is traded through the
NASDAQ/NMS.
REASONS AND RECOMMENDATIONS OF THE BOARDS OF DIRECTORS OF UPC AND GSSC
For the reasons described below, the UPC Board of Directors and the
GSSC Board of Directors have each unanimously approved the Reorganization
Agreement and recommend that their respective shareholders and stockholders
vote "FOR" approval or adoption, as the case may be, of the Reorganization
Agreement. See "THE MERGER -- Reasons for the Merger and Recommendations of
the Boards of Directors of UPC and GSSC."
OTHER MATTERS
The Boards of Directors of UPC and GSSC are not aware of any business
to come before the Special Meetings other than the matters described in this
Joint Proxy Statement/Prospectus. However, if any other matters should
properly come before either of the Special Meetings, it is intended that
proxies properly submitted in the accompanying form will be voted in respect
thereof at the respective Special Meeting in accordance with the determination
of a majority of the Board of Directors of UPC or GSSC, as the case may be.
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THE MERGER
The following description of the Merger is not intended to be a complete
description of all material facts regarding the Merger and is qualified in all
respects by reference to the Agreement and Plan of Reorganization, including
the Plan of Merger annexed thereto as Exhibit A, the fairness opinion of
Robinson-Humphrey and the fairness opinion of Stifel Nicolaus, attached hereto
as Appendices A, B and C, respectively. All UPC shareholders and GSSC
stockholders are urged to read the Reorganization Agreement, as well as the
other Appendices, in their entirety.
BACKGROUND OF THE MERGER
During the past several years, the banking industry has witnessed a
period of substantial and rapid change in general, and the Board of Directors
and management of GSSC specifically have been aware of change occurring in the
financial services available in the markets served by GSSC. Recently, there
has been consolidation activity in the southeastern United States and
nation-wide in which institutions of GSSC's size have been acquired by larger
regional bank holding companies with access to capital and resources
substantially greater than those of GSSC.
GSSC has been approached from time to time by companies seeking
either to be acquired by GSSC or to acquire GSSC. On February 3, 1992, GSSC
and First Tennessee National Corporation announced that they had entered into a
Letter of Intent stating that they would use their best efforts to negotiate
and execute a definitive merger agreement and addressing certain non-price
aspects of the anticipated transaction. The parties subsequently negotiated
price terms, but were unable to agree on mutually satisfactory terms. On
February 7, 1992, the parties announced that the merger negotiations in which
they had been engaged had been terminated and that they did not anticipate that
negotiations would resume.
After the termination of negotiations with First Tennessee National
Corporation, GSSC adopted a long-term business strategy to remain independent,
subject to the GSSC Board of Directors' fiduciary obligations to GSSC's
stockholders.
On March 15, 1994, a representative of UPC contacted a representative
of GSSC to inquire whether GSSC would be interested in being acquired by or
merged with UPC. The representative of GSSC responded that it was GSSC's
long-term strategy to remain independent. On March 21, 1994, a special
committee of the GSSC Board of Directors, formed at the time of the First
Tennessee National Corporation negotiations for the purpose of dealing with a
potential acquisition of GSSC (the "Committee"), discussed the initial contact
from UPC and decided that GSSC's long-term strategy had not changed, but that
GSSC would be willing to listen to UPC. On March 30, 1994, the representatives
of UPC and GSSC again met and had general discussions regarding the operations
of the two companies.
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On April 21, 1994, at UPC's request the representatives had further
discussions regarding a potential combination. The UPC and GSSC
representatives discussed synergies possible in a combined operation and UPC
indicated various synergy levels which would produce various exchange ratios.
The values ranged from approximately $29 to $33 per share of GSSC Common Stock.
In addition, the parties discussed having a pro rata portion of the UPC Board
of Directors consisting of members of the GSSC Board of Directors if the
combination were made. The parties also generally discussed UPC's practice of
extending employment contracts for key employees. No price offer was made by
UPC.
On April 29, 1994, the members of the Committee met to discuss the
prior meetings with UPC. During the meeting the Committee contacted Thompson &
Mitchell ("Counsel") to obtain legal advice regarding its fiduciary
obligations, including the need for the directors to be fully informed before
making any decision concerning a particular merger or mergers in general. The
Committee concluded that it would be in GSSC's best interest to employ an
investment banker to advise the GSSC Board of Directors about UPC and about
markets generally and values. Thereafter, Counsel, on behalf of GSSC,
contacted Robinson-Humphrey, and the Committee approved the employment of
Robinson-Humphrey for a period of one year for a fee of $25,000. Further, at
the meeting on April 29, 1994, the Committee agreed to contact UPC to tell its
representative that GSSC needed time for internal evaluation and would not be
in a position to have any further discussions in the immediate future. This
information was relayed to UPC on May 12, 1994.
On May 13, 1994, the members of the Committee and representatives of
each of Robinson-Humphrey and Counsel had an extended telephone conversation at
which time Robinson-Humphrey gave the Committee a preliminary estimation of
market value of GSSC Common Stock based on a wide variety of transactions.
This preliminary estimation showed a range of prices of $32 to $37 per share
for GSSC as the value that might be expected in a merger. However, a range of
prices based on other transactions occurring in the market place indicated that
an even higher price would be possible, although the transactions in which such
prices were paid were not directly comparable to GSSC's situation. During this
meeting, a member of the Committee reported that he had been contacted by a
representative of a second bank holding company (the "Second Company") about
the possibility of meeting, but such representative did not identify what he
wanted to discuss. A meeting with the representatives of the Second Company
was scheduled for May 16, 1994. After the May 13, 1994 meeting, the members of
the Committee met privately by telephone to discuss the recommendations that
should be made to the GSSC Board of Directors. The general view of the
Committee was that GSSC would be willing to listen to anyone, but that GSSC was
not "for sale" unless someone offered a preemptive price.
On May 16, 1994, representatives of GSSC and the Second Company met.
The representative of the Second Company wanted to discuss a possible merger of
the Second Company and GSSC. The Second Company representative stated he
believed that GSSC would be a perfect fit and that the two companies would be
complementary. After this meeting the members of the Committee met to discuss
this latest inquiry. The Committee decided to
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recommend to the GSSC Board of Directors that it not proceed with any further
discussions with either UPC or the Second Company. Further, based upon (i)
the GSSC Board of Directors' duty to be fully informed with respect to the
financial matters and (ii) the GSSC Board of Directors' legal obligations,
the Committee recommended that the entire GSSC Board of Directors meet with
Robinson-Humphrey to review financial matters and with Counsel to review legal
obligations and considerations.
On June 16, 1994, the GSSC Board of Directors met with
representatives of each of Robinson-Humphrey and Counsel. The purpose of the
meeting was (i) to consider whether GSSC should consider changing its policy of
independence and respond affirmatively to expressions of interest, (ii) to
review the GSSC Board of Directors' fiduciary duties of due care and absolute
loyalty, (iii) to review anti-trust considerations of any potential transaction
and (iv) to review a merger analysis and valuation report prepared by
Robinson-Humphrey.
At this meeting, the GSSC Board of Directors discussed generally the
banking climate and GSSC's policy of remaining independent. The consensus of
the meeting was that it would be appropriate to explore the subject of a merger
based upon the existing climate and the prospect that a very significant
amount might be realized by the stockholders of GSSC in excess of GSSC's
current market price. Additionally, the GSSC Board of Directors discussed
potential acquirors and the prospects of such potential acquirors identified by
Robinson-Humphrey.
Counsel then summarized the applicable statutory and case law with
respect to the GSSC Board of Directors' fiduciary duties of due care and
absolute loyalty. The GSSC Board of Directors discussed its obligation with
respect to any expression of interest and the role of a market check in the
event the GSSC Board of Directors received an expression of interest. Counsel
also reviewed antitrust considerations affecting bank mergers. Counsel noted
that some of the prospects identified by Robinson-Humphrey would require
substantial divestitures to pass the screens imposed by the Federal Reserve and
the United States Department of Justice as they administered the anti-trust
laws.
Robinson-Humphrey next presented a merger analysis and market
comparison of GSSC and each of UPC and the Second Company. The GSSC Board of
Directors reviewed the expected increase in the dividend yield to the
stockholders of GSSC if a proposed transaction were consummated with either UPC
or the Second Company or either of two additional prospects identified by
Robinson-Humphrey. In addition, with respect to UPC and the Second Company,
the GSSC Board of Directors reviewed, among other things, (i) synergy
estimates, (ii) expected market dilution at varying purchase prices, (ii) the
institution's ability to consummate a transaction and (iv) the takeover value
of a combined institution.
Robinson-Humphrey then presented a valuation analysis and discussed
the current banking environment. The analysis indicated that the premiums paid
on comparable transactions averaged approximately 1.82 times book value.
Robinson-Humphrey stated that the current banking environment was at a stage
where companies were trying to grow their franchises and paying toward the high
end of the range for acquisitions. Robinson-Humphrey indicated that
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the decrease in interest rate margins would probably slow this trend. After a
thorough discussion of the topics presented, the GSSC Board of Directors agreed
to review carefully the materials provided by Robinson-Humphrey and Counsel
prior to the GSSC Board of Directors' next meeting.
On June 20, 1994, after a thorough review by each member of the GSSC
Board of Directors of all materials prepared by Robinson-Humphrey and Counsel,
the GSSC Board of Directors voted to authorize Robinson-Humphrey to seek an
expression of interest from UPC. The GSSC Board of Directors decided not to
contact the Second Company because (i) such a combination appeared to require a
large divestiture of loans and deposits to obtain the required regulatory
approvals and (ii) the materials prepared by Robinson-Humphrey indicated that
the Second Company would be unable to pay the premium that UPC could pay.
Additionally, the GSSC Board of Directors viewed UPC as a more attractive
acquiror if the GSSC Board of Directors considered the possibility of a "double
dip" (that is, the acquiror in turn being acquired by a larger bank holding
company at some time in the future) as a result of further industry
consolidation following then anticipated federally authorized nation-wide
banking and branching.
On June 24, 1994, UPC, through Robinson-Humphrey, submitted to GSSC
an expression of interest of $35.00 per share in stock, based upon certain
synergies that would be necessary. UPC indicated that the expression of
interest could be increased, but that there would be no commitment to give
members of the GSSC Board of Directors any seats on the UPC Board of Directors.
A GSSC Board of Directors meeting was held to consider this expression of
interest and to decide whether the expression of interest would be considered
preemptive. The view of the GSSC Board of Directors was that the expression of
interest was not preemptive. The GSSC Board of Directors determined to see if
UPC would express interest at a higher level, subject to a market check to see
if a better price might otherwise be available. Based upon the analysis of
Robinson-Humphrey, which included a review of a group of financial institutions
that were thought to be able to pay at the higher end of the scale, the GSSC
Board of Directors decided to contact a third financial institution (the
"Third Company") to obtain a market check.
On June 28, 1994, representatives of GSSC and representatives of the
Third Company met to discuss the possibility of an expression of interest on
the part of the Third Company.
On June 29, 1994, the GSSC Board of Directors met to consider an
expression of interest submitted by the Third Company. The Third Company
proposed a minimum exchange ratio that would increase based upon an ability to
achieve certain synergy levels. Robinson-Humphrey stated that, based upon the
closing stock price of the Third Company's stock on June 29, 1994, the minimum
exchange ratio equated to a value of approximately $34.38 per share of GSSC
Common Stock and the maximum exchange ratio equated to a value of $37.81 per
share of GSSC Common Stock assuming certain synergies were attainable.
Robinson-Humphrey noted that UPC's expression of interest was not contingent on
any synergy level, and noted that as the exchange ratio increased, the amount
of synergies that would be necessary would also increase. In addition to the
price offered by each of UPC and the Third Company, the GSSC Board of Directors
reviewed (i) the dividends paid by each institution, (ii) the trading levels of
each stock,
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(iii) the market capitalization of each company, (iv) the credit
quality of each company and (v) the capital adequacy of each company. After a
thorough discussion of the expressions of interest, and these additional
factors, the GSSC Board of Directors concluded that UPC's expression of
interest should be further explored. Robinson-Humphrey was also authorized to
contact a representative of the Third Company to inform them that GSSC intended
to negotiate a possible transaction with a party other than the Third Company.
On June 29, 1994 and June 30, 1994, representatives of each of UPC
and GSSC met to negotiate the terms of a definitive agreement. During the
evening of June 30, 1994, the GSSC Board of Directors met to consider its
approval and recommendation of the Merger. Counsel was present at the meeting
as well as representatives of Robinson-Humphrey. At the meeting, the GSSC
Board of Directors received presentations from members of the GSSC Board of
Directors who negotiated on behalf of GSSC, Robinson-Humphrey and Counsel. The
GSSC Board of Directors thoroughly reviewed the terms and the conditions of
UPC's proposed definitive agreement. The GSSC Board of Directors also
reexamined the strategic benefits of the proposed combination and the long-term
prospects of the combined company and concluded that the combination continued
to represent a strategic opportunity for GSSC.
At the meeting, Robinson-Humphrey delivered its oral opinion (which
it subsequently confirmed in writing) to the GSSC Board of Directors to the
effect that, as of June 30, 1994, the range of exchange ratios set forth in the
Reorganization Agreement (the "Exchange Ratio Range") was fair to the
stockholders of GSSC from a financial point of view. Robinson-Humphrey noted
that each stockholder of GSSC would receive for each share of GSSC Common Stock
held by such stockholder shares of UPC Common Stock having a value of
approximately $38.00 based on the closing price of UPC Common Stock on June 30,
1994.
Following these reports and further discussions, the GSSC Board of
Directors unanimously approved the terms of the Reorganization Agreement. The
Reorganization Agreement was signed on July 1, 1994 and a press release and a
public announcement of the proposed transaction was made before the NYSE and
the NASDAQ/NMS opened for trading on July 1, 1994.
Pursuant to the Agreement and Plan of Reorganization, each party had
the opportunity to conduct a preliminary due diligence review of the other
party, with such review to be completed within 30 days from the date of the
Agreement and Plan of Reorganization. GSSC conducted certain due diligence
procedures with respect to UPC. The findings of these due diligence procedures
were presented to the GSSC Board of Directors on July 28, 1994. In addition,
GSSC's management internally reviewed the operations of UPC. Based upon the
presentation of these findings and the report of the results of the internal
review to the GSSC Board of Directors, the GSSC Board of Directors determined
on July 28, 1994 that it was satisfied with its due diligence review and it did
not exercise any right to terminate the Reorganization Agreement.
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Senior Management of UPC presented the proposed Merger to the UPC Board
of Directors in late June of 1994. Included in the presentation to the UPC
Board of Directors were the views of UPC management that (i) the Consideration
offered the GSSC stockholders in the Merger would be fair to the UPC
shareholders from a financial point of view based on certain preliminary pro
forma financial analysis undertaken by UPC; (ii) GSSC presented a unique
opportunity for UPC to expand its market franchise across the State of
Mississippi with a dominant market presence; (iii) the close proximity of GSSC
to UPC and existing UPC markets allowed for significant efficiencies and
economies of scale; (iv) the Merger would introduce UPC to Louisiana, a
contiguous banking market which it had previously sought to enter, with the
viable presence of Sunburst Bank, Louisiana in Baton Rouge, Louisiana; and (v)
the Merger was consistent with and in furtherance of the strategic plan of UPC
to continue to build and develop its banking franchise. The UPC Board of
Directors held a special meeting on June 30, 1994 to further consider these
items and the specific terms of the Reorganization Agreement. After a lengthy
discussion concerning the above matters and the specific terms of the
Reorganization Agreement, the UPC Board of Directors unanimously approved the
Merger and the Reorganization Agreement and approved the engagement by UPC of a
financial advisor to review the fairness to the shareholders of UPC from a
financial point of view of the Consideration to be delivered by UPC to the GSSC
stockholders in the Merger. The UPC Board of Directors reaffirmed and ratified
the Reorganization Agreement at its regularly scheduled meeting held on October
27, 1994. At this meeting, management of UPC provided an update of the status
of the transaction and its analysis of the Merger to the UPC Board of
Directors and Stifel Nicolaus presented its opinion as to the fairness to the
UPC shareholders from a financial point of view of the Consideration which
would be delivered by UPC to the GSSC stockholders in the Merger.
REASONS FOR THE MERGER AND RECOMMENDATIONS OF THE BOARDS OF DIRECTORS OF UPC
AND GSSC
Reasons and Recommendations of UPC Board of Directors. Management of
UPC has recommended to the UPC Board of Directors, and the UPC Board of
Directors has unanimously approved the Merger and the Reorganization Agreement
because (i) the Banks are located geographically in states in which UPC has
sought to increase its market share, and (ii) UPC believes that by providing
the Banks with access to the UPC capital base and other banking resources, the
Banks will be well positioned to compete in their markets in the face of
enhanced competition from larger, well capitalized institutions.
The UPC Board of Directors believes that the Merger is fair to and in
the best interests of UPC and its shareholders. The conclusion of the UPC Board
of Directors is based upon a number of factors, including the substantial
benefits expected to result from the combination of certain operations of GSSC
into UPC; information concerning the financial condition, results of operations
and prospects of UPC and GSSC both on a stand-alone and a combined basis; the
market prices of UPC Common Stock; and the fairness opinion of the financial
advisor to UPC. The UPC Board of Directors believes that the consolidation of
resources brought about by the Merger will enable UPC to realize certain
economies of scale, to provide a wider and improved
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<PAGE> 54
array of financial services to customers and to achieve greater geographic and
market diversity, which will give UPC added flexibility in dealing with the
changing competitive environment. The UPC Board of Directors also believes
that the Merger will provide UPC with a stronger market position and financial
resources to meet the competitive challenges arising from further changes in
the banking and financial services industry. The UPC Board of Directors
believes for the reasons set forth herein, without assigning any relative
weights to these factors, that the Merger would be in the best interests of
the shareholders of UPC.
FOR THE REASONS SET FORTH ABOVE, THE BOARD OF DIRECTORS OF UPC BELIEVES THAT
THE MERGER IS IN THE BEST INTERESTS OF THE SHAREHOLDERS OF UPC AND,
ACCORDINGLY, RECOMMENDS THAT THE UPC SHAREHOLDERS VOTE "FOR" APPROVAL OF THE
REORGANIZATION AGREEMENT.
Fairness Opinion of Stifel Nicolaus. The Reorganization Agreement
provides that as a condition of consummating the Merger, UPC shall have
received an opinion from an investment banking firm prior to the Closing and
such opinion shall not have been withdrawn to the effect that, in the opinion
of the investment banking firm, the Merger is fair, from a financial point of
view, to the holders of UPC Common Stock, and UPC shall receive an updated
opinion from such advisor as of a date no more than five days prior to the
Closing. Pursuant to an engagement letter dated August 31, 1994 (the
"Engagement Letter"), UPC retained Stifel Nicolaus as its financial advisor on
the basis of the firm's reputation, experience and familiarity with the banking
industry and with merger and acquisition transactions. Stifel Nicolaus is a
nationally recognized investment banking and securities firm and, as part of
its investment banking business, is regularly engaged in the valuation of
businesses in connection with mergers and acquisitions, negotiating
underwritings, secondary distributions of listed and unlisted securities,
private placements and valuations for corporate and other purposes. The terms
of the Reorganization Agreement, including the Consideration to be delivered by
UPC to the GSSC stockholders in the Merger, were negotiated by UPC.
Stifel Nicolaus has delivered its opinion dated October 20, 1994 to
UPC. The opinion indicates that Stifel Nicolaus has reviewed, among
other things, a comparison of the financial statements and other financial
information concerning UPC and GSSC, certain publicly available documents filed
by UPC and GSSC, the nature and terms of recent sale and merger transactions
involving banks and bank holding companies, historical and current market data
for the UPC Common Stock and the GSSC Common Stock and financial and other
information provided by the management of GSSC and UPC. Stifel Nicolaus also
took into account its assessment of general economic, market and financial
conditions, its experience in other transactions and its knowledge of the
banking industry. Stifel Nicolaus did not and does not intend to make or
obtain any independent appraisal of the assets of UPC or GSSC. UPC did not and
does not intend to impose any limitations on the scope of Stifel Nicolaus'
investigation.
In connection with its services in rendering the fairness opinion,
Stifel Nicolaus will receive a fee of approximately $250,000, plus reasonable
travel and out-of-pocket expenses,
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$40,000 of which has been paid and the remainder of which is payable by UPC at
the Closing. UPC has also agreed to indemnify Stifel Nicolaus against certain
liabilities and expenses, including liabilities arising under federal
securities laws, in connection with Stifel Nicolaus' services to UPC.
For the purpose of rendering its opinion, Stifel Nicolaus assumed that
the Exchange Ratio would be in the range of 1.3296 shares of UPC Common Stock
to 1.5495 shares of UPC Common Stock for each share of GSSC Common Stock.
No opinion was expressed by Stifel Nicolaus as to the fairness of the
Consideration outside of the assumed range. Generally, the assumed range of
exchange ratios would be in effect only in the event the Current Market Price
Per Share of UPC Common Stock were equal to or greater than $22.00 per share of
UPC Common Stock but less than or equal to $31.25 per share of UPC Common
Stock.
At the October 27, 1994 meeting of the UPC Board of Directors, Stifel
Nicolaus delivered its written opinion dated October 20, 1994, that the
Consideration to be delivered by UPC to the GSSC stockholders in the Merger is
fair to the UPC shareholders from a financial point of view. The full text of
Stifel Nicolaus' written opinion to the UPC Board of Directors is attached
hereto as Appendix C and is incorporated herein by reference and should be read
carefully and in its entirety in connection with this Joint Proxy
Statement/Prospectus. The following summary of Stifel Nicolaus' opinion is
qualified in its entirety by reference to the full text of the opinion. Stifel
Nicolaus' opinion is addressed only to the UPC Board of Directors and does not
constitute a recommendation to any UPC shareholder or GSSC stockholder as to
how such UPC shareholder or GSSC stockholder should vote at their respective
Special Meetings.
Stifel Nicolaus reviewed with UPC's directors the general analysis
performed by Stifel Nicolaus in reaching its opinion. In connection with its
opinion, Stifel Nicolaus, among other things: (i) reviewed certain publicly
available financial and other data with respect to UPC and GSSC, including the
consolidated financial statements for the last five years and for the six-month
period ended June 30, 1994, and certain other relevant financial operating data
relating to UPC and GSSC made available to Stifel Nicolaus from published
sources; (ii) reviewed the Reorganization Agreement; (iii) reviewed certain
historical market prices and trading volumes of the UPC Common Stock and the
GSSC Common Stock as reported by the NYSE and the NASDAQ/NMS, respectively;
(iv) compared UPC and GSSC from a financial point of view with certain other
companies in the banking industry that Stifel Nicolaus deemed to be relevant;
(v) considered the financial terms, to the extent publicly available, of
selected recent acquisitions of bank holding companies that Stifel Nicolaus
deemed to be reasonably similar, in whole or in part, to the Merger; (vi)
reviewed and discussed with representatives of the management of UPC and GSSC
certain information of a business and financial nature regarding UPC and GSSC
furnished to Stifel Nicolaus by UPC and GSSC, including financial forecasts and
related assumptions; (vii) made inquiries regarding, and discussed the Merger
and the Reorganization Agreement and other matters related thereto with UPC's
counsel; and (viii) performed such other analyses and examinations as Stifel
Nicolaus deemed appropriate.
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<PAGE> 56
In connection with its review, Stifel Nicolaus did not independently
verify any of the foregoing information, relied on such information and assumed
that such information was complete and accurate in all material respects. With
respect to the financial forecasts of UPC and GSSC provided to Stifel Nicolaus
by UPC's management, Stifel Nicolaus assumed for purposes of its opinion that
they were reasonably prepared on bases reflecting the best available estimates
and judgments of the management of UPC and the management of GSSC at the time
of preparation as to the future financial performance of UPC and GSSC and that
they provided a reasonable basis upon which Stifel Nicolaus could form its
opinion. Stifel Nicolaus also assumed that there had been no material changes
in UPC's or GSSC's assets, financial condition, results of operations,
business or prospects since the date of the last financial statements made
available to Stifel Nicolaus. Stifel Nicolaus relied on advice of counsel to
UPC as to all legal matters with respect to UPC, the Merger and the
Reorganization Agreement. In addition, Stifel Nicolaus did not make or obtain
an independent evaluation, appraisal or physical inspection of the assets,
individual properties or liabilities of UPC or GSSC, nor was Stifel Nicolaus
furnished with any such appraisal. Further, Stifel Nicolaus' opinion was
based on economic, monetary, market and other conditions existing as of the
date of its opinion. No opinion was expressed as to the prices at which
shares of the UPC Common Stock or shares of the GSSC Common Stock might trade
in the future.
The following is a summary of the financial analyses performed by
Stifel Nicolaus in connection with providing its opinion to the UPC Board of
Directors on October 27, 1994.
Pro Forma Per Share Impact. Stifel Nicolaus reviewed the estimated
future earnings per share for UPC and GSSC and analyzed a range of profit
improvement levels of the combined companies furnished by, and based on the
estimates of, UPC management. These estimates were derived by UPC management
in conjunction with the profitability analysis being conducted by Alex
Shesunoff Management Services, Inc. Based on these estimates, the analysis
suggested a range of UPC 1996 earnings per share impact of 7.7% dilutive to
7.3% accretive based on a full range of possible profit improvement
realizations. The analysis also suggests that the Merger is projected to be
dilutive with respect to the book value and tangible book value per share of
UPC.
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<PAGE> 57
Contribution Analysis. Stifel Nicolaus reviewed certain historical
operating and financial information, including net revenues (before and after
provision for loan losses), net income (before extraordinary items and
preferred dividends), assets, loans, deposits and total equity of UPC and GSSC
and compared the contribution of GSSC to the pro forma combined figures for UPC
and GSSC to the percentage of total shares of UPC Common Stock on a pro forma
combined UPC and GSSC basis that would be owned by the GSSC stockholders as a
result of the Merger. The analysis showed the following percentage
contribution of GSSC to the pro forma combined company:
GSSC PERCENTAGE CONTRIBUTION (PRO FORMA)
<TABLE>
<CAPTION>
Six-Month Period Ended
June 30, 1994
----------------------
<S> <C>
Common Stock Ownership 33.94%
Net Revenues(1) (Before 28.97
Provision for Loan Loss)
Net Revenues(1) (After 27.16
Provision for Loan Loss)
Net Income Before 26.82
Extraordinary Items and
Preferred Dividends
Assets 25.99
Loans 33.23
Deposits 28.38
Total Equity 25.70
</TABLE>
____________________
(1) Net Revenues include net interest income plus noninterest income net of
noninterest expense.
Present Value Analysis. Applying discounted cash flow analysis to the
theoretical future earnings and dividends of the pro forma combined UPC and
GSSC, Stifel Nicolaus compared the calculated future value of a share of UPC
Common Stock (assuming a stand-alone scenario) to the calculated value of a
share of the pro forma combined company pursuant to the terms of the
Reorganization Agreement. The analysis was based upon a range of assumed
returns on assets, 5% annual asset growth, current dividend rates, a range of
assumed price/earnings ratios and a 10% discount rate. Based on this analysis,
Stifel Nicolaus concluded that the Merger does not materially impact the
calculated future value of a share of UPC Common Stock.
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<PAGE> 58
Discounted Cash Flow Analysis. Based on estimates by the management of
GSSC of the future earnings and range of profit improvements for the Banks
furnished to Stifel Nicolaus by the management of UPC, Stifel Nicolaus
estimated the present value of future dividends available to be paid from the
Banks to UPC under various scenarios assuming the Banks would maintain adequate
capital levels as required by their respective regulatory authorities. Based
on a range of profitability levels and a range of discount rates, under UPC
ownership, the Banks could theoretically produce future cash flows to UPC with
a present value ranging from $219 million (assuming no profit improvements) to
$448 million (assuming maximum estimated profit improvements).
Summary Analysis of Bank Merger Transactions. Stifel Nicolaus
analyzed certain information relating to transactions in the banking industry,
including (i) median information for 399 bank acquisitions announced in the
United States since October 19, 1993, (ii) median information for 97 bank
acquisitions announced in the Southeast since October 19, 1993, and (iii)
median information for 14 selected acquisitions of "significant banking
franchises" (defined as banks with assets between $2 billion and $20 billion
and each having a major statewide franchise) since January 1, 1993
(collectively, the "Selected Transactions"). Stifel Nicolaus calculated the
following ratios with respect to the Merger (based on financial data of GSSC
as of June 30, 1994, and the closing price of UPC Common Stock of $23.875 per
share on the NYSE on October 18, 1994) and the Selected Transactions:
<TABLE>
<CAPTION>
Significant
Southeast Banking Franchises
Ratios The Merger U.S. Median Median Median
---------- ----------- --------- ------------------
<S> <C> <C> <C> <C>
Deal Price per share/Book Value 176% 170% 186% 211%
Deal Price per share/ 185 173 190 233
Tangible Book Value
Deal Price per share/Last 12.2 times 14.6 times 17.4 times 16.8 times
12 months earnings per
share
Deal Price/Assets 13.2% 14.6% 16.4% 17.2%
Premium over Tangible 6.7 6.6 8.2 11.3
Book Value/Deposits
Deal Price/Deposits 14.6 16.6 18.9 19.7
</TABLE>
The summary set forth above does not purport to be a complete
description of the presentation made by Stifel Nicolaus to the UPC Board of
Directors or of all of the analyses performed by Stifel Nicolaus. The
preparation of a fairness opinion is not necessarily susceptible to partial
analysis or summary description. Stifel Nicolaus believes that its analyses
and the summary set forth above must be considered as a whole and that selecting
portions of
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<PAGE> 59
its analyses and of the factors considered, without considering all analyses
and factors, would create an incomplete view of the process underlying
the analyses set forth in its presentation to the UPC Board of Directors. In
addition, Stifel Nicolaus may have given various analyses more or less weight
than other analyses, and may have deemed certain assumptions more or less
probable than other assumptions, such that the ranges of valuations resulting
from any particular analysis described above should not be taken to be Stifel
Nicolaus' view of the actual value of UPC or the combined companies. The fact
that any specific analysis has been referred to in the summary above is not
meant to indicate that such analysis was given greater weight than any other
analysis.
In performing its analyses, Stifel Nicolaus made numerous assumptions
with respect to industry performance, general business and economic conditions
and other matters, many of which are beyond the control of UPC or GSSC. The
analyses performed by Stifel Nicolaus are not necessarily indicative of actual
values or actual future results, which may be significantly more or less
favorable than suggested by such analyses. Such analyses were prepared solely
as part of Stifel Nicolaus' analysis of the fairness to the UPC shareholders
from a financial point of view of the Consideration to be delivered by UPC to
the GSSC stockholders in the Merger under the terms of the Reorganization
Agreement and were provided to the UPC Board of Directors in connection with
the delivery of Stifel Nicolaus' opinion. The analyses do not purport to be
appraisals or to reflect the prices at which a company might actually be sold
or the prices at which any securities may trade at the present time or at any
time in the future. Stifel Nicolaus used in its analyses various projections
of future performance prepared by the managements of UPC and GSSC. The
projections are based on numerous variables and assumptions which are
inherently unpredictable and must not be considered certain of occurrence as
projected. Accordingly, actual results could vary significantly from those set
forth in such projections.
As described above, Stifel Nicolaus' opinion and presentation to the
UPC Board of Directors were among the many factors taken into consideration by
the UPC Board of Directors.
In the ordinary course of its business, Stifel Nicolaus actively
trades equity securities of UPC for its own account and for the accounts of
customers and, accordingly, may at any time hold a long or short position in
such securities.
Reasons and Recommendations of GSSC Board of Directors. The GSSC
Board of Directors believes that the Merger is in the best interests of GSSC
and its stockholders. In the course of reaching its determination to approve
the Merger and recommend it to the stockholders of GSSC, the GSSC Board of
Directors, without assigning any relative weights, considered a number of
factors, including the following material considerations:
(i) Personnel costs are rising because of the need to implement
new regulations, and changing interpretations of old regulations.
Those costs are mounting each year with no apparent end in sight. Over
the past few years, GSSC has spent an estimated $1,000,000 in evaluating,
planning and implementing required regulatory changes. If an accounting were
made
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of time spent by every employee, this figure could multiply several times.
It is probable that regulatory required changes will continue. Such regulatory
costs can be absorbed only if spread over a broader asset base.
(ii) Increased competition and changing consumer demands require
greater investment in technology, both hardware and software. These
investments would need to be made to stay close to the competition, but these
investments would not necessarily put GSSC ahead of the competition.
(iii) Traditional banking institutions, such as GSSC, are not
competing on a level playing field with non-bank suppliers of financial
services. Investment companies offering mutual funds, stock brokers, finance
companies, savings and loan associations, credit card issuers, mortgage bankers
and other non-banks providing competing financial services do not have the
overhead burden of banking regulations. They are targeting, among others,
GSSC's most profitable customers and are regularly successful in their
efforts. Unless the playing field is leveled, these non-banks are expected to
continue to grow in market share at GSSC's expense.
(iv) Owning the stock of smaller bank holding companies is not as
attractive an investment opportunity as in years past. Investors are seeking
shorter payout terms and higher earnings-per-share growth than the banking
industry historically has realized. Smaller holding companies of GSSC's size
cannot overcome the cost of the regulatory burden and non-regulated competition
in the short run. Linking with a larger company to achieve "critical mass" and
experience economies of scale and diversity of risk is in the best interests of
GSSC stockholders.
(v) The agreed upon Exchange Ratio Range was higher than prior
overtures made by other potential acquirors and within the range of fairness as
determined by Robinson-Humphrey and that ratio was toward the high end of the
scale.
(vi) Robinson-Humphrey issued its written opinion to the effect that
at July 1, 1994, the proposed financial terms of the Merger are fair from a
financial point of view, to stockholders of GSSC. In this respect, while the
GSSC Board of Directors did not explicitly adopt Robinson-Humphrey's financial
analyses, the GSSC Board of Directors took such analyses into account in its
overall evaluation of the benefits of the Merger. See a copy of the fairness
opinion of Robinson-Humphrey attached as Appendix B to this Joint Proxy
Statement/Prospectus.
(vii) The Reorganization Agreement, although containing certain
limitations on negotiations and "no shop" provisions and a termination fee in
the event of a third party acquiror of GSSC, does not contain a punitive "lock
up" provision which would substantially impede a competing bid or restrict the
GSSC Board of Directors' ability to consider a competing bid, if one were to be
presented. GSSC has the right to terminate the Reorganization Agreement in
order to accept a higher bid if required by the GSSC Board of Directors'
fiduciary duties.
(viii) Stockholders of GSSC who retain their shares of UPC Common
Stock following the Merger would have the potential to receive greater
dividends after the Merger in that the
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<PAGE> 61
dividend yield on the UPC Common Stock which would be received by the GSSC
stockholders in the Merger would substantially exceed the dividend yield on the
GSSC Common Stock, based upon the current dividend rates of both companies.
(ix) Management of GSSC respects the operations of UPC as a
competitor and believes UPC would operate the combined companies to the benefit
of its shareholders, communities and customers.
(x) There are few branch overlaps in GSSC's and UPC's market coverage
and divestitures necessary to comply with regulatory anti-trust standards would
be minimal.
(xi) UPC Common Stock is traded on the NYSE and it has greater
liquidity than GSSC's Common Stock due to UPC's larger size and market
visibility.
(xii) The Merger has been structured to enable GSSC stockholders to
have all of their shares of GSSC Common Stock converted into shares of UPC
Common Stock on a tax-free basis for federal income tax purposes except for the
satisfaction of any fractional shares which would be settled in cash.
(xiii) GSSC's management believes that the Merger, compared with a
merger with other potential candidates, would beneficially impact the customers
and the communities served by GSSC.
(xiv) There is a limited ability on the part of GSSC to expand in its
current markets.
(xv) The financial condition, results of operations, current business
and expansion opportunities and constraints, and prospects of future
performance and earnings of GSSC on a stand-alone basis compares unfavorably to
the potential financial condition, results of operation, expansion
opportunities and prospects of future performance and earnings of GSSC and UPC
on a combined basis.
FOR THE REASONS SET FORTH ABOVE, THE BOARD OF DIRECTORS OF GSSC BELIEVES THAT
THE MERGER IS IN THE BEST INTERESTS OF THE STOCKHOLDERS OF GSSC AND,
ACCORDINGLY, RECOMMENDS THAT THE GSSC STOCKHOLDERS VOTE "FOR" ADOPTION OF THE
REORGANIZATION AGREEMENT.
Fairness Opinion of Robinson-Humphrey. GSSC retained
Robinson-Humphrey to act as its financial advisor in connection with the
Merger. Robinson-Humphrey has rendered an opinion to the GSSC Board of
Directors that, based on the matters set forth therein, the Consideration to be
received by the GSSC stockholders pursuant to the Merger is fair, from a
financial point of view, to the stockholders of GSSC. The full text of such
opinion is set forth in Appendix B to this Joint Proxy Statement/Prospectus
and should be read in its entirety by the stockholders of GSSC.
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<PAGE> 62
The Consideration to be received by the GSSC stockholders in the
Merger was determined by GSSC and UPC in their negotiations. No limitations
were imposed by the GSSC Board of Directors or management of GSSC upon
Robinson-Humphrey with respect to the investigations made or the procedures
followed by Robinson-Humphrey in rendering its opinion.
In connection with rendering its opinion to the GSSC Board of
Directors, Robinson-Humphrey performed a variety of financial analyses.
However, the preparation of a fairness opinion involves various determinations
as to the most appropriate and relevant methods of financial analysis and the
application of those methods to the particular circumstances, and, therefore,
such an opinion is not readily susceptible to summary description.
Robinson-Humphrey, in conducting its analysis and in arriving at its opinion,
has not conducted a physical inspection of any of the properties or assets of
GSSC, and has not made or obtained any independent valuation or appraisals of
any properties, assets or liabilities of GSSC. Robinson-Humphrey has assumed
and relied upon the accuracy and completeness of the financial and other
information that was provided to it by GSSC or that was publicly available.
Its opinion is necessarily based on economic, market and other conditions as in
effect on, and the information made available to it as of, the date of its
analyses.
Valuation Methodologies. In connection with its opinion on the Merger
and the presentation of that opinion to the GSSC Board of Directors,
Robinson-Humphrey performed two valuation analyses with respect to GSSC: (i) an
analysis of comparable prices and terms of recent transactions involving banks
and bank holding companies buying banks and bank holding companies; and (ii) a
discounted cash flow analysis. For purposes of the comparable company and
comparable transaction analyses, UPC stock was valued at $26.25 per share.
Both of these methodologies are discussed briefly below.
Comparable Transaction Analysis. Robinson-Humphrey performed two
analyses of premiums paid for selected banks with comparable characteristics to
GSSC. Comparable transactions were considered to be (i) transactions which
occurred since January 1, 1994, where the seller was a bank or bank holding
company, and (ii) transactions which occurred since January 1, 1993, where the
seller was a bank or bank holding company with assets between $1 billion and $5
billion.
(i) Based on the first grouping of transactions, banks selling banks
during 1994, the analysis yielded a range of transaction values to book value
of 99.82 percent to 358.00 percent, with a mean of 175.10 percent and a median
of 167.14 percent. These compare to a transaction value for the Merger of
approximately 202.7 percent of GSSC book value as of March 31, 1994.
In addition, the analysis yielded a range of transaction values as a
percentage of tangible book value for the comparable transactions ranging from
99.82 percent to 358.00 percent, with a mean of 179.36 percent and a median of
169.97 percent. These compare to a transaction value to tangible book value
at March 31, 1994 of approximately 214.0 percent for the Merger.
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<PAGE> 63
Lastly, the analysis yielded a range of transaction values as a
multiple of trailing twelve month earnings per share. These values ranged from
4.65 times to 48.98 times, with a mean of 16.34 times and a median of 14.74
times. These compare to a transaction value for the Merger of 14.13 times
March 31, 1994 trailing twelve months earnings per share.
(ii) Based on the second grouping of transactions since January 1,
1993, where the seller was a bank or bank holding company with assets between
$1 billion and $5 billion, the analysis yielded a range of transaction values
to book value of 116.62 percent to 262.28 percent, with a mean of 211.00
percent and a median of 219.00 percent. These compare to a transaction value
for the Merger of approximately 202.7 percent of GSSC book value as of March
31, 1994.
In addition, the analysis yielded a range of transaction values as a
percentage of tangible book value for the comparable transactions ranging from
117.67 percent to 268.50 percent, with a mean of 224.00 percent and a median of
239.00 percent. These compare to a transaction value to tangible book value at
March 31, 1994 of approximately 214.0 percent for the Merger.
Lastly, the analysis yielded a range of transaction values as a
multiple of trailing twelve month earnings per share. These values ranged from
7.48 times to 54.69 times, with a mean of 23.40 times and a median of 18.50
times. These compare to a transaction value for the Merger of 14.13 times
March 31, 1994 trailing twelve months earnings per share.
No company or transaction used in the comparable transaction analyses
is identical to GSSC. Accordingly, an analysis of the foregoing necessarily
involves complex considerations and judgments, as well as other factors that
affect the public trading value or the acquisition value of the company to
which it is being compared.
Discounted Cash Flow Analysis. Using discounted cash flow analysis,
Robinson-Humphrey estimated the present value of the future stream of after-tax
cash flows that GSSC could produce through 1998, under various circumstances,
assuming that GSSC performed in accordance with the earnings/return projections
of management at the time that GSSC entered into acquisition discussions in
June, 1994. Robinson-Humphrey estimated the terminal value for GSSC at the end
of the period by applying multiples of earnings ranging from 9.0 to 11.0 times
and then discounting the cash flow streams, dividends paid to stockholders and
terminal value using differing discount rates (ranging from 9.0 percent to
11.0 percent) chosen to reflect different assumptions regarding the required
rates of return of GSSC and the inherent risk surrounding the underlying
projections. This discounted cash flow analysis indicated a reference range
of $293.0 million to $354.2 million, or $30.86 to $37.31 per share, for GSSC.
These compare to Consideration of 1.4206 shares of UPC Common Stock, valued at
approximately $38.00, per share of GSSC Common Stock based on a value per share
of UPC Common Stock of $26.75 at the close of business on June 30, 1994, or
approximately $361,000,000.
Compensation of Robinson-Humphrey. Pursuant to an engagement letter
dated May 4, 1994 between GSSC and Robinson-Humphrey, GSSC agreed to pay
Robinson-Humphrey $25,000 (the "Valuation Fee") as a one year retainer fee, and
for which Robinson-Humphrey
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<PAGE> 64
prepared a valuation analysis which was used to assist the GSSC Board of
Directors in determining a fair price range during the negotiations with UPC.
In a subsequent engagement letter dated June 20, 1994, GSSC agreed to pay (A)
$750,000 for a written fairness opinion (the "Fairness Opinion Fee") and (B)
an incremental success fee, which would be equal to a percentage of the total
value of the UPC Common Stock to be received by the GSSC Record Holders in the
Merger, less the Valuation Fee and the Fairness Opinion Fee (the "Success
Fee").
Pursuant to the terms of the engagement letter, the Success Fee would
be $466,301, based on the $22.50 closing price per share of UPC Common Stock
on November 4, 1994. GSSC has also agreed to reimburse Robinson-Humphrey for
its out-of-pocket expenses, whether or not the Merger is consummated, and to
indemnify and hold harmless Robinson-Humphrey and its officers and employees
against certain liabilities in connection with its services under the
engagement letter except for liabilities resulting from the negligence of
Robinson-Humphrey.
As part of its investment banking business, Robinson-Humphrey is
regularly engaged in the valuation of securities in connection with mergers and
acquisitions, negotiated underwritings, secondary distributions of listed and
unlisted securities, private placements and valuations for estate, corporate
and other purposes. The GSSC Board of Directors decided to retain
Robinson-Humphrey based on its experience as a financial advisor in mergers and
acquisitions of financial institutions, particularly transactions in the
Southeastern region of the United States, and its knowledge of financial
institutions and GSSC in particular.
TERMS OF THE MERGER.
Pursuant to the Reorganization Agreement, at the Effective Time of the
Merger, the outstanding shares of GSSC Common Stock held by the GSSC Record
Holders immediately prior to the Effective Time of the Merger shall, without
any further action on the part of anyone, cease to represent any interest
(equity, stockholder or otherwise) in GSSC and shall automatically be converted
exclusively into, and constitute only the right of the GSSC Record Holders to
receive in exchange for their shares of GSSC Common Stock, whole shares of UPC
Common Stock and a cash payment in settlement of any remaining fractional share
of UPC Common Stock, in accordance with the terms and conditions of Section
3.1(e) of the Agreement and Plan of Reorganization. The shares of UPC Common
Stock and the cash settlement of any remaining fractional shares of UPC Common
Stock deliverable by UPC or INTERIM to the GSSC Record Holders pursuant to the
terms of the Reorganization Agreement are sometimes collectively referred to
herein as the "Consideration."
The number of shares of UPC Common Stock to be exchanged for each
share of GSSC Common Stock issued and outstanding immediately prior to the
Effective Time of the Merger shall be based on the Exchange Ratio as determined
and set forth in Section 3.1(e) of the Agreement and Plan of Reorganization.
The Exchange Ratio was determined as follows:
(A) In the event the Current Market Price Per Share of UPC Common
Stock had been greater than or equal to $24.00 per share of UPC Common Stock
but less than or equal to
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<PAGE> 65
$29.25 per share of UPC Common Stock (the "Primary Collar"), the Exchange
Ratio would have been fixed at 1.4206 shares of UPC Common Stock for each
share of GSSC Common Stock validly issued and outstanding immediately prior to
the Effective Time of the Merger;
(B) In the event the Current Market Price Per Share of UPC Common
Stock had been greater than $29.25 per share of UPC Common Stock but less than
or equal to $31.25 per share of UPC Common Stock (the "Upper Secondary
Collar"), the Exchange Ratio would have been based on (a) a fixed price of
$41.55 per share of GSSC Common Stock divided by (b) the Current Market Price
Per Share of UPC Common Stock for each share of GSSC Common Stock validly
issued and outstanding immediately prior to the Effective Time of the Merger;
(C) In the event the Current Market Price Per Share of UPC Common
Stock had been greater than $31.25 per share of UPC Common Stock (the
"Ceiling"), the Exchange Ratio would have been fixed at 1.3296 shares of UPC
Common Stock for each share or GSSC Common Stock validly issued and outstanding
immediately prior to the Effective Time of the Merger; provided, however, that
UPC would have had the right to either deliver shares of UPC Common Stock based
on the fixed Exchange Ratio of 1.3296 or to terminate the transaction;
provided, however, that should UPC have elected to terminate the transaction
under this provision, GSSC would have had the unilateral right to reinstate the
transaction by accepting in exchange for each share of GSSC Common Stock
validly issued and outstanding immediately prior to the Effective Time of the
Merger that number of shares of UPC Common Stock at the Current Market Price
Per Share sufficient to equal $41.55 per share of GSSC Common Stock;
(D) In the event the Current Market Price Per Share of UPC Common
Stock had been greater than or equal to $22.00 per share of UPC Common Stock
but less than $24.00 per share of UPC Common Stock (the "Lower Secondary
Collar"), the Exchange Ratio would have been based on (a) a fixed price of
$34.09 per share of GSSC Common Stock divided by (b) the Current Market Price
Per Share of UPC Common Stock for each share of GSSC Common Stock validly
issued and outstanding immediately prior to the Effective Time of the Merger;
and
(E) In the event the Current Market Price Per Share of UPC Common
Stock had been less than $22.00 per share of UPC Common Stock (the "Floor"),
the Exchange Ratio would have been fixed at 1.5495 shares of UPC Common Stock
for each share of GSSC Common Stock validly issued and outstanding immediately
prior to the Effective Time of the Merger; provided, however, that subject to
the terms and provisions of Section 3.3 of the Agreement and Plan of
Reorganization, GSSC would have had the right to either accept the fixed
Exchange Ratio of 1.5495 or terminate the transaction in accordance with the
terms and provisions of Section 3.3 of the Agreement and Plan of Reorganization,
provided, however, that should GSSC have elected to terminate the transaction
under this provision and the Current Market Price Per Share of UPC Common Stock
had been greater than or equal to $18.50, UPC would have had the unilateral
right to reinstate the transaction by delivering in exchange for each share of
GSSC Common Stock validly issued and outstanding immediately prior to the
Effective Time of the Merger shares of UPC Common Stock based on that number of
shares of UPC Common Stock
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at the Current Market Price Per Share sufficient to equal $34.09 per share of
GSSC Common Stock.
The Exchange Ratio as determined in Section 3.1(e) of the Agreement
and Plan of Reorganization is based on an aggregate of no more than
9,600,000 shares of GSSC Common Stock being validly issued and outstanding
immediately prior to the Effective Time of the Merger and, for purposes of
determining the total number of shares outstanding, counting all unexercised
GSSC stock options issued and outstanding immediately prior to the Effective
Time of the Merger as issued and outstanding shares of GSSC Common Stock so
converted and exchanged; provided, however, that no fractional shares of UPC
Common Stock shall be issued and if, after aggregating all of the shares of UPC
Common Stock to which a GSSC Record Holder would be entitled based upon the
Exchange Ratio, there should be a fractional share of UPC Common Stock
remaining, such fractional share would be settled by a cash payment therefor
pursuant to the "Mechanics of Payment of Consideration" set forth in Section
3.1(f) of the Agreement and Plan of Reorganization, which would be calculated
based upon the Current Market Price Per Share of one (1) full share of UPC
Common Stock.
The "Current Market Price Per Share" of the UPC Common Stock is
defined in the Reorganization Agreement to be the average closing price per
share of the "last" real time trades (i.e., closing price) of the UPC Common
Stock on the NYSE (as published in The Wall Street Journal, Eastern Edition)
for each of the twenty (20) NYSE general market trading days on which the NYSE
was open for business next preceding the issuance of all necessary regulatory
approvals (the "Pricing Period"). In the event the UPC Common Stock should not
trade on one or more of the trading days during the Pricing Period (a "No Trade
Date"), any such No Trade Date would be disregarded in computing the average
closing price per share of UPC Common Stock and the average would be based upon
the "last" real time trades and number of days on which the UPC Common Stock
actually traded during the Pricing Period.
The last necessary regulatory approvals were issued on November 7,
1994, such that the Pricing Period commenced on October 10, 1994 and ended
November 4, 1994. Pursuant to the terms of the Reorganization Agreement, the
Exchange Ratio is 1.4530 shares of UPC Common Stock for each share of GSSC
Common Stock, which is equivalent to the quotient of dividing $34.09 by
$23.462, the Current Market Price Per Share of UPC Common Stock, as provided in
paragraph (D) above.
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EFFECTIVE DATE AND EFFECTIVE TIME OF THE MERGER
A Certificate of Merger along with the executed Plan of Merger will be
filed as soon as practicable after all conditions precedent contained in the
Reorganization Agreement have been satisfied or lawfully waived, including
receipt of all regulatory approvals and expiration of all statutory waiting
periods, or on such later date as may be agreed to by UPC and GSSC. The
Effective Time of the Merger will be at the time the Certificate of Merger
along with the Plan of Merger are filed in the Office of the Delaware Secretary
of State pursuant to the DGCL or at such later time as the parties may agree
and specify in the Certificate of Merger and the Plan of Merger. The Effective
Date of the Merger will be the day on which the Effective Time of the Merger
occurs. It is presently expected that the Certificate of Merger will be filed
and will specify, by agreement of the parties, an Effective Time of the Merger
to occur during fourth quarter of 1994. There can be no assurance that such
expectation will be achieved.
SURRENDER OF CERTIFICATES
As promptly as practicable after the Effective Time of the Merger,
Union Planters National Bank, acting in the capacity of exchange agent (the
"Exchange Agent"), will mail to each GSSC Record Holder a form letter of
transmittal, together with instructions and a return envelope (collectively,
the "Exchange Materials") to facilitate the exchange of such holder's
certificates, formerly representing shares of GSSC Common Stock, for
certificates representing shares of UPC Common Stock and a cash payment in lieu
of any remaining fractional share.
Upon receipt of the Exchange Materials, the GSSC Record Holders should
complete the letter of transmittal in accordance with the instructions provided
and deliver the letter of transmittal, together with all stock certificates
formerly representing shares of GSSC Common Stock to the Exchange Agent in the
return envelope provided. Provided the Exchange Agent shall have received the
certificates and related documentation completed in proper form, as soon as
practicable after the Effective Time of the Merger, UPC will issue, and the
Exchange Agent will mail to the GSSC Record Holder a certificate representing
the whole number of shares of UPC Common Stock to which such holder is entitled
pursuant to the Reorganization Agreement and a check in the amount of the cash
portion of the Consideration with respect to any remaining fractional share to
which the holder is entitled. No Consideration will be delivered to a GSSC
Record Holder unless and until such holder shall have delivered to the Exchange
Agent in accordance with the Exchange Materials provided, all certificates
formerly representing the shares of GSSC Common Stock held by such holder and
in respect of which such holder claims payment is due, or such documentation,
if applicable, and security in respect of lost or stolen certificates as is
required by the Reorganization Agreement.
No dividend or other distribution with respect to the UPC Common Stock
shall be paid or delivered to the holder of any unsurrendered GSSC certificate
until the holder surrenders such certificate(s) in accordance with the Exchange
Materials, at which time the holder would be entitled to receive all previously
withheld dividends and distributions, without interest.
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After the Effective Time of the Merger, there will be no further
transfers on GSSC's stock transfer books of shares of GSSC Common Stock issued
and outstanding immediately prior to the Effective Time of the Merger. If
certificates representing shares of GSSC Common Stock should be presented for
transfer after the Effective Time of the Merger, they will be returned to the
presenter together with a form letter of transmittal and exchange instructions.
Neither UPC, the Exchange Agent, GSSC nor any other person shall be
liable to any former holder of GSSC Common Stock for any amount properly
delivered to a public official pursuant to applicable unclaimed property,
escheat or similar laws.
If a certificate formerly representing GSSC Common Stock shall have
been lost, stolen or destroyed, the Exchange Agent will deliver the
Consideration properly payable with respect to such certificate in accordance
with the Reorganization Agreement upon receipt of appropriate evidence as to
such loss, theft or destruction; appropriate evidence as to ownership of such
certificate by the claimant; and a lost instrument bond in form and with a
surety satisfactory to UPC and the Exchange Agent as required by the Exchange
Materials.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
GSSC has entered into change of control agreements (the "Agreements")
with Messrs. J.T. Boone, Chairman and Chief Executive Officer of GSSC; Don W.
Ayres, Senior Executive Vice President and Chief Operating Officer of Sunburst
Bank, Mississippi; James A. Baker, Executive Vice President of Sunburst Bank,
Mississippi; John L. Bomar, Executive Vice President of Sunburst Bank,
Mississippi; D. L. Holland, Treasurer and Chief Financial Officer of GSSC;
Jerry A. Pegg, Executive Vice President of Sunburst Bank, Mississippi; J.
Daniel Garrick, III, Senior Executive Vice President of Sunburst Bank,
Mississippi; Frank W. Smith, Jr., Senior Executive Vice President of Sunburst
Bank, Mississippi; and A. Jackson Huff, President and Chief Executive Officer
of Sunburst Bank, Louisiana (the "Executives"), pursuant to which each
Executive would be eligible to receive certain payments in settlement of the
terms of their respective Agreements with GSSC in the event of a change in
control of GSSC and such Executive's employment were terminated within two
years subsequent to such change in control. Consummation of the Merger would
qualify as a change in control under the terms of the Agreements. The
Agreements provide that in the event the respective Executive's employment is
terminated within two years subsequent to a change in control, the Executive
would receive compensation in an amount equal to, in the case of Mr. Boone,
2.99 times, and in the case of all other individuals, two times their annual
base salary in effect on the date of termination. The compensation would be
subject to reduction so that the aggregate present value of all payments which
would constitute an "excess parachute payment" as defined in Section 280G of
the Code would be reduced to an amount which would not constitute an "excess
parachute payment".
The estimated aggregate present value of amounts presently payable in
the event of a change of control of GSSC, assuming each Executive were to leave
the employ of GSSC, the Banks or any successors thereto, and were to receive
the payment provided in the respective Agreements, would be $684,816 for Mr.
Boone, $290,000 for Mr. Ayres, $200,640 for Mr.
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Baker, $234,000 for Mr. Bomar, $254,700 for Mr. Holland, $193,740 for Mr.
Pegg, $280,000 for Mr. Garrick, $241,020 for Mr. Smith and $320,000 for Mr.
Huff.
In September, 1994, Mr. Boone announced that he would resign his
position as Chairman and Chief Executive Officer of GSSC effective with
the consummation of the Merger to become the Athletic Director of the
University of Mississippi. Subsequent to Mr. Boone's decision to accept such
position, UPC determined that subsequent to the Effective Time of the Merger,
Mr. Boone would be extended an invitation from UPC to be appointed to the UPC
Board of Directors in the first quarter of 1995. It is the present intention
of UPC to extend invitations to one or two additional members of the GSSC Board
of Directors to be appointed to the UPC Board of Directors in 1995. However,
such selections have not been made as of the date of this Joint Proxy
Statement/Prospectus.
Although UPC and GSSC expect that certain executive officers of GSSC
and the Banks would not continue their employ with GSSC or the Banks subsequent
to consummation of the Merger and that a number of employees of GSSC and the
Banks would terminate their employment with GSSC and the Banks as a result of
the early retirement and voluntary separation plans offered by GSSC effective
prior to consummation of the Merger and through natural attrition, the majority
of officers and employees of the Banks immediately subsequent to the Merger are
expected to continue to hold their employment positions and titles held
immediately prior to the Merger, and would be expected to receive compensation
at least equivalent to their compensation received prior to the Merger.
Subsequent to the Merger, all officers and employees of the Banks and other
operating subsidiaries of GSSC would be eligible to participate in the UPC
benefit and savings plans following the anticipated termination of the existing
GSSC benefit plans. Long term medical and health insurance would be provided
to all of the Banks' and GSSC's other subsidiaries' employees through the
health insurance plan provided by UPC to its employees, with any pre-existing
individual condition that was insured under GSSC's medical plan to continue to
be insured under UPC's plan. The Banks' and other GSSC subsidiaries' employees
would also be eligible to participate in UPC's group life and disability
insurance programs.
Following the Effective Time of the Merger, the Banks' directors,
officers and employees would be covered on a prospective basis under UPC's
directors' and officers' liability insurance policy. In addition, UPC would
cause the Banks to indemnify such persons under applicable provisions of their
Charters and Bylaws.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
As of the UPC Record Date, 25,431,252 shares of UPC Common Stock were
issued and outstanding and 1,061,014 shares of UPC Common Stock (not including
unexercised UPC stock options) were beneficially owned or held of record by all
executive officers and directors of UPC and their affiliates, as a group. As
of the GSSC Record Date, 9,492,975 shares of GSSC Common Stock were issued and
outstanding and 618,647 shares of GSSC Common Stock (not including unexercised
GSSC stock options) were beneficially owned or held of record by all
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executive officers and directors of GSSC and their affiliates, as a group.
These individuals would receive in the Merger the Consideration described
above. Persons or groups beneficially owning in excess of five percent (5%) of
GSSC's Common Stock (other than institutional investment managers) are required
to file certain reports disclosing such ownership pursuant to the Exchange Act
with the Commission. GSSC's management believes that no such reports have been
filed, and management of GSSC knows of no person who beneficially owned more
than five percent of the outstanding shares of GSSC Common Stock as of the GSSC
Record Date.
TRANSACTIONS WITH MANAGEMENT OF GSSC
The Banks, along with Sunburst Mortgage Corporation, a wholly owned
subsidiary of Sunburst Bank, Mississippi, offer loans to their officers,
directors and employees for the financing and improvement of their personal
residences as well as consumer and commercial loans. All such loans are
approved under loan policies established by their respective Boards of
Directors. Pursuant to the requirements of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, all loans made to executive officers and
directors are made at prevailing market rates, in the ordinary course of
business, on the same terms and subject to the same collateral requirements as
those of comparable transactions in effect at the time with unrelated parties
and do not involve more than the normal risk of collectibility or contain other
unfavorable features.
CONDITIONS TO CONSUMMATION OF THE MERGER
The respective obligations of UPC and GSSC to effect the Merger are
subject to the satisfaction of the following conditions prior to the Closing
Date: (i) approval of the Reorganization Agreement and the transactions
contemplated thereby by the affirmative votes of the holders of a majority of
the UPC Common Stock present in person or by proxy and entitled to vote at the
UPC Special Meeting; (ii) adoption of the Reorganization Agreement and the
transactions contemplated thereby by the affirmative votes of the holders of a
majority of the GSSC Common Stock outstanding on the GSSC Record Date and
entitled to vote at the GSSC Special Meeting; (iii) approval of the Merger and
the transactions contemplated thereby by the Federal Reserve, the MSBD and the
LOFI, and the expiration of any statutory waiting periods; (iv) receipt of all
other regulatory and contractual consents necessary to consummate the
transactions contemplated by the Reorganization Agreement; (v) the satisfaction
of all other requirements prescribed by law as conditions precedent to the
consummation of the transactions contemplated by the Reorganization Agreement;
(vi) none of UPC, INTERIM, GSSC or the Banks shall be subject to any claim,
action, suit, investigation or other proceeding, whether pending or threatened,
before any court or governmental agency which presents a substantial risk of
the restraint or prohibition of the consummation of the Merger or the obtaining
of material damages or other relief in connection therewith; and (vii) the
Registration Statement of which this Joint Proxy Statement/Prospectus forms a
part shall have been declared effective and shall not be subject to a stop
order of the Commission suspending the effectiveness of the Registration
Statement and shall not be subject to a stop order of any state securities
commission.
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The obligations of UPC and INTERIM to effect the Merger are further
subject to the satisfaction or waiver by UPC of, among others, the following
conditions: (i) each of the material acts and undertakings of GSSC and/or the
Banks to be performed at or before the Closing Date pursuant to the
Reorganization Agreement shall have been duly performed, except for breaches of
acts and undertakings which would not have, or would not be reasonably expected
to have, a material adverse effect on the business or operations of GSSC and
the Banks taken as a whole; (ii) the representations and warranties of GSSC and
the Banks contained in the Reorganization Agreement shall be true and correct,
in all material respects, on and as of the Effective Time of the Merger with
the same effect as though made on and as of the Effective Time of the Merger
except for any such representations and warranties made as of a specified date,
which shall be true and correct in all material respects as of such date, and
for breaches of representations and warranties which would not have, or would
not reasonably be expected to have, a material adverse effect on the business
or operations of GSSC and the Banks taken as a whole; (iii) UPC shall have
received a certificate signed by the Secretary or an Assistant Secretary of
GSSC and the secretary or the cashier of each of the Banks, as the case may be,
certifying that their respective Boards of Directors and stockholders have duly
adopted resolutions approving or adopting, as the case may be, the substantive
terms of the Reorganization Agreement and authorizing the consummation of the
transactions contemplated by the Reorganization Agreement, that each person
that executed and delivered the Reorganization Agreement on behalf of GSSC and
the Banks is an officer of GSSC or the Banks, as the case may be, holding the
office or offices specified therein, with full power to execute the
Reorganization Agreement and any and all other documents in connection with the
Merger, that the signature of each person set forth on such certificate is his
or her genuine signature, and that GSSC and the Banks are in good standing
under their respective corporate charters; (iv) between July 1, 1994 and the
Closing Date, there shall have been no damage to, or destruction of real
property, improvements or personal property of GSSC or the Banks which
materially reduces the market value of such property, and no zoning or other
order, limitation or restriction imposed against the same that might have in
either case a material adverse impact upon the operations, business or
prospects of GSSC or the Banks; (v) GSSC and the Banks shall have afforded UPC
and its authorized agents reasonable access to the properties, operations,
books, records, contracts, documents, loan files and other information of or
relating to GSSC and the Banks; (vi) no material adverse change in the
business, property, assets, liabilities, prospects, operations, liquidity,
income or condition of GSSC and the Banks taken as a whole shall have occurred
since July 1, 1994; (vii) UPC shall have received a legal opinion, dated as
of the Closing Date, from counsel to GSSC and the Banks as to the good standing
of GSSC and the Banks, the enforceability and due authorization of the
Reorganization Agreement and the receipt of all required approvals (subject to
limitations as permitted in the Agreement and Plan of Reorganization); (viii)
neither GSSC nor either of the Banks shall have entered into any agreement,
letter of intent, understanding or other arrangement pursuant to which GSSC or
the Banks would merge with, consolidate with, effect a business combination
with, sell any substantial part of its assets, acquire a significant part of
the shares or assets of any other person or entity, adopt any "poison pill" or
other type of anti-takeover arrangement, any stockholder rights provision, or
any "golden parachute" or similar program after the date of the Reorganization
Agreement which would have the effect of materially decreasing the value of
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GSSC or the Banks or the benefits of acquiring the GSSC Common Stock; (ix)
satisfaction by GSSC and the Banks of all of the covenants set forth in Article
7 of the Agreement and Plan of Reorganization; (x) each member of the Boards
of Directors of GSSC and the Banks shall have entered into a non-compete
agreement with UPC and GSSC; (xi) UPC shall have received from Price Waterhouse
LLP a letter dated within five business days prior to the Closing Date stating
such independent accountant's opinion that the Merger should be accounted for
by UPC as a "pooling of interests" for financial statement purposes and that
such accounting treatment is in accordance with GAAP; (xii) UPC shall have
received a written opinion from counsel to the effect that the transactions
contemplated by the Reorganization Agreement will constitute one or more
tax-free reorganizations under Section 368 of the Code; (xiii) UPC shall have
received a written commitment from each GSSC Record Holder who would be deemed
an "affiliate" of GSSC as of the Closing Date and who would receive shares of
UPC Common Stock, committing to UPC that such GSSC Record Holder shall not
pledge, assign, sell, transfer, devise, otherwise alienate or take any action
which would eliminate or diminish the risk of owning or holding the shares of
UPC Common Stock to be received by such GSSC Record Holder upon consummation
of the Merger, nor enter into any formal or informal agreement to pledge,
assign, sell or transfer, devise or otherwise alienate his or her right, title
and interests in any of the shares of UPC Common Stock to be delivered by UPC
pursuant to the terms and conditions of the Reorganization Agreement until such
time as UPC shall have publicly released a statement of UPC's consolidated
earnings reflecting the combined financial results of operations of UPC and
GSSC for a period of not less than 30 days subsequent to the Effective Time of
the Merger; and (xiv) UPC shall have received a written "fairness opinion" from
its financial advisor to the effect that, in the opinion of such advisor, the
Consideration to be delivered by UPC to the GSSC stockholders in the Merger is
fair to the UPC shareholders from a financial point of view and that such
opinion shall not have been withdrawn prior to the Closing Date and UPC shall
have received an updated "fairness opinion" from its financial advisor dated
within five days of the Closing Date reconfirming its opinion.
The obligations of GSSC and the Banks to effect the Merger are further
subject to the satisfaction or waiver by GSSC of, among other things, the
following conditions: (i) each of the material acts and undertakings of UPC
and INTERIM to be performed at or prior to the Closing Date pursuant to the
Reorganization Agreement shall have been duly performed, except for breaches of
acts and undertakings which would not have, or would not reasonably be expected
to have, any material adverse effect on the business or operations of UPC and
its subsidiaries taken as a whole; (ii) the representations and warranties of
UPC and INTERIM contained in the Reorganization Agreement shall be true and
complete, in all material respects, on and as of the Effective Time of the
Merger, except for any such representations and warranties made as of a
specified date, which shall be true and correct in all material respects as of
such date, and for breaches of representations and warranties which would not
have, or would not reasonably be expected to have, a material adverse effect on
the business or operations of UPC and its subsidiaries taken as a whole; (iii)
GSSC shall have received a certificate signed by the Secretary or an Assistant
Secretary of UPC and INTERIM dated as of the Closing Date certifying that UPC's
and INTERIM's respective Boards of Directors and shareholders and stockholder,
as the case may be, have duly adopted resolutions approving the
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substantive terms of the Reorganization Agreement and authorizing the
transactions contemplated by the Reorganization Agreement, that each person
that executed the Reorganization Agreement on behalf of UPC and INTERIM is an
officer of UPC or INTERIM, as the case may be, holding the office or offices
specified therein, with full power to execute the Reorganization Agreement and
any and all other documents in connection with the Merger, that the signature
of each person set forth on such certificate is his or her genuine signature,
and that UPC and INTERIM are in good standing under their respective corporate
charters; (iv) GSSC shall have received a certificate executed by an authorized
officer of the Exchange Agent to the effect that the Exchange Agent has
received and holds in its possession certificates evidencing and representing
that number of shares of UPC Common Stock and cash funds sufficient to meet the
obligations of UPC to the GSSC Record Holders to deliver the Consideration
under the Reorganization Agreement; (v) GSSC shall have been furnished an
opinion of counsel to UPC and INTERIM dated as of the Closing Date to the
effect that UPC and INTERIM are in good standing, that the Reorganization
Agreement has been duly and validly authorized, executed and delivered by UPC
and INTERIM and, with the exceptions stated, constitutes a valid and binding
agreement of UPC and INTERIM enforceable in accordance with its terms, that
neither the execution nor delivery by UPC or INTERIM of the Reorganization
Agreement violates or conflicts with either of their corporate Charters or
Bylaws, that all governmental approvals have been received, and that the shares
of UPC Common Stock to be issued in the names of the GSSC Record Holders and
delivered in exchange for their shares of GSSC Common Stock will be duly
authorized, validly issued, fully paid and non-assessable; (vi) GSSC shall have
received a written "fairness opinion" letter from Robinson-Humphrey to the
effect that, in the opinion of Robinson Humphrey, the Consideration to be
received by the GSSC Record Holders is fair to such holders from a financial
point of view and that such opinion shall not have been withdrawn prior to the
Closing Date and GSSC shall have received an updated "fairness opinion" from
Robinson-Humphrey dated within five days of the Closing Date reconfirming its
opinion; and (vii) GSSC shall have received a written opinion from counsel to
the effect that the transactions contemplated by the Reorganization Agreement
and the Plan of Merger will constitute one or more tax-free reorganizations
under Section 368 of the Code.
No assurance can be provided as to whether all of the conditions
precedent to the Merger will be satisfied or waived by the party lawfully
permitted to do so.
REGULATORY APPROVALS
The Merger is subject to prior approval by (i) the MSBD under the
Mississippi Code and the regulations of the MSBD promulgated thereunder, (ii)
the LOFI under the Louisiana Revised Statutes and the regulations of the LOFI
promulgated thereunder and (iii) the Federal Reserve under Section 3 and
Section 4 of the BHCA. The BHCA requires that the Federal Reserve take into
consideration, among other factors, the financial and managerial resources and
future prospects of the institutions and the convenience and needs of the
communities to be served. Applications for such approvals have been filed with
the Federal Reserve, the MSBD and the LOFI. The BHCA prohibits the Federal
Reserve from approving the Merger if to do so would result in a monopoly or be
in furtherance of any combination or conspiracy to monopolize or
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to attempt to monopolize the business of banking in any part of the United
States, or if its effect in any section of the country may be substantially to
lessen competition or to tend to create a monopoly, or if it would in any
other manner be a restraint of trade, unless the Federal Reserve should find
that the anticompetitive effects of the Merger are clearly outweighed by the
public interest and the probable effect of the transaction in meeting the
convenience and needs of the communities to be served. The Federal Reserve
has the authority to deny an application if it concludes that the combined
organization would have an inadequate capital position or that the acquiring
organization does not meet the requirements of the Community Reinvestment Act
of 1977.
GSSC has agreed to divest itself of the Clarksdale, Lula, Jonestown
and Shelby, Mississippi branches of Sunburst Bank, Mississippi, and UPC has
agreed to divest itself of the Tutwiler, Mississippi branch of its wholly owned
subsidary, United Southern Bank, in order to satisfy certain competitive issues
raised by the Federal Reserve and certain local community concerns raised by
certain local community groups in connection with the Merger. GSSC and UPC
have entered into definitive agreements with certain third-party banks for
the sale of these branches prior to consummation of the Merger and expect that
the branches would be divested by the end of the second quarter of 1995.
Under the BHCA, the Merger may be consummated no sooner than the 15th
day following the date of Federal Reserve approval, during which time the
United States Department of Justice has an opportunity to challenge the Merger
on antitrust grounds. The commencement of an antitrust action would stay the
effectiveness of the Federal Reserve's approval unless a court should
specifically order otherwise. There can be no assurance that the Department of
Justice will not challenge the Merger, or if such challenge is made, as to the
result thereof.
The Merger may not lawfully proceed in the absence of the requisite
prior regulatory approvals. Approval of the MSBD was obtained on September 7,
1994 and the approvals of both the Federal Reserve and the LOFI were issued on
November 7, 1994. See "-- Conditions to Consummation of the Merger" and
"-- Waiver and Amendment; Termination."
CONDUCT OF BUSINESS PENDING THE MERGER
The Agreement and Plan of Reorganization contains certain restrictions
upon the conduct of GSSC's and the Banks' business pending consummation
of the Merger. In particular, the Agreement and Plan of Reorganization
provides, in part, that, except as otherwise provided in the Agreement and Plan
of Reorganization and/or without the written consent of UPC, each of GSSC and
the Banks may not, among other things, (i) amend its Certificate of
Incorporation or Charter, as the case may be, or Bylaws; (ii) permit, impose,
or suffer the imposition of, any lien in respect to any share of stock held by
GSSC or any subsidiary; (iii) repurchase or redeem any of its capital stock,
split or otherwise subdivide its capital stock, recapitalize in any way or
declare a stock dividend in respect to the GSSC Common Stock or pay any cash
dividends except permitted cash dividends (see "-- Payment of Dividends"); (iv)
issue or sell any GSSC Common Stock or sell or otherwise dispose of a
substantial part of GSSC's or the Banks' assets
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or earnings power; (v) dispose of, discontinue or acquire any material
assets or businesses other than in the ordinary course of business;
(vi) incur any additional debt in excess of $50,000, except in the ordinary
course of business; (vii) increase compensation, pay bonuses or enter into
severance arrangements except in accordance with past practices; (viii) amend
any existing employment contract with any person having a salary in excess of
$30,000 per year or enter into any new employment contract providing for an
annual salary exceeding $30,000 per year unless GSSC or its subsidiaries may
terminate the same at will without liability; (ix) adopt any new benefit plan
or materially change an existing plan; (x) enter into any new service
contracts, purchase or sale agreements or lease agreements having a value in
excess of $100,000 to GSSC or any subsidiary of GSSC; (xi) make any capital
expenditures except in the ordinary course of business; (xii) extend credit (or
commit to extend credit) to any officer, director or known holder of two
percent (2%) or more of GSSC Common Stock if such extension of credit,
together with any other outstanding extension of credit to such person,
would exceed two percent (2%) of the capital of GSSC, or amend the terms of any
such credit; or (xiii) acquire direct or indirect control over any entity other
than in connection with (a) mergers, acquisitions or other transactions
approved by UPC, (b) internal reorganizations or consolidations involving
existing subsidiaries of GSSC, (c) foreclosures in the ordinary course of
business and not knowingly exposing GSSC or any subsidiary of GSSC to
liability by reason of hazardous substances, (d) acquisitions of control in
GSSC's or the Banks' fiduciary capacity or (e) the creation of new
subsidiaries organized to conduct or continue activities otherwise permitted
by the Agreement and Plan of Reorganization. Moreover, GSSC and the Banks,
respectively, shall, among other things, operate in the usual, regular and
ordinary course, preserve their organization and assets and maintain their
rights and franchises, use their best efforts to retain their customer base
and assist UPC in procuring all applicable regulatory approvals.
PAYMENT OF DIVIDENDS
Prior to the Effective Date of the Merger, GSSC is permitted under the
Reorganization Agreement to declare and pay its customary and ordinary
quarterly cash dividend with respect to the GSSC Common Stock. Notwithstanding
the foregoing, the Reorganization Agreement prohibits GSSC from paying a
dividend if such payment would disqualify the Merger from being accounted for
by UPC under the pooling of interests method of accounting. See "SUMMARY --
Market Prices of Common Stock; Dividends -- GSSC Common Stock."
WAIVER AND AMENDMENT; TERMINATION
Prior to the Effective Date of the Merger, any condition of the
Reorganization Agreement may (to the extent allowed by law) be waived by the
party benefitted by the provision or may be amended or modified (including the
structure of the transaction) by an agreement in writing approved by the Boards
of Directors of UPC and GSSC; provided, however, that no such amendment may be
effected after GSSC stockholder adoption and UPC shareholder approval of the
Reorganization Agreement without approval of the GSSC stockholders if the
effect of such amendment would be to change the amount or the type of
Consideration to be delivered in the Merger to the GSSC Record Holders.
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The Reorganization Agreement may be terminated at any time prior to the
Effective Date of the Merger, either before or after adoption by the
GSSC stockholders and approval by the UPC shareholders, as follows: (i) by the
mutual consent in writing of the parties; (ii) by UPC or INTERIM if GSSC or any
subsidiary of GSSC, respectively, should violate any affirmative or negative
covenant under Article 7 of the Agreement and Plan of Reorganization with
respect to the operation of its business; (iii) by UPC or INTERIM or by GSSC or
the Banks if the Closing shall not have occurred on or before March 31, 1995,
unless the failure shall be due to the failure of the party seeking to
terminate or the failure to receive the necessary regulatory approvals and UPC
shall have filed all applications to obtain the requisite governmental
approvals within sixty (60) days subsequent to the date of the Agreement and
Plan of Reorganization and the Closing shall not have occurred solely because
of a delay caused by a regulatory authority in its review of the application
before it; (iv) by either UPC or INTERIM or by GSSC or the Banks, if any
governmental or regulatory approval should be denied (or conditioned upon a
substantial deviation from the transaction contemplated) and not successfully
appealed within certain time limits; (v) by either UPC or INTERIM or by GSSC or
the Banks if the other parties' conditions have not been satisfied or waived as
of the Closing Date; (vi) by UPC or INTERIM if GSSC or any subsidiary of GSSC
should enter into a formal capital plan requiring GSSC or the Banks to raise
capital or sell substantial assets in cooperation with applicable banking
regulators; (vii) by UPC or INTERIM if there shall have been any material
adverse change affecting GSSC and the Banks, taken as a whole, or affecting the
rights of holders of GSSC Common Stock; (viii) by UPC or INTERIM if GSSC or any
subsidiary of GSSC should enter into any letter of intent or agreement with a
view to being acquired or effecting a business combination; (ix) by either UPC
or INTERIM or by GSSC or the Banks in the event their shall have been a
material breach of any obligation of the other party(s) to the Reorganization
Agreement and such breach shall not have been remedied within thirty (30) days
after receipt by the breaching party of written notice from the non-breaching
party(s) specifying the nature of such breach and requesting that it be
remedied; (x) by GSSC or the Banks if there shall have been any material
adverse change affecting UPC, taken as a whole, or affecting the rights of
holders of UPC Common Stock; or (xi) by GSSC or the Banks if UPC or any
subsidiary of UPC should enter into a formal capital plan requiring UPC or any
subsidiary of UPC to raise capital or sell a substantial portion of its assets
in cooperation with applicable banking regulators.
In the event of the valid termination of the Reorganization Agreement
by either UPC or INTERIM or by GSSC or the Banks, the Reorganization Agreement
would become void, and there would be no liability on the part of any party or
their officers or directors except for such party's liability for breach of the
Reorganization Agreement or for any misstatement or misrepresentation made
prior to such termination.
LIMITATION ON NEGOTIATIONS
The Reorganization Agreement provides that GSSC and the Banks shall not
(and shall use their best efforts to ensure that their respective directors,
officers, employees and advisors do not) institute, solicit or knowingly
encourage any inquiry, discussion or proposal, or
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participate in any discussions or negotiations with, or provide any
confidential or non-public information to, any entity or group concerning any
Acquisition Proposal, except for actions reasonably considered by the GSSC
Board of Directors, based on the advice of counsel, to be required to fulfill
the fiduciary obligations of the GSSC Board of Directors. GSSC must notify UPC
immediately following receipt of any Acquisition Proposal. In the event GSSC
were to enter into a letter of intent or agreement with respect to an
Acquisition Proposal not solicited by the GSSC Board of Directors, or in the
event such Acquisition Proposal were the result of a hostile takeover of GSSC,
GSSC or the acquiror would be required to pay liquidated damages upon
consummation of the transaction contemplated by such Acquisition Proposal in
the amount of $12,000,000 to UPC, which amount represents the sum of the agreed
expenses incurred by UPC in connection with the Merger and the agreed loss to
UPC in the event the Merger should not be consummated. Such sum would be
payable immediately in the event that GSSC were to enter into a letter of
intent or agreement with respect to an Acquisition Proposal solicited by the
GSSC Board of Directors. The limitation on negotiations and provision for
liquidated damages will remain in effect until October 1, 1995, unless before
that date either the Merger is consummated or the Reorganization Agreement is
terminated, or the Merger is otherwise not consummated, under specified
circumstances. These provisions may have the effect of discouraging competing
offers to acquire or merge with GSSC.
MANAGEMENT AFTER THE MERGER
Directors and Officers of UPC. The directors and officers of UPC
immediately prior to the Merger should not be affected by the Merger. UPC
expects that subsequent to the Effective Time of the Merger Mr. J.T. Boone
would be extended an invitation by UPC to be appointed to the UPC Board of
Directors during the first quarter of 1995. It is the present intention of UPC
to extend invitations to one or two additional members of the GSSC Board of
Directors upon consummation of the Merger to be appointed to the UPC Board of
Directors in 1995. However, such selections have not been made as of the date
of this Joint Proxy Statement/Prospectus. For information regarding UPC's
executive officers and directors, see UPC's Annual Report on Form 10-K
incorporated herein by reference. See also, "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE."
Directors and Officers of GSSC. It is expected by UPC and GSSC that
subsequent to the Effective Time of the Merger, the Banks would be managed by
boards of directors consisting of a majority of the members of the Boards of
Directors of the Banks immediately prior to the Effective Time of the Merger
and by officers consisting of a majority of the officers of the Banks who were
serving in such capacities immediately prior to the Effective Time of the
Merger. For information regarding GSSC's executive officers and directors, see
GSSC's Annual Report on Form 10-K incorporated herein by reference. See
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
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ACCOUNTING TREATMENT
The Merger is intended to be treated by UPC and GSSC as a "pooling of
interests" for accounting purposes. Accordingly, under GAAP as described in
Accounting Principles Board Opinion No. 16 for business combinations, the
assets and liabilities of GSSC and UPC will be carried on the books of UPC
immediately subsequent to the Effective Time of the Merger at the amounts
recorded on the respective books of each corporation immediately prior to the
Effective Time of the Merger. Net income of UPC subsequent to the Merger
becoming effective will include the net income of GSSC and UPC for the entire
fiscal period in which the Merger occurs, which is expected by UPC and GSSC to
be fiscal year 1994. Subsequent to the Merger becoming effective, the
historical reported income of GSSC and UPC will be combined and restated as
income of UPC. The unaudited pro forma financial information contained in this
Joint Proxy Statement/Prospectus has been prepared using the pooling of
interests method of accounting where applicable. It is a condition to the
consummation of the Merger that UPC receive an opinion from Price Waterhouse
LLP that the Merger would be accounted for as a "pooling of interests."
EXPENSES
The Reorganization Agreement provides, in general, that UPC and GSSC
will each pay its own expenses in connection with the Reorganization Agreement
and the transactions contemplated thereby, including fees and expenses of its
respective independent accountants and counsel and any investment advisor fees
or commissions.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a discussion of the material federal income tax
consequences of the Merger to certain GSSC stockholders and does not purport to
be a complete analysis or listing of all potential tax considerations or
consequences relevant to a decision whether to vote for the approval of the
Merger. The discussion does not address all aspects of federal income taxation
that may be applicable to GSSC stockholders subject to special federal income
tax treatment including (without limitation) foreign persons, insurance
companies, tax-exempt entities, retirement plans, dealers in securities and
persons who acquired their GSSC Common Stock pursuant to the exercise of
employee stock options or otherwise as compensation. The discussion addresses
neither the effect of any applicable state, local or foreign tax laws, nor the
effect of any federal tax laws other than those pertaining to the federal
income tax. In view of the individual nature of federal income tax
consequences, each GSSC stockholder is urged to consult their own tax advisor
to determine the specific tax consequences of the Merger to such holder.
The discussion is based on the Code, regulations and rulings now in
effect or proposed thereunder, current administrative rulings and practice, and
judicial precedent, all of which are subject to change. Any such change, which
may or may not be retroactive, could alter the tax consequences discussed
herein. The discussion is also based on certain assumptions regarding
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the factual circumstances that will exist at the Effective Time of the Merger,
including certain representations of UPC and GSSC. If any of these factual
assumptions is inaccurate, the tax consequences of the Merger could differ from
those described herein. The discussion assumes that shares of GSSC Common
Stock are held as capital assets (within the meaning of Section 1221 of the
Code).
Assuming the Merger occurs in accordance with the Reorganization
Agreement, the Merger will constitute a "reorganization" for federal income tax
purposes under Section 368(a)(1) of the Code, with the following federal income
tax consequences:
(1) GSSC stockholders will recognize no gain or loss as a result of
the exchange of their GSSC Common Stock solely for shares of UPC Common Stock
pursuant to the Merger, except with respect to cash received in lieu of
fractional shares, if any, as discussed below.
(2) The aggregate adjusted tax basis of the shares of UPC Common
Stock received by each GSSC stockholder in the Merger (including any fractional
share of UPC Common Stock deemed to have been received, as described in
paragraph 4 below) will be equal to the aggregate adjusted tax basis of the
shares of GSSC Common Stock surrendered.
(3) The holding period of the shares of UPC Common Stock received by
each GSSC stockholder in the Merger (including any fractional share of UPC
Common Stock deemed to have been received, as described in paragraph 4 below)
will include the holding period of the shares of GSSC Common Stock exchanged
therefor.
(4) A GSSC stockholder who receives cash in the Merger in lieu of a
fractional share of UPC Common Stock will be treated as if the fractional share
had been received in the Merger and then redeemed by UPC in return for the
cash. The receipt of such cash will cause the recipient to recognize capital
gain or loss equal to the difference between the amount of cash received and
the portion of such holder's adjusted tax basis in the shares of UPC Common
Stock allocable to the fractional share.
GSSC has received from McDonnell Dyer, a professional limited company,
counsel for UPC, an opinion to the effect that the Merger will be a
"reorganization" for federal income tax purposes under Section 368(a)(1) of the
Code. A copy of such opinion is attached as Exhibit 8 to the Registration
Statement of which this Joint Proxy Statement/Prospectus is a part. A copy of
such opinion may be obtained by request to Gary A. Simanson, UPC's Assistant
Secretary, made as provided under "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE." Such opinion is subject to the conditions and assumptions stated
therein and also relies on various representations made, and undertakings given
by GSSC and UPC. An opinion of counsel, unlike a private letter ruling from
the Internal Revenue Service (the "Service"), has no binding effect on the
Service. The Service could take a position contrary to counsel's opinion and,
if the matter should be litigated, a court may reach a decision contrary to the
opinion. The Service is not expected to issue a ruling on the tax consequences
of the Merger, and no such ruling has been requested.
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THE FOREGOING IS A GENERAL DISCUSSION OF CERTAIN OF THE MATERIAL
FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER AND IS INCLUDED FOR GENERAL
INFORMATION ONLY. THE FOREGOING DISCUSSION DOES NOT TAKE INTO ACCOUNT THE
PARTICULAR FACTS AND CIRCUMSTANCES OF EACH GSSC STOCKHOLDER'S TAX STATUS AND
ATTRIBUTES. AS A RESULT, THE FEDERAL INCOME TAX CONSEQUENCES ADDRESSED IN THE
FOREGOING DISCUSSION MAY NOT APPLY TO EACH GSSC STOCKHOLDER. IN VIEW OF THE
INDIVIDUAL NATURE OF INCOME TAX CONSEQUENCES, EACH GSSC STOCKHOLDER SHOULD
CONSULT THEIR OWN TAX ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES OF THE
MERGER TO THEM, INCLUDING THE APPLICATION AND EFFECT OF FEDERAL, STATE, LOCAL
AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL AND OTHER TAX
LAWS.
RESALES OF UPC COMMON STOCK
The shares of UPC Common Stock issued pursuant to the Reorganization
Agreement will be freely transferable under the Securities Act except for
shares issued to any stockholder of GSSC who may be deemed to be an "affiliate"
of GSSC and therefore an "underwriter" in respect to the UPC Common Stock
received in the Merger for purposes of Rule 145 under the Securities Act as of
the date of the Effective Time of the Merger. Affiliates may not sell their
shares of UPC Common Stock acquired in connection with the Merger except
pursuant to an effective registration statement (other than on Form S-4) under
the Securities Act covering such shares or in compliance with Rule 145
promulgated under the Securities Act or another applicable exemption from the
registration requirements of the Securities Act. Persons who may be deemed to
be affiliates of GSSC generally include individuals or entities that control,
are controlled by or are under common control with GSSC and would include
members of the management group in their roles as either executive officers or
directors of GSSC. UPC will place restrictive legends on certificates
representing UPC Common Stock issued to all persons who are deemed
"underwriters" under Rule 145. The shares of the UPC Common Stock to be
delivered pursuant to the Merger to any GSSC stockholder deemed to be an
"affiliate" of GSSC under the Securities Act are subject to the additional
restriction on resale imposed by provisions of the Reorganization
Agreement requiring all affiliates to retain all shares of UPC Common Stock
received by them in connection with the Merger until such time as UPC shall
have publicly released a statement of UPC's consolidated earnings reflecting
the combined financial results of UPC and GSSC for a period of not less than 30
days subsequent to the Effective Date of the Merger. Shares of UPC Common
Stock delivered to any GSSC stockholder deemed an affiliate will bear a legend
to that effect. See "DESCRIPTION OF UPC COMMON AND PREFERRED STOCK -- UPC
Common Stock -- Dividends."
COMPARISON OF SHAREHOLDER'S AND STOCKHOLDER'S RIGHTS
Introduction. Upon consummation of the Merger, holders of the GSSC
Common Stock, whose rights are presently governed by Delaware corporate law and
GSSC's Certificate of Incorporation and Bylaws, and indirectly by applicable
Federal Reserve regulations, will become
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shareholders of UPC, a Tennessee corporation. Accordingly, immediately
after the Effective Time of the Merger, their rights will be governed by
Tennessee corporate law and the Charter and Bylaws of UPC, and indirectly by
the regulations of the Federal Reserve and other federal banking regulatory
agencies. Certain differences arise from differences between the Certificate
of Incorporation and Bylaws of GSSC and the Charter and Bylaws of UPC. The
following discussion is not intended to be a complete statement of all
differences affecting the rights of stockholders and shareholders, but
summarizes material differences and is qualified in its entirety by reference
to the Charter and Bylaws of UPC and the Certificate of Incorporation and
Bylaws of GSSC. See "AVAILABLE INFORMATION."
Issuance of Capital Stock. The Certificate of Incorporation of GSSC
authorizes the issuance of 15,000,000 shares of common stock, par value $1.00
per share. The Charter of UPC authorizes the issuance of 50,000,000 shares of
common stock, par value $5.00 per share, and 10,000,000 shares of serial
preferred stock, no par value. At September 30, 1994, 9,492,975 and 25,431,252
shares of common stock of GSSC and UPC, respectively, were issued and
outstanding. For information regarding the number of shares of UPC Common
Stock that would have been issued on a pro forma basis upon the consummation of
the Merger as of June 30, 1994, see "SUMMARY -- Pro Forma Condensed
Consolidated Financial Information." Under GSSC's Certificate of
Incorporation and UPC's Charter, GSSC and UPC are generally authorized,
respectively, to issue additional shares of capital stock up to the amount
authorized, without stockholder or shareholder, as the case may be, approval.
Payment of Dividends. The ability of GSSC to pay dividends on its
common stock is governed by Delaware corporate law. UPC's ability to pay
dividends on its Common Stock is governed by Tennessee corporate law. Under
Tennessee corporate law, dividends may be paid so long as the corporation would
be able to pay its debts as they become due in the ordinary course of business
and the corporation's total assets would not be less than the sum of its total
liabilities plus the amount that would be needed if the corporation were to be
dissolved at the time of the distribution, to satisfy the preferential rights
upon dissolution of shareholders whose preferential rights are superior to
those receiving the distribution.
The ability of GSSC and UPC to pay dividends on their common stock
also is affected by regulatory considerations and restrictions upon their
receipt of dividends from their respective subsidiaries. See "SUMMARY --
Market Prices of Common Stock; Dividends" and "CERTAIN REGULATORY
CONSIDERATIONS" for additional information regarding dividends and restrictions
on dividends.
Special Meetings of Stockholders or Shareholders. GSSC's Bylaws
provide that special meetings of stockholders of GSSC may be called for any
purpose at any time by GSSC's Chairman of the Board, President or a majority
the GSSC Board of Directors. UPC's Bylaws provide that special meetings of
shareholders of UPC may be called for any purpose or purposes whatsoever at any
time by the Chairman of the UPC Board of Directors, the President, the
Secretary or the holders of not less than one-tenth of the shares entitled to
vote at such meeting.
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Number and Term of Directors. GSSC's Certificate of Incorporation
provides that the number of members of the GSSC Board of Directors shall
consist of a maximum of 35 individuals, but shall never be less than the number
required by law. GSSC's Certificate of Incorporation provides that the
directors shall be divided into three classes with each class serving for a
term of three years. Additionally, pursuant to GSSC's Bylaws, GSSC shall have
an Executive Committee, composed of not less than three nor more than seven
members, all of whom shall be members of the GSSC Board of Directors. The
Executive Committee shall have charge and may exercise complete control of all
matters which may require attention at any time between the regular meetings of
the GSSC Board of Directors and shall also perform such other duties as the
GSSC Board of Directors shall designate. UPC's Charter provides that the
number of directors may consist of between seven and 25 individuals, as
provided for from time to time in the Bylaws, provided that no amendment to the
Bylaws decreasing the number of directors will have the effect of shortening
the term of any incumbent director, and provided further that no action may be
taken by directors (whether through amendment of the Bylaws or otherwise) to
increase the number of directors as provided in the Bylaws from time to time
unless at least two-thirds of the directors then in office shall concur in said
action.
Advance Notice Requirements for Nominations of Directors and
Presentation of New Business at Special Meetings of Shareholders. UPC's Bylaws
generally provide that any proposal of a shareholder which is to be presented
at any annual meeting of shareholders must be sent so as to be received by UPC
at its principal offices not less than 120 days in advance of the date of UPC's
proxy statement issued in connection with the previous year's annual meeting of
shareholders. Neither GSSC's Certificate of Incorporation nor its Bylaws
contain any such provision.
Limitations on Acquisition of Capital Stock. The Charter of UPC does
not have any provision relating to the limitation on acquisition of the capital
stock of UPC. However, shareholders of UPC holding more than ten percent (10%)
of the shares of UPC Common Stock are subject to certain restrictions
in acquiring control as set forth below, and UPC would be, if they should so
elect, subject to the Control Share Acquisition Act under Tennessee law.
Approval of Mergers, Consolidations, Sale of Substantially All Assets
and Dissolution. GSSC's Certificate of Incorporation and UPC's Charter set
forth stockholder or shareholder approval requirements, as the case may be, for
mergers and other similarly important corporate transactions involving
substantial stockholders or shareholders, as the case may be. GSSC's
Certificate of Incorporation provides that the affirmative votes of holders of
not less than eighty percent (80%) of the outstanding shares of voting stock,
and the affirmative votes of the holders of not less than sixty-seven percent
(67%) of the outstanding shares of voting stock not counting shares held by a
controlling party, are required for approval of any merger, consolidation or
sale by GSSC of substantially all of its assets unless (i) the transaction has
been approved by a majority of the members of the GSSC Board of Directors or
(ii) the consideration to be received by the stockholders is greater than the
highest price paid by such controlling person to acquire stock within the last
three years. A controlling person is deemed to be any person owning or
controlling twenty percent (20%) or more of GSSC's voting stock.
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GSSC's Certificate of Incorporation further provides that the members
of the GSSC Board of Directors must consider all factors they deem relevant in
evaluating any proposed tender offer or exchange offer for GSSC or any
subsidiary, any proposed merger or consolidation of GSSC or any subsidiary with
or into another entity and any proposal to purchase or otherwise acquire all or
substantially all the assets of GSSC or any subsidiary. The directors of GSSC
must evaluate whether the proposal is in the best interests of GSSC and its
subsidiaries by considering the best interests of the GSSC stockholders, the
value of the consideration being offered (current market value and estimated
future value) and other factors the directors determine to be relevant,
including the social, legal and economic effects on employees, customers,
depositors and communities served by GSSC and/or any subsidiary.
UPC's Charter provides that the affirmative votes of the holders of
two-thirds or more of the outstanding capital stock of UPC are required to
approve any merger, sale, lease, exchange or other disposition of all or
substantially all of the assets of UPC to or with any other corporation or
person if such other corporation or person is the beneficial owner of 10% or
more of the outstanding capital stock of UPC.
Amendment of Certificate of Incorporation or Charter and Bylaws.
GSSC's Certificate of Incorporation provides that GSSC may amend, alter,
repeal or rescind any provision of the Certificate of Incorporation except
that certain provisions may not be modified without the affirmative votes of
holders of at least eighty percent (80%) of GSSC's outstanding voting stock.
GSSC's Certificate of Incorporation and Bylaws provide that the GSSC Board of
Directors may amend, alter, repeal or rescind any provision of the
Bylaws or the stockholders may do so upon a vote of eighty percent (80%) or
more of the shares entitled to vote. The UPC Charter provides that UPC
reserves the right to amend, alter, change or repeal any provision made in the
Charter in the manner prescribed by the laws of the State of Tennessee. UPC's
Bylaws provide that they may be amended or repealed, in whole or in part, or
new Bylaws may be adopted, by the UPC Board of Directors at any UPC Board of
Directors meeting by a vote of a majority of the entire UPC Board of Directors,
except where a greater affirmative vote is required by its Charter as is the
case on certain specified issues. The Bylaws may also be amended or repealed,
or new Bylaws may be adopted by vote of the shareholders of UPC, at any annual
or special meeting of shareholders.
Removal of Directors. GSSC's Certificate of Incorporation provides
that either (i) the affirmative votes of a majority of the GSSC Board of
Directors or (ii) the affirmative votes of a majority of those shares of GSSC
Common Stock present at a meeting that properly constitutes a quorum shall be
required to remove a director, but only for "cause" as defined in the
Certificate of Incorporation. UPC's Charter provides that the
affirmative votes of the holders of at least two-thirds of the outstanding
capital stock of UPC entitled to vote generally in the election of directors
are required to remove from office any director of UPC, whether with or without
cause.
Antitakeover Statute. Delaware has enacted a business combination
moratorium statute which generally prohibits a domestic corporation from
engaging in mergers or other business
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combinations with certain "interested persons" for a statutory time period.
The moratorium can be avoided if the business combination is approved by the
Board of Directors prior to the date on which the interested stockholder
acquires the requisite percentage of stock. The DGCL imposes a three (3) year
moratorium on such transactions, thereby potentially increasing the period
during which a hostile bid may be frustrated. In addition, the DGCL does not
apply if the interested stockholder obtains at least eighty-five percent (85%)
of the corporation's voting stock upon consummation of the transaction which
resulted in the stockholder becoming an interested stockholder. Thus, a person
acquiring at least eighty-five percent (85%) of GSSC's Common Stock could
circumvent the defensive provisions of the DGCL. For the rights of
shareholders under Tennessee law and the UPC Charter and Bylaws, see
"DESCRIPTION OF UPC COMMON STOCK AND PREFERRED STOCK -- Certain Provisions That
May Have an Anti-Takeover Effect."
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CERTAIN REGULATORY CONSIDERATIONS
GENERAL
As a bank holding company, UPC is subject to the regulation and
supervision of the Federal Reserve. In addition, as a savings and loan holding
company, UPC is registered with the Office of Thrift Supervision (the "OTS")
and is subject to OTS regulations, supervision and reporting requirements.
UPC's bank subsidiaries that are national banking associations, including UPNB
and the Regional Banks, are subject to supervision and examination by the
Office of the Comptroller of the Currency (the "Comptroller") and the Federal
Deposit Insurance Corporation (the "FDIC"). State bank subsidiaries of UPC
which are members of the Federal Reserve System are subject to supervision and
examination by the Federal Reserve and the state banking authorities of the
states in which they are located. State bank subsidiaries which are not
members of the Federal Reserve System are subject to supervision and
examination by the FDIC and the state banking authorities of the states in
which they are located. UPC's savings bank subsidiaries are subject to
supervision and examination by the OTS. UPC's banking subsidiaries are subject
to various requirements and restrictions, including requirements to maintain
reserves against deposits, restrictions on the types and amounts of loans and
other extensions of credit that may be granted and the interest that may be
charged thereon, and limitations on the types of investments that may be made
and the types of services that may be offered. Various consumer laws and
regulations also affect the operations of the banks. In addition to the impact
of regulation, the subsidiary banks are affected significantly by the actions
of the Federal Reserve as it attempts to control the money supply and credit
availability in order to influence the economy.
The BHCA generally requires the prior approval of the Federal Reserve
where a bank holding company proposes to acquire direct or indirect ownership
or control of more than five percent (5%) of the voting shares of any bank or
otherwise to acquire control of a bank or to merge or consolidate with any
other bank holding company. For transactions that close prior to September 29,
1995, the BHCA generally prohibits the Federal Reserve from approving an
application by a bank holding company to acquire a bank, located in another
state, unless such an acquisition is specifically authorized by statute of the
state in which the bank to be acquired is located. Tennessee has adopted
reciprocal interstate banking legislation permitting Tennessee-based bank
holding companies to acquire banks and bank holding companies in certain other
states and allowing bank holding companies located in certain states other than
Tennessee, to acquire banks and bank holding companies located in Tennessee.
A bank holding company is generally prohibited under the BHCA from
acquiring voting shares of any company which is not a bank, and from engaging
in any activities other than those of banking or of managing or controlling
banks or furnishing services to, or performing services for, its subsidiaries.
An exception to these prohibitions permits a bank holding company to engage in,
or to acquire an interest in, a company, such as a thrift institution, which
engages in activities that the Federal Reserve has determined are so closely
related to banking or managing or controlling banks as to be a proper incident
thereto.
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CAPITAL ADEQUACY
The Federal Reserve has adopted risk-based capital guidelines for bank
holding companies. The minimum guideline for the ratio of total capital
("Total Capital") to risk-weighted assets (including certain off-balance-sheet
activities such as standby letters of credit) is eight percent (8%). At least
half of the Total Capital must be composed of "Tier I Capital" which consists
of common shareholders' equity, minority interests in the equity accounts of
consolidated subsidiaries, non-cumulative perpetual preferred stock and a
limited amount of cumulative perpetual preferred stock, less goodwill ("Tier I
Capital"). The remainder, which is Tier 2 Capital, may consist of subordinated
debt (or certain other qualifying debt issued prior to March 12, 1988), other
preferred stock and a limited amount of loan loss reserves.
In addition, the Federal Reserve has established minimum leverage
ratio guidelines for bank holding companies. These guidelines provide for a
minimum ratio of Tier I Capital to average total assets, less goodwill (the
"Leverage Ratio") of three percent for bank holding companies that meet certain
specified criteria, including those having the highest regulatory rating. All
other bank holding companies generally are required to maintain a Leverage
Ratio of at least three percent (3%) plus an additional cushion of 100 to 200
basis points. The guidelines also provide that bank holding companies
experiencing internal growth or making acquisitions are expected to maintain
strong capital positions substantially above the minimum supervisory levels
without significant reliance on intangible assets. Furthermore, the Federal
Reserve has indicated that it will consider a "tangible Tier I capital leverage
ratio" (deducting all intangibles) and other indicia of capital strength in
evaluating proposals for expansion or new activities. The Federal Reserve has
not advised UPC of any specific minimum Leverage Ratio applicable to UPC.
The federal bank regulatory agencies have issued various proposals to
amend the risk-based capital guidelines for banks and bank holding companies.
Under one proposal, banks would be required to give explicit consideration to
interest rate risk as an element of capital adequacy by maintaining capital to
compensate for such risk in an amount measured by the bank's exposure to
interest rate risk in excess of a regulatory threshold. Another proposal would
revise the treatment given to (i) low-level recourse arrangements to reduce the
amount of capital required and (ii) certain direct credit substitutes provided
by banking organizations to require that capital be maintained against the
value of the assets enhanced or the loans protected. A proposal recently
issued by the Federal Reserve and expected to be joined in by the other bank
regulatory agencies increases the amount of capital required to be carried
against certain long-term derivative contracts; in addition, the proposal
recognizes the effect of certain bilateral netting arrangements in reducing
potential future exposure under these contracts. UPC believes that these
changes will not, if adopted, have a material effect on the company's
compliance with capital adequacy requirements.
Failure to meet capital requirements can subject an institution to a
variety of enforcement remedies, including issuance of a capital directive, the
termination of deposit insurance by the FDIC and a prohibition on the taking of
brokered deposits. As described below, under the
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"Prompt Corrective Action" regulations, substantial additional
restrictions can be imposed upon FDIC-insured institutions that fail to meet
applicable capital requirements. See "-- Prompt Corrective Action."
At June 30, 1994, UPC's total risk based capital ratio was 18.39%, its
Tier I Capital ratio was 15.11% and its Leverage Ratio was 7.49%. In addition,
each of UPC's banking subsidiaries satisfied the minimum capital requirements
applicable to it and had the requisite capital levels to qualify as a
"well-capitalized" institution under the prompt corrective action provisions
discussed below.
PROMPT CORRECTIVE ACTION
The Federal Deposit Insurance Corporation Improvement Act ("FDICIA")
enacted in December 1991, requires the federal banking regulators to take
prompt corrective action in respect of depository institutions that do not meet
their minimum capital requirements. FDICIA establishes five capital tiers:
"well capitalized," "adequately capitalized," "undercapitalized,"
"significantly undercapitalized" and "critically undercapitalized." Under
capital regulations, a bank is defined to be well capitalized if it maintains a
Leverage Ratio of at least five percent, a Tier I Capital ratio of at least six
percent and a Total Capital ratio of at least ten percent (10%) and is not
otherwise in a "troubled condition" as specified by its appropriate federal
regulatory agency. A bank is defined to be adequately capitalized if it meets
all of its minimum capital requirements as described above under "-- Capital
Adequacy." In addition, a bank will be considered undercapitalized if it fails
to meet any minimum required measure, significantly undercapitalized if it is
significantly below such measure and critically undercapitalized if it fails
to maintain a level of tangible equity equal to not less than two percent (2%)
of total assets. A bank may be deemed to be in a capitalization category that
is lower than is indicated by its actual capital position if it receives an
unsatisfactory examination rating.
All institutions, regardless of their capital levels, are restricted
from making any capital distribution or paying any management fees that would
cause the institution to fail to satisfy the minimum levels to be considered
adequately capitalized. An undercapitalized institution is: (i) subject to
increased monitoring by the appropriate federal banking regulator; (ii)
required to submit an acceptable capital restoration plan within 45 days; (iii)
subject to asset growth limits; and (iv) required to obtain prior regulatory
approval for acquisitions, branching and new lines of business. The capital
restoration plan must include a guarantee by the institution's holding company
that the institution will comply with the plan until it has been adequately
capitalized on average for four consecutive quarters. Pursuant to the
guarantee, the institution's holding company would be liable up to the lesser
of five percent (5%) of the institution's total assets or the amount necessary
to bring the institution into capital compliance as of the date it failed to
comply with its capital restoration plan. If the controlling bank holding
company should fail to fulfill its obligations under the guarantee and should
file (or should have filed against it) a petition under the federal Bankruptcy
Code, the appropriate federal banking regulator could have a claim as a general
creditor of the bank holding company, and, if the guarantee were deemed to be a
commitment to maintain capital under the federal Bankruptcy Code, the claim
would be
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entitled to a priority in such bankruptcy proceeding over third-party
creditors of the bank holding company.
The regulatory agencies have discretionary authority to reclassify
well capitalized institutions as adequately capitalized or to impose on
adequately capitalized institutions requirements or actions specified for
undercapitalized institutions if the agency determines after notice and an
opportunity for hearing that the institution is in an unsafe or unsound
condition or is engaging in an unsafe or unsound practice, which can consist of
the receipt of an unsatisfactory examination rating if the deficiencies cited
are not corrected. A significantly undercapitalized institution, as well as
any undercapitalized institution that did not submit an acceptable capital
restoration plan, may be subject to regulatory demands for recapitalization,
broader application of restrictions on transactions with affiliates,
limitations on interest rates paid on deposits, asset growth and other
activities, possible replacement of directors and officers and restrictions on
capital distributions by any bank holding company controlling the institution.
Any company controlling the institution could also be required to divest the
institution or the institution could be required to divest subsidiaries. The
senior executive officers of a significantly undercapitalized institution may
not receive bonuses or increases in compensation without prior regulatory
approval and the institution is prohibited from making payments of principal or
interest on its subordinated debt. If an institution should become critically
undercapitalized, the institution would be subject to conservatorship or
receivership within 90 days unless periodic determinations are made that
forbearance from such action would better protect the deposit insurance fund.
Unless appropriate findings and certifications are made by the appropriate
federal bank regulatory agencies, a critically undercapitalized institution
must be placed in receivership if it should remain critically undercapitalized
on average during the calendar quarter beginning 270 days after the date it
became critically undercapitalized.
DIVIDEND RESTRICTIONS
UPC is a legal entity separate and distinct from UPNB, the Regional
Banks, the Community Banks and its nonbank subsidiaries. UPC's revenues (on a
parent company only basis) result, in significant part, from dividends paid to
UPC by its subsidiaries. The right of UPC, and consequently the right of
creditors and shareholders of UPC, to participate in any distribution of the
assets or earnings of any subsidiary through the payment of such dividends or
otherwise is necessarily subject to the prior claims of creditors of the
subsidiary (including depositors, in the case of banking subsidiaries), except
to the extent that claims of UPC in its capacity as a creditor may be
recognized.
There are statutory and regulatory requirements applicable to the
payment of dividends by UPNB, the Regional Banks and the Community Banks to
UPC. Each national banking association subsidiary of UPC, including UPNB and
the Regional Banks, is required by federal law to obtain the prior approval of
the Comptroller for the payment of dividends if the total of all dividends
declared by the board of directors of such bank in any year will exceed the
total of (i) such bank's net profits (as defined and interpreted by regulation)
for that year plus (ii) the retained net profits (as defined and interpreted by
regulation) for the preceding two years, less
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any required transfers to surplus. In addition, national banks may only pay
dividends to the extent that their retained net profits (including the
portion transferred to surplus) exceed statutory bad debts (as defined by
regulation). The state-chartered Community Banks are subject to similar
restrictions on the payment of dividends by the respective state laws under
which they are organized. Furthermore, as described further under "-- Prompt
Corrective Action," all depository institutions are prohibited from paying any
dividends, making other distributions or paying any management fees if, after
such payment, the depository institution would fail to satisfy its minimum
capital requirements. In accordance with the specified calculations, at July
1, 1994, UPNB, the Regional Banks and the Community Banks had approximately
$12.8 million available for distribution to UPC without obtaining prior
regulatory approval. The actual amount of dividends paid will be limited to a
lesser amount by the management of UPC in order to maintain compliance with
UPC's internal capital guidelines and to maintain strong capital positions in
each of the subsidiary banks of UPC. Future dividends will depend upon the
level of earnings of the subsidiary banks of UPC. It is the policy of the
Federal Reserve that bank holding companies should pay dividends only out of
current earnings. Federal banking regulators also have the authority to
prohibit banks and bank holding companies from paying a dividend if they should
deem such payment to be an unsafe or unsound practice. In addition, it is the
position of the Federal Reserve Board that as a bank holding company, UPC is
expected to act as a source of financial strength to each of its subsidiary
banks. See "-- Support of Subsidiary Banks."
SUPPORT OF SUBSIDIARY BANKS
Under Federal Reserve policy, UPC is expected to act as a source of
financial strength to UPNB, the Regional Banks and the Community Banks and,
where required, to commit resources to support each of such subsidiaries. This
support may be required at times when, absent such Federal Reserve policy, UPC
may not be inclined to provide it. Moreover, if one of its subsidiary banks
should become undercapitalized, under FDICIA, UPC would be required to
guarantee the subsidiary bank's compliance with its capital plan in order for
such plan to be accepted by the federal regulatory authority. See "-- Prompt
Corrective Action."
Under the "cross guarantee" provisions of the Federal Deposit
Insurance Act, any FDIC-insured subsidiary of UPC may be held liable for any
loss incurred by, or reasonably expected to be incurred by, the FDIC in
connection with (i) the "default" of any other commonly controlled FDIC-insured
subsidiary or (ii) any assistance provided by the FDIC to any commonly
controlled FDIC-insured subsidiary "in danger of default." "Default" is defined
generally as the appointment of a conservator or receiver and "in danger of
default" is defined generally as the existence of certain conditions indicating
that a default is likely to occur in the absence of regulatory assistance.
Because it is a bank holding company, any capital loans made by UPC to
UPNB, the Regional Banks or any of the Community Banks are subordinate in right
to payment of deposits and to certain other indebtedness of such subsidiary
bank. In the event of a bank holding company's bankruptcy, any commitment by
the bank holding company to a federal bank
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regulatory agency to maintain the capital of a subsidiary bank will be
assumed by the bankruptcy trustee and entitled to a priority of payment over
certain other creditors of the bank holding company.
TRANSACTIONS WITH AFFILIATES
Provisions of the Federal Reserve Act impose restrictions on the type,
quantity and quality of transactions between affiliates of an insured bank and
the insured bank (including its bank holding company and its nonbank
subsidiaries). The purpose of these restrictions is to prevent misuse of the
resources of the insured institution by its uninsured affiliates. An exception
to most of these restrictions is provided for transactions between two insured
banks that are within the same holding company where the holding company owns
eighty percent (80%) or more of each of these banks (the "sister bank"
exception). The restrictions also do not apply to transactions between an
insured bank and its wholly owned subsidiaries. These restrictions include
limitations on the purchase and sale of assets and extensions of credit by the
insured bank to its holding company or its nonbank subsidiaries. An insured
bank and its subsidiaries are limited in engaging in "covered transactions"
with their nonbank or nonsavings bank affiliates to the following amounts: (i)
in the case of any one such affiliate, the aggregate amount of covered
transactions of the insured bank and its subsidiaries may not exceed ten
percent (10%) of the capital stock and surplus of the insured bank, and (ii)
in the case of all affiliates, the aggregate amount of covered transactions of
the insured bank and its subsidiaries may not exceed twenty percent (20%) of
the capital stock and surplus of the bank. "Covered transactions" are defined
by statute to include a loan or extension of credit, as well as a purchase of
securities issued by an affiliate, a purchase of assets (unless otherwise
exempted by the Federal Reserve), the acceptance of securities issued by the
affiliate as collateral for a loan and the issuance of a guarantee, acceptance
or letter of credit on behalf of an affiliate. Further, provisions of the
BHCA, as amended, prohibit a bank holding company and its subsidiaries from
engaging in certain tie-in arrangements in connection with any extension of
credit, lease or sale of property or furnishing of services.
FDIC INSURANCE ASSESSMENTS
The subsidiary banks of UPC are subject to FDIC deposit insurance
assessments. The FDIC has adopted a risk-based premium schedule which has
increased the assessment rates for most FDIC-insured depository institutions.
Under the new schedule, the annual premiums initially range from $.23 to $.31
for every $100 of deposits. Each financial institution is assigned to one of
three capital groups--well capitalized, adequately capitalized or
undercapitalized--and further assigned to one of three subgroups within a
capital group on the basis of supervisory evaluations by the institution's
primary federal and, if applicable, state supervisors and on the basis of other
information relevant to the institution's financial condition and the risk
posed to the applicable insurance fund. The actual assessment rate applicable
to a particular institution will, therefore, depend in part upon the risk
assessment classification so assigned to the institution by the FDIC.
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The legislation adopted in August, 1989 to provide for the resolution
of insolvent savings associations also required the FDIC to establish separate
deposit insurance funds -- the Bank Insurance Fund ("BIF") for banks and the
Savings Association Insurance Fund ("SAIF") for savings associations. The law
also requires the FDIC to set deposit insurance assessments at such levels as
will cause BIF and SAIF to reach their "designated reserve ratios" of 1.25
percent of the deposits insured by them within a reasonable period of time. Due
primarily to the low costs of resolving bank insolvencies in the last few
years, BIF is expected to reach its designated reserve ratio within one or two
years, at which time the FDIC will be required to lower deposit insurance
assessment rates on banks to those substantially lower levels that will
maintain the balance in BIF in the required relationship to insured bank
deposits. However, the balance in SAIF is not expected to reach the designated
reserve ratio for far longer than it is expected the BIF to reach its mandated
balance, as the law provides that a significant portion of the costs of
resolving past insolvencies of savings associations must be paid from this
source. Accordingly, while the BIF and SAIF assessment rates are presently the
same, it is likely that SAIF rates will be significantly higher than BIF rates
in the future. Since UPC acquired substantial amounts of SAIF-insured deposits
from insolvent savings associations during the years from 1989 to the present
which cannot be converted from SAIF to BIF under present law, it may be
required to pay insurance assessments on these acquired deposits at rates
significantly higher than the rates charged by BIF. While the amount of
additional deposit insurance assessments to be incurred cannot be calculated at
this time because the differential likely to develop between SAIF and BIF is
not known, UPC does not expect that such additional deposit insurance costs
will have a significant, adverse effect on its earnings.
OTHER BANKING LEGISLATION
In addition to the matters noted above, FDICIA made other significant
changes to the federal banking laws in 1991. FDICIA instituted certain changes
to the supervisory process, including provisions that mandate certain
regulatory agency actions against undercapitalized institutions within
specified time limits.
Standards for Safety and Soundness. FDICIA requires the federal bank
regulatory agencies to prescribe, by regulation, standards for all insured
depository institutions and depository-institution holding companies relating
to: (i) internal controls, information systems and audit systems; (ii) loan
documentation; (iii) credit underwriting; (iv) interest-rate risk exposure; (v)
asset growth; and (vi) compensation, fees and benefits. The compensation
standards must prohibit employment contracts, compensation or benefit
arrangements, stock option plans, fee arrangements or other compensatory
arrangements that would provide excessive compensation, fees or benefits or
could lead to material financial loss, but (subject to certain exceptions) may
not prescribe specific compensation levels or ranges for directors, officers or
employees. In addition, the federal banking regulatory agencies would be
required to prescribe by regulation standards specifying: (i) maximum
classified assets to capital ratios; (ii) minimum earnings sufficient to absorb
losses without impairing capital; and (iii) to the extent feasible, a minimum
ratio of market value to book value for publicly traded shares of depository
institutions and depository institution holding companies.
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Brokered Deposits. The FDIC has adopted regulations governing the
receipt of brokered deposits. Under the regulations, a bank may not lawfully
accept, roll over or renew brokered deposits unless (i) it is well capitalized
or (ii) it is adequately capitalized and receives a waiver from the FDIC. A
bank that may not receive brokered deposits also may not offer "pass-through"
insurance on certain employee benefit accounts. Whether or not it has obtained
such a waiver, an adequately capitalized bank may not pay an interest rate on
any deposits in excess of 75 basis points over certain prevailing market rates
specified by regulation. There are no such restrictions on a bank that is well
capitalized. Because UPNB, the Regional Banks and the Community Banks all had
at June 30, 1994, the requisite capital levels to qualify as well capitalized
institutions, UPC believes the brokered deposits regulation will have no
material effect on the funding or liquidity of UPNB, the Regional Banks or any
of the Community Banks.
Consumer Protection Provisions. FDICIA seeks to encourage enforcement of
existing consumer protection laws and enacted new consumer-oriented provisions
including a requirement of notice to regulators and customers of any proposed
branch closing and provisions intended to encourage the offering of "lifeline"
banking accounts and lending in distressed communities. FDICIA also requires
depository institutions to make additional disclosures to depositors with
respect to the rate of interest and the terms of their deposit accounts.
Miscellaneous. FDICIA also made extensive changes in the applicable rules
regarding audit, examinations and accounting. FDICIA generally requires
annual, on-site, full-scope examinations by each bank's primary federal
regulator. FDICIA also imposes new responsibilities on management, the
independent audit committee and outside accountants to develop, approve or
attest to reports regarding the effectiveness of internal controls, legal
compliance and off-balance-sheet liabilities and assets.
FDICIA also required the Federal Reserve to prescribe standards which
limit the risks posed by an insured institution's "exposure" to any other
depository institution to limit the risks that the failure of a large
depository institution would pose to an insured depository institution. FDICIA
broadly defines "exposure" to include extensions of credit to the other
institution; purchases of, or investments in, securities issued by the other
institution; securities issued by the other institution and accepted as
collateral for an extension of credit to any person; and all similar
transactions which the Federal Reserve has defined by regulation to be
"exposure." The Federal Reserve has proposed procedures and "benchmark"
standards to limit an insured depository institution's credit and settlement
exposure to each of its correspondent banks. The final rules were effective on
December 19, 1992, but provide for a two-year transition period.
Depositor Preference. Legislation recently enacted by Congress
establishes a nationwide depositor preference rule in the event of a bank
failure. Under this arrangement, all deposits and certain other claims against
a bank, including the claim of the FDIC as subrogee of insured depositors,
would receive payment in full before any general creditor of the bank would be
entitled to any payment in the event of an insolvency or liquidation of the
bank.
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The Interstate Banking and Community Development Legislation. In
September, 1994 legislation was enacted that is expected to have a significant
effect in restructuring the banking industry in the United States. The
Interstate Banking Efficiency Act facilitates the interstate expansion and
consolidation of banking organizations (i) by permitting bank holding companies
that are adequately capitalized and managed, one year after enactment of the
legislation (September 29, 1995), to acquire banks located in states outside
their home states regardless of whether such acquisitions are authorized under
the law of the host state; (ii) by permitting the interstate merger of banks
after June 1, 1997, subject to the right of individual states to "opt in" or to
"opt out" of this authority before that date; (iii) by permitting banks
to establish new branches on an interstate basis provided that such action is
specifically authorized by the law of the host state; (iv) by permitting one
year after enactment of the legislation a bank to engage in certain agency
relationships (receive deposits, renew time deposits, close loans, service
loans and receive payments on loans and other obligations) as agent for any
bank or thrift affiliate, whether the affiliate is located in the same State or
a different State than the agent bank; and (v) by permitting foreign banks to
establish, with approval of the regulators in the United States, branches
outside their home states to the same extent that national or state banks
located in the home state would be authorized to do so. One effect of this
legislation would be to permit UPC to acquire banks and bank holding companies
located in any state and to permit banking organizations located in any state
to acquire banks and bank holding companies headquartered in Tennessee.
Overall, this legislation is likely to have the effects of increasing
consolidation and competition and promoting geographic diversification in the
banking industry.
The Community Development Banking Act, also enacted in September, 1994, is
intended to: (i) increase the flow of loans to businesses in distressed
communities by providing incentives to lenders to provide credit within those
communities; (ii) remove impediments to the securitization of small business
loans; (iii) provide for a reduction in paperwork and to streamline bank
regulation through, for example, the coordination of examinations in a bank
holding company context, a reduction in the number of currency transaction
reports required, improvements to the National Flood Insurance Program that
include enabling lenders to force place flood insurance; and (iv) increase the
level of consumer protection provided to customers in banking transactions.
UPC believes that these provisions of the new law will not have a material
effect on its operation.
REGULATION OF GSSC AND THE BANKS
As a bank holding company, GSSC is subject to the same type of regulatory
supervision considerations as UPC. For information regarding regulations
governing GSSC and the Banks, see GSSC's Annual Report on Form 10-K for the
year ended December 31, 1993 which is incorporated herein by reference.
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DESCRIPTION OF UPC COMMON AND PREFERRED STOCK
UPC's Restated Charter (the "Charter") currently authorizes the
issuance of 50,000,000 shares of common stock, par value $5.00 per share, and
10,000,000 shares of preferred stock having no par value (the "UPC Preferred
Stock"). As of October 31, 1994, 25,431,252 shares of UPC Common Stock were
issued and outstanding, and approximately 651,000 shares were subject to
acquisition through the exercise of options granted pursuant to UPC's 1992 and
1983 Stock Option Plans and other employee, officer and director benefit plans;
approximately 1,175,000 shares were authorized for issuance pursuant to said
plans but not yet subject to option grants or otherwise issued; and
approximately 4,478,000 shares were authorized for issuance and reserved for
conversion of certain shares of UPC Preferred Stock. Additionally, as of
October 31, 1994; 3,405,577 shares of UPC Preferred Stock were issued and
outstanding, consisting of 44,000 shares of UPC's $8.00 Nonredeemable,
Cumulative, Convertible Preferred Stock, Series B (the "Series B Preferred
Stock"); 253,655 shares of UPC's 9.5% Redeemable, Cumulative Convertible
Preferred Stock, Series D (the "Series D Preferred Stock"); and 3,107,922
shares of UPC's 8% Cumulative, Convertible Preferred Stock, Series E (the
"Series E Preferred Stock"). As of October 31, 1994, UPC's 690,000 shares of
UPC 10 3/8% Increasing Rate, Redeemable, Cumulative Preferred Stock, Series C
(the "Series C Preferred Stock") were called for redemption and are no longer
outstanding. As of October 31, 1994, none of UPC's 250,000 authorized shares
of Series A Preferred Stock were issued and outstanding. The capital stock of
UPC does not represent or constitute a deposit account and is not insured by
the FDIC, the Bank Insurance Fund, the Savings Association Insurance Fund or
any governmental agency.
UPC has authorized the issuance or purchase in the open market of up to
150,000 shares of UPC Common Stock in connection with UPC's 401-K Retirement
Savings Plan.
UPC COMMON STOCK
General. Shares of UPC Common Stock may be issued at such time or times
and for such consideration (not less than the par value thereof) as the UPC
Board of Directors may deem advisable, subject to such limitations as may be
set forth in the laws of the State of Tennessee or UPC's Charter or Bylaws.
UPNB is the Registrar, Transfer Agent and Dividend Disbursing Agent for shares
of UPC Common Stock.
Dividends. Subject to the preferential dividend rights, if any,
applicable to shares of the UPC Preferred Stock and subject to applicable
requirements, if any, with respect to the setting aside of sums for purchase,
retirement or sinking funds for UPC Preferred Stock, the holders of UPC Common
Stock are entitled to receive, to the extent permitted by law, such dividends
as may be declared from time to time by the UPC Board of Directors.
UPC has the right to, and may from time to time, enter into borrowing
arrangements or issue other debt instruments, the provisions of which may
contain restrictions on payment of dividends and other distributions on UPC
Common Stock and UPC Preferred Stock. As of the
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date of this Joint Proxy Statement/Prospectus, no such restrictions
under any such borrowing arrangements or outstanding debt instruments are in
effect.
Liquidation Rights. In the event of the voluntary or involuntary
liquidation, dissolution, distribution of assets or winding-up of UPC, after
distribution in full of the preferential amounts, if any, to be distributed to
the holders of the UPC Preferred Stock, holders of UPC Common Stock will be
entitled to receive all of the remaining assets of UPC of whatever kind
available for distribution to shareholders ratably in proportion to the number
of shares of UPC Common Stock held. The UPC Board of Directors may distribute
in kind to the holders of UPC Common Stock such remaining assets of UPC or may
sell, transfer or otherwise dispose of all or any part of such remaining assets
to any other person or entity and receive payment therefor in cash, stock or
obligations of such other person or entity, and may sell all or any part of the
consideration so received and distribute any balance thereof in kind to holders
of UPC Common Stock. Neither the merger or consolidation of UPC into or with
any other corporation, nor the merger of any other corporation into UPC, nor
any purchase or redemption of shares of stock of UPC of any class, shall be
deemed to be a dissolution, liquidation or winding-up of UPC for purposes of
this paragraph.
Because UPC is a holding company, its right and the rights of its
creditors and shareholders, including the holders of UPC Common Stock, to
participate in the distribution of assets of a subsidiary on its liquidation or
recapitalization may be subject to prior claims of such subsidiary's creditors
except to the extent that UPC itself may be a creditor having recognized claims
against such subsidiary.
PREFERRED STOCK OF UPC
Series A Preferred Stock. UPC's Charter provides for the issuance of up
to 250,000 shares (subject to adjustment by action of the UPC Board of
Directors) of Series A Preferred Stock under certain circumstances involving a
potential change in control of UPC. None of such shares are outstanding and
management is aware of no facts suggesting that issuance of such shares may be
imminent. The Series A Preferred Stock is described in more detail in UPC's
Current Report on Form 8-K dated January 19, 1989, incorporated by reference
herein.
Series B Preferred Stock. In November 1989, UPC issued to two holders, in
a private offering incidental to an acquisition, 44,000 shares of its Series B
Preferred Stock all of which are outstanding as of the date hereof. Such
shares bear a dividend rate of $8.00 per share per annum; dividends are
cumulative. After November 30, 1994 (and in limited circumstances prior
thereto), each share of Series B Preferred Stock is convertible at the option
of the holder into 7.722 shares of UPC Common Stock, with the maximum number of
shares of UPC Common Stock into which such shares may be converted being
339,768. The Series B Preferred Stock is not subject to any sinking fund
provisions and has no preemptive rights. Such shares provide for a liquidation
preference of $100.00 per share plus unpaid dividends accrued thereon and are
not subject to redemption by UPC. Holders of Series B Preferred Stock have no
voting rights except as required by law and certain other limited
circumstances.
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Series C Preferred Stock. In August 1991, UPC issued in a public offering
690,000 shares of its Series C Preferred Stock. Such shares have a
stated value of $25.00 per share. Dividends are payable at the rates of
approximately $.65 per quarter, increasing to $.68 on November 1, 1994, to $.71
on November 1, 1995 and to $.74 on November 1, 1996; dividends are cumulative.
The Series C Preferred Stock is not convertible, is not subject to any sinking
fund provisions and has no preemptive rights. Such shares provide for a
liquidation preference of $25.00 per share plus unpaid dividends accrued
thereon and, with the prior approval of the Federal Reserve, are subject to
redemption by UPC at $25.00 per share at any time on or after October 31, 1994.
Holders of Series C Preferred Stock have no voting rights except as required by
law and in certain other limited circumstances. UPC has redeemed all of its
outstanding Series C Preferred Stock effective October 31, 1994.
Series D Preferred Stock. In connection with the July 1992 acquisition of
Southeastern Bancshares, Inc., UPC issued in a private offering 253,655 shares
of Series D Preferred Stock. Such shares have a stated value of $20.50 per
share on which dividends accrue at a rate of 9.5% per annum; dividends are
cumulative. At any time prior to redemption, each share of the Series D
Preferred Stock is convertible at the option of the holder into one share of
UPC Common Stock. The Series D Preferred Stock is not subject to any sinking
fund provisions and has no preemptive rights. Such shares have a liquidation
preference of $20.50 per share plus unpaid dividends accrued thereon and, at
UPC's option, with the prior approval of the Federal Reserve, are subject to
redemption by UPC at any time and from time to time on or after July 1, 1995.
Holders of Series D Preferred Stock have no voting rights except as required by
law and in certain other limited circumstances.
Series E Preferred Stock. In February 1992, UPC issued in a public
offering 2,200,000 shares of Series E Preferred Stock, all of which (except for
600 previously converted shares) are outstanding as of the date hereof. In the
first two quarters of 1993, UPC issued 908,522 shares of Series E Preferred
Stock in connection with UPC's acquisition of the remaining equity interest in
Bank of East Tennessee and UPC's acquisition of Erin Bank & Trust Company in
Erin, Tennessee, all of which are outstanding as of the date hereof. All
shares of Series E Preferred Stock have a stated value of $25.00 per share.
Dividends are payable at the rate of $.50 per share per quarter and are
cumulative. The Series E Preferred Stock is convertible at the rate of 1.25
shares of UPC Common Stock for each share of Series E Preferred Stock. The
Series E Preferred Stock is not subject to any sinking fund provisions and has
no preemptive rights. Such shares have a liquidation preference of $25 per
share plus unpaid dividends accrued thereon and, at UPC's option and with the
prior approval of the Federal Reserve, are subject to redemption by UPC at any
time or from time to time after March 31, 1997. Holders of Series E Preferred
Stock have no voting rights except as required by law and in certain other
limited circumstances.
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CERTAIN PROVISIONS THAT MAY HAVE AN ANTI-TAKEOVER EFFECT
Certain provisions of UPC's Charter and Bylaws and certain provisions of
Tennessee law may have an anti-takeover effect in that they could prevent,
discourage or delay a change in control of UPC. The following summary briefly
describes certain of those provisions. The summary is not intended to be
complete and is qualified in its entirety by reference to UPC's Charter and
Bylaws and to the Tennessee Code.
Charter and Bylaw Provisions. Pursuant to UPC's Charter, the directors of
UPC are elected for three-year terms of office, and approximately one-third of
the members of the UPC Board of Directors are up for election each year. The
Charter also restricts the removal of directors by the shareholders.
The Charter requires the affirmative votes of the holders of 66-2/3% of
UPC's outstanding Common Stock for approval of a merger, consolidation or a
sale or lease of all or substantially all of the assets of UPC if the other
party to the transaction is a beneficial owner of 10% or more of the
outstanding shares of UPC. The Charter also requires the affirmative votes of
the holders of 66-2/3% of UPC's outstanding Common Stock to amend the Bylaws of
UPC and the provisions of the Charter applicable to UPC's capital stock; to
change the number, election and classification of directors; to give approval
of certain transactions as described above; and to amend certain provisions of
the Charter.
Share Purchase Rights Plan. In 1989, the UPC Board of Directors
adopted a Share Purchase Rights Plan and distributed a dividend of one
Preferred Share Unit Purchase Right ("Right") for each outstanding share of UPC
Common Stock. Moreover, one Right shall be, automatically and without further
action by UPC, distributed in respect to each share of UPC Common Stock issued
thereafter. The Rights are generally designed to deter coercive takeover
tactics and to encourage all persons interested in potentially acquiring
control of UPC to treat each shareholder on a fair and equal basis. Each Right
trades in tandem with the share of UPC Common Stock to which it relates until
the occurrence of certain events indicating a potential change in control of
UPC. Upon the occurrence of such an event, the Rights would separate from UPC
Common Stock and each holder of a Right (other than the potential acquiror)
would be entitled to purchase certain equity securities at prices below their
market value. UPC has authorized 250,000 shares of Series A Preferred Stock
for issuance under the Share Purchase Rights Plan, but no shares have been
issued as of the date of this Prospectus. Until a Right is exercised, the
holder thereof, as such, will have no rights as a shareholder of UPC, including
the right to vote or to receive dividends.
Provisions of the Tennessee Code. As a Tennessee corporation, UPC is or
could be subject to various legislative acts set forth in Chapter 35 of Title
48 of the Tennessee Code, which imposes certain restrictions on business
combinations, including, but not limited to, combinations with interested
shareholders similar to those described above.
86
<PAGE> 98
The Tennessee Business Combination Act (the "Tennessee BCA") generally
prohibits a "business combination" (generally defined to include mergers, share
exchanges, sales and leases of assets, issuances of securities and similar
transactions) by UPC or a subsidiary with an "interested shareholder"
(generally defined as any person or entity which beneficially owns ten percent
(10%) or more of the voting power of any class or series of UPC's stock then
outstanding) within five years after the person or entity becomes an interested
shareholder unless the business combination or the transaction pursuant to
which the interested shareholder became such was approved by the UPC Board of
Directors before the interested shareholder became such, and the business
combination satisfies any other applicable requirements imposed by law or by
UPC's Charter or Bylaws. The Tennessee BCA also severely limits the extent to
which UPC or any of its officers or directors could be held liable for
resisting any business combination.
The Tennessee Control Share Acquisition Act (the "Tennessee CSAA")
restricts the voting powers of shares acquired by a party once a specific level
of control is acquired, unless certain conditions are met. Specifically, the
Tennessee CSAA provides that "Control Shares" will not have the voting rights
to which they normally would be entitled unless approved by the other
shareholders at an annual or special meeting. "Control shares" are shares
that, in the absence of the Tennessee CSAA, would give the acquiror voting
power within any of the following ranges of all of the voting power of UPC: (i)
one-fifth or more but less than one-third; (ii) one-third or more but less than
a majority; or (iii) a majority or more.
In addition, the Tennessee Investor Protection Act places limitations on
certain takeover offers by persons owning five percent (5%) or more of any
class of equity securities of UPC.
The provisions described above might be deemed to make UPC less attractive
as a candidate for acquisition by another company than would otherwise be the
case in the absence of such provisions. For example, if another company should
seek to acquire a controlling interest of less than 66-2/3% of the outstanding
shares of UPC Common Stock, the acquiror would not thereby obtain the ability
to replace a majority of the UPC Board of Directors until at least the second
annual meeting of shareholders following the acquisition, and furthermore the
acquiror would not obtain the ability immediately to effect a merger,
consolidation or other similar business combination unless the described
conditions were met.
As a result, UPC's shareholders may be deprived of opportunities to sell some
or all of their shares at prices that represent a premium over prevailing
market prices in a takeover context. The provisions described above also may
make it more difficult for UPC's shareholders to replace the UPC Board of
Directors or management, even if the holders of a majority of the UPC Common
Stock should believe that such replacement is in the interests of UPC. As a
result, such provisions may tend to perpetuate the incumbent UPC Board of
Directors and management.
87
<PAGE> 99
MANAGEMENT AND ADDITIONAL INFORMATION
Certain information relating to executive compensation, various benefit
plans (including stock option plans), voting securities and the principal
holders thereof, certain relationships and related transactions and other
related matters as to UPC and GSSC is incorporated by reference or set forth in
UPC's Annual Report on Form 10-K for the year ended December 31, 1993, and
GSSC's Annual Report on Form 10-K for the year ended December 31, 1993, each of
which is incorporated by reference in this Joint Proxy Statement/Prospectus.
See "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE." Shareholders of UPC and
Stockholders of GSSC desiring copies of such documents may contact UPC or GSSC,
as the case may be, at its address or phone number indicated under
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE." For additional information
regarding the directors and certain executive officers of UPC and GSSC prior to
and after the Effective Time of the Merger, see "THE MERGER -- Management after
the Merger" and "--Interests of Certain Persons in the Merger."
VALIDITY OF UPC COMMON STOCK
The validity of the shares of UPC Common Stock offered hereby will be
passed upon by Gary A. Simanson, Assistant Secretary and Associate General
Counsel of UPC. Gary A. Simanson is an officer of UPC and receives
compensation from UPC.
EXPERTS
The audited consolidated financial statements of Union Planters
Corporation as of December 31, 1993 and 1992 and for each of the three years in
the period ended December 31, 1993 incorporated in this Joint Proxy
Statement/Prospectus by reference to Union Planters Corporation's Current
Report on Form 8-K dated October 20, 1994, have been so incorporated in
reliance on the report of Price Waterhouse LLP, independent accountants, given
on the authority of said firm as experts in auditing and accounting.
The consolidated financial statements of BNF BANCORP, INC., formerly
BANCFIRST Corporation, as of September 30, 1993 and 1992 and for each
of the three years in the period ended September 30, 1993 incorporated in this
Joint Proxy Statement/Prospectus by reference to the Current Report on Form 8-K
dated February 8, 1994, have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by reference,
and has been so incorporated in reliance upon the reports of such firm given
upon their authority as experts in accounting and auditing.
The consolidated balance sheets of Grenada Sunburst System Corporation and
subsidiaries as of December 31, 1993 and 1992, and the related consolidated
statements of income, stockholders' equity, and cash flows for each of the
years in the three-year period ended December 31, 1993 have been incorporated
in this Joint Proxy Statement/Prospectus by reference to the Annual Report of
Grenada Sunburst System Corporation for the year ended December 31, 1993 and
the Current Report of Union Planters Corporation on Form 8-K dated
88
<PAGE> 100
July 26, 1994, in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
89
<PAGE> 101
UNION PLANTERS CORPORATION
INDEX TO APPENDICES
APPENDIX
A-1 -- Agreement and Plan of Reorganization dated July 1, 1994, together
with the Plan of Merger annexed thereto as Exhibit A
B-1 -- Fairness Opinion of The Robinson-Humphrey Company, Inc.
C-1 -- Fairness Opinion of Stifel, Nicolaus & Company, Incorporated
<PAGE> 102
APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
DATED
JULY 1, 1994
BY AND BETWEEN
UNION PLANTERS CORPORATION, GSSC ACQUISITION COMPANY, INC.,
GRENADA SUNBURST SYSTEM CORPORATION,
SUNBURST BANK, MISSISSIPPI, AND SUNBURST BANK, LOUISIANA
TOGETHER WITH THE PLAN OF MERGER
ANNEXED THERETO AS EXHIBIT A
<PAGE> 103
AGREEMENT AND PLAN OF REORGANIZATION
DATED July 1, 1994
Between
UNION PLANTERS CORPORATION and
GSSC ACQUISITION COMPANY, INC.
and
GRENADA SUNBURST SYSTEM CORPORATION,
SUNBURST BANK, MISSISSIPPI and
SUNBURST BANK
<PAGE> 104
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
AGREEMENT AND PLAN OF REORGANIZATION . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . . . . 1
AGREEMENT . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 1
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 3
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
-----------
ARTICLE 2
TERMS OF THE REORGANIZATION . . . . . . . . . . . . . . . . . 10
2.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
----------
2.2 Certificate of Incorporation, Bylaws, Directors, Officers and Name of the Surviving Corporation . 10
-----------------------------------------------------------------------------------------------
(a) Certificate of Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
----------------------------
(b) Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
------
(c) Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
----------------------
(d) Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
----
2.3 Due Diligence Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
--------------------
2.4 Availability of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
---------------------------
2.5 UPC's Right to Revise the Structure of the Transaction . . . . . . . . . . . . . . . . . . . . . . 11
------------------------------------------------------
2.6 Holding Period of UPC Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
----------------------------------
2.7 GSSC Stock Options and Treasury Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
-------------------------------------
ARTICLE 3
DESCRIPTION OF TRANSACTION . . . . . . . . . . . . . . . . . 14
3.1 Terms of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
-------------------
(a) Satisfaction of Conditions to Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 14
-------------------------------------
(b) Effective Time of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
----------------------------
(c) Conversion of Shares of INTERIM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
-------------------------------
(d) Conversion and Cancellation of Shares of GSSC . . . . . . . . . . . . . . . . . . . . . . 15
---------------------------------------------
(e) Conversion and Exchange of GSSC Shares; Exchange Ratio . . . . . . . . . . . . . . . . . 15
------------------------------------------------------
(f) Mechanics of Payment of Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . 18
-------------------------------------
(g) Stock Transfer Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
--------------------
(h) Effects of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
---------------------
(i) Transfer of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
------------------
(j) Assumption of Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
-------------------------
(k) Appraisal Rights of GSSC Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . 21
--------------------------------------
3.2 Time and Place of Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
-------------------------
3.3 Price Based Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
-----------------------
</TABLE>
i
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<TABLE>
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF UPC AND INTERIM . . . . . . . . . . . 23
4.1 Organization and Corporate Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
------------------------------------
4.2 Authorization, Execution and Delivery; Reorganization Agreement Not in Breach . . . . . . . . . . 23
-----------------------------------------------------------------------------
4.3 No Legal Bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
------------
4.4 Government and Shareholder Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
------------------------------------
4.5 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
--------------
4.6 UPC Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
------------------------
4.7 Exchange Act and Listing Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
--------------------------------
4.8 The UPC Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
--------------------
4.9 Licenses, Franchise, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
------------------------
4.10 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
--------------------------
4.11 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
-----------
4.12 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
----------
4.13 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
----------------------------------
4.14 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
--------------------
4.15 Material Contract Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
--------------------------
4.16 Statements True and Correct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
---------------------------
4.17 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
----------
4.18 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
-------
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF GSSC, SBM AND SBL . . . . . . . . . . . 32
5.1 Organization and Qualification of GSSC and Subsidiaries . . . . . . . . . . . . . . . . . . . . . 32
-------------------------------------------------------
5.2 Authorization, Execution and Delivery; Reorganization Agreement Not in Breach . . . . . . . . . . 33
-----------------------------------------------------------------------------
5.3 No Legal Bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
------------
5.4 Government and Other Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
------------------------------
5.5 Compliance With Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
-------------------
5.6 Charter Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
-----------------
5.7 GSSC Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
-------------------------
5.8 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
--------------------------
5.9 Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
--------
5.10 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
----------
5.11 GSSC Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
-----------------
5.12 Condition of Fixed Assets and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
---------------------------------------
5.13 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
-----------
5.14 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
----------
5.15 Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
-------------------
5.16 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
---------
5.17 Labor and Employment Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
----------------------------
5.18 Records and Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
---------------------
5.19 Capitalization of GSSC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
----------------------
5.20 Sole Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
--------------
5.21 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
----------
5.22 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
----------------------------------
5.23 Allowance for Possible Loan or ORE Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
-----------------------------------------
5.24 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
--------------------
</TABLE>
ii
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<TABLE>
<S> <C>
5.25 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
----------------------
5.26 Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
------------------
5.27 Material Contract Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
--------------------------
5.28 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
-------
5.29 Exchange Act and Listing Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
--------------------------------
5.30 Statements True and Correct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
---------------------------
ARTICLE 6
COVENANTS OF UPC . . . . . . . . . . . . . . . . . . . . 58
6.1 Proxy Statement; UPC Shareholder Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
-----------------------------------------
6.2 Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
--------------------
6.3 Reservation, Listing and Registration of UPC Common Stock under the Securities Laws . . . . . . . .59
-----------------------------------------------------------------------------------
6.4 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60
-----------------
6.5 Conduct of Business; Notice of Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . .61
---------------------------------------------
ARTICLE 7
COVENANTS OF GSSC, SBM AND SBL . . . . . . . . . . . . . . . . 61
7.1 Proxy Statement; GSSC Stockholder Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . .61
------------------------------------------
7.2 Conduct of Business -- Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
--------------------------------------------
7.3 Conduct of Business -- Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
-----------------------------------------
7.4 Conduct of Business -- Certain Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
--------------------------------------
ARTICLE 8
CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . 71
8.1 Conditions to the Obligations of GSSC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
-------------------------------------
(a) Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
-----------
(b) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
------------------------------
(c) Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
---------
(d) Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
-------------
(e) Opinion of UPC's and INTERIM's Counsel . . . . . . . . . . . . . . . . . . . . . . . . . 73
--------------------------------------
(f) Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
----------------
(g) Tax Opinion of McDonnell Boyd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
-----------------------------
8.2 Conditions to the Obligations of UPC and INTERIM . . . . . . . . . . . . . . . . . . . . . . . . . 74
------------------------------------------------
(a) Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
-----------
(b) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
------------------------------
(c) Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
---------
(d) Destruction of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
-----------------------
(e) Inspections Permitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
---------------------
(f) No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
--------------------------
(g) Opinion of GSSC's Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
-------------------------
(h) Other Business Combinations, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
--------------------------------
(i) Maintenance of Certain Covenants, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . 78
-------------------------------------
(j) Non-Compete Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
----------------------
(k) Tax Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
-----------
(l) Pooling of Interests Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . 79
-----------------------------------------
(m) Receipt of Affiliate Letters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
----------------------------
(n) Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
----------------
</TABLE>
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<TABLE>
<S> <C>
8.3 Conditions to Obligations of All Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
----------------------------------------
(a) No Pending or Threatened Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
-------------------------------
(b) Governmental Approvals and Acquiescence Obtained . . . . . . . . . . . . . . . . . . . . 80
------------------------------------------------
(c) Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
----------------------
(d) GSSC Stockholder and UPC Shareholder Approval . . . . . . . . . . . . . . . . . . . . . . 80
---------------------------------------------
ARTICLE 9
TERMINATION . . . . . . . . . . . . . . . . . . . . . 81
9.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
-----------
9.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
---------------------
ARTICLE 10
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . 84
10.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
-------
10.2 Assignability and Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
-------------------------------------
10.3 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
-------------
10.4 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
------------
10.5 Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
------------
10.6 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
---------
10.7 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
----------------
10.8 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
------------
10.9 Modifications, Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
-------------------------------------
10.10 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
--------------
10.11 Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
-------------------
10.12 Finders and Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
-------------------
10.13 Equitable Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
------------------
10.14 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
---------------
10.15 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . 88
------------------------------------------
10.16 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
---------
10.17 Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
-------------------
10.18 Materiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
-----------
</TABLE>
iv
<PAGE> 108
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Reorganization
Agreement") dated this 1st day of July, 1994, by and between UNION PLANTERS
CORPORATION ("UPC"), a corporation chartered and existing under the laws of the
State of Tennessee which is registered both as a bank holding company and a
savings and loan holding company and whose principal offices are located at
7130 Goodlett Farms Parkway, Memphis, Shelby County, Tennessee 38018; GSSC
ACQUISITION COMPANY, INC. ("INTERIM"), a corporation chartered and existing
under the laws of the State of Delaware, whose principal place of business is
located at 7130 Goodlett Farms Parkway, Memphis, Shelby County, Tennessee
38018, and which is a wholly-owned subsidiary of UPC; GRENADA SUNBURST SYSTEM
CORPORATION ("GSSC" or "Surviving Corporation" as the context may require), a
corporation chartered and existing under the laws of the State of Delaware
which is a registered bank holding company and whose principal offices are
located at 2000 Gateway, Grenada, Grenada County, Mississippi 38901; SUNBURST
BANK, MISSISSIPPI ("SBM"), a Mississippi banking corporation, chartered and
existing under the laws of the State of Mississippi, having its main office at
2000 Gateway, Grenada, Grenada County, Mississippi 38901, and which is a
wholly- owned subsidiary of GSSC; and SUNBURST BANK ("SBL"), a Louisiana
banking corporation, chartered and existing under the laws of the State of
Louisiana, having its main office at 8440 Jefferson Highway (Post Office Box
2710), Baton Rouge, East Baton Rouge Parish, Louisiana 70821, and which is a
wholly-owned subsidiary of GSSC.
UPC, INTERIM, GSSC, SBM and SBL are sometimes referred to herein as the
"Parties."
RECITALS
A. GSSC is the beneficial owner and holder of record of 3,465,440
shares of the common stock, $2.50 par value per share, of SBM which constitute
all of the shares of common stock of SBM issued and outstanding (the "SBM
Common Stock"), and 5,000,000 shares of the common stock, $1.00 par value per
share, of SBL which constitute all of the shares of common stock of SBL issued
and outstanding (the "SBL Common Stock") and desires to have itself, SBM and
SBL acquired by UPC on the terms and subject to the conditions set forth in
this Reorganization Agreement and the accompanying Plan of Merger (attached
hereto as Exhibit A) (the "Plan of Merger").
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 1
<PAGE> 109
B. UPC is the beneficial owner and holder of record of 1,000
shares of the common stock, $.01 par value per share, of INTERIM which
constitute all of the shares of common stock of INTERIM issued and outstanding
(the "INTERIM Common Stock"), and desires to acquire GSSC, SBM and SBL on the
terms and subject to the conditions set forth in this Reorganization Agreement
and the accompanying Plan of Merger.
C. The Boards of Directors of GSSC, SBM and SBL deem it desirable
and in the best interests of the stockholders of GSSC (the "GSSC Stockholders")
that INTERIM be merged with and into GSSC (which would survive the merger as
the Surviving Corporation, as defined herein) on the terms and subject to the
conditions set forth in this Reorganization Agreement and in the manner
provided in this Reorganization Agreement and the Plan of Merger (the
"Merger").
D. The Boards of Directors of UPC and INTERIM deem it desirable
and in the best interests of UPC and INTERIM and the shareholders of UPC (the
"UPC Shareholders") that INTERIM be merged with and into GSSC on the terms and
subject to the conditions set forth in this Reorganization Agreement and in the
manner provided in this Reorganization Agreement and the Plan of Merger.
E. The respective Boards of Directors of UPC, INTERIM, GSSC, SBM
and SBL have each adopted (or will each adopt) resolutions setting forth and
adopting this Reorganization Agreement and the Plan of Merger, and have
directed that this Reorganization Agreement and the Plan of Merger and all
resolutions adopted by said Boards of Directors and by the GSSC Stockholders
and the UPC Shareholders related to this Reorganization Agreement, be submitted
with appropriate applications to, and filed with the Board of Governors of the
Federal Reserve System (the "Federal Reserve") and such other regulatory
agencies or authorities as may be necessary in order to obtain all governmental
authorizations required to consummate the proposed Merger and the transactions
contemplated in this Reorganization Agreement in accordance with this
Reorganization Agreement, the Plan of Merger and applicable law.
NOW THEREFORE, in consideration of the foregoing premises and the
mutual representations, warranties, covenants and agreements herein contained
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Parties agree as follows:
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 2
<PAGE> 110
AGREEMENT
ARTICLE 1
DEFINITIONS
1.1 Definitions. As used in this Reorganization
Agreement, the following terms have the definitions indicated:
"AFFILIATE" of a party means any Person or other legal entity
directly or indirectly controlling, controlled by or under common Control, as
that term is defined herein, with that party.
"APPLICABLE ENVIRONMENTAL LAWS" shall have the meaning
assigned to such term in Section 5.15(a) of this Reorganization Agreement.
"AUDITED FINANCIAL STATEMENTS OF GSSC" shall have the meaning
assigned to such term in Section 5.7 of this Reorganization Agreement.
"BALANCE SHEET DATE" shall have the meaning assigned to such
term in Section 5.8 of this Reorganization Agreement.
"BHCA" shall mean the Bank Holding Company Act of 1956, as
amended.
"BROKERED DEPOSITS" shall mean all Deposits of SBM and SBL for
which SBM or SBL have paid a commission or an interest rate substantially above
that paid by SBM or SBL to the general depositors of SBM or SBL, respectively.
"BUSINESS DAY" shall mean any Monday, Tuesday, Wednesday,
Thursday or Friday that is not a federal or state holiday generally recognized
by banks in any of Mississippi, Louisiana or Tennessee.
"CERCLA" shall have the meaning set forth in Section 5.15(a)
of this Reorganization Agreement.
"CLOSING" shall have the meaning assigned to such term in
Section 3.1(a) of this Reorganization Agreement.
"CLOSING DATE" shall have the meaning assigned to such term in
Section 3.2 of this Reorganization Agreement.
"COMPTROLLER" shall mean the Office of the Comptroller of the
Currency, or any successor thereto.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 3
<PAGE> 111
"CONSIDERATION" shall mean the value to be received by the
GSSC Record Holders in exchange for their GSSC Common Stock, such value to be
determined as provided in Article 3, Section 3.1(e), of this Reorganization
Agreement.
"CONTROL" shall have the meaning assigned to such term in
Section 2(a)(2) of the Bank Holding Company Act of 1956, as amended.
"DELAWARE CODE" shall mean the Delaware Code (1974 Revision),
as amended.
"DEPOSITS" shall mean all deposits (including, but not limited
to, certificates of deposit, savings accounts, NOW accounts and checking
accounts) of SBM and SBL.
"EFFECTIVE DATE OF THE MERGER" shall mean that date on which
the Effective Time of the Merger shall have occurred.
"EFFECTIVE TIME OF THE MERGER" shall have the meaning assigned
in Section 3.3 of the Plan of Merger and Section 3.1(b) of this Reorganization
Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"EXCHANGE AGENT" shall mean Union Planters National Bank,
Memphis, Tennessee, acting through its Corporate Trust Department.
"EXCHANGE RATIO" shall have the meaning assigned to such term
in Section 3.1(e) of this Reorganization Agreement.
"FDIC" means the Federal Deposit Insurance Corporation, or any
successor thereto.
"FEDERAL RESERVE" shall mean the Board of Governors of the
Federal Reserve System and shall include the Federal Reserve Bank of St. Louis
acting under delegated authority.
"FIXED ASSETS" shall mean the furniture, fixtures and
equipment of the referenced Party.
"GAAP" shall mean generally accepted accounting principles,
consistently applied.
"GOVERNMENTAL APPROVALS" shall have the meaning assigned to
such term in Section 4.4 of this Reorganization Agreement.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 4
<PAGE> 112
"GSSC" means Grenada Sunburst System Corporation, a
corporation chartered and existing under the laws of the State of Delaware
which is a registered bank holding company and whose principal offices are
located at 2000 Gateway, Grenada, Grenada County, Mississippi 38901.
"GSSC COMMON STOCK" has the meaning assigned to such term in
Section 3.1(d) of this Reorganization Agreement.
"GSSC COMPANIES" shall mean GSSC and all of its Subsidiaries,
including SBM, SBL, all SBM Subsidiaries and all SBL Subsidiaries.
"GSSC EMPLOYEE PLANS" shall mean any pension plans, profit
sharing plans, deferred compensation plans, stock option plans, cafeteria
plans, and any other such or related benefit plans or arrangements offered or
funded by GSSC or any GSSC Subsidiary, including, but not limited to SBM or
SBL, to or for the benefit of the officers, directors or employees of GSSC or
any GSSC Subsidiary.
"GSSC RECORD HOLDERS" means the holders of record of all of
the issued and outstanding shares of GSSC Common Stock immediately prior to the
Effective Time of the Merger.
"GSSC STOCKHOLDERS" shall have the meaning assigned to such
term in Recital C of this Reorganization Agreement.
"GSSC STOCKHOLDERS MEETING" shall mean the meeting of the GSSC
Stockholders to be held pursuant to Section 7.1 of this Reorganization
Agreement, including any adjournment or adjournments thereof.
"GSSC STOCK OPTIONS" shall have the meaning assigned to such
term in Section 2.7 of this Reorganization Agreement.
"HOLA" shall mean the Home Owners' Loan Act of 1933, as
amended and recodified.
"HAZARDOUS SUBSTANCES" shall have the meaning set forth in
Section 5.15(a) of this Reorganization Agreement.
"INDEX GROUP" shall have the meaning assigned to such term in
Section 3.3 of this Reorganization Agreement.
"INDEX PRICE" shall have the meaning assigned to such term in
Section 3.3 of this Reorganization Agreement.
"INTERIM" shall mean GSSC Acquisition Company, Inc., a
corporation chartered and existing under the laws of the State of
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 5
<PAGE> 113
Delaware, whose principal place of business is located at 7130 Goodlett Farms
Parkway, Memphis, Shelby County, Tennessee 38018, and which is a wholly-owned
subsidiary of UPC formed solely to effect the Merger.
"INTERIM COMMON STOCK" shall have the meaning assigned to such
term in Section 3.1(c) of this Reorganization Agreement.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code
of 1986, as amended.
"LOFI" shall mean the State of Louisiana Office of Financial
Institutions.
"MERGER" shall, as described in Section 2.1 of this
Reorganization Agreement, mean the merger of INTERIM with and into GSSC, which
shall survive the Merger as the Surviving Corporation.
"MISSISSIPPI CODE" shall mean the Mississippi Code Annotated,
as amended.
"MISSISSIPPI COMMISSIONER" shall mean the Commissioner of
Banks of the State of Mississippi.
"MSBD" shall mean the Mississippi Department of Banking and
Consumer Finance.
"NASDAQ" shall mean the National Association of Securities
Dealers Automated Quotation System or its successor, upon which shares of the
GSSC Common Stock are listed for trading.
"NYSE" shall mean the New York Stock Exchange, or its
successor, upon which shares of the UPC Common Stock are listed for trading.
"1933 ACT" shall mean the Securities Act of 1933, as amended.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"OFFICER" shall have the meaning set forth in Section 5.8(k)
of this Reorganization Agreement.
"ORE" shall have the meaning set forth in Section 5.23 of this
Reorganization Agreement.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 6
<PAGE> 114
"OTS" shall mean the Office of Thrift Supervision, or any
successor thereto.
"PARTIES" shall mean GSSC, SBM, SBL, UPC and INTERIM
collectively; GSSC, SBM and SBL on the one hand, or UPC and INTERIM on the
other hand, may sometimes be referred to as a "PARTY."
"PENSION PLAN" shall mean any employee pension benefit plan as
such term is defined in Section 3(2) of ERISA which is maintained by the
referenced Party.
"PERSON" shall mean any natural person, fiduciary,
corporation, partnership, joint venture, association, business trust or any
other entity of any kind.
"PLAN OF MERGER" shall mean the Plan of Merger substantially
in the form of Exhibit A hereto which is incorporated by reference as part of
this Reorganization Agreement and which is to be executed by authorized
representatives of GSSC, UPC and INTERIM and filed with the Delaware Secretary
of State along with the Certificate of Merger in accordance with Title
8-Chapter 485- Section 251 of the Delaware Code and providing for the Merger of
INTERIM with and into GSSC as contemplated by Section 2.1 of this
Reorganization Agreement.
"PRICING PERIOD" shall have the meaning assigned to such term
in Section 3.1(e)(i) of this Reorganization Agreement.
"PROPERTY" shall have the meaning assigned to such term in
Section 5.15(a) of this Reorganization Agreement.
"PROXY STATEMENT" shall mean the proxy statement-prospectus to
be used by UPC and GSSC to solicit proxies with a view to securing the
approvals of the UPC Shareholders and GSSC Stockholders of this Reorganization
Agreement and the Plan of Merger and to register with the SEC the issuance of
the shares of UPC Common Stock to be issued by UPC to the GSSC Record Holders.
"REALTY" means the real property of GSSC, SBM or SBL owned or
leased by GSSC, SBM or SBL or any Subsidiary of GSSC, SBM or SBL.
"RECORDS" means all available records, minutes of meetings of
the Board of Directors, committees and stockholders of GSSC, and the Boards of
Directors and shareholders of SBM and SBL, original instruments and other
documentation, pertaining to GSSC, GSSC's consolidated assets (including plans
and specifications relating to the Realty), GSSC's consolidated
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 7
<PAGE> 115
liabilities, the GSSC Common Stock, the SBM Common Stock, the SBL Common Stock,
the Deposits and loans, and all other business and financial records which are
necessary or customary for use in the conduct of GSSC's, SBM's or SBL's
businesses by UPC and GSSC on and after the Effective Time of the Merger as
they were conducted prior to the Closing Date.
"REGULATORY AUTHORITIES" shall mean, collectively, the Federal
Reserve, the TDFI, the MSBD, the LOFI, the SEC, or any other state or federal
governmental or quasi-governmental entity which has, or may hereafter have,
jurisdiction over any of the transactions described in this Reorganization
Agreement.
"RELEASE" shall have the meaning assigned to such term in
Section 5.15(b)(i) of this Reorganization Agreement.
"REORGANIZATION" shall mean the Merger (as described in
Section 2.1(a) of this Reorganization Agreement) and the transactions
contemplated in this Reorganization Agreement and the Plan of Merger annexed
hereto as Exhibit A.
"REORGANIZATION AGREEMENT" means this Agreement and Plan of
Reorganization together with the Plan of Merger (Exhibit A) and all Exhibits
and Schedules annexed to, and incorporated by specific reference as a part of,
this Reorganization Agreement.
"SBL" means Sunburst Bank, a Louisiana banking corporation,
chartered and existing under the laws of the State of Louisiana, having its
main office at 8440 Jefferson Highway (Post Office Box 2710), Baton Rouge, East
Baton Rouge Parish, Louisiana 70821, and which is a wholly-owned subsidiary of
GSSC.
"SBL COMMON STOCK" shall have the meaning assigned to such
term in Recital A of this Reorganization Agreement.
"SBM" means Sunburst Bank, Mississippi, a Mississippi banking
corporation, chartered and existing under the laws of the State of Mississippi,
having its main office at 2000 Gateway, Grenada, Grenada County, Mississippi
38901, and which is a wholly- owned subsidiary of GSSC.
"SBM COMMON STOCK" shall have the meaning assigned to such
term in Recital A of this Reorganization Agreement.
"SEC" shall mean the Securities and Exchange Commission, or
any successor thereto.
"SEC DOCUMENTS" shall mean all reports, proxy statements and
registration statements filed, or required to be filed, by a Party or any of
its Subsidiaries pursuant to the
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 8
<PAGE> 116
Securities Laws, whether filed, or required to be filed, with the SEC, the OTS,
the Comptroller, the FDIC, the Federal Reserve or with any other Regulatory
Authority pursuant to the Securities Laws.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act of
1940, as amended, the Trust Indenture Act of 1939, as amended, and the rules
and regulations of the SEC promulgated thereunder, as well as any similar state
securities laws and any similar rules and regulations promulgated by the
applicable federal bank Regulatory Authorities.
"SUBSIDIARIES" shall mean all of those corporations, banks,
associations or other entities of which the entity in question owns or controls
5% or more of the outstanding voting equity securities either directly or
through an unbroken chain of entities as to each of which 5% or more of the
outstanding equity securities is owned directly or indirectly by its parent;
provided, however, that there shall not be included any such entity acquired
through foreclosure or in satisfaction of a debt previously contracted in good
faith, any such entity that owns or operates an automatic teller machine
interchange network, any such entity that is a joint venture of the parent or
of a Subsidiary of the parent, or any such entity the equity securities of
which are owned or controlled in a fiduciary capacity or through a small
business investment corporation.
"SURVIVING CORPORATION" shall mean GSSC as the corporation
resulting from the consummation of the Merger as set forth in Section 2.1(a) of
this Reorganization Agreement and which shall continue to be the sole
shareholder of SBM and SBL subsequent to the Merger.
"TENNESSEE CODE" shall mean the Tennessee Code Annotated, as
amended.
"UPC" shall mean Union Planters Corporation, a registered
Tennessee-chartered bank holding company which is also registered as a savings
and loan holding company having its principal place of business in Memphis,
Shelby County, Tennessee.
"UPC COMMON STOCK" shall have the meaning set forth in Section
4.5 of this Reorganization Agreement.
"UPC FINANCIAL STATEMENTS" shall mean (i) the audited
consolidated balance sheets and related consolidated statements of earnings, of
changes in shareholders' equity, and of cash flows (including related notes) of
UPC and its Subsidiaries as of December 31, 1992 and 1993 and each subsequent
December 31 prior
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 9
<PAGE> 117
to the Effective Time of the Merger, and (ii) the related unaudited
consolidated balance sheets and related consolidated statements of earnings, of
changes in shareholders' equity, and of cash flows (including related notes) of
UPC and its Subsidiaries for each of the quarters ended or ending after
December 31, 1993, as filed by UPC in SEC Documents.
"UPC PREFERRED STOCK" shall have the meaning assigned to such
term in Section 4.5 of this Reorganization Agreement.
"UPC SHAREHOLDERS" shall have the meaning assigned to such
term in Recital D of this Reorganization Agreement.
"UPC SHAREHOLDERS MEETING" shall mean the meeting of the UPC
Shareholders to be held pursuant to Section 6.1 of this Reorganization
Agreement, including any adjournment or adjournments thereof.
ARTICLE 2
TERMS OF THE REORGANIZATION
2.1 The Merger. Subject to the satisfaction (or waiver)
of all of the conditions to the obligations of each of the Parties to this
Reorganization Agreement, at the Effective Time of the Merger, INTERIM shall be
merged with and into GSSC (the "Merger"), which latter corporation (the
"Surviving Corporation") shall survive the Merger and shall continue to be the
sole shareholder of SBM and SBL.
2.2 Certificate of Incorporation, Bylaws, Directors,
Officers and Name of the Surviving Corporation.
(a) Certificate of Incorporation. At the
Effective Time of the Merger, the Certificate of Incorporation of GSSC, as in
effect immediately prior to the Effective Time of the Merger, shall continue to
be the Certificate of Incorporation of GSSC as the Surviving Corporation,
unless and until the same shall be amended thereafter as provided by law and
the terms of such Certificate of Incorporation.
(b) Bylaws. At the Effective Time of the Merger,
the Bylaws of GSSC, as in effect immediately prior to the Effective Time of the
Merger, shall continue to be the Bylaws of GSSC as the Surviving Corporation,
unless and until amended or repealed as provided by law, its Certificate of
Incorporation and such Bylaws.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 10
<PAGE> 118
(c) Directors and Officers. The directors and
officers of GSSC in office immediately prior to the Effective Time of the
Merger shall continue thereafter to be the directors and officers of the
Surviving Corporation, to hold office as provided in the Certificate of
Incorporation and Bylaws of the Surviving Corporation, unless and until their
successors shall have been elected or appointed and shall have qualified or
until they shall have been removed in the manner provided therein.
(d) Name. The name of GSSC as the Surviving
Corporation following the Merger shall remain unchanged and continue to be:
GRENADA SUNBURST SYSTEM CORPORATION
or such corporate name as GSSC shall elect to adopt.
2.3 Due Diligence Review. Each Party shall be entitled
to conduct a preliminary due diligence review of the Records and operations of
the other Party, including, but not limited to, a review of the Party's loan
portfolios, ORE and classified assets, investment portfolios and properties, to
verify the reasonableness of the other Party's earnings projections, growth
projections and sustained earnings prospects after consummation of the Merger
at reasonable growth rates; provided, however, that any review conducted by a
Party pursuant to the provisions of this Section 2.3 shall be completed within
thirty (30) days from the date of this Reorganization Agreement.
2.4 Availability of Information. Promptly after the
execution by the Parties of this Reorganization Agreement, each Party shall
provide to the other Party, its Officers, employees, agents, and
representatives access, on reasonable notice and during customary business
hours, to all of the Records, properties and facilities of the Party and shall
use its best efforts to cause its Officers, employees, agents and
representatives to cooperate with any of the reviewing Party's reasonable
requests for information which would be customary in order to conduct the
review provided for in Section 2.3 of this Reorganization Agreement. Each
Party shall keep all non-public information disclosed to it by the other Party
with respect to the transactions contemplated in this Reorganization Agreement
confidential pursuant to that certain Confidentiality Agreement dated June 21,
1994, and shall not disclose or use such information in any manner without the
prior written consent of the other Party.
2.5 UPC's Right to Revise the Structure of the
Transaction. UPC shall have the unilateral right to revise the structure of
the corporate Reorganization contemplated by this
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 11
<PAGE> 119
Reorganization Agreement and the Plan of Merger in order to achieve tax
benefits or for any other reason which UPC may deem advisable; provided,
however, that UPC shall not have the right, without the approval of the Board
of Directors of GSSC, to make any revision to the structure of the
Reorganization which (i) changes the amount of Consideration which the GSSC
Record Holders are entitled to receive; (ii) changes the intended tax-free
effects of the Merger to UPC, INTERIM, GSSC, SBM, SBL or the GSSC Record
Holders; (iii) would permit UPC to pay the Consideration other than by delivery
of shares of UPC Common Stock registered with the SEC (in the manner described
in Section 6.1 of this Reorganization Agreement); or (iv) adversely affects the
economic benefits of the transaction from the perspective of the GSSC Record
Holders. UPC may exercise this right of revision by giving written Notice to
GSSC, SBM or SBL in the manner provided in Section 10.1 of this Reorganization
Agreement, which Notice shall be in the form of an amendment to this
Reorganization Agreement and/or the Plan of Merger or in the form of an Amended
and Restated Agreement and Plan of Reorganization and/or Plan of Merger.
2.6 Holding Period of UPC Common Stock. GSSC, SBM and SBL
hereby acknowledge and agree that, in order to qualify the Merger under the
Internal Revenue Code as a tax-free reorganization and for accounting purposes
as a pooling of interests under the rules and regulations promulgated by the
SEC, Accounting Principles Board Opinion No. 16 and GAAP, any GSSC Record
Holder who would be deemed an Affiliate of GSSC by GSSC at the time of Closing
under the Securities Laws and who accepts shares of UPC Common Stock as
Consideration for the cancellation, exchange and conversion of his shares of
GSSC Common Stock in connection with the Merger, shall be required by GSSC to
deliver, and GSSC shall use its best efforts to obtain, an agreement that the
Affiliate shall not (a) pledge, assign, sell, transfer, devise, otherwise
alienate or take any action which would eliminate or diminish the risk of
owning or holding the shares of UPC Common Stock to be received by such GSSC
Record Holder upon consummation of the Merger, nor (b) enter into any formal or
informal agreement to pledge, assign, sell or transfer, devise, or otherwise
alienate his right, title and interests in any of the shares of GSSC Common
Stock held prior to the Merger or UPC Common Stock to be delivered by UPC to
such GSSC Record Holder in connection with the Merger for a period of thirty
(30) days prior to Closing and until such time as UPC shall have publicly
released a statement of UPC's earnings reflecting the combined financial
results of operations of UPC and GSSC for a period of not less than thirty (30)
days subsequent to the Effective Time of the Merger. GSSC further acknowledges
and agrees that any UPC Common Stock Certificates issued in connection with the
Merger to GSSC Record Holders who would be deemed Affiliates of GSSC or UPC
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 12
<PAGE> 120
at the time of Closing under the Securities Laws shall be subject to and bear a
restrictive legend substantially in the form as follows:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE HELD SUBJECT
TO ALL APPLICABLE PROVISIONS OF THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND THE RULES AND REGULATIONS PROMULGATED BY
THE SECURITIES AND EXCHANGE COMMISSION ("SEC") THEREUNDER. NO SALES,
TRANSFERS OR OTHER DISPOSITION OF THESE SHARES MAY BE MADE EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT (OTHER THAN A REGISTRATION STATEMENT ON SEC FORM S-4) OR UPON THE
PRIOR DELIVERY TO UNION PLANTERS CORPORATION ("UPC") OF AN OPINION
FROM LEGAL COUNSEL, SATISFACTORY TO UPC, IN FORM AND SUBSTANCE
SATISFACTORY TO UPC AND ITS LEGAL COUNSEL, STATING THAT SUCH SALE OR
OTHER DISPOSITION IS BEING MADE PURSUANT TO AND IN ACCORDANCE WITH THE
REQUIREMENTS OF SEC RULES 144 AND 145 OR IS OTHERWISE EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT. NO SALE, TRANSFER, OR OTHER
DISPOSITION OF THESE SHARES MAY BE MADE UNTIL AFTER THE PUBLICATION OF
FINANCIAL RESULTS COVERING AT LEAST 30 DAYS OF POST MERGER COMBINED
OPERATIONS OF UPC AND GRENADA SUNBURST SYSTEM CORPORATION. NO
AGREEMENT MAY BE ENTERED INTO BY THE HOLDER OF THIS CERTIFICATE WHICH
WOULD ALLOW OR REQUIRE THE SALE, TRANSFER, OR OTHER DISPOSITION OF
THESE SHARES OR WHICH WOULD OTHERWISE REDUCE THE RISK BORNE BY THE
SHAREHOLDER NAMED ON THE REVERSE SIDE OF THIS CERTIFICATE SUBSEQUENT
TO THE CONSUMMATION OF THE MERGER DURING THE TIME PERIOD MENTIONED
ABOVE.
2.7 GSSC Stock Options and Treasury Stock. Except as
described in Schedule 2.7 hereto, as of the date of this Reorganization
Agreement, there are 14,478 validly issued and outstanding options to purchase
shares of GSSC Common Stock, which were issued by GSSC to certain officers of
GSSC and the GSSC Subsidiaries in connection with the GSSC Key Employees Stock
Plan and no other options, rights, warrants, scrip or similar rights to
purchase shares of GSSC Common Stock (collectively, the "GSSC Stock Options")
are (or have been) issued and outstanding by GSSC other than those which may be
issuable pursuant to GSSC's various stock option and incentive plans. It is
contemplated by the Parties hereto that all validly issued and outstanding GSSC
Stock Options outstanding immediately prior to the Effective Time of the Merger
would be automatically converted at the Effective Time of the Merger into
options to purchase shares of UPC Common Stock based on the Exchange Ratio.
Therefore, in the event and to the extent that there are any GSSC Stock Options
validly issued and outstanding at the time of Closing, such GSSC Stock Options
shall at the Effective Time of the Merger automatically, and without further
action on the part of anyone, be converted
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 13
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into options to purchase shares of UPC Common Stock on the same terms and
conditions attributable to the GSSC Stock Options to purchase shares of GSSC
Common Stock in effect as of the date of this Reorganization Agreement adjusted
in all respects by and in accordance with the Exchange Ratio (i.e. if an
existing GSSC Stock Option for the purchase of 10,000 shares of GSSC Common
Stock were exercisable at $22.375 per share of GSSC Common Stock and the
Exchange Ratio were 1.4206, then at the Effective Time of the Merger such
unexercised GSSC Stock Option would automatically convert into an option to
purchase 14,206 shares of UPC Common Stock at an exercise price of $15.75 per
share). As of the date of this Reorganization Agreement, GSSC has not
repurchased or accelerated the vesting period of any GSSC Stock Options other
than pursuant to the terms and conditions of the GSSC Key Employees Stock Plan,
nor will it repurchase or accelerate the purchase rights of any GSSC Stock
Options, and GSSC has not repurchased any shares of its capital stock. As of
the date of this Reorganization Agreement, there are no shares of GSSC Common
Stock held by GSSC as Treasury Stock, nor will there be any such shares at the
Effective Time of the Merger.
ARTICLE 3
DESCRIPTION OF TRANSACTION
3.1 Terms of the Merger.
(a) Satisfaction of Conditions to Closing. After
the transactions contemplated herein have been approved by the shareholders of
UPC and the stockholders of GSSC and the INTERIM, and each other condition to
the obligations of the Parties hereto, other than those conditions which are to
be satisfied by delivery of documents by any Party to any other Party, has been
satisfied or, if lawfully permitted, waived by the Party or Parties entitled to
the benefits thereof, a closing (the "Closing") will be held on the date (the
"Closing Date") and at the time of day and place referred to in Section 3.2 of
this Reorganization Agreement. At the Closing the Parties shall use their
respective best efforts to deliver the certificates, letters and opinions which
constitute conditions precedent to effecting the Merger and each Party will
provide the other Parties with such proof or indication of satisfaction of the
conditions to the obligations of such other Parties to consummate the Merger as
such other Parties may reasonably require. If all conditions to the
obligations of each of the Parties shall have been satisfied or lawfully waived
by the Party entitled to the benefits thereof, the Parties shall, at the
Closing, duly execute a Certificate of Merger for filing with the Secretary of
State of the State of Delaware and promptly thereafter GSSC and INTERIM
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 14
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shall take all steps necessary or desirable to consummate the Merger in
accordance with all applicable laws, rules and regulations and the Plan of
Merger. The Parties shall thereupon take such other and further actions as UPC
shall direct or as may be required by law or this Reorganization Agreement to
consummate the transactions contemplated herein.
(b) Effective Time of the Merger. Upon the
satisfaction of all conditions to Closing (except those conditions waived by
the Parties), the Merger shall become effective on the date and at the time of
filing of a Certificate of Merger with the Secretary of State of the State of
Delaware or at such later date and/or time as may be agreed upon by the Parties
and set forth in the Certificate of Merger so filed (the "Effective Time of the
Merger").
(c) Conversion of Shares of INTERIM. At the
Effective Time of the Merger, each share of $.01 par value common stock of
INTERIM (the "INTERIM Common Stock") issued and outstanding immediately prior
to the Effective Time of The Merger shall, by virtue of the Merger becoming
effective and without any further action on the part of anyone, be converted
into and become one share of the issued and outstanding common stock of the
Surviving Corporation.
(d) Conversion and Cancellation of Shares of
GSSC. At the Effective Time of the Merger, each share of $1.00 par value
common stock of GSSC (the "GSSC Common Stock") validly issued and outstanding
immediately prior to the Effective Time of the Merger shall, by virtue of the
Merger becoming effective and without any further action on the part of anyone,
be converted, exchanged and cancelled as provided in Section 3.1(e) hereof.
(e) Conversion and Exchange of GSSC Shares;
Exchange Ratio. At the Effective Time of the Merger, the outstanding shares of
GSSC Common Stock held by the GSSC Record Holders immediately prior to the
Effective Time of the Merger shall, without any further action on the part of
anyone, cease to represent any interest (equity, stockholder or otherwise) in
GSSC and shall automatically be converted exclusively into, and constitute only
the right of the GSSC Record Holders to receive in exchange for their shares of
GSSC Common Stock, whole shares of UPC Common Stock and a cash payment in
settlement of any remaining fractional share of UPC Common Stock in accordance
with the terms and conditions of this Section 3.1(e) and the Plan of Merger.
The shares of UPC Common Stock and the cash settlement of any remaining
fractional share of UPC Common Stock deliverable by UPC or INTERIM to the GSSC
Record Holders pursuant to the terms of this Reorganization Agreement are
sometimes collectively referred to herein as the "Consideration."
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 15
<PAGE> 123
The number of shares of UPC Common Stock to be exchanged for each share of GSSC
Common Stock issued and outstanding immediately prior to the Effective Time of
the Merger shall be based on an exchange ratio (the "Exchange Ratio") as
determined and set forth in this Section 3.1(e). The Exchange Ratio shall be
determined as follows:
(A) In the event the Current Market Price
Per Share of UPC Common Stock should be greater than or equal to
$24.00 per share of UPC Common Stock but less than or equal to $29.25
per share of UPC Common Stock (the "Primary Collar"), the Exchange
Ratio shall be fixed at 1.4206 shares of UPC Common Stock for each
share of GSSC Common Stock validly issued and outstanding immediately
prior to the Effective Time of the Merger;
(B) In the event the Current Market Price
Per Share of UPC Common Stock should be greater than $29.25 per share
of UPC Common Stock but less than or equal to $31.25 per share of UPC
Common Stock (the "Upper Secondary Collar"), the Exchange Ratio shall
be based on (a) a fixed price of $41.55 per share of GSSC Common Stock
divided by (b) the Current Market Price Per Share of UPC Common Stock
for each share of GSSC Common Stock validly issued and outstanding
immediately prior to the Effective Time of the Merger;
(C) In the event the Current Market Price
Per Share of UPC Common Stock should be greater than $31.25 per share
of UPC Common Stock (the "Ceiling"), the Exchange Ratio shall be fixed
at 1.3296 shares of UPC Common Stock for each share or GSSC Common
Stock validly issued and outstanding immediately prior to the
Effective Time of the Merger; provided, however, that UPC would have
the right to either deliver shares of UPC Common Stock based on the
fixed Exchange Ratio of 1.3296 or to terminate the
transaction;provided, however, should UPC elect to terminate the
transaction under this provision, GSSC shall have the unilateral right
to reinstate the transaction by accepting in exchange for each share
of GSSC Common Stock validly issued and outstanding immediately prior
to the Effective Time of the Merger that number of shares of UPC
Common Stock at the Current Market Price Per Share sufficient to equal
$41.55 per share of GSSC Common Stock;
(D) In the event the Current Market Price
Per Share of UPC Common Stock should be greater than or equal to
$22.00 per share of UPC Common Stock but less than $24.00 per share of
UPC Common Stock (the "Lower Secondary
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 16
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Collar"), the Exchange Ratio shall be based on (a) a fixed price of
$34.09 per share of GSSC Common Stock divided by (b) the Current
Market Price Per Share of UPC Common Stock for each share of GSSC
Common Stock validly issued and outstanding immediately prior to the
Effective Time of the Merger; and
(E) In the event the Current Market Price
Per Share of UPC Common Stock should be less than $22.00 per share of
UPC Common Stock (the "Floor"), the Exchange Ratio shall be fixed at
1.5495 shares of UPC Common Stock for each share of GSSC Common Stock
validly issued and outstanding immediately prior to the Effective Time
of the Merger; provided, however, that subject to the terms and
provisions of Section 3.3 of this Reorganization Agreement, GSSC shall
have the right to either accept the fixed Exchange Ratio of 1.5495 or
terminate the transaction in accordance with the terms and provisions
of Section 3.3 of this Reorganization Agreement,provided, however,
that should GSSC elect to terminate the transaction under this
provision and the Current Market Price Per Share of UPC Common Stock
should be greater than or equal to $18.50, UPC shall have the
unilateral right to reinstate the transaction by delivering in
exchange for each share of GSSC Common Stock validly issued and
outstanding immediately prior to the Effective Time of the Merger
shares of UPC Common Stock based on that number of shares of UPC
Common Stock at the Current Market Price Per Share sufficient to equal
$34.09 per share of GSSC Common Stock.
The Exchange Ratio as determined in this Section 3.1(e) shall be based on an
aggregate of no more than 9,600,000 shares of GSSC Common Stock being validly
issued and outstanding immediately prior to the Effective Time of the Merger
and, for purposes of this paragraph, counting all unexercised GSSC Stock
Options issued and outstanding immediately prior to the Effective Time of the
Merger as issued and outstanding shares of GSSC Common Stock so converted and
exchanged; provided, however, that no fractional shares of UPC Common Stock
shall be issued and if, after aggregating all of the shares of UPC Common Stock
to which a GSSC Record Holder is entitled based upon the Exchange Ratio, there
shall be a fractional share of UPC Common Stock remaining, such fractional
share shall be settled by a cash payment therefor pursuant to the Mechanics of
Payment of the Consideration set forth in Section 3.1(f) hereof, which shall be
calculated based upon the Current Market Price Per Share of one (1) full share
of UPC Common Stock.
(1) DEFINITION OF "CURRENT MARKET PRICE
PER SHARE." The "Current Market Price Per Share" shall be the
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 17
<PAGE> 125
average closing price per share of the "last" real time trades (i.e.,
closing price) of the UPC Common Stock on the NYSE (as published in
The Wall Street Journal, Eastern Edition) for each of the twenty (20)
NYSE general market trading days on which the NYSE was open for
business next preceding the issuance of all necessary Regulatory
Approvals (the "Pricing Period"). In the event the UPC Common Stock
should not trade on one or more of the trading days during the Pricing
Period (a "No Trade Date"), any such No Trade Date shall be
disregarded in computing the average closing price per share of UPC
Common Stock and the average shall be based upon the "last" real time
trades and number of days on which the UPC Common Stock actually
traded during the Pricing Period.
(2) EFFECTS OF APPRAISAL RIGHTS ON THE
EXCHANGE RATIO. The Exchange Ratio shall be unaffected by appraisal
rights as granted under Delaware law because the GSSC Common Stock is
listed for trading on the NASDAQ National Market System, which is a
"national securities exchange" as defined in rules promulgated by the
SEC pursuant to the 1934 Act, and therefore, pursuant to Delaware Code
Section 8-503-262, no GSSC Record Holder may assert appraisal rights
in connection with the Merger or the transactions contemplated in this
Reorganization Agreement.
(3) EFFECT OF STOCK SPLITS, REVERSE STOCK
SPLITS, STOCK DIVIDENDS AND SIMILAR CHANGES IN THE CAPITAL OF GSSC OR
UPC. Should GSSC or UPC effect any stock splits, reverse stock
splits, stock dividends or similar changes in their respective capital
accounts subsequent to the date of this Reorganization Agreement but
prior to the Effective Time of the Merger, the Exchange Ratio shall be
adjusted in such a manner as the Board of Directors of UPC shall deem
in good faith to be fair and reasonable in order to give effect to
such changes subject to GSSC's Board of Directors' approval.
(f) Mechanics of Payment of Consideration. As
soon as reasonably practicable, but in any event no more than five (5) Business
Days after the Effective Time of the Merger, the Corporate Trust Department of
Union Planters National Bank, Memphis, Tennessee (the "Exchange Agent") shall
deliver to each of the GSSC Record Holders such materials and information
deemed necessary by the Exchange Agent to advise the GSSC Record Holders of the
procedures required for proper surrender of their certificates evidencing and
representing shares of the GSSC Common Stock in order for the GSSC Record
Holders to receive the Consideration. Such materials shall include, without
limitation, a Letter of Transmittal, an Instruction Sheet, and a return
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 18
<PAGE> 126
mailing envelope addressed to the Exchange Agent (collectively the "Stockholder
Materials"). All Stockholder Materials shall be sent by United States mail to
the GSSC Record Holders at the addresses set forth on a certified stockholder
list to be delivered by GSSC to UPC at the Closing (the "Stockholder List") and
shall also be made available at the Corporate Trust Department offices of the
Exchange Agent. As soon as reasonably practicable thereafter, the GSSC Record
Holders of all of the outstanding shares of GSSC Common Stock, shall be
requested by the Exchange Agent to deliver, or cause to be delivered, by United
States Postal Service, hand delivery or any other means of delivery selected by
such GSSC Record Holders, to the Exchange Agent, pursuant to the Stockholder
Materials, the certificates formerly evidencing and representing all of the
shares of GSSC Common Stock which were validly issued and outstanding
immediately prior to the Effective Time of the Merger, and the Exchange Agent
shall take prompt action to process such certificates formerly evidencing and
representing shares of GSSC Common Stock received by it (including the prompt
return of any defective submissions with instructions as to those actions which
may be necessary to remedy any defects). Upon receipt of the proper submission
of the certificate(s) formerly representing and evidencing ownership of the
shares of GSSC Common Stock, the Exchange Agent shall, on or prior to the 30th
day after the Effective Time of the Merger but as soon as practicable mail, to
the former GSSC Record Holders in exchange for the certificate(s) surrendered
by them, the Consideration to be delivered for each such GSSC Record Holder's
shares of GSSC Common Stock evidenced by the certificate or certificates which
were cancelled and converted exclusively into the right to receive the
Consideration upon the Merger becoming effective. After the Effective Time of
the Merger and until properly surrendered to the Exchange Agent, each
outstanding certificate or certificates which formerly evidenced and
represented the shares of GSSC Common Stock of a GSSC Record Holder, subject to
the provisions of this Section, shall be deemed for all corporate purposes to
represent and evidence only the right to receive the Consideration into which
such GSSC Record Holder's shares of GSSC Common Stock were converted and
aggregated at the Effective Time of the Merger. Unless and until the
outstanding certificate or certificates, which immediately prior to the
Effective Time of the Merger evidenced and represented the GSSC Record Holder's
GSSC Common Stock shall have been properly surrendered as provided above, the
Consideration payable to the GSSC Record Holder(s) of the cancelled shares as
of any time after the Effective Date shall not be delivered to the GSSC Record
Holder(s) of such certificate(s) until such certificates shall have been
surrendered in the manner required. Each GSSC Record Holder shall be
responsible for all federal, state and local taxes which may be incurred by
such holder on account of the receipt of any
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 19
<PAGE> 127
Consideration. The GSSC Record Holder(s) of any certificate(s) which shall
have been lost or destroyed may nevertheless, subject to the provisions of this
Section, receive the Consideration to which each such GSSC Record Holder is
entitled, provided that each such GSSC Record Holder shall deliver to UPC and
to the Exchange Agent: (i) a sworn statement certifying the fact of such loss
or destruction and specifying the circumstances thereof and (ii) a lost
instrument bond in form satisfactory to UPC and the Exchange Agent which has
been duly executed by a corporate surety satisfactory to UPC and the Exchange
Agent, indemnifying the Surviving Corporation, UPC, the Exchange Agent (and
their respective successors) to their satisfaction against any loss or expense
which any of them may incur as a result of such lost or destroyed certificates
being thereafter presented. Any costs or expenses which may arise from such
replacement procedure, including the premium on the lost instrument bond, shall
be for the account of the GSSC Record Holder.
(g) Stock Transfer Books. At the Effective Time
of the Merger, the stock transfer books of GSSC shall be closed and no transfer
of shares of GSSC Common Stock shall be made thereafter.
(h) Effects of the Merger. At the Effective Time
of the Merger, the separate existence of INTERIM shall cease, and INTERIM shall
be merged with and into GSSC which, as the Surviving Corporation, shall
thereupon and thereafter possess all of the assets, rights, privileges,
appointments, powers, licenses, permits and franchises of GSSC and INTERIM,
whether of a public or a private nature, and shall be subject to all of the
liabilities, restrictions, disabilities and duties of both GSSC and INTERIM.
(i) Transfer of Assets. At the Effective Time of
the Merger, all rights, assets, licenses, permits, franchises and interests of
GSSC and INTERIM in and to every type of property, whether real, personal, or
mixed, whether tangible or intangible and wherever located, and to choses in
action shall be deemed to be vested in GSSC as the Surviving Corporation by
virtue of the Merger becoming effective and without any deed or other
instrument or act of transfer whatsoever.
(j) Assumption of Liabilities. At the Effective
Time of the Merger, the Surviving Corporation shall become and be liable for
all debts, liabilities, obligations and contracts of GSSC as well as those of
INTERIM, whether the same shall be matured or unmatured; whether accrued,
absolute, contingent or otherwise; and whether or not reflected or reserved
against in the balance sheets, other financial statements, books of account or
records of GSSC or INTERIM.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 20
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(k) Appraisal Rights of GSSC Stockholders.
Pursuant to the provisions of Section 8-503-262 of the Delaware Code, GSSC
Stockholders shall not be entitled to assert appraisal rights in connection
with the Merger or to seek those appraisal remedies afforded by the Delaware
Code because the GSSC Common Stock is listed for trading on the NASDAQ,
National Market System which is a "national securities exchange" as defined in
rules promulgated by the SEC pursuant to the 1934 Act, and therefore, pursuant
to Delaware Code Section 8-503-262, no GSSC Record Holder may assert appraisal
rights in connection with the Merger or the transactions contemplated in this
Reorganization Agreement.
(l) Reservation, Registration and Listing of
shares of UPC Common Stock. UPC shall reserve for issuance, register under the
applicable Securities Laws and apply for listing for trading on the NYSE a
sufficient number of shares of UPC Common Stock for the purpose of issuing
shares of UPC Common Stock to (i) the GSSC Record Holders in accordance with
the terms and conditions of this Section 3.1 and (ii) the holders of
outstanding GSSC Stock Options issued under the terms of the GSSC Key Employees
Stock Plan.
3.2 Time and Place of Closing. The Closing shall take
place at 10:00 a.m. on the Business Day next preceding the date on which the
Effective Time of the Merger is expected to occur, or at such other time as the
Parties, acting through their chief executive officers, presidents or chief
financial officers, may mutually agree (the "Closing Date"). The place of
Closing shall be at the Union Planters Administrative Center, Union Planters
Corporation Executive Offices (Fourth Floor), 7130 Goodlett Farms Parkway,
Memphis, Shelby County, Tennessee 38018. The Closing may be held at such other
time and place as may be mutually agreed upon by the Parties.
3.3 Price Based Termination. This Reorganization
Agreement may be terminated by GSSC without penalty, if the GSSC Board of
Directors so determines by a majority vote, if (a) the Current Market Price Per
Share of UPC Common Stock should be less than $18.50; or (b) should both of the
following conditions be satisfied:
(i) The Current Market Price Per Share of a share of UPC Common
Stock shall be less than $22.00; and
(ii) (A) The number obtained by dividing the Current Market Price
Per Share of UPC Common Stock by $26.75 (the closing price per share of UPC
Common Stock, as reported on the NYSE Composite Transactions Tape reporting
system on June 30, 1994), shall be less than (B) the number obtained by
dividing the average of the
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 21
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Index Price (as defined below) for the Pricing Period by the Index Price on
June 30, 1994 (the last NYSE trading day immediately preceding the date of the
first public announcement of entry by the Parties into this Reorganization
Agreement) and subtracting 0.10 from the quotient in this clause (B); subject,
however, to the following three sentences.
In the event GSSC should elect to exercise its termination right
pursuant to the foregoing, it must give prompt written notice to UPC. Upon the
proper receipt of such notice, UPC shall (provided the Current Market Price Per
Share of UPC Common Stock is greater than or equal to $18.50) have the option
to increase the Consideration to be received by the GSSC Record Holders in the
Merger by adjusting the Exchange Ratio to equal the number (calculated to the
nearest one one-hundredth) obtained by dividing $34.09 (being the product of
$22.00 and the Exchange Ratio) by the Current Market Price Per Share of UPC
Common Stock (the "Maximum Exchange Ratio"). If UPC should so elect, it must
give prompt written notice to GSSC of such election and the adjusted Exchange
Ratio, whereupon no termination will be deemed to have occurred, and this
Reorganization Agreement shall remain in full force and effect in accordance
with its terms (except as the Exchange Ratio shall have been so modified).
For purposes of this provision of this Reorganization Agreement, the following
definitions shall apply:
"Index Group" means the fifteen (15) companies listed on Schedule 3.3
to this Reorganization Agreement. In the event that the common stock of any
such company should cease to be publicly traded or should a proposal to acquire
any such company be announced after June 30, 1994, such company shall be
removed from the Index Group.
"Index Price," on a given date, means the average of the closing
prices on such date of the common stocks of the companies comprising the Index
Group.
Prior to making any decision to terminate this Reorganization
Agreement, the GSSC Board of Directors shall consult with its financial and
other advisers and shall consider all financial and other information it should
deem relevant to its decision. The matter would not, however, be resubmitted
to the GSSC Record Holders after the GSSC Stockholder Meeting.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 22
<PAGE> 130
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF UPC AND INTERIM
As of the date hereof and as of the Effective Time of the
Merger, UPC and INTERIM represent and warrant to GSSC as follows:
4.1 Organization and Corporate Authority. UPC is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Tennessee. INTERIM is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Each of UPC's material Subsidiaries is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its formation. UPC,
INTERIM and all material UPC Subsidiaries (i) have the requisite corporate
power and authority to own, operate and lease their material properties and
carry on their businesses as they are currently being conducted; (ii) are in
good standing and are duly qualified to do business in each jurisdiction where
the character of their properties owned or held under lease or the nature of
their business makes such qualification necessary and where the failure to so
qualify would individually or in the aggregate have a material adverse effect
on the condition (financial or otherwise), affairs, business, assets or
prospects of UPC and all UPC Subsidiaries, taken as a whole; and (iii) have in
effect all federal, state, local and foreign governmental authorizations,
permits and licenses necessary for them to own or lease their respective
properties and assets and to carry on their businesses as they are currently
being conducted. The corporate Charter and Bylaws of UPC and the Certificate
of Incorporation and Bylaws of INTERIM, as amended to date, are in full force
and effect as of the date of this Reorganization Agreement.
4.2 Authorization, Execution and Delivery; Reorganization
Agreement Not in Breach.
(a) UPC and INTERIM have all requisite corporate
power and authority to execute and deliver this Reorganization Agreement and
the Plan of Merger and to consummate the transactions contemplated hereby and
thereby. This Reorganization Agreement and the Plan of Merger, and all other
agreements contemplated to be executed in connection herewith by UPC and
INTERIM, have been (or upon execution will have been) duly executed and
delivered by UPC and INTERIM, have been (or upon execution will have been)
effectively authorized by all necessary action, corporate or otherwise, and,
other than the approval of at least a majority of UPC Shareholders and of UPC
as sole stockholder of INTERIM and UPC's Board of Directors, no
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 23
<PAGE> 131
other corporate proceedings on the part of UPC or INTERIM are (or will be)
necessary to authorize such execution and delivery, and constitute (or upon
execution will constitute) legal, valid and enforceable obligations of UPC and
INTERIM, subject, as to enforceability, to applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally, and to the application of equitable principles and
judicial discretion.
(b) The execution and delivery of this
Reorganization Agreement and the Plan of Merger, the consummation of the
transactions contemplated hereby and thereby and the fulfillment of the terms
hereof and thereof will not result in a violation or breach of any of the terms
or provisions of, or constitute a default under (or an event which, with the
passage of time or the giving of notice or both, would constitute a default
under), or conflict with, or permit the acceleration of any obligation under,
any material mortgage, lease, covenant, agreement, indenture or other
instrument to which UPC, INTERIM or any material UPC Subsidiary is a party or
by which they or their property or any of their assets are bound; the corporate
Charter and Bylaws of UPC or the Certificate of Incorporation and Bylaws of
INTERIM; or any judgment, decree, order, regulatory letter of understanding or
award of any court, governmental body, authority or arbitrator by which UPC,
INTERIM or any material UPC Subsidiary is bound; or any permit, concession,
grant, franchise, license, law, statute, ordinance, rule or regulation
applicable to UPC, INTERIM or any material UPC Subsidiary or their properties;
or result in the creation of any lien, claim, security interest, encumbrance,
charge, restriction or right of any third party of any kind whatsoever upon the
property or assets of UPC, INTERIM or any material UPC Subsidiary, except that
the Government Approvals shall be required in order for UPC and INTERIM to
consummate the Merger.
4.3 No Legal Bar. Neither UPC nor INTERIM is a party to,
subject to or bound by any agreement, judgment, letter of understanding, order,
writ, prohibition, injunction or decree of any court or other governmental body
of competent jurisdiction or any law which would prevent the execution of this
Reorganization Agreement and the Plan of Merger by UPC or INTERIM, their
delivery to GSSC, SBM and SBL or the consummation of the transactions
contemplated hereby and thereby, and no action or proceeding is pending against
UPC or INTERIM in which the validity of this Reorganization Agreement or the
Plan of Merger, any of the transactions contemplated hereby or thereby or any
action which has been taken by any of the Parties in connection herewith or
therewith or in connection with any of the transactions contemplated hereby or
thereby is at issue.
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4.4 Government and Shareholder Approvals. No consent,
approval, order or authorization of, or registration, declaration or filing
with, any federal, state or local governmental authority is required to be made
or obtained by UPC or INTERIM in connection with the execution and delivery of
this Reorganization Agreement or the consummation of the transactions
contemplated hereby by UPC or INTERIM, except for the prior approval of the
Federal Reserve of the Merger under the Bank Holding Company Act of 1956, as
amended (collectively, the "Government Approval"). Neither UPC nor INTERIM is
aware of any facts, circumstances or reasons why such Government Approval
should not be forthcoming or which would prevent such approval from being
obtained. The transactions contemplated in this Reorganization Agreement,
including, but not limited to, the Merger and the issuance of shares of UPC
Common Stock by UPC is subject to approval of at least a majority of the UPC
Shareholders.
4.5 Capitalization. (a) The authorized capital stock of
UPC consists of 10,000,000 shares of preferred stock having no par value (the
"UPC Preferred Stock"), and 50,000,000 shares of common stock having a par
value of $5.00 per share (the "UPC Common Stock"). As of June 30, 1994, UPC
had issued and outstanding: 44,000 shares of $8.00 Nonredeemable Cumulative
Convertible Preferred Stock, Series B; 690,000 shares of 10-3/8% Increasing
Rate, Redeemable, Cumulative Preferred Stock, Series C; 253,655 shares of 9.5%
Redeemable, Cumulative Preferred Stock, Series D; and 3,107,922 shares of 8%
Cumulative, Convertible Preferred Stock, Series E. In addition, 250,000 shares
of UPC Preferred Stock have been reserved for issuance as Series A Preferred
Stock pursuant to the UPC Share Purchase Rights Agreement dated July 19, 1989,
between UPC and Union Planters National Bank as Rights Agent (the "UPC Share
Purchase Rights Agreement"). As of June 30, 1994, 21,814,022 shares of UPC
Common Stock were validly issued and outstanding.
As of the date hereof, UPC is the holder, directly or indirectly, of
all of the outstanding capital stock of its Subsidiaries, except for directors'
qualifying shares of Union Planters National Bank.
(b) The authorized capital stock of INTERIM consists
of 1,000 shares of common stock having a par value of $.01 per share (the
"INTERIM Common Stock") and no preferred stock. As of the date hereof, INTERIM
had issued all 1,000 shares of the authorized INTERIM Common Stock to UPC.
Therefore, UPC is the record holder and beneficial owner of all of the INTERIM
Common Stock outstanding. INTERIM was formed by UPC solely to effect the
Merger and has not incurred any material debts or liabilities.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 25
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4.6 UPC Financial Statements. Accompanying Schedule 4.6
hereto are true copies of the audited consolidated balance sheets of UPC as of
December 31, 1993, the audited consolidated balance sheets of UPC as of
December 31, 1992, and selected financial data for UPC as of December 31, 1993,
1992 and 1991, and the related consolidated statements of income and changes in
shareholders' equity and cash flows of UPC for the years ended December 31,
1993, 1992 and 1991 and the comparative interim (or annual) financial
statements for any subsequent quarter (or year) ending after December 31, 1993
and prior to the Closing Date. Such financial statements (i) were (or will be)
prepared from the books and records of UPC; (ii) were (or will be) prepared in
accordance with GAAP; (iii) accurately present (or will present) UPC's
consolidated financial condition and the consolidated results of its
operations, changes in shareholders' equity and cash flows at the relevant
dates thereof and for the periods covered thereby; (iv) in the opinion of UPC
do contain or reflect (or will contain and reflect) all necessary adjustments
and accruals for an accurate presentation of UPC's consolidated financial
condition and the consolidated results of UPC's operations and cash flows as
stated including any amendments thereto for the periods covered by such
financial statements; (v) in the opinion of UPC do contain and reflect (or will
contain and reflect) adequate provisions for loan losses, for ORE reserves and
for all reasonably anticipatable liabilities for all taxes (federal, state,
local or foreign) with respect to the periods then ended; and (vi) in the
opinion of UPC do contain and reflect (or will contain and reflect) adequate
provisions for all reasonably anticipated liabilities for Post Retirement
Benefits Other Than Pensions ("OPEB") pursuant to FASB 106 and 112.
4.7 Exchange Act and Listing Filings.
(a) The outstanding shares of UPC Common Stock are registered with
the SEC pursuant to the 1934 Act and UPC has filed with the SEC all forms and
reports required by law or by rule or regulation of the SEC to be filed by UPC
with the SEC, which forms and reports, taken as a whole, are true and correct
in all material respects, and do not misstate a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading.
(b) The outstanding shares of UPC Common Stock are listed for trading
on the NYSE (under the symbol "UPC") pursuant to the listing rules of the NYSE
and UPC has filed with the NYSE all material forms and reports required by law
or by rule or regulation of the NYSE to be filed by UPC with the NYSE, which
forms and reports, taken as a whole, are true and correct in all material
respects, and do not misstate a material fact or omit to
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 26
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state a material fact required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading.
4.8 The UPC Common Stock. All shares of UPC Common Stock
to be issued by UPC and delivered to the GSSC Record Holders in exchange for
all of the GSSC Common Stock validly issued and outstanding immediately prior
to the Effective Time of the Merger will be duly authorized, validly issued,
fully paid and non-assessable, and none of such shares of UPC Common Stock will
have been issued in violation of any preemptive rights of any UPC Shareholders.
The shares of UPC Common Stock to be delivered in payment of the Consideration
shall have in all respects such distinguishing characteristics as those of the
shares of UPC Common Stock outstanding immediately prior to the Effective Time
of the Merger.
4.9 Licenses, Franchise, Etc. UPC and all UPC
Subsidiaries hold all material licenses, franchises, permits and authorizations
necessary for the lawful conduct of their respective businesses. The benefits
of all of such material licenses, franchises, permits and authorizations are in
full force and effect and may continue to be enjoyed by UPC and all UPC
Subsidiaries subsequent to the Closing of the transactions contemplated herein
without any consent or approval. Neither UPC nor any UPC Subsidiary has
received notice of any proceeding for the suspension or revocation of any such
material license, franchise, permit, or authorization and no such proceeding is
pending or has been threatened by any governmental authority.
4.10 Absence of Certain Changes. Except as disclosed in
Schedule 4.10 or as provided for or contemplated in this Reorganization
Agreement, since December 31, 1993 (the "UPC Balance Sheet Date") there has not
been:
(a) any material adverse change in the business,
property, assets (including loan portfolios), liabilities (whether absolute,
accrued, contingent or otherwise), prospects, operations, liquidity, income,
condition (financial or otherwise) or net worth of UPC;
(b) any amendment, modification or termination of
any contract or agreement, relating to UPC or any UPC Subsidiary to which UPC
or any UPC Subsidiary is a party which would have a material adverse effect
upon the financial condition or operations of UPC;
(c) any incurring of, assumption of, or taking
of, by UPC or any UPC Subsidiary, any property subject to, any liability,
except for liabilities incurred or assumed or property
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 27
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taken subsequent to the UPC Balance Sheet Date in the ordinary course of
business and in conformity with past practice; or
(d) except as described in the UPC Financial
Statements, any material alteration in the manner of keeping the books,
accounts or Records of UPC or any UPC Subsidiary, or in the accounting policies
or practices therein reflected, except as may be required by GAAP.
4.11 Tax Matters. Except as described in Schedule 4.11
hereto:
(a) all federal, state, local, and foreign tax
returns required to be filed by or on behalf of UPC and each UPC Subsidiary
have been timely filed or requests for extensions have been timely filed,
granted, and have not expired for periods ended on or before the date of this
Reorganization Agreement, and all returns filed are, and the information
contained therein is, complete and accurate. All tax obligations reflected in
such returns have been paid. As of the date of this Reorganization Agreement,
there is no audit examination, deficiency, or refund litigation or matter in
controversy with respect to any taxes that might result in a determination
materially adverse to UPC or any UPC Subsidiary except as fully reserved for in
the UPC Financial Statements. All taxes, interest, additions, and penalties
due with respect to completed and settled examinations or concluded litigation
have been paid.
(b) Neither UPC nor any UPC Subsidiary has executed
an extension or waiver of any statute of limitations on the assessment or
collection of any material tax due that is currently in effect.
(c) Adequate provision for any federal, state,
local, or foreign taxes due or to become due for UPC and all UPC Subsidiaries
for all periods through and including December 31, 1993, has been made and is
reflected on the December 31, 1993 financial statements included in the UPC
Financial Statements, and have been and will continue to be made with respect
to periods ending after December 31, 1993.
(d) Deferred taxes of UPC and each UPC Subsidiary
have been and will continue to be provided for in accordance with GAAP.
(e) To the best knowledge of UPC and INTERIM,
neither the Internal Revenue Service nor any foreign, state, local or other
taxing authority is now asserting or threatening to assert against UPC or any
UPC Subsidiary any material
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 28
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deficiency or claim for additional taxes, or interest thereon or penalties in
connection therewith. All material income, payroll, withholding, property,
excise, sales, use, franchise and transfer taxes, and all other taxes, charges,
fees, levies or other assessments, imposed upon UPC by the United States or by
any state, municipality, subdivision or instrumentality of the United States or
by any other taxing authority, including all interest, penalties or additions
attributable thereto, which are due and payable by UPC or any UPC Subsidiary,
either have been paid in full, or have been properly accrued and reflected in
UPC's Financial Statements referred to in Section 4.6 of this Reorganization
Agreement.
4.12 Litigation. Except as set forth in Schedule 4.12
hereto, there is no action, suit or proceeding pending against UPC or any UPC
Subsidiary, or to the best knowledge of UPC or INTERIM threatened against or
affecting UPC, any UPC Subsidiary or any of their assets, before any court or
arbitrator or any governmental body, agency or official (i) that would, if
decided against UPC or any UPC Subsidiary, have a material adverse impact on
the business, properties, assets, liabilities, condition (financial or other)
or prospects of UPC and that are not reflected in the UPC Financial Statements
or (ii) by or on behalf of any employee employed or formerly employed by UPC or
any UPC Subsidiary.
4.13 Absence of Undisclosed Liabilities. Except as described
in Schedule 4.13 hereto, neither UPC nor any UPC Subsidiary has any obligation
or liability (contingent or otherwise) that is material to the financial
condition or operations of UPC or any UPC Subsidiary taken as a whole, or that,
when combined with all similar obligations or liabilities, would be material to
the financial condition or operations of UPC or any UPC Subsidiary taken as a
whole (i) except as disclosed in the UPC Financial Statements delivered to GSSC
prior to the date of this Reorganization Agreement or (ii) except obligations
or liabilities incurred in the ordinary course of its business consistent with
past practices or (iii) except as contemplated under this Reorganization
Agreement. Since December 31, 1993, neither UPC nor any UPC Subsidiary has
incurred or paid any obligation or liability which would be material to the
financial condition or operations of UPC or such UPC Subsidiary taken as a
whole, except for obligations paid in connection with transactions made by it
in the ordinary course of its business consistent with past practices, laws and
regulations applicable to UPC or any UPC Subsidiary.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 29
<PAGE> 137
4.14 Compliance with Laws. UPC and each UPC Subsidiary:
(a) Is in compliance with all laws, rules,
regulations, reporting and licensing requirements, and orders applicable to its
business or employees conducting its business (including, but not limited to,
those relating to consumer disclosure and currency transaction reporting) the
breach or violation of which would or could reasonably be expected to have a
material adverse effect on the financial condition or operations of UPC or any
UPC Subsidiary taken as a whole, or which would or could reasonably be expected
to subject UPC or any UPC Subsidiary or any of its directors or officers to
civil money penalties; and
(b) Has received no notification or communication
from any agency or department of federal, state or local government or any of
the Regulatory Authorities, or the staff thereof (i) asserting that UPC or any
UPC Subsidiary is not in compliance with any of the statutes, rules,
regulations, or ordinances which such governmental authority or Regulatory
Authority enforces, which, as a result of such noncompliance, would result in a
material adverse impact on UPC or any UPC Subsidiary, (ii) threatening to
revoke any license, franchise, permit or governmental authorization which is
material to the financial condition or operations of UPC or any UPC Subsidiary,
or (iii) requiring UPC or any UPC Subsidiary to enter into a cease and desist
order, consent, agreement or memorandum of understanding.
4.15 Material Contract Defaults. Neither UPC nor any UPC
Subsidiary is in default in any respect under any contract, agreement,
commitment, arrangement, lease, insurance policy, or other instrument to which
it is a party or 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 which default is reasonably expected to have
either individually or in the aggregate a material adverse effect on UPC or any
UPC Subsidiary taken as a whole, 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.
4.16 Statements True and Correct. None of the information
prepared by, or on behalf of, UPC or any UPC Subsidiary regarding UPC, INTERIM
or any other UPC Subsidiary included or to be included in the Proxy Statement
to be mailed to the GSSC Stockholders in connection with the GSSC Stockholders
Meeting, and any other documents to be filed with the SEC, or any other
Regulatory Authority in connection with the transaction contemplated herein,
will, at the respective times such documents
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 30
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are filed, and, with respect to the Proxy Statement, when first mailed to the
GSSC Stockholders, be false or misleading with respect to any material fact, or
omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, or, in
the case of the Proxy Statement or any amendment thereof or supplement thereto,
at the time of the GSSC Stockholders Meeting, be false or misleading with
respect to any material fact, or omit to state any material fact necessary to
correct any statement in any earlier communication with respect to the
solicitation of any proxy for the GSSC Stockholders Meeting. All documents
which UPC or any UPC Subsidiary is responsible for filing with the SEC or any
other Regulatory Authority in connection with the transactions contemplated
hereby will comply as to form in all material respects with the provisions of
applicable law, including applicable provisions of the Securities Laws and the
rules and regulations issued thereunder.
4.17 Disclosure. The information concerning, and the
representations or warranties made by UPC and/or INTERIM as set forth in this
Reorganization Agreement, or in any document, statement, certificate or other
writing furnished or to be furnished by UPC and/or INTERIM to GSSC, SBM and/or
SBL pursuant hereto, do not and will not contain any untrue statement of a
material fact or omit and will not omit to state a material fact required to be
stated herein or therein which is necessary to make the statements and facts
contained herein or therein, in light of the circumstances under which they
were or are made, not false or misleading. Copies of all documents heretofore
or hereafter delivered or made available to GSSC, SBM and SBL by UPC and/or
INTERIM pursuant hereto were or will be complete and accurate copies of such
documents.
4.18 Reports. Since December 31, 1989, UPC and its
Subsidiaries have filed all reports and statements, together with any
amendments required to be made with respect thereto, that they were required to
file with (i) any state banking authority; (ii) the Federal Reserve, including,
but not limited to, Reports on FR Y-6 and FR Y-9; (iii) the FDIC, (iv) the SEC,
including, but not limited to, Annual Reports on Form 10-K, Quarterly Reports
on Form 10-Q and proxy statements; and (vi) any other applicable federal or
state securities or banking authorities (except, in the case of federal or
state securities authorities, filings that are not material). As of their
respective dates, each of such reports and documents, including the financial
statements, exhibits and schedules thereto, complied in all material respects
with all of the requirements of their respective forms and all of the statutes,
rules and regulations enforced or promulgated by the Regulatory Authority with
which they were filed. All such reports were true and complete in all
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 31
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material respects and did not contain any untrue statement as stated including
any amendments thereto of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. UPC has
previously provided to GSSC true and correct copies of all such reports filed
by UPC and its Subsidiaries after December 31, 1989.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF GSSC, SBM AND SBL
As of the date hereof and as of the Effective Time of the Merger,
GSSC, SBM and SBL represent and warrant to UPC and INTERIM as follows:
5.1 Organization and Qualification of GSSC and
Subsidiaries. GSSC is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and (i) has all requisite
corporate power and authority to own, operate and lease its material properties
and to carry on its business as it is currently being conducted; (ii) is in
good standing and is duly qualified to do business in each jurisdiction where
the character of its properties owned or held under lease or the nature of its
business makes such qualification necessary and where the failure to so qualify
would individually or in the aggregate have a material adverse effect on the
condition (financial or otherwise), affairs, business, assets or prospects of
GSSC and all GSSC Subsidiaries, taken as a whole; and (iii) is a registered
bank holding company under the BHCA. Each GSSC Subsidiary is duly chartered,
validly existing and in good standing under the laws of the state or
jurisdiction of its incorporation and (i) has all requisite corporate power and
authority to own, operate and lease its material properties and to carry on its
business as it is currently being conducted and (ii) is in good standing and is
duly qualified to do business in each jurisdiction where the character of its
properties owned or held under lease or the nature of its business makes such
qualification necessary and where the failure to so qualify would individually
or in the aggregate have a material adverse effect on the condition (financial
or otherwise), affairs, business, assets or prospects of GSSC and all GSSC
Subsidiaries, taken as a whole. GSSC and each of its Subsidiaries have in
effect all federal, state, local and foreign governmental authorizations,
permits and licenses necessary for them to own or lease their respective
properties and assets and to carry on their business as such businesses are
currently being conducted. SBM is a Mississippi banking corporation, duly
organized, validly existing
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 32
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and in good standing under the laws of the State of Mississippi and engages
only in activities (and holds properties only of the types) permitted by the
Mississippi Code and the rules and regulations promulgated by the MSBD
thereunder or the FDIC for insured depository institutions. SBM's deposit
accounts are insured by the Bank Insurance Fund (the "BIF") or the Savings
Association Insurance Fund ("SAIF") as administered by the FDIC to the fullest
extent permitted under applicable law. SBL is a Louisiana banking corporation,
duly organized, validly existing and in good standing under the laws of the
State of Louisiana and engages only in activities (and holds properties only of
the types) permitted by the Civil Law of Louisiana and the rules and
regulations promulgated by the LOFI thereunder or the FDIC for insured
depository institutions. SBL's deposit accounts are insured by the BIF as
administered by the FDIC to the fullest extent permitted under applicable law.
5.2 Authorization, Execution and Delivery; Reorganization
Agreement Not in Breach.
(a) GSSC, SBM and SBL have all requisite power
and authority to execute and deliver this Reorganization Agreement and the Plan
of Merger and to consummate the transactions contemplated hereby and thereby.
The execution and delivery of this Reorganization Agreement and the Plan of
Merger and the consummation of the proposed transaction have been (or will have
been) duly authorized by majorities of the entire Boards of Directors of GSSC,
SBM and SBL and, except for the approval of the GSSC Stockholders, no other
corporate proceedings on the part of GSSC, SBM or SBL are (or upon approval by
their respective boards of directors will be) necessary to authorize the
execution and delivery of this Reorganization Agreement and the Plan of Merger
and the consummation of the transactions contemplated hereby and thereby. This
Reorganization Agreement, the Plan of Merger and all other agreements and
instruments herein contemplated to be executed by GSSC, SBM and SBL have been
(or upon execution will have been) duly executed and delivered by GSSC, SBM and
SBL and (subject to any requisite shareholder or stockholder approval hereof)
constitute (or upon execution will constitute) legal, valid and enforceable
obligations of GSSC, SBM and SBL, subject, as to enforceability, to applicable
bankruptcy, insolvency, receivership, conservatorship, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and to the application of equitable principles and judicial
discretion.
(b) The execution and delivery of this
Reorganization Agreement and the Plan of Merger, the consummation of the
transactions contemplated hereby and thereby, and the fulfillment of the terms
hereof and thereof will not result in a
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 33
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violation or breach of any of the terms or provisions of, or constitute a
default under (or an event which, with the passage of time or the giving of
notice, or both, would constitute a default under), or conflict with, or permit
the acceleration of, any obligation under any mortgage, lease, covenant,
agreement, indenture or other instrument to which GSSC or any GSSC Subsidiary
is a party or by which GSSC or any GSSC Subsidiary is bound; the Certificate of
Incorporation and Bylaws of GSSC or the Charter and Bylaws of SBM or the
Charter and Bylaws of SBL; or any judgment, decree, order, regulatory letter of
understanding or award of any court, governmental body, authority or arbitrator
by which GSSC or any GSSC Subsidiary is bound; or (subject to the receipt of
the Government Approvals) any permit, concession, grant, franchise, license,
law, statute, ordinance, rule or regulation applicable to GSSC or any GSSC
Subsidiary or the properties of any of them; or result in the creation of any
lien, claim, security interest, encumbrance, charge, restriction or right of
any third party of any kind whatsoever upon the properties or assets of GSSC or
any GSSC Subsidiary where any such violation, conflict, breach, default, lien,
termination, acceleration or creation described in this Section 5.2 would have,
individually or in the aggregate, a material adverse effect on the condition
(financial or other), affairs, business, assets, or prospects of GSSC and all
GSSC Subsidiaries, taken as a whole.
5.3 No Legal Bar. Neither GSSC, SBM nor SBL is a party
to, or subject to, or bound by, any agreement or judgment, order, letter of
understanding, writ, prohibition, injunction or decree of any court or other
governmental authority or body, or any law which would prevent the execution of
this Reorganization Agreement or the Plan of Merger by GSSC, SBM or SBL, the
delivery thereof to UPC and INTERIM, or the consummation of the transactions
contemplated hereby and thereby, and no action or proceeding is pending against
GSSC, SBM or SBL in which the validity of this Reorganization Agreement, the
transactions contemplated hereby or any action which has been taken by any of
the Parties in connection herewith or in connection with any of the
transactions contemplated hereby are at issue.
5.4 Government and Other Approvals. Except for the
Government Approvals described in Section 4.4, no consent, approval, order or
authorization of, or registration, declaration or filing with, any federal,
state or local governmental authority is required to be made or obtained by
GSSC, SBM or SBL in connection with the execution and delivery of this
Reorganization Agreement or the consummation of the transactions contemplated
by this Reorganization Agreement nor is any consent or approval of this
Reorganization Agreement required from any landlord, licensor or other
non-governmental party which has granted rights to GSSC, SBM or SBL in order to
avoid forfeiture
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 34
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or impairment of such rights. Neither GSSC, SBM nor SBL is aware of any facts,
circumstances or reasons why such Government Approvals should not be
forthcoming or which would prevent such approvals from being obtained.
5.5 Compliance With Law. GSSC and all GSSC Subsidiaries
hold all licenses, franchises, permits and authorizations necessary for the
lawful conduct of their respective businesses, and GSSC, SBM and SBL as the
owners of the Realty have complied in all material respects with all applicable
statutes, laws, ordinances, rules and regulations of all federal, state and
local governmental bodies, agencies and subdivisions having, asserting or
claiming jurisdiction over GSSC's, SBM's or SBL's properties or over any other
part of GSSC's, SBM's or SBL's assets, liabilities or operations, the breach or
violation of which would have, individually or in the aggregate, a material
adverse effect on the condition (financial or other), affairs, business,
assets, or prospects of GSSC or any GSSC Subsidiary, taken as a whole. The
benefits of all of such licenses, franchises, permits and authorizations are in
full force and effect and may continue to be enjoyed by GSSC, SBM and SBL
subsequent to the Closing of the transactions contemplated herein without any
consent or approval. Neither GSSC nor any GSSC Subsidiary has received notice
of any proceeding for the suspension or revocation of any such license,
franchise, permit, or authorization and no such proceeding is pending or has
been threatened by any governmental authority.
5.6 Charter Documents. Included in Schedule 5.6 hereto
are true and correct copies of the Certificate of Incorporation and Bylaws of
GSSC and the Charter and Bylaws of SBM and SBL, respectively. The Certificate
of Incorporation and Bylaws of GSSC and the Charter and Bylaws of SBM and SBL,
as amended to date, are in full force and effect.
5.7 GSSC Financial Statements. Accompanying Schedule 5.7
hereto are true copies of the audited consolidated balance sheets of GSSC as of
December 31, 1993, the audited consolidated balance sheets of GSSC as of
December 31, 1992, and selected financial data for GSSC as of December 31,
1993, 1992 and 1991, and the related consolidated statements of income and
changes in stockholders' equity and cash flows of GSSC for the years ended
December 31, 1993, 1992 and 1991 (the "Audited Financial Statements of GSSC")
and the comparative interim (or annual) financial statements for any subsequent
quarter (or year) ending after December 31, 1993 and prior to the Closing Date.
Such financial statements (i) were (or will be) prepared from the books and
records of GSSC, SBM and SBL; (ii) were (or will be) prepared in accordance
with GAAP consistently applied; (iii) accurately present (or will present)
GSSC's consolidated
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 35
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financial condition and the consolidated results of its operations, changes in
stockholders' equity and cash flows at the relevant dates thereof and for the
periods covered thereby; (iv) in the opinion of GSSC do contain or reflect (or
will contain and reflect) all necessary adjustments and accruals for an
accurate presentation of GSSC's consolidated financial condition and the
consolidated results of GSSC's operations and cash flows as stated including
any amendments thereto for the periods covered by such financial statements;
(v) in the opinion of GSSC do contain and reflect (or will contain and reflect)
adequate provisions for loan losses, for ORE reserves and for all reasonably
anticipatable liabilities for all taxes (federal, state, local or foreign) with
respect to the periods then ended; and (vi) in the opinion of GSSC do contain
and reflect (or will contain and reflect) adequate provisions for all
reasonably anticipated liabilities for OPEB pursuant to FASB 106 and 112.
5.8 Absence of Certain Changes. Except as disclosed in
Schedule 5.8 or as provided for or contemplated in this Reorganization
Agreement, since December 31, 1993 (the "GSSC Balance Sheet Date") there has
not been:
(a) any transaction having a value in excess of
One Hundred Thousand Dollars ($100,000) by GSSC, SBM or SBL not in the ordinary
course of business and in conformity with past practice;
(b) any material adverse change in the business,
property, assets (including loan portfolios), liabilities (whether absolute,
accrued, contingent or otherwise), prospects, operations, liquidity, income,
condition (financial or otherwise) or net worth of GSSC, SBM or SBL;
(c) any damage, destruction or loss, whether or
not covered by insurance, which has had or may have a material adverse effect
on any of the properties, business or prospects of GSSC, SBM or SBL or their
future use and operation by GSSC, SBM or SBL;
(d) any acquisition or disposition by GSSC, SBM
or SBL of any property or asset of GSSC, SBM or SBL, whether real or personal,
having a fair market value, singularly or in the aggregate, in an amount
greater than Fifty Thousand Dollars ($50,000), except in the ordinary course of
business and in conformity with past practice or with respect to the
disposition of repossessed or foreclosed assets at fair value;
(e) any mortgage, pledge or subjection to lien,
charge or encumbrance of any kind on any of the respective properties or assets
of GSSC, SBM or SBL, except to secure
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 36
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extensions of credit in the ordinary course of business and in conformity with
past practice;
(f) any amendment, modification or termination of
any contract or agreement, relating to GSSC, SBM or SBL, to which GSSC, SBM or
SBL is a party which would have a material adverse effect upon the financial
condition or operations of GSSC, SBM or SBL;
(g) any increase in, or commitment to increase,
the compensation payable or to become payable to any officer, director,
employee or agent of GSSC, SBM or SBL, or any bonus payment or similar
arrangement made to or with any of such officers, directors, employees or
agents, other than routine increases made in the ordinary course of business
not exceeding the greater of ten percent (10%) per annum or $6,000 for any of
them individually;
(h) any incurring of, assumption of, or taking
of, by GSSC, SBM or SBL, any property subject to, any liability, except for
liabilities incurred or assumed or property taken subsequent to the GSSC
Balance Sheet Date in the ordinary course of business and in conformity with
past practice;
(i) except as described in the Audited Financial
Statements of GSSC and the interim financial statements of GSSC, any material
alteration in the manner of keeping the books, accounts or Records of GSSC, SBM
or SBL, or in the accounting policies or practices therein reflected, except as
may be required by GAAP or the Federal Reserve or the FDIC;
(j) any release or discharge of any obligation or
liability of any person or entity related to or arising out of any loan made by
GSSC, SBM or SBL of any nature whatsoever, except in the ordinary course of
business and in conformity with past practice; or
(k) to the best of GSSC's, SBM's and SBL's
knowledge, information and belief any loan (except credit card loans, passbook
loans or home loans) by GSSC, SBM or SBL to any policy Officer, director or
known 2% stockholder of GSSC, SBM or SBL or any Affiliate of GSSC, SBM or SBL;
or to any member of the immediate family of such Officer, director or 2%
stockholder of GSSC, SBM or SBL or any Affiliate of GSSC; or to any Person in
which such Officer, director or 2% stockholder directly or indirectly owns
beneficially or of record ten percent (10%) or more of any class of equity
securities in the case of a corporation, or of any equity interest, in the case
of a partnership or other non-corporate entity; or to any trust or estate in
which such Officer, director or 2% stockholder has a
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 37
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ten percent (10%) or more beneficial interest; or as to which such Officer,
director or 2% stockholder serves as a trustee or in a similar capacity. As
used in this Section 5.8, "Officer" shall refer to a person who holds the title
of chairman, president, executive vice president, senior vice president,
controller, secretary, cashier or treasurer or who performs the normal duties
of such officer whether or not he or she is compensated for such service or has
an official title.
5.9 Deposits. None of SBM's or SBL's Deposits is a
Brokered Deposit or, with respect to SBM's or SBL's rights to the Deposits,
subject to any encumbrance, legal restraint or other legal process. To the
best of the knowledge, information and belief of GSSC, SBM and SBL, except as
set forth in Schedule 5.9, no portion of the Deposits represents a Deposit by
any Affiliate of GSSC, SBM or SBL.
5.10 Properties. Except as described in Schedule 5.10
hereto or in the opinion of GSSC, SBM and SBL adequately reserved against in
the Audited Financial Statements of GSSC, GSSC and each GSSC Subsidiary has
good and marketable title free and clear of all material liens, encumbrances,
charges, defaults, or equities of whatever character to all of the material
properties and assets, tangible or intangible, reflected in the Audited
Financial Statements of GSSC as being owned by GSSC or any GSSC Subsidiary as
of the dates thereof. All buildings, and all fixtures, equipment, and other
property and assets that are material to the business of GSSC and its
Subsidiaries on a consolidated basis, held under leases or subleases by GSSC or
any GSSC Subsidiary, are held under valid instruments enforceable in accordance
with their respective terms (except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or other laws
affecting the enforcement of creditors' rights generally, and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceedings
may be pending).
5.11 GSSC Subsidiaries. Schedule 5.11 hereto lists all of
the active and inactive GSSC Subsidiaries (including any SBM or SBL Subsidiary)
as of the date of this Reorganization Agreement and describes generally the
business activities conducted, or permitted to be conducted, by each GSSC
Subsidiary. No equity securities of any of the GSSC Subsidiaries are or may
become required to be issued (other than to GSSC, SBM or SBL) by reason of any
options, warrants, scrip, rights to subscribe to, calls, or commitments of any
character whatsoever relating to, or securities or rights convertible into or
exchangeable for, shares of the capital stock of any GSSC Subsidiary, and there
are no contracts, commitments, understandings, or arrangements by which
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 38
<PAGE> 146
any GSSC Subsidiary is bound to issue (other than to GSSC) any additional
shares of its capital stock or options, warrants, or rights to purchase or
acquire any additional shares of its capital stock. All of the shares of
capital stock of each GSSC Subsidiary held by GSSC or by any GSSC Subsidiary
are fully paid and nonassessable and are owned by GSSC or such GSSC Subsidiary
free and clear of any claim, lien, or encumbrance of any nature whatsoever,
whether perfected or not.
5.12 Condition of Fixed Assets and Equipment. Except as
disclosed in Schedule 5.12 hereto, each item of GSSC's or SBM's or SBL's fixed
assets and equipment having a net book value in excess of Twenty Thousand
Dollars ($20,000) included in the Fixed Assets is in good operating condition
and repair, normal wear and tear excepted.
5.13 Tax Matters. Except as described in Schedule 5.13
hereto:
(a) all federal, state, local, and foreign tax
returns required to be filed by or on behalf of GSSC and each GSSC Subsidiary
have been timely filed or requests for extensions have been timely filed,
granted, and have not expired for periods ended on or before the date of this
Reorganization Agreement, and all returns filed are, and the information
contained therein is, complete and accurate in all material respects. All tax
obligations reflected in such returns have been paid. As of the date of this
Reorganization Agreement, there is no audit examination, deficiency, or refund
litigation or matter in controversy with respect to any taxes that might result
in a determination materially adverse to GSSC or any GSSC Subsidiary except as
fully reserved for in the Audited Financial Statements of GSSC. All taxes,
interest, additions, and penalties due with respect to completed and settled
examinations or concluded litigation have been paid.
(b) Neither GSSC nor any GSSC Subsidiary has
executed an extension or waiver of any statute of limitations on the assessment
or collection of any tax due that is currently in effect.
(c) To the best of the knowledge, information and
belief of GSSC, SBM and SBL, adequate provision for any federal, state, local,
or foreign taxes due or to become due for GSSC and all GSSC Subsidiaries for
all periods through and including December 31, 1993, has been made and is
reflected on the December 31, 1993 financial statements included in the Audited
Financial Statements of GSSC, and have been and will continue to be made with
respect to periods ending after December 31, 1993.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 39
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(d) Deferred taxes of GSSC and each GSSC Subsidiary
have been and will be provided for in accordance with GAAP.
(e) To the best knowledge of GSSC, SBM and SBL,
neither the Internal Revenue Service nor any foreign, state, local or other
taxing authority is now asserting or threatening to assert against GSSC or any
GSSC Subsidiary any deficiency or claim for additional taxes, or interest
thereon or penalties in connection therewith. All material income, payroll,
withholding, property, excise, sales, use, franchise and transfer taxes, and
all other taxes, charges, fees, levies or other assessments, imposed upon GSSC
by the United States or by any state, municipality, subdivision or
instrumentality of the United States or by any other taxing authority,
including all interest, penalties or additions attributable thereto, which are
due and payable by GSSC or any GSSC Subsidiary, either have been paid in full,
or have been properly accrued and reflected in the Audited Financial Statements
of GSSC referred to in Section 5.7 of this Reorganization Agreement.
5.14 Litigation. Except as set forth in Schedule 5.14
hereto or otherwise reflected in the Audited Financial Statements of GSSC,
there is no action, suit or proceeding pending against GSSC or any GSSC
Subsidiary, or to the best knowledge of GSSC, SBM or SBL threatened against or
affecting GSSC, any GSSC Subsidiary or any of their assets, before any court or
arbitrator or any governmental body, agency or official (i) that would, if
decided against GSSC or the GSSC Subsidiary, have a material adverse impact on
the business, properties, assets, liabilities, condition (financial or other)
or prospects of GSSC, SBM or SBL taken as a whole and that are not reflected in
the Audited Financial Statements of GSSC or (ii) by or on behalf of any
employee employed or formerly employed by GSSC or any GSSC Subsidiary.
5.15 Hazardous Materials. All statements made by GSSC and
any GSSC Subsidiaries in this Section 5.15 are made to the best of the
knowledge, information and belief of GSSC and such GSSC Subsidiaries. For
purposes of this Section 5.15, the term "knowledge, information and belief"
means that of the directors and officers of GSSC and all GSSC Subsidiaries and
includes their actual knowledge as well as that which could have been obtained
by a reasonably prudent person in exercise of reasonable inquiry; provided,
however, such inquiry shall not be construed to require a Phase I environmental
survey, unless under the specific facts and circumstances a reasonably prudent
person would do so.
(a) GSSC and all GSSC Subsidiaries have obtained
all permits, licenses and other authorizations which are required
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 40
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to be obtained by GSSC or its Subsidiaries with respect to the Property (as
defined herein) under all Applicable Environmental Laws (as defined herein)
except to the extent that failure to have such permits, licenses, or
authorizations would not have a material adverse effect on the consolidated
financial condition, operations, business or prospects of GSSC or any GSSC
Subsidiary. All Property controlled, directly or indirectly, by GSSC or any
GSSC Subsidiary is in compliance with the terms and conditions of all of such
permits, licenses and authorizations, and is also in compliance with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any Applicable Environmental
Laws or in any regulation, code, plan, order, decree, judgment, injunction,
notice or demand letter issued, entered, promulgated or approved thereunder,
except as described in detail in Schedule 5.15(a) hereto and except to the
extent that failure to have such permits, licenses, or authorizations would not
have a material adverse effect on the consolidated financial condition,
operations, business or prospects of GSSC or any GSSC Subsidiary. For purposes
hereof, the following terms shall have the following meanings:
"APPLICABLE ENVIRONMENTAL LAWS" shall mean all federal, state,
local and municipal environmental laws, rules or regulations to the extent
applicable to the Property, including, but not limited to, (a) the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section 9601 et seq. ("CERCLA"); (b) the Resource Conservation and Recovery
Act, 42 U.S.C. Section 6901 et seq. "RCRA"; (c) the Federal Water Pollution
Control Act, 33 U.S.C. Section 1251 et seq.; (d) the Clean Air Act, 42 U.S.C.
Section 7401 et seq.; (e) the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1471 et seq.; (f) the Toxic Substances Control Act, 15 U.S.C. Section
2601 et seq.; (g) the Emergency Planning and Community Right-to-Know Act, 42
U.S.C. Section 11001 et seq.; (h) the National Environmental Policy Act, 42
U.S.C. Section 4321 et seq.; (i) the Rivers and Harbours Act of 1899, 33 U.S.C.
Section 401 et seq.; (j) the Occupational Safety and Health Act, 29 U.S.C.
Section 651 et seq.; (k) the Safe Drinking Water Act, 42 U.S.C. Section 300(f)
et seq.; (l) the Oil Pollution Act of 1990, 33 U.S.C. Section 01 et seq.; (m)
the Hazardous Waste Management Act of 1977, Sections 68-46-101 et seq. of the
Tennessee Code; (n) the Hazardous Waste Management Act of 1983, Sections
68-46-201 et seq. of the Tennessee Code; (o) the Hazardous Waste Reduction Act
of 1990, Sections 68-46-301 et seq. of the Tennessee Code; (p) the Petroleum
Underground Storage Tank Act, Sections 68-58-101 et seq. of the Tennessee Code;
(q) any amendments to the foregoing Acts as adopted from time to time on or
before the Closing; (r) all Mississippi and Louisiana laws comparable to the
laws set forth above; and (s) any rule, regulation, order, injunction,
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 41
<PAGE> 149
judgment, declaration or decree implementing or interpreting any of the
foregoing Acts or laws, as amended.
"HAZARDOUS SUBSTANCES" shall mean any substance, material,
waste, or pollutant that is now (or prior to the Closing) listed, defined,
characterized or regulated as hazardous, toxic or dangerous under or pursuant
to any statute, law, ordinance, rule or regulation of any federal, state,
regional, county or local governmental authority having jurisdiction over the
Property of GSSC or any GSSC Subsidiary or its use or operation, including,
without limitation, (a) any substance, material, element, compound, mixture,
solution, waste, chemical or pollutant listed, defined, characterized or
regulated as hazardous, toxic or dangerous under any Applicable Environmental
Laws, (b) petroleum, petroleum derivatives or by-products, and other
hydrocarbons, (c) polychlorinated biphenyls (PCBs), asbestos and urea
formaldehyde, and (d) radioactive substances, materials or waste.
"PROPERTY" shall be deemed to include, but shall not be
limited to, all real property owned, controlled, leased or held by GSSC or a
GSSC Subsidiary, in whole or in part, solely or in a joint venture or other
business arrangement, either for operational or investment purposes, and
whether assigned, purchased, or obtained through foreclosure (or similar
action) or in satisfaction of debts previously contracted.
(b) In addition, except as set forth in Schedule
5.15(b) hereto:
(i) No notice, notification, demand,
request for information, citation, summons or order has been issued,
no complaint has been filed, no penalty has been assessed and no
investigation or review is pending by any governmental or other entity
with respect to any alleged failure by GSSC or any GSSC Subsidiary to
have any permit, license or authorization required in connection with
the conduct of the business of GSSC or any GSSC Subsidiary or with
respect to any generation, treatment, storage, recycling,
transportation, release or disposal, or any release as defined in 42
U.S.C. Section 9601(22) ("Release"), of any Hazardous Substances
generated by GSSC or any Affiliate of GSSC at the Property;
(ii) None of the Property has received
or held any Hazardous Substances in such amount and in such manner as
to constitute a violation of the Applicable Environmental Laws, and no
Hazardous Substances have been Released or disposed of on, in or under
any of the Property during or prior to GSSC's or any GSSC Subsidiary's
occupancy
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 42
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thereof, or during or prior to the occupancy thereof by any assignee
or sublessee of GSSC or any GSSC Subsidiary, except in compliance with
all Applicable Environmental Laws;
(iii) There are no Hazardous Substances
being stored at any Property or located in, on or upon, any Property
(including the subsurface thereof) or installed or affixed to
structures or equipment on the Property; and there are no underground
storage tanks for Hazardous Substances, active or abandoned, at any
Property; and
(iv) No Hazardous Substances have been
Released in a reportable quantity, where such a quantity has been
established by statute, ordinance, rule, regulation or order, at, on
or under any Property.
(c) Neither GSSC nor any Affiliate of GSSC has
transported or arranged for the transportation of any Hazardous Substances to
any location which is listed on the National Priorities List under CERCLA,
listed for possible inclusion on the National Priorities List by the
Environmental Protection Agency in the CERCLA Information System ("CERCLIS") or
on any similar state list or which is the subject of federal, state or local
enforcement actions or other investigations which may lead to claims against
the owner of the Property for cleanup costs, remedial work, damages to natural
resources or for personal injury claims, including, but not limited to, claims
under CERCLA.
(d) Except as set forth in Schedule 5.15(d), no
Hazardous Substances have been generated, recycled, treated, stored, disposed
of or Released by, GSSC or any Affiliate of GSSC in violation of Applicable
Environmental Laws.
(e) No oral or written notification of a Release
of Hazardous Substances has been filed by or on behalf of GSSC or any Affiliate
of GSSC relating to the Property and no Property is listed or proposed for
listing on the National Priority List promulgated pursuant to CERCLA, on
CERCLIS or on any similar state list of sites requiring investigation or
clean-up.
(f) There are no liens arising under or pursuant
to any Applicable Environmental Laws on any Property, and no government actions
have been taken or, to the best knowledge of GSSC, threatened, or are in
process which could subject any of such properties to such liens and none of
the Property would be required to place any notice or restriction relating to
the presence of Hazardous Substances at any Property in any deed to such
Property.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 43
<PAGE> 151
(g) Except as described in Schedule 5.15(g)
hereto, there have been no environmental investigations, studies, audits,
tests, reviews or other analyses conducted by or which are in the possession of
GSSC or any Affiliate of GSSC in relation to any Property, which have not been
made available to UPC.
(h) Neither GSSC, SBM nor SBL is aware of any
facts which might suggest that GSSC or any GSSC Subsidiary has engaged in any
management practice with respect to any of its past or existing borrowers which
could reasonably be expected to subject GSSC or any GSSC Subsidiary or the
Property to any liability, either directly or indirectly, under the principles
of law as set forth in United States v. Fleet Factors Corp., 901 F.2d 1550
(11th Cir. 1990).
5.16 Insurance. Except as described in Schedule 5.16
hereto, GSSC, SBM and SBL have paid all material amounts due and payable under
any insurance policies and guaranties applicable to GSSC, SBM and SBL and
GSSC's, SBM's and SBL's assets and operations; all such insurance policies and
guaranties are in full force and effect; GSSC, SBM and SBL and all of GSSC's,
SBM's and SBL's material assets, businesses, Realty and other material
properties are insured against fire, casualty, theft, liability, loss,
interruption, title and such other events against which it is customary to
insure, all such insurance policies being in amounts that are adequate and
consistent with past practice and experience; and the fidelity bonds in effect
as to which GSSC, SBM or SBL is a named insured are believed by GSSC to be
sufficient.
5.17 Labor and Employment Matters. Except as reflected
in Schedule 5.17 hereto, there is no (i) collective bargaining agreement or
other labor agreement to which GSSC or any GSSC Subsidiary is a party or by
which any of them is bound; (ii) employment, profit sharing, deferred
compensation, bonus, stock option, purchase, retainer, consulting, retirement,
welfare or incentive plan or contract to which GSSC or any GSSC Subsidiary is a
party or by which it is bound; or (iii) plan or agreement under which "fringe
benefits" (including, but not limited to, vacation plans or programs, sick
leave plans or programs and related benefits) are afforded any of the employees
of GSSC or any GSSC Subsidiary. No party to any such agreement, plan or
contract is in default with respect to any material term or condition thereof,
nor has any event occurred which, through the passage of time or the giving of
notice, or both, would constitute a default thereunder or would cause the
acceleration of any obligation of any party thereto. Neither GSSC nor any GSSC
Subsidiary has received notice from any governmental agency of any alleged
violation of applicable laws that remains
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 44
<PAGE> 152
unresolved respecting employment and employment practices, terms and conditions
of employment and wages and hours. GSSC and each GSSC Subsidiary have complied
in all material respects with all applicable laws, rules and regulations
relating to the employment of labor, including those related to its employment
practices, employee disabilities, wages, hours, collective bargaining and the
payment and withholding of taxes and other sums as required by the appropriate
governmental authorities, except for failures to comply with such laws which
would not have a material adverse effect on the business or operations of GSSC
and the GSSC Subsidiaries taken as a whole, and GSSC and each GSSC Subsidiary
have withheld and paid to the appropriate governmental authorities or are
holding for payment not yet due to such authorities, all amounts required to be
withheld from the employees of GSSC and each GSSC Subsidiary and are not liable
for any arrears of wages, taxes, penalties or other sums for failure to comply
with any of the foregoing. Except as set forth in Schedule 5.17, there is no:
unfair labor practice complaint against GSSC or any GSSC Subsidiary pending
before the National Labor Relations Board or any state or local agency; pending
labor strike or other labor trouble affecting GSSC or any GSSC Subsidiary;
labor grievance pending against GSSC or any GSSC Subsidiary; pending
representation question respecting the employees of GSSC or any GSSC
Subsidiary; pending arbitration proceedings arising out of or under any
collective bargaining agreement to which GSSC or any GSSC Subsidiary is a
party, or to the best knowledge of GSSC, any basis for which a claim may be
made under any collective bargaining agreement to which GSSC or any GSSC
Subsidiary is a party.
5.18 Records and Documents. The Records of SBM are and
will be sufficient to enable SBM to continue conducting its business as a
Mississippi state banking corporation under similar standards as SBM has
heretofore conducted such business. The Records of SBL are and will be
sufficient to enable SBL to continue conducting its business as a Louisiana
state banking corporation under similar standards as SBL has heretofore
conducted such business.
5.19 Capitalization of GSSC. The authorized capital stock
of GSSC consists of 15,000,000 shares of common stock having a par value of
$1.00 per share (the "GSSC Common Stock"), no shares of preferred stock (the
"GSSC Preferred Stock") and no other class of equity security. As of the date
of this Reorganization Agreement, a total of 9,492,975 shares of GSSC Common
Stock were issued and outstanding, no shares of GSSC Common Stock were held by
GSSC as treasury stock and no shares of GSSC Preferred Stock were issued and
outstanding. All of the outstanding GSSC Common Stock is validly issued,
fully-paid and nonassessable and has not been issued in violation of any
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 45
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preemptive rights of any GSSC Stockholder. Except as described in Section 2.7
of this Reorganization Agreement or as described on Schedule 5.19 hereto, as of
the date hereof, there are no outstanding securities or other obligations which
are convertible into GSSC Common Stock or into any other equity or debt
security of GSSC, and there are no outstanding options, warrants, rights,
scrip, rights to subscribe to, calls or other commitments of any nature which
would entitle the holder, upon exercise thereof, to be issued GSSC Common Stock
or any other equity or debt security of GSSC. Accordingly, immediately prior
to the Effective Time of the Merger, there will be not more than 9,600,000
shares of GSSC Common Stock issued and outstanding. Except as set forth in
Schedule 5.19 hereto, GSSC owns and is the beneficial and record holder of, and
has good and freely transferable title to, all of the 3,465,440 shares of SBM
Common Stock outstanding, and recorded on the books and Records of SBM as being
held in its name, free and clear of all liens, charges or encumbrances, and
such stock is not subject to any voting trusts, agreements or similar
arrangements or other claims which could affect the ability of GSSC to freely
vote such stock in support of the transactions contemplated herein. Except as
set forth in Schedule 5.19 hereto, GSSC owns and is the beneficial and record
holder of, and has good and freely transferable title to, all of the 5,000,000
shares of SBL Common Stock outstanding, and recorded on the books and Records
of SBL as being held in its name, free and clear of all liens, charges or
encumbrances, and such stock is not subject to any voting trusts, agreements or
similar arrangements or other claims which could affect the ability of GSSC to
freely vote such stock in support of the transactions contemplated herein.
5.20 Sole Agreement. Except as described in Schedule 5.20
hereto, with the exception of this Reorganization Agreement, neither GSSC, SBM,
SBL nor any Subsidiary of any of them has been or is a party to: any letter of
intent or agreement to merge, to consolidate, to sell or purchase assets (other
than in the normal course of its business) or to any other agreement which
contemplates the involvement of GSSC, SBM or SBL or any Subsidiary of either
(or any of their assets) in any business combination of any kind; or any
agreement obligating GSSC, SBM or SBL to issue or sell or authorize the sale or
transfer of GSSC Common Stock or the capital stock of SBM or SBL. Except as
described in Schedule 5.20 hereto, there are no (nor will there be at the
Effective Time of the Merger any) shares of capital stock or other equity
securities of GSSC outstanding, except for shares of GSSC Common Stock
presently issued and outstanding, and there are no (nor will there be at the
Effective Time of the Merger any) outstanding options, warrants, scrip, rights
to subscribe to, calls or commitments of any character whatsoever relating to,
or securities or rights convertible into or
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 46
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exchangeable for, shares of the capital stock of GSSC, SBM or SBL, or
contracts, commitments, understandings, or arrangements by which GSSC, SBM or
SBL is or may be bound to issue additional shares of their capital stock or
options, warrants, or rights to purchase or acquire any additional shares of
their capital stock. There are no (nor will there be at the Effective Time of
the Merger any) contracts, commitments, understandings, or arrangements by
which GSSC or any GSSC Subsidiary is or may be bound to transfer or issue to
any third party any shares of the capital stock of any GSSC Subsidiary, and
there are no (nor will there be at the Effective Time of the Merger any)
contracts, agreements, understandings or commitments relating to the right of
GSSC to vote or to dispose of any such shares.
5.21 Disclosure. The information concerning, and
representations and warranties made by, GSSC, SBM and SBL set forth in this
Reorganization Agreement, or in the schedules of GSSC hereto, or in any
document, statement, certificate or other writing furnished or to be furnished
by GSSC, SBM or SBL to UPC and INTERIM pursuant hereto, does not contain any
untrue statement of a material fact or omit and will not omit to state a
material fact required to be stated herein or therein necessary to make the
statements and facts contained herein or therein, in light of the circumstances
in which they were or are made, not false or misleading. Copies of all
documents heretofore or hereafter delivered or made available to UPC or INTERIM
by GSSC, SBM or SBL pursuant hereto were or will be complete and accurate
copies of such documents.
5.22 Absence of Undisclosed Liabilities. Except as described
in Schedule 5.22 hereto, to the best of the knowledge, information and belief
of GSSC, SBM and SBL neither GSSC nor any GSSC Subsidiary has any obligation or
liability (contingent or otherwise) that is material to the financial condition
or operations of GSSC or any GSSC Subsidiary, or that, when combined with all
similar obligations or liabilities, would be material to the financial
condition or operations of GSSC or any GSSC Subsidiary (i) except as disclosed
in the Audited Financial Statements of GSSC delivered to UPC prior to the date
of this Reorganization Agreement or (ii) except obligations or liabilities
incurred in the ordinary course of its business consistent with past practices
or (iii) except as contemplated under this Reorganization Agreement and the
schedules of GSSC hereto. Since December 31, 1993, neither GSSC nor any GSSC
Subsidiary has incurred or paid any obligation or liability which would be
material to the financial condition or operations of GSSC or such GSSC
Subsidiary, except for obligations paid by GSSC, SBM or SBL under the terms of
this Reorganization Agreement (all such obligations or payments are fully
described by GSSC in Schedule 5.22 hereto) or in connection with transactions
made by
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 47
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it in the ordinary course of its business consistent with past practices, laws
and regulations applicable to GSSC or any GSSC Subsidiary.
5.23 Allowance for Possible Loan or ORE Losses. To the
best of the knowledge, information and belief of GSSC, SBM and SBL, the
allowance for possible loan losses shown on the Audited Financial Statements of
GSSC is (with respect to periods ended on or before December 31, 1993) or will
be (with respect to periods ending subsequent to December 31, 1993) adequate in
all respects to provide for anticipated losses inherent in Loans outstanding or
for commitments to extend credit or similar off-balance- sheet items (including
accrued interest receivable) as of the dates thereof.
The allowance for possible losses on other real estate ("ORE") shown
on the Audited Financial Statements of GSSC is (with respect to periods ended
on or before December 31, 1993) or will be (with respect to periods ending
subsequent to December 31, 1993) adequate in all respects to provide for
anticipated losses inherent in ORE owned or held by GSSC or any GSSC Subsidiary
and the net book value of ORE on the Balance Sheet of the Audited Financial
Statements of GSSC is the fair value of the ORE determined in accordance with
Statement of Position 92-3.
5.24 Compliance with Laws. GSSC and each GSSC Subsidiary:
(a) To the best of the knowledge, information and
belief of the management of GSSC and each GSSC Subsidiary, is in compliance
with all laws, rules, regulations, reporting and licensing requirements, and
orders applicable to its business or employees conducting its business
(including, but not limited to, those relating to consumer disclosure and
currency transaction reporting) the breach or violation of which would or could
reasonably be expected to have a material adverse effect on the financial
condition or operations of GSSC or any GSSC Subsidiary, or which would or could
reasonably be expected to subject GSSC or any GSSC Subsidiary or any of its
directors or officers to civil money penalties; and
(b) Has received no notification or communication
from any agency or department of federal, state, or local government or any of
the Regulatory Authorities, or the staff thereof (i) asserting that GSSC or any
GSSC Subsidiary is not in compliance with any of the statutes, rules,
regulations, or ordinances which such governmental authority or Regulatory
Authority enforces, which, as a result of such noncompliance, would result in a
material adverse impact on GSSC or any GSSC Subsidiary, (ii) threatening to
revoke any license, franchise, permit, or governmental authorization which is
material to the
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 48
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financial condition or operations of GSSC or any GSSC Subsidiary, or (iii)
requiring GSSC or any GSSC Subsidiary to enter into a cease and desist order,
consent, agreement, or memorandum of understanding.
5.25 Employee Benefit Plans.
(a) GSSC has previously provided to UPC true and
complete copies of each "employee pension benefit plan," as defined in Section
3(2) of the Employee Retirement Income Security Act of 1974 ("ERISA") which, to
the best of its knowledge, is subject to any provision of ERISA and covers any
employee, whether active or retired, of GSSC or any GSSC Subsidiary or any
other entity which is a member of a controlled group or is under common control
with GSSC or its Subsidiaries in the manner defined and further described in
Section 414(b), (c), or (m) of the Internal Revenue Code. Such plans are
hereinafter referred to collectively as the "Employee Pension Benefit Plans",
and each such Employee Pension Benefit Plan is listed in Schedule 5.25(a)
hereto. GSSC has also provided to UPC true and complete copies of all trust
agreements, collective bargaining agreements, and insurance contracts related
to such Employee Pension Benefit Plans.
To the best knowledge of GSSC and its Subsidiaries,
each Employee Pension Benefit Plan which is intended to be qualified under
Section 401(a) of the Internal Revenue Code is so qualified and each trust
forming a part thereof is exempt from tax pursuant to Section 501(a) of the
Internal Revenue Code. Copies of the latest determination letters concerning
the qualified status of each Employee Pension Benefit Plan which is intended to
be qualified under Section 401(a) of the Internal Revenue Code have been
provided to UPC. Requests for determination letters relating to amendments
required to cause such Employee Pension Benefit Plans to be in compliance with
the Tax Equity and Fiscal Responsibility Act of 1982, the Deficit Reduction Act
of 1984 and the Retirement Equity Act of 1984 were timely filed and have been
received by GSSC and its Subsidiaries. Requests for determination letters
relating to any subsequent amendments to such plans which are currently pending
have been provided to UPC. All such requests were timely and properly filed
and appropriate notice of any such filing was timely and properly provided to
affected plan participants and beneficiaries.
To the best of the knowledge, information and belief
of GSSC, SBM and SBL, each of the Employee Pension Benefit Plans has been
operated in substantial conformity with the written provisions of the
applicable plan documents which have been delivered to UPC and in substantial
compliance with the
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 49
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requirements prescribed by all statutes, orders, rules, and regulations
including, but not limited to, ERISA and the Internal Revenue Code, which are
applicable to such Employee Pension Benefit Plans. To the extent that the
operation of an Employee Pension Benefit Plan has deviated from the written
provisions of the plan, such operational deviations have been disclosed in
Schedule 5.25(a) hereto. All such deviations have been made in conformity with
applicable laws, including ERISA and the Internal Revenue Code.
With respect to Employee Pension Benefit Plans which
are subject to the annual report requirement of ERISA Section 103 or to the
annual return requirement of Internal Revenue Code Section 6047, all required
annual reports and annual returns, or such other documents as may have been
required as alternative means of compliance with the annual report requirement,
have been timely filed. Copies of all such annual returns/reports, including
all attachments and Schedules, for the three (3) plan years immediately
preceding the current date have been delivered to UPC. With respect to
Employee Pension Benefit Plans which complied with the annual return
requirement by satisfaction of an alternate compliance method, any documents
required to be filed with the Department of Labor in satisfaction of such
requirements have been provided to UPC.
With respect to all Employee Pension Benefit Plans
which are subject to the summary plan description requirement of ERISA Section
102, all such summary plan descriptions as were required to be filed with the
Department of Labor and distributed to participants and beneficiaries have been
timely filed and distributed. Copies of all such summary plan descriptions
have been delivered to UPC. No Employee Pension Benefit Plan constitutes a
"multiemployer plan" as defined in Section 4001(a)(3) of ERISA.
No Employee Pension Benefit Plan subject to Part III
of Subtitle B of ERISA or Section 412 of the Internal Revenue Code, or both,
has incurred an "accumulated funding deficiency" within the meaning of Internal
Revenue Code Section 412, whether or not waived. All required contributions to
all Employee Pension Benefit Plans have been timely made. Any penalties or
taxes which have been incurred by GSSC or its Subsidiaries or by any Employee
Pension Benefit Plan with respect to the timing or amount of payment of any
contribution to an Employee Pension Benefit Plan have been timely paid. The
limitations of Internal Revenue Code Section 415 have not been exceeded with
respect to any Employee Pension Benefit Plan or combination of such plans to
which such limitations apply.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 50
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No "reportable event" (as described in Section
4043(b) of ERISA) has occurred with respect to any Employee Pension Benefit
Plan. No Employee Pension Benefit Plan or any trust created thereunder, nor
any "disqualified person" with respect to the plan (as defined in Section 4975
of the Internal Revenue Code), has engaged in a "prohibited transaction", as
such term is defined in Section 4975 of the Internal Revenue Code, which could
subject such Employee Pension Benefit Plan, any such trust or any such
disqualified person (other than a person for whom neither GSSC nor any GSSC
Subsidiary is directly or indirectly responsible) to liability under Title I of
ERISA or to the imposition of any tax under Section 4975 of the Internal
Revenue Code.
No condition exists with regard to any Employee
Pension Benefit Plan which constitutes grounds for the termination of such plan
pursuant to Section 4042 of ERISA.
The fair market value of the assets of any Employee
Pension Benefit Plan which is subject to Title IV of ERISA (excluding for these
purposes any accrued but unpaid contributions) exceeded the present value of
all benefits accrued under any such plan, determined on a termination basis
using the assumptions established by the Pension Benefit Guaranty Corporation
as in effect on such date. Neither GSSC nor its Subsidiaries have incurred any
liability under Title IV of ERISA arising in connection with the termination
of, or complete or partial withdrawal from, any plan covered or previously
covered by Title IV of ERISA. The termination of any Internal Revenue Code
Section 401(a) qualified Employee Pension Benefit Plan previously terminated by
GSSC or any GSSC Subsidiary did not adversely affect the qualification of such
Employee Pension Benefit Plan. The distribution of the assets of any such
Employee Pension Benefit Plan was made or is currently being made in conformity
with the requirements of that Employee Pension Benefit Plan and of applicable
legal requirements and has not resulted in, will not result in, and is
reasonably not anticipated to result in the assessment of any tax, penalty, or
excise tax against such pension plan, its related trusts, the fiduciary and
administrators of the Employee Pension Benefit Plan, GSSC or its Subsidiaries,
or any disqualified person (as defined in Internal Revenue Code Section 4975)
with respect to the Employee Pension Benefit Plan.
Except as disclosed in Schedule 5.25(a) hereto, all
Employee Pension Benefit Plans were in effect for substantially all of calendar
year 1993. There has been no material amendment of any such plans (other than
amendments required to comply with applicable law) or material increase in the
cost of maintaining such plans or providing benefits
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 51
<PAGE> 159
thereunder on or after the last day of the plan year which ended in calendar
year 1993 for each such Employee Pension Benefit Plan.
GSSC has provided to UPC copies of the annual
actuarial valuation or allocation report for each Employee Pension Benefit Plan
for the three (3) plan years for such plan immediately preceding the current
date. With regard to Employee Pension Benefit Plans which are not intended to
be qualified under Section 401(a) of the Internal Revenue Code, copies of
financial statements or reports containing information regarding the expense of
maintaining any such Employee Pension Benefit Plan for the three (3) plan years
preceding the current date have been delivered to UPC.
(b) GSSC has furnished to UPC true and complete copies of
each "Employee Welfare Benefit Plan" as defined in Section 3(1) of ERISA,
which, to the best of its knowledge, is subject to any provision of ERISA and
covers any employee, whether active or retired, of GSSC or any GSSC Subsidiary
or members of a controlled group or entities under common control with GSSC or
its Subsidiaries in the manner defined and further described in Section 414(b),
(c), or (m) of the Internal Revenue Code. Such plans are hereinafter referred
to collectively as the "Employee Welfare Benefit Plans", and each such Employee
Welfare Benefit Plan is listed in Schedule 5.25(b) hereto.
GSSC has also provided to UPC true and complete
copies of documents establishing all funding instruments for such Employee
Welfare Benefit Plans, including but not limited to, trust agreements,
cafeteria plans (pursuant to Internal Revenue Code Section 125), and voluntary
employee beneficiary associations (pursuant to Internal Revenue Code Section
501(c)(9)). Each of the Employee Welfare Benefit Plans has been operated in
substantial conformity with the written provisions of the plan documents which
have been delivered to UPC and in compliance with the requirements prescribed
by all statutes, orders, rules, and regulations including, but not limited to,
ERISA and the Internal Revenue Code, which are applicable to such Employee
Welfare Benefit Plans. Any deviation in the operation of such plans from the
requirements of the plan documents or of applicable laws have been listed in
Schedule 5.25(b) hereto. GSSC has provided any notification required by law to
any participant covered under any Employee Welfare Benefit Plan which has
failed to comply with the requirements of any Internal Revenue Code section
which results in the imposition of a tax on benefits provided to such
participants under such plan.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 52
<PAGE> 160
With respect to all Employee Welfare Benefit Plans
which are subject to the annual report requirement of ERISA Section 103 or to
the annual return requirement of Internal Revenue Code Section 6039D, all
annual reports and annual returns as were required to be filed pursuant to such
sections have been timely filed. Copies of all such annual returns/reports,
including all attachments and Schedules, for the three (3) plan years
immediately preceding the current date for all plans subject to such
requirements have been delivered to UPC. With respect to all Employee Welfare
Benefit Plans which are subject to the summary plan description requirement of
ERISA Section 102, all such summary plan descriptions as were required to be
filed with the Department of Labor and distributed to participants and
beneficiaries have been timely filed and distributed. Copies of all such
summary plan descriptions have been delivered to UPC.
Except as disclosed in Schedule 5.25(b) hereto, all
Employee Welfare Benefit Plans which are in effect were in effect for
substantially all of calendar year 1993. Except as disclosed in Schedule
5.25(b) hereto, there has been with respect to such Employee Welfare Benefit
Plans no material amendment thereof or material increase in the cost thereof or
benefits payable thereunder on or after December 31, 1993.
To the best of the knowledge, information and belief
of GSSC, SBM and SBL, no Employee Welfare Benefit Plan or any trust created
thereunder, nor any "party in interest" with respect to the plan (as defined in
Section 3(14) of ERISA), has engaged in a "prohibited transaction", as such
term is defined in Section 406 of ERISA, which could subject such Employee
Welfare Benefit Plan, any such trust, or any party in interest (other than a
person for whom neither GSSC nor any GSSC Subsidiary is directly or indirectly
responsible) to the imposition of a penalty for such prohibited transaction
under Section 502(i) of ERISA. The Department of Labor has not assessed any
such penalty or served notice to GSSC or any of its Subsidiaries that such a
penalty may be imposed upon any Employee Welfare Benefit Plan.
Neither GSSC nor any GSSC Subsidiary has failed to
make any contribution to, or pay any amount due and owing by GSSC or an GSSC
Subsidiary under the terms of, an Employee Welfare Benefit Plan. Except as
disclosed in Section 5.25(b) hereto, no claims have been incurred with respect
to any Employee Welfare Benefit Plan which may, to the best knowledge,
information and belief of GSSC, constitute a liability for GSSC or any GSSC
Subsidiary after the application of any insurance, trust or other funds which
are applicable to the payment of such claims.
Except as disclosed in Schedule 5.25(b) hereto, to
the best knowledge, information and belief of GSSC, no condition
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 53
<PAGE> 161
exists that could subject any Employee Welfare Benefit Plan or any person
(other than a person for whom neither GSSC nor any GSSC Subsidiary is directly
or indirectly responsible) to liabilities, damages, losses, taxes, or sanctions
that arise under Section 4980B of the Internal Revenue Code or Sections 601
through 608 of ERISA for failure to comply with the continuation health care
coverage requirements of ERISA Sections 601 through 608 and Internal Revenue
Code Section 4980B with respect to any current or former employee of GSSC or
any GSSC Subsidiary, or the beneficiaries of such employee.
(c) GSSC has furnished to UPC true and complete copies
and/or descriptions of each plan or arrangement maintained or otherwise
contributed to by GSSC or any GSSC Subsidiary which is not an Employee Pension
Benefit Plan and is not an Employee Welfare Benefit Plan and which (exclusive
of base salary and base wages) provides for any form of current or deferred
compensation, bonus, stock option, profit sharing, retirement, group health or
insurance, welfare benefits, fringe benefits, or similar plan or arrangement
for the benefit of any employee or class of employees, whether active or
retired, or independent contractors of GSSC or any GSSC Subsidiary. Such plans
and arrangements shall collectively be referred to herein as "Benefit
Arrangements" and all such Benefit Arrangements of GSSC and GSSC's Subsidiaries
are listed on Schedule 5.25(c) hereto. Except as disclosed in Schedule 5.25(c)
hereto, there are no other benefit arrangements of the GSSC companies and all
Benefit Arrangements which are in effect were in effect for substantially all
of calendar year 1993. Except as disclosed in Schedule 5.25(c) hereto, there
has been with respect to Benefit Arrangements no material amendment thereof or
material increase in the cost thereof or benefits payable thereunder on or
after December 31, 1993. There has been no material increase in the base
salary and wage levels of GSSC or any GSSC Subsidiary and, except in the
ordinary course of business, no change in the terms or conditions of employment
(including severance benefits) compared, in each case, to those prevailing for
substantially all of calendar year 1993. Except as disclosed in Schedule
5.25(c) hereto, there has been no material increase in the compensation of, or
benefits payable to, any senior executive employee of GSSC or any GSSC
Subsidiary on or after December 31, 1993, nor has any employment, severance, or
similar contract been entered into with any such employee, nor has any
amendment to any such contract been made on or after December 31, 1993.
With respect to all Benefit Arrangements which are
subject to the annual return requirement of Internal Revenue Code Section
6039D, all annual returns as were required to be filed have been timely filed.
Copies of all such annual returns for
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 54
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the three (3) plan years immediately preceding the current date have been
delivered to UPC.
(d) Listed on Schedule 5.25(d) hereto are all Employee
Pension Benefit Plans, Employee Welfare Benefit Plans, and Benefit Arrangements
which provide compensation or benefits which become effective upon a change in
control of GSSC or any GSSC Subsidiary, including, but not limited to,
additional compensation or benefits, or acceleration in the amount or timing of
payment of compensation or benefits which had become effective prior to the
date of such acceleration. Except as disclosed in Schedule 5.25(d) hereto,
there is no Employee Pension Benefit Plan, Employee Welfare Benefit Plan, or
Benefit Arrangement covering any employee of GSSC or any GSSC Subsidiary which
individually or collectively could give rise to the payment of any amount which
would constitute an "excess parachute payment", as such term is defined in
Section 280G of the Internal Revenue Code and Regulations proposed pursuant to
that section.
(e) Except as described in Schedule 5.25(e) hereto, each
Employee Pension Benefit Plan, Employee Welfare Benefit Plan, or Benefit
Arrangement and each personal services contract, fringe benefit, consulting
contract or similar arrangement with or for the benefit of any officer,
director, employee, or other person may be terminated by GSSC (or by GSSC as
the Surviving Corporation) within a period of no more than thirty (30) days
following the effective time of the merger, without payment of any amount as a
penalty, bonus, premium, severance pay, or other compensation for such
termination. No limitation on the right to terminate any such plan has been
communicated by GSSC or its Subsidiaries to employees, former employees, or
retirees who are or may be participants in or beneficiaries of such plans or
arrangements. Except as described in Schedule 5.25(e) hereto, each Employee
Pension Benefit Plan which is qualified under Section 401(a) of the Internal
Revenue Code as a qualified defined benefit pension plan permits the reversion
of excess assets to the employer maintaining the plan or its successors or
assigns upon a plan termination and such provision has been included in the
Employee Pension Benefit Plan for the period required under ERISA Section
4044(d).
(f) Except as disclosed in Schedule 5.25(f) hereto,
neither GSSC nor any GSSC Subsidiary has received notice from any governmental
agency of any alleged violation of applicable laws or of any prospective audit
or other investigation for the purpose of reviewing compliance with applicable
laws with respect to any Employee Pension Benefit Plan, Employee Welfare
Benefit Plan or Benefit Arrangement.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 55
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Except as disclosed in Schedule 5.25(f) hereto, no
suits, actions or claims have been filed in any court of law or with any
governmental agency regarding the operation of any Employee Pension Benefit
Plan, Employee Welfare Benefit Plan, or Benefit Arrangement and no such
additional suits, actions, or claims are, to the best information, knowledge
and belief of GSSC, anticipated to be filed.
5.26 Material Contracts. Except as reflected in the
Audited Financial Statements of GSSC, or as described in Schedule 5.26 hereto,
neither GSSC nor any GSSC Subsidiary, nor any of their respective assets,
businesses, or operations, is as of the date of this Reorganization Agreement a
party to, or is bound or obligated by, or receives benefits under any contract
or agreement or amendment thereto that in each case would (assuming that each
were a reporting company under the 1934 Act, whether or not it is so
registered) be required to be filed as an exhibit to an Annual Report on Form
10-K filed by GSSC as of the date of this Reorganization Agreement that has not
already been filed as an exhibit to GSSC's Form 10-K filed for the fiscal year
ended December 31, 1993, or in any other SEC Document filed prior to the date
of this Reorganization Agreement. Set forth on Schedule 5.26 hereto is an
accurate and complete list and true and complete copies of all contracts to
which GSSC, SBM or SBL are a party and having a value in excess of $100,000.
5.27 Material Contract Defaults. To the best of the
knowledge, information and belief of GSSC, SBM and SBL, neither GSSC nor any
GSSC Subsidiary is in default in any respect under any contract, agreement,
commitment, arrangement, lease, insurance policy, or other instrument to which
it is a party or 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 which default is reasonably expected to have
either individually or in the aggregate a material adverse effect on GSSC or
any GSSC Subsidiary on a consolidated basis, 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.
5.28 Reports. Since December 31, 1989, GSSC, SBM and SBL
have filed all reports and statements, together with any amendments required to
be made with respect thereto, that they were required to file with (i) the MSBD
or the LOFI; (ii) the Federal Reserve, including, but not limited to, Reports
on FR Y-6 and FR Y-9; (iii) the FDIC, (iv) the SEC, including, but not limited
to, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and proxy
statements; and (vi) any other applicable federal or state securities or
banking authorities (except, in the case of federal or state securities
authorities, filings that
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 56
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are not material). As of their respective dates, each of such reports and
documents, including the financial statements, exhibits and schedules thereto,
complied in all material respects with all of the requirements of their
respective forms and all of the statutes, rules, and regulations enforced or
promulgated by the Regulatory Authority with which they were filed. All such
reports were true and complete in all material respects and did not contain any
untrue statement as stated including any amendments thereto of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading. GSSC has previously provided to UPC true and
correct copies of all such reports filed by GSSC, SBM or SBL after December 31,
1989.
5.29 Exchange Act and Listing Filings.
(a) The outstanding shares of GSSC Common Stock are registered
with the SEC pursuant to the 1934 Act and GSSC has filed with the SEC all
material forms and reports required by law to be filed by GSSC with the SEC,
which forms and reports, taken as a whole, are true and correct in all material
respects, and do not misstate a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading.
(b) The outstanding shares of GSSC Common Stock are listed for
trading on the NASDAQ (under the symbol "GSSC") pursuant to the listing rules
of the NASDAQ and GSSC has filed with the NASDAQ all material forms and reports
required by law to be filed by GSSC with the NASDAQ, which forms and reports,
taken as a whole, are true and correct in all material respects, and do not
misstate a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading.
5.30 Statements True and Correct. None of the information
prepared by, or on behalf of, GSSC or any GSSC Subsidiary regarding GSSC, SBM
or any other GSSC Subsidiary included or to be included in the Proxy Statement
to be mailed to GSSC's Stockholders in connection with the GSSC Stockholders
Meeting, and any other documents to be filed with the SEC, or any other
Regulatory Authority in connection with the transactions contemplated herein,
at the respective times such documents are filed, and, with respect to the
Proxy Statement, when first mailed to the GSSC Stockholders, be false or
misleading with respect to any material fact, or omit to state any material
fact necessary to make the statements therein, in light of the
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 57
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circumstances under which they were made, not misleading, or, in the case of
the Proxy Statement or any amendment thereof or supplement thereto, at the time
of the GSSC Stockholders Meeting, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of any
proxy for the GSSC Stockholders Meeting. All documents which GSSC or any GSSC
Subsidiary is responsible for filing with the SEC or any other Regulatory
Authority in connection with the transactions contemplated hereby will comply
as to form in all material respects with the provisions of applicable law,
including applicable provisions of the Securities Laws and the rules and
regulations issued thereunder.
ARTICLE 6
COVENANTS OF UPC
6.1 Proxy Statement; UPC Shareholder Approval. UPC shall
call the UPC Shareholders Meeting to be held as soon as reasonably practicable
after the date of this Reorganization Agreement and the Federal Reserve shall
have entered its Order approving the transactions contemplated in this
Reorganization Agreement, for the purpose of (i) approving this Reorganization
Agreement and the Plan of Merger, and (ii) such other related matters as it
deems appropriate. In connection with the UPC Shareholders Meeting, (i) UPC
shall, with GSSC's assistance, prepare a Proxy Statement to be filed with the
SEC and with any other appropriate Regulatory Authority; shall mail or cause to
be mailed such Proxy Statement to the UPC Shareholders and shall provide GSSC
the opportunity to review and comment on the Proxy Statement at least five (5)
business days prior to the filing of the Proxy Statement with the Regulatory
Authorities for prior review and at least five (5) business days prior to the
mailing of the Proxy Statement to the UPC Shareholders; (ii) the Parties shall
furnish to each other all information concerning them that the other Party may
reasonably request in connection with the preparation of such Proxy Statement;
(iii) the Board of Directors of UPC shall recommend (subject to compliance with
its legal and fiduciary duties as advised by counsel) to UPC Shareholders the
approval of this Reorganization Agreement and the Plan of Merger; and (iv) UPC
shall use its best efforts, subject to compliance with its legal and fiduciary
duty as advised by counsel, to obtain such UPC Shareholders' approvals.
6.2 Regulatory Approvals. Within sixty (60) days after
execution of this Reorganization Agreement, UPC shall file any and all
applications with the appropriate government Regulatory Authorities in order to
obtain the Government
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 58
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Approvals and shall take such other actions as may be reasonably required to
consummate the transactions contemplated in this Reorganization Agreement and
the Plan of Merger with reasonable promptness. UPC shall pay all fees and
expenses arising in connection with such applications for regulatory approval.
UPC agrees to provide the appropriate Regulatory Authorities with the
information required by such authorities in connection with UPC's applications
for regulatory approval and UPC agrees to use its best efforts to obtain such
regulatory approvals, and any other approvals and consents as may be required
for the Closing, as promptly as practicable; provided, however, that nothing in
this Section 6.2 shall be construed to obligate UPC to take any action to meet
any condition required to obtain prior regulatory approval if UPC shall, in
UPC's reasonable judgment, deem such condition to be unreasonable or
inconsistent with previous regulatory approvals received by UPC in transactions
of this type and to constitute a significant impediment upon UPC's ability to
carry on its business or acquisition programs or to require UPC to increase
UPC's capital ratios to amounts in excess of the Federal Reserve's minimum
capital ratio guidelines which may be in effect from time to time. UPC shall
not knowingly take any action, or omit to take any action during the term of
this Reorganization Agreement which would adversely affect the receipt by UPC
of the Government Approvals or adversely affect the ability of UPC to perform
its obligations under this Reorganization Agreement. Subject to the terms and
conditions of this Reorganization Agreement, UPC and INTERIM agree to use all
reasonable efforts and to take, or to cause to be taken, all actions, and to
do, or to cause to be done, all things necessary, proper, or advisable under
applicable laws and regulations to consummate and make effective, with
reasonable promptness after the date of this Reorganization Agreement, the
transactions contemplated by this Reorganization Agreement, including, without
limitation, using reasonable efforts to lift or rescind any injunction or
restraining or other order adversely affecting the ability of the Parties to
consummate the transactions contemplated by this Reorganization Agreement. UPC
shall use, and shall cause each of its Subsidiaries to use, its best efforts to
obtain consents of all third parties and Regulatory Authorities necessary or
desirable for the consummation of each of the transactions contemplated by this
Reorganization Agreement.
6.3 Reservation, Listing and Registration of UPC Common Stock
under the Securities Laws. UPC shall reserve for issuance that number of
shares of UPC Common Stock necessary to (i) satisfy the Consideration to be
delivered to the GSSC Record Holders at the Effective Time of the Merger and
(ii) provide shares of UPC Common Stock which will be issued upon the exercise
of options granted under the GSSC Key Employees Stock Plan and
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 59
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which are outstanding immediately prior to Effective Time of the Merger. UPC
shall cooperate with GSSC in the preparation of the GSSC Proxy Statement to be
used at the GSSC Stockholders Meeting (and which shall serve also as UPC's
prospectus with respect to UPC's issuance of shares of the UPC Common Stock)
and shall cause a registration statement on the appropriate form of the SEC to
be prepared and filed so as to cause any shares of UPC Common Stock which may
be delivered to the GSSC Record Holders in payment of the Consideration to be
registered under the 1933 Act and to be duly qualified under appropriate state
securities laws. UPC shall also list for trading on the NYSE the shares of UPC
Common Stock so delivered. Such reservation, registration, qualification and
listing shall be effected prior to the Closing. As soon as practicable after
the issuance of all Governmental Approvals, but no later than thirty days
following such date, UPC shall file with the SEC a Registration Statement on
Form S-8 to register the shares of UPC Common Stock that will be issued to
holders of options granted under the GSSC Key Employees Stock Plan. UPC shall
use its best efforts to have such Registration Statement declared effective as
promptly as practicable.
6.4 Employee Benefits. Following the consummation of the
transactions contemplated herein, UPC shall not be obligated to make further
contributions to any of the Employee Plans or Benefit Arrangements of GSSC or
the GSSC Subsidiaries and all employees of GSSC and the GSSC Subsidiaries
immediately prior to the Effective Time of the Merger who shall continue as
employees of GSSC as the Surviving Corporation or as employees of any other UPC
Subsidiary will be afforded the opportunity to participate in any employee
benefit plans maintained by UPC or UPC's Subsidiaries, including but not
limited to, any "employee benefit plan," as that term is defined in ERISA, on
an equal basis with employees of UPC or any UPC Subsidiaries with comparable
positions, compensation, and tenure. Service with GSSC or with any GSSC
Subsidiary prior to the Effective Time of the Merger by former employees of
GSSC or any GSSC Subsidiary will be deemed service with UPC for purposes of
determining eligibility for participation and vesting in such employee benefit
plans of UPC and UPC's Subsidiaries. In its sole discretion, UPC may
elect to postpone until the first day of July next following the Effective Time
of the Merger the participation of the employees of GSSC and GSSC's
Subsidiaries in the employee benefit plans maintained by UPC or UPC's
Subsidiaries; provided, however, during any such postponement period, the GSSC
Employee Plans and all related employee benefit plans shall continue in full
force and effect, (including the continued receipt of all customary corporate
contributions in accordance with the past practice of GSSC, SBM and SBL for the
period prior to the termination of the plans), except as expressly modified or
amended by the terms of this
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 60
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Reorganization Agreement, or until such time as the plans are replaced by
benefit plans maintained by UPC.
6.5 Conduct of Business; Notice of Adverse Change. UPC shall
not knowingly engage in any activity which would (i) prohibit UPC or INTERIM
from delivering the Consideration to the Exchange Agent at Closing; (ii)
prevent UPC or INTERIM from consummating the transactions contemplated in this
Reorganization Agreement; (iii) prevent or impede the ability of UPC to account
for the Merger as a pooling of interests on the financial statements of UPC;
and (iv) prevent or impede the ability of UPC, GSSC and the GSSC Record Holders
to accomplish the Merger as a tax-free reorganization and, except with respect
to cash received in lieu of a fractional share of UPC Common Stock, on a
tax-free basis to the GSSC Record Holders. Upon receipt of UPC Shareholder
Approval and the satisfaction (or lawful waiver by UPC) of all conditions
precedent, UPC shall vote the shares of INTERIM in favor of the Merger. UPC
shall notify GSSC in writing immediately upon becoming aware of any material
adverse change in the financial condition or prospects of UPC or of any event
which would prohibit UPC's performance under the terms of this Reorganization
Agreement.
ARTICLE 7
COVENANTS OF GSSC, SBM AND SBL
7.1 Proxy Statement; GSSC Stockholder Approval. GSSC shall
call the GSSC Stockholders Meeting to be held as soon as reasonably practicable
after the date of this Reorganization Agreement and the Federal Reserve shall
have entered its Order approving the transactions contemplated in this
Reorganization Agreement, for the purpose of (i) approving this Reorganization
Agreement and the Plan of Merger, and (ii) such other related matters as it
deems appropriate. In connection with the GSSC Stockholders Meeting, (i) GSSC
shall, with UPC's assistance, prepare the Proxy Statement to be filed with the
SEC and with any other appropriate Regulatory Authority; shall mail or cause to
be mailed such Proxy Statement to the GSSC Stockholders and shall provide UPC
the opportunity to review and comment on the Proxy Statement at least five (5)
business days prior to the filing of the Proxy Statement with the Regulatory
Authorities for prior review and at least five (5) business days prior to the
mailing of the Proxy Statement to the GSSC Stockholders; (ii) the Parties shall
furnish to each other all information concerning them that the other Party may
reasonably request in connection with the preparation of such Proxy Statement;
(iii) the Board of Directors of GSSC shall recommend (subject to compliance
with its legal and fiduciary duties as advised by counsel) to the GSSC
Stockholders
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 61
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the approval of this Reorganization Agreement and the Plan of Merger; and (iv)
GSSC shall use its best efforts, subject to compliance with its legal and
fiduciary duty as advised by counsel, to obtain such GSSC Stockholders'
approvals.
7.2 Conduct of Business -- Affirmative Covenants. Unless
the prior written consent of UPC shall have been obtained, which consent will
not be unreasonably withheld by UPC and shall be forthcoming by UPC within five
(5) Business Days from the submission of a written request by GSSC therefor
and, except as otherwise contemplated herein:
(a) Except as may be required by statute, rule or
regulation, GSSC, SBM and SBL shall, and shall cause each GSSC Subsidiary to:
(i) Operate its business only in the
usual, regular, and ordinary course;
(ii) Preserve intact its business
organizations and assets and to maintain its rights and franchises;
(iii) Take no action, unless otherwise
required by law, rules or regulation, that would (A) adversely affect
the ability of any of them or UPC to obtain any necessary approvals of
Regulatory Authorities required to consummate the transactions
contemplated by this Reorganization Agreement, or (B) adversely affect
the ability of such Party to perform its covenants and agreements
under this Reorganization Agreement;
(iv) Except as they may terminate in
accordance with their terms, keep in full force and effect, and not
default in any of their obligations under, all material contracts;
(v) Keep in full force and effect
insurance coverage with responsible insurance carriers which is
reasonably adequate in coverage and amount for companies the size of
GSSC or such GSSC Subsidiary and for the businesses and properties
owned by each and in which each is engaged, to the extent that such
insurance is reasonably available;
(vi) Use its best efforts to retain SBM's
and SBL's present customer base and to facilitate the retention of
such customers by SBM and SBL and their branches after the Effective
Time of the Merger; and
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 62
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(vii) Maintain, renew, keep in full force
and effect, and preserve its business organization and material rights
and franchises, permits and licenses, and to use its best efforts to
maintain positive relations with its present employees so that such
employees will continue to perform effectively and will be available
to GSSC, SBM, SBL or UPC and UPC's Subsidiaries at and after the
Effective Time of the Merger, and to use its best efforts to maintain
its existing, or substantially equivalent, credit arrangements with
banks and other financial institutions and to assure the continuance
of SBM's and SBL's customer relationships;
(b) GSSC, SBM and SBL agree to use their best
efforts to assist UPC in obtaining the Government Approvals necessary to
complete the transactions contemplated hereby and do not know of any reason why
such Government Approvals can not be obtained, and GSSC, SBM and SBL shall
provide to UPC or to the appropriate governmental authorities all information
reasonably required to be submitted in connection with obtaining such
approvals;
(c) GSSC, SBM and SBL, at their own cost and
expense, shall use their best efforts to secure all necessary consents and all
consents and releases, if any, required of GSSC, SBM, SBL or third parties and
shall comply with all applicable laws, regulations and rulings in connection
with this Reorganization Agreement and the consummation of the transactions
contemplated hereby;
(d) At all times to and including, and as of, the
Effective Time of the Merger, GSSC, SBM and SBL shall inform UPC in writing of
any and all facts necessary to amend or supplement the representations and
warranties made herein and the Schedules attached hereto as necessary so that
the information contained herein and therein will accurately reflect the
current status of GSSC, SBM and SBL; provided, however, that any such updates
to Schedules shall be required prior to the Closing only with respect to
matters which represent material changes to the Schedules and the information
contained therein; and provided further, that before such amendment, supplement
or update may be deemed to be a part of this Reorganization Agreement, UPC
shall have agreed in writing to each amendment, supplement or update to the
Schedules made subsequent to the date of this Reorganization Agreement as an
amendment to this Reorganization Agreement;
(e) On and after the Closing Date, GSSC, SBM and
SBL shall give such further assistance to UPC and shall execute, acknowledge
and deliver all such documents and instruments as UPC may reasonably request
and take such further action as may be
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 63
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necessary or appropriate effectively to consummate the transactions
contemplated by this Reorganization Agreement;
(f) Between the date of this Reorganization
Agreement and the Closing Date, GSSC, SBM and SBL shall afford UPC and its
authorized agents and representatives reasonable access during normal business
hours to the properties, operations, books, records, contracts, documents, loan
files and other information of, or relating to GSSC, SBM and SBL. GSSC, SBM
and SBL shall provide reasonable assistance to UPC in its investigation of
matters relating to GSSC, SBM and SBL; and
(g) Subject to the terms and conditions of this
Reorganization Agreement, GSSC, SBM and SBL agree to use all reasonable efforts
and to take, or to cause to be taken, all actions, and to do, or to cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective, with reasonable promptness after
the date of this Reorganization Agreement, the transactions contemplated by
this Reorganization Agreement, including, without limitation, using reasonable
efforts to lift or rescind any injunction or restraining or other order
adversely affecting the ability of the Parties to consummate the transaction
contemplated by this Reorganization Agreement. GSSC shall use, and shall cause
each of its Subsidiaries to use, its best efforts to obtain consents of all
third parties and Regulatory Authorities necessary or desirable for the
consummation of each of the transactions contemplated by this Reorganization
Agreement.
7.3 Conduct of Business -- Negative Covenants. From the
date of this Reorganization Agreement until the earlier of the Effective Time
of the Merger or the termination of this Reorganization Agreement, GSSC, SBM
and SBL covenant and agree that they will neither do, nor agree or commit to
do, nor permit any GSSC Subsidiary to do or commit or agree to do, any of the
following without the prior written consent of the chief executive officer,
president, or chief financial officer of UPC, which consent will not be
unreasonably withheld, or except as expressly permitted by this Reorganization
Agreement:
(a) Except as expressly contemplated by this
Reorganization Agreement or the Plan of Merger, amend its Certificate of
Incorporation or Bylaws; or
(b) Impose, or suffer the imposition, on any
share of capital stock held by it or by any of its Subsidiaries of any lien,
charge, or encumbrance, or permit any such lien, charge, or encumbrance to
exist; or
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 64
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(c) (i) Repurchase, redeem, or otherwise acquire or
exchange, directly or indirectly, any shares of its capital stock or other
equity securities or any securities or instruments convertible into any shares
of its capital stock, or any rights or options to acquire any shares of its
capital stock or other equity securities, except in satisfaction of any
exercised GSSC Stock Options or as expressly permitted by this Reorganization
Agreement or the Plan of Merger; or (ii) split or otherwise subdivide its
capital stock; or (iii) recapitalize in any way; or (iv) declare a stock
dividend on the GSSC Common Stock; or (v) pay or declare a cash dividend or
make or declare any other type of distribution on the GSSC Common Stock except
as expressly permitted by Section 8.2(i)(vi) of this Reorganization Agreement
or the Plan of Merger; or
(d) Except as expressly permitted by this
Reorganization Agreement, acquire direct or indirect control over any
corporation, association, firm, organization or other entity, other than in
connection with (i) mergers, acquisitions or other transactions approved in
writing by UPC, (ii) internal reorganizations or consolidations involving
existing Subsidiaries, (iii) foreclosures in the ordinary course of business
and not knowingly exposing it to liability by reason of Hazardous Substances,
(iv) acquisitions of control in its fiduciary capacity, or (v) the creation of
new subsidiaries organized to conduct or continue activities otherwise
permitted by this Reorganization Agreement; or
(e) Except as expressly permitted by this
Reorganization Agreement or the Plan of Merger, to (i) issue, sell, agree to
sell, or otherwise dispose of or otherwise permit to become outstanding any
additional shares of GSSC Common Stock (except in satisfaction of any exercised
GSSC Stock Options), or any other capital stock of GSSC or of any GSSC
Subsidiary, or any stock appreciation rights, or any option, warrant,
conversion, call, scrip, or other right to acquire any such stock, or any
security convertible into any such stock, unless any such shares of such stock
are directly sold or otherwise directly transferred to GSSC or any GSSC
Subsidiary, or are issued in connection with any of the above-described
securities encompassed in the GSSC Option Plans, or (ii) sell, agree to sell,
or otherwise dispose of any substantial part of the assets or earning power of
GSSC or of any GSSC Subsidiary; or (iii) sell, agree to sell, or otherwise
dispose of any asset of GSSC or any GSSC Subsidiary other than in the ordinary
course of business for reasonable and adequate consideration; or (iv) buy,
agree to buy or otherwise acquire a substantial part of the assets or earning
power of any other Person or entity; or
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 65
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(f) Incur, or permit any GSSC Subsidiary to incur,
any additional debt obligation or other obligation for borrowed money other
than (i) in replacement of existing short-term debt with other short-term debt
of an equal or lesser amount, (ii) financing of banking related activities
consistent with past practices, or (iii) indebtedness of GSSC or any GSSC
Subsidiary to SBM, SBL or another GSSC Subsidiary in excess of an aggregate of
$50,000 (for GSSC and its Subsidiaries on a consolidated basis) except in the
ordinary course of the business of GSSC or such GSSC Subsidiary consistent with
past practices (and such ordinary course of business shall include, but shall
not be limited to, creation of deposit liabilities, entry into repurchase
agreements or reverse repurchase agreements, purchases or sales of federal
funds, Federal Reserve advances, FHLB advances, and sales of certificates of
deposit); or
(g) Except as expressly permitted by the terms of
this Reorganization Agreement, grant any increase in compensation or benefits
to any of its employees or officers, except in accordance with past practices
or as required by law; pay any bonus except in accordance with past practices;
enter into any severance agreements with any of its officers or employees;
grant any material increase in fees or other increases in compensation or other
benefits to any director of GSSC or of any GSSC Subsidiary; or effect any
change in retirement benefits for any class of its employees or officers,
unless such change is required by applicable law; or
(h) Except as expressly required by the terms of
this Reorganization Agreement, amend any existing employment contract between
it and any person having a salary thereunder in excess of $30,000 per year
(unless such amendment is required by law) to increase the compensation or
benefits payable thereunder; or to enter into any new employment contract with
any person having an annual salary thereunder in excess of $30,000 that GSSC,
SBM or SBL (or their respective successors) do not have the unconditional right
to terminate without liability (other than liability for services already
rendered), at any time on or after the Effective Time of the Merger; or
(i) Except as expressly required by the terms of
this Reorganization Agreement, adopt any new employee benefit plan or terminate
or make any material change in or to any existing employee benefit plan other
than any change that is required by law or that, in the opinion of counsel, is
necessary or advisable to maintain the tax-qualified status of any such plan;
or
(j) Enter into any new service contracts, purchase
or sale agreements or lease agreements having a value in
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 66
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excess of One Hundred Thousand Dollars ($100,000) to GSSC or any GSSC
Subsidiary; or
(k) Make any capital expenditure except for ordinary
purchases, repairs, renewals or replacements; or
(l) Enter into any transactions other than in the
ordinary course of business; or
(m) Other than in the ordinary course of business,
grant or commit to grant any new extension of credit to any officer, director
or known holder of 2% or more of the outstanding GSSC Common Stock, or to any
corporation, partnership, trust or other entity controlled by any such person,
if such extension of credit, together with all other credits then outstanding
to the same borrower and all affiliated persons of such borrower, would exceed
two percent (2%) of the capital of GSSC or amend the terms of any such credit
outstanding on the date hereof.
7.4 Conduct of Business -- Certain Actions.
(a) Except to the extent necessary to consummate the
transactions specifically contemplated by this Reorganization Agreement, GSSC,
SBM and SBL shall not, and shall use their respective best efforts to ensure
that their respective directors, officers, employees, and advisors do not,
directly or indirectly, institute, solicit, or knowingly encourage (including
by way of furnishing any information not legally required to be furnished) any
inquiry, discussion, or proposal, or participate in any discussions or
negotiations with, or provide any confidential or non-public information to,
any corporation, partnership, person or other entity or group (other than to
UPC or any UPC Subsidiary) concerning any "Acquisition Proposal" (as defined
below), except for actions reasonably considered by the Board of Directors of
GSSC, based upon the advice of outside legal counsel, to be required in order
to fulfill its fiduciary obligations. GSSC shall notify UPC immediately if any
Acquisition Proposal has been or should hereafter be received by GSSC, SBM or
SBL, such notice to contain, at a minimum, the identity of such persons, and,
subject to disclosure being consistent with the fiduciary obligations of GSSC's
Board of Directors, a copy of any written inquiry, the terms of any proposal or
inquiry, any information requested or discussions sought to be initiated, and
the status of any reports, negotiations or expressions of interest. For
purposes of this Section, "Acquisition Proposal" means any proposed tender
offer, agreement, understanding or other proposal pursuant to which any
corporation, partnership, Person or other entity or group, other than UPC or
any UPC Subsidiary, would directly or indirectly (i)
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 67
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acquire or participate in a merger, share exchange, consolidation or any other
business combination involving GSSC, SBM or SBL; (ii) acquire the right to vote
ten percent (10%) or more of the GSSC Common Stock, SBM Common Stock or SBL
Common Stock; (iii) acquire a significant portion of the assets or earning
power of GSSC, SBM or SBL; or (iv) acquire in excess of ten percent (10%) of
the outstanding GSSC Common Stock, SBM Common Stock or SBL Common Stock.
(b) As a condition of and as an inducement to UPC's
entering into this Reorganization Agreement, GSSC, SBM and SBL covenant,
acknowledge, and agree that it shall be a specific, absolute, and
unconditionally binding condition precedent to either GSSC's, SBM's or SBL's
entering into a letter of intent, agreement in principle, or definitive
agreement (whether or not considered binding, non-binding, conditional or
unconditional) with any third-party with respect to an Acquisition Proposal, or
supporting or indicating an intent to support an Acquisition Proposal, other
than this Reorganization Agreement and the transactions contemplated in this
Reorganization Agreement, regardless of whether GSSC, SBM or SBL has otherwise
complied with the provisions of Section 7.4(a) hereof, that GSSC or such
third-party which is a party to any Acquisition Proposal shall have paid UPC
the sum of Twelve Million and No/100 Dollars ($12,000,000), which sum
represents the (i) direct costs and expenses (including, but not limited to,
fees and expenses incurred by UPC's financial or other consultants, printing
costs, investment bankers, accountants, and counsel) incurred by or on behalf
of UPC in negotiating and undertaking to carry out the transactions
contemplated by this Reorganization Agreement; (ii) indirect costs and expenses
of UPC in connection with the transactions contemplated by this Reorganization
Agreement, including UPC's management time devoted to negotiation and
preparation for the transactions contemplated by this Reorganization Agreement;
and (iii) UPC's loss as a result of the transactions contemplated by this
Reorganization Agreement not being consummated. Accordingly, GSSC, SBM and SBL
hereby jointly and severally stipulate and covenant that prior to GSSC's, SBM's
or SBL's entering into a letter of intent, agreement in principle, or
definitive agreement, (whether binding or non-binding, conditional or
unconditional) with any third-party with respect to an Acquisition Proposal or
supporting or indicating an intent to support an Acquisition Proposal, either
GSSC or such third-party shall have paid to UPC the amount set forth above in
immediately available funds to satisfy the specific, absolute, and
unconditionally binding condition precedent imposed by this Section 7.4.
Notwithstanding anything in this Section 7.4(b) to the contrary, in the event
such Acquisition Proposal should be the result of an unsolicited offer or
takeover of GSSC, SBM or SBL, any sums due UPC by GSSC pursuant to the terms of
this
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 68
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Section 7.4 shall be paid by GSSC to UPC at the closing of the transactions set
forth in such Acquisition Proposal and all obligations of UPC to hold the
Closing by the Target Date shall be tolled until such time as the transactions
set forth in any such Acquisition Proposal shall have been consummated or until
such time as the Acquisition Proposal shall have expired plus such reasonable
time as UPC shall require. UPC and INTERIM each acknowledges that under no
circumstances shall any officer or director of GSSC, SBM or SBL (unless such
officer or director shall have an interest in a potential acquiring party in
any Acquisition Proposal) be held personally liable to UPC or INTERIM for any
amount of the foregoing payment. On payment of such amount to UPC, UPC and
INTERIM shall have no cause of action or claim (either in law or equity)
whatsoever against GSSC, SBM or SBL, or any officer or director of GSSC, SBM or
SBL, with respect to or in connection with such Acquisition Proposal, this
Reorganization Agreement or the Plan of Merger.
(c) The requirements, conditions, and obligations
imposed by this Section 7.4 shall continue in full force and effect from the
date of this Reorganization Agreement until October 1, 1995, unless and until
the earlier of any of the following events shall occur, in which event,
thereafter neither GSSC, SBM nor SBL shall be obligated to pay the amount
required by this Section 7.4 as a condition precedent to such transaction:
(1) This Reorganization Agreement shall have been terminated (i)
mutually by the Parties pursuant to Section 9.1(a) of this
Reorganization Agreement; (ii) by UPC and INTERIM pursuant to
Section 9.1(b) of this Reorganization Agreement; (iii) by UPC
and INTERIM or GSSC, SBM and SBL pursuant to Section 9.1(c) of
this Reorganization Agreement; (iv) by UPC and INTERIM or
GSSC, SBM and SBL pursuant to Section 9.1(d) of this
Reorganization Agreement; (v) by UPC and INTERIM or GSSC, SBM
and SBL pursuant to Section 9.1(e) of this Reorganization
Agreement, and in the case of termination pursuant to Section
9.1(e), only on the basis of the failure to satisfy the
conditions enumerated in subparagraph (2) below; (vi) by UPC
and INTERIM pursuant to Section 9.1(f) of this Reorganization
Agreement; (vii) by UPC and INTERIM or GSSC, SBM and SBL
pursuant to Section 9.1(g) of this Reorganization Agreement;
(viii) by UPC and INTERIM pursuant to Section 9.1(h) of this
Reorganization Agreement; (ix) by UPC and INTERIM pursuant to
Section 9.1(i) of this Reorganization Agreement; and (x) by
UPC and INTERIM or GSSC, SBM and SBL pursuant to Section
9.1(j) or Section 9.1(k) of this Reorganization Agreement; or
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 69
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(2) In the event the Merger should not be consummated as a result
of the failure to satisfy any of the following conditions:
(i) Material inaccuracy (without waiver thereof) of
representations and warranties of UPC as contemplated
by the provisions of Section 8.1(b) of this
Reorganization Agreement;
(ii) Noncompliance by UPC or INTERIM with their
respective obligations as required by the provisions
of Section 8.1(a) of this Reorganization Agreement;
(iii) The failure by UPC or INTERIM to effect all
corporate action necessary on their respective parts
as required by the provisions of Section 8.1 of this
Reorganization Agreement or to satisfy the conditions
set forth in Sections 8.1(d) or 8.1(g) of this
Reorganization Agreement;
(iv) The failure to receive the requisite approvals
as required by the provisions of Section 8.3(b) of
this Reorganization Agreement other than any such
failure arising out of any action or inaction on the
part of GSSC, SBM or SBL;
(v) The occurrence of material legal proceedings as
contemplated by the provisions of Section 8.3(a) of
this Reorganization Agreement;
(vi) The failure on the part of the appropriate
officers of UPC to deliver the certificates set forth
in Section 8.1(c) of this Reorganization Agreement,
or the failure on the part of counsel to UPC to
deliver the requisite opinion required by the
provisions of Section 8.1(e) of this Reorganization
Agreement;
(vii) UPC shall have determined not to consummate the
Merger pursuant to Sections 8.2(d), 8.2(f), 8.2(i),
8.2(k) or 8.2(l);
(viii) The failure to receive the fairness opinion of
either (a) GSSC's independent financial adviser as
required by the provisions of Section 8.1(f) of this
Reorganization Agreement except if such failure is
based on the receipt by GSSC of an Acquisition
Proposal from a third party or (b)
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 70
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UPC's independent financial adviser as required by
Section 8.2(n) of this Reorganization Agreement;
(ix) The failure to receive the approval of the UPC
Shareholders as required by the provisions of Section
8.3(d) of this Reorganization Agreement;
(x) The failure of the registration statement to be
declared effective or if the registration statement
is subject to a stop order of the SEC or any state
securities commission as required by Section 8.3(c)
of this Reorganization Agreement and such failure is
based solely on a review by the SEC of the material
presented by UPC in the registration statement or an
action or inaction on the part of UPC; or
(xi) The failure of any Affiliate of GSSC to execute
an Affiliate Letter as required by Section 8.3(m) of
this Reorganization Agreement (unless such
requirement is waived by UPC) but only if the failure
of any Affiliates of GSSC to execute the Affiliate
Letter would not potentially disqualify the
transactions contemplated by this Reorganization
Agreement from qualifying for pooling-of-interests
accounting treatment.
ARTICLE 8
CONDITIONS TO CLOSING
8.1 Conditions to the Obligations of GSSC. Unless waived
in writing by GSSC, the obligation of GSSC to consummate the transaction
contemplated by this Reorganization Agreement is subject to the satisfaction at
or prior to the Closing Date of the following conditions:
(a) Performance. Each of the material acts and
undertakings of UPC and INTERIM to be performed at or prior to the Closing Date
pursuant to this Reorganization Agreement shall have been duly performed,
except for breaches of acts and undertakings which would not have, or would not
reasonably be expected to have, any material adverse effect on the business or
operations of UPC and the UPC Subsidiaries taken as a whole;
(b) Representations and Warranties. The
representations and warranties of UPC and INTERIM contained in Article 4 of
this Reorganization Agreement shall be true and complete, in all material
respects, on and as of the Effective
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 71
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Time of the Merger with the same effect as though made on and as of the
Effective Time of the Merger, except (i) for any such representations and
warranties made as of a specified date, which shall be true and correct in all
material respects as of such date and (ii) for breaches of representations and
warranties which would not have, or would not reasonably be expected to have, a
material adverse effect on the business or operations of UPC and the UPC
Subsidiaries taken as a whole;
(c) Documents. In addition to the other
deliveries of UPC or INTERIM described elsewhere in this Reorganization
Agreement, GSSC shall have received the following documents and instruments:
(i) a certificate signed by the
Secretary or an assistant secretary of UPC and INTERIM dated as of the
Closing Date certifying that:
(A) UPC's and INTERIM's respective
Boards of Directors, shareholders and stockholders have duly
adopted resolutions (copies of which shall be attached to such
certificate) approving the substantive terms of this
Reorganization Agreement (including the Plan of Merger) and
authorizing the consummation of the transactions contemplated
by this Reorganization Agreement and certifying that such
resolutions have not been amended or modified and remain in
full force and effect;
(B) each person executing this
Reorganization Agreement on behalf of UPC or INTERIM is an
officer of UPC or INTERIM, as the case may be, holding the
office or offices specified therein, with full power and
authority to execute this Reorganization Agreement and any and
all other documents in connection with the Merger, and that
the signature of each person set forth on such certificate is
his or her genuine signature;
(C) the charter documents of UPC
and INTERIM attached to such certificate remain in full force
and effect; and
(D) UPC and INTERIM are in good
standing under their respective corporate charters; and
(ii) a certificate signed respectively by
duly authorized officers of UPC and INTERIM stating that the
conditions set forth in Section 8.1(a) and Section 8.1(b) of this
Reorganization Agreement have been fulfilled;
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 72
<PAGE> 180
(d) Consideration. GSSC shall have received a
certificate executed by an authorized officer of the Exchange Agent to the
effect that the Exchange Agent has received and holds in its possession proper
authorization to issue certificates evidencing shares of UPC Common Stock and
cash or other good funds sufficient to meet the obligations of UPC or INTERIM
to the GSSC Record Holders to deliver the Consideration under this
Reorganization Agreement and the Plan of Merger;
(e) Opinion of UPC's and INTERIM's Counsel. GSSC
shall have been furnished with an opinion of counsel to UPC and INTERIM, dated
as of the Closing Date, addressed to and in form and substance satisfactory to
GSSC, to the effect that:
(i) UPC is a Tennessee corporation duly
organized, validly existing and in good standing under the laws of the
State of Tennessee; and INTERIM is a Delaware corporation duly
organized, validly existing, and in good standing under the laws of
the State of Delaware;
(ii) this Reorganization Agreement has
been duly and validly authorized, executed and delivered by UPC, and
INTERIM and (assuming this Reorganization Agreement is a binding
obligation of GSSC, SBM and SBL) constitutes a valid and binding
obligation of UPC and INTERIM enforceable in accordance with its
terms, subject as to enforceability to applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and to the application of
equitable principles and judicial discretion;
(iii) neither the execution and delivery
by UPC or INTERIM of this Reorganization Agreement nor the execution,
delivery and performance of any of the documents to be executed and
delivered by UPC or INTERIM in connection herewith violates or
conflicts with UPC's, or INTERIM's corporate charters or bylaws or, to
the best of the knowledge, information and belief (without making
special inquiry) of such counsel, any material contracts, agreements
or other commitments of UPC or INTERIM;
(iv) to the knowledge of such counsel
after due inquiry, no consent or approval by any Governmental
Authority which has not already been obtained is required for
execution and delivery by UPC and INTERIM of this Reorganization
Agreement or any of the documents to be executed and delivered by UPC
or INTERIM in connection herewith; and
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 73
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(v) the shares of UPC Common Stock to be
issued in the names of the GSSC Record Holders and delivered in
exchange for their GSSC Common Stock will be duly authorized, validly
issued, fully paid and non-assessable.
Such opinion may (i) expressly rely as to matters of fact upon certificates
furnished by appropriate officers of UPC or INTERIM or appropriate government
officials; and (ii) in the case of matters of law governed by the laws of the
states in which they are not licensed, reasonably rely upon the opinions of
legal counsel duly licensed in such states and may be limited, in any event, to
Federal Law and the law of the State of Tennessee;
(f) Fairness Opinion. GSSC shall have received a
"fairness opinion" letter from its independent financial adviser to the effect
that, in the opinion of such adviser the Consideration to be received by the
GSSC Record Holders is fair to the GSSC Stockholders from a financial point of
view, and such "fairness opinion" shall not have been withdrawn prior to the
Closing Date, and GSSC shall have received an updated "fairness opinion" letter
from such advisers within five (5) days prior to the Closing Date reconfirming
the opinions provided in the initial "fairness opinion" letter; and
(g) Tax Opinion of McDonnell Boyd. GSSC shall
have received a written opinion substantially in the form of opinion set forth
in Schedule 8.1(g) hereto from the law firm of McDonnell Boyd to the effect
that the transactions contemplated by this Reorganization Agreement and the
Plan of Merger will constitute one or more tax-free reorganizations under
Section 368 of the Internal Revenue Code.
8.2 Conditions to the Obligations of UPC and INTERIM.
Unless waived in writing by UPC and INTERIM, the obligation of UPC and INTERIM
to consummate the transactions contemplated by this Reorganization Agreement is
subject to the satisfaction at or prior to the Closing Date of the following
conditions:
(a) Performance. Each of the material acts and
undertakings of GSSC, SBM and SBL to be performed at or before the Closing Date
pursuant to this Reorganization Agreement shall have been duly performed,
except for breaches of acts and undertakings which would not have, or would not
reasonably be expected to have, any material adverse effect on the business or
operations of GSSC and the GSSC Subsidiaries taken as a whole;
(b) Representations and Warranties. The
representations and warranties of GSSC, SBM and SBL contained in Article 5 of
this Reorganization Agreement shall be true and correct, in all material
respects, on and as of the Effective
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 74
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Time of the Merger with the same effect as though made on and as of the
Effective Time of the Merger, except (i) for any such representations and
warranties made as of a specified date, which shall be true and correct in all
material respects as of such date and (ii) for breaches or representations and
warranties which would not have, or would not reasonably be expected to have, a
material adverse effect on the business or operations of GSSC and the GSSC
Subsidiaries taken as a whole;
(c) Documents. In addition to the documents
described elsewhere in this Reorganization Agreement, UPC shall have received
the following documents and instruments:
(i) a certificate signed by the
Secretary or an assistant secretary of GSSC and SBL, and a certificate
signed by the Cashier of SBM dated as of the Closing Date certifying
that:
(A) GSSC's, SBM'S and SBL's
respective Boards of Directors and stockholders and
shareholders have duly adopted resolutions (copies of which
shall be attached to such certificate) approving the
substantive terms of this Reorganization Agreement (including
the Plan of Merger) and authorizing the consummation of the
transactions contemplated by this Reorganization Agreement and
certifying that such resolutions have not been amended or
modified and remain in full force and effect;
(B) each person executing this
Reorganization Agreement on behalf of GSSC, SBM or SBL, is an
officer of GSSC, SBM or SBL, as the case may be, holding the
office or offices specified therein, with full power and
authority to execute this Reorganization Agreement and any and
all other documents in connection with the Merger, and that
the signature of each person set forth on such certificate is
his or her genuine signature;
(C) the charter documents of GSSC,
SBM and SBL attached to such certificate remain in full force
and effect; and
(D) GSSC, SBM and SBL are in good
standing under their respective corporate charters; and
(ii) a certificate signed by the
respective President, Chief Executive Officer or an Executive Vice
President of each of GSSC, SBM and SBL stating that the
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 75
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conditions set forth in Section 8.2(a), Section 8.2(b) and 8.2(f) this
Reorganization Agreement have been satisfied;
(d) Destruction of Property. Between the date of
this Reorganization Agreement and the Closing Date, there shall have been no
damage to or destruction of real property, improvements or personal property of
GSSC, SBM or SBL which materially reduces the market value of such property,
and no zoning or other order, limitation or restriction imposed against the
same that might have a material adverse impact upon the operations, business or
prospects of GSSC, SBM or SBL; provided, however, that the availability of
insurance coverage shall be taken into account in determining whether there has
been such a material adverse impact or material reduction in market value. In
the event of such damage, destruction, order, limitation or restriction, UPC
and INTERIM may elect either (i) to close the contemplated transactions in
accordance with the terms of this Reorganization Agreement or (ii) to terminate
this Reorganization Agreement without penalty;
(e) Inspections Permitted. Between the date of
this Reorganization Agreement and the Closing Date, GSSC, SBM and SBL shall
have afforded UPC and its authorized agents and representatives reasonable
access during normal business hours to the properties, operations, books,
records, contracts, documents, loan files and other information of or relating
to GSSC, SBM and SBL. GSSC, SBM and SBL shall have caused all GSSC, SBM or SBL
personnel to provide reasonable assistance to UPC in its investigation of
matters relating to GSSC, SBM and SBL;
(f) No Material Adverse Change. No material
adverse change in the business, property, assets (including loan portfolios),
liabilities (whether absolute, contingent or otherwise), prospects, operations,
liquidity, income, or condition (financial or otherwise) of GSSC, SBM and SBL
taken as a whole shall have occurred since the date of this Reorganization
Agreement. In the event of such a material adverse change with respect to
GSSC, SBM or SBL, UPC may elect either (i) to close the contemplated
transactions in accordance with the terms of this Reorganization Agreement or
(ii) to terminate this Reorganization Agreement without penalty;
(g) Opinion of GSSC's Counsel. UPC shall have
been furnished with an opinion of legal counsel to GSSC, SBM and SBL, dated the
Closing Date, addressed to and in form and substance satisfactory to UPC, to
the effect that:
(i) GSSC is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware;
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 76
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(ii) SBM is a Mississippi banking
corporation, duly organized, validly existing, and in good standing
under the laws of the State of Mississippi; SBL is a Louisiana banking
corporation, duly organized, validly existing, and in good standing
under the laws of the State of Louisiana;
(iii) this Reorganization Agreement has
been duly and validly authorized, executed and delivered by GSSC, SBM
and SBL and (assuming that this Reorganization Agreement is a binding
obligation of UPC and INTERIM and the Plan of Merger is a binding
obligation of UPC and INTERIM) constitutes a valid and binding
obligation of GSSC, SBM and SBL enforceable in accordance with its
terms, subject as to enforceability to applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and to the application of
equitable principles and judicial discretion; and
(iv) to the knowledge of such counsel
after due inquiry, no consent or approval, which has not already been
obtained, by any governmental authority is required for execution,
delivery and performance by GSSC, SBM or SBL of this Reorganization
Agreement or any of the documents to be executed and delivered by
GSSC, SBM and SBL in connection herewith.
Such opinion may (i) expressly rely as to matters of fact upon certificates
furnished by appropriate officers of GSSC, SBM or SBL or appropriate government
officials; and (ii) in the case of matters of law governed by the laws of the
states in which they are not licensed, reasonably rely upon the opinions of
legal counsel duly licensed in such states and may be limited, in any event, to
Federal Law and the law of the State of Delaware;
(h) Other Business Combinations, Etc. Neither GSSC,
SBM nor SBL shall have entered into any agreement, letter of intent,
understanding or other arrangement pursuant to which GSSC, SBM or SBL would
merge; consolidate with; effect a business combination with; sell any
substantial part of GSSC's, SBM's or SBL's assets; acquire a significant part
of the shares or assets of any other Person or entity (financial or otherwise);
adopt any "poison pill" or other type of anti-takeover arrangement, any
shareholder rights provision, any "golden parachute" or similar program after
the date hereto which would have the effect of materially decreasing the value
of GSSC, SBM or SBL or the benefits of acquiring the GSSC Common Stock;
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 77
<PAGE> 185
(i) Maintenance of Certain Covenants, Etc. At
the time of Closing (i) the total assets of GSSC shall be not less than
$2,300,000,000; (ii) the consolidated equity capital of GSSC shall have been
not less than $178,000,000 as of March 31, 1994, and shall have increased since
that date through normal earnings growth; (iii) the consolidated tangible
equity capital of GSSC shall have been not less than $171,000,000 as of March
31, 1994, and shall have increased since that date through normal earnings
growth; (iv) neither GSSC, SBM nor SBL shall have issued or repurchased from
the date hereof any additional equity or debt securities, or any rights to
purchase or repurchase such securities, except as set forth in this Agreement
(therefore, there shall be not more than 9,600,000 shares of GSSC Common Stock
validly issued and outstanding at the Effective Time of the Merger); (iv) from
December 31, 1993, there shall have been no extraordinary sale of assets, nor
any investment portfolio restructuring by either GSSC, SBM or SBL; (v) neither
GSSC, SBM nor SBL shall have issued or granted since December 31, 1993, through
the Closing Date any additional GSSC Stock Options other than stock options
which could be issued pursuant to the various GSSC stock option and incentive
plans consistent with the terms and conditions of this Reorganization
Agreement, and all validly issued and outstanding GSSC Stock Options shall have
been fully exercised prior to the Closing or tendered to GSSC for conversion
into options to purchase shares of UPC Common Stock as contemplated in Section
2.7 of this Reorganization Agreement and none shall have been repurchased by
GSSC, SBM or SBL prior to the Closing; (vi) from the date hereof, GSSC shall
not have declared or paid any cash dividends except its customary and
historical quarterly cash dividend prior to Closing; and (vii) the Merger can
be accounted for as a "pooling of interests" on the financial statements of
UPC. The criteria and calculations set forth above shall be determined in
accordance with GAAP assuming that GSSC, SBM and SBL shall have been operated
consistently in the normal course of their business; provided, however, that
the effects of any balance sheet expansion through abnormal, unusual,
nonrecurring or out of the ordinary borrowings or by the realization of
extraordinary or nonrecurring gains or other income from the disposition of
assets or liabilities or through similar transactions shall be eliminated from
the calculations;
(j) Non-Compete Agreements. Each member of the
Boards of Directors of GSSC, SBM and SBL shall have entered into a non-compete
agreement with UPC and GSSC substantially in the form of UPC's standard form of
non-compete agreement, a copy which is annexed hereto as Exhibit 8.2(j),
providing for a term of not less than two (2) years and covering the general
geographic region(s) in which GSSC, SBM and SBL currently operate and do
business or in which any of them have a present intention to do business;
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 78
<PAGE> 186
(k) Tax Opinion. UPC shall have received a
written opinion from its counsel to the effect that the transactions
contemplated by this Reorganization Agreement and the Plan of Merger will
constitute one or more tax-free reorganizations under Section 368 of the
Internal Revenue Code;
(l) Pooling of Interests Accounting Treatment.
UPC shall have received (i) from Price Waterhouse, or other independent
accountants acceptable to UPC, a letter dated within five (5) days prior to the
Closing Date, in form and substance acceptable to UPC, stating the accountants'
opinion that, based upon the information furnished to them, the Merger should
be accounted for by UPC as a "pooling of interests" for financial statement
purposes and that such accounting treatment is in accordance with generally
accepted accounting principles and (ii) from GSSC's regularly retained
independent accountants or other independent accountants acceptable to UPC, a
letter dated within five (5) days prior to the Closing Date stating that, upon
a review of GSSC's books and records, the accountants are aware of no reason
why the business combination contemplated in this Reorganization Agreement to
which GSSC is a party should not be accounted for as a "pooling of interests"
under GAAP;
(m) Receipt of Affiliate Letters. Pursuant to
the provisions of Section 2.6 of this Reorganization Agreement, UPC shall have
received a written commitment in form and substance satisfactory to UPC and its
counsel (an "Affiliate Letter") from each GSSC Record Holder who would be
deemed by GSSC to be an Affiliate of GSSC at the time of Closing under the
Securities Laws and who accepts shares of UPC Common Stock as Consideration for
the cancellation, exchange and conversion of his shares of GSSC Common Stock
pursuant to the terms and conditions of this Reorganization Agreement,
committing to UPC that such GSSC Record Holder shall not pledge, assign, sell,
transfer, devise, otherwise alienate or take any action which would eliminate
or diminish the risk of owning or holding the shares of UPC Common Stock to be
received by such GSSC Record Holder upon consummation of the Merger, nor enter
into any formal or informal agreement to pledge, assign, sell or transfer,
devise, or otherwise alienate his right, title and interests in any of the
shares of UPC Common Stock to be delivered by UPC to such GSSC Record Holder
pursuant to the terms and conditions of this Reorganization Agreement until
such time as UPC shall have publicly released a statement of UPC's consolidated
earnings reflecting the combined financial results of operations of UPC and
GSSC for a period of not less than thirty (30) days subsequent to the Effective
Time of the Merger; and
(n) Fairness Opinion. UPC shall have received a
"fairness opinion" letter from its independent financial adviser
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 79
<PAGE> 187
to the effect that, in the opinion of such adviser, the Consideration to be
received by the GSSC Record Holders is fair to the UPC Shareholders from a
financial point of view, and such "fairness opinion" shall not have been
withdrawn prior to the Closing Date, and UPC shall have received an updated
"fairness opinion" letter from such advisers within five (5) days prior to the
Closing Date reinforcing the opinions provided in the initial "fairness
opinion" letter.
8.3 Conditions to Obligations of All Parties. The
obligation of each party to effect the transactions contemplated hereby shall
be subject to the fulfillment, at or prior to the Closing, of the following
conditions:
(a) No Pending or Threatened Claims. That no
claim, action, suit, investigation or other proceeding shall be pending or
threatened before any court or governmental agency which presents a substantial
risk of the restraint or prohibition of the transactions contemplated by this
Reorganization Agreement or the obtaining of material damages or other relief
in connection therewith;
(b) Governmental Approvals and Acquiescence
Obtained. The Parties hereto shall have received all applicable Governmental
Approvals for the consummation of the transactions contemplated herein and all
waiting periods incidental to such approvals or notices given shall have
expired;
(c) Registration Statement. The registration
statement which includes the Proxy Statement shall have been declared effective
and shall not be subject to a stop order of the SEC and, if the offer and sale
of UPC Common Stock in the Merger pursuant to this Reorganization Agreement is
subject to the Blue Sky laws of any state, shall not be subject to a stop order
of any state securities commission; and
(d) GSSC Stockholder and UPC Shareholder
Approval. This Reorganization Agreement and the Plan of Merger shall have been
approved by the GSSC Stockholders by vote of at least the number of GSSC
Stockholders as required by applicable law and the Certificate of Incorporation
of GSSC. This Reorganization Agreement and the Plan of Merger shall have been
approved by the UPC Shareholders by vote of at least the number of UPC
Shareholders as required by applicable law and the Charter of UPC and shall
have been approved by UPC as sole stockholder of INTERIM as required by
applicable law and the Certificate of Incorporation of INTERIM.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 80
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ARTICLE 9
TERMINATION
9.1 Termination. This Reorganization Agreement and the
Plan of Merger may be terminated at any time prior to the Closing, as follows:
(a) By mutual consent in writing of the Parties
pursuant to actions of their respective Boards of Directors;
(b) By UPC or INTERIM, should GSSC or any GSSC
Subsidiary fail to conduct its business pursuant to GSSC's, SBM's and SBL's
Covenants made in Article 7;
(c) By UPC or INTERIM or by GSSC, SBM or SBL in
the event the Closing shall not have occurred on or before March 31, 1995 (the
"Target Date"), unless the failure of the Closing to occur shall be due to the
failure of the Party seeking to terminate this Agreement to perform its
obligations hereunder in a timely manner. If UPC shall have filed any and all
applications to obtain the requisite Government Approvals within sixty (60)
days of the date hereof, and if the Closing shall not have occurred solely
because of a delay caused by a government regulatory agency or authority in its
review of the application before it, then GSSC, SBM and SBL shall, upon UPC's
written request, extend the Closing Date until such time as all Government
Approvals have been obtained and any stipulated waiting periods have expired;
(d) By either UPC or INTERIM or by GSSC, SBM or
SBL, upon written notice to the other Party, upon denial of any Governmental
Approval necessary for the consummation of the Merger (or should such approval
be conditioned upon a substantial deviation from the transactions contemplated);
provided, however, that either UPC or GSSC may, upon written notice to
the other, extend the term of this Reorganization Agreement for only
one sixty (60) day period to prosecute diligently and overturn such denial,
provided that such denial has been appealed within ten (10) business days of
the receipt thereof;
(e) By UPC or INTERIM in the event the conditions
set forth in Sections 8.2 or 8.3 are not satisfied in all material respects as
of the Closing Date, or by GSSC, SBM or SBL if the conditions set forth in
Section 8.1 or 8.3 are not satisfied in all material respects as of the Closing
Date, and such failure has not been waived prior to the Closing or it is
determined that no such Closing Date shall occur;
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 81
<PAGE> 189
(f) By UPC or INTERIM in the event that there
shall have been, in UPC's good faith opinion, a material adverse change in the
business, property, assets (including loan portfolios), liabilities (whether
absolute, accrued, contingent or otherwise), prospects, operations, liquidity,
income, condition (financial or otherwise) or net worth of GSSC, SBM or SBL
taken as a whole, or upon the occurrence of any event or circumstance which may
have the effect of limiting or restricting UPC's voting power or other rights
normally enjoyed by the registered holders of the GSSC Common Stock which are
the subject of the instant transaction;
(g) By UPC or INTERIM or GSSC, SBM or SBL in the
event that there shall have been a material breach of any obligation of the
other Party hereunder and such breach shall not have been remedied within
thirty (30) days after receipt by the breaching Party of written notice from
the other Party specifying the nature of such breach and requesting that it be
remedied;
(h) By UPC or INTERIM should GSSC or any GSSC
Subsidiary enter into any letter of intent or agreement with a view to being
acquired by, or effecting a business combination with any other Person; or any
agreement to merge, to consolidate, to combine, or, other than in the ordinary
course of business consistent with past practices, to sell a material portion
of its assets; or to be acquired in any other manner by any other Person; or,
other than in the ordinary course of business consistent with past practices,
to acquire a material amount of assets or a material equity position in any
other Person, whether financial or otherwise;
(i) By UPC or INTERIM should GSSC, SBM or SBL or
any GSSC Subsidiary enter into any formal agreement, letter of understanding,
memorandum or other similar arrangement with any bank regulatory authority
establishing a formal capital plan requiring GSSC, SBM or SBL to raise
additional capital or to sell a substantial portion of its assets;
(j) By GSSC, SBM or SBL in the event the Current
Market Price Per Share of the UPC Common Stock should be less than $22.00 per
share of UPC Common Stock; By UPC or INTERIM in the event the Current Market
Price Per Share of the UPC Common Stock should be greater than $31.25 per share
of UPC Common Stock; provided, however, any such termination of this
Reorganization Agreement by GSSC, SBM or SBL or by UPC or INTERIM pursuant to
this Section 9.1(j) shall be subject to the limitations imposed on the Parties
by Section 3.1(e) of this Reorganization Agreement;
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 82
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(k) By either Party, within thirty (30) days from
the date of this Reorganization Agreement, in the event such Party, based on
the Party's opportunity to conduct a preliminary due diligence review of the
books, records and operations of the other Party as provided for in Section 2.3
of this Reorganization Agreement, in good faith determines in it sole
discretion that the results of the review conducted by such Party or its agents
do not support and reinforce the reviewing Party's preliminary expectations as
to the sustained growth and earnings prospects of the reviewed Party;
(l) By GSSC, SBM or SBL in the event that there
shall have been, in GSSC's good faith opinion, a material adverse change in the
business, property, assets (including loan portfolios), liabilities (whether
absolute, accrued, contingent or otherwise), prospects, operations, liquidity,
income, condition (financial or otherwise) or net worth of UPC taken as a
whole, or upon the occurrence of any event or circumstance which may have the
effect of limiting or restricting the GSSC Record Holder's voting power or
other rights normally enjoyed by the registered holders of the UPC Common Stock
which are the subject of the instant transaction; or
(m) By GSSC, SBM or SBL should UPC or INTERIM or
any UPC Subsidiary enter into any formal agreement, letter of understanding,
memorandum or other similar arrangement with any bank regulatory authority
establishing a formal capital plan requiring UPC to raise additional capital or
to sell a substantial portion of its assets.
If a Party should elect to terminate this Reorganization Agreement pursuant to
subsections (b), (c), (d), (e), (f), (g), (h), (i), (j), (k), (l) or (m) of
this Section 9.1, it shall give notice to the other Party, in writing, of its
election in the manner prescribed in Section 10.1 ("Notices") of this
Reorganization Agreement.
9.2 Effect of Termination. In the event that this
Reorganization Agreement should be terminated pursuant to Section 9.1 hereof,
all further obligations of the Parties under this Reorganization Agreement
shall terminate without further liability of any Party to another; provided,
however, that a termination under Section 9.1 hereof shall (i) not relieve any
Party of any liability for a breach of this Reorganization Agreement or for any
misstatement or misrepresentation made hereunder prior to such termination, or
be deemed to constitute a waiver of any available remedy for any such breach,
misstatement or misrepresentation; and (ii) shall not be deemed a termination
of the obligations of GSSC to UPC under Section 7.4 of this Reorganization
Agreement which are intended by the Parties hereto
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 83
<PAGE> 191
to survive a termination under Section 9.1 hereof, and any termination of this
Reorganization Agreement pursuant to Section 7.4 hereof shall give rise to
liability only to the extent therein provided.
ARTICLE 10
GENERAL PROVISIONS
10.1 Notices. Any notice, request, demand and other
communication which either Party hereto may desire or may be required hereunder
to give shall be in writing and shall be deemed to be duly given if delivered
personally or mailed by certified or registered mail (postage prepaid, return
receipt requested), air courier or facsimile transmission, addressed or
transmitted to such other Party as follows:
If to GSSC, SBM or SBL:
Grenada Sunburst System Corporation
2000 Gateway
Post Office Box 947
Grenada, Mississippi 38902-0947
Fax: (601) 227-2070
Attn: James T. Boone, Chairman, President and
Chief Executive Officer
With a copy to: Thompson & Mitchell
One Mercantile Center
St. Louis, Missouri
Fax: (314) 231-1717
Attn: Gerard K. Sandweg, Jr., Esq.
If to UPC or INTERIM:
Union Planters Corporation
P.O. Box 387 (mailing address)
Memphis, Tennessee 38147
or 7130 Goodlett Farms Parkway (deliveries)
Memphis, Tennessee 38018
Fax: (901) 383-2877
Attn: Jackson W. Moore, President
Gary A. Simanson, Associate General Counsel
or to such other address as any Party hereto may hereafter designate to the
other Parties in writing. Notice shall be deemed to have been given on the
date reflected in the proof or evidence of delivery, or if none, on the date
actually received.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 84
<PAGE> 192
10.2 Assignability and Parties in Interest. This
Reorganization Agreement shall not be assignable by any of the Parties hereto;
provided, however, that UPC may assign, set over and transfer all, or any part
of its rights and obligations under this Reorganization Agreement to any one or
more of its present or future Affiliates. This Reorganization Agreement shall
inure to the benefit of, and be binding only upon the Parties hereto and their
respective successors and permitted assigns and no other Persons.
10.3 Governing Law. This Reorganization Agreement shall
be governed by, and construed and enforced in accordance with, the internal
laws, and not the laws pertaining to choice or conflicts of laws, of the State
of Tennessee, unless and to the extent that federal law controls and in
accordance with the laws of the State of Delaware with respect to those
provisions of this Reorganization Agreement that reference the Delaware Code.
Any dispute arising between the Parties in connection with the transactions
which are the subject of this Reorganization Agreement shall be heard in a
court of competent jurisdiction located in Shelby County, Tennessee.
10.4 Counterparts. This Reorganization Agreement may be
executed simultaneously in one or more counterparts, each of which shall be
deemed an original, but all of which shall constitute but one and the same
instrument.
10.5 Best Efforts. GSSC, SBM, UPC and INTERIM each
agrees to use its best efforts to complete the transactions contemplated by
this Reorganization Agreement in accordance with the terms and provisions of
this Reorganization Agreement.
10.6 Publicity. The Parties agree that press releases
and other public announcements to be made by any of them with respect to the
transactions contemplated hereby shall be subject to mutual agreement.
Notwithstanding the foregoing, each of the Parties hereto may respond to
inquiries relating to this Reorganization Agreement and the transactions
contemplated hereby by the press, employees or customers without any notice or
further consent of the other Parties. Nothing in this Reorganization Agreement
shall be construed to prohibit GSSC or the Board of Directors of GSSC from
making any disclosure to the GSSC Stockholders which in the judgment of the
Board of Directors of GSSC (as advised by counsel) may be required in
connection with this Reorganization Agreement. GSSC shall promptly notify UPC
in writing if any such disclosure is made. Nothing in this Reorganization
Agreement shall be construed to prohibit UPC or the Board of Directors of UPC
from making any disclosure to the UPC Shareholders which in the judgment of the
Board of Directors of UPC (as advised by counsel) may be required in connection
with
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 85
<PAGE> 193
this Reorganization Agreement. UPC shall promptly notify GSSC in writing if
any such disclosure is made.
10.7 Entire Agreement. This Reorganization Agreement,
together with the Plan of Merger which is Exhibit A hereto, the Confidentiality
Agreement described in Section 2.4 herein, the Schedules, Annexes, Exhibits and
certificates required to be delivered hereunder and any amendments or addenda
hereafter executed and delivered in accordance with Section 10.9 hereof
constitute the entire agreement of the Parties hereto pertaining to the
transaction contemplated hereby and supersede all prior written and oral (and
all contemporaneous oral) agreements and understandings of the Parties hereto
concerning the subject matter hereof. The Schedules, Annexes, Exhibits and
certificates attached hereto or furnished pursuant to this Reorganization
Agreement are hereby incorporated as integral parts of this Reorganization
Agreement. Except as provided herein, by specific language and not by mere
implication, this Reorganization Agreement is not intended to confer upon any
other person not a Party to this Reorganization Agreement any rights or
remedies hereunder.
10.8 Severability. If any portion or provision of this
Reorganization Agreement should be determined by a court of competent
jurisdiction to be invalid, illegal or unenforceable in any jurisdiction, such
portion or provision shall be ineffective as to that jurisdiction to the extent
of such invalidity, illegality or unenforceability, without affecting in any
way the validity or enforceability of the remaining portions or provisions
hereof in such jurisdiction or rendering that or any other portions or
provisions of this Reorganization Agreement invalid, illegal or unenforceable
in any other jurisdiction.
10.9 Modifications, Amendments and Waivers. At any time
prior to the Closing or termination of this Reorganization Agreement, the
Parties may, solely by written agreement executed by their duly authorized
officers:
(a) extend the time for the performance of any of
the obligations or other acts of the other Party hereto;
(b) waive any inaccuracies in the representations
and warranties made by the other Party contained in this Reorganization
Agreement or in the Annexes, Schedules or Exhibits hereto or any other document
delivered pursuant to this Reorganization Agreement;
(c) waive compliance with any of the covenants or
agreements of the other Party contained in this Reorganization Agreement; and
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 86
<PAGE> 194
(d) except as provided in Section 2.5 of this
Reorganization Agreement, amend or add to any provision of this Reorganization
Agreement or the Plan of Merger; provided, however, that no provision of this
Reorganization Agreement may be amended or added to except by an agreement in
writing signed by the Parties hereto or their respective successors in interest
and expressly stating that it is an amendment to this Reorganization Agreement.
10.10 Interpretation. The headings contained in this
Reorganization Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Reorganization Agreement.
10.11 Payment of Expenses. Except as set forth in Section
7.4 of this Reorganization Agreement, UPC and GSSC shall each pay its own fees
and expenses (including, without limitation, legal fees and expenses) incurred
by it in connection with the transactions contemplated hereunder.
10.12 Finders and Brokers. UPC, INTERIM, GSSC, SBM and SBL
represent and warrant to each other that except for the employment by GSSC of
The Robinson Humphrey Company, Inc. they have employed no broker or finder in
connection with the transactions described in this Reorganization Agreement
under an arrangement pursuant to which a fee is, or may be due to such broker
or finder as a result of the execution of this Reorganization Agreement or the
closing of the transactions contemplated herein. This section shall survive
the termination of this Reorganization Agreement.
10.13 Equitable Remedies. The Parties hereto agree that, in
the event of a breach of this Reorganization Agreement by GSSC, SBM or SBL, UPC
and INTERIM will be without an adequate remedy at law by reason of the unique
nature of GSSC, SBM and SBL. In recognition thereof, in addition to (and not
in lieu of) any remedies at law which may be available to UPC and INTERIM, UPC
and INTERIM shall be entitled to obtain equitable relief, including the
remedies of specific performance and injunction, in the event of a breach of
this Reorganization Agreement by GSSC, SBM or SBL, and no attempt on the part
of UPC or INTERIM to obtain such equitable relief shall be deemed to constitute
an election of remedies by UPC or INTERIM which would preclude UPC or INTERIM
from obtaining any remedies at law to which it would otherwise be entitled.
GSSC, SBM and SBL covenant that they shall not contend in any such proceeding
that UPC or INTERIM is not entitled to a decree of specific performance by
reason of having an adequate remedy at law. Nothing in this Section 10.13
shall be deemed to restrict any remedies which the Parties hereto may have
under law or equity.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 87
<PAGE> 195
10.14 Attorneys' Fees. If any Party hereto shall bring an
action at law or in equity to enforce its rights under this Reorganization
Agreement (including an action based upon a misrepresentation or the breach of
any warranty, covenant, agreement or obligation contained herein), the
prevailing Party in such action shall be entitled to recover from the other
Party its reasonable costs and expenses necessarily incurred in connection with
such action (including fees, disbursements and expenses of attorneys and costs
of investigation).
10.15 Survival of Representations and Warranties. All
representations and warranties made by the Parties hereto or in any instrument
or document furnished in connection herewith, shall survive the Closing and any
investigation at any time made by or on behalf of the Parties hereto and shall
expire at the Effective Time of the Merger except as to any matter which is
based upon willful fraud with respect to which the representations and
warranties set forth in this Reorganization Agreement shall expire on the
earlier of six months from the Effective Time of the Merger or the expiration
of the applicable statutes of limitation; provided, however, nothing herein
shall create any right of action as to any individual who has not personally
and individually engaged in any act of willful fraud giving rise to any breach
of the representations and warranties made by the Parties hereto. Nothing in
this Section 10.15 shall limit GSSC's, SBM's, SBL's, UPC's or INTERIM's rights
or remedies for misrepresentations, breaches of this Reorganization Agreement
or any other improper action or inaction by the other Party hereto prior to the
its termination. All obligations, agreements, covenants and undertakings of
the Parties hereto to be performed either in whole or in part after the
Effective Time of the Merger shall survive the Closing and shall not expire at
the Effective Time of the Merger.
10.16 No Waiver. No failure, delay or omission of or by any
Party in exercising any right, power or remedy upon any breach or default of
any other Party shall impair any such rights, powers or remedies of the Party
not in breach or default, nor shall it be construed to be a waiver of any such
right, power or remedy, or an acquiescence in any similar breach or default;
nor shall any waiver of any single breach or default be deemed a waiver of any
other breach or default theretofore or thereafter occurring. Any waiver,
permit, consent or approval of any kind or character on the part of any Party
of any provisions of this Reorganization Agreement must be in writing and must
be executed by the Parties to this Reorganization Agreement and shall be
effective only to the extent specifically set forth in such writing.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 88
<PAGE> 196
10.17 Remedies Cumulative. All remedies provided in this
Reorganization Agreement, by law or otherwise, shall be cumulative and not
alternative.
10.18 Materiality. For purposes of this Reorganization
Agreement, any determination of materiality shall be made based on the financial
condition of either GSSC and its Subsidiaries or UPC and its Subsidiaries taken
as a whole.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 89
<PAGE> 197
IN WITNESS WHEREOF, each of the Parties hereto has duly executed and
delivered this Reorganization Agreement or has caused this Reorganization
Agreement to be executed and delivered in its name and on its behalf by its
representative thereunto duly authorized, all as of the date first written
above.
GRENADA SUNBURST SYSTEM CORPORATION
By:
-------------------------------
James T. Boone
Its: Chairman of the Board
ATTEST:
- ------------------------------
Edwin T. Cofer, Secretary
SUNBURST BANK, MISSISSIPPI
By:
-------------------------------
James T. Boone
Its: President and Chief
Executive Officer
ATTEST:
- ------------------------------
Cashier
SUNBURST BANK
By:
-------------------------------
Jackson A. Huff
Its: President and Chief
Executive Officer
ATTEST:
- ------------------------------
Secretary
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 90
<PAGE> 198
UNION PLANTERS CORPORATION
By:
-------------------------------
Jackson W. Moore
Its: President
ATTEST:
- ------------------------------
Secretary
GSSC ACQUISITION COMPANY, INC.
By:
-------------------------------
Jackson W. Moore
Its: President
ATTEST:
- ------------------------------
Secretary
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 91
<PAGE> 199
PLAN OF MERGER EXHIBIT A
SETTING FORTH THE PLAN OF MERGER
OF
GSSC ACQUISITION COMPANY, INC.
(A DELAWARE CORPORATION)
WITH AND INTO
GRENADA SUNBURST SYSTEM CORPORATION
(A DELAWARE CORPORATION)
THIS PLAN OF MERGER ("Plan of Merger") is made and entered into as of
the 1st day of July, 1994, by and between GRENADA SUNBURST SYSTEM CORPORATION
("GSSC"), a corporation chartered and existing under the laws of the State of
Delaware which is a registered bank holding company and whose principal offices
are located at 2000 Gateway (Post Office Box 947), Grenada, Grenada County,
Mississippi 38901; UNION PLANTERS CORPORATION ("UPC"), a corporation organized
and existing under the laws of the State of Tennessee having its principal
office at 7130 Goodlett Farms Parkway, Memphis, Shelby County, Tennessee 38018
and which is registered as a bank holding company under the Bank Holding
Company Act; and GSSC ACQUISITION COMPANY, INC. ("INTERIM"), a corporation
chartered and existing under the laws of the State of Delaware, whose principal
place of business is located at 7130 Goodlett Farms Parkway, Memphis, Shelby
County, Tennessee 38018, and which is a wholly-owned subsidiary of UPC. All of
the authorized, issued and outstanding shares of capital stock of INTERIM are
owned and held of record by UPC.
PREAMBLE
WHEREAS, UPC, INTERIM and GSSC have entered into an Agreement and Plan
of Reorganization dated the 1st day of July, 1994 ("Reorganization Agreement")
to which this Plan of Merger is Exhibit A and is incorporated by reference as
an integral part thereof providing for the merger of INTERIM with and into GSSC
(which would be the Surviving Corporation) as a result of which UPC would
become the beneficial owner and holder of record of all of the GSSC Common
Stock outstanding immediately prior to the Effective Time of the Merger for the
Consideration set forth in the Reorganization Agreement and this Plan of
Merger; and
PLAN OF MERGER - EXHIBIT A TO AGREEMENT AND PLAN OF REORGANIZATION
PAGE 92
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WHEREAS, As provided in the Reorganization Agreement, UPC has caused
INTERIM to join in this Plan of Merger by executing and delivering same; and
WHEREAS, The Boards of Directors of UPC, INTERIM and GSSC are each of
the opinion that the interests of their respective corporations and their
corporations' respective stockholders and shareholders would best be served if
INTERIM were to be merged with and into GSSC, which would survive the Merger,
on the terms and conditions provided in the Reorganization Agreement and in
this Plan of Merger, and as a result of such Merger becoming effective, the
Surviving Corporation would become a wholly-owned subsidiary of UPC.
NOW, THEREFORE, in consideration of the covenants and agreements of
the Parties contained herein, GSSC, UPC and INTERIM hereby make, adopt and
approve this Plan of Merger in order to set forth the terms and conditions for
the merger of INTERIM with and into GSSC (the "Merger").
ARTICLE I.
DEFINITIONS
1.1 As used in this Plan of Merger and in any amendments hereto,
all capitalized terms herein shall have the meanings assigned to such terms in
the Reorganization Agreement unless otherwise defined herein.
ARTICLE 2
CAPITALIZATION
2.1 GSSC ACQUISITION COMPANY, INC.. The authorized capital stock
of INTERIM consists of 1,000 shares of common stock having a par value of $.01
per share (the "INTERIM Common Stock") and no shares of preferred stock. As of
the date of this Plan of Merger, 1,000 shares of INTERIM Common Stock are
issued and outstanding, and no shares of INTERIM Common Stock are held by it as
treasury stock. All such issued and outstanding shares of INTERIM Common Stock
are owned beneficially and of record by UPC.
2.2 GRENADA SUNBURST SYSTEM CORPORATION The authorized capital
stock of GSSC consists of 15,000,000 shares of common stock having a par value
of $1.00 per share (the "GSSC Common Stock") and no shares of preferred stock
(the "GSSC Preferred Stock). As of the date hereof, 9,492,975 shares of GSSC
Common Stock were issued and outstanding, no shares of GSSC Common Stock were
held by GSSC as GSSC Treasury Stock and no shares of GSSC Preferred Stock were
issued and outstanding.
PLAN OF MERGER - EXHIBIT A TO AGREEMENT AND PLAN OF REORGANIZATION
PAGE 93
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ARTICLE 3
PLAN OF MERGER
3.1 Constituent Corporations. The name of each constituent
corporation to the Merger is:
GSSC ACQUISITION COMPANY, INC.
and
GRENADA SUNBURST SYSTEM CORPORATION
3.2 Surviving Corporation. The Surviving Corporation shall be:
GRENADA SUNBURST SYSTEM CORPORATION
which subsequent to the Effective Time of the Merger shall continue to be
named:
GRENADA SUNBURST SYSTEM CORPORATION
3.3 Terms and Conditions of Merger. The Merger shall be
consummated only pursuant to, and in accordance with this Plan of Merger and
the Reorganization Agreement. Conditioned upon the satisfaction or waiver (by
the Party or Parties entitled to the benefits thereof) of all conditions
precedent to consummation of the Merger, the Merger shall become effective on
the date and at the time (the "Effective Time of the Merger") of the filing of
a Certificate of Merger with the Secretary of State of the State of Delaware,
or at such later time and/or date as may be agreed upon by the parties and set
forth in the Certificate of Merger. At the Effective Time of the Merger,
INTERIM shall be merged with and into GSSC which will survive the Merger, and
the separate existence of INTERIM shall cease thereupon, and without further
action, GSSC shall thereafter possess all of the assets, rights, privileges,
appointments, powers, licenses, permits and franchises of both GSSC and
INTERIM, whether of a public or private nature, and shall be subject to all of
the liabilities, restrictions, disabilities, and duties of both GSSC and
INTERIM.
3.4 Certificate of Incorporation. At the Effective Time of the
Merger, the Certificate of Incorporation of GSSC, as in effect immediately
prior to the Effective Time of the Merger, shall constitute the Certificate of
Incorporation of GSSC as the Surviving Corporation, unless and until the same
shall be amended thereafter as provided by law and the terms of such
Certificate of Incorporation.
3.5 Bylaws. At the Effective Time of the Merger, the Bylaws of
GSSC, as in effect immediately prior to the Effective Time of the Merger, shall
continue to be its Bylaws as the
PLAN OF MERGER - EXHIBIT A TO AGREEMENT AND PLAN OF REORGANIZATION
PAGE 94
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Surviving Corporation, unless and until amended or repealed thereafter as
provided by law, its Certificate of Incorporation and such Bylaws.
3.6 Directors and Officers. The directors and officers of GSSC in
office immediately prior to the Effective Time of the Merger shall continue to
be the directors and officers of the Surviving Corporation, to hold office as
provided in the Certificate of Incorporation and Bylaws of the Surviving
Corporation, unless and until their successors shall have been elected or
appointed and shall have qualified or they shall have been removed as provided
therein.
3.7 Name. The name of GSSC as the Surviving Corporation following
the Merger, shall remain:
GRENADA SUNBURST SYSTEM CORPORATION
or such other name as GSSC shall thereafter adopt.
ARTICLE 4
DESCRIPTION OF THE TRANSACTION
4.1 Conversion of the INTERIM Common Stock. At the Effective Time
of the Merger, each share of $.01 par value common stock of INTERIM (the
"INTERIM Common Stock") issued and outstanding immediately prior to the
Effective Time of The Merger shall, by virtue of the Merger becoming effective
and without any further action on the part of anyone, be converted into and
become one share of the issued and outstanding common stock of the Surviving
Corporation.
4.2 Conversion and Cancellation of Shares of GSSC. At the
Effective Time of the Merger, each share of $1.00 par value common stock of
GSSC issued and outstanding immediately prior to the Effective Time of the
Merger shall, by virtue of the Merger becoming effective and without any
further action on the part of anyone, be converted, exchanged and cancelled as
provided in Section 4.3 hereof.
4.3 Exchange of GSSC Shares; Exchange Ratio. At the Effective
Time of the Merger, the outstanding shares of GSSC Common Stock held by the
GSSC Record Holders immediately prior to the Effective Time of the Merger
shall, without any further action on the part of anyone, cease to represent any
interest (equity, shareholder or otherwise) in GSSC and shall automatically be
converted exclusively into, and constitute only the right of the GSSC Record
Holders to receive in exchange for their shares of GSSC Common Stock, whole
shares of UPC Common
PLAN OF MERGER - EXHIBIT A TO AGREEMENT AND PLAN OF REORGANIZATION
PAGE 95
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Stock and a cash payment in settlement of any remaining fractional share of UPC
Common Stock in accordance with the terms and conditions of this Section 4.3.
The shares of UPC Common Stock and the cash settlement of any remaining
fractional share of UPC Common Stock deliverable by UPC or INTERIM to the GSSC
Record Holders pursuant to the terms of this Reorganization Agreement are
sometimes collectively referred to herein as the "Consideration."
The number of shares of UPC Common Stock to be exchanged for each share of GSSC
Common Stock issued and outstanding immediately prior to the Effective Time of
the Merger shall be based on an exchange ratio (the "Exchange Ratio") as
determined and set forth in this Section 4.3. The Exchange Ratio shall be
determined as follows:
(A) In the event the Current Market Price
Per Share of UPC Common Stock should be greater than or equal to
$24.00 per share of UPC Common Stock but less than or equal to $29.25
per share of UPC Common Stock (the "Primary Collar"), the Exchange
Ratio shall be fixed at 1.4206 shares of UPC Common Stock for each
share of GSSC Common Stock validly issued and outstanding immediately
prior to the Effective Time of the Merger;
(B) In the event the Current Market Price
Per Share of UPC Common Stock should be greater than $29.25 per share
of UPC Common Stock but less than or equal to $31.25 per share of UPC
Common Stock (the "Upper Secondary Collar"), the Exchange Ratio shall
be based on (a) a fixed price of $41.55 per share of GSSC Common Stock
divided by (b) the Current Market Price Per Share of UPC Common Stock
for each share of GSSC Common Stock validly issued and outstanding
immediately prior to the Effective Time of the Merger;
(C) In the event the Current Market Price
Per Share of UPC Common Stock should be greater than $31.25 per share
of UPC Common Stock (the "Ceiling"), the Exchange Ratio shall be fixed
at 1.3296 shares of UPC Common Stock for each share or GSSC Common
Stock validly issued and outstanding immediately prior to the
Effective Time of the Merger; provided, however, that UPC would have
the right to either deliver shares of UPC Common Stock based on the
fixed Exchange Ratio of 1.3296 or to terminate the
transaction;provided, however, should UPC elect to terminate the
transaction under this provision, GSSC shall have the unilateral right
to reinstate the transaction by accepting in exchange for each share
of GSSC Common Stock validly issued and outstanding immediately prior
to the Effective
PLAN OF MERGER - EXHIBIT A TO AGREEMENT AND PLAN OF REORGANIZATION
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Time of the Merger that number of shares of UPC Common Stock at the
Current Market Price Per Share sufficient to equal $41.55 per share of
GSSC Common Stock;
(D) In the event the Current Market Price
Per Share of UPC Common Stock should be greater than or equal to
$22.00 per share of UPC Common Stock but less than $24.00 per share of
UPC Common Stock (the "Lower Secondary Collar"), the Exchange Ratio
shall be based on (a) a fixed price of $34.09 per share of GSSC Common
Stock divided by (b) the Current Market Price Per Share of UPC Common
Stock for each share of GSSC Common Stock validly issued and
outstanding immediately prior to the Effective Time of the Merger; and
(E) In the event the Current Market Price
Per Share of UPC Common Stock should be less than $22.00 per share of
UPC Common Stock (the "Floor"), the Exchange Ratio shall be fixed at
1.5495 shares of UPC Common Stock for each share of GSSC Common Stock
validly issued and outstanding immediately prior to the Effective Time
of the Merger; provided, however, that subject to the terms and
provisions of Section 3.3 of this Reorganization Agreement, GSSC shall
have the right to either accept the fixed Exchange Ratio of 1.5495 or
terminate the transaction in accordance with the terms and provisions
of Section 3.3 of the Reorganization Agreement, provided, however,
that should GSSC elect to terminate the transaction under this
provision and the Current Market Price Per Share of UPC Common Stock
should be greater than or equal to $18.50, UPC shall have the
unilateral right to reinstate the transaction by delivering in
exchange for each share of GSSC Common Stock validly issued and
outstanding immediately prior to the Effective Time of the Merger
shares of UPC Common Stock based on that number of shares of UPC
Common Stock at the Current Market Price Per Share sufficient to equal
$34.09 per share of GSSC Common Stock.
The Exchange Ratio as determined in this Section 4.3 shall be based on an
aggregate of no more than 9,600,000 shares of GSSC Common Stock being validly
issued and outstanding immediately prior to the Effective Time of the Merger
and, for purposes of this paragraph, counting all unexercised GSSC Stock
Options issued and outstanding immediately prior to the Effective Time of the
Merger as issued and outstanding shares of GSSC Common Stock so converted and
exchanged; provided, however, that no fractional shares of UPC Common Stock
shall be issued and if, after aggregating all of the shares of UPC Common Stock
to which a GSSC Record Holder is entitled based upon the Exchange Ratio, there
shall be a fractional share of UPC Common Stock remaining, such
PLAN OF MERGER - EXHIBIT A TO AGREEMENT AND PLAN OF REORGANIZATION
PAGE 97
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fractional share shall be settled by a cash payment therefor pursuant to the
Mechanics of Payment of the Consideration set forth in Section 4.4 hereof,
which shall be calculated based upon the Current Market Price Per Share of one
(1) full share of UPC Common Stock.
(1) DEFINITION OF "CURRENT MARKET PRICE
PER SHARE." The "Current Market Price Per Share" shall be the average
closing price per share of the "last" real time trades (i.e., closing
price) of the UPC Common Stock on the NYSE (as published in The Wall
Street Journal, Eastern Edition) for each of the twenty (20) NYSE
general market trading days on which the NYSE was open for business
next preceding the issuance of all necessary Regulatory Approvals (the
"Pricing Period"). In the event the UPC Common Stock should not trade
on one or more of the trading days during the Pricing Period (a "No
Trade Date"), any such No Trade Date shall be disregarded in computing
the average closing price per share of UPC Common Stock and the
average shall be based upon the "last" real time trades and number of
days on which the UPC Common Stock actually traded during the Pricing
Period.
(2) EFFECTS OF APPRAISAL RIGHTS ON THE
EXCHANGE RATIO. The Exchange Ratio shall be unaffected by appraisal
rights as granted under Delaware law because the GSSC Common Stock is
listed for trading on the NASDAQ National Market System, which is a
"national securities exchange" as defined in rules promulgated by the
SEC pursuant to the 1934 Act, and therefore, pursuant to Delaware Code
Section 8-503-262, no GSSC Record Holder may assert appraisal rights
in connection with the Merger or the transactions contemplated in the
Reorganization Agreement.
(3) EFFECT OF STOCK SPLITS, REVERSE
STOCK SPLITS, STOCK DIVIDENDS AND SIMILAR CHANGES IN THE CAPITAL OF
GSSC OR UPC. Should GSSC or UPC effect any stock splits, reverse
stock splits, stock dividends or similar changes in their respective
capital accounts subsequent to the date of the Reorganization
Agreement but prior to the Effective Time of the Merger, the Exchange
Ratio shall be adjusted in such a manner as the Board of Directors of
UPC shall deem in good faith to be fair and reasonable in order to
give effect to such changes subject to GSSC's Board of Directors'
approval.
4.4 Mechanics of Payment of the Consideration. As soon as
reasonably practicable, but in any event no more than five (5) Business Days
after the Effective Time of the Merger, the Corporate Trust Department of Union
Planters National Bank, Memphis, Tennessee (the "Exchange Agent") shall deliver
to each
PLAN OF MERGER - EXHIBIT A TO AGREEMENT AND PLAN OF REORGANIZATION
PAGE 98
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of the GSSC Record Holders such materials and information deemed necessary by
the Exchange Agent to advise the GSSC Record Holders of the procedures required
for proper surrender of their certificates evidencing and representing shares
of the GSSC Common Stock in order for the GSSC Record Holders to receive the
Consideration. Such materials shall include, without limitation, a Letter of
Transmittal, an Instruction Sheet, and a return mailing envelope addressed to
the Exchange Agent (collectively the "Stockholder Materials"). All Stockholder
Materials shall be sent by United States mail to the GSSC Record Holders at the
addresses set forth on a certified stockholder list to be delivered by GSSC to
UPC at the Closing (the "Stockholder List") and shall also be made available at
the Corporate Trust Department offices of the Exchange Agent. As soon as
reasonably practicable thereafter, the GSSC Record Holders of all of the
outstanding shares of GSSC Common Stock, shall be requested by the Exchange
Agent to deliver, or cause to be delivered, by United States Postal Service,
hand delivery or any other means of delivery selected by such GSSC Record
Holders, to the Exchange Agent, pursuant to the Stockholder Materials, the
certificates formerly evidencing and representing all of the shares of GSSC
Common Stock which were validly issued and outstanding immediately prior to the
Effective Time of the Merger, and the Exchange Agent shall take prompt action
to process such certificates formerly evidencing and representing shares of
GSSC Common Stock received by it (including the prompt return of any defective
submissions with instructions as to those actions which may be necessary to
remedy any defects). Upon receipt of the proper submission of the
certificate(s) formerly representing and evidencing ownership of the shares of
GSSC Common Stock, the Exchange Agent shall, on or prior to the 30th day after
the Effective Time of the Merger but as soon as practicable mail, to the former
GSSC Record Holders in exchange for the certificate(s) surrendered by them, the
Consideration to be delivered for each such GSSC Record Holder's shares of GSSC
Common Stock evidenced by the certificate or certificates which were cancelled
and converted exclusively into the right to receive the Consideration upon the
Merger becoming effective. After the Effective Time of the Merger and until
properly surrendered to the Exchange Agent, each outstanding certificate or
certificates which formerly evidenced and represented the shares of GSSC Common
Stock of a GSSC Record Holder, subject to the provisions of this Section, shall
be deemed for all corporate purposes to represent and evidence only the right
to receive the Consideration into which such GSSC Record Holder's shares of
GSSC Common Stock were converted and aggregated at the Effective Time of the
Merger. Unless and until the outstanding certificate or certificates, which
immediately prior to the Effective Time of the Merger evidenced and represented
the GSSC Record Holder's GSSC Common Stock shall have been properly surrendered
as provided above, the
PLAN OF MERGER - EXHIBIT A TO AGREEMENT AND PLAN OF REORGANIZATION
PAGE 99
<PAGE> 207
Consideration payable to the GSSC Record Holder(s) of the cancelled shares as
of any time after the Effective Date shall not be delivered to the GSSC Record
Holder(s) of such certificate(s) until such certificates shall have been
surrendered in the manner required. Each GSSC Record Holder shall be
responsible for all federal, state and local taxes which may be incurred by
such holder on account of the receipt of any Consideration. The GSSC Record
Holder(s) of any certificate(s) which shall have been lost or destroyed may
nevertheless, subject to the provisions of this Section, receive the
Consideration to which each such GSSC Record Holder is entitled, provided that
each such GSSC Record Holder shall deliver to UPC and to the Exchange Agent:
(i) a sworn statement certifying the fact of such loss or destruction and
specifying the circumstances thereof and (ii) a lost instrument bond in form
satisfactory to UPC and the Exchange Agent which has been duly executed by a
corporate surety satisfactory to UPC and the Exchange Agent, indemnifying the
Surviving Corporation, UPC, the Exchange Agent (and their respective
successors) to their satisfaction against any loss or expense which any of them
may incur as a result of such lost or destroyed certificates being thereafter
presented. Any costs or expenses which may arise from such replacement
procedure, including the premium on the lost instrument bond, shall be for the
account of the GSSC Record Holder.
4.5 Stock Transfer Books. At the Effective Time of the Merger,
the stock transfer books of GSSC shall be closed and no transfer of shares of
GSSC Common Stock shall be made thereafter.
4.6 Effects of the Merger. At the Effective Time of the Merger,
the separate existence of INTERIM shall cease, and INTERIM shall be merged with
and into GSSC which, as the Surviving Corporation, shall thereupon and
thereafter possess all of the assets, rights, privileges, appointments, powers,
licenses, permits and franchises of GSSC and INTERIM, whether of a public or a
private nature, and shall be subject to all of the liabilities, restrictions,
disabilities and duties of both GSSC and INTERIM.
4.7 Transfer of Assets. At the Effective Time of the Merger, all
rights, assets, licenses, permits, franchises and interests of GSSC and INTERIM
in and to every type of property, whether real, personal, or mixed, whether
tangible or intangible, and to choses in action shall be deemed to be vested in
GSSC as the Surviving Corporation by virtue of the Merger and without any deed
or other instrument or act of transfer whatsoever.
4.8 Assumption of Liabilities. At the Effective Time of the
Merger, the Surviving Corporation shall become and be liable for all debts,
liabilities, obligations and contracts of INTERIM
PLAN OF MERGER - EXHIBIT A TO AGREEMENT AND PLAN OF REORGANIZATION
PAGE 100
<PAGE> 208
as well as those of the Surviving Corporation, whether the same shall be
matured or unmatured; whether accrued, absolute, contingent or otherwise; and
whether or not reflected or reserved against in the balance sheets, other
financial statements, books of account or records of INTERIM or the Surviving
Corporation.
4.9 Appraisal Rights of GSSC Stockholders. Pursuant to the
provisions of Section 8-503-262 of the Delaware Code, GSSC Stockholders shall
not be entitled to assert appraisal rights in connection with the Merger or to
seek those appraisal remedies afforded by the Delaware Code because the GSSC
Common Stock is listed for trading on the NASDAQ National Market System, which
is a "national securities exchange" as defined in rules promulgated by the SEC
pursuant to the 1934 Act, and therefore, pursuant to Delaware Code Section
8-503-262, no GSSC Record Holder may assert appraisal rights in connection with
the Merger or the transactions contemplated in the Reorganization Agreement.
4.10 Approvals of Stockholders of GSSC, UPC and INTERIM. In order
to become effective, the Merger must be approved by the respective stockholders
of GSSC, UPC and of INTERIM at meetings to be called for that purpose by their
respective Boards of Directors, or by their unanimous action by written consent
complying fully with the laws of Delaware and Tennessee.
4.11 GSSC Stock Options. In the event and to the extent that there
are any GSSC Stock Options validly issued and outstanding at the time of
Closing, such GSSC Stock Options shall at the Effective Time of the Merger
automatically and without further action on the part of anyone be converted
into options to purchase shares of UPC Common Stock on the same terms and
conditions attributable to the GSSC Stock Options to purchase shares of GSSC
Common Stock adjusted by and in accordance with the Exchange Ratio as provided
in the Reorganization Agreement.
ARTICLE 5
AMENDMENTS AND WAIVERS
5.1 AMENDMENTS. To the extent permitted by law, this Plan of
Merger may be amended unilaterally by UPC and INTERIM as set forth in Section
2.5 and Section 10.9(d) of the Reorganization Agreement; provided, however,
that the provisions of Section 4.3 of this Plan of Merger relating to the
manner or basis upon which shares of GSSC Common Stock will be converted into
the exclusive right to receive the Consideration from UPC shall not be amended
in such a manner as to reduce the amount of the Consideration payable to the
GSSC Record Holders determined as provided in Section 4.3 of this Plan of
Merger nor shall this
PLAN OF MERGER - EXHIBIT A TO AGREEMENT AND PLAN OF REORGANIZATION
PAGE 101
<PAGE> 209
Plan of Merger be amended to permit UPC to utilize assets other than cash or
good funds to make payment of the Consideration as provided in Section 3.1(e)
of the Reorganization Agreement at any time after the GSSC Stockholders'
Meeting without the requisite approval (except as provided for in the
Reorganization Agreement) of the GSSC Record Holders, and that no amendment to
this Plan of Merger shall modify the requirements of regulatory approval as set
forth in Section 8.3(b) of the Reorganization Agreement.
5.2 AUTHORITY FOR AMENDMENTS AND WAIVERS. Prior to the
Effective Time of the Merger, UPC and INTERIM, acting through their respective
Boards of Directors or chief executive officers or presidents or other
authorized officers, shall have the right to amend this Plan of Merger to
postpone the Effective Time of the Merger to a date and time subsequent to the
time of filing of the Plan of Merger with the Delaware Secretary of State, to
waive any default in the performance of any term of this Plan of Merger by
GSSC, to waive or extend the time for the compliance or fulfillment by GSSC of
any and all of its obligations under this Plan of Merger, and to waive any or
all of the conditions precedent to the obligations of UPC and INTERIM under
this Plan of Merger, except any condition that, if not satisfied, would result
in the violation of any law or applicable governmental regulation. Prior to
the Effective Time of the Merger, GSSC, acting through its Board of Directors
or chief executive officer or president or other authorized officer, shall have
the right to amend this Plan of Merger to postpone the Effective Time of the
Merger to a date and time subsequent to the time of filing of the Plan of
Merger with the Delaware Secretary of State, to waive any default in the
performance of any term of this Plan of Merger by UPC or INTERIM, to waive or
extend the time for the compliance or fulfillment by UPC or INTERIM of any and
all of their obligations under this Plan of Merger, and to waive any or all of
the conditions precedent to the obligations of GSSC under this Plan of Merger
except any condition that, if not satisfied, would result in the violation of
any law or applicable governmental regulation.
ARTICLE 6
MISCELLANEOUS
6.1 NOTICES. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
by hand, by facsimile transmission, or by registered or certified mail, postage
pre-paid to the persons at the addresses set forth below (or at such other
addresses or facsimile numbers as may hereafter be designated as provided
below), and shall be deemed to have been delivered as of the date received by
the Party to which, or to whom it is addressed:
PLAN OF MERGER - EXHIBIT A TO AGREEMENT AND PLAN OF REORGANIZATION
PAGE 102
<PAGE> 210
If to UPC or INTERIM:
Union Planters Corporation
P.O. Box 387 (mailing)
Memphis, Tennessee 38147
7130 Goodlett Farms Parkway (deliveries)
Memphis, Tennessee 38018
Fax: (901) 383-2877
Attn: Mr. Jackson W. Moore, President
Gary A. Simanson,
Associate General Counsel
If to GSSC: Grenada Sunburst System Corporation
2000 Gateway
(P.O. Box 947)
Grenada, Mississippi 38902-0947
Fax: (601) 227-2070
Attn: Mr. James T. Boone, Chairman
President and Chief Executive Officer
With a copy to: Thompson & Mitchell
One Mercantile Center
St. Louis, Missouri
Fax: (314) 231-1717
Attn: Gerard K. Sandweg, Jr., Esq.
or at such other address as shall be furnished in writing by any of the Parties
to the others by notice given as provided in this section 6.1.
6.2 GOVERNING LAW. Except to the extent federal law shall be
controlling, this Plan of Merger shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware with respect to
those provisions of this Plan of Merger expressly required by Delaware law to
be included in this Plan of Merger, disregarding, however, the Delaware
conflicts of laws rules. In all other instances, this Plan of Merger shall be
governed by and construed and enforced in accordance with the laws of the State
of Tennessee disregarding, however, the Tennessee conflicts of laws rules.
6.3 CAPTIONS. The Captions heading the Sections in this Plan
of Merger are for convenience only and shall not affect the construction or
interpretation of this Plan of Merger.
6.4 COUNTERPARTS. This Plan of Merger may be executed in two
or more counterparts, each of which shall be deemed an
PLAN OF MERGER - EXHIBIT A TO AGREEMENT AND PLAN OF REORGANIZATION
PAGE 103
<PAGE> 211
original instrument, but all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, each of the Parties has caused this Plan of Merger
to be duly executed and delivered by its duly authorized officers as of the
date first above written.
ATTEST: UNION PLANTERS CORPORATION
__________________________ By:___________________________
J. F. Springfield Jackson W. Moore
Its: Secretary Its: President
ATTEST: GSSC ACQUISITION COMPANY, INC.
__________________________ By:___________________________
J. F. Springfield Jackson W. Moore
Its: Secretary Its: President
ATTEST: GRENADA SUNBURST SYSTEM
CORPORATION
_____________________________ By:___________________________
Edwin T. Cofer James T. Boone
Its: Secretary Its: Chairman, President and
Chief Executive Officer
PLAN OF MERGER - EXHIBIT A TO AGREEMENT AND PLAN OF REORGANIZATION
PAGE 104
<PAGE> 212
PROXY
UNION PLANTERS CORPORATION
No. of Shares
7130 GOODLETT FARMS PARKWAY
MEMPHIS, TENNESSEE 38018
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John H. Hembree, Timmons L. Treadwell, III
and Thomas R. Price, or any one of them acting alone, as proxies, each with the
power to appoint such person's substitute, and hereby authorizes them to vote,
as designated below, all of the shares of common stock of Union Planters
Corporation held of record by the undersigned on October 27, 1994, at the
Special Meeting of Shareholders to be held on December 28, 1994, or at any
adjournments or postponements thereof.
1. APPROVAL OF THE AGREEMENT AND PLAN OF REORGANIZATION BY AND
BETWEEN UNION PLANTERS CORPORATION, GSSC ACQUISITION COMPANY,
INC., GRENADA SUBURST SYSTEM CORPORATION, SUNBURST BANK,
MISSISSIPPI AND SUNBURST BANK, LOUISIANA, DATED JULY 1, 1994,
ALONG WITH THE PLAN OF MERGER ANNEXED THERETO AS EXHIBIT A.
<TABLE>
<S> <C> <C>
/ / / / / /
FOR AGAINST ABSTAIN
</TABLE>
(Continued on other side)
(Continued from other side)
2. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this proxy will
be voted FOR approval of the Reorganization Agreement and the Plan of Merger
annexed thereto as Exhibit A.
Dated: , 1994
------------- ---
Signature
--------------------
Signature
--------------------
(if held jointly)
Please sign exactly as name
appears to left. When shares
are hold by joint tenants,
both should sign, When
signing as attorney,
executor, administrator,
trustee or guardian, please
give full title as such. If a
corporation, please sign full
corporate name by President
or other authorized officer.
If a partnership, please sign
in partnership name by
authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE> 213
Filed Pursuant to Rule 424(b)(3)
Registration No. 33-56269
[GRENADA SUNBURST SYSTEM CORPORATION LETTERHEAD]
November 10, 1994
Dear Fellow Stockholder:
You are cordially invited to attend a Special Meeting of Stockholders
(the "GSSC Special Meeting") of Grenada Sunburst System Corporation ("GSSC") on
Wednesday, December 28, 1994. The GSSC Special Meeting will be held at the
Corporate Administration Building, 2000 Gateway, Grenada, Mississippi 38901,
commencing at 1:00 p.m., Central Standard Time.
At the GSSC Special Meeting, stockholders will be asked to adopt an
Agreement and Plan of Reorganization and related Plan of Merger (collectively,
the "Reorganization Agreement"), pursuant to which Union Planters Corporation
("UPC") would acquire GSSC through the merger of a wholly owned subsidiary of
UPC with and into GSSC (the "Merger"). Upon consummation of the Merger, each
outstanding share of GSSC Common Stock would be converted exclusively into the
right to receive 1.4530 shares of UPC Common Stock (the "Exchange Ratio"). A
cash payment would be made in settlement of a GSSC stockholder's remaining
fractional share (if any) of UPC Common Stock. Adoption of the Reorganization
Agreement requires the affirmative votes of the holders of at least a majority
of the outstanding shares of GSSC Common Stock.
The proposed Merger would provide holders of GSSC Common Stock with
the opportunity to receive a significant premium over the market price of their
shares immediately prior to the public announcement of the proposed Merger,
while at the same time enabling GSSC stockholders to participate in the
enhanced growth and other opportunities for UPC. The Merger is intended to be
tax-free to GSSC stockholders for federal income tax purposes, except to the
extent of cash received for fractional share interests.
THE BOARD OF DIRECTORS OF GRENADA SUNBURST SYSTEM CORPORATION HAS
CAREFULLY CONSIDERED AND UNANIMOUSLY APPROVED THE TERMS OF THE REORGANIZATION
AGREEMENT AS BEING IN THE BEST INTEREST OF GRENADA SUNBURST SYSTEM CORPORATION
AND ITS STOCKHOLDERS. THE GRENADA SUNBURST SYSTEM CORPORATION BOARD OF
DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE PROPOSAL TO ADOPT THE
REORGANIZATION AGREEMENT.
The accompanying Joint Proxy Statement/Prospectus and related proxy
materials set forth, or incorporate by reference, information, including
financial data, relating to GSSC and UPC and describe the terms and conditions
of the proposed Merger. The Board of Directors of GSSC requests that the
stockholders carefully review these materials before completing the enclosed
proxy card.
ADOPTION OF THE REORGANIZATION AGREEMENT IS A CONDITION TO THE
CONSUMMATION OF THE MERGER. Accordingly, it is important that your shares be
represented at the GSSC Special Meeting, whether or not you plan to attend the
GSSC Special Meeting in person. Please complete, date and sign the enclosed
proxy card and return it in the accompanying envelope which requires no postage
if mailed in the United States. If you later decide to attend the GSSC
<PAGE> 214
Special Meeting and vote in person, or if you wish to revoke your proxy for
any reason prior to the vote at the GSSC Special Meeting, you may do so and
your proxy will have no further effect.
Should you require assistance in completing your proxy card or if you
have questions about the voting procedure or the accompanying Joint Proxy
Statement/Prospectus, please feel free to contact Edwin T. Cofer, Secretary of
GSSC, at (601) 226-1100.
Sincerely,
J. T. BOONE
Chairman of the Board and Chief Executive Officer
November 10, 1994
Grenada, Mississippi
2
<PAGE> 215
GRENADA SUNBURST SYSTEM CORPORATION
2000 GATEWAY
GRENADA, MISSISSIPPI 38901
______________________________________
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD
DECEMBER 28, 1994
______________________________________
TO THE STOCKHOLDERS OF GRENADA SUNBURST SYSTEM CORPORATION
NOTICE IS HEREBY GIVEN that a Special Meeting of the Stockholders (the
"GSSC Special Meeting") of Grenada Sunburst System Corporation ("GSSC") will be
held at the Corporate Administration Building, 2000 Gateway, Grenada,
Mississippi 38901, on Wednesday, December 28, 1994, at 1:00 p.m., Central
Standard Time, for the following purposes:
(1) To consider and vote upon a proposal to adopt an Agreement and
Plan of Reorganization and the related Plan of Merger (collectively, the
"Reorganization Agreement") providing for the acquisition of GSSC by Union
Planters Corporation ("UPC") through the merger of a wholly owned subsidiary of
UPC with and into GSSC (the "Merger") whereby, upon consummation of the Merger,
each share of GSSC Common Stock would be converted exclusively into the right
to receive 1.4530 shares of UPC Common Stock (the "Exchange Ratio"). A cash
payment would be made in settlement of a GSSC stockholder's remaining
fractional share (if any) of UPC Common Stock.
(2) To transact such other business as may properly come before
the GSSC Special Meeting or any adjournments or postponements thereof.
Pursuant to the Bylaws of GSSC, the GSSC Board of Directors has fixed
the close of business on October 31, 1994, as the record date for determination
of stockholders entitled to notice of and to vote at the GSSC Special Meeting
and at any adjournments or postponements thereof.
The affirmative votes of the holders of a majority of the outstanding
shares of GSSC Common Stock are required to approve the proposal to adopt the
Reorganization Agreement. Accordingly, each stockholder is urged to sign the
enclosed proxy card and return it promptly to GSSC.
<PAGE> 216
WHETHER OR NOT YOU EXPECT TO ATTEND THE GSSC SPECIAL MEETING, PLEASE
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT IN THE
ACCOMPANYING ENVELOPE. THE PROXY MAY BE REVOKED AT ANY TIME PRIOR TO THE VOTE
AT THE GSSC SPECIAL MEETING BY FOLLOWING THE PROCEDURES SET FORTH IN THE
ACCOMPANYING JOINT PROXY STATEMENT/PROSPECTUS.
BY ORDER OF THE BOARD OF DIRECTORS
Edwin T. Cofer
Secretary
November 10, 1994
Grenada, Mississippi
2
<PAGE> 217
UNION PLANTERS CORPORATION
PROXY STATEMENT
FOR
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 28, 1994
AND
PROSPECTUS
UP TO 14,750,000 SHARES OF COMMON STOCK HAVING A PAR VALUE OF $5.00 PER SHARE
______________________________
GRENADA SUNBURST SYSTEM CORPORATION
PROXY STATEMENT
FOR
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 28, 1994
_______________________________
This Prospectus of Union Planters Corporation ("UPC") relates to up to
14,750,000 shares of Common Stock, $5.00 par value, of UPC (the "UPC Common
Stock") to be issued to the stockholders of Grenada Sunburst System Corporation
("GSSC") upon consummation of the proposed merger (the "Merger") of GSSC
Acquisition Company, Inc., a newly organized, wholly owned subsidiary of UPC
("INTERIM"), with and into GSSC. The Merger would be consummated pursuant to
the terms of the Agreement and Plan of Reorganization dated July 1, 1994 (the
"Agreement and Plan of Reorganization"), by and between UPC, INTERIM, GSSC and
two wholly owned subsidiaries of GSSC, Sunburst Bank, Mississippi and Sunburst
Bank, Louisiana (collectively, the "Banks"), and the related Plan of Merger
annexed thereto as Exhibit A (the Agreement and Plan of Reorganization and the
Plan of Merger being collectively referred to herein as the "Reorganization
Agreement"). This Prospectus also serves as the Joint Proxy Statement of UPC
and of GSSC for use in connection with the separate special meetings of
shareholders or stockholders, as the case may be, of each of UPC and GSSC
(individually, such meetings are referred to herein as the "UPC Special
Meeting" and the "GSSC Special Meeting" and, collectively, as the "Special
Meetings"). The UPC Special Meeting and the GSSC Special Meeting will both be
held on December 28, 1994, and each such meeting will be held at the time and
the place and for the purposes stated in the Notice of Special Meeting of
Shareholders and the Notice of Special Meeting of Stockholders, respectively,
accompanying this Joint Proxy Statement/Prospectus.
Following consummation of the Merger, GSSC would be liquidated and
dissolved and the business and operations of the Banks would be continued as
direct wholly owned subsidiaries of UPC. Upon consummation of the Merger, each
outstanding share of GSSC Common Stock, $1.00 par value (the "GSSC Common
Stock"), would be converted exclusively into the right to receive 1.4530
shares of UPC Common Stock (the "Exchange Ratio"). A cash payment would be
made by UPC in settlement of a GSSC stockholder's remaining fractional share
(if any) of UPC Common Stock. Pursuant to the terms of the Reorganization
Agreement, the computation of the Exchange Ratio was based on the Current
Market Price Per Share (as defined below) of UPC Common Stock being within a
certain range of prices as set forth in Section 3.1(e) of the Agreement and Plan
of Reorganization. The Current Market Price Per Share of UPC Common Stock was
based on the average of the closing prices of UPC Common Stock on the New York
Stock Exchange ("NYSE") for the twenty (20) trading days next preceding the
issuance of all necessary regulatory approvals. The last necessary regulatory
approval was issued on November 7, 1994, and the Current Market Price Per Share
of UPC Common Stock was determined to be $23.462 based on the average of the
closing prices of UPC Common Stock from October 10, 1994 through November 4,
1994. See "THE MERGER -- Terms of the Merger."
<PAGE> 218
The transaction is intended to qualify as a tax-free reorganization
under the Internal Revenue Code of 1986, as amended (the "Code") (except to the
extent of the cash payment that each GSSC stockholder would receive in lieu of
such stockholder's fractional share, if any). See "THE MERGER - Certain
Federal Income Tax Consequences."
Shares of the outstanding UPC Common Stock are now, and the UPC Common
Stock to be issued in connection with the Merger will be, listed for trading on
the NYSE under the symbol "UPC." The last reported sale price of UPC Common
Stock on the NYSE on November 8, 1994, was $22.13 per share. Shares of the
outstanding GSSC Common Stock are traded on the National Association of
Securities Dealers Automated Quotation System/National Market System
("NASDAQ/NMS") under the symbol "GSSC." The last reported sale price of GSSC
Common Stock on the NASDAQ/NMS on November 8, 1994 was $30.50 per share.
All information contained in this Joint Proxy Statement/Prospectus
pertaining to UPC and its subsidiaries has been supplied by UPC, and all
information pertaining to GSSC and its subsidiaries has been supplied by GSSC.
Neither UPC nor GSSC warrants the accuracy of the information provided by the
other.
This Joint Proxy Statement/Prospectus and the accompanying proxy cards
are first being mailed to the shareholders of UPC and the stockholders of GSSC
on or about November 10, 1994.
_________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS JOINT PROXY STATEMENT/PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SECURITIES OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OBLIGATIONS
OF A BANK OR SAVINGS ASSOCIATION AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
_________________________
THE DATE OF THIS JOINT PROXY STATEMENT/PROSPECTUS IS NOVEMBER 10, 1994
<PAGE> 219
AVAILABLE INFORMATION
Both UPC and GSSC are subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith file reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at regional offices
of the Commission located at Room 1228, 75 Park Place, New York, New York 10007
and 500 West Madison Street, Chicago, Illinois 60661-2511. Copies of such
materials can be obtained by mail from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. In addition, such reports, proxy statements and other information
concerning UPC can be inspected at the offices of the NYSE, 20 Broad Street,
New York, New York 10005. Reports, proxy statements and other information
concerning GSSC can be inspected at the offices of the National Association of
Securities Dealers, Inc., 1735 K Street, Washington, D.C. 20006. UPC has filed
with the Commission a Registration Statement (No. 33-56269) on Form S-4
(together with any amendments thereto, the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act") with respect to the
shares of UPC Common Stock to be issued pursuant to the Reorganization
Agreement. This Joint Proxy Statement/Prospectus does not contain all of the
information set forth in the Registration Statement and the exhibits thereto.
Certain items were omitted in accordance with the rules and regulations of the
Commission.
For further information regarding UPC and the UPC Common Stock offered
by this Joint Proxy Statement/Prospectus, reference is made to the complete
Registration Statement, including all amendments thereto and the schedules and
exhibits and other documents filed or deemed filed as a part thereof.
Statements contained herein concerning provisions of documents are necessarily
summaries of the documents, and each statement is qualified in its entirety by
reference to the copy of the applicable document filed with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by UPC (Commission File No.
1-10160) and GSSC (Commission File No. 0-15003) with the Commission pursuant to
the Exchange Act are hereby incorporated by reference in this Joint Proxy
Statement/Prospectus:
1. UPC's Annual Report on Form 10-K for the year ended December
31, 1993;
2. UPC's Quarterly Reports on Form 10-Q dated March 31, 1994 and
June 30, 1994;
3. UPC's Current Report on Form 8-K dated October 20, 1994, which
includes preliminary third quarter 1994 operating results
(unaudited) and consolidated financial statements of UPC for
the three years ended December 31, 1993 (audited) and for the
six-month periods ended June 30, 1994 and 1993 (unaudited)
presenting the restatement of UPC's historical consolidated
financial statements to reflect consummation of recently
completed acquisitions by UPC (these financial statements
constitute the historical consolidated financial statements
of UPC effective October 20, 1994);
ii
<PAGE> 220
4. UPC's Current Report on Form 8-K dated January 19, 1989, filed
on February 1, 1989 (Commission File No. 0-6919), in
connection with UPC's designation and authorization
of its Series A Preferred Stock;
5. UPC's Current Reports on Form 8-K dated January 11, 1994,
January 20, 1994, February 8, 1994 (as amended February 23,
1994), April 14, 1994, April 15, 1994, April 28, 1994,
May 18, 1994, May 19, 1994 (as amended July 26, 1994), July 1,
1994, July 21, 1994, July 26, 1994, August 18, 1994, August
19, 1994, September 1, 1994, September 19, 1994 and September
28, 1994;
6. The description of the UPC Common Stock contained in UPC's
Registration Statement under Section 12(b) of the Exchange
Act, and any amendment or report filed for the purpose of
updating such description;
7. GSSC's Annual Report on Form 10-K for the year ended December
31, 1993;
8. GSSC's Quarterly Reports on Form 10-Q for the periods ended
March 31, 1994 and June 30, 1994;
9. GSSC's Current Reports on Form 8-K dated July 11, 1994 (as
amended August 1, 1994), September 28, 1994 and October 20,
1994; and
10. The description of GSSC Common Stock set forth in GSSC's
Post-Effective Amendment No. 1 of the Registration Statement
on Form S-1 (File No. 33-63312), including any amendment or
report filed for the purpose of updating such description.
The fact that a report has been listed above does not mean that it has
not been superseded or amended, in whole or in part, by a subsequent report.
All documents filed by UPC and GSSC with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Joint Proxy Statement/Prospectus and prior to the dates of the Special Meetings
or any adjournments or postponements thereof shall be deemed to be incorporated
by reference in this Joint Proxy Statement/Prospectus and to be a part hereof
from the dates of filing of such documents or reports. Any statement contained
in a document incorporated or deemed to be incorporated herein by reference
shall be deemed to be modified or superseded for purposes of this Joint Proxy
Statement/Prospectus to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Joint Proxy Statement/Prospectus.
THIS JOINT PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY
REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. SUCH DOCUMENTS
(OTHER THAN EXHIBITS TO SUCH DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY
INCORPORATED BY REFERENCE) ARE AVAILABLE, WITHOUT CHARGE, TO ANY PERSON,
INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS JOINT PROXY STATEMENT/PROSPECTUS
IS DELIVERED, ON WRITTEN OR ORAL REQUEST, IN THE CASE OF DOCUMENTS RELATING TO
UPC, TO UNION PLANTERS CORPORATION, P.O. BOX 387, MEMPHIS, TENNESSEE 38147
(TELEPHONE NUMBER (901) 383-6590), ATTENTION: GARY A. SIMANSON, ASSISTANT
SECRETARY AND ASSOCIATE GENERAL COUNSEL, OR, IN THE CASE OF DOCUMENTS RELATING
TO GSSC, TO GRENADA SUNBURST SYSTEM CORPORATION, 2000 GATEWAY, GRENADA,
MISSISSIPPI 38901 (TELEPHONE NUMBER (601) 226-1100), ATTENTION: EDWIN T.
COFER, SECRETARY AND
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GENERAL COUNSEL. IN ORDER TO ENSURE DELIVERY OF THE DOCUMENTS PRIOR TO THE
APPLICABLE SHAREHOLDER OR STOCKHOLDER MEETING, AS THE CASE MAY BE, REQUESTS
SHOULD BE RECEIVED PRIOR TO DECEMBER 1, 1994.
UPC's Annual Report on Form 10-K for the year ended December 31, 1993
incorporates by reference specific portions of UPC's Annual Report to
Shareholders for that year (the "UPC Annual Report to Shareholders"), but does
not incorporate other portions of the UPC Annual Report to Shareholders. The
portion of the UPC Annual Report to Shareholders captioned "Letter to
Shareholders" and other portions of the UPC Annual Report to Shareholders not
specifically incorporated into UPC's Annual Report on Form 10-K are not
incorporated herein and are not a part of the Registration Statement.
GSSC's Annual Report on Form 10-K for the year ended December 31, 1993
incorporates by reference specific portions of GSSC's Annual Report to
Stockholders for that year (the "GSSC Annual Report to Stockholders"), but does
not incorporate other portions of the GSSC Annual Report to Stockholders. The
portion of the GSSC Annual Report to Stockholders captioned "Letter to
Shareholders" and other portions of the GSSC Annual Report to Stockholders not
specifically incorporated into GSSC's Annual Report on Form 10-K are not
incorporated herein and are not a part of the Registration Statement.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED HEREIN, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY
ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION. NEITHER THE DELIVERY OF THIS DOCUMENT NOR ANY DISTRIBUTION OF
SECURITIES MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF UPC OR GSSC SINCE THE DATE
HEREOF OR THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE HEREOF.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
AVAILABLE INFORMATION ii
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE ii
SUMMARY 1
Parties to the Transaction 1
The Merger 3
The Special Meetings 3
Reasons for the Merger and Recommendations of the UPC Board of Directors 4
Fairness Opinion of Stifel Nicholas 5
Reasons for the Merger and Recommendations of the GSSC Board of Directors 5
Fairness Opinion of Robinson-Humphrey 5
Effective Time of the Merger 6
Conditions; Regulatory Approvals 6
Waiver and Amendment; Termination 6
Limitation on Negotiations 7
Management After the Merger 7
Interests of Certain Persons in the Merger 7
Comparison of Shareholder's and Stockholder's Rights 8
Provisions That May Have an Anti-Takeover Effect 8
Certain Federal Income Tax Consequences 8
Accounting Treatment 8
No Shareholder's or Stockholder's Appraisal Rights 8
Market Prices of Common Stock; Dividends 9
Selected Consolidated Financial Data 11
Recent Developments Affecting UPC 18
Recent Developments Affecting GSSC 23
Equivalent and Pro Forma Per Share Data 25
Pro Forma Condensed Consolidated Financial Information 27
THE SPECIAL MEETINGS 33
The UPC Special Meeting 33
Date, Time and Place 33
Matters to be Considered at the UPC Special Meeting 33
Record Date; Vote Required 33
Voting and Revocation of Proxies 33
Solicitation of Proxies 34
The GSSC Special Meeting 34
Date, Time and Place 34
Matters to be Considered at the GSSC Special Meeting 35
Record Date; Vote Required 35
Voting and Revocation of Proxies 35
Solicitation of Proxies 36
No Shareholder's or Stockholder's Appraisal Rights 37
Reasons and Recommendations of the Boards of Directors of UPC and GSSC 37
Other Matters 37
THE MERGER 38
Background of the Merger 38
</TABLE>
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<TABLE>
<S> <C>
Reasons for the Merger and Recommendations of the Boards of Directors of UPC and GSSC 43
Reasons and Recommendations of UPC Board of Directors 43
Fairness Opinion of Stifel Nicolaus 44
Reasons and Recommendations of GSSC Board of Directors 49
Fairness Opinion of Robinson-Humphrey 51
Terms of the Merger 54
Effective Date and Effective Time of the Merger 57
Surrender of Certificates 57
Interests of Certain Persons in the Merger 58
Voting Securities and Principal Holders Thereof 59
Transactions with Management of GSSC 60
Conditions to Consummation of the Merger 60
Regulatory Approvals 63
Conduct of Business Pending the Merger 64
Payment of Dividends 65
Waiver and Amendment; Termination 65
Limitation on Negotiations 67
Management After the Merger 67
Accounting Treatment 68
Expenses 68
Certain Federal Income tax Consequences 68
Resales of UPC Common Stock 70
Comparison of Shareholder's and Stockholder's Rights 71
CERTAIN REGULATORY CONSIDERATIONS 75
General 75
Capital Adequacy 76
Prompt Corrective Action 77
Dividend Restrictions 78
Support of Subsidiary Banks 79
Transactions with Affiliates 80
FDIC Insurance Assessments 80
Other Banking Legislation 81
Regulation of GSSC and the Banks 83
DESCRIPTION OF UPC COMMON AND PREFERRED STOCK 84
UPC Common Stock 84
Preferred Stock of UPC 85
Certain Provisions That May Have an Anti-Takeover Effect 87
MANAGEMENT AND ADDITIONAL INFORMATION 89
VALIDITY OF UPC COMMON STOCK 89
EXPERTS 89
Index to Appendices
Appendix A -- Agreement and Plan of Reorganization, along with the Plan of Merger
annexed thereto as Exhibit A A-1
Appendix B -- Fairness Opinion of The Robinson-Humphrey Company, Inc. B-1
Appendix C -- Fairness Opinion of Stifel, Nicolaus & Company, Incorporated C-1
</TABLE>
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SUMMARY
The following summary is not intended to be a complete description of
all material facts regarding UPC, GSSC and the matters to be considered at the
Special Meetings and is qualified in all respects by the information appearing
elsewhere or incorporated by reference in this Joint Proxy
Statement/Prospectus, the Appendices hereto and the documents referred to
herein.
PARTIES TO THE TRANSACTION
UPC. UPC is a multi-state bank holding company and savings and loan
holding company headquartered in Memphis, Tennessee. At June 30, 1994 (after
restatement for Recently Completed Acquisitions (as defined below), see
"-- Recent Developments Affecting UPC -- Recently Completed Acquisitions and
- -- Restatement of UPC Financial Data"), UPC had total consolidated assets of
approximately $7.5 billion, loans of approximately $3.6 billion, deposits of
approximately $6.0 billion and shareholders' equity of approximately $576
million. As of that date, UPC was the second largest independent bank holding
company headquartered in Tennessee as measured by consolidated deposits.
Management's emphasis in recent years has been to improve asset quality and
maintain capital well in excess of regulatory minimums. At June 30, 1994
(after restatement for Recently Completed Acquisitions), UPC's ratio of
nonperforming loans to total loans was .53% and nonperforming assets to loans
and foreclosed property was .64%. UPC's allowance for losses on loans to
total loans ratio at such date was 2.43% and UPC's allowance for losses on
loans to nonperforming loans ratio was 462.40%. Also at such date, UPC's Tier
1 risk-based capital, total risk-based capital and leverage ratios were 15.11%,
18.39% and 7.49%, respectively.
UPC conducts its business activities through its principal bank
subsidiary, Union Planters National Bank ("UPNB"), four Tennessee regional bank
subsidiaries (the "Regional Banks"), and through 34 community banks and five
savings and loan subsidiaries (collectively, the "Community Banks") located in
Tennessee, Arkansas, Mississippi, Alabama and Kentucky. UPNB was founded in
1869 and operates 34 branches throughout West Tennessee. The Regional Banks
resulted from a corporate division of UPNB effective on July 1, 1994 as part of
UPC's effort to emphasize community management. Those subsidiaries operate 31,
13, five and 10 branches in Middle Tennessee, East Tennessee, Chattanooga, and
Jackson, Tennessee, respectively. At June 30, 1994, UPNB had total
consolidated assets of approximately $3.7 billion (total assets of
approximately $2.4 billion after the corporate division effective July 1,
1994). For information with respect to the split off of the Regional Banks and
recent changes to UPNB, see "-- Recent Developments Affecting UPC." UPNB, the
Regional Banks and the Community Banks provide a diversified range of financial
services in the communities in which they operate, including consumer,
commercial and corporate lending, retail banking and mortgage banking. To
enhance fee income, UPNB also is engaged in mortgage servicing, investment
management and trust services, the issuance and servicing of credit and debit
cards and the origination, packaging and securitization of the
government-guaranteed portions of Small Business Administration (SBA) loans.
In addition to UPNB and the Regional Banks, UPC, through the Community
Banks, operates 157 branches. At June 30, 1994 (after restatement for Recently
Completed Acquisitions), the Community Banks had total combined assets of
approximately $3.8 billion ($2.4 billion in Tennessee, $503 million in
Mississippi, $546 million in Arkansas, $109 million in Kentucky and $305
million in Alabama). All of the Community Banks have been acquired by UPC
since 1986, generally are located in nonmetropolitan towns and communities and
provide banking services and loan products to such communities, with an
emphasis on one-to-four-family residential mortgages and consumer and small
commercial lending. Of the 34 Community Banks, 21 have the largest deposit
share and nine have the
<PAGE> 225
second largest deposit share in their respective markets based on June 30, 1993
information, providing UPC with a strong competitive position in those markets.
UPC believes that the Regional Banks and Community Banks provide
additional diversification of the funding and revenue sources for UPC, and UPC
intends to continue expansion of the Community Banks and Regional Banks. UPC
believes that its strategy of permitting, where practicable, the Community
Banks and Regional Banks substantial autonomy in their day-to-day operations
enables UPC to be an attractive acquiror of community banking organizations and
permits such institutions to continue to grow within their markets without
disruption. UPC controls risk through centralized loan review and audit
functions as well as close monitoring of the financial performance of each
Community Bank. UPC also implements its asset and liability management strategy
on a consolidated basis and effects all trades for the investment portfolios of
the Community Banks and Regional Banks. UPC seeks economies in the Community
Banks and Regional Banks through consolidation of administrative and
operational processes and is currently in the process of converting all of the
Community Banks and Regional Banks to a common data processing system. This
system conversion should be completed by mid-year 1995 and should permit UPC to
realize significant cost savings upon full implementation.
UPC expects to continue to take advantage of the consolidation of the
financial services industry by further developing its franchise through the
acquisition of financial institutions in the major markets of Tennessee and
through the acquisition of community banks that have a significant local market
share, primarily in communities located in Tennessee and contiguous states.
Future acquisitions may entail the payment by UPC of consideration in excess of
the book value of the underlying assets being acquired, may result in the
issuance of additional shares of UPC capital stock or the incurrence of
additional indebtedness by UPC, and could have a dilutive effect on the per
share earnings or book value of the UPC Common Stock. For information with
respect to acquisitions that have been consummated recently or that are
currently pending, see "-- Recent Developments Affecting UPC."
UPC's corporate office is located at 7130 Goodlett Farms Parkway,
Memphis, Tennessee 38018, and its telephone number is (901) 383-6000.
GSSC. GSSC, a Delaware corporation, was organized on January 10, 1986
and is registered as a bank holding company under the Bank Holding Company Act
of 1956, as amended (the "BHCA"). GSSC currently owns all of the capital stock
of two state-chartered banks, Sunburst Bank, Mississippi and Sunburst Bank,
Louisiana (collectively, the "Banks"), which operate from 124 community banking
locations serving Mississippi and Louisiana. GSSC also owns Sunburst Financial
Group, Inc., which offers full service brokerage to its customers.
As of September 30, 1994, GSSC had 9,492,975 shares of its common
stock issued and outstanding. As of June 30, 1994, GSSC reported, on a
consolidated basis, assets of $2.5 billion, loans net of unearned income of
$1.7 billion, deposits of $2.2 billion and stockholders' equity of $183
million. GSSC reported net earnings of $25.4 million for the year 1993 and
$13.2 million for the first six months of 1994. See "-- Recent Developments
Affecting GSSC."
The principal executive offices of GSSC are located at 2000 Gateway,
Grenada, Mississippi 38901 and its telephone number is (601) 226-1100.
Sunburst Bank, Mississippi. Sunburst Bank, Mississippi, a
Mississippi-chartered state bank, was organized in 1890. Sunburst Bank,
Mississippi has its headquarters in Grenada, Mississippi and currently
2
<PAGE> 226
operates from 108 locations throughout Mississippi. As of June 30, 1994,
Sunburst Bank, Mississippi reported total assets of $2.0 billion, total loans
of $1.4 billion, total deposits of $1.8 billion and stockholder's equity of
$140 million.
Sunburst Bank, Louisiana. Sunburst Bank, Louisiana, a
Louisiana-chartered state bank, was acquired by GSSC in May 1988. Sunburst
Bank, Louisiana has its headquarters in Baton Rouge, Louisiana and has 16
locations in the Baton Rouge metropolitan area. As of June 30, 1994, Sunburst
Bank, Louisiana reported total assets of $507 million, total loans of $308
million, total deposits of $446 million and stockholder's equity of $38
million.
INTERIM. INTERIM was organized by UPC solely to effectuate the
Merger. At the Effective Time of the Merger (as defined below), INTERIM will,
pursuant to the terms of the Reorganization Agreement, merge with and into
GSSC, with GSSC surviving the Merger and immediately thereafter being
liquidated and dissolved by UPC with the Banks thereafter operating as direct
wholly-owned subsidiaries of UPC.
Additional Information. For additional information regarding the
business of UPC, GSSC and their respective subsidiaries, see "THE MERGER
- -- Background of the Merger and -- Reasons for the Merger and Recommendations of
the Boards of Directors of UPC and GSSC," "-- Recent Developments Affecting
UPC," "-- Recent Developments Affecting GSSC" and the documents incorporated by
reference in this Joint Proxy Statement/Prospectus (see "INCORPORATION OF
CERTAIN DOCUMENTS BY REFERENCE").
THE MERGER
The Reorganization Agreement provides for the merger of INTERIM with
and into GSSC, with GSSC surviving the Merger. It is contemplated by the
parties that immediately subsequent to the Effective Time of the Merger GSSC
would be liquidated and dissolved by UPC whereupon the Banks would become
direct, wholly-owned subsidiaries of UPC. Upon consummation of the Merger,
each outstanding share of GSSC Common Stock would be converted exclusively into
the right to receive 1.4530 shares of UPC Common Stock. Each outstanding
share of UPC Common Stock would remain outstanding. A holder of shares of GSSC
Common Stock would receive cash (without interest) in lieu of any fractional
share of UPC Common Stock. See "THE MERGER -- Terms of the Merger."
THE SPECIAL MEETINGS
UPC Special Meeting. The UPC Special Meeting will be held on
Wednesday, December 28, 1994, at 1:00 p.m., Central Standard Time, at the
offices of UPC, Union Planters Administrative Center, 7130 Goodlett Farms
Parkway, Memphis, Tennessee 38018. Only holders of record of UPC Common Stock
at the close of business on October 27, 1994 will be entitled to notice of, and
to vote at, the UPC Special Meeting. As of the close of business on October
27, 1994, there were 25,431,252 shares of UPC Common Stock outstanding and
entitled to vote.
UPC Votes Required. The affirmative votes of the holders of at least
a majority of the outstanding shares of UPC Common Stock present in person or
by proxy and entitled to vote at the UPC Special Meeting are required for UPC's
Merger. Each share of UPC Common Stock outstanding at the close of business on
the record date and to vote at the UPC Special Meeting is entitled to one vote
on each matter to be considered at the
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UPC Special Meeting. UPC's directors and executive officers
and their affiliates, are expected to vote substantially all of the 1,061,014
shares, or 4.17%, of the outstanding UPC Common Stock beneficially owned by
them as of the record date and entitled to vote at the UPC Special
Meeting "FOR" approval of the Reorganization Agreement and the Merger.
GSSC Special Meeting. The GSSC Special Meeting will be held on
Wednesday, December 28, 1994, at 1:00 p.m., Central Standard Time, at the
offices of GSSC, Corporate Administration Building, 2000 Gateway, Grenada,
Mississippi 38901. Only holders of record of GSSC Common Stock at the close of
business on October 31, 1994 will be entitled to notice of, and to vote at, the
GSSC Special Meeting. At the close of business on October 31, 1994, there were
9,492,975 shares of GSSC Common Stock outstanding and entitled to vote.
GSSC Votes Required. The affirmative votes of the holders of at least
a majority of the outstanding shares of GSSC Common Stock entitled to vote at
the GSSC Special Meeting are required for GSSC's stockholders to adopt the
Reorganization Agreement and thereby approve the Merger. Each share of GSSC
Common Stock outstanding at the close of business on the record date and
entitled to vote at the GSSC Special Meeting is entitled to one vote on each
matter to be considered at the GSSC Special Meeting. GSSC's directors and
executive officers, and their affiliates, are expected to vote substantially
all of the 618,647 shares, or approximately 6.5%, of the outstanding GSSC
Common Stock beneficially owned by them as of the record date and entitled to
vote at the GSSC Special Meeting "FOR" the proposal to adopt the Reorganization
Agreement.
REASONS FOR THE MERGER AND RECOMMENDATIONS OF THE UPC BOARD OF DIRECTORS
The UPC Board of Directors believes that the Merger is fair to and in
the best interests of UPC and its shareholders. The conclusion of the UPC Board
of Directors is based upon a number of factors, including the substantial
benefits expected to result from the combination of certain operations of GSSC
into UPC; information concerning the financial condition, results of operations
and prospects of UPC and GSSC on a stand-alone and combined basis; the market
price of UPC Common Stock; and the fairness opinion of the financial advisor to
UPC. The UPC Board of Directors believes that the consolidation of resources
brought about by the Merger would enable UPC to realize certain economies of
scale, to provide a wider and improved array of financial services to customers
and to achieve greater geographic and market diversity, which would give UPC
added flexibility in dealing with the changing competitive environment. The
UPC Board of Directors also believes that the Merger would provide UPC with
greater market position and financial resources to meet the competitive
challenges arising from further changes in the banking and financial services
industry. The UPC Board of Directors believes for the reasons set forth
herein, without assigning any relative weights to these factors, that the
Merger would be in the best interests of the shareholders of UPC. See "THE
MERGER -- Reasons for the Merger and Recommendations of the Boards of
Directors of GSSC and UPC -- Reasons and Recommendations of UPC Board of
Directors."
THE UPC BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED AND ADOPTED THE
REORGANIZATION AGREEMENT AND RECOMMENDS THAT THE UPC SHAREHOLDERS VOTE "FOR"
THE PROPOSAL TO APPROVE THE REORGANIZATION AGREEMENT.
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FAIRNESS OPINION OF STIFEL NICOLAUS
UPC retained Stifel, Nicolaus & Company, Incorporated ("Stifel
Nicolaus") as its financial advisor in connection with the Merger. Stifel
Nicolaus has rendered its written opinion dated October 20, 1994 to the UPC
Board of Directors, stating that on the date of such opinion, and based upon
the procedures and subject to the assumptions described in such opinion, the
Consideration (as defined below) to be received by the stockholders of GSSC
upon consummation of the Merger is fair, from a financial point of view, to the
holders of UPC Common Stock. The opinion of Stifel Nicolaus is attached as
Appendix C to this Joint Proxy Statement/Prospectus and shareholders of UPC are
urged to read the opinion in its entirety. It is a condition to the Closing
(as defined below) that such fairness opinion not be withdrawn prior to the
Closing and that UPC receive an updated fairness opinion from Stifel Nicolaus
dated within five days prior to the Closing Date. See "THE MERGER -- Reasons
for the Merger and Recommendations of the Boards of Directors of UPC and GSSC
- -- Fairness Opinion of Stifel Nicolaus."
REASONS FOR THE MERGER AND RECOMMENDATIONS OF THE GSSC BOARD OF DIRECTORS
The GSSC Board of Directors believes that the Merger is in the best
interests of GSSC and GSSC's stockholders. The GSSC Board of Directors has
carefully considered and unanimously approved the terms of the Reorganization
Agreement as being in the best interests of GSSC and its stockholders and
unanimously recommends its adoption. The recommendation of the GSSC Board of
Directors is based upon a number of factors including, but not limited to, the
value of the UPC Common Stock to be received in exchange for GSSC Common Stock
and other terms of the Reorganization Agreement, the tax-free nature of the
Merger for GSSC's stockholders, the benefits expected to result from the
combination of UPC and GSSC, information concerning the financial condition,
results of operations and prospects of UPC and GSSC on a combined basis, the
dividend policies with respect to UPC Common Stock and GSSC Common Stock,
recent developments in the financial institutions industry and the fairness
opinion of The Robinson-Humphrey Company, Inc. ("Robinson-Humphrey"). See "THE
MERGER -- Reasons for the Merger and Recommendations of the Boards of Directors
of GSSC and UPC -- Reasons and Recommendations of GSSC Board of Directors" and
"--Fairness Opinion of Robinson-Humphrey."
THE GSSC BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE
REORGANIZATION AGREEMENT AND RECOMMENDS THAT THE GSSC STOCKHOLDERS VOTE "FOR"
THE PROPOSAL TO ADOPT THE REORGANIZATION AGREEMENT.
FAIRNESS OPINION OF ROBINSON-HUMPHREY
GSSC retained Robinson-Humphrey as its financial advisor in connection
with the Merger. Robinson-Humphrey has rendered its written opinion to the
GSSC Board of Directors, stating that on the date of such opinion, and based
upon the procedures and subject to the assumptions described in such opinion,
the Consideration to be received by the stockholders of GSSC upon consummation
of the Merger is fair, from a financial point of view, to the holders of the
GSSC Common Stock. The opinion of Robinson-Humphrey is attached as Appendix B
to this Joint Proxy Statement/Prospectus and the GSSC stockholders are urged to
read the opinion in its entirety. It is a condition to the Closing that such
fairness opinion not be withdrawn prior to the Closing and that GSSC receive
an updated fairness opinion from Robinson-Humphrey dated within five days prior
to the Closing Date. See "THE MERGER -- Reasons for the Merger and
Recommendations of the Boards of Directors of UPC and GSSC -- Fairness Opinion
of Robinson-Humphrey."
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EFFECTIVE TIME OF THE MERGER
The Merger will become effective at the time a Certificate of Merger
along with the executed Plan of Merger are filed with the Delaware Secretary of
State in accordance with the Delaware General Corporation Law, as amended (the
"DGCL"), or on such later date and at such later time as the Certificate of
Merger and the Plan of Merger may specify (the "Effective Time of the Merger").
Assuming the expiration of all statutory waiting periods and the satisfaction
or waiver of all conditions to the Closing in the Reorganization Agreement, it
is intended by the parties to the Reorganization Agreement that the Certificate
of Merger along with the Plan of Merger will be filed so as to become effective
on December 31, 1994. The effective date of the Merger will be the day on
which the Effective Time of the Merger occurs (the "Effective Date of the
Merger"). The parties to the Reorganization Agreement intend to close the
transactions contemplated therein (the "Closing") approximately one day prior
to the Effective Date of the Merger (the "Closing Date"). Holders of record of
GSSC Common Stock immediately prior to the Effective Time of the Merger (the
"GSSC Record Holders") will be entitled to receive the Consideration for the
Merger pursuant to the Reorganization Agreement.
CONDITIONS; REGULATORY APPROVALS
Consummation of the Merger is subject to various conditions, including
receipt of the approval of GSSC's stockholders and UPC's shareholders, receipt
of all necessary regulatory approvals and satisfaction of customary contractual
closing conditions. The regulatory approvals and consents necessary to
consummate the transactions contemplated by the Reorganization Agreement
include the prior approvals of the Board of Governors of the Federal Reserve
System (the "Federal Reserve"), the Mississippi Department of Banking and
Consumer Finance (the "MSBD") and the State of Louisiana Office of Financial
Institutions (the "LOFI"). Applications for such approvals have been submitted
to each of the respective regulatory agencies. Approval was issued by the
MSBD on September 7, 1994 and by both the Federal Reserve and the LOFI on
November 7, 1994. See "THE MERGER -- Conditions to Consummation of the Merger;
- -- Regulatory Approvals; and -- Conduct of Business Pending the Merger" and
"CERTAIN REGULATORY CONSIDERATIONS."
WAIVER AND AMENDMENT; TERMINATION
Prior to the Effective Date of the Merger, any condition to
consummation of the Merger (to the extent permitted by law) may be amended,
modified or waived by the party benefitted by the provision by an agreement in
writing which is approved by the Boards of Directors of UPC and GSSC; provided,
however, that no such amendment may be effected after approval by the UPC
shareholders and adoption by the GSSC stockholders of the Reorganization
Agreement without such shareholders' and stockholders' approval or adoption, as
the case may be, if the effect of such amendment would be to change the amount
or type of Consideration to be paid in the Merger to the GSSC Record Holders
at the Effective Time of the Merger.
The Reorganization Agreement is subject to termination by UPC and/or
GSSC at any time prior to the Effective Date of the Merger upon the occurrence
of certain events. See "THE MERGER --Waiver and Amendment; Termination."
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LIMITATION ON NEGOTIATIONS
GSSC is prohibited from instituting, soliciting or knowingly
encouraging individuals or entities concerning any "Acquisition Proposal"
(defined generally as any agreement or proposal pursuant to which any entity
other than UPC would acquire, directly or indirectly, GSSC ownership or the
right to vote ten percent (10%) of the outstanding GSSC Common Stock, or a
significant portion of the assets or earnings power of GSSC). In the event
GSSC were to enter into a letter of intent or agreement with respect to an
Acquisition Proposal not solicited by the GSSC Board of Directors, or in the
event such Acquisition Proposal were the result of a hostile takeover of GSSC,
GSSC or the acquiror would be required to pay liquidated damages to UPC upon
consummation of the transaction contemplated by such Acquisition Proposal in
the amount of $12,000,000. Such sum would be payable immediately in the event
that GSSC were to enter into a letter of intent or agreement with respect to an
Acquisition Proposal solicited by the GSSC Board of Directors. The limitation
will remain in effect until October 1, 1995 unless before that date either the
Merger shall have been consummated or the Reorganization Agreement shall have
been terminated, or if the Merger should not be consummated under specified
circumstances. See "THE MERGER -- Limitation on Negotiations."
MANAGEMENT AFTER THE MERGER
The majority of the persons who are serving as directors and officers
of the Banks immediately prior to the Effective Time of the Merger are expected
to continue to be the directors and officers of the Banks and will hold office
thereafter as provided in the Charter and Bylaws of the Banks unless and until
their successors shall have been duly elected or appointed and qualified. The
persons who are serving as directors and officers of UPC immediately prior to
the Effective Time of the Merger are expected to continue to be the directors
and officers of UPC and will hold office as provided in the Charter and Bylaws
of UPC unless and until their successors shall have been duly elected or
appointed and qualified. It is also expected that Mr. J.T. Boone, Chairman and
Chief Executive Officer of GSSC will, at the Effective Time of the Merger,
leave the employ of GSSC to serve as the Athletic Director of the University of
Mississippi. Subsequent to Mr. Boone's decision to accept such position, UPC
determined that an invitation would be extended to Mr. Boone to join the UPC
Board of Directors in the first quarter of 1995. It is the present intention
of UPC to extend invitations to one or two additional members of the GSSC
Board of Directors to be appointed to the UPC Board of Directors in 1995.
However, such selections have not been made as of the date of this Joint Proxy
Statement/Prospectus. See "THE MERGER -- Management After the Merger; and
- -- Interests of Certain Persons in the Merger."
INTERESTS OF CERTAIN PERSONS IN THE MERGER
In connection with the Merger, Messrs. J.T. Boone, Chairman and Chief
Executive Officer of GSSC; Don W. Ayres, Senior Executive Vice President and
Chief Operating Officer of Sunburst Bank, Mississippi; James A. Baker,
Executive Vice President of Sunburst Bank, Mississippi; John L. Bomar,
Executive Vice President of Sunburst Bank, Mississippi; D. L. Holland,
Treasurer and Chief Financial Officer of GSSC; Jerry A. Pegg, Executive Vice
President of Sunburst Bank, Mississippi; J. Daniel Garrick, III, Senior
Executive Vice President of Sunburst Bank, Mississippi; Frank W. Smith, Jr.,
Senior Executive Vice President of Sunburst Bank, Mississippi; and A. Jackson
Huff, President and Chief Executive Officer of Sunburst Bank, Louisiana, would
each be eligible to receive certain payments in settlement of the terms of each
such officer's respective agreement with GSSC in the event such officer's
employment were terminated within two years subsequent to the Effective Time of
the Merger. See "THE MERGER -- Interests of Certain Persons in the Merger."
7
<PAGE> 231
COMPARISON OF SHAREHOLDER'S AND STOCKHOLDER'S RIGHTS
Upon consummation of the Merger, holders of GSSC's Common Stock, whose
rights are presently governed by Delaware corporate law and GSSC's Certificate
of Incorporation and Bylaws, would become shareholders of UPC, a Tennessee
corporation. Accordingly, their rights would be governed by Tennessee
corporate law and the Charter and Bylaws of UPC. Certain differences arise
from differences between the Charter and Bylaws of UPC and the Certificate of
Incorporation and Bylaws of GSSC. See "THE MERGER -- Comparison of
Shareholder's and Stockholder's Rights."
PROVISIONS THAT MAY HAVE AN ANTI-TAKEOVER EFFECT
Certain provisions of UPC's Charter and Bylaws, and certain provisions
of Tennessee law, may have an anti-takeover effect in that they could prevent,
discourage or delay a change in control of UPC. See "DESCRIPTION OF UPC COMMON
AND PREFERRED STOCK -- Certain Provisions That May Have an Anti-Takeover
Effect."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
McDonnell Dyer, a professional limited company, UPC's legal counsel,
has delivered its opinion to UPC and GSSC to the effect that, assuming the
Merger occurs in accordance with the terms of the Reorganization Agreement and
conditioned on the accuracy of certain representations and the performance of
certain undertakings made by UPC and GSSC, the Merger will constitute a
"reorganization" for federal income tax purposes and that, accordingly, no gain
or loss would be recognized by GSSC stockholders who exchange their shares of
GSSC Common Stock solely for shares of UPC Common Stock in the Merger.
However, cash received in lieu of fractional shares may give rise to taxable
income or loss. EACH GSSC STOCKHOLDER IS URGED TO CONSULT THEIR OWN TAX
ADVISOR TO DETERMINE THE SPECIFIC TAX CONSEQUENCES OF THE MERGER TO THEM,
INCLUDING THE APPLICABILITY OF VARIOUS STATE, LOCAL AND FOREIGN TAX LAWS. See
"THE MERGER -- Certain Federal Income Tax Consequences."
ACCOUNTING TREATMENT
The Merger is expected to be accounted for as a "pooling of interests"
under generally accepted accounting principles ("GAAP") as described in
Accounting Principles Board Opinion No. 16 and the interpretations thereof. It
is a condition to the consummation of the Merger that UPC receive an opinion
from Price Waterhouse LLP to the effect that the Merger should be accounted for
as a "pooling of interests." See "THE MERGER -- Accounting Treatment."
NO SHAREHOLDER'S OR STOCKHOLDER'S APPRAISAL RIGHTS
Neither holders of UPC Common Stock nor holders of GSSC Common Stock
will have any dissenters' or appraisal rights as a result of the matters to be
voted upon at the Special Meetings. See "THE SPECIAL MEETINGS -- No
Shareholder's or Stockholder's Appraisal Rights."
8
<PAGE> 232
MARKET PRICES OF COMMON STOCK; DIVIDENDS
UPC Common Stock. The UPC Common Stock is listed and traded on the
NYSE (symbol: UPC). The following table sets forth for the periods indicated
the high and low closing sale prices of UPC Common Stock on the NYSE and the
cash dividends declared per share for the periods indicated:
<TABLE>
<CAPTION>
CASH
PRICE RANGE DIVIDENDS
------------------------------- DECLARED
HIGH LOW PER SHARE
---- --- ---------
<S> <C> <C> <C>
1994
First Quarter $26.25 $23.13 $.21
Second Quarter 28.75 24.75 .21
Third Quarter 26.00 23.50 .23
Fourth Quarter through
November 8, 1994 24.50 22.13 .23
----
Total $.88
====
1993
First Quarter $29.13 $22.50 $.18
Second Quarter 29.25 22.63 .18
Third Quarter 30.00 25.00 .18
Fourth Quarter 28.75 23.63 .18
----
Total $.72
====
1992
First Quarter $15.50 $13.75 $.15
Second Quarter 20.13 14.63 .15
Third Quarter 20.75 17.50 .15
Fourth Quarter 24.75 17.75 .15
----
Total $.60
====
</TABLE>
The last reported sale price of UPC Common Stock on the NYSE as of
November 8, 1994, which was the last practicable date prior to the mailing of
this Joint Proxy Statement/Prospectus, was $22.13 per share.
9
<PAGE> 233
GSSC Common Stock. The GSSC Common Stock is listed and traded through
the NASDAQ/NMS (symbol: GSSC). The following table sets forth for the periods
indicated the high and low closing sale prices of GSSC Common Stock as reported
by the NASDAQ/NMS and the cash dividends declared per share for the periods
indicated:
<TABLE>
<CAPTION>
CASH
PRICE RANGE DIVIDENDS
---------------------------------- DECLARED
HIGH LOW PER SHARE
---- ---- ---------
<S> <C> <C> <C>
1994
First Quarter $25.00 $21.25 $.20
Second Quarter 27.25 21.00 .20
Third Quarter 36.00 30.75 .20
Fourth Quarter through
November 8, 1994 33.50 30.50 .20
----
Total $.80
====
1993
First Quarter $25.00 $19.75 $.15
Second Quarter 25.25 19.88 .17
Third Quarter 24.75 22.75 .20
Fourth Quarter 26.75 23.00 .20
----
Total $.72
====
1992
First Quarter $22.00 $15.00 $.15
Second Quarter 16.50 14.75 .15
Third Quarter 17.75 15.25 .15
Fourth Quarter 20.50 15.50 .15
----
Total $.60
====
</TABLE>
The last reported sale price of GSSC Common Stock on the NASDAQ/NMS as
of November 8, 1994, which was the last practicable date prior to the mailing
of this Joint Proxy Statement/Prospectus, was $30.50 per share.
GSSC STOCKHOLDERS AND UPC SHAREHOLDERS ARE ADVISED TO OBTAIN CURRENT
MARKET QUOTATIONS FOR THE UPC COMMON STOCK AND THE GSSC COMMON STOCK. No
assurance can be given as to the market price of UPC Common Stock or GSSC
Common Stock at the Effective Time of the Merger or, in the case of UPC Common
Stock, after the Effective Time of the Merger.
10
<PAGE> 234
SELECTED CONSOLIDATED FINANCIAL DATA
The following tables present for UPC, GSSC and UPC on a proforma basis,
selected consolidated financial data. The information for UPC has been derived
from the consolidated financial statements of UPC (restated for the consummation
of the Recently Completed Acquisitions; see "-- Recent Developments Affecting
UPC -- Restatement of UPC Financial Data"), including the consolidated financial
statements of UPC incorporated by reference in this Joint Proxy
Statement/Prospectus, and should be read in conjunction therewith and with the
notes thereto. The information for GSSC has been derived from the consolidated
financial statements of GSSC, including the consolidated financial statements of
GSSC incorporated by reference in this Joint Proxy Statement/Prospectus and
should be read in conjunction therewith and with the notes thereto. See
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE." Historical results are not
necessarily indicative of results to be expected for any future period. In the
opinion of the managements of UPC and GSSC, all adjustments necessary to arrive
at a fair statement of results of operations of the respective companies have
been included.
11
<PAGE> 235
UPC Selected Consolidated Financial Data
<TABLE>
<CAPTION>
Six Months Ended
June 30, (1) Years Ended December 31,
------------------- ----------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
-------- -------- -------- -------- -------- -------- --------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data
Net interest income $131,656 $122,486 $243,843 $200,554 $160,473 $139,984 $127,834
Provision for losses on loans -- 7,544 9,743 19,194 25,281 19,262 49,270
Profits and commissions from trading
activities 2,841 3,803 8,720 10,168 14,707 24,268 36,700
Investment securities gains (losses) 210 3,438 4,732 13,363 3,391 (349) (1,047)
Other noninterest income 37,469 36,717 74,464 62,581 53,983 48,160 41,553
Noninterest expense 117,586 114,125 230,319 204,838 169,601 165,479 179,876
-------- -------- -------- -------- -------- -------- --------
Earnings (loss) before income taxes,
extraordinary item and accounting changes 54,590 44,775 91,697 62,634 37,672 27,322 (24,106)
Applicable income taxes (benefit) 16,769 14,660 26,333 17,611 7,538 2,666 (3,298)
-------- -------- -------- -------- -------- -------- --------
Earnings (loss) before extraordinary item and
accounting changes 37,821 30,115 65,364 45,023 30,134 24,656 (20,808)
Extraordinary item-defeasance of debt, net of
taxes -- -- (3,206) -- -- -- --
Accounting changes, net of taxes -- 5,001 5,001 -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Net earnings (loss) $ 37,821 $ 35,116 $ 67,159 $ 45,023 $ 30,134 $ 24,656 $(20,808)
======== ======== ======== ======== ======== ======== ========
Per Common Share Data
Primary
Earnings (loss) before extraordinary item
and accounting changes $ 1.31 $ 1.22 $ 2.63 $ 2.07 $ 1.56 $ 1.18 $ (1.00)
Extraordinary item-defeasance of debt, net
of taxes -- -- (0.15) -- -- -- --
Accounting changes, net of taxes -- 0.23 0.23 -- -- -- --
Net earnings (loss) 1.31 1.45 2.71 2.07 1.56 1.18 (1.00)
Fully diluted
Earnings (loss) before extraordinary item
and accounting changes 1.23 1.15 2.46 2.00 1.55 1.18 (1.00)
Extraordinary item-defeasance of debt, net
of taxes -- -- (0.12) -- -- -- --
Accounting changes, net of taxes -- 0.20 0.19 -- -- -- --
Net earnings (loss) 1.23 1.35 2.53 2.00 1.55 1.18 (1.00)
Cash dividends 0.42 0.36 0.72 0.60 0.48 0.48 0.48
Book value 18.58 17.69 18.63 16.07 14.72 13.39 12.31
Book value assuming conversion of convertible
preferred stock 18.72 18.00 18.77 16.56 14.68 13.38 12.32
</TABLE>
(Continued on following page)
12
<PAGE> 236
UPC Selected Consolidated Financial Data (Continued)
<TABLE>
<CAPTION>
Six Months Ended
June 30, (1) Years Ended December 31,
----------------------- --------------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ---------- ---------- ----------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance Sheet Data (at period end)
Total assets $7,467,906 $6,587,251 $6,593,695 $5,522,388 $4,031,361 $4,232,047 $4,234,874
Loans, net of unearned income 3,639,444 2,940,230 3,092,828 2,383,830 2,053,490 2,270,229 2,138,159
Allowance for losses on loans 88,476 81,237 81,604 65,415 48,442 51,181 47,105
Investment securities 3,036,137 2,771,368 2,720,066 2,294,565 1,242,188 1,230,047 1,091,904
Deposits 5,989,878 5,587,842 5,471,814 4,665,420 3,423,299 3,544,531 3,336,806
Long-term debt
Parent company 114,764 74,292 114,729 74,292 38,163 44,662 34,500
Subsidiary banks 195,684 144,767 182,501 17,864 9,922 4,103 39,021
Total shareholders' equity 575,740 485,782 507,930 383,758 294,309 260,060 262,235
Average assets 7,349,083 6,457,617 6,518,448 5,001,228 4,077,078 4,279,867 4,223,075
Average shareholders' equity (2) 577,061 455,137 476,655 356,003 271,941 266,214 287,127
Average shares outstanding (in
thousands)
Primary 25,449 21,459 21,622 18,765 18,632 20,641 20,761
Fully diluted 29,931 25,426 25,852 21,609 18,986 20,981 20,761
Profitability and Capital Ratios
Before extraordinary item and
accounting changes
Return on average assets 1.04% 0.94% 1.00% 0.90% 0.74% 0.58% NM%
Return on average common equity
(2) 14.25 14.55 15.07 13.64 11.16 9.28 NM
Net earnings
Return on average assets 1.04 1.10 1.03 0.90 0.74 0.58 NM
Return on average common equity
(2) 14.25 17.34 15.55 13.64 11.16 9.28 NM
Net interest income
(taxable-equivalent) to average
earning assets (2) 4.14 4.38 4.52 4.84 4.58 3.96 3.73
Loans/deposits 60.76 52.62 56.52 51.10 59.99 64.05 64.08
Common and preferred dividend
payout ratio 38.24 29.86 33.66 38.13 32.77 39.96 NM
Equity/assets (period end) 7.71 7.37 7.70 6.95 7.30 6.15 6.19
Average shareholders'
equity/average total assets (2) 7.85 7.05 7.31 7.12 6.67 6.22 6.80
Tier 1 capital to risk-weighted
assets (3) 15.11 13.80 15.11 14.49 12.59 10.03 NA
Total capital to risk-weighted
assets (3) 18.39 16.04 18.74 15.77 15.33 12.56 NA
Leverage ratio (3) 7.49 6.86 7.28 7.03 7.14 5.95 5.95
Asset Quality Ratios
Allowance/period end loans 2.43 2.76 2.64 2.74 2.36 2.25 2.20
Nonperforming loans/total loans (4) 0.53 0.88 0.72 1.60 1.28 0.92 0.82
Allowance/nonperforming loans (4) 462.40 312.41 368.07 171.92 184.91 246.02 268.99
Nonperforming assets/loans and
foreclosed property (5) 0.64 1.15 0.87 1.88 1.82 1.52 1.19
Provision/average loans NM 0.53 0.33 0.83 1.17 0.87 2.33
Net charge-offs/average loans 0.07 0.51 0.35 0.77 1.30 1.03 2.10
</TABLE>
(1) Interim period ratios have been annualized where applicable.
(2) Average balances and calculations do not include the impact of the net
unrealized gain or loss on available for sale investment securities.
(3) The risk-based capital ratios are based upon capital guidelines prescribed
by federal bank regulatory authorities. Under those guidelines, the required
minimum Tier 1 and total capital to risk-weighted assets ratios are 4% and
8%, respectively. The required minimum leverage ratio of Tier 1 capital to
total adjusted assets is 3% to 5% (5% for bank holding companies effecting
acquisitions).
(4) Nonperforming loans include loans on nonaccrual status and restructured
loans.
(5) Nonperforming assets include nonperforming loans and foreclosed properties.
NA -- Not Available NM -- Not Meaningful
13
<PAGE> 237
GSSC Selected Consolidated Financial Data
<TABLE>
<CAPTION>
Six Months
Ended
June 30, (1) Years Ended December 31,
----------------- ------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
------- ------- -------- ------- ------- ------- -------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data
Net Interest income $53,758 $48,744 $101,041 $81,756 $74,549 $67,781 $63,484
Provision for losses on loans 1,775 3,940 6,815 7,988 8,922 7,042 11,592
Profits and commissions from trading activities -- 169 269 -- (33) (126) 312
Investment securities gains (losses) (101) (302) (237) 656 (767) 432 (250)
Other noninterest income 15,185 14,727 30,803 24,679 20,808 18,539 17,968
Noninterest expense 48,095 43,367 89,362 74,626 68,874 66,255 63,174
------- ------- -------- ------- ------- ------- -------
Earnings before income taxes and accounting changes 18,972 16,031 35,699 24,477 16,761 13,329 6,748
Applicable income taxes 5,821 4,814 11,087 6,250 3,999 2,742 1,148
------- ------- -------- ------- ------- ------- -------
Earnings before accounting changes 13,151 11,217 24,612 18,227 12,762 10,587 5,600
Accounting changes, net of taxes -- 781 781 -- -- -- --
------- ------- -------- ------- ------- ------- -------
Net earnings $13,151 $11,998 $ 25,393 $18,227 $12,762 $10,587 $ 5,600
======= ======= ======== ======= ======= ======= =======
Per Common Share Data
Primary
Earnings before accounting changes $ 1.39 $ 1.20 $ 2.62 $ 2.01 $ 1.41 $ 1.17 $ 0.62
Accounting changes, net of taxes -- 0.08 0.08 -- -- -- --
Net earnings 1.39 1.28 2.70 2.01 1.41 1.17 0.62
Cash dividends 0.40 0.32 0.72 0.60 0.60 0.60 0.60
Book value 19.28 17.31 18.34 16.11 14.55 13.68 13.16
</TABLE>
(continued on following page)
14
<PAGE> 238
GSSC Selected Consolidated Financial Data (Continued)
<TABLE>
<CAPTION>
Six Months Ended
June 30, (1) Years Ended December 31,
----------------------- --------------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ---------- ---------- ----------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance Sheet Data (at period end)
Total assets $2,466,209 $2,434,596 $2,436,198 $1,970,616 $1,897,135 $1,863,484 $1,782,500
Loans, net of unearned income 1,657,756 1,491,328 1,560,540 1,201,939 1,079,434 1,106,206 1,045,806
Allowance for losses on loans 33,132 31,849 32,749 24,412 19,547 16,324 15,003
Investment securities 588,638 659,672 575,578 499,385 535,566 543,461 525,227
Deposits 2,210,705 2,181,007 2,199,807 1,776,571 1,721,882 1,637,848 1,559,677
Long-term debt
Parent company -- -- -- -- -- -- --
Subsidiary banks 25,071 13,347 12,941 3,892 161 366 408
Total stockholders' equity 183,046 164,369 174,072 145,738 131,661 123,289 118,617
Average assets 2,456,924 2,265,833 2,338,768 1,933,490 1,851,849 1,816,941 1,731,553
Average stockholders' equity (2) 179,137 156,595 163,219 138,526 126,710 120,586 119,689
Average shares outstanding (in
thousands) 9,493 9,348 9,421 9,047 9,029 9,014 9,017
Profitability and Capital Ratios
Before accounting changes
Return on average assets 1.08% 1.00% 1.05% 0.94% 0.69% 0.58% 0.32%
Return on average common equity
(2) 14.80 14.44 15.08 13.16 10.07 8.78 4.68
Net earnings
Return on average assets 1.08 1.07 1.09 0.94 0.69 0.58 0.32
Return on average common equity
(2) 14.80 15.45 15.56 13.16 10.07 8.78 4.68
Net interest income
(taxable-equivalent) to average
earning assets (2) 4.95 4.89 4.87 4.83 4.63 4.33 4.28
Loans/deposits 74.99 68.38 70.94 67.65 62.69 67.54 67.05
Common and preferred dividend
payout ratio 28.87 25.32 26.92 29.78 42.48 50.37 94.82
Equity/assets (period end) 7.42 6.75 7.15 7.40 6.94 6.62 6.65
Average stockholders'
equity/average total assets (2) 7.29 6.91 6.98 7.16 6.84 6.64 6.91
Tier 1 capital to risk-weighted
assets (3) 10.69 10.29 10.52 10.98 10.58 9.84 9.50
Total capital to risk-weighted
assets (3) 11.95 11.55 11.78 12.24 11.83 11.09 10.73
Leverage ratio (3) 7.31 6.76 7.11 7.33 7.01 6.70 6.67
Asset Quality Ratios
Allowance/period end loans 2.00 2.14 2.10 2.03 1.81 1.48 1.43
Nonperforming loans/total loans (4) 0.30 0.59 0.35 0.76 0.73 1.39 1.30
Allowance/nonperforming loans (4) 674.65 359.47 600.57 266.16 249.07 106.35 110.16
Nonperforming assets/loans and
foreclosed property (5) 0.51 1.04 0.61 1.33 1.68 2.42 1.81
Provision/average loans 0.11 0.29 0.47 0.71 0.84 0.65 1.17
Net charge-offs/average loans 0.09 0.10 0.24 0.28 0.53 0.53 0.98
</TABLE>
(1) Interim period ratios have been annualized where applicable.
(2) Average balances and calculations do not include the impact of the net
unrealized gain or loss on available for sale investment securities.
(3) The risk-based capital ratios are based upon capital guidelines prescribed
by federal bank regulatory authorities. Under those guidelines, the required
minimum Tier 1 and total capital to risk-weighted assets ratios are 4% and
8%, respectively. The required minimum leverage ratio of Tier 1 capital to
total adjusted assets is 3% to 5%.
(4) Nonperforming loans include loans on nonaccrual status and restructured
loans.
(5) Nonperforming assets include nonperforming loans and foreclosed properties.
15
<PAGE> 239
UPC Selected Proforma Consolidated Financial Data
<TABLE>
<CAPTION>
Six Months Ended
June 30, (1) Years Ended December 31,
------------------- ----------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
-------- -------- -------- -------- -------- -------- --------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data
Net interest income $185,414 $171,230 $344,884 $282,310 $235,022 $207,765 $191,318
Provision for losses on loans 1,775 11,484 16,558 27,182 34,203 26,304 60,862
Profits and commissions from
trading activities 2,841 3,972 8,989 10,168 14,674 24,142 37,012
Investment securities gains
(losses) 109 3,136 4,495 14,019 2,624 83 (1,297)
Other noninterest income 52,654 51,444 105,267 87,260 74,791 66,699 59,521
Noninterest expense 165,681 157,492 319,681 279,464 238,475 231,734 243,050
-------- -------- -------- -------- -------- -------- --------
Earnings (loss) before income
taxes, extraordinary item and
accounting changes 73,562 60,806 127,396 87,111 54,433 40,651 (17,358)
Applicable income taxes (benefit) 22,590 19,474 37,420 23,861 11,537 5,408 (2,150)
-------- -------- -------- -------- -------- -------- --------
Earnings (loss) before
extraordinary item and
accounting changes 50,972 41,332 89,976 63,250 42,896 35,243 (15,208)
Extraordinary item-defeasance of
debt, net of taxes -- -- (3,206) -- -- -- --
Accounting changes, net of taxes -- 5,782 5,782 -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Net earnings (loss) $ 50,972 $ 47,114 $ 92,552 $ 63,250 $ 42,896 $ 35,243 $(15,208)
========= ========= ========= ========= ========= ========= =========
Per Common Share Data
Primary
Earnings (loss) before
extraordinary item and
accounting changes $ 1.20 $ 1.07 $ 2.32 $ 1.77 $ 1.30 $ 1.02 $ (0.44)
Extraordinary item-defeasance
of debt, net of taxes -- -- (0.08) -- -- -- --
Accounting changes, net of
taxes -- 0.16 0.16 -- -- -- --
Net earnings (loss) 1.20 1.23 2.40 1.77 1.30 1.02 (0.44)
Fully diluted
Earnings (loss) before
extraordinary item and
accounting changes 1.15 1.04 2.24 1.75 1.30 1.02 (0.44)
Extraordinary item-defeasance
of debt, net of taxes -- -- (0.08) -- -- -- --
Accounting changes, net of
taxes -- 0.15 0.15 -- -- -- --
Net earnings (loss) 1.15 1.19 2.31 1.75 1.30 1.02 (0.44)
Cash dividends 0.42 0.36 0.72 0.60 0.48 0.48 0.48
Book value 16.84 15.57 16.43 13.87 12.63 11.63 10.93
Book value assuming conversion of
convertible preferred stock 17.12 16.02 16.78 14.38 12.63 11.65 10.95
</TABLE>
(continued on following page)
16
<PAGE> 240
UPC Selected Proforma Consolidated Financial Data (Continued)
<TABLE>
<CAPTION>
Six Months Ended
June 30, (1) Years Ended December 31,
----------------------- --------------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ---------- ---------- ----------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance Sheet Data (at period end)
Total assets $9,934,115 $9,021,847 $9,029,893 $7,493,004 $5,928,496 $6,095,531 $6,017,374
Loans, net of unearned income 5,297,200 4,431,558 4,673,368 3,585,769 3,132,924 3,376,435 3,183,965
Allowance for losses on loans 121,608 113,086 114,353 89,827 67,989 67,505 62,108
Investment securities 3,624,775 3,431,040 3,295,644 2,793,950 1,777,754 1,773,508 1,617,131
Deposits 8,200,583 7,768,849 7,671,621 6,441,991 5,145,181 5,182,379 4,896,483
Long-term debt
Parent company 114,764 74,292 114,729 74,292 38,163 44,662 34,500
Subsidiary banks 220,755 158,114 195,442 21,756 10,083 4,469 39,429
Total shareholders' equity 758,786 650,151 682,002 529,496 425,970 383,349 380,852
Average assets 9,806,007 8,723,450 8,857,216 6,934,718 5,928,927 6,096,808 5,954,628
Average shareholders' equity (2) 756,198 611,732 639,874 494,529 398,651 386,800 406,816
Average shares outstanding (in
thousands)
Primary 38,935 34,944 35,108 32,251 32,118 34,127 34,247
Fully diluted 43,417 38,912 39,338 35,095 32,472 34,467 34,247
Profitability and Capital Ratios
Before extraordinary item and
accounting changes
Return on average assets 1.05% 0.96% 1.02% 0.91% 0.72% 0.58% NM%
Return on average common equity
(2) 14.40 14.52 15.08 13.48 10.80 9.12 NM
Net earnings
Return on average assets 1.05 1.09 1.04 0.91 0.72 0.58 NM
Return on average common equity
(2) 14.40 16.77 15.55 13.48 10.80 9.12 NM
Net interest income
(taxable-equivalent) to average
earning assets (2) 4.35 4.52 4.61 4.84 4.59 4.07 3.89
Loans/deposits 64.60 57.04 60.92 55.66 60.89 65.15 65.03
Common and preferred dividend
payout ratio 35.83 28.70 31.81 35.72 35.66 43.08 NM
Equity/assets (period end) 7.64 7.21 7.55 7.07 7.19 6.29 6.33
Average shareholders'
equity/average total assets (2) 7.71 7.01 7.22 7.13 6.72 6.34 6.83
Tier 1 capital to risk-weighted
assets (3) 13.75 12.69 13.58 13.35 11.91 9.98 NA
Total capital to risk-weighted
assets (3) 16.39 14.62 16.40 14.62 14.13 12.09 NA
Leverage ratio (3) 7.45 6.83 7.23 7.11 7.10 6.18 6.16
Asset Quality Ratios
Allowance/period end loans 2.30 2.55 2.45 2.51 2.17 2.00 1.95
Nonperforming loans/total loans(4) 0.45 0.79 0.59 1.32 1.09 1.07 0.98
Allowance/nonperforming loans (4) 505.75 324.37 413.96 190.23 199.70 186.72 199.51
Nonperforming assets/loans and
foreclosed property (5) 0.60 1.12 0.78 1.69 1.77 1.82 1.39
Provision/average loans 0.07 0.54 0.38 0.79 1.06 0.80 1.96
Net charge-offs/average loans 0.11 0.42 0.31 0.61 1.05 0.87 1.74
</TABLE>
(1) Interim period ratios have been annualized where applicable.
(2) Average balances and calculations do not include the impact of the net
unrealized gain or loss on available for sale investment securities.
(3) The risk-based capital ratios are based upon capital guidelines prescribed
by federal bank regulatory authorities. Under those guidelines, the required
minimum Tier 1 and total capital to risk-weighted assets ratios are 4% and
8%, respectively. The required minimum leverage ratio of Tier 1 capital to
total adjusted assets is 3% to 5% (5% for bank holding companies effecting
acquisitions).
(4) Nonperforming loans include loans on nonaccrual status and restructured
loans.
(5) Nonperforming assets include nonperforming loans and foreclosed properties.
NA -- Not Available NM -- Not Meaningful
17
<PAGE> 241
RECENT DEVELOPMENTS AFFECTING UPC
1994 Third Quarter UPC Operating Results. The following table presents
certain information for the three and nine months ended September 30, 1994 and
1993. Reference is made to UPC's press release dated October 20, 1994, which is
included as an exhibit to UPC's Current Report on Form 8-K dated October 20,
1994. For additional information, see "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE."
<TABLE>
<CAPTION>
Three Months Ended
Nine Months Ended
September 30, (1) September 30, (1)
------------------- -------------------------
1994 1993 1994 1993
------- ------- ---------- ----------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C>
Income statement amounts
Net interest income $69,081 $61,382 $ 200,737 $ 183,868
Provision for losses on loans -- 1,489 -- 9,033
Investment securities gains (losses) (8,099) 514 (7,889) 3,952
Other noninterest income 21,698 21,731 62,008 62,251
Noninterest expense 60,751 59,676 178,337 173,801
Earnings before accounting changes 15,778 18,007 53,599 48,122
Accounting changes, net of taxes -- -- -- 5,001
Net earnings 15,778 18,007 53,599 53,123
Earnings before investment securities gains (losses) and accounting
changes 20,718 17,693 58,419 45,712
Per common share data
Earnings before investment securities gains (losses) and accounting
changes -- primary $ .73 $ .71 $ 2.03 $ 1.83
-- fully diluted .68 .66 1.91 1.73
Earnings before accounting changes -- primary .53 .72 1.84 1.94
-- fully diluted .51 .67 1.74 1.82
Net earnings -- primary .53 .72 1.84 2.17
-- fully diluted .51 .67 1.74 2.01
Cash dividends .23 .18 .65 .54
Book value 18.93 18.25
Profitability ratios
Return on average assets
Earnings before investment securities gains (losses) and
accounting changes 1.10% 1.07% 1.06% .94%
Earnings before accounting changes .84 1.09 .97 .99
Net earnings .84 1.09 .97 1.09
Return on average common equity (3)
Earnings before investment securities gains (losses) and
accounting changes 15.03 15.90 14.53 14.27
Earnings before accounting changes 11.02 16.22 13.18 15.14
Net earnings 11.02 16.22 13.18 16.95
Net interest income (taxable-equivalent) as a percentage of average
earning assets 4.15 4.29 4.15 4.35
Asset quality data
Allowance for losses on loans $ 88,870 $ 84,559
Nonperforming loans 16,566 24,137
Nonperforming assets 19,863 29,506
Loans 90 days or more past due 3,982 5,581
Allowance for losses on loans to loans 2.36% 2.85%
Nonperforming loans to loans .44 .81
Nonperforming assets to loans and foreclosed properties .53 .99
Allowance/nonperforming loans 536.46 350.33
Balance sheet data (at period end)
Total assets $7,495,154 $6,491,529
Loans, net of unearned income 3,759,681 2,966,004
Investment securities
Amortized cost 2,919,617 2,657,612
Fair value 2,893,805 2,723,473
Total deposits 5,905,589 5,470,363
Long-term debt (2) 307,082 248,073
Total shareholders' equity 585,828 498,728
Capital ratios
Equity/assets 7.82% 7.68%
Leverage (3) 7.51 7.13
</TABLE>
(1) Interim period ratios are annualized.
(2) Includes subsidiary banks' long-term debt (primarily Federal Home Loan Bank
advances) of $192.3 million and $173.8 million at September 30, 1994 and
1993, respectively.
(3) Excludes the impact of the fair value adjustment for available for sale
securities.
18
<PAGE> 242
Reorganization of UPNB. UPC's four Regional Banks, which were split off
from UPNB as of July 1, 1994, consist of Union Planters Bank of East Tennessee,
National Association ("Knoxville"), Union Planters Bank of Middle Tennessee,
National Association ("Nashville"), Union Planters Bank of Chattanooga, National
Association ("Chattanooga") and Union Planters Bank of Jackson, National
Association ("Jackson"). UPC injected equity of $101.7 million into the four
Regional Banks, a majority of the funds ($98 million) having been provided by a
special dividend from UPNB. Each of the Regional Banks acquired from UPNB, at
book value, substantially all of the assets and assumed the liabilities of the
UPNB branches located in its region. While the separation of the branches
previously held by UPNB had no material impact on the consolidated financial
condition of UPC, it is expected to promote the identification of individual
branch operations within their local communities. UPNB continues to operate
branches located in Memphis and West Tennessee.
Earnings Considerations Related to Pending Acquisitions and
Reorganization. In connection with UPC's pending acquisition of GSSC and as
part of both companies' continuing efforts to reduce expenses, both UPC and
GSSC have retained the services of Alex Sheshunoff Management Services, Inc., a
nationally recognized consulting firm, to make recommendations for improving
the financial performance of each organization and to facilitate the
consolidation of the two organizations. Through its study of each organization,
individually and collectively, certain opportunities to reduce costs and
reengineer operations in order to become more efficient have already been, and
more are expected to be, identified. Management of UPC and GSSC expect that
there will be a reduction in the number of employees and branches in each
organization regardless of whether the Merger is consummated.
Whether or not the Merger is consummated, UPC and GSSC will each offer
voluntary early retirement and voluntary separation programs in the fourth
quarter of 1994 to facilitate staff reductions. Charges associated with the
early retirement and separation programs, along with other acquisition- and
consolidation-related expenses have been preliminarily estimated to be between
$18 million to $27 million after tax. Management of UPC estimates that charges
associated with these items of between $3 million to $6 million after tax would
be incurred by UPC in the fourth quarter of 1994 regardless of the status of the
Merger. The remaining charges are expected to be incurred in the quarter in
which the Merger is actually consummated. The ranges of charges are based on
currently available information as well as preliminary estimates and are subject
to change. The ranges are provided as a preliminary estimate of the significance
of the charges which may be required and should be viewed accordingly. The
actual charges required may vary substantially from these estimates.
Additional Fourth Quarter 1994 Earnings Considerations. In addition to the
above charges, UPC has undertaken a marketing program in the fourth quarter of
1994 with a view to increasing the number of account relationships and the
related dollar amount of loans in a segment of its consumer loan portfolio. A
substantial part of the marketing- and acquisition-related cost of this program
is expected to be incurred during the fourth quarter of 1994 and is expected to
result in a significant increase in loan volume, interest income and fee income
in 1995 and future periods. Based on current estimates, the cost of this
marketing program would be between $7 million and $9 million after tax. This
range is provided as a preliminary estimate of the significance of the charges
which may be required and should be viewed accordingly. The actual charges
required may vary substantially from these estimates.
19
<PAGE> 243
Recently Completed Acquisitions. Since June 30, 1994, UPC has completed
the acquisitions of the following institutions (collectively, the "Recently
Completed Acquisitions"). UPC's Current Report on Form 8-K, dated October 20,
1994 includes audited consolidated financial statements for the years ended
December 31, 1993, 1992 and 1991, which have been restated to reflect
consummation of the BNF BANCORP, Inc. acquisition, and interim unaudited
consolidated financial statements for June 30, 1994, which have been restated
for all of the Recently Completed Acquisitions:
<TABLE>
<CAPTION>
Asset Size
------------- Method of
Institution Consideration Accounting
- -------------------------------- (In millions) -------------------------------- ------------
<S> <C> <C> <C>
Liberty Bancshares, Inc. and its
subsidiary, Liberty Federal
Savings Bank, Paris, Henry 1,223,353 Shares Pooling of
County, Tennessee $ 181 UPC Common Stock Interests
Earle Bankshares, Inc. and its
subsidiary, First Southern
Bank, Earle, Crittenden Pooling of
County, Arkansas 43 320,112 Shares UPC Common Stock Interests
BNF BANCORP, Inc. and its
subsidiary, BANKFIRST, a
federal savings bank, Decatur, 2,000,329 Shares Pooling of
Morgan County, Alabama 278 UPC Common Stock Interests
------
Total $ 502
===========
</TABLE>
20
<PAGE> 244
Pending Acquisitions. Consistent with UPC's acquisition strategy, UPC has
entered into definitive agreements to acquire the following financial
institutions in addition to GSSC (collectively, the "Pending Acquisitions")
which management considers probable of consummation and which are expected to
close by the end of 1994:
<TABLE>
<CAPTION>
Consideration
-------------------------------------
Approximate
Institution Asset Size Value Type
- ---------------------------------------- ---------- ----------- ---------------------
(In millions)
<S> <C> <C> <C>
Commercial Bancorp, Inc. and its UPC Common Stock
subsidiary, The Commercial Bank, (Approximately
Obion, Obion County, Tennessee (1) $ 29 $ 4.6 189,442 shares)
Mid South Bancshares, Inc. and its
subsidiaries, Security Bank,
Paragould, Greene County, and Farmers UPC Common Stock
& Merchants Bank, Reyno, Randolph (Approximately
County, Arkansas 130 13.0 567,000 shares) (2)
---------- -----------
Totals $159 $17.6
========= ===========
</TABLE>
(1) This transaction closed effective November 1, 1994, but has not been
included in Recently Completed Acquisitions due to its immateriality to the
financial results of UPC.
(2) The number of shares of UPC Common Stock to be issued in connection with
this acquisition is subject to change depending on the market price of the
UPC Common Stock during the stipulated pricing period. The number of shares
reflected above is based upon an assumed current market price of $22.13,
the closing price of UPC Common Stock on the NYSE on November 8, 1994.
21
<PAGE> 245
If the Merger, the Pending Acquisitions and the Recently Completed
Acquisitions had been consummated at June 30, 1994, UPC's consolidated total
assets would have increased by approximately $2.6 billion to approximately $10.1
billion, UPC's consolidated total loans would have increased by approximately
$1.8 billion to approximately $5.4 billion and UPC's consolidated total deposits
would have increased by approximately $2.3 billion to approximately $8.3
billion, based upon June 30, 1994, pro forma financial information. See " -- Pro
Forma Condensed Consolidated Financial Information" and the related pro forma
financial information in UPC's Current Report on Form 8-K dated August 18, 1994
and the consolidated financial statements included in UPC's Current Report on
Form 8-K dated October 20, 1994, incorporated by reference. See "INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE."
Restatement of UPC Financial Data. Effective September 1, 1994, UPC
consummated the acquisition of BNF BANCORP, Inc., which was a significant
acquisition for UPC and has been accounted for by UPC using the pooling of
interests method of accounting. UPC has, consistent with this method of
accounting and in accordance with GAAP, filed restated historical consolidated
financial statements as of and for the three years ended December 31, 1993, and
as of and for the six months ended June 30, 1994, in a Current Report on Form
8-K dated October 20, 1994, reflecting consummation of the Recently Completed
Acquisitions.
22
<PAGE> 246
RECENT DEVELOPMENTS AFFECTING GSSC
1994 Third Quarter GSSC Operating Results. The following table presents
certain information for the three and nine months ended September 30, 1994 and
1993. Reference is made to GSSC's press release dated October 20, 1994, which is
included in GSSC's Current Report on Form 8-K dated October 20, 1994. For
additional information, see "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
<TABLE>
<CAPTION>
Three Months Ended
Nine Months Ended
September 30, (1) September 30, (1)
------------------- -------------------------
1994 1993 1994 1993
------- ------- ---------- ----------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C>
Income statement amounts
Net interest income $28,825 $25,980 $ 82,583 $ 74,724
Provision for losses on loans 990 1,560 2,765 5,500
Investment securities gains (losses) (44) 170 (145) (131)
Other noninterest income 7,710 8,189 22,896 23,084
Noninterest expense 24,286 22,888 72,381 66,255
Earnings before accounting changes 7,740 6,720 20,891 17,937
Accounting changes, net of taxes -- -- -- 781
Net earnings 7,740 6,720 20,891 18,718
Per common share data
Earnings before accounting changes .82 .71 2.20 1.91
Net earnings .82 .71 2.20 1.99
Cash dividends .20 .20 .60 .52
Book value 19.88 17.84
Profitability ratios
Return on average assets
Earnings before accounting changes 1.23% 1.11% 1.13% 1.04%
Net earnings 1.23 1.11 1.13 1.07
Return on average common equity (3)
Earnings before accounting changes 16.43 15.95 15.38 14.97
Net earnings 16.43 15.95 15.38 15.46
Net interest income (taxable-equivalent) as a
percentage of average earning assets (3) 5.17 4.83 5.03 4.88
Asset quality data
Allowance for losses on loans $ 32,898 $ 32,142
Nonperforming loans 2,902 6,278
Nonperforming assets 6,846 12,992
Loans 90 days or more past due 2,591 3,138
Allowance for losses on loans to loans 1.94% 2.10%
Nonperforming loans to loans .17 .41
Nonperforming assets to loans and foreclosed properties .40 .85
Allowance/nonperforming loans 1,133.63 511.98
Balance sheet data (at period end)
Total assets $2,510,895 $2,393,800
Loans, net of unearned income 1,695,765 1,530,709
Investment securities
Amortized cost 575,761 586,105
Fair value 573,803 609,859
Total deposits 2,222,374 2,164,425
Long-term debt (2) 24,355 13,117
Total stockholders' equity 188,743 169,350
Capital ratios
Equity/assets 7.52% 7.07%
Leverage (3) 7.50 6.97
</TABLE>
(1) Interim period ratios are annualized.
(2) Subsidiary banks' long-term debt (primarily Federal Home Loan Bank
advances).
(3) Excludes the impact of the fair value adjustment for available for sale
securities.
23
<PAGE> 247
EQUIVALENT AND PRO FORMA PER SHARE DATA
The following table presents selected, comparative, unaudited per share
data for (i) the UPC Common Stock and the GSSC Common Stock on an historical
basis; (ii) the UPC Common Stock on a pro forma basis for GSSC only and for
GSSC, the Recently Completed Acquisitions and the Pending Acquisitions; and
(iii) the GSSC Common Stock on an equivalent pro forma basis for GSSC only and
for GSSC, the Recently Completed Acquisitions and the Pending Acquisitions, for
the periods indicated. These data are not necessarily indicative of the results
of the future operations of either entity or the actual results that would have
occurred had the Merger been consummated January 1, 1989. The information as of
and for the six months ended June 30, 1994, and as of and for the year ended
December 31, 1993, reflects on a pro forma basis the Recently Completed
Acquisitions and the Pending Acquisitions accounted for using either the pooling
of interests or purchase method of accounting in accordance with the accounting
requirements of each respective acquisition. The information as of and for the
four years ended December 31, 1992 presents only UPC and GSSC on an historical
basis using the pooling of interests method of accounting. The information is
derived from, and should be read in conjunction with, the historical
consolidated financial statements of UPC (including related notes thereto) which
are incorporated by reference, the historical consolidated financial statements
of GSSC (including related notes thereto) which are incorporated by reference
and the unaudited pro forma consolidated financial statements and related notes
in UPC's Current Report on Form 8-K dated August 18, 1994, incorporated by
reference. See "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
24
<PAGE> 248
Union Planters Corporation
Historical and Pro Forma Comparative Per Share Data
<TABLE>
<CAPTION>
Six Months As of and for the Years Ended December 31,
Ended (1)
June 30, ------------------------------------------
1994 (1) 1993 1992 1991 1990 1989
---------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Book value per common share
UPC $18.58 $18.63 $16.07 $14.72 $13.39 $12.31
UPC pro forma (GSSC only) 16.84 16.43 13.87 12.63 11.63 10.93
UPC pro forma (all recently completed and pending
acquisitions, including GSSC) (2) 16.82 16.29 NA NA NA NA
GSSC 19.28 18.34 16.11 14.55 13.68 13.16
GSSC equivalent pro forma (GSSC only) 24.47 23.87 20.15 18.35 16.90 15.88
GSSC equivalent pro forma (all recently completed
and pending acquisitions, including GSSC) (2) 24.44 23.67 NA NA NA NA
Cash dividends per share
UPC 0.42 0.72 0.60 0.48 0.48 0.48
UPC pro forma 0.42 0.72 0.60 0.48 0.48 0.48
GSSC 0.40 0.72 0.60 0.60 0.60 0.60
GSSC equivalent pro forma 0.61 1.05 0.87 0.70 0.70 0.70
Earnings before extraordinary items and accounting
changes
UPC
Primary 1.31 2.63 2.07 1.56 1.18 (1.00)
Fully diluted 1.23 2.46 2.00 1.55 1.18 (1.00)
UPC pro forma (GSSC only)
Primary 1.20 2.32 1.77 1.30 1.02 (0.44)
Fully diluted 1.15 2.24 1.75 1.30 1.02 (0.44)
UPC pro forma (all recently completed and pending
acquisitions, including GSSC) (2)
Primary 1.17 2.13 NA NA NA NA
Fully diluted 1.13 2.07 NA NA NA NA
GSSC
Primary 1.39 2.62 2.01 1.41 1.17 0.62
Fully diluted 1.39 2.62 2.01 1.41 1.17 0.62
GSSC equivalent pro forma (GSSC only)
Primary 1.74 3.37 2.57 1.89 1.48 (0.64)
Fully diluted 1.67 3.25 2.54 1.89 1.48 (0.64)
GSSC equivalent pro forma (all recently completed
and pending acquisitions, including GSSC) (2)
Primary 1.70 3.09 NA NA NA NA
Fully diluted 1.64 3.01 NA NA NA NA
</TABLE>
NA = Not Applicable
(1) The equivalent pro forma per share data for GSSC are computed by multiplying
UPC's pro forma information by 1.4530, the Exchange Ratio.
(2) See also, "-- Recent Developments Affecting UPC; -- Recently Completed
Acquisitions" and "-- Pending Acquisitions."
25
<PAGE> 249
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following tables contain unaudited consolidated pro forma condensed
financial information showing a balance sheet at June 30, 1994 and statements of
earnings for the six months ended June 30, 1994, and for the years ended
December 31, 1993, 1992 and 1991, for (i) UPC; (ii) UPC and GSSC; and (iii) UPC,
the Recently Completed Acquisitions and the pro forma impact of acquisitions by
UPC accounted for as purchases in 1993 and through June 30, 1994, the Pending
Acquisitions and GSSC. The unaudited pro forma financial information reflects
each acquisition using either the pooling of interests or purchase method of
accounting in accordance with the accounting requirements applicable to each
respective transaction. The unaudited pro forma financial information should be
read in conjunction with the historical consolidated financial statements and
notes thereto of UPC and GSSC, respectively, and in conjunction with the
information presented in UPC's Current Reports on Form 8-K dated February 8,
1994, April 14, 1994, May 18, 1994, July 1, 1994, July 26, 1994, August 18,
1994, August 19, 1994, September 1, 1994 and October 20, 1994. Pro forma results
are not necessarily indicative of future operating results. See "INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE." Certain nonrecurring charges as discussed in
"-- Recent Developments Affecting UPC -- Earnings Considerations Relating to
Pending Acquisitions and Reorganization" and "-- Additional Fourth Quarter 1994
Earnings Considerations" have not been included in the proforma condensed
consolidated financial information.
26
<PAGE> 250
UNION PLANTERS CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED PRO FORMA BALANCE SHEET
(Dollars in thousands)
<TABLE>
<CAPTION>
June 30, 1994
-----------------------------------------
UPC,
All Pending
UPC and Acquisitions
UPC GSSC and GSSC
---------- ---------- -----------
<S> <C> <C> <C>
Assets
Cash and due from banks $ 294,565 $ 414,270 $ 420,690
Interest-bearing deposits at financial institutions 10,689 11,832 17,994
Federal funds sold and securities purchased under
agreements to resell 42,128 42,128 41,223
Trading account securities, at market 148,204 148,204 148,204
Loans held for resale 9,974 40,937 40,937
Investment securities
Available for sale 2,465,523 2,592,940 2,584,600
Held to maturity 570,614 1,031,835 1,087,717
Loans, net of unearned income 3,639,444 5,297,200 5,387,472
Less:
Allowance for losses on loans (88,476) (121,608) (122,445)
---------- ---------- -----------
Net loans 3,550,968 5,175,592 5,265,027
Premises and equipment 158,553 208,097 212,960
Accrued interest receivable 62,415 81,817 82,702
Goodwill and other intangibles 45,193 45,193 46,467
Other assets 109,080 141,270 143,547
---------- ---------- -----------
Total assets $7,467,906 $9,934,115 $10,092,068
========= ========= ==========
Liabilities and shareholders' equity
Deposits
Noninterest-bearing $ 832,603 $1,229,668 $ 1,242,535
Other interest-bearing 5,157,275 6,970,915 7,096,443
---------- ---------- -----------
Total deposits 5,989,878 8,200,583 8,338,978
Short-term borrowings 506,516 534,101 534,914
Federal Home Loan Bank advances 193,399 218,420 218,420
Long-term debt 117,049 117,099 118,664
Accrued interest, expenses and taxes 49,392 59,335 63,092
Other liabilities 35,932 45,791 48,098
---------- ---------- -----------
Total liabilities 6,892,166 9,175,329 9,322,166
---------- ---------- -----------
Shareholders' equity
Preferred stock
Convertible 87,298 87,298 87,298
Nonconvertible 17,250 17,250 17,250
Common stock 126,788 194,217 198,030
Additional paid-in capital 92,369 92,369 92,570
Net unrealized loss -- available for sale
securities (13,760) (14,229) (14,050)
Retained earnings 265,795 381,881 388,804
---------- ---------- -----------
Total shareholders' equity 575,740 758,786 769,902
---------- ---------- -----------
Total liabilities and shareholders' equity $7,467,906 $9,934,115 $10,092,068
========= ========= ==========
</TABLE>
27
<PAGE> 251
UNION PLANTERS CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED PRO FORMA STATEMENT OF EARNINGS
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Six Months Ended June 30, 1994
---------------------------------------
UPC, Recently
Completed
Acquisitions,
All Pending
UPC and Acquisitions
UPC GSSC and GSSC
-------- -------- -------------
<S> <C> <C> <C>
Interest income
Interest and fees on loans $145,416 $211,466 $ 213,463
Interest on investment securities 75,180 90,987 92,797
Interest on deposits at financial institutions 229 240 368
Interest on federal funds sold and securities
purchased under agreements to resell 1,715 1,978 1,849
Interest on trading account securities 3,978 3,978 3,978
Interest on loans held for resale 878 2,638 2,638
-------- -------- -------------
Total interest income 227,396 311,287 315,093
-------- -------- -------------
Interest expense
Interest on deposits 81,570 110,497 112,022
Interest on short-term borrowings 6,270 6,792 6,792
Interest on Federal Home Loan Bank advances and
long-term debt 7,900 8,584 8,681
-------- -------- -------------
Total interest expense 95,740 125,873 127,495
-------- -------- -------------
Net interest income 131,656 185,414 187,598
Provision for losses on loans -- 1,775 1,974
-------- -------- -------------
Net interest income after provision for losses on
loans 131,656 183,639 185,624
-------- -------- -------------
Noninterest income
Service charges on deposit accounts 15,989 24,583 24,783
Profits and commissions from trading activities 2,841 2,841 2,841
Investment securities gains 210 109 266
Other income 21,480 28,071 28,534
-------- -------- -------------
Total noninterest income 40,520 55,604 56,424
-------- -------- -------------
Noninterest expense
Salaries and employee benefits 52,591 78,505 80,036
Net occupancy expense 9,029 12,644 12,733
Equipment expense 9,173 13,063 13,460
Other expense 46,793 61,469 62,153
-------- -------- -------------
Total noninterest expense 117,586 165,681 168,382
-------- -------- -------------
Earnings before income taxes, extraordinary item
and accounting changes 54,590 73,562 73,666
Applicable income taxes 16,769 22,590 22,632
-------- -------- -------------
Earnings before extraordinary item and accounting
changes $ 37,821 $ 50,972 $ 51,034
======== ======== =============
Earnings per common share
Primary $ 1.31 $ 1.20 $ 1.17
Fully diluted 1.23 1.15 1.13
Average common shares outstanding (in thousands)
Primary 25,449 38,935 39,697
Fully diluted 29,931 43,417 44,179
</TABLE>
28
<PAGE> 252
UNION PLANTERS CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED PRO FORMA STATEMENT OF EARNINGS
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Year Ended December 31, 1993
---------------------------------------
UPC, Recently
Completed
Acquisitions,
All Pending
UPC Acquisitions
UPC and GSSC and GSSC
-------- -------- -------------
<S> <C> <C> <C>
Interest income
Interest and fees on loans $254,259 $376,741 $ 426,496
Interest on investment securities 146,950 181,363 197,984
Interest on deposits at financial institutions 1,634 1,742 2,288
Interest on federal funds sold and securities
purchased under agreements to resell 4,602 5,092 5,730
Interest on trading account securities 6,194 6,194 6,194
Interest on loans held for resale 3,336 7,432 7,432
-------- -------- -------------
Total interest income 416,975 578,564 646,124
-------- -------- -------------
Interest expense
Interest on deposits 154,487 213,197 242,640
Interest on short-term borrowings 6,287 7,230 7,520
Interest on Federal Home Loan Bank advances and
long-term debt 12,358 13,253 13,771
-------- -------- -------------
Total interest expense 173,132 233,680 263,931
-------- -------- -------------
Net interest income 243,843 344,884 382,193
Provision for losses on loans 9,743 16,558 21,262
-------- -------- -------------
Net interest income after provision for losses on
loans 234,100 328,326 360,931
-------- -------- -------------
Noninterest income
Service charges on deposit accounts 29,274 46,532 50,401
Profits and commissions from trading activities 8,720 8,989 9,040
Investment securities gains 4,732 4,495 4,892
Other income 45,190 58,735 61,307
-------- -------- -------------
Total noninterest income 87,916 118,751 125,640
-------- -------- -------------
Noninterest expense
Salaries and employee benefits 101,650 150,383 164,915
Net occupancy expense 16,256 23,356 24,552
Equipment expense 16,679 23,986 24,366
Other expense 95,734 121,956 138,834
-------- -------- -------------
Total noninterest expense 230,319 319,681 352,667
-------- -------- -------------
Earnings before income taxes, extraordinary item
and accounting changes 91,697 127,396 133,904
Applicable income taxes 26,333 37,420 40,591
-------- -------- -------------
Earnings before extraordinary item and accounting
changes $ 65,364 $ 89,976 $ 93,313
======== ======== =============
Earnings per common share
Primary $ 2.63 $ 2.32 $ 2.13
Fully diluted 2.46 2.24 2.07
Average common shares outstanding (in thousands)
Primary 21,622 35,108 39,630
Fully diluted 25,852 39,338 44,228
</TABLE>
29
<PAGE> 253
UNION PLANTERS CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED PRO FORMA STATEMENT OF EARNINGS
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Year Ended
December 31, 1992
-------------------------
UPC UPC AND GSSC
-------- ------------
<S> <C> <C>
Interest income
Interest and fees on loans $212,225 $315,976
Interest on investment securities 129,404 165,005
Interest on deposits at financial institutions 3,999 4,915
Interest on federal funds sold and securities purchased
under agreements to resell 4,280 5,250
Interest on trading account securities 6,648 6,648
Interest on loans held for resale 3,561 7,146
-------- ------------
Total interest income 360,117 504,940
-------- ------------
Interest expense
Interest on deposits 147,132 209,035
Interest on short-term borrowings 6,942 8,040
Interest on Federal Home Loan Bank advances and long-term
debt 5,489 5,555
-------- ------------
Total interest expense 159,563 222,630
-------- ------------
Net interest income 200,554 282,310
Provision for losses on loans 19,194 27,182
-------- ------------
Net interest income after provision for losses on loans 181,360 255,128
-------- ------------
Noninterest income
Service charges on deposit accounts 21,335 35,590
Profits and commissions from trading activities 10,168 10,168
Investment securities gains 13,363 14,019
Other income 41,246 51,670
-------- ------------
Total noninterest income 86,112 111,447
-------- ------------
Noninterest expense
Salaries and employee benefits 77,245 116,764
Net occupancy expense 13,509 19,989
Equipment expense 12,875 18,186
Other expense 101,209 124,525
-------- ------------
Total noninterest expense 204,838 279,464
-------- ------------
Earnings before income taxes, extraordinary item and
accounting changes 62,634 87,111
Applicable income taxes 17,611 23,861
-------- ------------
Earnings before extraordinary item and accounting changes $ 45,023 $ 63,250
======== ================
Earnings per common share
Primary $ 2.07 $ 1.77
Fully diluted 2.00 1.75
Average common shares outstanding (in thousands)
Primary 18,765 32,251
Fully diluted 21,609 35,095
</TABLE>
30
<PAGE> 254
UNION PLANTERS CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED PRO FORMA STATEMENT OF EARNINGS
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Year Ended
December 31, 1991
-------------------------
UPC UPC and GSSC
-------- ------------
<S> <C> <C>
Interest income
Interest and fees on loans $227,667 $341,936
Interest on investment securities 99,580 141,925
Interest on deposits at financial institutions 7,525 9,898
Interest on federal funds sold and securities purchased under
agreements to resell 6,606 8,791
Interest on trading account securities 5,419 5,419
Interest on loans held for resale 4,784 6,150
-------- ------------
Total interest income 351,581 514,119
-------- ------------
Interest expense
Interest on deposits 173,295 259,518
Interest on short-term borrowings 12,809 14,383
Interest on Federal Home Loan Bank advances and long-term debt 5,004 5,196
-------- ------------
Total interest expense 191,108 279,097
-------- ------------
Net interest income 160,473 235,022
Provision for losses on loans 25,281 34,203
-------- ------------
Net interest income after provision for losses on loans 135,192 200,819
-------- ------------
Noninterest income
Service charges on deposit accounts 19,868 33,626
Profits and commissions from trading activities 14,707 14,674
Investment securities gains 3,391 2,624
Other income 34,115 41,165
-------- ------------
Total noninterest income 72,081 92,089
-------- ------------
Noninterest expense
Salaries and employee benefits 71,953 108,490
Net occupancy expense 10,901 17,414
Equipment expense 11,346 16,077
Other expense 75,401 96,494
-------- ------------
Total noninterest expense 169,601 238,475
-------- ------------
Earnings before income taxes, extraordinary item and
accounting changes 37,672 54,433
Applicable income taxes 7,538 11,537
-------- ------------
Earnings before extraordinary item and accounting changes $ 30,134 $ 42,896
======== ==============
Earnings per common share
Primary $ 1.56 $ 1.30
Fully diluted 1.55 1.30
Average common shares outstanding (in thousands)
Primary 18,632 32,118
Fully diluted 18,986 32,472
</TABLE>
31
<PAGE> 255
THE SPECIAL MEETINGS
THE UPC SPECIAL MEETING
Date, Time and Place. This Joint Proxy Statement/Prospectus is being
furnished to the shareholders of UPC in connection with the solicitation of
proxies by the UPC Board of Directors for use at the UPC Special Meeting to be
held at the offices of UPC, Union Planters Administrative Center, 7130 Goodlett
Farms Parkway, Memphis, Tennessee 38018, on Wednesday, December 28, 1994, at
1:00 p.m., Central Standard Time.
This Joint Proxy Statement/Prospectus is first being sent to the
shareholders of UPC on or about November 10, 1994.
Matters to be Considered at the UPC Special Meeting. At the UPC
Special Meeting, holders of record of UPC Common Stock on the UPC Record Date
(as defined below) will consider and vote upon the approval of the
Reorganization Agreement providing for the acquisition of GSSC by UPC through
the merger of INTERIM with and into GSSC. Upon consummation of the Merger,
GSSC would immediately thereafter be liquidated and dissolved by UPC,
whereupon the Banks would become direct wholly owned subsidiaries of UPC.
Other than procedural matters, no other business may properly come before the
UPC Special Meeting or any adjournments or postponements thereof.
Record Date; Vote Required. The UPC Board of Directors has fixed the
close of business on October 27, 1994, as the record date (the "UPC Record
Date") for the determination of shareholders of UPC entitled to receive
notice of and to vote at the UPC Special Meeting. On the UPC Record Date there
were 25,431,252 shares of UPC Common Stock outstanding and entitled to vote at
the UPC Special Meeting. Only holders of record of UPC Common Stock on the UPC
Record Date are entitled to vote at the UPC Special Meeting. No shares of UPC
Common Stock can be voted at the UPC Special Meeting unless the record holder
is present in person or represented by proxy at the UPC Special Meeting.
The affirmative votes of the holders of a majority of the outstanding
shares of UPC Common Stock present in person or by proxy and entitled to vote
at the UPC Special Meeting are required to approve the Reorganization
Agreement.
As of the UPC Record Date, the directors and executive officers of
UPC and their affiliates owned beneficially an aggregate of 1,061,014 shares of
UPC Common Stock (excluding shares which may be received upon the exercise of
options), or approximately 4.17% of the shares entitled to vote at the UPC
Special Meeting. All such directors and executive officers and their
affiliates have indicated their intention to vote substantially all of their
shares for the approval of the Reorganization Agreement.
Voting and Revocation of Proxies. If the recipient of this Joint
Proxy Statement/Prospectus should be a UPC shareholder, a proxy for use at the
UPC Special Meeting
32
<PAGE> 256
will accompany this Joint Proxy Statement/Prospectus. A UPC
shareholder may use the proxy if they should be unable to attend the UPC
Special Meeting in person or should wish to have their shares voted by proxy
even if the UPC shareholder should attend the UPC Special Meeting. Shares of
UPC Common Stock represented by a proxy properly signed and returned to UPC
at, or prior to, the UPC Special Meeting, unless subsequently revoked, will be
voted at the UPC Special Meeting in accordance with the instructions thereon.
If a proxy is properly signed and returned and the manner of voting is not
indicated on the proxy, any shares of UPC Common Stock represented by such
proxy will be voted "FOR" approval of the Reorganization Agreement.
Proxies marked to abstain from voting will be treated as shares that
are present at the UPC Special Meeting for purposes of determining the presence
of a quorum but as unvoted for purposes of determining the number of shares
voting on the proposal. If a broker or other nominee holder should indicate on
the proxy card that it does not have discretionary authority to vote the shares
it holds of record on the proposal, those shares will not be considered as
voted for purposes of determining the approval of the proposal by the
shareholders of UPC.
Any proxy given pursuant to this solicitation may be revoked at any
time prior to the voting thereof by filing with the Secretary of UPC a written
revocation or a duly executed proxy bearing a later date. A holder of UPC
Common Stock may withdraw their proxy at the UPC Special Meeting at any time
before it is exercised by electing to vote in person, however attendance at the
UPC Special Meeting will not in and of itself constitute a revocation of the
proxy.
Solicitation of Proxies. In addition to solicitation of proxies from
shareholders of UPC Common Stock by use of the mail, proxies also may be
solicited by personal interview, telephone or facsimile by directors, officers,
employees and agents of UPC, who will not be specifically compensated for such
services. It is expected that banks, brokerage houses and other institutions,
nominees or fiduciaries will be requested to forward the soliciting materials
to their principals and to obtain authorization for the execution of proxies.
All costs of soliciting proxies for the UPC Special Meeting, assembling and
mailing the Joint Proxy Statement/Prospectus to the UPC shareholders and all
papers which now accompany or hereafter may supplement the same, as well as
reasonable out-of-pocket expenses incurred by such banks, brokerage houses and
other institutions, nominees or fiduciaries for forwarding proxy materials to
and obtaining proxies from their principals will be borne by UPC.
SHAREHOLDERS OF UPC COMMON STOCK ARE REQUESTED TO COMPLETE, DATE AND SIGN THE
ACCOMPANYING PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE-PREPAID
ENVELOPE.
THE GSSC SPECIAL MEETING
Date, Time and Place. This Joint Proxy Statement/Prospectus is being
furnished to the stockholders of GSSC in connection with the solicitation of
proxies by the GSSC Board of
33
<PAGE> 257
Directors for use at the GSSC Special Meeting to be held at the offices
of GSSC, Corporate Administration Building, 2000 Gateway, Grenada, Mississippi
38901, on Wednesday, December 28, 1994, at 1:00 p.m., Central Standard Time.
This Joint Proxy Statement/Prospectus is first being sent to the
stockholders of GSSC on or about November 10, 1994.
Matters to be Considered at the GSSC Special Meeting. At the GSSC
Special Meeting, holders of record of GSSC Common Stock on the GSSC Record Date
(as defined below) will consider and vote upon the adoption of the
Reorganization Agreement providing for the acquisition of GSSC by UPC through
the merger of INTERIM with and into GSSC. Upon consummation of the Merger,
GSSC would immediately thereafter be liquidated and dissolved by UPC,
whereupon the Banks would become direct wholly owned subsidiaries of UPC.
Other than procedural matters, no other business may properly come before the
GSSC Special Meeting or any adjournments or postponements thereof.
Record Date; Vote Required. The GSSC Board of Directors has fixed
the close of business on October 31, 1994, as the record date (the "GSSC
Record Date") for the determination of stockholders of GSSC entitled to
receive notice of and to vote at the GSSC Special Meeting. On the GSSC Record
Date there were 9,492,975 shares of GSSC Common Stock outstanding and entitled
to vote at the GSSC Special Meeting. Only holders of record of GSSC Common
Stock on the GSSC Record Date are entitled to vote at the GSSC Special Meeting.
No shares of GSSC Common Stock can be voted at the GSSC Special Meeting unless
the record holder is present in person or represented by proxy at the GSSC
Special Meeting.
The affirmative votes of the holders of a majority of the outstanding
shares of GSSC Common Stock entitled to vote at the GSSC Special Meeting are
required to adopt the Reorganization Agreement. Therefore, a failure to
return a properly executed proxy or, alternatively, to vote in person at the
GSSC Special Meeting in favor of the proposal, will have the same effect as a
vote against adoption of the Reorganization Agreement.
As of the GSSC Record Date, the directors and executive officers of
GSSC and their affiliates owned beneficially an aggregate of 618,647 shares of
GSSC Common Stock (excluding shares which may be received upon the exercise of
options), or approximately 6.5% of the shares entitled to vote at the GSSC
Special Meeting. All such directors and executive officers and their
affiliates have indicated their intention to vote substantially all of their
shares for the proposal to adopt the Reorganization Agreement.
Voting and Revocation of Proxies. If the recipient of this Joint
Proxy Statement/Prospectus should be a GSSC stockholder, a proxy for use at the
GSSC Special Meeting will accompany this Joint Proxy Statement/Prospectus. A
GSSC stockholder may use the proxy if they should be unable to attend the GSSC
Special Meeting in person or should wish to have their shares voted by proxy
even if the GSSC stockholder should attend the GSSC Special Meeting. Shares of
GSSC Common Stock represented by a proxy properly signed and
34
<PAGE> 258
returned to GSSC at, or prior to, the GSSC Special Meeting, unless subsequently
revoked, will be voted at the GSSC
Special Meeting in accordance with the instructions thereon. If a proxy is
properly signed and returned and the manner of voting is notindicated on the
proxy, any shares of GSSC Common Stock represented by such proxy will be voted
"FOR" the proposal to adopt the Reorganization Agreement.
Proxies marked to abstain from voting will be treated as shares that
are present at the GSSC Special Meeting for purposes of determining the
presence of a quorum but as unvoted for purposes of determining the number of
shares voting on the proposal. If a broker or other nominee holder should
indicate on the proxy card that it does not have discretionary authority to
vote the shares it holds of record on the proposal, those shares will not be
considered as voted for purposes of determining the adoption of the proposal by
the stockholders of GSSC.
Any proxy given pursuant to this solicitation may be revoked at any
time prior to the voting thereof by filing with the Secretary of GSSC a written
revocation or a duly executed proxy bearing a later date. A holder of GSSC
Common Stock may withdraw their proxy at the GSSC Special Meeting at any time
before it is exercised by electing to vote in person; however, attendance at
the GSSC Special Meeting will not in and of itself constitute a revocation of
the proxy.
Solicitation of Proxies. In addition to solicitation of proxies from
stockholders of GSSC Common Stock by use of the mail, proxies also may be
solicited by personal interview, telephone and facsimile by directors,
officers, employees and agents of GSSC, who will not be specifically
compensated for such services. It is expected that banks, brokerage houses
and other institutions, nominees or fiduciaries will be requested to forward
the soliciting materials to their principals and to obtain authorization for
the execution of proxies. All costs of soliciting proxies for the GSSC Special
Meeting, assembling and mailing the Joint Proxy Statement/Prospectus to the
GSSC stockholders and all papers which now accompany or hereafter may
supplement the same, as well as reasonable out-of-pocket expenses incurred by
such banks, brokerage houses and other institutions, nominees or fiduciaries
for forwarding proxy materials to and obtaining proxies from their principals
will be borne by GSSC.
GSSC and UPC will each bear its own expenses in connection with
soliciting proxies for its respective Special Meeting, except that UPC shall
pay all Commission and other regulatory filing fees incurred in connection with
the Merger.
STOCKHOLDERS OF GSSC ARE REQUESTED TO COMPLETE, DATE AND SIGN THE ACCOMPANYING
PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE.
FAILURE TO RETURN YOUR PROPERLY EXECUTED PROXY CARD OR FAILURE TO VOTE AT THE
GSSC SPECIAL MEETING WILL HAVE THE SAME EFFECT AS A VOTE AGAINST THE ADOPTION
OF THE REORGANIZATION AGREEMENT. GSSC STOCKHOLDERS SHOULD NOT FORWARD ANY STOCK
CERTIFICATES WITH THEIR PROXY CARDS.
35
<PAGE> 259
NO SHAREHOLDER'S OR STOCKHOLDER'S APPRAISAL RIGHTS
No dissenters' or appraisal rights will be available to the
shareholders of UPC entitled to receive notice of and to vote at the UPC
Special Meeting or the stockholders of GSSC Common Stock entitled to receive
notice of and to vote at the GSSC Special Meeting, since the UPC Common Stock
is listed on the NYSE and the GSSC Common Stock is traded through the
NASDAQ/NMS.
REASONS AND RECOMMENDATIONS OF THE BOARDS OF DIRECTORS OF UPC AND GSSC
For the reasons described below, the UPC Board of Directors and the
GSSC Board of Directors have each unanimously approved the Reorganization
Agreement and recommend that their respective shareholders and stockholders
vote "FOR" approval or adoption, as the case may be, of the Reorganization
Agreement. See "THE MERGER -- Reasons for the Merger and Recommendations of
the Boards of Directors of UPC and GSSC."
OTHER MATTERS
The Boards of Directors of UPC and GSSC are not aware of any business
to come before the Special Meetings other than the matters described in this
Joint Proxy Statement/Prospectus. However, if any other matters should
properly come before either of the Special Meetings, it is intended that
proxies properly submitted in the accompanying form will be voted in respect
thereof at the respective Special Meeting in accordance with the determination
of a majority of the Board of Directors of UPC or GSSC, as the case may be.
36
<PAGE> 260
THE MERGER
The following description of the Merger is not intended to be a complete
description of all material facts regarding the Merger and is qualified in all
respects by reference to the Agreement and Plan of Reorganization, including
the Plan of Merger annexed thereto as Exhibit A, the fairness opinion of
Robinson-Humphrey and the fairness opinion of Stifel Nicolaus, attached hereto
as Appendices A, B and C, respectively. All UPC shareholders and GSSC
stockholders are urged to read the Reorganization Agreement, as well as the
other Appendices, in their entirety.
BACKGROUND OF THE MERGER
During the past several years, the banking industry has witnessed a
period of substantial and rapid change in general, and the Board of Directors
and management of GSSC specifically have been aware of change occurring in the
financial services available in the markets served by GSSC. Recently, there
has been consolidation activity in the southeastern United States and
nation-wide in which institutions of GSSC's size have been acquired by larger
regional bank holding companies with access to capital and resources
substantially greater than those of GSSC.
GSSC has been approached from time to time by companies seeking
either to be acquired by GSSC or to acquire GSSC. On February 3, 1992, GSSC
and First Tennessee National Corporation announced that they had entered into a
Letter of Intent stating that they would use their best efforts to negotiate
and execute a definitive merger agreement and addressing certain non-price
aspects of the anticipated transaction. The parties subsequently negotiated
price terms, but were unable to agree on mutually satisfactory terms. On
February 7, 1992, the parties announced that the merger negotiations in which
they had been engaged had been terminated and that they did not anticipate that
negotiations would resume.
After the termination of negotiations with First Tennessee National
Corporation, GSSC adopted a long-term business strategy to remain independent,
subject to the GSSC Board of Directors' fiduciary obligations to GSSC's
stockholders.
On March 15, 1994, a representative of UPC contacted a representative
of GSSC to inquire whether GSSC would be interested in being acquired by or
merged with UPC. The representative of GSSC responded that it was GSSC's
long-term strategy to remain independent. On March 21, 1994, a special
committee of the GSSC Board of Directors, formed at the time of the First
Tennessee National Corporation negotiations for the purpose of dealing with a
potential acquisition of GSSC (the "Committee"), discussed the initial contact
from UPC and decided that GSSC's long-term strategy had not changed, but that
GSSC would be willing to listen to UPC. On March 30, 1994, the representatives
of UPC and GSSC again met and had general discussions regarding the operations
of the two companies.
37
<PAGE> 261
On April 21, 1994, at UPC's request the representatives had further
discussions regarding a potential combination. The UPC and GSSC
representatives discussed synergies possible in a combined operation and UPC
indicated various synergy levels which would produce various exchange ratios.
The values ranged from approximately $29 to $33 per share of GSSC Common Stock.
In addition, the parties discussed having a pro rata portion of the UPC Board
of Directors consisting of members of the GSSC Board of Directors if the
combination were made. The parties also generally discussed UPC's practice of
extending employment contracts for key employees. No price offer was made by
UPC.
On April 29, 1994, the members of the Committee met to discuss the
prior meetings with UPC. During the meeting the Committee contacted Thompson &
Mitchell ("Counsel") to obtain legal advice regarding its fiduciary
obligations, including the need for the directors to be fully informed before
making any decision concerning a particular merger or mergers in general. The
Committee concluded that it would be in GSSC's best interest to employ an
investment banker to advise the GSSC Board of Directors about UPC and about
markets generally and values. Thereafter, Counsel, on behalf of GSSC,
contacted Robinson-Humphrey, and the Committee approved the employment of
Robinson-Humphrey for a period of one year for a fee of $25,000. Further, at
the meeting on April 29, 1994, the Committee agreed to contact UPC to tell its
representative that GSSC needed time for internal evaluation and would not be
in a position to have any further discussions in the immediate future. This
information was relayed to UPC on May 12, 1994.
On May 13, 1994, the members of the Committee and representatives of
each of Robinson-Humphrey and Counsel had an extended telephone conversation at
which time Robinson-Humphrey gave the Committee a preliminary estimation of
market value of GSSC Common Stock based on a wide variety of transactions.
This preliminary estimation showed a range of prices of $32 to $37 per share
for GSSC as the value that might be expected in a merger. However, a range of
prices based on other transactions occurring in the market place indicated that
an even higher price would be possible, although the transactions in which such
prices were paid were not directly comparable to GSSC's situation. During this
meeting, a member of the Committee reported that he had been contacted by a
representative of a second bank holding company (the "Second Company") about
the possibility of meeting, but such representative did not identify what he
wanted to discuss. A meeting with the representatives of the Second Company
was scheduled for May 16, 1994. After the May 13, 1994 meeting, the members of
the Committee met privately by telephone to discuss the recommendations that
should be made to the GSSC Board of Directors. The general view of the
Committee was that GSSC would be willing to listen to anyone, but that GSSC was
not "for sale" unless someone offered a preemptive price.
On May 16, 1994, representatives of GSSC and the Second Company met.
The representative of the Second Company wanted to discuss a possible merger of
the Second Company and GSSC. The Second Company representative stated he
believed that GSSC would be a perfect fit and that the two companies would be
complementary. After this meeting the members of the Committee met to discuss
this latest inquiry. The Committee decided to
38
<PAGE> 262
recommend to the GSSC Board of Directors that it not proceed with any further
discussions with either UPC or the Second Company. Further, based upon (i)
the GSSC Board of Directors' duty to be fully informed with respect to the
financial matters and (ii) the GSSC Board of Directors' legal obligations,
the Committee recommended that the entire GSSC Board of Directors meet with
Robinson-Humphrey to review financial matters and with Counsel to review legal
obligations and considerations.
On June 16, 1994, the GSSC Board of Directors met with
representatives of each of Robinson-Humphrey and Counsel. The purpose of the
meeting was (i) to consider whether GSSC should consider changing its policy of
independence and respond affirmatively to expressions of interest, (ii) to
review the GSSC Board of Directors' fiduciary duties of due care and absolute
loyalty, (iii) to review anti-trust considerations of any potential transaction
and (iv) to review a merger analysis and valuation report prepared by
Robinson-Humphrey.
At this meeting, the GSSC Board of Directors discussed generally the
banking climate and GSSC's policy of remaining independent. The consensus of
the meeting was that it would be appropriate to explore the subject of a merger
based upon the existing climate and the prospect that a very significant
amount might be realized by the stockholders of GSSC in excess of GSSC's
current market price. Additionally, the GSSC Board of Directors discussed
potential acquirors and the prospects of such potential acquirors identified by
Robinson-Humphrey.
Counsel then summarized the applicable statutory and case law with
respect to the GSSC Board of Directors' fiduciary duties of due care and
absolute loyalty. The GSSC Board of Directors discussed its obligation with
respect to any expression of interest and the role of a market check in the
event the GSSC Board of Directors received an expression of interest. Counsel
also reviewed antitrust considerations affecting bank mergers. Counsel noted
that some of the prospects identified by Robinson-Humphrey would require
substantial divestitures to pass the screens imposed by the Federal Reserve and
the United States Department of Justice as they administered the anti-trust
laws.
Robinson-Humphrey next presented a merger analysis and market
comparison of GSSC and each of UPC and the Second Company. The GSSC Board of
Directors reviewed the expected increase in the dividend yield to the
stockholders of GSSC if a proposed transaction were consummated with either UPC
or the Second Company or either of two additional prospects identified by
Robinson-Humphrey. In addition, with respect to UPC and the Second Company,
the GSSC Board of Directors reviewed, among other things, (i) synergy
estimates, (ii) expected market dilution at varying purchase prices, (ii) the
institution's ability to consummate a transaction and (iv) the takeover value
of a combined institution.
Robinson-Humphrey then presented a valuation analysis and discussed
the current banking environment. The analysis indicated that the premiums paid
on comparable transactions averaged approximately 1.82 times book value.
Robinson-Humphrey stated that the current banking environment was at a stage
where companies were trying to grow their franchises and paying toward the high
end of the range for acquisitions. Robinson-Humphrey indicated that
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the decrease in interest rate margins would probably slow this trend. After a
thorough discussion of the topics presented, the GSSC Board of Directors agreed
to review carefully the materials provided by Robinson-Humphrey and Counsel
prior to the GSSC Board of Directors' next meeting.
On June 20, 1994, after a thorough review by each member of the GSSC
Board of Directors of all materials prepared by Robinson-Humphrey and Counsel,
the GSSC Board of Directors voted to authorize Robinson-Humphrey to seek an
expression of interest from UPC. The GSSC Board of Directors decided not to
contact the Second Company because (i) such a combination appeared to require a
large divestiture of loans and deposits to obtain the required regulatory
approvals and (ii) the materials prepared by Robinson-Humphrey indicated that
the Second Company would be unable to pay the premium that UPC could pay.
Additionally, the GSSC Board of Directors viewed UPC as a more attractive
acquiror if the GSSC Board of Directors considered the possibility of a "double
dip" (that is, the acquiror in turn being acquired by a larger bank holding
company at some time in the future) as a result of further industry
consolidation following then anticipated federally authorized nation-wide
banking and branching.
On June 24, 1994, UPC, through Robinson-Humphrey, submitted to GSSC
an expression of interest of $35.00 per share in stock, based upon certain
synergies that would be necessary. UPC indicated that the expression of
interest could be increased, but that there would be no commitment to give
members of the GSSC Board of Directors any seats on the UPC Board of Directors.
A GSSC Board of Directors meeting was held to consider this expression of
interest and to decide whether the expression of interest would be considered
preemptive. The view of the GSSC Board of Directors was that the expression of
interest was not preemptive. The GSSC Board of Directors determined to see if
UPC would express interest at a higher level, subject to a market check to see
if a better price might otherwise be available. Based upon the analysis of
Robinson-Humphrey, which included a review of a group of financial institutions
that were thought to be able to pay at the higher end of the scale, the GSSC
Board of Directors decided to contact a third financial institution (the
"Third Company") to obtain a market check.
On June 28, 1994, representatives of GSSC and representatives of the
Third Company met to discuss the possibility of an expression of interest on
the part of the Third Company.
On June 29, 1994, the GSSC Board of Directors met to consider an
expression of interest submitted by the Third Company. The Third Company
proposed a minimum exchange ratio that would increase based upon an ability to
achieve certain synergy levels. Robinson-Humphrey stated that, based upon the
closing stock price of the Third Company's stock on June 29, 1994, the minimum
exchange ratio equated to a value of approximately $34.38 per share of GSSC
Common Stock and the maximum exchange ratio equated to a value of $37.81 per
share of GSSC Common Stock assuming certain synergies were attainable.
Robinson-Humphrey noted that UPC's expression of interest was not contingent on
any synergy level, and noted that as the exchange ratio increased, the amount
of synergies that would be necessary would also increase. In addition to the
price offered by each of UPC and the Third Company, the GSSC Board of Directors
reviewed (i) the dividends paid by each institution, (ii) the trading levels of
each stock,
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(iii) the market capitalization of each company, (iv) the credit
quality of each company and (v) the capital adequacy of each company. After a
thorough discussion of the expressions of interest, and these additional
factors, the GSSC Board of Directors concluded that UPC's expression of
interest should be further explored. Robinson-Humphrey was also authorized to
contact a representative of the Third Company to inform them that GSSC intended
to negotiate a possible transaction with a party other than the Third Company.
On June 29, 1994 and June 30, 1994, representatives of each of UPC
and GSSC met to negotiate the terms of a definitive agreement. During the
evening of June 30, 1994, the GSSC Board of Directors met to consider its
approval and recommendation of the Merger. Counsel was present at the meeting
as well as representatives of Robinson-Humphrey. At the meeting, the GSSC
Board of Directors received presentations from members of the GSSC Board of
Directors who negotiated on behalf of GSSC, Robinson-Humphrey and Counsel. The
GSSC Board of Directors thoroughly reviewed the terms and the conditions of
UPC's proposed definitive agreement. The GSSC Board of Directors also
reexamined the strategic benefits of the proposed combination and the long-term
prospects of the combined company and concluded that the combination continued
to represent a strategic opportunity for GSSC.
At the meeting, Robinson-Humphrey delivered its oral opinion (which
it subsequently confirmed in writing) to the GSSC Board of Directors to the
effect that, as of June 30, 1994, the range of exchange ratios set forth in the
Reorganization Agreement (the "Exchange Ratio Range") was fair to the
stockholders of GSSC from a financial point of view. Robinson-Humphrey noted
that each stockholder of GSSC would receive for each share of GSSC Common Stock
held by such stockholder shares of UPC Common Stock having a value of
approximately $38.00 based on the closing price of UPC Common Stock on June 30,
1994.
Following these reports and further discussions, the GSSC Board of
Directors unanimously approved the terms of the Reorganization Agreement. The
Reorganization Agreement was signed on July 1, 1994 and a press release and a
public announcement of the proposed transaction was made before the NYSE and
the NASDAQ/NMS opened for trading on July 1, 1994.
Pursuant to the Agreement and Plan of Reorganization, each party had
the opportunity to conduct a preliminary due diligence review of the other
party, with such review to be completed within 30 days from the date of the
Agreement and Plan of Reorganization. GSSC conducted certain due diligence
procedures with respect to UPC. The findings of these due diligence procedures
were presented to the GSSC Board of Directors on July 28, 1994. In addition,
GSSC's management internally reviewed the operations of UPC. Based upon the
presentation of these findings and the report of the results of the internal
review to the GSSC Board of Directors, the GSSC Board of Directors determined
on July 28, 1994 that it was satisfied with its due diligence review and it did
not exercise any right to terminate the Reorganization Agreement.
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Senior Management of UPC presented the proposed Merger to the UPC Board
of Directors in late June of 1994. Included in the presentation to the UPC
Board of Directors were the views of UPC management that (i) the Consideration
offered the GSSC stockholders in the Merger would be fair to the UPC
shareholders from a financial point of view based on certain preliminary pro
forma financial analysis undertaken by UPC; (ii) GSSC presented a unique
opportunity for UPC to expand its market franchise across the State of
Mississippi with a dominant market presence; (iii) the close proximity of GSSC
to UPC and existing UPC markets allowed for significant efficiencies and
economies of scale; (iv) the Merger would introduce UPC to Louisiana, a
contiguous banking market which it had previously sought to enter, with the
viable presence of Sunburst Bank, Louisiana in Baton Rouge, Louisiana; and (v)
the Merger was consistent with and in furtherance of the strategic plan of UPC
to continue to build and develop its banking franchise. The UPC Board of
Directors held a special meeting on June 30, 1994 to further consider these
items and the specific terms of the Reorganization Agreement. After a lengthy
discussion concerning the above matters and the specific terms of the
Reorganization Agreement, the UPC Board of Directors unanimously approved the
Merger and the Reorganization Agreement and approved the engagement by UPC of a
financial advisor to review the fairness to the shareholders of UPC from a
financial point of view of the Consideration to be delivered by UPC to the GSSC
stockholders in the Merger. The UPC Board of Directors reaffirmed and ratified
the Reorganization Agreement at its regularly scheduled meeting held on October
27, 1994. At this meeting, management of UPC provided an update of the status
of the transaction and its analysis of the Merger to the UPC Board of
Directors and Stifel Nicolaus presented its opinion as to the fairness to the
UPC shareholders from a financial point of view of the Consideration which
would be delivered by UPC to the GSSC stockholders in the Merger.
REASONS FOR THE MERGER AND RECOMMENDATIONS OF THE BOARDS OF DIRECTORS OF UPC
AND GSSC
Reasons and Recommendations of UPC Board of Directors. Management of
UPC has recommended to the UPC Board of Directors, and the UPC Board of
Directors has unanimously approved the Merger and the Reorganization Agreement
because (i) the Banks are located geographically in states in which UPC has
sought to increase its market share, and (ii) UPC believes that by providing
the Banks with access to the UPC capital base and other banking resources, the
Banks will be well positioned to compete in their markets in the face of
enhanced competition from larger, well capitalized institutions.
The UPC Board of Directors believes that the Merger is fair to and in
the best interests of UPC and its shareholders. The conclusion of the UPC Board
of Directors is based upon a number of factors, including the substantial
benefits expected to result from the combination of certain operations of GSSC
into UPC; information concerning the financial condition, results of operations
and prospects of UPC and GSSC both on a stand-alone and a combined basis; the
market prices of UPC Common Stock; and the fairness opinion of the financial
advisor to UPC. The UPC Board of Directors believes that the consolidation of
resources brought about by the Merger will enable UPC to realize certain
economies of scale, to provide a wider and improved
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array of financial services to customers and to achieve greater geographic and
market diversity, which will give UPC added flexibility in dealing with the
changing competitive environment. The UPC Board of Directors also believes
that the Merger will provide UPC with a stronger market position and financial
resources to meet the competitive challenges arising from further changes in
the banking and financial services industry. The UPC Board of Directors
believes for the reasons set forth herein, without assigning any relative
weights to these factors, that the Merger would be in the best interests of
the shareholders of UPC.
FOR THE REASONS SET FORTH ABOVE, THE BOARD OF DIRECTORS OF UPC BELIEVES THAT
THE MERGER IS IN THE BEST INTERESTS OF THE SHAREHOLDERS OF UPC AND,
ACCORDINGLY, RECOMMENDS THAT THE UPC SHAREHOLDERS VOTE "FOR" APPROVAL OF THE
REORGANIZATION AGREEMENT.
Fairness Opinion of Stifel Nicolaus. The Reorganization Agreement
provides that as a condition of consummating the Merger, UPC shall have
received an opinion from an investment banking firm prior to the Closing and
such opinion shall not have been withdrawn to the effect that, in the opinion
of the investment banking firm, the Merger is fair, from a financial point of
view, to the holders of UPC Common Stock, and UPC shall receive an updated
opinion from such advisor as of a date no more than five days prior to the
Closing. Pursuant to an engagement letter dated August 31, 1994 (the
"Engagement Letter"), UPC retained Stifel Nicolaus as its financial advisor on
the basis of the firm's reputation, experience and familiarity with the banking
industry and with merger and acquisition transactions. Stifel Nicolaus is a
nationally recognized investment banking and securities firm and, as part of
its investment banking business, is regularly engaged in the valuation of
businesses in connection with mergers and acquisitions, negotiating
underwritings, secondary distributions of listed and unlisted securities,
private placements and valuations for corporate and other purposes. The terms
of the Reorganization Agreement, including the Consideration to be delivered by
UPC to the GSSC stockholders in the Merger, were negotiated by UPC.
Stifel Nicolaus has delivered its opinion dated October 20, 1994 to
UPC. The opinion indicates that Stifel Nicolaus has reviewed, among
other things, a comparison of the financial statements and other financial
information concerning UPC and GSSC, certain publicly available documents filed
by UPC and GSSC, the nature and terms of recent sale and merger transactions
involving banks and bank holding companies, historical and current market data
for the UPC Common Stock and the GSSC Common Stock and financial and other
information provided by the management of GSSC and UPC. Stifel Nicolaus also
took into account its assessment of general economic, market and financial
conditions, its experience in other transactions and its knowledge of the
banking industry. Stifel Nicolaus did not and does not intend to make or
obtain any independent appraisal of the assets of UPC or GSSC. UPC did not and
does not intend to impose any limitations on the scope of Stifel Nicolaus'
investigation.
In connection with its services in rendering the fairness opinion,
Stifel Nicolaus will receive a fee of approximately $250,000, plus reasonable
travel and out-of-pocket expenses,
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$40,000 of which has been paid and the remainder of which is payable by UPC at
the Closing. UPC has also agreed to indemnify Stifel Nicolaus against certain
liabilities and expenses, including liabilities arising under federal
securities laws, in connection with Stifel Nicolaus' services to UPC.
For the purpose of rendering its opinion, Stifel Nicolaus assumed that
the Exchange Ratio would be in the range of 1.3296 shares of UPC Common Stock
to 1.5495 shares of UPC Common Stock for each share of GSSC Common Stock.
No opinion was expressed by Stifel Nicolaus as to the fairness of the
Consideration outside of the assumed range. Generally, the assumed range of
exchange ratios would be in effect only in the event the Current Market Price
Per Share of UPC Common Stock were equal to or greater than $22.00 per share of
UPC Common Stock but less than or equal to $31.25 per share of UPC Common
Stock.
At the October 27, 1994 meeting of the UPC Board of Directors, Stifel
Nicolaus delivered its written opinion dated October 20, 1994, that the
Consideration to be delivered by UPC to the GSSC stockholders in the Merger is
fair to the UPC shareholders from a financial point of view. The full text of
Stifel Nicolaus' written opinion to the UPC Board of Directors is attached
hereto as Appendix C and is incorporated herein by reference and should be read
carefully and in its entirety in connection with this Joint Proxy
Statement/Prospectus. The following summary of Stifel Nicolaus' opinion is
qualified in its entirety by reference to the full text of the opinion. Stifel
Nicolaus' opinion is addressed only to the UPC Board of Directors and does not
constitute a recommendation to any UPC shareholder or GSSC stockholder as to
how such UPC shareholder or GSSC stockholder should vote at their respective
Special Meetings.
Stifel Nicolaus reviewed with UPC's directors the general analysis
performed by Stifel Nicolaus in reaching its opinion. In connection with its
opinion, Stifel Nicolaus, among other things: (i) reviewed certain publicly
available financial and other data with respect to UPC and GSSC, including the
consolidated financial statements for the last five years and for the six-month
period ended June 30, 1994, and certain other relevant financial operating data
relating to UPC and GSSC made available to Stifel Nicolaus from published
sources; (ii) reviewed the Reorganization Agreement; (iii) reviewed certain
historical market prices and trading volumes of the UPC Common Stock and the
GSSC Common Stock as reported by the NYSE and the NASDAQ/NMS, respectively;
(iv) compared UPC and GSSC from a financial point of view with certain other
companies in the banking industry that Stifel Nicolaus deemed to be relevant;
(v) considered the financial terms, to the extent publicly available, of
selected recent acquisitions of bank holding companies that Stifel Nicolaus
deemed to be reasonably similar, in whole or in part, to the Merger; (vi)
reviewed and discussed with representatives of the management of UPC and GSSC
certain information of a business and financial nature regarding UPC and GSSC
furnished to Stifel Nicolaus by UPC and GSSC, including financial forecasts and
related assumptions; (vii) made inquiries regarding, and discussed the Merger
and the Reorganization Agreement and other matters related thereto with UPC's
counsel; and (viii) performed such other analyses and examinations as Stifel
Nicolaus deemed appropriate.
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In connection with its review, Stifel Nicolaus did not independently
verify any of the foregoing information, relied on such information and assumed
that such information was complete and accurate in all material respects. With
respect to the financial forecasts of UPC and GSSC provided to Stifel Nicolaus
by UPC's management, Stifel Nicolaus assumed for purposes of its opinion that
they were reasonably prepared on bases reflecting the best available estimates
and judgments of the management of UPC and the management of GSSC at the time
of preparation as to the future financial performance of UPC and GSSC and that
they provided a reasonable basis upon which Stifel Nicolaus could form its
opinion. Stifel Nicolaus also assumed that there had been no material changes
in UPC's or GSSC's assets, financial condition, results of operations,
business or prospects since the date of the last financial statements made
available to Stifel Nicolaus. Stifel Nicolaus relied on advice of counsel to
UPC as to all legal matters with respect to UPC, the Merger and the
Reorganization Agreement. In addition, Stifel Nicolaus did not make or obtain
an independent evaluation, appraisal or physical inspection of the assets,
individual properties or liabilities of UPC or GSSC, nor was Stifel Nicolaus
furnished with any such appraisal. Further, Stifel Nicolaus' opinion was
based on economic, monetary, market and other conditions existing as of the
date of its opinion. No opinion was expressed as to the prices at which
shares of the UPC Common Stock or shares of the GSSC Common Stock might trade
in the future.
The following is a summary of the financial analyses performed by
Stifel Nicolaus in connection with providing its opinion to the UPC Board of
Directors on October 27, 1994.
Pro Forma Per Share Impact. Stifel Nicolaus reviewed the estimated
future earnings per share for UPC and GSSC and analyzed a range of profit
improvement levels of the combined companies furnished by, and based on the
estimates of, UPC management. These estimates were derived by UPC management
in conjunction with the profitability analysis being conducted by Alex
Shesunoff Management Services, Inc. Based on these estimates, the analysis
suggested a range of UPC 1996 earnings per share impact of 7.7% dilutive to
7.3% accretive based on a full range of possible profit improvement
realizations. The analysis also suggests that the Merger is projected to be
dilutive with respect to the book value and tangible book value per share of
UPC.
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Contribution Analysis. Stifel Nicolaus reviewed certain historical
operating and financial information, including net revenues (before and after
provision for loan losses), net income (before extraordinary items and
preferred dividends), assets, loans, deposits and total equity of UPC and GSSC
and compared the contribution of GSSC to the pro forma combined figures for UPC
and GSSC to the percentage of total shares of UPC Common Stock on a pro forma
combined UPC and GSSC basis that would be owned by the GSSC stockholders as a
result of the Merger. The analysis showed the following percentage
contribution of GSSC to the pro forma combined company:
GSSC PERCENTAGE CONTRIBUTION (PRO FORMA)
<TABLE>
<CAPTION>
Six-Month Period Ended
June 30, 1994
----------------------
<S> <C>
Common Stock Ownership 33.94%
Net Revenues(1) (Before 28.97
Provision for Loan Loss)
Net Revenues(1) (After 27.16
Provision for Loan Loss)
Net Income Before 26.82
Extraordinary Items and
Preferred Dividends
Assets 25.99
Loans 33.23
Deposits 28.38
Total Equity 25.70
</TABLE>
____________________
(1) Net Revenues include net interest income plus noninterest income net of
noninterest expense.
Present Value Analysis. Applying discounted cash flow analysis to the
theoretical future earnings and dividends of the pro forma combined UPC and
GSSC, Stifel Nicolaus compared the calculated future value of a share of UPC
Common Stock (assuming a stand-alone scenario) to the calculated value of a
share of the pro forma combined company pursuant to the terms of the
Reorganization Agreement. The analysis was based upon a range of assumed
returns on assets, 5% annual asset growth, current dividend rates, a range of
assumed price/earnings ratios and a 10% discount rate. Based on this analysis,
Stifel Nicolaus concluded that the Merger does not materially impact the
calculated future value of a share of UPC Common Stock.
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Discounted Cash Flow Analysis. Based on estimates by the management of
GSSC of the future earnings and range of profit improvements for the Banks
furnished to Stifel Nicolaus by the management of UPC, Stifel Nicolaus
estimated the present value of future dividends available to be paid from the
Banks to UPC under various scenarios assuming the Banks would maintain adequate
capital levels as required by their respective regulatory authorities. Based
on a range of profitability levels and a range of discount rates, under UPC
ownership, the Banks could theoretically produce future cash flows to UPC with
a present value ranging from $219 million (assuming no profit improvements) to
$448 million (assuming maximum estimated profit improvements).
Summary Analysis of Bank Merger Transactions. Stifel Nicolaus
analyzed certain information relating to transactions in the banking industry,
including (i) median information for 399 bank acquisitions announced in the
United States since October 19, 1993, (ii) median information for 97 bank
acquisitions announced in the Southeast since October 19, 1993, and (iii)
median information for 14 selected acquisitions of "significant banking
franchises" (defined as banks with assets between $2 billion and $20 billion
and each having a major statewide franchise) since January 1, 1993
(collectively, the "Selected Transactions"). Stifel Nicolaus calculated the
following ratios with respect to the Merger (based on financial data of GSSC
as of June 30, 1994, and the closing price of UPC Common Stock of $23.875 per
share on the NYSE on October 18, 1994) and the Selected Transactions:
<TABLE>
<CAPTION>
Significant
Southeast Banking Franchises
Ratios The Merger U.S. Median Median Median
---------- ----------- --------- ------------------
<S> <C> <C> <C> <C>
Deal Price per share/Book Value 176% 170% 186% 211%
Deal Price per share/ 185 173 190 233
Tangible Book Value
Deal Price per share/Last 12.2 times 14.6 times 17.4 times 16.8 times
12 months earnings per
share
Deal Price/Assets 13.2% 14.6% 16.4% 17.2%
Premium over Tangible 6.7 6.6 8.2 11.3
Book Value/Deposits
Deal Price/Deposits 14.6 16.6 18.9 19.7
</TABLE>
The summary set forth above does not purport to be a complete
description of the presentation made by Stifel Nicolaus to the UPC Board of
Directors or of all of the analyses performed by Stifel Nicolaus. The
preparation of a fairness opinion is not necessarily susceptible to partial
analysis or summary description. Stifel Nicolaus believes that its analyses
and the summary set forth above must be considered as a whole and that selecting
portions of
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its analyses and of the factors considered, without considering all analyses
and factors, would create an incomplete view of the process underlying
the analyses set forth in its presentation to the UPC Board of Directors. In
addition, Stifel Nicolaus may have given various analyses more or less weight
than other analyses, and may have deemed certain assumptions more or less
probable than other assumptions, such that the ranges of valuations resulting
from any particular analysis described above should not be taken to be Stifel
Nicolaus' view of the actual value of UPC or the combined companies. The fact
that any specific analysis has been referred to in the summary above is not
meant to indicate that such analysis was given greater weight than any other
analysis.
In performing its analyses, Stifel Nicolaus made numerous assumptions
with respect to industry performance, general business and economic conditions
and other matters, many of which are beyond the control of UPC or GSSC. The
analyses performed by Stifel Nicolaus are not necessarily indicative of actual
values or actual future results, which may be significantly more or less
favorable than suggested by such analyses. Such analyses were prepared solely
as part of Stifel Nicolaus' analysis of the fairness to the UPC shareholders
from a financial point of view of the Consideration to be delivered by UPC to
the GSSC stockholders in the Merger under the terms of the Reorganization
Agreement and were provided to the UPC Board of Directors in connection with
the delivery of Stifel Nicolaus' opinion. The analyses do not purport to be
appraisals or to reflect the prices at which a company might actually be sold
or the prices at which any securities may trade at the present time or at any
time in the future. Stifel Nicolaus used in its analyses various projections
of future performance prepared by the managements of UPC and GSSC. The
projections are based on numerous variables and assumptions which are
inherently unpredictable and must not be considered certain of occurrence as
projected. Accordingly, actual results could vary significantly from those set
forth in such projections.
As described above, Stifel Nicolaus' opinion and presentation to the
UPC Board of Directors were among the many factors taken into consideration by
the UPC Board of Directors.
In the ordinary course of its business, Stifel Nicolaus actively
trades equity securities of UPC for its own account and for the accounts of
customers and, accordingly, may at any time hold a long or short position in
such securities.
Reasons and Recommendations of GSSC Board of Directors. The GSSC
Board of Directors believes that the Merger is in the best interests of GSSC
and its stockholders. In the course of reaching its determination to approve
the Merger and recommend it to the stockholders of GSSC, the GSSC Board of
Directors, without assigning any relative weights, considered a number of
factors, including the following material considerations:
(i) Personnel costs are rising because of the need to implement
new regulations, and changing interpretations of old regulations.
Those costs are mounting each year with no apparent end in sight. Over
the past few years, GSSC has spent an estimated $1,000,000 in evaluating,
planning and implementing required regulatory changes. If an accounting were
made
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of time spent by every employee, this figure could multiply several times.
It is probable that regulatory required changes will continue. Such regulatory
costs can be absorbed only if spread over a broader asset base.
(ii) Increased competition and changing consumer demands require
greater investment in technology, both hardware and software. These
investments would need to be made to stay close to the competition, but these
investments would not necessarily put GSSC ahead of the competition.
(iii) Traditional banking institutions, such as GSSC, are not
competing on a level playing field with non-bank suppliers of financial
services. Investment companies offering mutual funds, stock brokers, finance
companies, savings and loan associations, credit card issuers, mortgage bankers
and other non-banks providing competing financial services do not have the
overhead burden of banking regulations. They are targeting, among others,
GSSC's most profitable customers and are regularly successful in their
efforts. Unless the playing field is leveled, these non-banks are expected to
continue to grow in market share at GSSC's expense.
(iv) Owning the stock of smaller bank holding companies is not as
attractive an investment opportunity as in years past. Investors are seeking
shorter payout terms and higher earnings-per-share growth than the banking
industry historically has realized. Smaller holding companies of GSSC's size
cannot overcome the cost of the regulatory burden and non-regulated competition
in the short run. Linking with a larger company to achieve "critical mass" and
experience economies of scale and diversity of risk is in the best interests of
GSSC stockholders.
(v) The agreed upon Exchange Ratio Range was higher than prior
overtures made by other potential acquirors and within the range of fairness as
determined by Robinson-Humphrey and that ratio was toward the high end of the
scale.
(vi) Robinson-Humphrey issued its written opinion to the effect that
at July 1, 1994, the proposed financial terms of the Merger are fair from a
financial point of view, to stockholders of GSSC. In this respect, while the
GSSC Board of Directors did not explicitly adopt Robinson-Humphrey's financial
analyses, the GSSC Board of Directors took such analyses into account in its
overall evaluation of the benefits of the Merger. See a copy of the fairness
opinion of Robinson-Humphrey attached as Appendix B to this Joint Proxy
Statement/Prospectus.
(vii) The Reorganization Agreement, although containing certain
limitations on negotiations and "no shop" provisions and a termination fee in
the event of a third party acquiror of GSSC, does not contain a punitive "lock
up" provision which would substantially impede a competing bid or restrict the
GSSC Board of Directors' ability to consider a competing bid, if one were to be
presented. GSSC has the right to terminate the Reorganization Agreement in
order to accept a higher bid if required by the GSSC Board of Directors'
fiduciary duties.
(viii) Stockholders of GSSC who retain their shares of UPC Common
Stock following the Merger would have the potential to receive greater
dividends after the Merger in that the
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dividend yield on the UPC Common Stock which would be received by the GSSC
stockholders in the Merger would substantially exceed the dividend yield on the
GSSC Common Stock, based upon the current dividend rates of both companies.
(ix) Management of GSSC respects the operations of UPC as a
competitor and believes UPC would operate the combined companies to the benefit
of its shareholders, communities and customers.
(x) There are few branch overlaps in GSSC's and UPC's market coverage
and divestitures necessary to comply with regulatory anti-trust standards would
be minimal.
(xi) UPC Common Stock is traded on the NYSE and it has greater
liquidity than GSSC's Common Stock due to UPC's larger size and market
visibility.
(xii) The Merger has been structured to enable GSSC stockholders to
have all of their shares of GSSC Common Stock converted into shares of UPC
Common Stock on a tax-free basis for federal income tax purposes except for the
satisfaction of any fractional shares which would be settled in cash.
(xiii) GSSC's management believes that the Merger, compared with a
merger with other potential candidates, would beneficially impact the customers
and the communities served by GSSC.
(xiv) There is a limited ability on the part of GSSC to expand in its
current markets.
(xv) The financial condition, results of operations, current business
and expansion opportunities and constraints, and prospects of future
performance and earnings of GSSC on a stand-alone basis compares unfavorably to
the potential financial condition, results of operation, expansion
opportunities and prospects of future performance and earnings of GSSC and UPC
on a combined basis.
FOR THE REASONS SET FORTH ABOVE, THE BOARD OF DIRECTORS OF GSSC BELIEVES THAT
THE MERGER IS IN THE BEST INTERESTS OF THE STOCKHOLDERS OF GSSC AND,
ACCORDINGLY, RECOMMENDS THAT THE GSSC STOCKHOLDERS VOTE "FOR" ADOPTION OF THE
REORGANIZATION AGREEMENT.
Fairness Opinion of Robinson-Humphrey. GSSC retained
Robinson-Humphrey to act as its financial advisor in connection with the
Merger. Robinson-Humphrey has rendered an opinion to the GSSC Board of
Directors that, based on the matters set forth therein, the Consideration to be
received by the GSSC stockholders pursuant to the Merger is fair, from a
financial point of view, to the stockholders of GSSC. The full text of such
opinion is set forth in Appendix B to this Joint Proxy Statement/Prospectus
and should be read in its entirety by the stockholders of GSSC.
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The Consideration to be received by the GSSC stockholders in the
Merger was determined by GSSC and UPC in their negotiations. No limitations
were imposed by the GSSC Board of Directors or management of GSSC upon
Robinson-Humphrey with respect to the investigations made or the procedures
followed by Robinson-Humphrey in rendering its opinion.
In connection with rendering its opinion to the GSSC Board of
Directors, Robinson-Humphrey performed a variety of financial analyses.
However, the preparation of a fairness opinion involves various determinations
as to the most appropriate and relevant methods of financial analysis and the
application of those methods to the particular circumstances, and, therefore,
such an opinion is not readily susceptible to summary description.
Robinson-Humphrey, in conducting its analysis and in arriving at its opinion,
has not conducted a physical inspection of any of the properties or assets of
GSSC, and has not made or obtained any independent valuation or appraisals of
any properties, assets or liabilities of GSSC. Robinson-Humphrey has assumed
and relied upon the accuracy and completeness of the financial and other
information that was provided to it by GSSC or that was publicly available.
Its opinion is necessarily based on economic, market and other conditions as in
effect on, and the information made available to it as of, the date of its
analyses.
Valuation Methodologies. In connection with its opinion on the Merger
and the presentation of that opinion to the GSSC Board of Directors,
Robinson-Humphrey performed two valuation analyses with respect to GSSC: (i) an
analysis of comparable prices and terms of recent transactions involving banks
and bank holding companies buying banks and bank holding companies; and (ii) a
discounted cash flow analysis. For purposes of the comparable company and
comparable transaction analyses, UPC stock was valued at $26.25 per share.
Both of these methodologies are discussed briefly below.
Comparable Transaction Analysis. Robinson-Humphrey performed two
analyses of premiums paid for selected banks with comparable characteristics to
GSSC. Comparable transactions were considered to be (i) transactions which
occurred since January 1, 1994, where the seller was a bank or bank holding
company, and (ii) transactions which occurred since January 1, 1993, where the
seller was a bank or bank holding company with assets between $1 billion and $5
billion.
(i) Based on the first grouping of transactions, banks selling banks
during 1994, the analysis yielded a range of transaction values to book value
of 99.82 percent to 358.00 percent, with a mean of 175.10 percent and a median
of 167.14 percent. These compare to a transaction value for the Merger of
approximately 202.7 percent of GSSC book value as of March 31, 1994.
In addition, the analysis yielded a range of transaction values as a
percentage of tangible book value for the comparable transactions ranging from
99.82 percent to 358.00 percent, with a mean of 179.36 percent and a median of
169.97 percent. These compare to a transaction value to tangible book value
at March 31, 1994 of approximately 214.0 percent for the Merger.
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Lastly, the analysis yielded a range of transaction values as a
multiple of trailing twelve month earnings per share. These values ranged from
4.65 times to 48.98 times, with a mean of 16.34 times and a median of 14.74
times. These compare to a transaction value for the Merger of 14.13 times
March 31, 1994 trailing twelve months earnings per share.
(ii) Based on the second grouping of transactions since January 1,
1993, where the seller was a bank or bank holding company with assets between
$1 billion and $5 billion, the analysis yielded a range of transaction values
to book value of 116.62 percent to 262.28 percent, with a mean of 211.00
percent and a median of 219.00 percent. These compare to a transaction value
for the Merger of approximately 202.7 percent of GSSC book value as of March
31, 1994.
In addition, the analysis yielded a range of transaction values as a
percentage of tangible book value for the comparable transactions ranging from
117.67 percent to 268.50 percent, with a mean of 224.00 percent and a median of
239.00 percent. These compare to a transaction value to tangible book value at
March 31, 1994 of approximately 214.0 percent for the Merger.
Lastly, the analysis yielded a range of transaction values as a
multiple of trailing twelve month earnings per share. These values ranged from
7.48 times to 54.69 times, with a mean of 23.40 times and a median of 18.50
times. These compare to a transaction value for the Merger of 14.13 times
March 31, 1994 trailing twelve months earnings per share.
No company or transaction used in the comparable transaction analyses
is identical to GSSC. Accordingly, an analysis of the foregoing necessarily
involves complex considerations and judgments, as well as other factors that
affect the public trading value or the acquisition value of the company to
which it is being compared.
Discounted Cash Flow Analysis. Using discounted cash flow analysis,
Robinson-Humphrey estimated the present value of the future stream of after-tax
cash flows that GSSC could produce through 1998, under various circumstances,
assuming that GSSC performed in accordance with the earnings/return projections
of management at the time that GSSC entered into acquisition discussions in
June, 1994. Robinson-Humphrey estimated the terminal value for GSSC at the end
of the period by applying multiples of earnings ranging from 9.0 to 11.0 times
and then discounting the cash flow streams, dividends paid to stockholders and
terminal value using differing discount rates (ranging from 9.0 percent to
11.0 percent) chosen to reflect different assumptions regarding the required
rates of return of GSSC and the inherent risk surrounding the underlying
projections. This discounted cash flow analysis indicated a reference range
of $293.0 million to $354.2 million, or $30.86 to $37.31 per share, for GSSC.
These compare to Consideration of 1.4206 shares of UPC Common Stock, valued at
approximately $38.00, per share of GSSC Common Stock based on a value per share
of UPC Common Stock of $26.75 at the close of business on June 30, 1994, or
approximately $361,000,000.
Compensation of Robinson-Humphrey. Pursuant to an engagement letter
dated May 4, 1994 between GSSC and Robinson-Humphrey, GSSC agreed to pay
Robinson-Humphrey $25,000 (the "Valuation Fee") as a one year retainer fee, and
for which Robinson-Humphrey
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prepared a valuation analysis which was used to assist the GSSC Board of
Directors in determining a fair price range during the negotiations with UPC.
In a subsequent engagement letter dated June 20, 1994, GSSC agreed to pay (A)
$750,000 for a written fairness opinion (the "Fairness Opinion Fee") and (B)
an incremental success fee, which would be equal to a percentage of the total
value of the UPC Common Stock to be received by the GSSC Record Holders in the
Merger, less the Valuation Fee and the Fairness Opinion Fee (the "Success
Fee").
Pursuant to the terms of the engagement letter, the Success Fee would
be $466,301, based on the $22.50 closing price per share of UPC Common Stock
on November 4, 1994. GSSC has also agreed to reimburse Robinson-Humphrey for
its out-of-pocket expenses, whether or not the Merger is consummated, and to
indemnify and hold harmless Robinson-Humphrey and its officers and employees
against certain liabilities in connection with its services under the
engagement letter except for liabilities resulting from the negligence of
Robinson-Humphrey.
As part of its investment banking business, Robinson-Humphrey is
regularly engaged in the valuation of securities in connection with mergers and
acquisitions, negotiated underwritings, secondary distributions of listed and
unlisted securities, private placements and valuations for estate, corporate
and other purposes. The GSSC Board of Directors decided to retain
Robinson-Humphrey based on its experience as a financial advisor in mergers and
acquisitions of financial institutions, particularly transactions in the
Southeastern region of the United States, and its knowledge of financial
institutions and GSSC in particular.
TERMS OF THE MERGER.
Pursuant to the Reorganization Agreement, at the Effective Time of the
Merger, the outstanding shares of GSSC Common Stock held by the GSSC Record
Holders immediately prior to the Effective Time of the Merger shall, without
any further action on the part of anyone, cease to represent any interest
(equity, stockholder or otherwise) in GSSC and shall automatically be converted
exclusively into, and constitute only the right of the GSSC Record Holders to
receive in exchange for their shares of GSSC Common Stock, whole shares of UPC
Common Stock and a cash payment in settlement of any remaining fractional share
of UPC Common Stock, in accordance with the terms and conditions of Section
3.1(e) of the Agreement and Plan of Reorganization. The shares of UPC Common
Stock and the cash settlement of any remaining fractional shares of UPC Common
Stock deliverable by UPC or INTERIM to the GSSC Record Holders pursuant to the
terms of the Reorganization Agreement are sometimes collectively referred to
herein as the "Consideration."
The number of shares of UPC Common Stock to be exchanged for each
share of GSSC Common Stock issued and outstanding immediately prior to the
Effective Time of the Merger shall be based on the Exchange Ratio as determined
and set forth in Section 3.1(e) of the Agreement and Plan of Reorganization.
The Exchange Ratio was determined as follows:
(A) In the event the Current Market Price Per Share of UPC Common
Stock had been greater than or equal to $24.00 per share of UPC Common Stock
but less than or equal to
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$29.25 per share of UPC Common Stock (the "Primary Collar"), the Exchange
Ratio would have been fixed at 1.4206 shares of UPC Common Stock for each
share of GSSC Common Stock validly issued and outstanding immediately prior to
the Effective Time of the Merger;
(B) In the event the Current Market Price Per Share of UPC Common
Stock had been greater than $29.25 per share of UPC Common Stock but less than
or equal to $31.25 per share of UPC Common Stock (the "Upper Secondary
Collar"), the Exchange Ratio would have been based on (a) a fixed price of
$41.55 per share of GSSC Common Stock divided by (b) the Current Market Price
Per Share of UPC Common Stock for each share of GSSC Common Stock validly
issued and outstanding immediately prior to the Effective Time of the Merger;
(C) In the event the Current Market Price Per Share of UPC Common
Stock had been greater than $31.25 per share of UPC Common Stock (the
"Ceiling"), the Exchange Ratio would have been fixed at 1.3296 shares of UPC
Common Stock for each share or GSSC Common Stock validly issued and outstanding
immediately prior to the Effective Time of the Merger; provided, however, that
UPC would have had the right to either deliver shares of UPC Common Stock based
on the fixed Exchange Ratio of 1.3296 or to terminate the transaction;
provided, however, that should UPC have elected to terminate the transaction
under this provision, GSSC would have had the unilateral right to reinstate the
transaction by accepting in exchange for each share of GSSC Common Stock
validly issued and outstanding immediately prior to the Effective Time of the
Merger that number of shares of UPC Common Stock at the Current Market Price
Per Share sufficient to equal $41.55 per share of GSSC Common Stock;
(D) In the event the Current Market Price Per Share of UPC Common
Stock had been greater than or equal to $22.00 per share of UPC Common Stock
but less than $24.00 per share of UPC Common Stock (the "Lower Secondary
Collar"), the Exchange Ratio would have been based on (a) a fixed price of
$34.09 per share of GSSC Common Stock divided by (b) the Current Market Price
Per Share of UPC Common Stock for each share of GSSC Common Stock validly
issued and outstanding immediately prior to the Effective Time of the Merger;
and
(E) In the event the Current Market Price Per Share of UPC Common
Stock had been less than $22.00 per share of UPC Common Stock (the "Floor"),
the Exchange Ratio would have been fixed at 1.5495 shares of UPC Common Stock
for each share of GSSC Common Stock validly issued and outstanding immediately
prior to the Effective Time of the Merger; provided, however, that subject to
the terms and provisions of Section 3.3 of the Agreement and Plan of
Reorganization, GSSC would have had the right to either accept the fixed
Exchange Ratio of 1.5495 or terminate the transaction in accordance with the
terms and provisions of Section 3.3 of the Agreement and Plan of Reorganization,
provided, however, that should GSSC have elected to terminate the transaction
under this provision and the Current Market Price Per Share of UPC Common Stock
had been greater than or equal to $18.50, UPC would have had the unilateral
right to reinstate the transaction by delivering in exchange for each share of
GSSC Common Stock validly issued and outstanding immediately prior to the
Effective Time of the Merger shares of UPC Common Stock based on that number of
shares of UPC Common Stock
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at the Current Market Price Per Share sufficient to equal $34.09 per share of
GSSC Common Stock.
The Exchange Ratio as determined in Section 3.1(e) of the Agreement
and Plan of Reorganization is based on an aggregate of no more than
9,600,000 shares of GSSC Common Stock being validly issued and outstanding
immediately prior to the Effective Time of the Merger and, for purposes of
determining the total number of shares outstanding, counting all unexercised
GSSC stock options issued and outstanding immediately prior to the Effective
Time of the Merger as issued and outstanding shares of GSSC Common Stock so
converted and exchanged; provided, however, that no fractional shares of UPC
Common Stock shall be issued and if, after aggregating all of the shares of UPC
Common Stock to which a GSSC Record Holder would be entitled based upon the
Exchange Ratio, there should be a fractional share of UPC Common Stock
remaining, such fractional share would be settled by a cash payment therefor
pursuant to the "Mechanics of Payment of Consideration" set forth in Section
3.1(f) of the Agreement and Plan of Reorganization, which would be calculated
based upon the Current Market Price Per Share of one (1) full share of UPC
Common Stock.
The "Current Market Price Per Share" of the UPC Common Stock is
defined in the Reorganization Agreement to be the average closing price per
share of the "last" real time trades (i.e., closing price) of the UPC Common
Stock on the NYSE (as published in The Wall Street Journal, Eastern Edition)
for each of the twenty (20) NYSE general market trading days on which the NYSE
was open for business next preceding the issuance of all necessary regulatory
approvals (the "Pricing Period"). In the event the UPC Common Stock should not
trade on one or more of the trading days during the Pricing Period (a "No Trade
Date"), any such No Trade Date would be disregarded in computing the average
closing price per share of UPC Common Stock and the average would be based upon
the "last" real time trades and number of days on which the UPC Common Stock
actually traded during the Pricing Period.
The last necessary regulatory approvals were issued on November 7,
1994, such that the Pricing Period commenced on October 10, 1994 and ended
November 4, 1994. Pursuant to the terms of the Reorganization Agreement, the
Exchange Ratio is 1.4530 shares of UPC Common Stock for each share of GSSC
Common Stock, which is equivalent to the quotient of dividing $34.09 by
$23.462, the Current Market Price Per Share of UPC Common Stock, as provided in
paragraph (D) above.
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EFFECTIVE DATE AND EFFECTIVE TIME OF THE MERGER
A Certificate of Merger along with the executed Plan of Merger will be
filed as soon as practicable after all conditions precedent contained in the
Reorganization Agreement have been satisfied or lawfully waived, including
receipt of all regulatory approvals and expiration of all statutory waiting
periods, or on such later date as may be agreed to by UPC and GSSC. The
Effective Time of the Merger will be at the time the Certificate of Merger
along with the Plan of Merger are filed in the Office of the Delaware Secretary
of State pursuant to the DGCL or at such later time as the parties may agree
and specify in the Certificate of Merger and the Plan of Merger. The Effective
Date of the Merger will be the day on which the Effective Time of the Merger
occurs. It is presently expected that the Certificate of Merger will be filed
and will specify, by agreement of the parties, an Effective Time of the Merger
to occur during fourth quarter of 1994. There can be no assurance that such
expectation will be achieved.
SURRENDER OF CERTIFICATES
As promptly as practicable after the Effective Time of the Merger,
Union Planters National Bank, acting in the capacity of exchange agent (the
"Exchange Agent"), will mail to each GSSC Record Holder a form letter of
transmittal, together with instructions and a return envelope (collectively,
the "Exchange Materials") to facilitate the exchange of such holder's
certificates, formerly representing shares of GSSC Common Stock, for
certificates representing shares of UPC Common Stock and a cash payment in lieu
of any remaining fractional share.
Upon receipt of the Exchange Materials, the GSSC Record Holders should
complete the letter of transmittal in accordance with the instructions provided
and deliver the letter of transmittal, together with all stock certificates
formerly representing shares of GSSC Common Stock to the Exchange Agent in the
return envelope provided. Provided the Exchange Agent shall have received the
certificates and related documentation completed in proper form, as soon as
practicable after the Effective Time of the Merger, UPC will issue, and the
Exchange Agent will mail to the GSSC Record Holder a certificate representing
the whole number of shares of UPC Common Stock to which such holder is entitled
pursuant to the Reorganization Agreement and a check in the amount of the cash
portion of the Consideration with respect to any remaining fractional share to
which the holder is entitled. No Consideration will be delivered to a GSSC
Record Holder unless and until such holder shall have delivered to the Exchange
Agent in accordance with the Exchange Materials provided, all certificates
formerly representing the shares of GSSC Common Stock held by such holder and
in respect of which such holder claims payment is due, or such documentation,
if applicable, and security in respect of lost or stolen certificates as is
required by the Reorganization Agreement.
No dividend or other distribution with respect to the UPC Common Stock
shall be paid or delivered to the holder of any unsurrendered GSSC certificate
until the holder surrenders such certificate(s) in accordance with the Exchange
Materials, at which time the holder would be entitled to receive all previously
withheld dividends and distributions, without interest.
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After the Effective Time of the Merger, there will be no further
transfers on GSSC's stock transfer books of shares of GSSC Common Stock issued
and outstanding immediately prior to the Effective Time of the Merger. If
certificates representing shares of GSSC Common Stock should be presented for
transfer after the Effective Time of the Merger, they will be returned to the
presenter together with a form letter of transmittal and exchange instructions.
Neither UPC, the Exchange Agent, GSSC nor any other person shall be
liable to any former holder of GSSC Common Stock for any amount properly
delivered to a public official pursuant to applicable unclaimed property,
escheat or similar laws.
If a certificate formerly representing GSSC Common Stock shall have
been lost, stolen or destroyed, the Exchange Agent will deliver the
Consideration properly payable with respect to such certificate in accordance
with the Reorganization Agreement upon receipt of appropriate evidence as to
such loss, theft or destruction; appropriate evidence as to ownership of such
certificate by the claimant; and a lost instrument bond in form and with a
surety satisfactory to UPC and the Exchange Agent as required by the Exchange
Materials.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
GSSC has entered into change of control agreements (the "Agreements")
with Messrs. J.T. Boone, Chairman and Chief Executive Officer of GSSC; Don W.
Ayres, Senior Executive Vice President and Chief Operating Officer of Sunburst
Bank, Mississippi; James A. Baker, Executive Vice President of Sunburst Bank,
Mississippi; John L. Bomar, Executive Vice President of Sunburst Bank,
Mississippi; D. L. Holland, Treasurer and Chief Financial Officer of GSSC;
Jerry A. Pegg, Executive Vice President of Sunburst Bank, Mississippi; J.
Daniel Garrick, III, Senior Executive Vice President of Sunburst Bank,
Mississippi; Frank W. Smith, Jr., Senior Executive Vice President of Sunburst
Bank, Mississippi; and A. Jackson Huff, President and Chief Executive Officer
of Sunburst Bank, Louisiana (the "Executives"), pursuant to which each
Executive would be eligible to receive certain payments in settlement of the
terms of their respective Agreements with GSSC in the event of a change in
control of GSSC and such Executive's employment were terminated within two
years subsequent to such change in control. Consummation of the Merger would
qualify as a change in control under the terms of the Agreements. The
Agreements provide that in the event the respective Executive's employment is
terminated within two years subsequent to a change in control, the Executive
would receive compensation in an amount equal to, in the case of Mr. Boone,
2.99 times, and in the case of all other individuals, two times their annual
base salary in effect on the date of termination. The compensation would be
subject to reduction so that the aggregate present value of all payments which
would constitute an "excess parachute payment" as defined in Section 280G of
the Code would be reduced to an amount which would not constitute an "excess
parachute payment".
The estimated aggregate present value of amounts presently payable in
the event of a change of control of GSSC, assuming each Executive were to leave
the employ of GSSC, the Banks or any successors thereto, and were to receive
the payment provided in the respective Agreements, would be $684,816 for Mr.
Boone, $290,000 for Mr. Ayres, $200,640 for Mr.
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Baker, $234,000 for Mr. Bomar, $254,700 for Mr. Holland, $193,740 for Mr.
Pegg, $280,000 for Mr. Garrick, $241,020 for Mr. Smith and $320,000 for Mr.
Huff.
In September, 1994, Mr. Boone announced that he would resign his
position as Chairman and Chief Executive Officer of GSSC effective with
the consummation of the Merger to become the Athletic Director of the
University of Mississippi. Subsequent to Mr. Boone's decision to accept such
position, UPC determined that subsequent to the Effective Time of the Merger,
Mr. Boone would be extended an invitation from UPC to be appointed to the UPC
Board of Directors in the first quarter of 1995. It is the present intention
of UPC to extend invitations to one or two additional members of the GSSC Board
of Directors to be appointed to the UPC Board of Directors in 1995. However,
such selections have not been made as of the date of this Joint Proxy
Statement/Prospectus.
Although UPC and GSSC expect that certain executive officers of GSSC
and the Banks would not continue their employ with GSSC or the Banks subsequent
to consummation of the Merger and that a number of employees of GSSC and the
Banks would terminate their employment with GSSC and the Banks as a result of
the early retirement and voluntary separation plans offered by GSSC effective
prior to consummation of the Merger and through natural attrition, the majority
of officers and employees of the Banks immediately subsequent to the Merger are
expected to continue to hold their employment positions and titles held
immediately prior to the Merger, and would be expected to receive compensation
at least equivalent to their compensation received prior to the Merger.
Subsequent to the Merger, all officers and employees of the Banks and other
operating subsidiaries of GSSC would be eligible to participate in the UPC
benefit and savings plans following the anticipated termination of the existing
GSSC benefit plans. Long term medical and health insurance would be provided
to all of the Banks' and GSSC's other subsidiaries' employees through the
health insurance plan provided by UPC to its employees, with any pre-existing
individual condition that was insured under GSSC's medical plan to continue to
be insured under UPC's plan. The Banks' and other GSSC subsidiaries' employees
would also be eligible to participate in UPC's group life and disability
insurance programs.
Following the Effective Time of the Merger, the Banks' directors,
officers and employees would be covered on a prospective basis under UPC's
directors' and officers' liability insurance policy. In addition, UPC would
cause the Banks to indemnify such persons under applicable provisions of their
Charters and Bylaws.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
As of the UPC Record Date, 25,431,252 shares of UPC Common Stock were
issued and outstanding and 1,061,014 shares of UPC Common Stock (not including
unexercised UPC stock options) were beneficially owned or held of record by all
executive officers and directors of UPC and their affiliates, as a group. As
of the GSSC Record Date, 9,492,975 shares of GSSC Common Stock were issued and
outstanding and 618,647 shares of GSSC Common Stock (not including unexercised
GSSC stock options) were beneficially owned or held of record by all
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executive officers and directors of GSSC and their affiliates, as a group.
These individuals would receive in the Merger the Consideration described
above. Persons or groups beneficially owning in excess of five percent (5%) of
GSSC's Common Stock (other than institutional investment managers) are required
to file certain reports disclosing such ownership pursuant to the Exchange Act
with the Commission. GSSC's management believes that no such reports have been
filed, and management of GSSC knows of no person who beneficially owned more
than five percent of the outstanding shares of GSSC Common Stock as of the GSSC
Record Date.
TRANSACTIONS WITH MANAGEMENT OF GSSC
The Banks, along with Sunburst Mortgage Corporation, a wholly owned
subsidiary of Sunburst Bank, Mississippi, offer loans to their officers,
directors and employees for the financing and improvement of their personal
residences as well as consumer and commercial loans. All such loans are
approved under loan policies established by their respective Boards of
Directors. Pursuant to the requirements of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, all loans made to executive officers and
directors are made at prevailing market rates, in the ordinary course of
business, on the same terms and subject to the same collateral requirements as
those of comparable transactions in effect at the time with unrelated parties
and do not involve more than the normal risk of collectibility or contain other
unfavorable features.
CONDITIONS TO CONSUMMATION OF THE MERGER
The respective obligations of UPC and GSSC to effect the Merger are
subject to the satisfaction of the following conditions prior to the Closing
Date: (i) approval of the Reorganization Agreement and the transactions
contemplated thereby by the affirmative votes of the holders of a majority of
the UPC Common Stock present in person or by proxy and entitled to vote at the
UPC Special Meeting; (ii) adoption of the Reorganization Agreement and the
transactions contemplated thereby by the affirmative votes of the holders of a
majority of the GSSC Common Stock outstanding on the GSSC Record Date and
entitled to vote at the GSSC Special Meeting; (iii) approval of the Merger and
the transactions contemplated thereby by the Federal Reserve, the MSBD and the
LOFI, and the expiration of any statutory waiting periods; (iv) receipt of all
other regulatory and contractual consents necessary to consummate the
transactions contemplated by the Reorganization Agreement; (v) the satisfaction
of all other requirements prescribed by law as conditions precedent to the
consummation of the transactions contemplated by the Reorganization Agreement;
(vi) none of UPC, INTERIM, GSSC or the Banks shall be subject to any claim,
action, suit, investigation or other proceeding, whether pending or threatened,
before any court or governmental agency which presents a substantial risk of
the restraint or prohibition of the consummation of the Merger or the obtaining
of material damages or other relief in connection therewith; and (vii) the
Registration Statement of which this Joint Proxy Statement/Prospectus forms a
part shall have been declared effective and shall not be subject to a stop
order of the Commission suspending the effectiveness of the Registration
Statement and shall not be subject to a stop order of any state securities
commission.
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The obligations of UPC and INTERIM to effect the Merger are further
subject to the satisfaction or waiver by UPC of, among others, the following
conditions: (i) each of the material acts and undertakings of GSSC and/or the
Banks to be performed at or before the Closing Date pursuant to the
Reorganization Agreement shall have been duly performed, except for breaches of
acts and undertakings which would not have, or would not be reasonably expected
to have, a material adverse effect on the business or operations of GSSC and
the Banks taken as a whole; (ii) the representations and warranties of GSSC and
the Banks contained in the Reorganization Agreement shall be true and correct,
in all material respects, on and as of the Effective Time of the Merger with
the same effect as though made on and as of the Effective Time of the Merger
except for any such representations and warranties made as of a specified date,
which shall be true and correct in all material respects as of such date, and
for breaches of representations and warranties which would not have, or would
not reasonably be expected to have, a material adverse effect on the business
or operations of GSSC and the Banks taken as a whole; (iii) UPC shall have
received a certificate signed by the Secretary or an Assistant Secretary of
GSSC and the secretary or the cashier of each of the Banks, as the case may be,
certifying that their respective Boards of Directors and stockholders have duly
adopted resolutions approving or adopting, as the case may be, the substantive
terms of the Reorganization Agreement and authorizing the consummation of the
transactions contemplated by the Reorganization Agreement, that each person
that executed and delivered the Reorganization Agreement on behalf of GSSC and
the Banks is an officer of GSSC or the Banks, as the case may be, holding the
office or offices specified therein, with full power to execute the
Reorganization Agreement and any and all other documents in connection with the
Merger, that the signature of each person set forth on such certificate is his
or her genuine signature, and that GSSC and the Banks are in good standing
under their respective corporate charters; (iv) between July 1, 1994 and the
Closing Date, there shall have been no damage to, or destruction of real
property, improvements or personal property of GSSC or the Banks which
materially reduces the market value of such property, and no zoning or other
order, limitation or restriction imposed against the same that might have in
either case a material adverse impact upon the operations, business or
prospects of GSSC or the Banks; (v) GSSC and the Banks shall have afforded UPC
and its authorized agents reasonable access to the properties, operations,
books, records, contracts, documents, loan files and other information of or
relating to GSSC and the Banks; (vi) no material adverse change in the
business, property, assets, liabilities, prospects, operations, liquidity,
income or condition of GSSC and the Banks taken as a whole shall have occurred
since July 1, 1994; (vii) UPC shall have received a legal opinion, dated as
of the Closing Date, from counsel to GSSC and the Banks as to the good standing
of GSSC and the Banks, the enforceability and due authorization of the
Reorganization Agreement and the receipt of all required approvals (subject to
limitations as permitted in the Agreement and Plan of Reorganization); (viii)
neither GSSC nor either of the Banks shall have entered into any agreement,
letter of intent, understanding or other arrangement pursuant to which GSSC or
the Banks would merge with, consolidate with, effect a business combination
with, sell any substantial part of its assets, acquire a significant part of
the shares or assets of any other person or entity, adopt any "poison pill" or
other type of anti-takeover arrangement, any stockholder rights provision, or
any "golden parachute" or similar program after the date of the Reorganization
Agreement which would have the effect of materially decreasing the value of
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GSSC or the Banks or the benefits of acquiring the GSSC Common Stock; (ix)
satisfaction by GSSC and the Banks of all of the covenants set forth in Article
7 of the Agreement and Plan of Reorganization; (x) each member of the Boards
of Directors of GSSC and the Banks shall have entered into a non-compete
agreement with UPC and GSSC; (xi) UPC shall have received from Price Waterhouse
LLP a letter dated within five business days prior to the Closing Date stating
such independent accountant's opinion that the Merger should be accounted for
by UPC as a "pooling of interests" for financial statement purposes and that
such accounting treatment is in accordance with GAAP; (xii) UPC shall have
received a written opinion from counsel to the effect that the transactions
contemplated by the Reorganization Agreement will constitute one or more
tax-free reorganizations under Section 368 of the Code; (xiii) UPC shall have
received a written commitment from each GSSC Record Holder who would be deemed
an "affiliate" of GSSC as of the Closing Date and who would receive shares of
UPC Common Stock, committing to UPC that such GSSC Record Holder shall not
pledge, assign, sell, transfer, devise, otherwise alienate or take any action
which would eliminate or diminish the risk of owning or holding the shares of
UPC Common Stock to be received by such GSSC Record Holder upon consummation
of the Merger, nor enter into any formal or informal agreement to pledge,
assign, sell or transfer, devise or otherwise alienate his or her right, title
and interests in any of the shares of UPC Common Stock to be delivered by UPC
pursuant to the terms and conditions of the Reorganization Agreement until such
time as UPC shall have publicly released a statement of UPC's consolidated
earnings reflecting the combined financial results of operations of UPC and
GSSC for a period of not less than 30 days subsequent to the Effective Time of
the Merger; and (xiv) UPC shall have received a written "fairness opinion" from
its financial advisor to the effect that, in the opinion of such advisor, the
Consideration to be delivered by UPC to the GSSC stockholders in the Merger is
fair to the UPC shareholders from a financial point of view and that such
opinion shall not have been withdrawn prior to the Closing Date and UPC shall
have received an updated "fairness opinion" from its financial advisor dated
within five days of the Closing Date reconfirming its opinion.
The obligations of GSSC and the Banks to effect the Merger are further
subject to the satisfaction or waiver by GSSC of, among other things, the
following conditions: (i) each of the material acts and undertakings of UPC
and INTERIM to be performed at or prior to the Closing Date pursuant to the
Reorganization Agreement shall have been duly performed, except for breaches of
acts and undertakings which would not have, or would not reasonably be expected
to have, any material adverse effect on the business or operations of UPC and
its subsidiaries taken as a whole; (ii) the representations and warranties of
UPC and INTERIM contained in the Reorganization Agreement shall be true and
complete, in all material respects, on and as of the Effective Time of the
Merger, except for any such representations and warranties made as of a
specified date, which shall be true and correct in all material respects as of
such date, and for breaches of representations and warranties which would not
have, or would not reasonably be expected to have, a material adverse effect on
the business or operations of UPC and its subsidiaries taken as a whole; (iii)
GSSC shall have received a certificate signed by the Secretary or an Assistant
Secretary of UPC and INTERIM dated as of the Closing Date certifying that UPC's
and INTERIM's respective Boards of Directors and shareholders and stockholder,
as the case may be, have duly adopted resolutions approving the
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substantive terms of the Reorganization Agreement and authorizing the
transactions contemplated by the Reorganization Agreement, that each person
that executed the Reorganization Agreement on behalf of UPC and INTERIM is an
officer of UPC or INTERIM, as the case may be, holding the office or offices
specified therein, with full power to execute the Reorganization Agreement and
any and all other documents in connection with the Merger, that the signature
of each person set forth on such certificate is his or her genuine signature,
and that UPC and INTERIM are in good standing under their respective corporate
charters; (iv) GSSC shall have received a certificate executed by an authorized
officer of the Exchange Agent to the effect that the Exchange Agent has
received and holds in its possession certificates evidencing and representing
that number of shares of UPC Common Stock and cash funds sufficient to meet the
obligations of UPC to the GSSC Record Holders to deliver the Consideration
under the Reorganization Agreement; (v) GSSC shall have been furnished an
opinion of counsel to UPC and INTERIM dated as of the Closing Date to the
effect that UPC and INTERIM are in good standing, that the Reorganization
Agreement has been duly and validly authorized, executed and delivered by UPC
and INTERIM and, with the exceptions stated, constitutes a valid and binding
agreement of UPC and INTERIM enforceable in accordance with its terms, that
neither the execution nor delivery by UPC or INTERIM of the Reorganization
Agreement violates or conflicts with either of their corporate Charters or
Bylaws, that all governmental approvals have been received, and that the shares
of UPC Common Stock to be issued in the names of the GSSC Record Holders and
delivered in exchange for their shares of GSSC Common Stock will be duly
authorized, validly issued, fully paid and non-assessable; (vi) GSSC shall have
received a written "fairness opinion" letter from Robinson-Humphrey to the
effect that, in the opinion of Robinson Humphrey, the Consideration to be
received by the GSSC Record Holders is fair to such holders from a financial
point of view and that such opinion shall not have been withdrawn prior to the
Closing Date and GSSC shall have received an updated "fairness opinion" from
Robinson-Humphrey dated within five days of the Closing Date reconfirming its
opinion; and (vii) GSSC shall have received a written opinion from counsel to
the effect that the transactions contemplated by the Reorganization Agreement
and the Plan of Merger will constitute one or more tax-free reorganizations
under Section 368 of the Code.
No assurance can be provided as to whether all of the conditions
precedent to the Merger will be satisfied or waived by the party lawfully
permitted to do so.
REGULATORY APPROVALS
The Merger is subject to prior approval by (i) the MSBD under the
Mississippi Code and the regulations of the MSBD promulgated thereunder, (ii)
the LOFI under the Louisiana Revised Statutes and the regulations of the LOFI
promulgated thereunder and (iii) the Federal Reserve under Section 3 and
Section 4 of the BHCA. The BHCA requires that the Federal Reserve take into
consideration, among other factors, the financial and managerial resources and
future prospects of the institutions and the convenience and needs of the
communities to be served. Applications for such approvals have been filed with
the Federal Reserve, the MSBD and the LOFI. The BHCA prohibits the Federal
Reserve from approving the Merger if to do so would result in a monopoly or be
in furtherance of any combination or conspiracy to monopolize or
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to attempt to monopolize the business of banking in any part of the United
States, or if its effect in any section of the country may be substantially to
lessen competition or to tend to create a monopoly, or if it would in any
other manner be a restraint of trade, unless the Federal Reserve should find
that the anticompetitive effects of the Merger are clearly outweighed by the
public interest and the probable effect of the transaction in meeting the
convenience and needs of the communities to be served. The Federal Reserve
has the authority to deny an application if it concludes that the combined
organization would have an inadequate capital position or that the acquiring
organization does not meet the requirements of the Community Reinvestment Act
of 1977.
GSSC has agreed to divest itself of the Clarksdale, Lula, Jonestown
and Shelby, Mississippi branches of Sunburst Bank, Mississippi, and UPC has
agreed to divest itself of the Tutwiler, Mississippi branch of its wholly owned
subsidary, United Southern Bank, in order to satisfy certain competitive issues
raised by the Federal Reserve and certain local community concerns raised by
certain local community groups in connection with the Merger. GSSC and UPC
have entered into definitive agreements with certain third-party banks for
the sale of these branches prior to consummation of the Merger and expect that
the branches would be divested by the end of the second quarter of 1995.
Under the BHCA, the Merger may be consummated no sooner than the 15th
day following the date of Federal Reserve approval, during which time the
United States Department of Justice has an opportunity to challenge the Merger
on antitrust grounds. The commencement of an antitrust action would stay the
effectiveness of the Federal Reserve's approval unless a court should
specifically order otherwise. There can be no assurance that the Department of
Justice will not challenge the Merger, or if such challenge is made, as to the
result thereof.
The Merger may not lawfully proceed in the absence of the requisite
prior regulatory approvals. Approval of the MSBD was obtained on September 7,
1994 and the approvals of both the Federal Reserve and the LOFI were issued on
November 7, 1994. See "-- Conditions to Consummation of the Merger" and
"-- Waiver and Amendment; Termination."
CONDUCT OF BUSINESS PENDING THE MERGER
The Agreement and Plan of Reorganization contains certain restrictions
upon the conduct of GSSC's and the Banks' business pending consummation
of the Merger. In particular, the Agreement and Plan of Reorganization
provides, in part, that, except as otherwise provided in the Agreement and Plan
of Reorganization and/or without the written consent of UPC, each of GSSC and
the Banks may not, among other things, (i) amend its Certificate of
Incorporation or Charter, as the case may be, or Bylaws; (ii) permit, impose,
or suffer the imposition of, any lien in respect to any share of stock held by
GSSC or any subsidiary; (iii) repurchase or redeem any of its capital stock,
split or otherwise subdivide its capital stock, recapitalize in any way or
declare a stock dividend in respect to the GSSC Common Stock or pay any cash
dividends except permitted cash dividends (see "-- Payment of Dividends"); (iv)
issue or sell any GSSC Common Stock or sell or otherwise dispose of a
substantial part of GSSC's or the Banks' assets
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or earnings power; (v) dispose of, discontinue or acquire any material
assets or businesses other than in the ordinary course of business;
(vi) incur any additional debt in excess of $50,000, except in the ordinary
course of business; (vii) increase compensation, pay bonuses or enter into
severance arrangements except in accordance with past practices; (viii) amend
any existing employment contract with any person having a salary in excess of
$30,000 per year or enter into any new employment contract providing for an
annual salary exceeding $30,000 per year unless GSSC or its subsidiaries may
terminate the same at will without liability; (ix) adopt any new benefit plan
or materially change an existing plan; (x) enter into any new service
contracts, purchase or sale agreements or lease agreements having a value in
excess of $100,000 to GSSC or any subsidiary of GSSC; (xi) make any capital
expenditures except in the ordinary course of business; (xii) extend credit (or
commit to extend credit) to any officer, director or known holder of two
percent (2%) or more of GSSC Common Stock if such extension of credit,
together with any other outstanding extension of credit to such person,
would exceed two percent (2%) of the capital of GSSC, or amend the terms of any
such credit; or (xiii) acquire direct or indirect control over any entity other
than in connection with (a) mergers, acquisitions or other transactions
approved by UPC, (b) internal reorganizations or consolidations involving
existing subsidiaries of GSSC, (c) foreclosures in the ordinary course of
business and not knowingly exposing GSSC or any subsidiary of GSSC to
liability by reason of hazardous substances, (d) acquisitions of control in
GSSC's or the Banks' fiduciary capacity or (e) the creation of new
subsidiaries organized to conduct or continue activities otherwise permitted
by the Agreement and Plan of Reorganization. Moreover, GSSC and the Banks,
respectively, shall, among other things, operate in the usual, regular and
ordinary course, preserve their organization and assets and maintain their
rights and franchises, use their best efforts to retain their customer base
and assist UPC in procuring all applicable regulatory approvals.
PAYMENT OF DIVIDENDS
Prior to the Effective Date of the Merger, GSSC is permitted under the
Reorganization Agreement to declare and pay its customary and ordinary
quarterly cash dividend with respect to the GSSC Common Stock. Notwithstanding
the foregoing, the Reorganization Agreement prohibits GSSC from paying a
dividend if such payment would disqualify the Merger from being accounted for
by UPC under the pooling of interests method of accounting. See "SUMMARY --
Market Prices of Common Stock; Dividends -- GSSC Common Stock."
WAIVER AND AMENDMENT; TERMINATION
Prior to the Effective Date of the Merger, any condition of the
Reorganization Agreement may (to the extent allowed by law) be waived by the
party benefitted by the provision or may be amended or modified (including the
structure of the transaction) by an agreement in writing approved by the Boards
of Directors of UPC and GSSC; provided, however, that no such amendment may be
effected after GSSC stockholder adoption and UPC shareholder approval of the
Reorganization Agreement without approval of the GSSC stockholders if the
effect of such amendment would be to change the amount or the type of
Consideration to be delivered in the Merger to the GSSC Record Holders.
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The Reorganization Agreement may be terminated at any time prior to the
Effective Date of the Merger, either before or after adoption by the
GSSC stockholders and approval by the UPC shareholders, as follows: (i) by the
mutual consent in writing of the parties; (ii) by UPC or INTERIM if GSSC or any
subsidiary of GSSC, respectively, should violate any affirmative or negative
covenant under Article 7 of the Agreement and Plan of Reorganization with
respect to the operation of its business; (iii) by UPC or INTERIM or by GSSC or
the Banks if the Closing shall not have occurred on or before March 31, 1995,
unless the failure shall be due to the failure of the party seeking to
terminate or the failure to receive the necessary regulatory approvals and UPC
shall have filed all applications to obtain the requisite governmental
approvals within sixty (60) days subsequent to the date of the Agreement and
Plan of Reorganization and the Closing shall not have occurred solely because
of a delay caused by a regulatory authority in its review of the application
before it; (iv) by either UPC or INTERIM or by GSSC or the Banks, if any
governmental or regulatory approval should be denied (or conditioned upon a
substantial deviation from the transaction contemplated) and not successfully
appealed within certain time limits; (v) by either UPC or INTERIM or by GSSC or
the Banks if the other parties' conditions have not been satisfied or waived as
of the Closing Date; (vi) by UPC or INTERIM if GSSC or any subsidiary of GSSC
should enter into a formal capital plan requiring GSSC or the Banks to raise
capital or sell substantial assets in cooperation with applicable banking
regulators; (vii) by UPC or INTERIM if there shall have been any material
adverse change affecting GSSC and the Banks, taken as a whole, or affecting the
rights of holders of GSSC Common Stock; (viii) by UPC or INTERIM if GSSC or any
subsidiary of GSSC should enter into any letter of intent or agreement with a
view to being acquired or effecting a business combination; (ix) by either UPC
or INTERIM or by GSSC or the Banks in the event their shall have been a
material breach of any obligation of the other party(s) to the Reorganization
Agreement and such breach shall not have been remedied within thirty (30) days
after receipt by the breaching party of written notice from the non-breaching
party(s) specifying the nature of such breach and requesting that it be
remedied; (x) by GSSC or the Banks if there shall have been any material
adverse change affecting UPC, taken as a whole, or affecting the rights of
holders of UPC Common Stock; or (xi) by GSSC or the Banks if UPC or any
subsidiary of UPC should enter into a formal capital plan requiring UPC or any
subsidiary of UPC to raise capital or sell a substantial portion of its assets
in cooperation with applicable banking regulators.
In the event of the valid termination of the Reorganization Agreement
by either UPC or INTERIM or by GSSC or the Banks, the Reorganization Agreement
would become void, and there would be no liability on the part of any party or
their officers or directors except for such party's liability for breach of the
Reorganization Agreement or for any misstatement or misrepresentation made
prior to such termination.
LIMITATION ON NEGOTIATIONS
The Reorganization Agreement provides that GSSC and the Banks shall not
(and shall use their best efforts to ensure that their respective directors,
officers, employees and advisors do not) institute, solicit or knowingly
encourage any inquiry, discussion or proposal, or
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participate in any discussions or negotiations with, or provide any
confidential or non-public information to, any entity or group concerning any
Acquisition Proposal, except for actions reasonably considered by the GSSC
Board of Directors, based on the advice of counsel, to be required to fulfill
the fiduciary obligations of the GSSC Board of Directors. GSSC must notify UPC
immediately following receipt of any Acquisition Proposal. In the event GSSC
were to enter into a letter of intent or agreement with respect to an
Acquisition Proposal not solicited by the GSSC Board of Directors, or in the
event such Acquisition Proposal were the result of a hostile takeover of GSSC,
GSSC or the acquiror would be required to pay liquidated damages upon
consummation of the transaction contemplated by such Acquisition Proposal in
the amount of $12,000,000 to UPC, which amount represents the sum of the agreed
expenses incurred by UPC in connection with the Merger and the agreed loss to
UPC in the event the Merger should not be consummated. Such sum would be
payable immediately in the event that GSSC were to enter into a letter of
intent or agreement with respect to an Acquisition Proposal solicited by the
GSSC Board of Directors. The limitation on negotiations and provision for
liquidated damages will remain in effect until October 1, 1995, unless before
that date either the Merger is consummated or the Reorganization Agreement is
terminated, or the Merger is otherwise not consummated, under specified
circumstances. These provisions may have the effect of discouraging competing
offers to acquire or merge with GSSC.
MANAGEMENT AFTER THE MERGER
Directors and Officers of UPC. The directors and officers of UPC
immediately prior to the Merger should not be affected by the Merger. UPC
expects that subsequent to the Effective Time of the Merger Mr. J.T. Boone
would be extended an invitation by UPC to be appointed to the UPC Board of
Directors during the first quarter of 1995. It is the present intention of UPC
to extend invitations to one or two additional members of the GSSC Board of
Directors upon consummation of the Merger to be appointed to the UPC Board of
Directors in 1995. However, such selections have not been made as of the date
of this Joint Proxy Statement/Prospectus. For information regarding UPC's
executive officers and directors, see UPC's Annual Report on Form 10-K
incorporated herein by reference. See also, "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE."
Directors and Officers of GSSC. It is expected by UPC and GSSC that
subsequent to the Effective Time of the Merger, the Banks would be managed by
boards of directors consisting of a majority of the members of the Boards of
Directors of the Banks immediately prior to the Effective Time of the Merger
and by officers consisting of a majority of the officers of the Banks who were
serving in such capacities immediately prior to the Effective Time of the
Merger. For information regarding GSSC's executive officers and directors, see
GSSC's Annual Report on Form 10-K incorporated herein by reference. See
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
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ACCOUNTING TREATMENT
The Merger is intended to be treated by UPC and GSSC as a "pooling of
interests" for accounting purposes. Accordingly, under GAAP as described in
Accounting Principles Board Opinion No. 16 for business combinations, the
assets and liabilities of GSSC and UPC will be carried on the books of UPC
immediately subsequent to the Effective Time of the Merger at the amounts
recorded on the respective books of each corporation immediately prior to the
Effective Time of the Merger. Net income of UPC subsequent to the Merger
becoming effective will include the net income of GSSC and UPC for the entire
fiscal period in which the Merger occurs, which is expected by UPC and GSSC to
be fiscal year 1994. Subsequent to the Merger becoming effective, the
historical reported income of GSSC and UPC will be combined and restated as
income of UPC. The unaudited pro forma financial information contained in this
Joint Proxy Statement/Prospectus has been prepared using the pooling of
interests method of accounting where applicable. It is a condition to the
consummation of the Merger that UPC receive an opinion from Price Waterhouse
LLP that the Merger would be accounted for as a "pooling of interests."
EXPENSES
The Reorganization Agreement provides, in general, that UPC and GSSC
will each pay its own expenses in connection with the Reorganization Agreement
and the transactions contemplated thereby, including fees and expenses of its
respective independent accountants and counsel and any investment advisor fees
or commissions.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a discussion of the material federal income tax
consequences of the Merger to certain GSSC stockholders and does not purport to
be a complete analysis or listing of all potential tax considerations or
consequences relevant to a decision whether to vote for the approval of the
Merger. The discussion does not address all aspects of federal income taxation
that may be applicable to GSSC stockholders subject to special federal income
tax treatment including (without limitation) foreign persons, insurance
companies, tax-exempt entities, retirement plans, dealers in securities and
persons who acquired their GSSC Common Stock pursuant to the exercise of
employee stock options or otherwise as compensation. The discussion addresses
neither the effect of any applicable state, local or foreign tax laws, nor the
effect of any federal tax laws other than those pertaining to the federal
income tax. In view of the individual nature of federal income tax
consequences, each GSSC stockholder is urged to consult their own tax advisor
to determine the specific tax consequences of the Merger to such holder.
The discussion is based on the Code, regulations and rulings now in
effect or proposed thereunder, current administrative rulings and practice, and
judicial precedent, all of which are subject to change. Any such change, which
may or may not be retroactive, could alter the tax consequences discussed
herein. The discussion is also based on certain assumptions regarding
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the factual circumstances that will exist at the Effective Time of the Merger,
including certain representations of UPC and GSSC. If any of these factual
assumptions is inaccurate, the tax consequences of the Merger could differ from
those described herein. The discussion assumes that shares of GSSC Common
Stock are held as capital assets (within the meaning of Section 1221 of the
Code).
Assuming the Merger occurs in accordance with the Reorganization
Agreement, the Merger will constitute a "reorganization" for federal income tax
purposes under Section 368(a)(1) of the Code, with the following federal income
tax consequences:
(1) GSSC stockholders will recognize no gain or loss as a result of
the exchange of their GSSC Common Stock solely for shares of UPC Common Stock
pursuant to the Merger, except with respect to cash received in lieu of
fractional shares, if any, as discussed below.
(2) The aggregate adjusted tax basis of the shares of UPC Common
Stock received by each GSSC stockholder in the Merger (including any fractional
share of UPC Common Stock deemed to have been received, as described in
paragraph 4 below) will be equal to the aggregate adjusted tax basis of the
shares of GSSC Common Stock surrendered.
(3) The holding period of the shares of UPC Common Stock received by
each GSSC stockholder in the Merger (including any fractional share of UPC
Common Stock deemed to have been received, as described in paragraph 4 below)
will include the holding period of the shares of GSSC Common Stock exchanged
therefor.
(4) A GSSC stockholder who receives cash in the Merger in lieu of a
fractional share of UPC Common Stock will be treated as if the fractional share
had been received in the Merger and then redeemed by UPC in return for the
cash. The receipt of such cash will cause the recipient to recognize capital
gain or loss equal to the difference between the amount of cash received and
the portion of such holder's adjusted tax basis in the shares of UPC Common
Stock allocable to the fractional share.
GSSC has received from McDonnell Dyer, a professional limited company,
counsel for UPC, an opinion to the effect that the Merger will be a
"reorganization" for federal income tax purposes under Section 368(a)(1) of the
Code. A copy of such opinion is attached as Exhibit 8 to the Registration
Statement of which this Joint Proxy Statement/Prospectus is a part. A copy of
such opinion may be obtained by request to Gary A. Simanson, UPC's Assistant
Secretary, made as provided under "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE." Such opinion is subject to the conditions and assumptions stated
therein and also relies on various representations made, and undertakings given
by GSSC and UPC. An opinion of counsel, unlike a private letter ruling from
the Internal Revenue Service (the "Service"), has no binding effect on the
Service. The Service could take a position contrary to counsel's opinion and,
if the matter should be litigated, a court may reach a decision contrary to the
opinion. The Service is not expected to issue a ruling on the tax consequences
of the Merger, and no such ruling has been requested.
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THE FOREGOING IS A GENERAL DISCUSSION OF CERTAIN OF THE MATERIAL
FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER AND IS INCLUDED FOR GENERAL
INFORMATION ONLY. THE FOREGOING DISCUSSION DOES NOT TAKE INTO ACCOUNT THE
PARTICULAR FACTS AND CIRCUMSTANCES OF EACH GSSC STOCKHOLDER'S TAX STATUS AND
ATTRIBUTES. AS A RESULT, THE FEDERAL INCOME TAX CONSEQUENCES ADDRESSED IN THE
FOREGOING DISCUSSION MAY NOT APPLY TO EACH GSSC STOCKHOLDER. IN VIEW OF THE
INDIVIDUAL NATURE OF INCOME TAX CONSEQUENCES, EACH GSSC STOCKHOLDER SHOULD
CONSULT THEIR OWN TAX ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES OF THE
MERGER TO THEM, INCLUDING THE APPLICATION AND EFFECT OF FEDERAL, STATE, LOCAL
AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL AND OTHER TAX
LAWS.
RESALES OF UPC COMMON STOCK
The shares of UPC Common Stock issued pursuant to the Reorganization
Agreement will be freely transferable under the Securities Act except for
shares issued to any stockholder of GSSC who may be deemed to be an "affiliate"
of GSSC and therefore an "underwriter" in respect to the UPC Common Stock
received in the Merger for purposes of Rule 145 under the Securities Act as of
the date of the Effective Time of the Merger. Affiliates may not sell their
shares of UPC Common Stock acquired in connection with the Merger except
pursuant to an effective registration statement (other than on Form S-4) under
the Securities Act covering such shares or in compliance with Rule 145
promulgated under the Securities Act or another applicable exemption from the
registration requirements of the Securities Act. Persons who may be deemed to
be affiliates of GSSC generally include individuals or entities that control,
are controlled by or are under common control with GSSC and would include
members of the management group in their roles as either executive officers or
directors of GSSC. UPC will place restrictive legends on certificates
representing UPC Common Stock issued to all persons who are deemed
"underwriters" under Rule 145. The shares of the UPC Common Stock to be
delivered pursuant to the Merger to any GSSC stockholder deemed to be an
"affiliate" of GSSC under the Securities Act are subject to the additional
restriction on resale imposed by provisions of the Reorganization
Agreement requiring all affiliates to retain all shares of UPC Common Stock
received by them in connection with the Merger until such time as UPC shall
have publicly released a statement of UPC's consolidated earnings reflecting
the combined financial results of UPC and GSSC for a period of not less than 30
days subsequent to the Effective Date of the Merger. Shares of UPC Common
Stock delivered to any GSSC stockholder deemed an affiliate will bear a legend
to that effect. See "DESCRIPTION OF UPC COMMON AND PREFERRED STOCK -- UPC
Common Stock -- Dividends."
COMPARISON OF SHAREHOLDER'S AND STOCKHOLDER'S RIGHTS
Introduction. Upon consummation of the Merger, holders of the GSSC
Common Stock, whose rights are presently governed by Delaware corporate law and
GSSC's Certificate of Incorporation and Bylaws, and indirectly by applicable
Federal Reserve regulations, will become
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shareholders of UPC, a Tennessee corporation. Accordingly, immediately
after the Effective Time of the Merger, their rights will be governed by
Tennessee corporate law and the Charter and Bylaws of UPC, and indirectly by
the regulations of the Federal Reserve and other federal banking regulatory
agencies. Certain differences arise from differences between the Certificate
of Incorporation and Bylaws of GSSC and the Charter and Bylaws of UPC. The
following discussion is not intended to be a complete statement of all
differences affecting the rights of stockholders and shareholders, but
summarizes material differences and is qualified in its entirety by reference
to the Charter and Bylaws of UPC and the Certificate of Incorporation and
Bylaws of GSSC. See "AVAILABLE INFORMATION."
Issuance of Capital Stock. The Certificate of Incorporation of GSSC
authorizes the issuance of 15,000,000 shares of common stock, par value $1.00
per share. The Charter of UPC authorizes the issuance of 50,000,000 shares of
common stock, par value $5.00 per share, and 10,000,000 shares of serial
preferred stock, no par value. At September 30, 1994, 9,492,975 and 25,431,252
shares of common stock of GSSC and UPC, respectively, were issued and
outstanding. For information regarding the number of shares of UPC Common
Stock that would have been issued on a pro forma basis upon the consummation of
the Merger as of June 30, 1994, see "SUMMARY -- Pro Forma Condensed
Consolidated Financial Information." Under GSSC's Certificate of
Incorporation and UPC's Charter, GSSC and UPC are generally authorized,
respectively, to issue additional shares of capital stock up to the amount
authorized, without stockholder or shareholder, as the case may be, approval.
Payment of Dividends. The ability of GSSC to pay dividends on its
common stock is governed by Delaware corporate law. UPC's ability to pay
dividends on its Common Stock is governed by Tennessee corporate law. Under
Tennessee corporate law, dividends may be paid so long as the corporation would
be able to pay its debts as they become due in the ordinary course of business
and the corporation's total assets would not be less than the sum of its total
liabilities plus the amount that would be needed if the corporation were to be
dissolved at the time of the distribution, to satisfy the preferential rights
upon dissolution of shareholders whose preferential rights are superior to
those receiving the distribution.
The ability of GSSC and UPC to pay dividends on their common stock
also is affected by regulatory considerations and restrictions upon their
receipt of dividends from their respective subsidiaries. See "SUMMARY --
Market Prices of Common Stock; Dividends" and "CERTAIN REGULATORY
CONSIDERATIONS" for additional information regarding dividends and restrictions
on dividends.
Special Meetings of Stockholders or Shareholders. GSSC's Bylaws
provide that special meetings of stockholders of GSSC may be called for any
purpose at any time by GSSC's Chairman of the Board, President or a majority
the GSSC Board of Directors. UPC's Bylaws provide that special meetings of
shareholders of UPC may be called for any purpose or purposes whatsoever at any
time by the Chairman of the UPC Board of Directors, the President, the
Secretary or the holders of not less than one-tenth of the shares entitled to
vote at such meeting.
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Number and Term of Directors. GSSC's Certificate of Incorporation
provides that the number of members of the GSSC Board of Directors shall
consist of a maximum of 35 individuals, but shall never be less than the number
required by law. GSSC's Certificate of Incorporation provides that the
directors shall be divided into three classes with each class serving for a
term of three years. Additionally, pursuant to GSSC's Bylaws, GSSC shall have
an Executive Committee, composed of not less than three nor more than seven
members, all of whom shall be members of the GSSC Board of Directors. The
Executive Committee shall have charge and may exercise complete control of all
matters which may require attention at any time between the regular meetings of
the GSSC Board of Directors and shall also perform such other duties as the
GSSC Board of Directors shall designate. UPC's Charter provides that the
number of directors may consist of between seven and 25 individuals, as
provided for from time to time in the Bylaws, provided that no amendment to the
Bylaws decreasing the number of directors will have the effect of shortening
the term of any incumbent director, and provided further that no action may be
taken by directors (whether through amendment of the Bylaws or otherwise) to
increase the number of directors as provided in the Bylaws from time to time
unless at least two-thirds of the directors then in office shall concur in said
action.
Advance Notice Requirements for Nominations of Directors and
Presentation of New Business at Special Meetings of Shareholders. UPC's Bylaws
generally provide that any proposal of a shareholder which is to be presented
at any annual meeting of shareholders must be sent so as to be received by UPC
at its principal offices not less than 120 days in advance of the date of UPC's
proxy statement issued in connection with the previous year's annual meeting of
shareholders. Neither GSSC's Certificate of Incorporation nor its Bylaws
contain any such provision.
Limitations on Acquisition of Capital Stock. The Charter of UPC does
not have any provision relating to the limitation on acquisition of the capital
stock of UPC. However, shareholders of UPC holding more than ten percent (10%)
of the shares of UPC Common Stock are subject to certain restrictions
in acquiring control as set forth below, and UPC would be, if they should so
elect, subject to the Control Share Acquisition Act under Tennessee law.
Approval of Mergers, Consolidations, Sale of Substantially All Assets
and Dissolution. GSSC's Certificate of Incorporation and UPC's Charter set
forth stockholder or shareholder approval requirements, as the case may be, for
mergers and other similarly important corporate transactions involving
substantial stockholders or shareholders, as the case may be. GSSC's
Certificate of Incorporation provides that the affirmative votes of holders of
not less than eighty percent (80%) of the outstanding shares of voting stock,
and the affirmative votes of the holders of not less than sixty-seven percent
(67%) of the outstanding shares of voting stock not counting shares held by a
controlling party, are required for approval of any merger, consolidation or
sale by GSSC of substantially all of its assets unless (i) the transaction has
been approved by a majority of the members of the GSSC Board of Directors or
(ii) the consideration to be received by the stockholders is greater than the
highest price paid by such controlling person to acquire stock within the last
three years. A controlling person is deemed to be any person owning or
controlling twenty percent (20%) or more of GSSC's voting stock.
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GSSC's Certificate of Incorporation further provides that the members
of the GSSC Board of Directors must consider all factors they deem relevant in
evaluating any proposed tender offer or exchange offer for GSSC or any
subsidiary, any proposed merger or consolidation of GSSC or any subsidiary with
or into another entity and any proposal to purchase or otherwise acquire all or
substantially all the assets of GSSC or any subsidiary. The directors of GSSC
must evaluate whether the proposal is in the best interests of GSSC and its
subsidiaries by considering the best interests of the GSSC stockholders, the
value of the consideration being offered (current market value and estimated
future value) and other factors the directors determine to be relevant,
including the social, legal and economic effects on employees, customers,
depositors and communities served by GSSC and/or any subsidiary.
UPC's Charter provides that the affirmative votes of the holders of
two-thirds or more of the outstanding capital stock of UPC are required to
approve any merger, sale, lease, exchange or other disposition of all or
substantially all of the assets of UPC to or with any other corporation or
person if such other corporation or person is the beneficial owner of 10% or
more of the outstanding capital stock of UPC.
Amendment of Certificate of Incorporation or Charter and Bylaws.
GSSC's Certificate of Incorporation provides that GSSC may amend, alter,
repeal or rescind any provision of the Certificate of Incorporation except
that certain provisions may not be modified without the affirmative votes of
holders of at least eighty percent (80%) of GSSC's outstanding voting stock.
GSSC's Certificate of Incorporation and Bylaws provide that the GSSC Board of
Directors may amend, alter, repeal or rescind any provision of the
Bylaws or the stockholders may do so upon a vote of eighty percent (80%) or
more of the shares entitled to vote. The UPC Charter provides that UPC
reserves the right to amend, alter, change or repeal any provision made in the
Charter in the manner prescribed by the laws of the State of Tennessee. UPC's
Bylaws provide that they may be amended or repealed, in whole or in part, or
new Bylaws may be adopted, by the UPC Board of Directors at any UPC Board of
Directors meeting by a vote of a majority of the entire UPC Board of Directors,
except where a greater affirmative vote is required by its Charter as is the
case on certain specified issues. The Bylaws may also be amended or repealed,
or new Bylaws may be adopted by vote of the shareholders of UPC, at any annual
or special meeting of shareholders.
Removal of Directors. GSSC's Certificate of Incorporation provides
that either (i) the affirmative votes of a majority of the GSSC Board of
Directors or (ii) the affirmative votes of a majority of those shares of GSSC
Common Stock present at a meeting that properly constitutes a quorum shall be
required to remove a director, but only for "cause" as defined in the
Certificate of Incorporation. UPC's Charter provides that the
affirmative votes of the holders of at least two-thirds of the outstanding
capital stock of UPC entitled to vote generally in the election of directors
are required to remove from office any director of UPC, whether with or without
cause.
Antitakeover Statute. Delaware has enacted a business combination
moratorium statute which generally prohibits a domestic corporation from
engaging in mergers or other business
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combinations with certain "interested persons" for a statutory time period.
The moratorium can be avoided if the business combination is approved by the
Board of Directors prior to the date on which the interested stockholder
acquires the requisite percentage of stock. The DGCL imposes a three (3) year
moratorium on such transactions, thereby potentially increasing the period
during which a hostile bid may be frustrated. In addition, the DGCL does not
apply if the interested stockholder obtains at least eighty-five percent (85%)
of the corporation's voting stock upon consummation of the transaction which
resulted in the stockholder becoming an interested stockholder. Thus, a person
acquiring at least eighty-five percent (85%) of GSSC's Common Stock could
circumvent the defensive provisions of the DGCL. For the rights of
shareholders under Tennessee law and the UPC Charter and Bylaws, see
"DESCRIPTION OF UPC COMMON STOCK AND PREFERRED STOCK -- Certain Provisions That
May Have an Anti-Takeover Effect."
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CERTAIN REGULATORY CONSIDERATIONS
GENERAL
As a bank holding company, UPC is subject to the regulation and
supervision of the Federal Reserve. In addition, as a savings and loan holding
company, UPC is registered with the Office of Thrift Supervision (the "OTS")
and is subject to OTS regulations, supervision and reporting requirements.
UPC's bank subsidiaries that are national banking associations, including UPNB
and the Regional Banks, are subject to supervision and examination by the
Office of the Comptroller of the Currency (the "Comptroller") and the Federal
Deposit Insurance Corporation (the "FDIC"). State bank subsidiaries of UPC
which are members of the Federal Reserve System are subject to supervision and
examination by the Federal Reserve and the state banking authorities of the
states in which they are located. State bank subsidiaries which are not
members of the Federal Reserve System are subject to supervision and
examination by the FDIC and the state banking authorities of the states in
which they are located. UPC's savings bank subsidiaries are subject to
supervision and examination by the OTS. UPC's banking subsidiaries are subject
to various requirements and restrictions, including requirements to maintain
reserves against deposits, restrictions on the types and amounts of loans and
other extensions of credit that may be granted and the interest that may be
charged thereon, and limitations on the types of investments that may be made
and the types of services that may be offered. Various consumer laws and
regulations also affect the operations of the banks. In addition to the impact
of regulation, the subsidiary banks are affected significantly by the actions
of the Federal Reserve as it attempts to control the money supply and credit
availability in order to influence the economy.
The BHCA generally requires the prior approval of the Federal Reserve
where a bank holding company proposes to acquire direct or indirect ownership
or control of more than five percent (5%) of the voting shares of any bank or
otherwise to acquire control of a bank or to merge or consolidate with any
other bank holding company. For transactions that close prior to September 29,
1995, the BHCA generally prohibits the Federal Reserve from approving an
application by a bank holding company to acquire a bank, located in another
state, unless such an acquisition is specifically authorized by statute of the
state in which the bank to be acquired is located. Tennessee has adopted
reciprocal interstate banking legislation permitting Tennessee-based bank
holding companies to acquire banks and bank holding companies in certain other
states and allowing bank holding companies located in certain states other than
Tennessee, to acquire banks and bank holding companies located in Tennessee.
A bank holding company is generally prohibited under the BHCA from
acquiring voting shares of any company which is not a bank, and from engaging
in any activities other than those of banking or of managing or controlling
banks or furnishing services to, or performing services for, its subsidiaries.
An exception to these prohibitions permits a bank holding company to engage in,
or to acquire an interest in, a company, such as a thrift institution, which
engages in activities that the Federal Reserve has determined are so closely
related to banking or managing or controlling banks as to be a proper incident
thereto.
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CAPITAL ADEQUACY
The Federal Reserve has adopted risk-based capital guidelines for bank
holding companies. The minimum guideline for the ratio of total capital
("Total Capital") to risk-weighted assets (including certain off-balance-sheet
activities such as standby letters of credit) is eight percent (8%). At least
half of the Total Capital must be composed of "Tier I Capital" which consists
of common shareholders' equity, minority interests in the equity accounts of
consolidated subsidiaries, non-cumulative perpetual preferred stock and a
limited amount of cumulative perpetual preferred stock, less goodwill ("Tier I
Capital"). The remainder, which is Tier 2 Capital, may consist of subordinated
debt (or certain other qualifying debt issued prior to March 12, 1988), other
preferred stock and a limited amount of loan loss reserves.
In addition, the Federal Reserve has established minimum leverage
ratio guidelines for bank holding companies. These guidelines provide for a
minimum ratio of Tier I Capital to average total assets, less goodwill (the
"Leverage Ratio") of three percent for bank holding companies that meet certain
specified criteria, including those having the highest regulatory rating. All
other bank holding companies generally are required to maintain a Leverage
Ratio of at least three percent (3%) plus an additional cushion of 100 to 200
basis points. The guidelines also provide that bank holding companies
experiencing internal growth or making acquisitions are expected to maintain
strong capital positions substantially above the minimum supervisory levels
without significant reliance on intangible assets. Furthermore, the Federal
Reserve has indicated that it will consider a "tangible Tier I capital leverage
ratio" (deducting all intangibles) and other indicia of capital strength in
evaluating proposals for expansion or new activities. The Federal Reserve has
not advised UPC of any specific minimum Leverage Ratio applicable to UPC.
The federal bank regulatory agencies have issued various proposals to
amend the risk-based capital guidelines for banks and bank holding companies.
Under one proposal, banks would be required to give explicit consideration to
interest rate risk as an element of capital adequacy by maintaining capital to
compensate for such risk in an amount measured by the bank's exposure to
interest rate risk in excess of a regulatory threshold. Another proposal would
revise the treatment given to (i) low-level recourse arrangements to reduce the
amount of capital required and (ii) certain direct credit substitutes provided
by banking organizations to require that capital be maintained against the
value of the assets enhanced or the loans protected. A proposal recently
issued by the Federal Reserve and expected to be joined in by the other bank
regulatory agencies increases the amount of capital required to be carried
against certain long-term derivative contracts; in addition, the proposal
recognizes the effect of certain bilateral netting arrangements in reducing
potential future exposure under these contracts. UPC believes that these
changes will not, if adopted, have a material effect on the company's
compliance with capital adequacy requirements.
Failure to meet capital requirements can subject an institution to a
variety of enforcement remedies, including issuance of a capital directive, the
termination of deposit insurance by the FDIC and a prohibition on the taking of
brokered deposits. As described below, under the
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"Prompt Corrective Action" regulations, substantial additional
restrictions can be imposed upon FDIC-insured institutions that fail to meet
applicable capital requirements. See "-- Prompt Corrective Action."
At June 30, 1994, UPC's total risk based capital ratio was 18.39%, its
Tier I Capital ratio was 15.11% and its Leverage Ratio was 7.49%. In addition,
each of UPC's banking subsidiaries satisfied the minimum capital requirements
applicable to it and had the requisite capital levels to qualify as a
"well-capitalized" institution under the prompt corrective action provisions
discussed below.
PROMPT CORRECTIVE ACTION
The Federal Deposit Insurance Corporation Improvement Act ("FDICIA")
enacted in December 1991, requires the federal banking regulators to take
prompt corrective action in respect of depository institutions that do not meet
their minimum capital requirements. FDICIA establishes five capital tiers:
"well capitalized," "adequately capitalized," "undercapitalized,"
"significantly undercapitalized" and "critically undercapitalized." Under
capital regulations, a bank is defined to be well capitalized if it maintains a
Leverage Ratio of at least five percent, a Tier I Capital ratio of at least six
percent and a Total Capital ratio of at least ten percent (10%) and is not
otherwise in a "troubled condition" as specified by its appropriate federal
regulatory agency. A bank is defined to be adequately capitalized if it meets
all of its minimum capital requirements as described above under "-- Capital
Adequacy." In addition, a bank will be considered undercapitalized if it fails
to meet any minimum required measure, significantly undercapitalized if it is
significantly below such measure and critically undercapitalized if it fails
to maintain a level of tangible equity equal to not less than two percent (2%)
of total assets. A bank may be deemed to be in a capitalization category that
is lower than is indicated by its actual capital position if it receives an
unsatisfactory examination rating.
All institutions, regardless of their capital levels, are restricted
from making any capital distribution or paying any management fees that would
cause the institution to fail to satisfy the minimum levels to be considered
adequately capitalized. An undercapitalized institution is: (i) subject to
increased monitoring by the appropriate federal banking regulator; (ii)
required to submit an acceptable capital restoration plan within 45 days; (iii)
subject to asset growth limits; and (iv) required to obtain prior regulatory
approval for acquisitions, branching and new lines of business. The capital
restoration plan must include a guarantee by the institution's holding company
that the institution will comply with the plan until it has been adequately
capitalized on average for four consecutive quarters. Pursuant to the
guarantee, the institution's holding company would be liable up to the lesser
of five percent (5%) of the institution's total assets or the amount necessary
to bring the institution into capital compliance as of the date it failed to
comply with its capital restoration plan. If the controlling bank holding
company should fail to fulfill its obligations under the guarantee and should
file (or should have filed against it) a petition under the federal Bankruptcy
Code, the appropriate federal banking regulator could have a claim as a general
creditor of the bank holding company, and, if the guarantee were deemed to be a
commitment to maintain capital under the federal Bankruptcy Code, the claim
would be
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entitled to a priority in such bankruptcy proceeding over third-party
creditors of the bank holding company.
The regulatory agencies have discretionary authority to reclassify
well capitalized institutions as adequately capitalized or to impose on
adequately capitalized institutions requirements or actions specified for
undercapitalized institutions if the agency determines after notice and an
opportunity for hearing that the institution is in an unsafe or unsound
condition or is engaging in an unsafe or unsound practice, which can consist of
the receipt of an unsatisfactory examination rating if the deficiencies cited
are not corrected. A significantly undercapitalized institution, as well as
any undercapitalized institution that did not submit an acceptable capital
restoration plan, may be subject to regulatory demands for recapitalization,
broader application of restrictions on transactions with affiliates,
limitations on interest rates paid on deposits, asset growth and other
activities, possible replacement of directors and officers and restrictions on
capital distributions by any bank holding company controlling the institution.
Any company controlling the institution could also be required to divest the
institution or the institution could be required to divest subsidiaries. The
senior executive officers of a significantly undercapitalized institution may
not receive bonuses or increases in compensation without prior regulatory
approval and the institution is prohibited from making payments of principal or
interest on its subordinated debt. If an institution should become critically
undercapitalized, the institution would be subject to conservatorship or
receivership within 90 days unless periodic determinations are made that
forbearance from such action would better protect the deposit insurance fund.
Unless appropriate findings and certifications are made by the appropriate
federal bank regulatory agencies, a critically undercapitalized institution
must be placed in receivership if it should remain critically undercapitalized
on average during the calendar quarter beginning 270 days after the date it
became critically undercapitalized.
DIVIDEND RESTRICTIONS
UPC is a legal entity separate and distinct from UPNB, the Regional
Banks, the Community Banks and its nonbank subsidiaries. UPC's revenues (on a
parent company only basis) result, in significant part, from dividends paid to
UPC by its subsidiaries. The right of UPC, and consequently the right of
creditors and shareholders of UPC, to participate in any distribution of the
assets or earnings of any subsidiary through the payment of such dividends or
otherwise is necessarily subject to the prior claims of creditors of the
subsidiary (including depositors, in the case of banking subsidiaries), except
to the extent that claims of UPC in its capacity as a creditor may be
recognized.
There are statutory and regulatory requirements applicable to the
payment of dividends by UPNB, the Regional Banks and the Community Banks to
UPC. Each national banking association subsidiary of UPC, including UPNB and
the Regional Banks, is required by federal law to obtain the prior approval of
the Comptroller for the payment of dividends if the total of all dividends
declared by the board of directors of such bank in any year will exceed the
total of (i) such bank's net profits (as defined and interpreted by regulation)
for that year plus (ii) the retained net profits (as defined and interpreted by
regulation) for the preceding two years, less
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any required transfers to surplus. In addition, national banks may only pay
dividends to the extent that their retained net profits (including the
portion transferred to surplus) exceed statutory bad debts (as defined by
regulation). The state-chartered Community Banks are subject to similar
restrictions on the payment of dividends by the respective state laws under
which they are organized. Furthermore, as described further under "-- Prompt
Corrective Action," all depository institutions are prohibited from paying any
dividends, making other distributions or paying any management fees if, after
such payment, the depository institution would fail to satisfy its minimum
capital requirements. In accordance with the specified calculations, at July
1, 1994, UPNB, the Regional Banks and the Community Banks had approximately
$12.8 million available for distribution to UPC without obtaining prior
regulatory approval. The actual amount of dividends paid will be limited to a
lesser amount by the management of UPC in order to maintain compliance with
UPC's internal capital guidelines and to maintain strong capital positions in
each of the subsidiary banks of UPC. Future dividends will depend upon the
level of earnings of the subsidiary banks of UPC. It is the policy of the
Federal Reserve that bank holding companies should pay dividends only out of
current earnings. Federal banking regulators also have the authority to
prohibit banks and bank holding companies from paying a dividend if they should
deem such payment to be an unsafe or unsound practice. In addition, it is the
position of the Federal Reserve Board that as a bank holding company, UPC is
expected to act as a source of financial strength to each of its subsidiary
banks. See "-- Support of Subsidiary Banks."
SUPPORT OF SUBSIDIARY BANKS
Under Federal Reserve policy, UPC is expected to act as a source of
financial strength to UPNB, the Regional Banks and the Community Banks and,
where required, to commit resources to support each of such subsidiaries. This
support may be required at times when, absent such Federal Reserve policy, UPC
may not be inclined to provide it. Moreover, if one of its subsidiary banks
should become undercapitalized, under FDICIA, UPC would be required to
guarantee the subsidiary bank's compliance with its capital plan in order for
such plan to be accepted by the federal regulatory authority. See "-- Prompt
Corrective Action."
Under the "cross guarantee" provisions of the Federal Deposit
Insurance Act, any FDIC-insured subsidiary of UPC may be held liable for any
loss incurred by, or reasonably expected to be incurred by, the FDIC in
connection with (i) the "default" of any other commonly controlled FDIC-insured
subsidiary or (ii) any assistance provided by the FDIC to any commonly
controlled FDIC-insured subsidiary "in danger of default." "Default" is defined
generally as the appointment of a conservator or receiver and "in danger of
default" is defined generally as the existence of certain conditions indicating
that a default is likely to occur in the absence of regulatory assistance.
Because it is a bank holding company, any capital loans made by UPC to
UPNB, the Regional Banks or any of the Community Banks are subordinate in right
to payment of deposits and to certain other indebtedness of such subsidiary
bank. In the event of a bank holding company's bankruptcy, any commitment by
the bank holding company to a federal bank
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regulatory agency to maintain the capital of a subsidiary bank will be
assumed by the bankruptcy trustee and entitled to a priority of payment over
certain other creditors of the bank holding company.
TRANSACTIONS WITH AFFILIATES
Provisions of the Federal Reserve Act impose restrictions on the type,
quantity and quality of transactions between affiliates of an insured bank and
the insured bank (including its bank holding company and its nonbank
subsidiaries). The purpose of these restrictions is to prevent misuse of the
resources of the insured institution by its uninsured affiliates. An exception
to most of these restrictions is provided for transactions between two insured
banks that are within the same holding company where the holding company owns
eighty percent (80%) or more of each of these banks (the "sister bank"
exception). The restrictions also do not apply to transactions between an
insured bank and its wholly owned subsidiaries. These restrictions include
limitations on the purchase and sale of assets and extensions of credit by the
insured bank to its holding company or its nonbank subsidiaries. An insured
bank and its subsidiaries are limited in engaging in "covered transactions"
with their nonbank or nonsavings bank affiliates to the following amounts: (i)
in the case of any one such affiliate, the aggregate amount of covered
transactions of the insured bank and its subsidiaries may not exceed ten
percent (10%) of the capital stock and surplus of the insured bank, and (ii)
in the case of all affiliates, the aggregate amount of covered transactions of
the insured bank and its subsidiaries may not exceed twenty percent (20%) of
the capital stock and surplus of the bank. "Covered transactions" are defined
by statute to include a loan or extension of credit, as well as a purchase of
securities issued by an affiliate, a purchase of assets (unless otherwise
exempted by the Federal Reserve), the acceptance of securities issued by the
affiliate as collateral for a loan and the issuance of a guarantee, acceptance
or letter of credit on behalf of an affiliate. Further, provisions of the
BHCA, as amended, prohibit a bank holding company and its subsidiaries from
engaging in certain tie-in arrangements in connection with any extension of
credit, lease or sale of property or furnishing of services.
FDIC INSURANCE ASSESSMENTS
The subsidiary banks of UPC are subject to FDIC deposit insurance
assessments. The FDIC has adopted a risk-based premium schedule which has
increased the assessment rates for most FDIC-insured depository institutions.
Under the new schedule, the annual premiums initially range from $.23 to $.31
for every $100 of deposits. Each financial institution is assigned to one of
three capital groups--well capitalized, adequately capitalized or
undercapitalized--and further assigned to one of three subgroups within a
capital group on the basis of supervisory evaluations by the institution's
primary federal and, if applicable, state supervisors and on the basis of other
information relevant to the institution's financial condition and the risk
posed to the applicable insurance fund. The actual assessment rate applicable
to a particular institution will, therefore, depend in part upon the risk
assessment classification so assigned to the institution by the FDIC.
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The legislation adopted in August, 1989 to provide for the resolution
of insolvent savings associations also required the FDIC to establish separate
deposit insurance funds -- the Bank Insurance Fund ("BIF") for banks and the
Savings Association Insurance Fund ("SAIF") for savings associations. The law
also requires the FDIC to set deposit insurance assessments at such levels as
will cause BIF and SAIF to reach their "designated reserve ratios" of 1.25
percent of the deposits insured by them within a reasonable period of time. Due
primarily to the low costs of resolving bank insolvencies in the last few
years, BIF is expected to reach its designated reserve ratio within one or two
years, at which time the FDIC will be required to lower deposit insurance
assessment rates on banks to those substantially lower levels that will
maintain the balance in BIF in the required relationship to insured bank
deposits. However, the balance in SAIF is not expected to reach the designated
reserve ratio for far longer than it is expected the BIF to reach its mandated
balance, as the law provides that a significant portion of the costs of
resolving past insolvencies of savings associations must be paid from this
source. Accordingly, while the BIF and SAIF assessment rates are presently the
same, it is likely that SAIF rates will be significantly higher than BIF rates
in the future. Since UPC acquired substantial amounts of SAIF-insured deposits
from insolvent savings associations during the years from 1989 to the present
which cannot be converted from SAIF to BIF under present law, it may be
required to pay insurance assessments on these acquired deposits at rates
significantly higher than the rates charged by BIF. While the amount of
additional deposit insurance assessments to be incurred cannot be calculated at
this time because the differential likely to develop between SAIF and BIF is
not known, UPC does not expect that such additional deposit insurance costs
will have a significant, adverse effect on its earnings.
OTHER BANKING LEGISLATION
In addition to the matters noted above, FDICIA made other significant
changes to the federal banking laws in 1991. FDICIA instituted certain changes
to the supervisory process, including provisions that mandate certain
regulatory agency actions against undercapitalized institutions within
specified time limits.
Standards for Safety and Soundness. FDICIA requires the federal bank
regulatory agencies to prescribe, by regulation, standards for all insured
depository institutions and depository-institution holding companies relating
to: (i) internal controls, information systems and audit systems; (ii) loan
documentation; (iii) credit underwriting; (iv) interest-rate risk exposure; (v)
asset growth; and (vi) compensation, fees and benefits. The compensation
standards must prohibit employment contracts, compensation or benefit
arrangements, stock option plans, fee arrangements or other compensatory
arrangements that would provide excessive compensation, fees or benefits or
could lead to material financial loss, but (subject to certain exceptions) may
not prescribe specific compensation levels or ranges for directors, officers or
employees. In addition, the federal banking regulatory agencies would be
required to prescribe by regulation standards specifying: (i) maximum
classified assets to capital ratios; (ii) minimum earnings sufficient to absorb
losses without impairing capital; and (iii) to the extent feasible, a minimum
ratio of market value to book value for publicly traded shares of depository
institutions and depository institution holding companies.
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Brokered Deposits. The FDIC has adopted regulations governing the
receipt of brokered deposits. Under the regulations, a bank may not lawfully
accept, roll over or renew brokered deposits unless (i) it is well capitalized
or (ii) it is adequately capitalized and receives a waiver from the FDIC. A
bank that may not receive brokered deposits also may not offer "pass-through"
insurance on certain employee benefit accounts. Whether or not it has obtained
such a waiver, an adequately capitalized bank may not pay an interest rate on
any deposits in excess of 75 basis points over certain prevailing market rates
specified by regulation. There are no such restrictions on a bank that is well
capitalized. Because UPNB, the Regional Banks and the Community Banks all had
at June 30, 1994, the requisite capital levels to qualify as well capitalized
institutions, UPC believes the brokered deposits regulation will have no
material effect on the funding or liquidity of UPNB, the Regional Banks or any
of the Community Banks.
Consumer Protection Provisions. FDICIA seeks to encourage enforcement of
existing consumer protection laws and enacted new consumer-oriented provisions
including a requirement of notice to regulators and customers of any proposed
branch closing and provisions intended to encourage the offering of "lifeline"
banking accounts and lending in distressed communities. FDICIA also requires
depository institutions to make additional disclosures to depositors with
respect to the rate of interest and the terms of their deposit accounts.
Miscellaneous. FDICIA also made extensive changes in the applicable rules
regarding audit, examinations and accounting. FDICIA generally requires
annual, on-site, full-scope examinations by each bank's primary federal
regulator. FDICIA also imposes new responsibilities on management, the
independent audit committee and outside accountants to develop, approve or
attest to reports regarding the effectiveness of internal controls, legal
compliance and off-balance-sheet liabilities and assets.
FDICIA also required the Federal Reserve to prescribe standards which
limit the risks posed by an insured institution's "exposure" to any other
depository institution to limit the risks that the failure of a large
depository institution would pose to an insured depository institution. FDICIA
broadly defines "exposure" to include extensions of credit to the other
institution; purchases of, or investments in, securities issued by the other
institution; securities issued by the other institution and accepted as
collateral for an extension of credit to any person; and all similar
transactions which the Federal Reserve has defined by regulation to be
"exposure." The Federal Reserve has proposed procedures and "benchmark"
standards to limit an insured depository institution's credit and settlement
exposure to each of its correspondent banks. The final rules were effective on
December 19, 1992, but provide for a two-year transition period.
Depositor Preference. Legislation recently enacted by Congress
establishes a nationwide depositor preference rule in the event of a bank
failure. Under this arrangement, all deposits and certain other claims against
a bank, including the claim of the FDIC as subrogee of insured depositors,
would receive payment in full before any general creditor of the bank would be
entitled to any payment in the event of an insolvency or liquidation of the
bank.
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The Interstate Banking and Community Development Legislation. In
September, 1994 legislation was enacted that is expected to have a significant
effect in restructuring the banking industry in the United States. The
Interstate Banking Efficiency Act facilitates the interstate expansion and
consolidation of banking organizations (i) by permitting bank holding companies
that are adequately capitalized and managed, one year after enactment of the
legislation (September 29, 1995), to acquire banks located in states outside
their home states regardless of whether such acquisitions are authorized under
the law of the host state; (ii) by permitting the interstate merger of banks
after June 1, 1997, subject to the right of individual states to "opt in" or to
"opt out" of this authority before that date; (iii) by permitting banks
to establish new branches on an interstate basis provided that such action is
specifically authorized by the law of the host state; (iv) by permitting one
year after enactment of the legislation a bank to engage in certain agency
relationships (receive deposits, renew time deposits, close loans, service
loans and receive payments on loans and other obligations) as agent for any
bank or thrift affiliate, whether the affiliate is located in the same State or
a different State than the agent bank; and (v) by permitting foreign banks to
establish, with approval of the regulators in the United States, branches
outside their home states to the same extent that national or state banks
located in the home state would be authorized to do so. One effect of this
legislation would be to permit UPC to acquire banks and bank holding companies
located in any state and to permit banking organizations located in any state
to acquire banks and bank holding companies headquartered in Tennessee.
Overall, this legislation is likely to have the effects of increasing
consolidation and competition and promoting geographic diversification in the
banking industry.
The Community Development Banking Act, also enacted in September, 1994, is
intended to: (i) increase the flow of loans to businesses in distressed
communities by providing incentives to lenders to provide credit within those
communities; (ii) remove impediments to the securitization of small business
loans; (iii) provide for a reduction in paperwork and to streamline bank
regulation through, for example, the coordination of examinations in a bank
holding company context, a reduction in the number of currency transaction
reports required, improvements to the National Flood Insurance Program that
include enabling lenders to force place flood insurance; and (iv) increase the
level of consumer protection provided to customers in banking transactions.
UPC believes that these provisions of the new law will not have a material
effect on its operation.
REGULATION OF GSSC AND THE BANKS
As a bank holding company, GSSC is subject to the same type of regulatory
supervision considerations as UPC. For information regarding regulations
governing GSSC and the Banks, see GSSC's Annual Report on Form 10-K for the
year ended December 31, 1993 which is incorporated herein by reference.
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DESCRIPTION OF UPC COMMON AND PREFERRED STOCK
UPC's Restated Charter (the "Charter") currently authorizes the
issuance of 50,000,000 shares of common stock, par value $5.00 per share, and
10,000,000 shares of preferred stock having no par value (the "UPC Preferred
Stock"). As of October 31, 1994, 25,431,252 shares of UPC Common Stock were
issued and outstanding, and approximately 651,000 shares were subject to
acquisition through the exercise of options granted pursuant to UPC's 1992 and
1983 Stock Option Plans and other employee, officer and director benefit plans;
approximately 1,175,000 shares were authorized for issuance pursuant to said
plans but not yet subject to option grants or otherwise issued; and
approximately 4,478,000 shares were authorized for issuance and reserved for
conversion of certain shares of UPC Preferred Stock. Additionally, as of
October 31, 1994; 3,405,577 shares of UPC Preferred Stock were issued and
outstanding, consisting of 44,000 shares of UPC's $8.00 Nonredeemable,
Cumulative, Convertible Preferred Stock, Series B (the "Series B Preferred
Stock"); 253,655 shares of UPC's 9.5% Redeemable, Cumulative Convertible
Preferred Stock, Series D (the "Series D Preferred Stock"); and 3,107,922
shares of UPC's 8% Cumulative, Convertible Preferred Stock, Series E (the
"Series E Preferred Stock"). As of October 31, 1994, UPC's 690,000 shares of
UPC 10 3/8% Increasing Rate, Redeemable, Cumulative Preferred Stock, Series C
(the "Series C Preferred Stock") were called for redemption and are no longer
outstanding. As of October 31, 1994, none of UPC's 250,000 authorized shares
of Series A Preferred Stock were issued and outstanding. The capital stock of
UPC does not represent or constitute a deposit account and is not insured by
the FDIC, the Bank Insurance Fund, the Savings Association Insurance Fund or
any governmental agency.
UPC has authorized the issuance or purchase in the open market of up to
150,000 shares of UPC Common Stock in connection with UPC's 401-K Retirement
Savings Plan.
UPC COMMON STOCK
General. Shares of UPC Common Stock may be issued at such time or times
and for such consideration (not less than the par value thereof) as the UPC
Board of Directors may deem advisable, subject to such limitations as may be
set forth in the laws of the State of Tennessee or UPC's Charter or Bylaws.
UPNB is the Registrar, Transfer Agent and Dividend Disbursing Agent for shares
of UPC Common Stock.
Dividends. Subject to the preferential dividend rights, if any,
applicable to shares of the UPC Preferred Stock and subject to applicable
requirements, if any, with respect to the setting aside of sums for purchase,
retirement or sinking funds for UPC Preferred Stock, the holders of UPC Common
Stock are entitled to receive, to the extent permitted by law, such dividends
as may be declared from time to time by the UPC Board of Directors.
UPC has the right to, and may from time to time, enter into borrowing
arrangements or issue other debt instruments, the provisions of which may
contain restrictions on payment of dividends and other distributions on UPC
Common Stock and UPC Preferred Stock. As of the
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date of this Joint Proxy Statement/Prospectus, no such restrictions
under any such borrowing arrangements or outstanding debt instruments are in
effect.
Liquidation Rights. In the event of the voluntary or involuntary
liquidation, dissolution, distribution of assets or winding-up of UPC, after
distribution in full of the preferential amounts, if any, to be distributed to
the holders of the UPC Preferred Stock, holders of UPC Common Stock will be
entitled to receive all of the remaining assets of UPC of whatever kind
available for distribution to shareholders ratably in proportion to the number
of shares of UPC Common Stock held. The UPC Board of Directors may distribute
in kind to the holders of UPC Common Stock such remaining assets of UPC or may
sell, transfer or otherwise dispose of all or any part of such remaining assets
to any other person or entity and receive payment therefor in cash, stock or
obligations of such other person or entity, and may sell all or any part of the
consideration so received and distribute any balance thereof in kind to holders
of UPC Common Stock. Neither the merger or consolidation of UPC into or with
any other corporation, nor the merger of any other corporation into UPC, nor
any purchase or redemption of shares of stock of UPC of any class, shall be
deemed to be a dissolution, liquidation or winding-up of UPC for purposes of
this paragraph.
Because UPC is a holding company, its right and the rights of its
creditors and shareholders, including the holders of UPC Common Stock, to
participate in the distribution of assets of a subsidiary on its liquidation or
recapitalization may be subject to prior claims of such subsidiary's creditors
except to the extent that UPC itself may be a creditor having recognized claims
against such subsidiary.
PREFERRED STOCK OF UPC
Series A Preferred Stock. UPC's Charter provides for the issuance of up
to 250,000 shares (subject to adjustment by action of the UPC Board of
Directors) of Series A Preferred Stock under certain circumstances involving a
potential change in control of UPC. None of such shares are outstanding and
management is aware of no facts suggesting that issuance of such shares may be
imminent. The Series A Preferred Stock is described in more detail in UPC's
Current Report on Form 8-K dated January 19, 1989, incorporated by reference
herein.
Series B Preferred Stock. In November 1989, UPC issued to two holders, in
a private offering incidental to an acquisition, 44,000 shares of its Series B
Preferred Stock all of which are outstanding as of the date hereof. Such
shares bear a dividend rate of $8.00 per share per annum; dividends are
cumulative. After November 30, 1994 (and in limited circumstances prior
thereto), each share of Series B Preferred Stock is convertible at the option
of the holder into 7.722 shares of UPC Common Stock, with the maximum number of
shares of UPC Common Stock into which such shares may be converted being
339,768. The Series B Preferred Stock is not subject to any sinking fund
provisions and has no preemptive rights. Such shares provide for a liquidation
preference of $100.00 per share plus unpaid dividends accrued thereon and are
not subject to redemption by UPC. Holders of Series B Preferred Stock have no
voting rights except as required by law and certain other limited
circumstances.
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Series C Preferred Stock. In August 1991, UPC issued in a public offering
690,000 shares of its Series C Preferred Stock. Such shares have a
stated value of $25.00 per share. Dividends are payable at the rates of
approximately $.65 per quarter, increasing to $.68 on November 1, 1994, to $.71
on November 1, 1995 and to $.74 on November 1, 1996; dividends are cumulative.
The Series C Preferred Stock is not convertible, is not subject to any sinking
fund provisions and has no preemptive rights. Such shares provide for a
liquidation preference of $25.00 per share plus unpaid dividends accrued
thereon and, with the prior approval of the Federal Reserve, are subject to
redemption by UPC at $25.00 per share at any time on or after October 31, 1994.
Holders of Series C Preferred Stock have no voting rights except as required by
law and in certain other limited circumstances. UPC has redeemed all of its
outstanding Series C Preferred Stock effective October 31, 1994.
Series D Preferred Stock. In connection with the July 1992 acquisition of
Southeastern Bancshares, Inc., UPC issued in a private offering 253,655 shares
of Series D Preferred Stock. Such shares have a stated value of $20.50 per
share on which dividends accrue at a rate of 9.5% per annum; dividends are
cumulative. At any time prior to redemption, each share of the Series D
Preferred Stock is convertible at the option of the holder into one share of
UPC Common Stock. The Series D Preferred Stock is not subject to any sinking
fund provisions and has no preemptive rights. Such shares have a liquidation
preference of $20.50 per share plus unpaid dividends accrued thereon and, at
UPC's option, with the prior approval of the Federal Reserve, are subject to
redemption by UPC at any time and from time to time on or after July 1, 1995.
Holders of Series D Preferred Stock have no voting rights except as required by
law and in certain other limited circumstances.
Series E Preferred Stock. In February 1992, UPC issued in a public
offering 2,200,000 shares of Series E Preferred Stock, all of which (except for
600 previously converted shares) are outstanding as of the date hereof. In the
first two quarters of 1993, UPC issued 908,522 shares of Series E Preferred
Stock in connection with UPC's acquisition of the remaining equity interest in
Bank of East Tennessee and UPC's acquisition of Erin Bank & Trust Company in
Erin, Tennessee, all of which are outstanding as of the date hereof. All
shares of Series E Preferred Stock have a stated value of $25.00 per share.
Dividends are payable at the rate of $.50 per share per quarter and are
cumulative. The Series E Preferred Stock is convertible at the rate of 1.25
shares of UPC Common Stock for each share of Series E Preferred Stock. The
Series E Preferred Stock is not subject to any sinking fund provisions and has
no preemptive rights. Such shares have a liquidation preference of $25 per
share plus unpaid dividends accrued thereon and, at UPC's option and with the
prior approval of the Federal Reserve, are subject to redemption by UPC at any
time or from time to time after March 31, 1997. Holders of Series E Preferred
Stock have no voting rights except as required by law and in certain other
limited circumstances.
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CERTAIN PROVISIONS THAT MAY HAVE AN ANTI-TAKEOVER EFFECT
Certain provisions of UPC's Charter and Bylaws and certain provisions of
Tennessee law may have an anti-takeover effect in that they could prevent,
discourage or delay a change in control of UPC. The following summary briefly
describes certain of those provisions. The summary is not intended to be
complete and is qualified in its entirety by reference to UPC's Charter and
Bylaws and to the Tennessee Code.
Charter and Bylaw Provisions. Pursuant to UPC's Charter, the directors of
UPC are elected for three-year terms of office, and approximately one-third of
the members of the UPC Board of Directors are up for election each year. The
Charter also restricts the removal of directors by the shareholders.
The Charter requires the affirmative votes of the holders of 66-2/3% of
UPC's outstanding Common Stock for approval of a merger, consolidation or a
sale or lease of all or substantially all of the assets of UPC if the other
party to the transaction is a beneficial owner of 10% or more of the
outstanding shares of UPC. The Charter also requires the affirmative votes of
the holders of 66-2/3% of UPC's outstanding Common Stock to amend the Bylaws of
UPC and the provisions of the Charter applicable to UPC's capital stock; to
change the number, election and classification of directors; to give approval
of certain transactions as described above; and to amend certain provisions of
the Charter.
Share Purchase Rights Plan. In 1989, the UPC Board of Directors
adopted a Share Purchase Rights Plan and distributed a dividend of one
Preferred Share Unit Purchase Right ("Right") for each outstanding share of UPC
Common Stock. Moreover, one Right shall be, automatically and without further
action by UPC, distributed in respect to each share of UPC Common Stock issued
thereafter. The Rights are generally designed to deter coercive takeover
tactics and to encourage all persons interested in potentially acquiring
control of UPC to treat each shareholder on a fair and equal basis. Each Right
trades in tandem with the share of UPC Common Stock to which it relates until
the occurrence of certain events indicating a potential change in control of
UPC. Upon the occurrence of such an event, the Rights would separate from UPC
Common Stock and each holder of a Right (other than the potential acquiror)
would be entitled to purchase certain equity securities at prices below their
market value. UPC has authorized 250,000 shares of Series A Preferred Stock
for issuance under the Share Purchase Rights Plan, but no shares have been
issued as of the date of this Prospectus. Until a Right is exercised, the
holder thereof, as such, will have no rights as a shareholder of UPC, including
the right to vote or to receive dividends.
Provisions of the Tennessee Code. As a Tennessee corporation, UPC is or
could be subject to various legislative acts set forth in Chapter 35 of Title
48 of the Tennessee Code, which imposes certain restrictions on business
combinations, including, but not limited to, combinations with interested
shareholders similar to those described above.
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The Tennessee Business Combination Act (the "Tennessee BCA") generally
prohibits a "business combination" (generally defined to include mergers, share
exchanges, sales and leases of assets, issuances of securities and similar
transactions) by UPC or a subsidiary with an "interested shareholder"
(generally defined as any person or entity which beneficially owns ten percent
(10%) or more of the voting power of any class or series of UPC's stock then
outstanding) within five years after the person or entity becomes an interested
shareholder unless the business combination or the transaction pursuant to
which the interested shareholder became such was approved by the UPC Board of
Directors before the interested shareholder became such, and the business
combination satisfies any other applicable requirements imposed by law or by
UPC's Charter or Bylaws. The Tennessee BCA also severely limits the extent to
which UPC or any of its officers or directors could be held liable for
resisting any business combination.
The Tennessee Control Share Acquisition Act (the "Tennessee CSAA")
restricts the voting powers of shares acquired by a party once a specific level
of control is acquired, unless certain conditions are met. Specifically, the
Tennessee CSAA provides that "Control Shares" will not have the voting rights
to which they normally would be entitled unless approved by the other
shareholders at an annual or special meeting. "Control shares" are shares
that, in the absence of the Tennessee CSAA, would give the acquiror voting
power within any of the following ranges of all of the voting power of UPC: (i)
one-fifth or more but less than one-third; (ii) one-third or more but less than
a majority; or (iii) a majority or more.
In addition, the Tennessee Investor Protection Act places limitations on
certain takeover offers by persons owning five percent (5%) or more of any
class of equity securities of UPC.
The provisions described above might be deemed to make UPC less attractive
as a candidate for acquisition by another company than would otherwise be the
case in the absence of such provisions. For example, if another company should
seek to acquire a controlling interest of less than 66-2/3% of the outstanding
shares of UPC Common Stock, the acquiror would not thereby obtain the ability
to replace a majority of the UPC Board of Directors until at least the second
annual meeting of shareholders following the acquisition, and furthermore the
acquiror would not obtain the ability immediately to effect a merger,
consolidation or other similar business combination unless the described
conditions were met.
As a result, UPC's shareholders may be deprived of opportunities to sell some
or all of their shares at prices that represent a premium over prevailing
market prices in a takeover context. The provisions described above also may
make it more difficult for UPC's shareholders to replace the UPC Board of
Directors or management, even if the holders of a majority of the UPC Common
Stock should believe that such replacement is in the interests of UPC. As a
result, such provisions may tend to perpetuate the incumbent UPC Board of
Directors and management.
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MANAGEMENT AND ADDITIONAL INFORMATION
Certain information relating to executive compensation, various benefit
plans (including stock option plans), voting securities and the principal
holders thereof, certain relationships and related transactions and other
related matters as to UPC and GSSC is incorporated by reference or set forth in
UPC's Annual Report on Form 10-K for the year ended December 31, 1993, and
GSSC's Annual Report on Form 10-K for the year ended December 31, 1993, each of
which is incorporated by reference in this Joint Proxy Statement/Prospectus.
See "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE." Shareholders of UPC and
Stockholders of GSSC desiring copies of such documents may contact UPC or GSSC,
as the case may be, at its address or phone number indicated under
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE." For additional information
regarding the directors and certain executive officers of UPC and GSSC prior to
and after the Effective Time of the Merger, see "THE MERGER -- Management after
the Merger" and "--Interests of Certain Persons in the Merger."
VALIDITY OF UPC COMMON STOCK
The validity of the shares of UPC Common Stock offered hereby will be
passed upon by Gary A. Simanson, Assistant Secretary and Associate General
Counsel of UPC. Gary A. Simanson is an officer of UPC and receives
compensation from UPC.
EXPERTS
The audited consolidated financial statements of Union Planters
Corporation as of December 31, 1993 and 1992 and for each of the three years in
the period ended December 31, 1993 incorporated in this Joint Proxy
Statement/Prospectus by reference to Union Planters Corporation's Current
Report on Form 8-K dated October 20, 1994, have been so incorporated in
reliance on the report of Price Waterhouse LLP, independent accountants, given
on the authority of said firm as experts in auditing and accounting.
The consolidated financial statements of BNF BANCORP, INC., formerly
BANCFIRST Corporation, as of September 30, 1993 and 1992 and for each
of the three years in the period ended September 30, 1993 incorporated in this
Joint Proxy Statement/Prospectus by reference to the Current Report on Form 8-K
dated February 8, 1994, have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by reference,
and has been so incorporated in reliance upon the reports of such firm given
upon their authority as experts in accounting and auditing.
The consolidated balance sheets of Grenada Sunburst System Corporation and
subsidiaries as of December 31, 1993 and 1992, and the related consolidated
statements of income, stockholders' equity, and cash flows for each of the
years in the three-year period ended December 31, 1993 have been incorporated
in this Joint Proxy Statement/Prospectus by reference to the Annual Report of
Grenada Sunburst System Corporation for the year ended December 31, 1993 and
the Current Report of Union Planters Corporation on Form 8-K dated
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July 26, 1994, in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
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UNION PLANTERS CORPORATION
INDEX TO APPENDICES
APPENDIX
A-1 -- Agreement and Plan of Reorganization dated July 1, 1994, together
with the Plan of Merger annexed thereto as Exhibit A
B-1 -- Fairness Opinion of The Robinson-Humphrey Company, Inc.
C-1 -- Fairness Opinion of Stifel, Nicolaus & Company, Incorporated
<PAGE> 314
APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
DATED
JULY 1, 1994
BY AND BETWEEN
UNION PLANTERS CORPORATION, GSSC ACQUISITION COMPANY, INC.,
GRENADA SUNBURST SYSTEM CORPORATION,
SUNBURST BANK, MISSISSIPPI, AND SUNBURST BANK, LOUISIANA
TOGETHER WITH THE PLAN OF MERGER
ANNEXED THERETO AS EXHIBIT A
<PAGE> 315
AGREEMENT AND PLAN OF REORGANIZATION
DATED July 1, 1994
Between
UNION PLANTERS CORPORATION and
GSSC ACQUISITION COMPANY, INC.
and
GRENADA SUNBURST SYSTEM CORPORATION,
SUNBURST BANK, MISSISSIPPI and
SUNBURST BANK
<PAGE> 316
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
AGREEMENT AND PLAN OF REORGANIZATION . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . . . . 1
AGREEMENT . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 1
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 3
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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ARTICLE 2
TERMS OF THE REORGANIZATION . . . . . . . . . . . . . . . . . 10
2.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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2.2 Certificate of Incorporation, Bylaws, Directors, Officers and Name of the Surviving Corporation . 10
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(a) Certificate of Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
----------------------------
(b) Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
------
(c) Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
----------------------
(d) Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
----
2.3 Due Diligence Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
--------------------
2.4 Availability of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
---------------------------
2.5 UPC's Right to Revise the Structure of the Transaction . . . . . . . . . . . . . . . . . . . . . . 11
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2.6 Holding Period of UPC Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
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2.7 GSSC Stock Options and Treasury Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
-------------------------------------
ARTICLE 3
DESCRIPTION OF TRANSACTION . . . . . . . . . . . . . . . . . 14
3.1 Terms of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
-------------------
(a) Satisfaction of Conditions to Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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(b) Effective Time of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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(c) Conversion of Shares of INTERIM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
-------------------------------
(d) Conversion and Cancellation of Shares of GSSC . . . . . . . . . . . . . . . . . . . . . . 15
---------------------------------------------
(e) Conversion and Exchange of GSSC Shares; Exchange Ratio . . . . . . . . . . . . . . . . . 15
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(f) Mechanics of Payment of Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . 18
-------------------------------------
(g) Stock Transfer Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
--------------------
(h) Effects of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
---------------------
(i) Transfer of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
------------------
(j) Assumption of Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
-------------------------
(k) Appraisal Rights of GSSC Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . 21
--------------------------------------
3.2 Time and Place of Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
-------------------------
3.3 Price Based Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
-----------------------
</TABLE>
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<TABLE>
<S> <C>
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF UPC AND INTERIM . . . . . . . . . . . 23
4.1 Organization and Corporate Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
------------------------------------
4.2 Authorization, Execution and Delivery; Reorganization Agreement Not in Breach . . . . . . . . . . 23
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4.3 No Legal Bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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4.4 Government and Shareholder Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
------------------------------------
4.5 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
--------------
4.6 UPC Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
------------------------
4.7 Exchange Act and Listing Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
--------------------------------
4.8 The UPC Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
--------------------
4.9 Licenses, Franchise, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
------------------------
4.10 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
--------------------------
4.11 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
-----------
4.12 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
----------
4.13 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
----------------------------------
4.14 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
--------------------
4.15 Material Contract Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
--------------------------
4.16 Statements True and Correct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
---------------------------
4.17 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
----------
4.18 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
-------
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF GSSC, SBM AND SBL . . . . . . . . . . . 32
5.1 Organization and Qualification of GSSC and Subsidiaries . . . . . . . . . . . . . . . . . . . . . 32
-------------------------------------------------------
5.2 Authorization, Execution and Delivery; Reorganization Agreement Not in Breach . . . . . . . . . . 33
-----------------------------------------------------------------------------
5.3 No Legal Bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
------------
5.4 Government and Other Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
------------------------------
5.5 Compliance With Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
-------------------
5.6 Charter Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
-----------------
5.7 GSSC Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
-------------------------
5.8 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
--------------------------
5.9 Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
--------
5.10 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
----------
5.11 GSSC Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
-----------------
5.12 Condition of Fixed Assets and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
---------------------------------------
5.13 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
-----------
5.14 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
----------
5.15 Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
-------------------
5.16 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
---------
5.17 Labor and Employment Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
----------------------------
5.18 Records and Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
---------------------
5.19 Capitalization of GSSC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
----------------------
5.20 Sole Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
--------------
5.21 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
----------
5.22 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
----------------------------------
5.23 Allowance for Possible Loan or ORE Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
-----------------------------------------
5.24 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
--------------------
</TABLE>
ii
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<TABLE>
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5.25 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
----------------------
5.26 Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
------------------
5.27 Material Contract Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
--------------------------
5.28 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
-------
5.29 Exchange Act and Listing Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
--------------------------------
5.30 Statements True and Correct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
---------------------------
ARTICLE 6
COVENANTS OF UPC . . . . . . . . . . . . . . . . . . . . 58
6.1 Proxy Statement; UPC Shareholder Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
-----------------------------------------
6.2 Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
--------------------
6.3 Reservation, Listing and Registration of UPC Common Stock under the Securities Laws . . . . . . . .59
-----------------------------------------------------------------------------------
6.4 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60
-----------------
6.5 Conduct of Business; Notice of Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . .61
---------------------------------------------
ARTICLE 7
COVENANTS OF GSSC, SBM AND SBL . . . . . . . . . . . . . . . . 61
7.1 Proxy Statement; GSSC Stockholder Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . .61
------------------------------------------
7.2 Conduct of Business -- Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
--------------------------------------------
7.3 Conduct of Business -- Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
-----------------------------------------
7.4 Conduct of Business -- Certain Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
--------------------------------------
ARTICLE 8
CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . 71
8.1 Conditions to the Obligations of GSSC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
-------------------------------------
(a) Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
-----------
(b) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
------------------------------
(c) Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
---------
(d) Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
-------------
(e) Opinion of UPC's and INTERIM's Counsel . . . . . . . . . . . . . . . . . . . . . . . . . 73
--------------------------------------
(f) Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
----------------
(g) Tax Opinion of McDonnell Boyd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
-----------------------------
8.2 Conditions to the Obligations of UPC and INTERIM . . . . . . . . . . . . . . . . . . . . . . . . . 74
------------------------------------------------
(a) Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
-----------
(b) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
------------------------------
(c) Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
---------
(d) Destruction of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
-----------------------
(e) Inspections Permitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
---------------------
(f) No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
--------------------------
(g) Opinion of GSSC's Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
-------------------------
(h) Other Business Combinations, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
--------------------------------
(i) Maintenance of Certain Covenants, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . 78
-------------------------------------
(j) Non-Compete Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
----------------------
(k) Tax Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
-----------
(l) Pooling of Interests Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . 79
-----------------------------------------
(m) Receipt of Affiliate Letters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
----------------------------
(n) Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
----------------
</TABLE>
iii
<PAGE> 319
<TABLE>
<S> <C>
8.3 Conditions to Obligations of All Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
----------------------------------------
(a) No Pending or Threatened Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
-------------------------------
(b) Governmental Approvals and Acquiescence Obtained . . . . . . . . . . . . . . . . . . . . 80
------------------------------------------------
(c) Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
----------------------
(d) GSSC Stockholder and UPC Shareholder Approval . . . . . . . . . . . . . . . . . . . . . . 80
---------------------------------------------
ARTICLE 9
TERMINATION . . . . . . . . . . . . . . . . . . . . . 81
9.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
-----------
9.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
---------------------
ARTICLE 10
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . 84
10.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
-------
10.2 Assignability and Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
-------------------------------------
10.3 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
-------------
10.4 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
------------
10.5 Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
------------
10.6 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
---------
10.7 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
----------------
10.8 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
------------
10.9 Modifications, Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
-------------------------------------
10.10 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
--------------
10.11 Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
-------------------
10.12 Finders and Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
-------------------
10.13 Equitable Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
------------------
10.14 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
---------------
10.15 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . 88
------------------------------------------
10.16 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
---------
10.17 Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
-------------------
10.18 Materiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
-----------
</TABLE>
iv
<PAGE> 320
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Reorganization
Agreement") dated this 1st day of July, 1994, by and between UNION PLANTERS
CORPORATION ("UPC"), a corporation chartered and existing under the laws of the
State of Tennessee which is registered both as a bank holding company and a
savings and loan holding company and whose principal offices are located at
7130 Goodlett Farms Parkway, Memphis, Shelby County, Tennessee 38018; GSSC
ACQUISITION COMPANY, INC. ("INTERIM"), a corporation chartered and existing
under the laws of the State of Delaware, whose principal place of business is
located at 7130 Goodlett Farms Parkway, Memphis, Shelby County, Tennessee
38018, and which is a wholly-owned subsidiary of UPC; GRENADA SUNBURST SYSTEM
CORPORATION ("GSSC" or "Surviving Corporation" as the context may require), a
corporation chartered and existing under the laws of the State of Delaware
which is a registered bank holding company and whose principal offices are
located at 2000 Gateway, Grenada, Grenada County, Mississippi 38901; SUNBURST
BANK, MISSISSIPPI ("SBM"), a Mississippi banking corporation, chartered and
existing under the laws of the State of Mississippi, having its main office at
2000 Gateway, Grenada, Grenada County, Mississippi 38901, and which is a
wholly- owned subsidiary of GSSC; and SUNBURST BANK ("SBL"), a Louisiana
banking corporation, chartered and existing under the laws of the State of
Louisiana, having its main office at 8440 Jefferson Highway (Post Office Box
2710), Baton Rouge, East Baton Rouge Parish, Louisiana 70821, and which is a
wholly-owned subsidiary of GSSC.
UPC, INTERIM, GSSC, SBM and SBL are sometimes referred to herein as the
"Parties."
RECITALS
A. GSSC is the beneficial owner and holder of record of 3,465,440
shares of the common stock, $2.50 par value per share, of SBM which constitute
all of the shares of common stock of SBM issued and outstanding (the "SBM
Common Stock"), and 5,000,000 shares of the common stock, $1.00 par value per
share, of SBL which constitute all of the shares of common stock of SBL issued
and outstanding (the "SBL Common Stock") and desires to have itself, SBM and
SBL acquired by UPC on the terms and subject to the conditions set forth in
this Reorganization Agreement and the accompanying Plan of Merger (attached
hereto as Exhibit A) (the "Plan of Merger").
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 1
<PAGE> 321
B. UPC is the beneficial owner and holder of record of 1,000
shares of the common stock, $.01 par value per share, of INTERIM which
constitute all of the shares of common stock of INTERIM issued and outstanding
(the "INTERIM Common Stock"), and desires to acquire GSSC, SBM and SBL on the
terms and subject to the conditions set forth in this Reorganization Agreement
and the accompanying Plan of Merger.
C. The Boards of Directors of GSSC, SBM and SBL deem it desirable
and in the best interests of the stockholders of GSSC (the "GSSC Stockholders")
that INTERIM be merged with and into GSSC (which would survive the merger as
the Surviving Corporation, as defined herein) on the terms and subject to the
conditions set forth in this Reorganization Agreement and in the manner
provided in this Reorganization Agreement and the Plan of Merger (the
"Merger").
D. The Boards of Directors of UPC and INTERIM deem it desirable
and in the best interests of UPC and INTERIM and the shareholders of UPC (the
"UPC Shareholders") that INTERIM be merged with and into GSSC on the terms and
subject to the conditions set forth in this Reorganization Agreement and in the
manner provided in this Reorganization Agreement and the Plan of Merger.
E. The respective Boards of Directors of UPC, INTERIM, GSSC, SBM
and SBL have each adopted (or will each adopt) resolutions setting forth and
adopting this Reorganization Agreement and the Plan of Merger, and have
directed that this Reorganization Agreement and the Plan of Merger and all
resolutions adopted by said Boards of Directors and by the GSSC Stockholders
and the UPC Shareholders related to this Reorganization Agreement, be submitted
with appropriate applications to, and filed with the Board of Governors of the
Federal Reserve System (the "Federal Reserve") and such other regulatory
agencies or authorities as may be necessary in order to obtain all governmental
authorizations required to consummate the proposed Merger and the transactions
contemplated in this Reorganization Agreement in accordance with this
Reorganization Agreement, the Plan of Merger and applicable law.
NOW THEREFORE, in consideration of the foregoing premises and the
mutual representations, warranties, covenants and agreements herein contained
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Parties agree as follows:
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 2
<PAGE> 322
AGREEMENT
ARTICLE 1
DEFINITIONS
1.1 Definitions. As used in this Reorganization
Agreement, the following terms have the definitions indicated:
"AFFILIATE" of a party means any Person or other legal entity
directly or indirectly controlling, controlled by or under common Control, as
that term is defined herein, with that party.
"APPLICABLE ENVIRONMENTAL LAWS" shall have the meaning
assigned to such term in Section 5.15(a) of this Reorganization Agreement.
"AUDITED FINANCIAL STATEMENTS OF GSSC" shall have the meaning
assigned to such term in Section 5.7 of this Reorganization Agreement.
"BALANCE SHEET DATE" shall have the meaning assigned to such
term in Section 5.8 of this Reorganization Agreement.
"BHCA" shall mean the Bank Holding Company Act of 1956, as
amended.
"BROKERED DEPOSITS" shall mean all Deposits of SBM and SBL for
which SBM or SBL have paid a commission or an interest rate substantially above
that paid by SBM or SBL to the general depositors of SBM or SBL, respectively.
"BUSINESS DAY" shall mean any Monday, Tuesday, Wednesday,
Thursday or Friday that is not a federal or state holiday generally recognized
by banks in any of Mississippi, Louisiana or Tennessee.
"CERCLA" shall have the meaning set forth in Section 5.15(a)
of this Reorganization Agreement.
"CLOSING" shall have the meaning assigned to such term in
Section 3.1(a) of this Reorganization Agreement.
"CLOSING DATE" shall have the meaning assigned to such term in
Section 3.2 of this Reorganization Agreement.
"COMPTROLLER" shall mean the Office of the Comptroller of the
Currency, or any successor thereto.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 3
<PAGE> 323
"CONSIDERATION" shall mean the value to be received by the
GSSC Record Holders in exchange for their GSSC Common Stock, such value to be
determined as provided in Article 3, Section 3.1(e), of this Reorganization
Agreement.
"CONTROL" shall have the meaning assigned to such term in
Section 2(a)(2) of the Bank Holding Company Act of 1956, as amended.
"DELAWARE CODE" shall mean the Delaware Code (1974 Revision),
as amended.
"DEPOSITS" shall mean all deposits (including, but not limited
to, certificates of deposit, savings accounts, NOW accounts and checking
accounts) of SBM and SBL.
"EFFECTIVE DATE OF THE MERGER" shall mean that date on which
the Effective Time of the Merger shall have occurred.
"EFFECTIVE TIME OF THE MERGER" shall have the meaning assigned
in Section 3.3 of the Plan of Merger and Section 3.1(b) of this Reorganization
Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"EXCHANGE AGENT" shall mean Union Planters National Bank,
Memphis, Tennessee, acting through its Corporate Trust Department.
"EXCHANGE RATIO" shall have the meaning assigned to such term
in Section 3.1(e) of this Reorganization Agreement.
"FDIC" means the Federal Deposit Insurance Corporation, or any
successor thereto.
"FEDERAL RESERVE" shall mean the Board of Governors of the
Federal Reserve System and shall include the Federal Reserve Bank of St. Louis
acting under delegated authority.
"FIXED ASSETS" shall mean the furniture, fixtures and
equipment of the referenced Party.
"GAAP" shall mean generally accepted accounting principles,
consistently applied.
"GOVERNMENTAL APPROVALS" shall have the meaning assigned to
such term in Section 4.4 of this Reorganization Agreement.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 4
<PAGE> 324
"GSSC" means Grenada Sunburst System Corporation, a
corporation chartered and existing under the laws of the State of Delaware
which is a registered bank holding company and whose principal offices are
located at 2000 Gateway, Grenada, Grenada County, Mississippi 38901.
"GSSC COMMON STOCK" has the meaning assigned to such term in
Section 3.1(d) of this Reorganization Agreement.
"GSSC COMPANIES" shall mean GSSC and all of its Subsidiaries,
including SBM, SBL, all SBM Subsidiaries and all SBL Subsidiaries.
"GSSC EMPLOYEE PLANS" shall mean any pension plans, profit
sharing plans, deferred compensation plans, stock option plans, cafeteria
plans, and any other such or related benefit plans or arrangements offered or
funded by GSSC or any GSSC Subsidiary, including, but not limited to SBM or
SBL, to or for the benefit of the officers, directors or employees of GSSC or
any GSSC Subsidiary.
"GSSC RECORD HOLDERS" means the holders of record of all of
the issued and outstanding shares of GSSC Common Stock immediately prior to the
Effective Time of the Merger.
"GSSC STOCKHOLDERS" shall have the meaning assigned to such
term in Recital C of this Reorganization Agreement.
"GSSC STOCKHOLDERS MEETING" shall mean the meeting of the GSSC
Stockholders to be held pursuant to Section 7.1 of this Reorganization
Agreement, including any adjournment or adjournments thereof.
"GSSC STOCK OPTIONS" shall have the meaning assigned to such
term in Section 2.7 of this Reorganization Agreement.
"HOLA" shall mean the Home Owners' Loan Act of 1933, as
amended and recodified.
"HAZARDOUS SUBSTANCES" shall have the meaning set forth in
Section 5.15(a) of this Reorganization Agreement.
"INDEX GROUP" shall have the meaning assigned to such term in
Section 3.3 of this Reorganization Agreement.
"INDEX PRICE" shall have the meaning assigned to such term in
Section 3.3 of this Reorganization Agreement.
"INTERIM" shall mean GSSC Acquisition Company, Inc., a
corporation chartered and existing under the laws of the State of
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 5
<PAGE> 325
Delaware, whose principal place of business is located at 7130 Goodlett Farms
Parkway, Memphis, Shelby County, Tennessee 38018, and which is a wholly-owned
subsidiary of UPC formed solely to effect the Merger.
"INTERIM COMMON STOCK" shall have the meaning assigned to such
term in Section 3.1(c) of this Reorganization Agreement.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code
of 1986, as amended.
"LOFI" shall mean the State of Louisiana Office of Financial
Institutions.
"MERGER" shall, as described in Section 2.1 of this
Reorganization Agreement, mean the merger of INTERIM with and into GSSC, which
shall survive the Merger as the Surviving Corporation.
"MISSISSIPPI CODE" shall mean the Mississippi Code Annotated,
as amended.
"MISSISSIPPI COMMISSIONER" shall mean the Commissioner of
Banks of the State of Mississippi.
"MSBD" shall mean the Mississippi Department of Banking and
Consumer Finance.
"NASDAQ" shall mean the National Association of Securities
Dealers Automated Quotation System or its successor, upon which shares of the
GSSC Common Stock are listed for trading.
"NYSE" shall mean the New York Stock Exchange, or its
successor, upon which shares of the UPC Common Stock are listed for trading.
"1933 ACT" shall mean the Securities Act of 1933, as amended.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"OFFICER" shall have the meaning set forth in Section 5.8(k)
of this Reorganization Agreement.
"ORE" shall have the meaning set forth in Section 5.23 of this
Reorganization Agreement.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 6
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"OTS" shall mean the Office of Thrift Supervision, or any
successor thereto.
"PARTIES" shall mean GSSC, SBM, SBL, UPC and INTERIM
collectively; GSSC, SBM and SBL on the one hand, or UPC and INTERIM on the
other hand, may sometimes be referred to as a "PARTY."
"PENSION PLAN" shall mean any employee pension benefit plan as
such term is defined in Section 3(2) of ERISA which is maintained by the
referenced Party.
"PERSON" shall mean any natural person, fiduciary,
corporation, partnership, joint venture, association, business trust or any
other entity of any kind.
"PLAN OF MERGER" shall mean the Plan of Merger substantially
in the form of Exhibit A hereto which is incorporated by reference as part of
this Reorganization Agreement and which is to be executed by authorized
representatives of GSSC, UPC and INTERIM and filed with the Delaware Secretary
of State along with the Certificate of Merger in accordance with Title
8-Chapter 485- Section 251 of the Delaware Code and providing for the Merger of
INTERIM with and into GSSC as contemplated by Section 2.1 of this
Reorganization Agreement.
"PRICING PERIOD" shall have the meaning assigned to such term
in Section 3.1(e)(i) of this Reorganization Agreement.
"PROPERTY" shall have the meaning assigned to such term in
Section 5.15(a) of this Reorganization Agreement.
"PROXY STATEMENT" shall mean the proxy statement-prospectus to
be used by UPC and GSSC to solicit proxies with a view to securing the
approvals of the UPC Shareholders and GSSC Stockholders of this Reorganization
Agreement and the Plan of Merger and to register with the SEC the issuance of
the shares of UPC Common Stock to be issued by UPC to the GSSC Record Holders.
"REALTY" means the real property of GSSC, SBM or SBL owned or
leased by GSSC, SBM or SBL or any Subsidiary of GSSC, SBM or SBL.
"RECORDS" means all available records, minutes of meetings of
the Board of Directors, committees and stockholders of GSSC, and the Boards of
Directors and shareholders of SBM and SBL, original instruments and other
documentation, pertaining to GSSC, GSSC's consolidated assets (including plans
and specifications relating to the Realty), GSSC's consolidated
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 7
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liabilities, the GSSC Common Stock, the SBM Common Stock, the SBL Common Stock,
the Deposits and loans, and all other business and financial records which are
necessary or customary for use in the conduct of GSSC's, SBM's or SBL's
businesses by UPC and GSSC on and after the Effective Time of the Merger as
they were conducted prior to the Closing Date.
"REGULATORY AUTHORITIES" shall mean, collectively, the Federal
Reserve, the TDFI, the MSBD, the LOFI, the SEC, or any other state or federal
governmental or quasi-governmental entity which has, or may hereafter have,
jurisdiction over any of the transactions described in this Reorganization
Agreement.
"RELEASE" shall have the meaning assigned to such term in
Section 5.15(b)(i) of this Reorganization Agreement.
"REORGANIZATION" shall mean the Merger (as described in
Section 2.1(a) of this Reorganization Agreement) and the transactions
contemplated in this Reorganization Agreement and the Plan of Merger annexed
hereto as Exhibit A.
"REORGANIZATION AGREEMENT" means this Agreement and Plan of
Reorganization together with the Plan of Merger (Exhibit A) and all Exhibits
and Schedules annexed to, and incorporated by specific reference as a part of,
this Reorganization Agreement.
"SBL" means Sunburst Bank, a Louisiana banking corporation,
chartered and existing under the laws of the State of Louisiana, having its
main office at 8440 Jefferson Highway (Post Office Box 2710), Baton Rouge, East
Baton Rouge Parish, Louisiana 70821, and which is a wholly-owned subsidiary of
GSSC.
"SBL COMMON STOCK" shall have the meaning assigned to such
term in Recital A of this Reorganization Agreement.
"SBM" means Sunburst Bank, Mississippi, a Mississippi banking
corporation, chartered and existing under the laws of the State of Mississippi,
having its main office at 2000 Gateway, Grenada, Grenada County, Mississippi
38901, and which is a wholly- owned subsidiary of GSSC.
"SBM COMMON STOCK" shall have the meaning assigned to such
term in Recital A of this Reorganization Agreement.
"SEC" shall mean the Securities and Exchange Commission, or
any successor thereto.
"SEC DOCUMENTS" shall mean all reports, proxy statements and
registration statements filed, or required to be filed, by a Party or any of
its Subsidiaries pursuant to the
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 8
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Securities Laws, whether filed, or required to be filed, with the SEC, the OTS,
the Comptroller, the FDIC, the Federal Reserve or with any other Regulatory
Authority pursuant to the Securities Laws.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act of
1940, as amended, the Trust Indenture Act of 1939, as amended, and the rules
and regulations of the SEC promulgated thereunder, as well as any similar state
securities laws and any similar rules and regulations promulgated by the
applicable federal bank Regulatory Authorities.
"SUBSIDIARIES" shall mean all of those corporations, banks,
associations or other entities of which the entity in question owns or controls
5% or more of the outstanding voting equity securities either directly or
through an unbroken chain of entities as to each of which 5% or more of the
outstanding equity securities is owned directly or indirectly by its parent;
provided, however, that there shall not be included any such entity acquired
through foreclosure or in satisfaction of a debt previously contracted in good
faith, any such entity that owns or operates an automatic teller machine
interchange network, any such entity that is a joint venture of the parent or
of a Subsidiary of the parent, or any such entity the equity securities of
which are owned or controlled in a fiduciary capacity or through a small
business investment corporation.
"SURVIVING CORPORATION" shall mean GSSC as the corporation
resulting from the consummation of the Merger as set forth in Section 2.1(a) of
this Reorganization Agreement and which shall continue to be the sole
shareholder of SBM and SBL subsequent to the Merger.
"TENNESSEE CODE" shall mean the Tennessee Code Annotated, as
amended.
"UPC" shall mean Union Planters Corporation, a registered
Tennessee-chartered bank holding company which is also registered as a savings
and loan holding company having its principal place of business in Memphis,
Shelby County, Tennessee.
"UPC COMMON STOCK" shall have the meaning set forth in Section
4.5 of this Reorganization Agreement.
"UPC FINANCIAL STATEMENTS" shall mean (i) the audited
consolidated balance sheets and related consolidated statements of earnings, of
changes in shareholders' equity, and of cash flows (including related notes) of
UPC and its Subsidiaries as of December 31, 1992 and 1993 and each subsequent
December 31 prior
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 9
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to the Effective Time of the Merger, and (ii) the related unaudited
consolidated balance sheets and related consolidated statements of earnings, of
changes in shareholders' equity, and of cash flows (including related notes) of
UPC and its Subsidiaries for each of the quarters ended or ending after
December 31, 1993, as filed by UPC in SEC Documents.
"UPC PREFERRED STOCK" shall have the meaning assigned to such
term in Section 4.5 of this Reorganization Agreement.
"UPC SHAREHOLDERS" shall have the meaning assigned to such
term in Recital D of this Reorganization Agreement.
"UPC SHAREHOLDERS MEETING" shall mean the meeting of the UPC
Shareholders to be held pursuant to Section 6.1 of this Reorganization
Agreement, including any adjournment or adjournments thereof.
ARTICLE 2
TERMS OF THE REORGANIZATION
2.1 The Merger. Subject to the satisfaction (or waiver)
of all of the conditions to the obligations of each of the Parties to this
Reorganization Agreement, at the Effective Time of the Merger, INTERIM shall be
merged with and into GSSC (the "Merger"), which latter corporation (the
"Surviving Corporation") shall survive the Merger and shall continue to be the
sole shareholder of SBM and SBL.
2.2 Certificate of Incorporation, Bylaws, Directors,
Officers and Name of the Surviving Corporation.
(a) Certificate of Incorporation. At the
Effective Time of the Merger, the Certificate of Incorporation of GSSC, as in
effect immediately prior to the Effective Time of the Merger, shall continue to
be the Certificate of Incorporation of GSSC as the Surviving Corporation,
unless and until the same shall be amended thereafter as provided by law and
the terms of such Certificate of Incorporation.
(b) Bylaws. At the Effective Time of the Merger,
the Bylaws of GSSC, as in effect immediately prior to the Effective Time of the
Merger, shall continue to be the Bylaws of GSSC as the Surviving Corporation,
unless and until amended or repealed as provided by law, its Certificate of
Incorporation and such Bylaws.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 10
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(c) Directors and Officers. The directors and
officers of GSSC in office immediately prior to the Effective Time of the
Merger shall continue thereafter to be the directors and officers of the
Surviving Corporation, to hold office as provided in the Certificate of
Incorporation and Bylaws of the Surviving Corporation, unless and until their
successors shall have been elected or appointed and shall have qualified or
until they shall have been removed in the manner provided therein.
(d) Name. The name of GSSC as the Surviving
Corporation following the Merger shall remain unchanged and continue to be:
GRENADA SUNBURST SYSTEM CORPORATION
or such corporate name as GSSC shall elect to adopt.
2.3 Due Diligence Review. Each Party shall be entitled
to conduct a preliminary due diligence review of the Records and operations of
the other Party, including, but not limited to, a review of the Party's loan
portfolios, ORE and classified assets, investment portfolios and properties, to
verify the reasonableness of the other Party's earnings projections, growth
projections and sustained earnings prospects after consummation of the Merger
at reasonable growth rates; provided, however, that any review conducted by a
Party pursuant to the provisions of this Section 2.3 shall be completed within
thirty (30) days from the date of this Reorganization Agreement.
2.4 Availability of Information. Promptly after the
execution by the Parties of this Reorganization Agreement, each Party shall
provide to the other Party, its Officers, employees, agents, and
representatives access, on reasonable notice and during customary business
hours, to all of the Records, properties and facilities of the Party and shall
use its best efforts to cause its Officers, employees, agents and
representatives to cooperate with any of the reviewing Party's reasonable
requests for information which would be customary in order to conduct the
review provided for in Section 2.3 of this Reorganization Agreement. Each
Party shall keep all non-public information disclosed to it by the other Party
with respect to the transactions contemplated in this Reorganization Agreement
confidential pursuant to that certain Confidentiality Agreement dated June 21,
1994, and shall not disclose or use such information in any manner without the
prior written consent of the other Party.
2.5 UPC's Right to Revise the Structure of the
Transaction. UPC shall have the unilateral right to revise the structure of
the corporate Reorganization contemplated by this
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 11
<PAGE> 331
Reorganization Agreement and the Plan of Merger in order to achieve tax
benefits or for any other reason which UPC may deem advisable; provided,
however, that UPC shall not have the right, without the approval of the Board
of Directors of GSSC, to make any revision to the structure of the
Reorganization which (i) changes the amount of Consideration which the GSSC
Record Holders are entitled to receive; (ii) changes the intended tax-free
effects of the Merger to UPC, INTERIM, GSSC, SBM, SBL or the GSSC Record
Holders; (iii) would permit UPC to pay the Consideration other than by delivery
of shares of UPC Common Stock registered with the SEC (in the manner described
in Section 6.1 of this Reorganization Agreement); or (iv) adversely affects the
economic benefits of the transaction from the perspective of the GSSC Record
Holders. UPC may exercise this right of revision by giving written Notice to
GSSC, SBM or SBL in the manner provided in Section 10.1 of this Reorganization
Agreement, which Notice shall be in the form of an amendment to this
Reorganization Agreement and/or the Plan of Merger or in the form of an Amended
and Restated Agreement and Plan of Reorganization and/or Plan of Merger.
2.6 Holding Period of UPC Common Stock. GSSC, SBM and SBL
hereby acknowledge and agree that, in order to qualify the Merger under the
Internal Revenue Code as a tax-free reorganization and for accounting purposes
as a pooling of interests under the rules and regulations promulgated by the
SEC, Accounting Principles Board Opinion No. 16 and GAAP, any GSSC Record
Holder who would be deemed an Affiliate of GSSC by GSSC at the time of Closing
under the Securities Laws and who accepts shares of UPC Common Stock as
Consideration for the cancellation, exchange and conversion of his shares of
GSSC Common Stock in connection with the Merger, shall be required by GSSC to
deliver, and GSSC shall use its best efforts to obtain, an agreement that the
Affiliate shall not (a) pledge, assign, sell, transfer, devise, otherwise
alienate or take any action which would eliminate or diminish the risk of
owning or holding the shares of UPC Common Stock to be received by such GSSC
Record Holder upon consummation of the Merger, nor (b) enter into any formal or
informal agreement to pledge, assign, sell or transfer, devise, or otherwise
alienate his right, title and interests in any of the shares of GSSC Common
Stock held prior to the Merger or UPC Common Stock to be delivered by UPC to
such GSSC Record Holder in connection with the Merger for a period of thirty
(30) days prior to Closing and until such time as UPC shall have publicly
released a statement of UPC's earnings reflecting the combined financial
results of operations of UPC and GSSC for a period of not less than thirty (30)
days subsequent to the Effective Time of the Merger. GSSC further acknowledges
and agrees that any UPC Common Stock Certificates issued in connection with the
Merger to GSSC Record Holders who would be deemed Affiliates of GSSC or UPC
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 12
<PAGE> 332
at the time of Closing under the Securities Laws shall be subject to and bear a
restrictive legend substantially in the form as follows:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE HELD SUBJECT
TO ALL APPLICABLE PROVISIONS OF THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND THE RULES AND REGULATIONS PROMULGATED BY
THE SECURITIES AND EXCHANGE COMMISSION ("SEC") THEREUNDER. NO SALES,
TRANSFERS OR OTHER DISPOSITION OF THESE SHARES MAY BE MADE EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT (OTHER THAN A REGISTRATION STATEMENT ON SEC FORM S-4) OR UPON THE
PRIOR DELIVERY TO UNION PLANTERS CORPORATION ("UPC") OF AN OPINION
FROM LEGAL COUNSEL, SATISFACTORY TO UPC, IN FORM AND SUBSTANCE
SATISFACTORY TO UPC AND ITS LEGAL COUNSEL, STATING THAT SUCH SALE OR
OTHER DISPOSITION IS BEING MADE PURSUANT TO AND IN ACCORDANCE WITH THE
REQUIREMENTS OF SEC RULES 144 AND 145 OR IS OTHERWISE EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT. NO SALE, TRANSFER, OR OTHER
DISPOSITION OF THESE SHARES MAY BE MADE UNTIL AFTER THE PUBLICATION OF
FINANCIAL RESULTS COVERING AT LEAST 30 DAYS OF POST MERGER COMBINED
OPERATIONS OF UPC AND GRENADA SUNBURST SYSTEM CORPORATION. NO
AGREEMENT MAY BE ENTERED INTO BY THE HOLDER OF THIS CERTIFICATE WHICH
WOULD ALLOW OR REQUIRE THE SALE, TRANSFER, OR OTHER DISPOSITION OF
THESE SHARES OR WHICH WOULD OTHERWISE REDUCE THE RISK BORNE BY THE
SHAREHOLDER NAMED ON THE REVERSE SIDE OF THIS CERTIFICATE SUBSEQUENT
TO THE CONSUMMATION OF THE MERGER DURING THE TIME PERIOD MENTIONED
ABOVE.
2.7 GSSC Stock Options and Treasury Stock. Except as
described in Schedule 2.7 hereto, as of the date of this Reorganization
Agreement, there are 14,478 validly issued and outstanding options to purchase
shares of GSSC Common Stock, which were issued by GSSC to certain officers of
GSSC and the GSSC Subsidiaries in connection with the GSSC Key Employees Stock
Plan and no other options, rights, warrants, scrip or similar rights to
purchase shares of GSSC Common Stock (collectively, the "GSSC Stock Options")
are (or have been) issued and outstanding by GSSC other than those which may be
issuable pursuant to GSSC's various stock option and incentive plans. It is
contemplated by the Parties hereto that all validly issued and outstanding GSSC
Stock Options outstanding immediately prior to the Effective Time of the Merger
would be automatically converted at the Effective Time of the Merger into
options to purchase shares of UPC Common Stock based on the Exchange Ratio.
Therefore, in the event and to the extent that there are any GSSC Stock Options
validly issued and outstanding at the time of Closing, such GSSC Stock Options
shall at the Effective Time of the Merger automatically, and without further
action on the part of anyone, be converted
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 13
<PAGE> 333
into options to purchase shares of UPC Common Stock on the same terms and
conditions attributable to the GSSC Stock Options to purchase shares of GSSC
Common Stock in effect as of the date of this Reorganization Agreement adjusted
in all respects by and in accordance with the Exchange Ratio (i.e. if an
existing GSSC Stock Option for the purchase of 10,000 shares of GSSC Common
Stock were exercisable at $22.375 per share of GSSC Common Stock and the
Exchange Ratio were 1.4206, then at the Effective Time of the Merger such
unexercised GSSC Stock Option would automatically convert into an option to
purchase 14,206 shares of UPC Common Stock at an exercise price of $15.75 per
share). As of the date of this Reorganization Agreement, GSSC has not
repurchased or accelerated the vesting period of any GSSC Stock Options other
than pursuant to the terms and conditions of the GSSC Key Employees Stock Plan,
nor will it repurchase or accelerate the purchase rights of any GSSC Stock
Options, and GSSC has not repurchased any shares of its capital stock. As of
the date of this Reorganization Agreement, there are no shares of GSSC Common
Stock held by GSSC as Treasury Stock, nor will there be any such shares at the
Effective Time of the Merger.
ARTICLE 3
DESCRIPTION OF TRANSACTION
3.1 Terms of the Merger.
(a) Satisfaction of Conditions to Closing. After
the transactions contemplated herein have been approved by the shareholders of
UPC and the stockholders of GSSC and the INTERIM, and each other condition to
the obligations of the Parties hereto, other than those conditions which are to
be satisfied by delivery of documents by any Party to any other Party, has been
satisfied or, if lawfully permitted, waived by the Party or Parties entitled to
the benefits thereof, a closing (the "Closing") will be held on the date (the
"Closing Date") and at the time of day and place referred to in Section 3.2 of
this Reorganization Agreement. At the Closing the Parties shall use their
respective best efforts to deliver the certificates, letters and opinions which
constitute conditions precedent to effecting the Merger and each Party will
provide the other Parties with such proof or indication of satisfaction of the
conditions to the obligations of such other Parties to consummate the Merger as
such other Parties may reasonably require. If all conditions to the
obligations of each of the Parties shall have been satisfied or lawfully waived
by the Party entitled to the benefits thereof, the Parties shall, at the
Closing, duly execute a Certificate of Merger for filing with the Secretary of
State of the State of Delaware and promptly thereafter GSSC and INTERIM
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 14
<PAGE> 334
shall take all steps necessary or desirable to consummate the Merger in
accordance with all applicable laws, rules and regulations and the Plan of
Merger. The Parties shall thereupon take such other and further actions as UPC
shall direct or as may be required by law or this Reorganization Agreement to
consummate the transactions contemplated herein.
(b) Effective Time of the Merger. Upon the
satisfaction of all conditions to Closing (except those conditions waived by
the Parties), the Merger shall become effective on the date and at the time of
filing of a Certificate of Merger with the Secretary of State of the State of
Delaware or at such later date and/or time as may be agreed upon by the Parties
and set forth in the Certificate of Merger so filed (the "Effective Time of the
Merger").
(c) Conversion of Shares of INTERIM. At the
Effective Time of the Merger, each share of $.01 par value common stock of
INTERIM (the "INTERIM Common Stock") issued and outstanding immediately prior
to the Effective Time of The Merger shall, by virtue of the Merger becoming
effective and without any further action on the part of anyone, be converted
into and become one share of the issued and outstanding common stock of the
Surviving Corporation.
(d) Conversion and Cancellation of Shares of
GSSC. At the Effective Time of the Merger, each share of $1.00 par value
common stock of GSSC (the "GSSC Common Stock") validly issued and outstanding
immediately prior to the Effective Time of the Merger shall, by virtue of the
Merger becoming effective and without any further action on the part of anyone,
be converted, exchanged and cancelled as provided in Section 3.1(e) hereof.
(e) Conversion and Exchange of GSSC Shares;
Exchange Ratio. At the Effective Time of the Merger, the outstanding shares of
GSSC Common Stock held by the GSSC Record Holders immediately prior to the
Effective Time of the Merger shall, without any further action on the part of
anyone, cease to represent any interest (equity, stockholder or otherwise) in
GSSC and shall automatically be converted exclusively into, and constitute only
the right of the GSSC Record Holders to receive in exchange for their shares of
GSSC Common Stock, whole shares of UPC Common Stock and a cash payment in
settlement of any remaining fractional share of UPC Common Stock in accordance
with the terms and conditions of this Section 3.1(e) and the Plan of Merger.
The shares of UPC Common Stock and the cash settlement of any remaining
fractional share of UPC Common Stock deliverable by UPC or INTERIM to the GSSC
Record Holders pursuant to the terms of this Reorganization Agreement are
sometimes collectively referred to herein as the "Consideration."
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 15
<PAGE> 335
The number of shares of UPC Common Stock to be exchanged for each share of GSSC
Common Stock issued and outstanding immediately prior to the Effective Time of
the Merger shall be based on an exchange ratio (the "Exchange Ratio") as
determined and set forth in this Section 3.1(e). The Exchange Ratio shall be
determined as follows:
(A) In the event the Current Market Price
Per Share of UPC Common Stock should be greater than or equal to
$24.00 per share of UPC Common Stock but less than or equal to $29.25
per share of UPC Common Stock (the "Primary Collar"), the Exchange
Ratio shall be fixed at 1.4206 shares of UPC Common Stock for each
share of GSSC Common Stock validly issued and outstanding immediately
prior to the Effective Time of the Merger;
(B) In the event the Current Market Price
Per Share of UPC Common Stock should be greater than $29.25 per share
of UPC Common Stock but less than or equal to $31.25 per share of UPC
Common Stock (the "Upper Secondary Collar"), the Exchange Ratio shall
be based on (a) a fixed price of $41.55 per share of GSSC Common Stock
divided by (b) the Current Market Price Per Share of UPC Common Stock
for each share of GSSC Common Stock validly issued and outstanding
immediately prior to the Effective Time of the Merger;
(C) In the event the Current Market Price
Per Share of UPC Common Stock should be greater than $31.25 per share
of UPC Common Stock (the "Ceiling"), the Exchange Ratio shall be fixed
at 1.3296 shares of UPC Common Stock for each share or GSSC Common
Stock validly issued and outstanding immediately prior to the
Effective Time of the Merger; provided, however, that UPC would have
the right to either deliver shares of UPC Common Stock based on the
fixed Exchange Ratio of 1.3296 or to terminate the
transaction;provided, however, should UPC elect to terminate the
transaction under this provision, GSSC shall have the unilateral right
to reinstate the transaction by accepting in exchange for each share
of GSSC Common Stock validly issued and outstanding immediately prior
to the Effective Time of the Merger that number of shares of UPC
Common Stock at the Current Market Price Per Share sufficient to equal
$41.55 per share of GSSC Common Stock;
(D) In the event the Current Market Price
Per Share of UPC Common Stock should be greater than or equal to
$22.00 per share of UPC Common Stock but less than $24.00 per share of
UPC Common Stock (the "Lower Secondary
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 16
<PAGE> 336
Collar"), the Exchange Ratio shall be based on (a) a fixed price of
$34.09 per share of GSSC Common Stock divided by (b) the Current
Market Price Per Share of UPC Common Stock for each share of GSSC
Common Stock validly issued and outstanding immediately prior to the
Effective Time of the Merger; and
(E) In the event the Current Market Price
Per Share of UPC Common Stock should be less than $22.00 per share of
UPC Common Stock (the "Floor"), the Exchange Ratio shall be fixed at
1.5495 shares of UPC Common Stock for each share of GSSC Common Stock
validly issued and outstanding immediately prior to the Effective Time
of the Merger; provided, however, that subject to the terms and
provisions of Section 3.3 of this Reorganization Agreement, GSSC shall
have the right to either accept the fixed Exchange Ratio of 1.5495 or
terminate the transaction in accordance with the terms and provisions
of Section 3.3 of this Reorganization Agreement,provided, however,
that should GSSC elect to terminate the transaction under this
provision and the Current Market Price Per Share of UPC Common Stock
should be greater than or equal to $18.50, UPC shall have the
unilateral right to reinstate the transaction by delivering in
exchange for each share of GSSC Common Stock validly issued and
outstanding immediately prior to the Effective Time of the Merger
shares of UPC Common Stock based on that number of shares of UPC
Common Stock at the Current Market Price Per Share sufficient to equal
$34.09 per share of GSSC Common Stock.
The Exchange Ratio as determined in this Section 3.1(e) shall be based on an
aggregate of no more than 9,600,000 shares of GSSC Common Stock being validly
issued and outstanding immediately prior to the Effective Time of the Merger
and, for purposes of this paragraph, counting all unexercised GSSC Stock
Options issued and outstanding immediately prior to the Effective Time of the
Merger as issued and outstanding shares of GSSC Common Stock so converted and
exchanged; provided, however, that no fractional shares of UPC Common Stock
shall be issued and if, after aggregating all of the shares of UPC Common Stock
to which a GSSC Record Holder is entitled based upon the Exchange Ratio, there
shall be a fractional share of UPC Common Stock remaining, such fractional
share shall be settled by a cash payment therefor pursuant to the Mechanics of
Payment of the Consideration set forth in Section 3.1(f) hereof, which shall be
calculated based upon the Current Market Price Per Share of one (1) full share
of UPC Common Stock.
(1) DEFINITION OF "CURRENT MARKET PRICE
PER SHARE." The "Current Market Price Per Share" shall be the
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 17
<PAGE> 337
average closing price per share of the "last" real time trades (i.e.,
closing price) of the UPC Common Stock on the NYSE (as published in
The Wall Street Journal, Eastern Edition) for each of the twenty (20)
NYSE general market trading days on which the NYSE was open for
business next preceding the issuance of all necessary Regulatory
Approvals (the "Pricing Period"). In the event the UPC Common Stock
should not trade on one or more of the trading days during the Pricing
Period (a "No Trade Date"), any such No Trade Date shall be
disregarded in computing the average closing price per share of UPC
Common Stock and the average shall be based upon the "last" real time
trades and number of days on which the UPC Common Stock actually
traded during the Pricing Period.
(2) EFFECTS OF APPRAISAL RIGHTS ON THE
EXCHANGE RATIO. The Exchange Ratio shall be unaffected by appraisal
rights as granted under Delaware law because the GSSC Common Stock is
listed for trading on the NASDAQ National Market System, which is a
"national securities exchange" as defined in rules promulgated by the
SEC pursuant to the 1934 Act, and therefore, pursuant to Delaware Code
Section 8-503-262, no GSSC Record Holder may assert appraisal rights
in connection with the Merger or the transactions contemplated in this
Reorganization Agreement.
(3) EFFECT OF STOCK SPLITS, REVERSE STOCK
SPLITS, STOCK DIVIDENDS AND SIMILAR CHANGES IN THE CAPITAL OF GSSC OR
UPC. Should GSSC or UPC effect any stock splits, reverse stock
splits, stock dividends or similar changes in their respective capital
accounts subsequent to the date of this Reorganization Agreement but
prior to the Effective Time of the Merger, the Exchange Ratio shall be
adjusted in such a manner as the Board of Directors of UPC shall deem
in good faith to be fair and reasonable in order to give effect to
such changes subject to GSSC's Board of Directors' approval.
(f) Mechanics of Payment of Consideration. As
soon as reasonably practicable, but in any event no more than five (5) Business
Days after the Effective Time of the Merger, the Corporate Trust Department of
Union Planters National Bank, Memphis, Tennessee (the "Exchange Agent") shall
deliver to each of the GSSC Record Holders such materials and information
deemed necessary by the Exchange Agent to advise the GSSC Record Holders of the
procedures required for proper surrender of their certificates evidencing and
representing shares of the GSSC Common Stock in order for the GSSC Record
Holders to receive the Consideration. Such materials shall include, without
limitation, a Letter of Transmittal, an Instruction Sheet, and a return
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 18
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mailing envelope addressed to the Exchange Agent (collectively the "Stockholder
Materials"). All Stockholder Materials shall be sent by United States mail to
the GSSC Record Holders at the addresses set forth on a certified stockholder
list to be delivered by GSSC to UPC at the Closing (the "Stockholder List") and
shall also be made available at the Corporate Trust Department offices of the
Exchange Agent. As soon as reasonably practicable thereafter, the GSSC Record
Holders of all of the outstanding shares of GSSC Common Stock, shall be
requested by the Exchange Agent to deliver, or cause to be delivered, by United
States Postal Service, hand delivery or any other means of delivery selected by
such GSSC Record Holders, to the Exchange Agent, pursuant to the Stockholder
Materials, the certificates formerly evidencing and representing all of the
shares of GSSC Common Stock which were validly issued and outstanding
immediately prior to the Effective Time of the Merger, and the Exchange Agent
shall take prompt action to process such certificates formerly evidencing and
representing shares of GSSC Common Stock received by it (including the prompt
return of any defective submissions with instructions as to those actions which
may be necessary to remedy any defects). Upon receipt of the proper submission
of the certificate(s) formerly representing and evidencing ownership of the
shares of GSSC Common Stock, the Exchange Agent shall, on or prior to the 30th
day after the Effective Time of the Merger but as soon as practicable mail, to
the former GSSC Record Holders in exchange for the certificate(s) surrendered
by them, the Consideration to be delivered for each such GSSC Record Holder's
shares of GSSC Common Stock evidenced by the certificate or certificates which
were cancelled and converted exclusively into the right to receive the
Consideration upon the Merger becoming effective. After the Effective Time of
the Merger and until properly surrendered to the Exchange Agent, each
outstanding certificate or certificates which formerly evidenced and
represented the shares of GSSC Common Stock of a GSSC Record Holder, subject to
the provisions of this Section, shall be deemed for all corporate purposes to
represent and evidence only the right to receive the Consideration into which
such GSSC Record Holder's shares of GSSC Common Stock were converted and
aggregated at the Effective Time of the Merger. Unless and until the
outstanding certificate or certificates, which immediately prior to the
Effective Time of the Merger evidenced and represented the GSSC Record Holder's
GSSC Common Stock shall have been properly surrendered as provided above, the
Consideration payable to the GSSC Record Holder(s) of the cancelled shares as
of any time after the Effective Date shall not be delivered to the GSSC Record
Holder(s) of such certificate(s) until such certificates shall have been
surrendered in the manner required. Each GSSC Record Holder shall be
responsible for all federal, state and local taxes which may be incurred by
such holder on account of the receipt of any
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 19
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Consideration. The GSSC Record Holder(s) of any certificate(s) which shall
have been lost or destroyed may nevertheless, subject to the provisions of this
Section, receive the Consideration to which each such GSSC Record Holder is
entitled, provided that each such GSSC Record Holder shall deliver to UPC and
to the Exchange Agent: (i) a sworn statement certifying the fact of such loss
or destruction and specifying the circumstances thereof and (ii) a lost
instrument bond in form satisfactory to UPC and the Exchange Agent which has
been duly executed by a corporate surety satisfactory to UPC and the Exchange
Agent, indemnifying the Surviving Corporation, UPC, the Exchange Agent (and
their respective successors) to their satisfaction against any loss or expense
which any of them may incur as a result of such lost or destroyed certificates
being thereafter presented. Any costs or expenses which may arise from such
replacement procedure, including the premium on the lost instrument bond, shall
be for the account of the GSSC Record Holder.
(g) Stock Transfer Books. At the Effective Time
of the Merger, the stock transfer books of GSSC shall be closed and no transfer
of shares of GSSC Common Stock shall be made thereafter.
(h) Effects of the Merger. At the Effective Time
of the Merger, the separate existence of INTERIM shall cease, and INTERIM shall
be merged with and into GSSC which, as the Surviving Corporation, shall
thereupon and thereafter possess all of the assets, rights, privileges,
appointments, powers, licenses, permits and franchises of GSSC and INTERIM,
whether of a public or a private nature, and shall be subject to all of the
liabilities, restrictions, disabilities and duties of both GSSC and INTERIM.
(i) Transfer of Assets. At the Effective Time of
the Merger, all rights, assets, licenses, permits, franchises and interests of
GSSC and INTERIM in and to every type of property, whether real, personal, or
mixed, whether tangible or intangible and wherever located, and to choses in
action shall be deemed to be vested in GSSC as the Surviving Corporation by
virtue of the Merger becoming effective and without any deed or other
instrument or act of transfer whatsoever.
(j) Assumption of Liabilities. At the Effective
Time of the Merger, the Surviving Corporation shall become and be liable for
all debts, liabilities, obligations and contracts of GSSC as well as those of
INTERIM, whether the same shall be matured or unmatured; whether accrued,
absolute, contingent or otherwise; and whether or not reflected or reserved
against in the balance sheets, other financial statements, books of account or
records of GSSC or INTERIM.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 20
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(k) Appraisal Rights of GSSC Stockholders.
Pursuant to the provisions of Section 8-503-262 of the Delaware Code, GSSC
Stockholders shall not be entitled to assert appraisal rights in connection
with the Merger or to seek those appraisal remedies afforded by the Delaware
Code because the GSSC Common Stock is listed for trading on the NASDAQ,
National Market System which is a "national securities exchange" as defined in
rules promulgated by the SEC pursuant to the 1934 Act, and therefore, pursuant
to Delaware Code Section 8-503-262, no GSSC Record Holder may assert appraisal
rights in connection with the Merger or the transactions contemplated in this
Reorganization Agreement.
(l) Reservation, Registration and Listing of
shares of UPC Common Stock. UPC shall reserve for issuance, register under the
applicable Securities Laws and apply for listing for trading on the NYSE a
sufficient number of shares of UPC Common Stock for the purpose of issuing
shares of UPC Common Stock to (i) the GSSC Record Holders in accordance with
the terms and conditions of this Section 3.1 and (ii) the holders of
outstanding GSSC Stock Options issued under the terms of the GSSC Key Employees
Stock Plan.
3.2 Time and Place of Closing. The Closing shall take
place at 10:00 a.m. on the Business Day next preceding the date on which the
Effective Time of the Merger is expected to occur, or at such other time as the
Parties, acting through their chief executive officers, presidents or chief
financial officers, may mutually agree (the "Closing Date"). The place of
Closing shall be at the Union Planters Administrative Center, Union Planters
Corporation Executive Offices (Fourth Floor), 7130 Goodlett Farms Parkway,
Memphis, Shelby County, Tennessee 38018. The Closing may be held at such other
time and place as may be mutually agreed upon by the Parties.
3.3 Price Based Termination. This Reorganization
Agreement may be terminated by GSSC without penalty, if the GSSC Board of
Directors so determines by a majority vote, if (a) the Current Market Price Per
Share of UPC Common Stock should be less than $18.50; or (b) should both of the
following conditions be satisfied:
(i) The Current Market Price Per Share of a share of UPC Common
Stock shall be less than $22.00; and
(ii) (A) The number obtained by dividing the Current Market Price
Per Share of UPC Common Stock by $26.75 (the closing price per share of UPC
Common Stock, as reported on the NYSE Composite Transactions Tape reporting
system on June 30, 1994), shall be less than (B) the number obtained by
dividing the average of the
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 21
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Index Price (as defined below) for the Pricing Period by the Index Price on
June 30, 1994 (the last NYSE trading day immediately preceding the date of the
first public announcement of entry by the Parties into this Reorganization
Agreement) and subtracting 0.10 from the quotient in this clause (B); subject,
however, to the following three sentences.
In the event GSSC should elect to exercise its termination right
pursuant to the foregoing, it must give prompt written notice to UPC. Upon the
proper receipt of such notice, UPC shall (provided the Current Market Price Per
Share of UPC Common Stock is greater than or equal to $18.50) have the option
to increase the Consideration to be received by the GSSC Record Holders in the
Merger by adjusting the Exchange Ratio to equal the number (calculated to the
nearest one one-hundredth) obtained by dividing $34.09 (being the product of
$22.00 and the Exchange Ratio) by the Current Market Price Per Share of UPC
Common Stock (the "Maximum Exchange Ratio"). If UPC should so elect, it must
give prompt written notice to GSSC of such election and the adjusted Exchange
Ratio, whereupon no termination will be deemed to have occurred, and this
Reorganization Agreement shall remain in full force and effect in accordance
with its terms (except as the Exchange Ratio shall have been so modified).
For purposes of this provision of this Reorganization Agreement, the following
definitions shall apply:
"Index Group" means the fifteen (15) companies listed on Schedule 3.3
to this Reorganization Agreement. In the event that the common stock of any
such company should cease to be publicly traded or should a proposal to acquire
any such company be announced after June 30, 1994, such company shall be
removed from the Index Group.
"Index Price," on a given date, means the average of the closing
prices on such date of the common stocks of the companies comprising the Index
Group.
Prior to making any decision to terminate this Reorganization
Agreement, the GSSC Board of Directors shall consult with its financial and
other advisers and shall consider all financial and other information it should
deem relevant to its decision. The matter would not, however, be resubmitted
to the GSSC Record Holders after the GSSC Stockholder Meeting.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 22
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF UPC AND INTERIM
As of the date hereof and as of the Effective Time of the
Merger, UPC and INTERIM represent and warrant to GSSC as follows:
4.1 Organization and Corporate Authority. UPC is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Tennessee. INTERIM is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Each of UPC's material Subsidiaries is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its formation. UPC,
INTERIM and all material UPC Subsidiaries (i) have the requisite corporate
power and authority to own, operate and lease their material properties and
carry on their businesses as they are currently being conducted; (ii) are in
good standing and are duly qualified to do business in each jurisdiction where
the character of their properties owned or held under lease or the nature of
their business makes such qualification necessary and where the failure to so
qualify would individually or in the aggregate have a material adverse effect
on the condition (financial or otherwise), affairs, business, assets or
prospects of UPC and all UPC Subsidiaries, taken as a whole; and (iii) have in
effect all federal, state, local and foreign governmental authorizations,
permits and licenses necessary for them to own or lease their respective
properties and assets and to carry on their businesses as they are currently
being conducted. The corporate Charter and Bylaws of UPC and the Certificate
of Incorporation and Bylaws of INTERIM, as amended to date, are in full force
and effect as of the date of this Reorganization Agreement.
4.2 Authorization, Execution and Delivery; Reorganization
Agreement Not in Breach.
(a) UPC and INTERIM have all requisite corporate
power and authority to execute and deliver this Reorganization Agreement and
the Plan of Merger and to consummate the transactions contemplated hereby and
thereby. This Reorganization Agreement and the Plan of Merger, and all other
agreements contemplated to be executed in connection herewith by UPC and
INTERIM, have been (or upon execution will have been) duly executed and
delivered by UPC and INTERIM, have been (or upon execution will have been)
effectively authorized by all necessary action, corporate or otherwise, and,
other than the approval of at least a majority of UPC Shareholders and of UPC
as sole stockholder of INTERIM and UPC's Board of Directors, no
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 23
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other corporate proceedings on the part of UPC or INTERIM are (or will be)
necessary to authorize such execution and delivery, and constitute (or upon
execution will constitute) legal, valid and enforceable obligations of UPC and
INTERIM, subject, as to enforceability, to applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally, and to the application of equitable principles and
judicial discretion.
(b) The execution and delivery of this
Reorganization Agreement and the Plan of Merger, the consummation of the
transactions contemplated hereby and thereby and the fulfillment of the terms
hereof and thereof will not result in a violation or breach of any of the terms
or provisions of, or constitute a default under (or an event which, with the
passage of time or the giving of notice or both, would constitute a default
under), or conflict with, or permit the acceleration of any obligation under,
any material mortgage, lease, covenant, agreement, indenture or other
instrument to which UPC, INTERIM or any material UPC Subsidiary is a party or
by which they or their property or any of their assets are bound; the corporate
Charter and Bylaws of UPC or the Certificate of Incorporation and Bylaws of
INTERIM; or any judgment, decree, order, regulatory letter of understanding or
award of any court, governmental body, authority or arbitrator by which UPC,
INTERIM or any material UPC Subsidiary is bound; or any permit, concession,
grant, franchise, license, law, statute, ordinance, rule or regulation
applicable to UPC, INTERIM or any material UPC Subsidiary or their properties;
or result in the creation of any lien, claim, security interest, encumbrance,
charge, restriction or right of any third party of any kind whatsoever upon the
property or assets of UPC, INTERIM or any material UPC Subsidiary, except that
the Government Approvals shall be required in order for UPC and INTERIM to
consummate the Merger.
4.3 No Legal Bar. Neither UPC nor INTERIM is a party to,
subject to or bound by any agreement, judgment, letter of understanding, order,
writ, prohibition, injunction or decree of any court or other governmental body
of competent jurisdiction or any law which would prevent the execution of this
Reorganization Agreement and the Plan of Merger by UPC or INTERIM, their
delivery to GSSC, SBM and SBL or the consummation of the transactions
contemplated hereby and thereby, and no action or proceeding is pending against
UPC or INTERIM in which the validity of this Reorganization Agreement or the
Plan of Merger, any of the transactions contemplated hereby or thereby or any
action which has been taken by any of the Parties in connection herewith or
therewith or in connection with any of the transactions contemplated hereby or
thereby is at issue.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 24
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4.4 Government and Shareholder Approvals. No consent,
approval, order or authorization of, or registration, declaration or filing
with, any federal, state or local governmental authority is required to be made
or obtained by UPC or INTERIM in connection with the execution and delivery of
this Reorganization Agreement or the consummation of the transactions
contemplated hereby by UPC or INTERIM, except for the prior approval of the
Federal Reserve of the Merger under the Bank Holding Company Act of 1956, as
amended (collectively, the "Government Approval"). Neither UPC nor INTERIM is
aware of any facts, circumstances or reasons why such Government Approval
should not be forthcoming or which would prevent such approval from being
obtained. The transactions contemplated in this Reorganization Agreement,
including, but not limited to, the Merger and the issuance of shares of UPC
Common Stock by UPC is subject to approval of at least a majority of the UPC
Shareholders.
4.5 Capitalization. (a) The authorized capital stock of
UPC consists of 10,000,000 shares of preferred stock having no par value (the
"UPC Preferred Stock"), and 50,000,000 shares of common stock having a par
value of $5.00 per share (the "UPC Common Stock"). As of June 30, 1994, UPC
had issued and outstanding: 44,000 shares of $8.00 Nonredeemable Cumulative
Convertible Preferred Stock, Series B; 690,000 shares of 10-3/8% Increasing
Rate, Redeemable, Cumulative Preferred Stock, Series C; 253,655 shares of 9.5%
Redeemable, Cumulative Preferred Stock, Series D; and 3,107,922 shares of 8%
Cumulative, Convertible Preferred Stock, Series E. In addition, 250,000 shares
of UPC Preferred Stock have been reserved for issuance as Series A Preferred
Stock pursuant to the UPC Share Purchase Rights Agreement dated July 19, 1989,
between UPC and Union Planters National Bank as Rights Agent (the "UPC Share
Purchase Rights Agreement"). As of June 30, 1994, 21,814,022 shares of UPC
Common Stock were validly issued and outstanding.
As of the date hereof, UPC is the holder, directly or indirectly, of
all of the outstanding capital stock of its Subsidiaries, except for directors'
qualifying shares of Union Planters National Bank.
(b) The authorized capital stock of INTERIM consists
of 1,000 shares of common stock having a par value of $.01 per share (the
"INTERIM Common Stock") and no preferred stock. As of the date hereof, INTERIM
had issued all 1,000 shares of the authorized INTERIM Common Stock to UPC.
Therefore, UPC is the record holder and beneficial owner of all of the INTERIM
Common Stock outstanding. INTERIM was formed by UPC solely to effect the
Merger and has not incurred any material debts or liabilities.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 25
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4.6 UPC Financial Statements. Accompanying Schedule 4.6
hereto are true copies of the audited consolidated balance sheets of UPC as of
December 31, 1993, the audited consolidated balance sheets of UPC as of
December 31, 1992, and selected financial data for UPC as of December 31, 1993,
1992 and 1991, and the related consolidated statements of income and changes in
shareholders' equity and cash flows of UPC for the years ended December 31,
1993, 1992 and 1991 and the comparative interim (or annual) financial
statements for any subsequent quarter (or year) ending after December 31, 1993
and prior to the Closing Date. Such financial statements (i) were (or will be)
prepared from the books and records of UPC; (ii) were (or will be) prepared in
accordance with GAAP; (iii) accurately present (or will present) UPC's
consolidated financial condition and the consolidated results of its
operations, changes in shareholders' equity and cash flows at the relevant
dates thereof and for the periods covered thereby; (iv) in the opinion of UPC
do contain or reflect (or will contain and reflect) all necessary adjustments
and accruals for an accurate presentation of UPC's consolidated financial
condition and the consolidated results of UPC's operations and cash flows as
stated including any amendments thereto for the periods covered by such
financial statements; (v) in the opinion of UPC do contain and reflect (or will
contain and reflect) adequate provisions for loan losses, for ORE reserves and
for all reasonably anticipatable liabilities for all taxes (federal, state,
local or foreign) with respect to the periods then ended; and (vi) in the
opinion of UPC do contain and reflect (or will contain and reflect) adequate
provisions for all reasonably anticipated liabilities for Post Retirement
Benefits Other Than Pensions ("OPEB") pursuant to FASB 106 and 112.
4.7 Exchange Act and Listing Filings.
(a) The outstanding shares of UPC Common Stock are registered with
the SEC pursuant to the 1934 Act and UPC has filed with the SEC all forms and
reports required by law or by rule or regulation of the SEC to be filed by UPC
with the SEC, which forms and reports, taken as a whole, are true and correct
in all material respects, and do not misstate a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading.
(b) The outstanding shares of UPC Common Stock are listed for trading
on the NYSE (under the symbol "UPC") pursuant to the listing rules of the NYSE
and UPC has filed with the NYSE all material forms and reports required by law
or by rule or regulation of the NYSE to be filed by UPC with the NYSE, which
forms and reports, taken as a whole, are true and correct in all material
respects, and do not misstate a material fact or omit to
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 26
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state a material fact required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading.
4.8 The UPC Common Stock. All shares of UPC Common Stock
to be issued by UPC and delivered to the GSSC Record Holders in exchange for
all of the GSSC Common Stock validly issued and outstanding immediately prior
to the Effective Time of the Merger will be duly authorized, validly issued,
fully paid and non-assessable, and none of such shares of UPC Common Stock will
have been issued in violation of any preemptive rights of any UPC Shareholders.
The shares of UPC Common Stock to be delivered in payment of the Consideration
shall have in all respects such distinguishing characteristics as those of the
shares of UPC Common Stock outstanding immediately prior to the Effective Time
of the Merger.
4.9 Licenses, Franchise, Etc. UPC and all UPC
Subsidiaries hold all material licenses, franchises, permits and authorizations
necessary for the lawful conduct of their respective businesses. The benefits
of all of such material licenses, franchises, permits and authorizations are in
full force and effect and may continue to be enjoyed by UPC and all UPC
Subsidiaries subsequent to the Closing of the transactions contemplated herein
without any consent or approval. Neither UPC nor any UPC Subsidiary has
received notice of any proceeding for the suspension or revocation of any such
material license, franchise, permit, or authorization and no such proceeding is
pending or has been threatened by any governmental authority.
4.10 Absence of Certain Changes. Except as disclosed in
Schedule 4.10 or as provided for or contemplated in this Reorganization
Agreement, since December 31, 1993 (the "UPC Balance Sheet Date") there has not
been:
(a) any material adverse change in the business,
property, assets (including loan portfolios), liabilities (whether absolute,
accrued, contingent or otherwise), prospects, operations, liquidity, income,
condition (financial or otherwise) or net worth of UPC;
(b) any amendment, modification or termination of
any contract or agreement, relating to UPC or any UPC Subsidiary to which UPC
or any UPC Subsidiary is a party which would have a material adverse effect
upon the financial condition or operations of UPC;
(c) any incurring of, assumption of, or taking
of, by UPC or any UPC Subsidiary, any property subject to, any liability,
except for liabilities incurred or assumed or property
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 27
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taken subsequent to the UPC Balance Sheet Date in the ordinary course of
business and in conformity with past practice; or
(d) except as described in the UPC Financial
Statements, any material alteration in the manner of keeping the books,
accounts or Records of UPC or any UPC Subsidiary, or in the accounting policies
or practices therein reflected, except as may be required by GAAP.
4.11 Tax Matters. Except as described in Schedule 4.11
hereto:
(a) all federal, state, local, and foreign tax
returns required to be filed by or on behalf of UPC and each UPC Subsidiary
have been timely filed or requests for extensions have been timely filed,
granted, and have not expired for periods ended on or before the date of this
Reorganization Agreement, and all returns filed are, and the information
contained therein is, complete and accurate. All tax obligations reflected in
such returns have been paid. As of the date of this Reorganization Agreement,
there is no audit examination, deficiency, or refund litigation or matter in
controversy with respect to any taxes that might result in a determination
materially adverse to UPC or any UPC Subsidiary except as fully reserved for in
the UPC Financial Statements. All taxes, interest, additions, and penalties
due with respect to completed and settled examinations or concluded litigation
have been paid.
(b) Neither UPC nor any UPC Subsidiary has executed
an extension or waiver of any statute of limitations on the assessment or
collection of any material tax due that is currently in effect.
(c) Adequate provision for any federal, state,
local, or foreign taxes due or to become due for UPC and all UPC Subsidiaries
for all periods through and including December 31, 1993, has been made and is
reflected on the December 31, 1993 financial statements included in the UPC
Financial Statements, and have been and will continue to be made with respect
to periods ending after December 31, 1993.
(d) Deferred taxes of UPC and each UPC Subsidiary
have been and will continue to be provided for in accordance with GAAP.
(e) To the best knowledge of UPC and INTERIM,
neither the Internal Revenue Service nor any foreign, state, local or other
taxing authority is now asserting or threatening to assert against UPC or any
UPC Subsidiary any material
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 28
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deficiency or claim for additional taxes, or interest thereon or penalties in
connection therewith. All material income, payroll, withholding, property,
excise, sales, use, franchise and transfer taxes, and all other taxes, charges,
fees, levies or other assessments, imposed upon UPC by the United States or by
any state, municipality, subdivision or instrumentality of the United States or
by any other taxing authority, including all interest, penalties or additions
attributable thereto, which are due and payable by UPC or any UPC Subsidiary,
either have been paid in full, or have been properly accrued and reflected in
UPC's Financial Statements referred to in Section 4.6 of this Reorganization
Agreement.
4.12 Litigation. Except as set forth in Schedule 4.12
hereto, there is no action, suit or proceeding pending against UPC or any UPC
Subsidiary, or to the best knowledge of UPC or INTERIM threatened against or
affecting UPC, any UPC Subsidiary or any of their assets, before any court or
arbitrator or any governmental body, agency or official (i) that would, if
decided against UPC or any UPC Subsidiary, have a material adverse impact on
the business, properties, assets, liabilities, condition (financial or other)
or prospects of UPC and that are not reflected in the UPC Financial Statements
or (ii) by or on behalf of any employee employed or formerly employed by UPC or
any UPC Subsidiary.
4.13 Absence of Undisclosed Liabilities. Except as described
in Schedule 4.13 hereto, neither UPC nor any UPC Subsidiary has any obligation
or liability (contingent or otherwise) that is material to the financial
condition or operations of UPC or any UPC Subsidiary taken as a whole, or that,
when combined with all similar obligations or liabilities, would be material to
the financial condition or operations of UPC or any UPC Subsidiary taken as a
whole (i) except as disclosed in the UPC Financial Statements delivered to GSSC
prior to the date of this Reorganization Agreement or (ii) except obligations
or liabilities incurred in the ordinary course of its business consistent with
past practices or (iii) except as contemplated under this Reorganization
Agreement. Since December 31, 1993, neither UPC nor any UPC Subsidiary has
incurred or paid any obligation or liability which would be material to the
financial condition or operations of UPC or such UPC Subsidiary taken as a
whole, except for obligations paid in connection with transactions made by it
in the ordinary course of its business consistent with past practices, laws and
regulations applicable to UPC or any UPC Subsidiary.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 29
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4.14 Compliance with Laws. UPC and each UPC Subsidiary:
(a) Is in compliance with all laws, rules,
regulations, reporting and licensing requirements, and orders applicable to its
business or employees conducting its business (including, but not limited to,
those relating to consumer disclosure and currency transaction reporting) the
breach or violation of which would or could reasonably be expected to have a
material adverse effect on the financial condition or operations of UPC or any
UPC Subsidiary taken as a whole, or which would or could reasonably be expected
to subject UPC or any UPC Subsidiary or any of its directors or officers to
civil money penalties; and
(b) Has received no notification or communication
from any agency or department of federal, state or local government or any of
the Regulatory Authorities, or the staff thereof (i) asserting that UPC or any
UPC Subsidiary is not in compliance with any of the statutes, rules,
regulations, or ordinances which such governmental authority or Regulatory
Authority enforces, which, as a result of such noncompliance, would result in a
material adverse impact on UPC or any UPC Subsidiary, (ii) threatening to
revoke any license, franchise, permit or governmental authorization which is
material to the financial condition or operations of UPC or any UPC Subsidiary,
or (iii) requiring UPC or any UPC Subsidiary to enter into a cease and desist
order, consent, agreement or memorandum of understanding.
4.15 Material Contract Defaults. Neither UPC nor any UPC
Subsidiary is in default in any respect under any contract, agreement,
commitment, arrangement, lease, insurance policy, or other instrument to which
it is a party or 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 which default is reasonably expected to have
either individually or in the aggregate a material adverse effect on UPC or any
UPC Subsidiary taken as a whole, 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.
4.16 Statements True and Correct. None of the information
prepared by, or on behalf of, UPC or any UPC Subsidiary regarding UPC, INTERIM
or any other UPC Subsidiary included or to be included in the Proxy Statement
to be mailed to the GSSC Stockholders in connection with the GSSC Stockholders
Meeting, and any other documents to be filed with the SEC, or any other
Regulatory Authority in connection with the transaction contemplated herein,
will, at the respective times such documents
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 30
<PAGE> 350
are filed, and, with respect to the Proxy Statement, when first mailed to the
GSSC Stockholders, be false or misleading with respect to any material fact, or
omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, or, in
the case of the Proxy Statement or any amendment thereof or supplement thereto,
at the time of the GSSC Stockholders Meeting, be false or misleading with
respect to any material fact, or omit to state any material fact necessary to
correct any statement in any earlier communication with respect to the
solicitation of any proxy for the GSSC Stockholders Meeting. All documents
which UPC or any UPC Subsidiary is responsible for filing with the SEC or any
other Regulatory Authority in connection with the transactions contemplated
hereby will comply as to form in all material respects with the provisions of
applicable law, including applicable provisions of the Securities Laws and the
rules and regulations issued thereunder.
4.17 Disclosure. The information concerning, and the
representations or warranties made by UPC and/or INTERIM as set forth in this
Reorganization Agreement, or in any document, statement, certificate or other
writing furnished or to be furnished by UPC and/or INTERIM to GSSC, SBM and/or
SBL pursuant hereto, do not and will not contain any untrue statement of a
material fact or omit and will not omit to state a material fact required to be
stated herein or therein which is necessary to make the statements and facts
contained herein or therein, in light of the circumstances under which they
were or are made, not false or misleading. Copies of all documents heretofore
or hereafter delivered or made available to GSSC, SBM and SBL by UPC and/or
INTERIM pursuant hereto were or will be complete and accurate copies of such
documents.
4.18 Reports. Since December 31, 1989, UPC and its
Subsidiaries have filed all reports and statements, together with any
amendments required to be made with respect thereto, that they were required to
file with (i) any state banking authority; (ii) the Federal Reserve, including,
but not limited to, Reports on FR Y-6 and FR Y-9; (iii) the FDIC, (iv) the SEC,
including, but not limited to, Annual Reports on Form 10-K, Quarterly Reports
on Form 10-Q and proxy statements; and (vi) any other applicable federal or
state securities or banking authorities (except, in the case of federal or
state securities authorities, filings that are not material). As of their
respective dates, each of such reports and documents, including the financial
statements, exhibits and schedules thereto, complied in all material respects
with all of the requirements of their respective forms and all of the statutes,
rules and regulations enforced or promulgated by the Regulatory Authority with
which they were filed. All such reports were true and complete in all
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 31
<PAGE> 351
material respects and did not contain any untrue statement as stated including
any amendments thereto of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. UPC has
previously provided to GSSC true and correct copies of all such reports filed
by UPC and its Subsidiaries after December 31, 1989.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF GSSC, SBM AND SBL
As of the date hereof and as of the Effective Time of the Merger,
GSSC, SBM and SBL represent and warrant to UPC and INTERIM as follows:
5.1 Organization and Qualification of GSSC and
Subsidiaries. GSSC is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and (i) has all requisite
corporate power and authority to own, operate and lease its material properties
and to carry on its business as it is currently being conducted; (ii) is in
good standing and is duly qualified to do business in each jurisdiction where
the character of its properties owned or held under lease or the nature of its
business makes such qualification necessary and where the failure to so qualify
would individually or in the aggregate have a material adverse effect on the
condition (financial or otherwise), affairs, business, assets or prospects of
GSSC and all GSSC Subsidiaries, taken as a whole; and (iii) is a registered
bank holding company under the BHCA. Each GSSC Subsidiary is duly chartered,
validly existing and in good standing under the laws of the state or
jurisdiction of its incorporation and (i) has all requisite corporate power and
authority to own, operate and lease its material properties and to carry on its
business as it is currently being conducted and (ii) is in good standing and is
duly qualified to do business in each jurisdiction where the character of its
properties owned or held under lease or the nature of its business makes such
qualification necessary and where the failure to so qualify would individually
or in the aggregate have a material adverse effect on the condition (financial
or otherwise), affairs, business, assets or prospects of GSSC and all GSSC
Subsidiaries, taken as a whole. GSSC and each of its Subsidiaries have in
effect all federal, state, local and foreign governmental authorizations,
permits and licenses necessary for them to own or lease their respective
properties and assets and to carry on their business as such businesses are
currently being conducted. SBM is a Mississippi banking corporation, duly
organized, validly existing
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 32
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and in good standing under the laws of the State of Mississippi and engages
only in activities (and holds properties only of the types) permitted by the
Mississippi Code and the rules and regulations promulgated by the MSBD
thereunder or the FDIC for insured depository institutions. SBM's deposit
accounts are insured by the Bank Insurance Fund (the "BIF") or the Savings
Association Insurance Fund ("SAIF") as administered by the FDIC to the fullest
extent permitted under applicable law. SBL is a Louisiana banking corporation,
duly organized, validly existing and in good standing under the laws of the
State of Louisiana and engages only in activities (and holds properties only of
the types) permitted by the Civil Law of Louisiana and the rules and
regulations promulgated by the LOFI thereunder or the FDIC for insured
depository institutions. SBL's deposit accounts are insured by the BIF as
administered by the FDIC to the fullest extent permitted under applicable law.
5.2 Authorization, Execution and Delivery; Reorganization
Agreement Not in Breach.
(a) GSSC, SBM and SBL have all requisite power
and authority to execute and deliver this Reorganization Agreement and the Plan
of Merger and to consummate the transactions contemplated hereby and thereby.
The execution and delivery of this Reorganization Agreement and the Plan of
Merger and the consummation of the proposed transaction have been (or will have
been) duly authorized by majorities of the entire Boards of Directors of GSSC,
SBM and SBL and, except for the approval of the GSSC Stockholders, no other
corporate proceedings on the part of GSSC, SBM or SBL are (or upon approval by
their respective boards of directors will be) necessary to authorize the
execution and delivery of this Reorganization Agreement and the Plan of Merger
and the consummation of the transactions contemplated hereby and thereby. This
Reorganization Agreement, the Plan of Merger and all other agreements and
instruments herein contemplated to be executed by GSSC, SBM and SBL have been
(or upon execution will have been) duly executed and delivered by GSSC, SBM and
SBL and (subject to any requisite shareholder or stockholder approval hereof)
constitute (or upon execution will constitute) legal, valid and enforceable
obligations of GSSC, SBM and SBL, subject, as to enforceability, to applicable
bankruptcy, insolvency, receivership, conservatorship, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and to the application of equitable principles and judicial
discretion.
(b) The execution and delivery of this
Reorganization Agreement and the Plan of Merger, the consummation of the
transactions contemplated hereby and thereby, and the fulfillment of the terms
hereof and thereof will not result in a
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 33
<PAGE> 353
violation or breach of any of the terms or provisions of, or constitute a
default under (or an event which, with the passage of time or the giving of
notice, or both, would constitute a default under), or conflict with, or permit
the acceleration of, any obligation under any mortgage, lease, covenant,
agreement, indenture or other instrument to which GSSC or any GSSC Subsidiary
is a party or by which GSSC or any GSSC Subsidiary is bound; the Certificate of
Incorporation and Bylaws of GSSC or the Charter and Bylaws of SBM or the
Charter and Bylaws of SBL; or any judgment, decree, order, regulatory letter of
understanding or award of any court, governmental body, authority or arbitrator
by which GSSC or any GSSC Subsidiary is bound; or (subject to the receipt of
the Government Approvals) any permit, concession, grant, franchise, license,
law, statute, ordinance, rule or regulation applicable to GSSC or any GSSC
Subsidiary or the properties of any of them; or result in the creation of any
lien, claim, security interest, encumbrance, charge, restriction or right of
any third party of any kind whatsoever upon the properties or assets of GSSC or
any GSSC Subsidiary where any such violation, conflict, breach, default, lien,
termination, acceleration or creation described in this Section 5.2 would have,
individually or in the aggregate, a material adverse effect on the condition
(financial or other), affairs, business, assets, or prospects of GSSC and all
GSSC Subsidiaries, taken as a whole.
5.3 No Legal Bar. Neither GSSC, SBM nor SBL is a party
to, or subject to, or bound by, any agreement or judgment, order, letter of
understanding, writ, prohibition, injunction or decree of any court or other
governmental authority or body, or any law which would prevent the execution of
this Reorganization Agreement or the Plan of Merger by GSSC, SBM or SBL, the
delivery thereof to UPC and INTERIM, or the consummation of the transactions
contemplated hereby and thereby, and no action or proceeding is pending against
GSSC, SBM or SBL in which the validity of this Reorganization Agreement, the
transactions contemplated hereby or any action which has been taken by any of
the Parties in connection herewith or in connection with any of the
transactions contemplated hereby are at issue.
5.4 Government and Other Approvals. Except for the
Government Approvals described in Section 4.4, no consent, approval, order or
authorization of, or registration, declaration or filing with, any federal,
state or local governmental authority is required to be made or obtained by
GSSC, SBM or SBL in connection with the execution and delivery of this
Reorganization Agreement or the consummation of the transactions contemplated
by this Reorganization Agreement nor is any consent or approval of this
Reorganization Agreement required from any landlord, licensor or other
non-governmental party which has granted rights to GSSC, SBM or SBL in order to
avoid forfeiture
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 34
<PAGE> 354
or impairment of such rights. Neither GSSC, SBM nor SBL is aware of any facts,
circumstances or reasons why such Government Approvals should not be
forthcoming or which would prevent such approvals from being obtained.
5.5 Compliance With Law. GSSC and all GSSC Subsidiaries
hold all licenses, franchises, permits and authorizations necessary for the
lawful conduct of their respective businesses, and GSSC, SBM and SBL as the
owners of the Realty have complied in all material respects with all applicable
statutes, laws, ordinances, rules and regulations of all federal, state and
local governmental bodies, agencies and subdivisions having, asserting or
claiming jurisdiction over GSSC's, SBM's or SBL's properties or over any other
part of GSSC's, SBM's or SBL's assets, liabilities or operations, the breach or
violation of which would have, individually or in the aggregate, a material
adverse effect on the condition (financial or other), affairs, business,
assets, or prospects of GSSC or any GSSC Subsidiary, taken as a whole. The
benefits of all of such licenses, franchises, permits and authorizations are in
full force and effect and may continue to be enjoyed by GSSC, SBM and SBL
subsequent to the Closing of the transactions contemplated herein without any
consent or approval. Neither GSSC nor any GSSC Subsidiary has received notice
of any proceeding for the suspension or revocation of any such license,
franchise, permit, or authorization and no such proceeding is pending or has
been threatened by any governmental authority.
5.6 Charter Documents. Included in Schedule 5.6 hereto
are true and correct copies of the Certificate of Incorporation and Bylaws of
GSSC and the Charter and Bylaws of SBM and SBL, respectively. The Certificate
of Incorporation and Bylaws of GSSC and the Charter and Bylaws of SBM and SBL,
as amended to date, are in full force and effect.
5.7 GSSC Financial Statements. Accompanying Schedule 5.7
hereto are true copies of the audited consolidated balance sheets of GSSC as of
December 31, 1993, the audited consolidated balance sheets of GSSC as of
December 31, 1992, and selected financial data for GSSC as of December 31,
1993, 1992 and 1991, and the related consolidated statements of income and
changes in stockholders' equity and cash flows of GSSC for the years ended
December 31, 1993, 1992 and 1991 (the "Audited Financial Statements of GSSC")
and the comparative interim (or annual) financial statements for any subsequent
quarter (or year) ending after December 31, 1993 and prior to the Closing Date.
Such financial statements (i) were (or will be) prepared from the books and
records of GSSC, SBM and SBL; (ii) were (or will be) prepared in accordance
with GAAP consistently applied; (iii) accurately present (or will present)
GSSC's consolidated
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 35
<PAGE> 355
financial condition and the consolidated results of its operations, changes in
stockholders' equity and cash flows at the relevant dates thereof and for the
periods covered thereby; (iv) in the opinion of GSSC do contain or reflect (or
will contain and reflect) all necessary adjustments and accruals for an
accurate presentation of GSSC's consolidated financial condition and the
consolidated results of GSSC's operations and cash flows as stated including
any amendments thereto for the periods covered by such financial statements;
(v) in the opinion of GSSC do contain and reflect (or will contain and reflect)
adequate provisions for loan losses, for ORE reserves and for all reasonably
anticipatable liabilities for all taxes (federal, state, local or foreign) with
respect to the periods then ended; and (vi) in the opinion of GSSC do contain
and reflect (or will contain and reflect) adequate provisions for all
reasonably anticipated liabilities for OPEB pursuant to FASB 106 and 112.
5.8 Absence of Certain Changes. Except as disclosed in
Schedule 5.8 or as provided for or contemplated in this Reorganization
Agreement, since December 31, 1993 (the "GSSC Balance Sheet Date") there has
not been:
(a) any transaction having a value in excess of
One Hundred Thousand Dollars ($100,000) by GSSC, SBM or SBL not in the ordinary
course of business and in conformity with past practice;
(b) any material adverse change in the business,
property, assets (including loan portfolios), liabilities (whether absolute,
accrued, contingent or otherwise), prospects, operations, liquidity, income,
condition (financial or otherwise) or net worth of GSSC, SBM or SBL;
(c) any damage, destruction or loss, whether or
not covered by insurance, which has had or may have a material adverse effect
on any of the properties, business or prospects of GSSC, SBM or SBL or their
future use and operation by GSSC, SBM or SBL;
(d) any acquisition or disposition by GSSC, SBM
or SBL of any property or asset of GSSC, SBM or SBL, whether real or personal,
having a fair market value, singularly or in the aggregate, in an amount
greater than Fifty Thousand Dollars ($50,000), except in the ordinary course of
business and in conformity with past practice or with respect to the
disposition of repossessed or foreclosed assets at fair value;
(e) any mortgage, pledge or subjection to lien,
charge or encumbrance of any kind on any of the respective properties or assets
of GSSC, SBM or SBL, except to secure
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 36
<PAGE> 356
extensions of credit in the ordinary course of business and in conformity with
past practice;
(f) any amendment, modification or termination of
any contract or agreement, relating to GSSC, SBM or SBL, to which GSSC, SBM or
SBL is a party which would have a material adverse effect upon the financial
condition or operations of GSSC, SBM or SBL;
(g) any increase in, or commitment to increase,
the compensation payable or to become payable to any officer, director,
employee or agent of GSSC, SBM or SBL, or any bonus payment or similar
arrangement made to or with any of such officers, directors, employees or
agents, other than routine increases made in the ordinary course of business
not exceeding the greater of ten percent (10%) per annum or $6,000 for any of
them individually;
(h) any incurring of, assumption of, or taking
of, by GSSC, SBM or SBL, any property subject to, any liability, except for
liabilities incurred or assumed or property taken subsequent to the GSSC
Balance Sheet Date in the ordinary course of business and in conformity with
past practice;
(i) except as described in the Audited Financial
Statements of GSSC and the interim financial statements of GSSC, any material
alteration in the manner of keeping the books, accounts or Records of GSSC, SBM
or SBL, or in the accounting policies or practices therein reflected, except as
may be required by GAAP or the Federal Reserve or the FDIC;
(j) any release or discharge of any obligation or
liability of any person or entity related to or arising out of any loan made by
GSSC, SBM or SBL of any nature whatsoever, except in the ordinary course of
business and in conformity with past practice; or
(k) to the best of GSSC's, SBM's and SBL's
knowledge, information and belief any loan (except credit card loans, passbook
loans or home loans) by GSSC, SBM or SBL to any policy Officer, director or
known 2% stockholder of GSSC, SBM or SBL or any Affiliate of GSSC, SBM or SBL;
or to any member of the immediate family of such Officer, director or 2%
stockholder of GSSC, SBM or SBL or any Affiliate of GSSC; or to any Person in
which such Officer, director or 2% stockholder directly or indirectly owns
beneficially or of record ten percent (10%) or more of any class of equity
securities in the case of a corporation, or of any equity interest, in the case
of a partnership or other non-corporate entity; or to any trust or estate in
which such Officer, director or 2% stockholder has a
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 37
<PAGE> 357
ten percent (10%) or more beneficial interest; or as to which such Officer,
director or 2% stockholder serves as a trustee or in a similar capacity. As
used in this Section 5.8, "Officer" shall refer to a person who holds the title
of chairman, president, executive vice president, senior vice president,
controller, secretary, cashier or treasurer or who performs the normal duties
of such officer whether or not he or she is compensated for such service or has
an official title.
5.9 Deposits. None of SBM's or SBL's Deposits is a
Brokered Deposit or, with respect to SBM's or SBL's rights to the Deposits,
subject to any encumbrance, legal restraint or other legal process. To the
best of the knowledge, information and belief of GSSC, SBM and SBL, except as
set forth in Schedule 5.9, no portion of the Deposits represents a Deposit by
any Affiliate of GSSC, SBM or SBL.
5.10 Properties. Except as described in Schedule 5.10
hereto or in the opinion of GSSC, SBM and SBL adequately reserved against in
the Audited Financial Statements of GSSC, GSSC and each GSSC Subsidiary has
good and marketable title free and clear of all material liens, encumbrances,
charges, defaults, or equities of whatever character to all of the material
properties and assets, tangible or intangible, reflected in the Audited
Financial Statements of GSSC as being owned by GSSC or any GSSC Subsidiary as
of the dates thereof. All buildings, and all fixtures, equipment, and other
property and assets that are material to the business of GSSC and its
Subsidiaries on a consolidated basis, held under leases or subleases by GSSC or
any GSSC Subsidiary, are held under valid instruments enforceable in accordance
with their respective terms (except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or other laws
affecting the enforcement of creditors' rights generally, and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceedings
may be pending).
5.11 GSSC Subsidiaries. Schedule 5.11 hereto lists all of
the active and inactive GSSC Subsidiaries (including any SBM or SBL Subsidiary)
as of the date of this Reorganization Agreement and describes generally the
business activities conducted, or permitted to be conducted, by each GSSC
Subsidiary. No equity securities of any of the GSSC Subsidiaries are or may
become required to be issued (other than to GSSC, SBM or SBL) by reason of any
options, warrants, scrip, rights to subscribe to, calls, or commitments of any
character whatsoever relating to, or securities or rights convertible into or
exchangeable for, shares of the capital stock of any GSSC Subsidiary, and there
are no contracts, commitments, understandings, or arrangements by which
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 38
<PAGE> 358
any GSSC Subsidiary is bound to issue (other than to GSSC) any additional
shares of its capital stock or options, warrants, or rights to purchase or
acquire any additional shares of its capital stock. All of the shares of
capital stock of each GSSC Subsidiary held by GSSC or by any GSSC Subsidiary
are fully paid and nonassessable and are owned by GSSC or such GSSC Subsidiary
free and clear of any claim, lien, or encumbrance of any nature whatsoever,
whether perfected or not.
5.12 Condition of Fixed Assets and Equipment. Except as
disclosed in Schedule 5.12 hereto, each item of GSSC's or SBM's or SBL's fixed
assets and equipment having a net book value in excess of Twenty Thousand
Dollars ($20,000) included in the Fixed Assets is in good operating condition
and repair, normal wear and tear excepted.
5.13 Tax Matters. Except as described in Schedule 5.13
hereto:
(a) all federal, state, local, and foreign tax
returns required to be filed by or on behalf of GSSC and each GSSC Subsidiary
have been timely filed or requests for extensions have been timely filed,
granted, and have not expired for periods ended on or before the date of this
Reorganization Agreement, and all returns filed are, and the information
contained therein is, complete and accurate in all material respects. All tax
obligations reflected in such returns have been paid. As of the date of this
Reorganization Agreement, there is no audit examination, deficiency, or refund
litigation or matter in controversy with respect to any taxes that might result
in a determination materially adverse to GSSC or any GSSC Subsidiary except as
fully reserved for in the Audited Financial Statements of GSSC. All taxes,
interest, additions, and penalties due with respect to completed and settled
examinations or concluded litigation have been paid.
(b) Neither GSSC nor any GSSC Subsidiary has
executed an extension or waiver of any statute of limitations on the assessment
or collection of any tax due that is currently in effect.
(c) To the best of the knowledge, information and
belief of GSSC, SBM and SBL, adequate provision for any federal, state, local,
or foreign taxes due or to become due for GSSC and all GSSC Subsidiaries for
all periods through and including December 31, 1993, has been made and is
reflected on the December 31, 1993 financial statements included in the Audited
Financial Statements of GSSC, and have been and will continue to be made with
respect to periods ending after December 31, 1993.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 39
<PAGE> 359
(d) Deferred taxes of GSSC and each GSSC Subsidiary
have been and will be provided for in accordance with GAAP.
(e) To the best knowledge of GSSC, SBM and SBL,
neither the Internal Revenue Service nor any foreign, state, local or other
taxing authority is now asserting or threatening to assert against GSSC or any
GSSC Subsidiary any deficiency or claim for additional taxes, or interest
thereon or penalties in connection therewith. All material income, payroll,
withholding, property, excise, sales, use, franchise and transfer taxes, and
all other taxes, charges, fees, levies or other assessments, imposed upon GSSC
by the United States or by any state, municipality, subdivision or
instrumentality of the United States or by any other taxing authority,
including all interest, penalties or additions attributable thereto, which are
due and payable by GSSC or any GSSC Subsidiary, either have been paid in full,
or have been properly accrued and reflected in the Audited Financial Statements
of GSSC referred to in Section 5.7 of this Reorganization Agreement.
5.14 Litigation. Except as set forth in Schedule 5.14
hereto or otherwise reflected in the Audited Financial Statements of GSSC,
there is no action, suit or proceeding pending against GSSC or any GSSC
Subsidiary, or to the best knowledge of GSSC, SBM or SBL threatened against or
affecting GSSC, any GSSC Subsidiary or any of their assets, before any court or
arbitrator or any governmental body, agency or official (i) that would, if
decided against GSSC or the GSSC Subsidiary, have a material adverse impact on
the business, properties, assets, liabilities, condition (financial or other)
or prospects of GSSC, SBM or SBL taken as a whole and that are not reflected in
the Audited Financial Statements of GSSC or (ii) by or on behalf of any
employee employed or formerly employed by GSSC or any GSSC Subsidiary.
5.15 Hazardous Materials. All statements made by GSSC and
any GSSC Subsidiaries in this Section 5.15 are made to the best of the
knowledge, information and belief of GSSC and such GSSC Subsidiaries. For
purposes of this Section 5.15, the term "knowledge, information and belief"
means that of the directors and officers of GSSC and all GSSC Subsidiaries and
includes their actual knowledge as well as that which could have been obtained
by a reasonably prudent person in exercise of reasonable inquiry; provided,
however, such inquiry shall not be construed to require a Phase I environmental
survey, unless under the specific facts and circumstances a reasonably prudent
person would do so.
(a) GSSC and all GSSC Subsidiaries have obtained
all permits, licenses and other authorizations which are required
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 40
<PAGE> 360
to be obtained by GSSC or its Subsidiaries with respect to the Property (as
defined herein) under all Applicable Environmental Laws (as defined herein)
except to the extent that failure to have such permits, licenses, or
authorizations would not have a material adverse effect on the consolidated
financial condition, operations, business or prospects of GSSC or any GSSC
Subsidiary. All Property controlled, directly or indirectly, by GSSC or any
GSSC Subsidiary is in compliance with the terms and conditions of all of such
permits, licenses and authorizations, and is also in compliance with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any Applicable Environmental
Laws or in any regulation, code, plan, order, decree, judgment, injunction,
notice or demand letter issued, entered, promulgated or approved thereunder,
except as described in detail in Schedule 5.15(a) hereto and except to the
extent that failure to have such permits, licenses, or authorizations would not
have a material adverse effect on the consolidated financial condition,
operations, business or prospects of GSSC or any GSSC Subsidiary. For purposes
hereof, the following terms shall have the following meanings:
"APPLICABLE ENVIRONMENTAL LAWS" shall mean all federal, state,
local and municipal environmental laws, rules or regulations to the extent
applicable to the Property, including, but not limited to, (a) the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section 9601 et seq. ("CERCLA"); (b) the Resource Conservation and Recovery
Act, 42 U.S.C. Section 6901 et seq. "RCRA"; (c) the Federal Water Pollution
Control Act, 33 U.S.C. Section 1251 et seq.; (d) the Clean Air Act, 42 U.S.C.
Section 7401 et seq.; (e) the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1471 et seq.; (f) the Toxic Substances Control Act, 15 U.S.C. Section
2601 et seq.; (g) the Emergency Planning and Community Right-to-Know Act, 42
U.S.C. Section 11001 et seq.; (h) the National Environmental Policy Act, 42
U.S.C. Section 4321 et seq.; (i) the Rivers and Harbours Act of 1899, 33 U.S.C.
Section 401 et seq.; (j) the Occupational Safety and Health Act, 29 U.S.C.
Section 651 et seq.; (k) the Safe Drinking Water Act, 42 U.S.C. Section 300(f)
et seq.; (l) the Oil Pollution Act of 1990, 33 U.S.C. Section 01 et seq.; (m)
the Hazardous Waste Management Act of 1977, Sections 68-46-101 et seq. of the
Tennessee Code; (n) the Hazardous Waste Management Act of 1983, Sections
68-46-201 et seq. of the Tennessee Code; (o) the Hazardous Waste Reduction Act
of 1990, Sections 68-46-301 et seq. of the Tennessee Code; (p) the Petroleum
Underground Storage Tank Act, Sections 68-58-101 et seq. of the Tennessee Code;
(q) any amendments to the foregoing Acts as adopted from time to time on or
before the Closing; (r) all Mississippi and Louisiana laws comparable to the
laws set forth above; and (s) any rule, regulation, order, injunction,
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 41
<PAGE> 361
judgment, declaration or decree implementing or interpreting any of the
foregoing Acts or laws, as amended.
"HAZARDOUS SUBSTANCES" shall mean any substance, material,
waste, or pollutant that is now (or prior to the Closing) listed, defined,
characterized or regulated as hazardous, toxic or dangerous under or pursuant
to any statute, law, ordinance, rule or regulation of any federal, state,
regional, county or local governmental authority having jurisdiction over the
Property of GSSC or any GSSC Subsidiary or its use or operation, including,
without limitation, (a) any substance, material, element, compound, mixture,
solution, waste, chemical or pollutant listed, defined, characterized or
regulated as hazardous, toxic or dangerous under any Applicable Environmental
Laws, (b) petroleum, petroleum derivatives or by-products, and other
hydrocarbons, (c) polychlorinated biphenyls (PCBs), asbestos and urea
formaldehyde, and (d) radioactive substances, materials or waste.
"PROPERTY" shall be deemed to include, but shall not be
limited to, all real property owned, controlled, leased or held by GSSC or a
GSSC Subsidiary, in whole or in part, solely or in a joint venture or other
business arrangement, either for operational or investment purposes, and
whether assigned, purchased, or obtained through foreclosure (or similar
action) or in satisfaction of debts previously contracted.
(b) In addition, except as set forth in Schedule
5.15(b) hereto:
(i) No notice, notification, demand,
request for information, citation, summons or order has been issued,
no complaint has been filed, no penalty has been assessed and no
investigation or review is pending by any governmental or other entity
with respect to any alleged failure by GSSC or any GSSC Subsidiary to
have any permit, license or authorization required in connection with
the conduct of the business of GSSC or any GSSC Subsidiary or with
respect to any generation, treatment, storage, recycling,
transportation, release or disposal, or any release as defined in 42
U.S.C. Section 9601(22) ("Release"), of any Hazardous Substances
generated by GSSC or any Affiliate of GSSC at the Property;
(ii) None of the Property has received
or held any Hazardous Substances in such amount and in such manner as
to constitute a violation of the Applicable Environmental Laws, and no
Hazardous Substances have been Released or disposed of on, in or under
any of the Property during or prior to GSSC's or any GSSC Subsidiary's
occupancy
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 42
<PAGE> 362
thereof, or during or prior to the occupancy thereof by any assignee
or sublessee of GSSC or any GSSC Subsidiary, except in compliance with
all Applicable Environmental Laws;
(iii) There are no Hazardous Substances
being stored at any Property or located in, on or upon, any Property
(including the subsurface thereof) or installed or affixed to
structures or equipment on the Property; and there are no underground
storage tanks for Hazardous Substances, active or abandoned, at any
Property; and
(iv) No Hazardous Substances have been
Released in a reportable quantity, where such a quantity has been
established by statute, ordinance, rule, regulation or order, at, on
or under any Property.
(c) Neither GSSC nor any Affiliate of GSSC has
transported or arranged for the transportation of any Hazardous Substances to
any location which is listed on the National Priorities List under CERCLA,
listed for possible inclusion on the National Priorities List by the
Environmental Protection Agency in the CERCLA Information System ("CERCLIS") or
on any similar state list or which is the subject of federal, state or local
enforcement actions or other investigations which may lead to claims against
the owner of the Property for cleanup costs, remedial work, damages to natural
resources or for personal injury claims, including, but not limited to, claims
under CERCLA.
(d) Except as set forth in Schedule 5.15(d), no
Hazardous Substances have been generated, recycled, treated, stored, disposed
of or Released by, GSSC or any Affiliate of GSSC in violation of Applicable
Environmental Laws.
(e) No oral or written notification of a Release
of Hazardous Substances has been filed by or on behalf of GSSC or any Affiliate
of GSSC relating to the Property and no Property is listed or proposed for
listing on the National Priority List promulgated pursuant to CERCLA, on
CERCLIS or on any similar state list of sites requiring investigation or
clean-up.
(f) There are no liens arising under or pursuant
to any Applicable Environmental Laws on any Property, and no government actions
have been taken or, to the best knowledge of GSSC, threatened, or are in
process which could subject any of such properties to such liens and none of
the Property would be required to place any notice or restriction relating to
the presence of Hazardous Substances at any Property in any deed to such
Property.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 43
<PAGE> 363
(g) Except as described in Schedule 5.15(g)
hereto, there have been no environmental investigations, studies, audits,
tests, reviews or other analyses conducted by or which are in the possession of
GSSC or any Affiliate of GSSC in relation to any Property, which have not been
made available to UPC.
(h) Neither GSSC, SBM nor SBL is aware of any
facts which might suggest that GSSC or any GSSC Subsidiary has engaged in any
management practice with respect to any of its past or existing borrowers which
could reasonably be expected to subject GSSC or any GSSC Subsidiary or the
Property to any liability, either directly or indirectly, under the principles
of law as set forth in United States v. Fleet Factors Corp., 901 F.2d 1550
(11th Cir. 1990).
5.16 Insurance. Except as described in Schedule 5.16
hereto, GSSC, SBM and SBL have paid all material amounts due and payable under
any insurance policies and guaranties applicable to GSSC, SBM and SBL and
GSSC's, SBM's and SBL's assets and operations; all such insurance policies and
guaranties are in full force and effect; GSSC, SBM and SBL and all of GSSC's,
SBM's and SBL's material assets, businesses, Realty and other material
properties are insured against fire, casualty, theft, liability, loss,
interruption, title and such other events against which it is customary to
insure, all such insurance policies being in amounts that are adequate and
consistent with past practice and experience; and the fidelity bonds in effect
as to which GSSC, SBM or SBL is a named insured are believed by GSSC to be
sufficient.
5.17 Labor and Employment Matters. Except as reflected
in Schedule 5.17 hereto, there is no (i) collective bargaining agreement or
other labor agreement to which GSSC or any GSSC Subsidiary is a party or by
which any of them is bound; (ii) employment, profit sharing, deferred
compensation, bonus, stock option, purchase, retainer, consulting, retirement,
welfare or incentive plan or contract to which GSSC or any GSSC Subsidiary is a
party or by which it is bound; or (iii) plan or agreement under which "fringe
benefits" (including, but not limited to, vacation plans or programs, sick
leave plans or programs and related benefits) are afforded any of the employees
of GSSC or any GSSC Subsidiary. No party to any such agreement, plan or
contract is in default with respect to any material term or condition thereof,
nor has any event occurred which, through the passage of time or the giving of
notice, or both, would constitute a default thereunder or would cause the
acceleration of any obligation of any party thereto. Neither GSSC nor any GSSC
Subsidiary has received notice from any governmental agency of any alleged
violation of applicable laws that remains
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 44
<PAGE> 364
unresolved respecting employment and employment practices, terms and conditions
of employment and wages and hours. GSSC and each GSSC Subsidiary have complied
in all material respects with all applicable laws, rules and regulations
relating to the employment of labor, including those related to its employment
practices, employee disabilities, wages, hours, collective bargaining and the
payment and withholding of taxes and other sums as required by the appropriate
governmental authorities, except for failures to comply with such laws which
would not have a material adverse effect on the business or operations of GSSC
and the GSSC Subsidiaries taken as a whole, and GSSC and each GSSC Subsidiary
have withheld and paid to the appropriate governmental authorities or are
holding for payment not yet due to such authorities, all amounts required to be
withheld from the employees of GSSC and each GSSC Subsidiary and are not liable
for any arrears of wages, taxes, penalties or other sums for failure to comply
with any of the foregoing. Except as set forth in Schedule 5.17, there is no:
unfair labor practice complaint against GSSC or any GSSC Subsidiary pending
before the National Labor Relations Board or any state or local agency; pending
labor strike or other labor trouble affecting GSSC or any GSSC Subsidiary;
labor grievance pending against GSSC or any GSSC Subsidiary; pending
representation question respecting the employees of GSSC or any GSSC
Subsidiary; pending arbitration proceedings arising out of or under any
collective bargaining agreement to which GSSC or any GSSC Subsidiary is a
party, or to the best knowledge of GSSC, any basis for which a claim may be
made under any collective bargaining agreement to which GSSC or any GSSC
Subsidiary is a party.
5.18 Records and Documents. The Records of SBM are and
will be sufficient to enable SBM to continue conducting its business as a
Mississippi state banking corporation under similar standards as SBM has
heretofore conducted such business. The Records of SBL are and will be
sufficient to enable SBL to continue conducting its business as a Louisiana
state banking corporation under similar standards as SBL has heretofore
conducted such business.
5.19 Capitalization of GSSC. The authorized capital stock
of GSSC consists of 15,000,000 shares of common stock having a par value of
$1.00 per share (the "GSSC Common Stock"), no shares of preferred stock (the
"GSSC Preferred Stock") and no other class of equity security. As of the date
of this Reorganization Agreement, a total of 9,492,975 shares of GSSC Common
Stock were issued and outstanding, no shares of GSSC Common Stock were held by
GSSC as treasury stock and no shares of GSSC Preferred Stock were issued and
outstanding. All of the outstanding GSSC Common Stock is validly issued,
fully-paid and nonassessable and has not been issued in violation of any
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 45
<PAGE> 365
preemptive rights of any GSSC Stockholder. Except as described in Section 2.7
of this Reorganization Agreement or as described on Schedule 5.19 hereto, as of
the date hereof, there are no outstanding securities or other obligations which
are convertible into GSSC Common Stock or into any other equity or debt
security of GSSC, and there are no outstanding options, warrants, rights,
scrip, rights to subscribe to, calls or other commitments of any nature which
would entitle the holder, upon exercise thereof, to be issued GSSC Common Stock
or any other equity or debt security of GSSC. Accordingly, immediately prior
to the Effective Time of the Merger, there will be not more than 9,600,000
shares of GSSC Common Stock issued and outstanding. Except as set forth in
Schedule 5.19 hereto, GSSC owns and is the beneficial and record holder of, and
has good and freely transferable title to, all of the 3,465,440 shares of SBM
Common Stock outstanding, and recorded on the books and Records of SBM as being
held in its name, free and clear of all liens, charges or encumbrances, and
such stock is not subject to any voting trusts, agreements or similar
arrangements or other claims which could affect the ability of GSSC to freely
vote such stock in support of the transactions contemplated herein. Except as
set forth in Schedule 5.19 hereto, GSSC owns and is the beneficial and record
holder of, and has good and freely transferable title to, all of the 5,000,000
shares of SBL Common Stock outstanding, and recorded on the books and Records
of SBL as being held in its name, free and clear of all liens, charges or
encumbrances, and such stock is not subject to any voting trusts, agreements or
similar arrangements or other claims which could affect the ability of GSSC to
freely vote such stock in support of the transactions contemplated herein.
5.20 Sole Agreement. Except as described in Schedule 5.20
hereto, with the exception of this Reorganization Agreement, neither GSSC, SBM,
SBL nor any Subsidiary of any of them has been or is a party to: any letter of
intent or agreement to merge, to consolidate, to sell or purchase assets (other
than in the normal course of its business) or to any other agreement which
contemplates the involvement of GSSC, SBM or SBL or any Subsidiary of either
(or any of their assets) in any business combination of any kind; or any
agreement obligating GSSC, SBM or SBL to issue or sell or authorize the sale or
transfer of GSSC Common Stock or the capital stock of SBM or SBL. Except as
described in Schedule 5.20 hereto, there are no (nor will there be at the
Effective Time of the Merger any) shares of capital stock or other equity
securities of GSSC outstanding, except for shares of GSSC Common Stock
presently issued and outstanding, and there are no (nor will there be at the
Effective Time of the Merger any) outstanding options, warrants, scrip, rights
to subscribe to, calls or commitments of any character whatsoever relating to,
or securities or rights convertible into or
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 46
<PAGE> 366
exchangeable for, shares of the capital stock of GSSC, SBM or SBL, or
contracts, commitments, understandings, or arrangements by which GSSC, SBM or
SBL is or may be bound to issue additional shares of their capital stock or
options, warrants, or rights to purchase or acquire any additional shares of
their capital stock. There are no (nor will there be at the Effective Time of
the Merger any) contracts, commitments, understandings, or arrangements by
which GSSC or any GSSC Subsidiary is or may be bound to transfer or issue to
any third party any shares of the capital stock of any GSSC Subsidiary, and
there are no (nor will there be at the Effective Time of the Merger any)
contracts, agreements, understandings or commitments relating to the right of
GSSC to vote or to dispose of any such shares.
5.21 Disclosure. The information concerning, and
representations and warranties made by, GSSC, SBM and SBL set forth in this
Reorganization Agreement, or in the schedules of GSSC hereto, or in any
document, statement, certificate or other writing furnished or to be furnished
by GSSC, SBM or SBL to UPC and INTERIM pursuant hereto, does not contain any
untrue statement of a material fact or omit and will not omit to state a
material fact required to be stated herein or therein necessary to make the
statements and facts contained herein or therein, in light of the circumstances
in which they were or are made, not false or misleading. Copies of all
documents heretofore or hereafter delivered or made available to UPC or INTERIM
by GSSC, SBM or SBL pursuant hereto were or will be complete and accurate
copies of such documents.
5.22 Absence of Undisclosed Liabilities. Except as described
in Schedule 5.22 hereto, to the best of the knowledge, information and belief
of GSSC, SBM and SBL neither GSSC nor any GSSC Subsidiary has any obligation or
liability (contingent or otherwise) that is material to the financial condition
or operations of GSSC or any GSSC Subsidiary, or that, when combined with all
similar obligations or liabilities, would be material to the financial
condition or operations of GSSC or any GSSC Subsidiary (i) except as disclosed
in the Audited Financial Statements of GSSC delivered to UPC prior to the date
of this Reorganization Agreement or (ii) except obligations or liabilities
incurred in the ordinary course of its business consistent with past practices
or (iii) except as contemplated under this Reorganization Agreement and the
schedules of GSSC hereto. Since December 31, 1993, neither GSSC nor any GSSC
Subsidiary has incurred or paid any obligation or liability which would be
material to the financial condition or operations of GSSC or such GSSC
Subsidiary, except for obligations paid by GSSC, SBM or SBL under the terms of
this Reorganization Agreement (all such obligations or payments are fully
described by GSSC in Schedule 5.22 hereto) or in connection with transactions
made by
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 47
<PAGE> 367
it in the ordinary course of its business consistent with past practices, laws
and regulations applicable to GSSC or any GSSC Subsidiary.
5.23 Allowance for Possible Loan or ORE Losses. To the
best of the knowledge, information and belief of GSSC, SBM and SBL, the
allowance for possible loan losses shown on the Audited Financial Statements of
GSSC is (with respect to periods ended on or before December 31, 1993) or will
be (with respect to periods ending subsequent to December 31, 1993) adequate in
all respects to provide for anticipated losses inherent in Loans outstanding or
for commitments to extend credit or similar off-balance- sheet items (including
accrued interest receivable) as of the dates thereof.
The allowance for possible losses on other real estate ("ORE") shown
on the Audited Financial Statements of GSSC is (with respect to periods ended
on or before December 31, 1993) or will be (with respect to periods ending
subsequent to December 31, 1993) adequate in all respects to provide for
anticipated losses inherent in ORE owned or held by GSSC or any GSSC Subsidiary
and the net book value of ORE on the Balance Sheet of the Audited Financial
Statements of GSSC is the fair value of the ORE determined in accordance with
Statement of Position 92-3.
5.24 Compliance with Laws. GSSC and each GSSC Subsidiary:
(a) To the best of the knowledge, information and
belief of the management of GSSC and each GSSC Subsidiary, is in compliance
with all laws, rules, regulations, reporting and licensing requirements, and
orders applicable to its business or employees conducting its business
(including, but not limited to, those relating to consumer disclosure and
currency transaction reporting) the breach or violation of which would or could
reasonably be expected to have a material adverse effect on the financial
condition or operations of GSSC or any GSSC Subsidiary, or which would or could
reasonably be expected to subject GSSC or any GSSC Subsidiary or any of its
directors or officers to civil money penalties; and
(b) Has received no notification or communication
from any agency or department of federal, state, or local government or any of
the Regulatory Authorities, or the staff thereof (i) asserting that GSSC or any
GSSC Subsidiary is not in compliance with any of the statutes, rules,
regulations, or ordinances which such governmental authority or Regulatory
Authority enforces, which, as a result of such noncompliance, would result in a
material adverse impact on GSSC or any GSSC Subsidiary, (ii) threatening to
revoke any license, franchise, permit, or governmental authorization which is
material to the
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 48
<PAGE> 368
financial condition or operations of GSSC or any GSSC Subsidiary, or (iii)
requiring GSSC or any GSSC Subsidiary to enter into a cease and desist order,
consent, agreement, or memorandum of understanding.
5.25 Employee Benefit Plans.
(a) GSSC has previously provided to UPC true and
complete copies of each "employee pension benefit plan," as defined in Section
3(2) of the Employee Retirement Income Security Act of 1974 ("ERISA") which, to
the best of its knowledge, is subject to any provision of ERISA and covers any
employee, whether active or retired, of GSSC or any GSSC Subsidiary or any
other entity which is a member of a controlled group or is under common control
with GSSC or its Subsidiaries in the manner defined and further described in
Section 414(b), (c), or (m) of the Internal Revenue Code. Such plans are
hereinafter referred to collectively as the "Employee Pension Benefit Plans",
and each such Employee Pension Benefit Plan is listed in Schedule 5.25(a)
hereto. GSSC has also provided to UPC true and complete copies of all trust
agreements, collective bargaining agreements, and insurance contracts related
to such Employee Pension Benefit Plans.
To the best knowledge of GSSC and its Subsidiaries,
each Employee Pension Benefit Plan which is intended to be qualified under
Section 401(a) of the Internal Revenue Code is so qualified and each trust
forming a part thereof is exempt from tax pursuant to Section 501(a) of the
Internal Revenue Code. Copies of the latest determination letters concerning
the qualified status of each Employee Pension Benefit Plan which is intended to
be qualified under Section 401(a) of the Internal Revenue Code have been
provided to UPC. Requests for determination letters relating to amendments
required to cause such Employee Pension Benefit Plans to be in compliance with
the Tax Equity and Fiscal Responsibility Act of 1982, the Deficit Reduction Act
of 1984 and the Retirement Equity Act of 1984 were timely filed and have been
received by GSSC and its Subsidiaries. Requests for determination letters
relating to any subsequent amendments to such plans which are currently pending
have been provided to UPC. All such requests were timely and properly filed
and appropriate notice of any such filing was timely and properly provided to
affected plan participants and beneficiaries.
To the best of the knowledge, information and belief
of GSSC, SBM and SBL, each of the Employee Pension Benefit Plans has been
operated in substantial conformity with the written provisions of the
applicable plan documents which have been delivered to UPC and in substantial
compliance with the
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 49
<PAGE> 369
requirements prescribed by all statutes, orders, rules, and regulations
including, but not limited to, ERISA and the Internal Revenue Code, which are
applicable to such Employee Pension Benefit Plans. To the extent that the
operation of an Employee Pension Benefit Plan has deviated from the written
provisions of the plan, such operational deviations have been disclosed in
Schedule 5.25(a) hereto. All such deviations have been made in conformity with
applicable laws, including ERISA and the Internal Revenue Code.
With respect to Employee Pension Benefit Plans which
are subject to the annual report requirement of ERISA Section 103 or to the
annual return requirement of Internal Revenue Code Section 6047, all required
annual reports and annual returns, or such other documents as may have been
required as alternative means of compliance with the annual report requirement,
have been timely filed. Copies of all such annual returns/reports, including
all attachments and Schedules, for the three (3) plan years immediately
preceding the current date have been delivered to UPC. With respect to
Employee Pension Benefit Plans which complied with the annual return
requirement by satisfaction of an alternate compliance method, any documents
required to be filed with the Department of Labor in satisfaction of such
requirements have been provided to UPC.
With respect to all Employee Pension Benefit Plans
which are subject to the summary plan description requirement of ERISA Section
102, all such summary plan descriptions as were required to be filed with the
Department of Labor and distributed to participants and beneficiaries have been
timely filed and distributed. Copies of all such summary plan descriptions
have been delivered to UPC. No Employee Pension Benefit Plan constitutes a
"multiemployer plan" as defined in Section 4001(a)(3) of ERISA.
No Employee Pension Benefit Plan subject to Part III
of Subtitle B of ERISA or Section 412 of the Internal Revenue Code, or both,
has incurred an "accumulated funding deficiency" within the meaning of Internal
Revenue Code Section 412, whether or not waived. All required contributions to
all Employee Pension Benefit Plans have been timely made. Any penalties or
taxes which have been incurred by GSSC or its Subsidiaries or by any Employee
Pension Benefit Plan with respect to the timing or amount of payment of any
contribution to an Employee Pension Benefit Plan have been timely paid. The
limitations of Internal Revenue Code Section 415 have not been exceeded with
respect to any Employee Pension Benefit Plan or combination of such plans to
which such limitations apply.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 50
<PAGE> 370
No "reportable event" (as described in Section
4043(b) of ERISA) has occurred with respect to any Employee Pension Benefit
Plan. No Employee Pension Benefit Plan or any trust created thereunder, nor
any "disqualified person" with respect to the plan (as defined in Section 4975
of the Internal Revenue Code), has engaged in a "prohibited transaction", as
such term is defined in Section 4975 of the Internal Revenue Code, which could
subject such Employee Pension Benefit Plan, any such trust or any such
disqualified person (other than a person for whom neither GSSC nor any GSSC
Subsidiary is directly or indirectly responsible) to liability under Title I of
ERISA or to the imposition of any tax under Section 4975 of the Internal
Revenue Code.
No condition exists with regard to any Employee
Pension Benefit Plan which constitutes grounds for the termination of such plan
pursuant to Section 4042 of ERISA.
The fair market value of the assets of any Employee
Pension Benefit Plan which is subject to Title IV of ERISA (excluding for these
purposes any accrued but unpaid contributions) exceeded the present value of
all benefits accrued under any such plan, determined on a termination basis
using the assumptions established by the Pension Benefit Guaranty Corporation
as in effect on such date. Neither GSSC nor its Subsidiaries have incurred any
liability under Title IV of ERISA arising in connection with the termination
of, or complete or partial withdrawal from, any plan covered or previously
covered by Title IV of ERISA. The termination of any Internal Revenue Code
Section 401(a) qualified Employee Pension Benefit Plan previously terminated by
GSSC or any GSSC Subsidiary did not adversely affect the qualification of such
Employee Pension Benefit Plan. The distribution of the assets of any such
Employee Pension Benefit Plan was made or is currently being made in conformity
with the requirements of that Employee Pension Benefit Plan and of applicable
legal requirements and has not resulted in, will not result in, and is
reasonably not anticipated to result in the assessment of any tax, penalty, or
excise tax against such pension plan, its related trusts, the fiduciary and
administrators of the Employee Pension Benefit Plan, GSSC or its Subsidiaries,
or any disqualified person (as defined in Internal Revenue Code Section 4975)
with respect to the Employee Pension Benefit Plan.
Except as disclosed in Schedule 5.25(a) hereto, all
Employee Pension Benefit Plans were in effect for substantially all of calendar
year 1993. There has been no material amendment of any such plans (other than
amendments required to comply with applicable law) or material increase in the
cost of maintaining such plans or providing benefits
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 51
<PAGE> 371
thereunder on or after the last day of the plan year which ended in calendar
year 1993 for each such Employee Pension Benefit Plan.
GSSC has provided to UPC copies of the annual
actuarial valuation or allocation report for each Employee Pension Benefit Plan
for the three (3) plan years for such plan immediately preceding the current
date. With regard to Employee Pension Benefit Plans which are not intended to
be qualified under Section 401(a) of the Internal Revenue Code, copies of
financial statements or reports containing information regarding the expense of
maintaining any such Employee Pension Benefit Plan for the three (3) plan years
preceding the current date have been delivered to UPC.
(b) GSSC has furnished to UPC true and complete copies of
each "Employee Welfare Benefit Plan" as defined in Section 3(1) of ERISA,
which, to the best of its knowledge, is subject to any provision of ERISA and
covers any employee, whether active or retired, of GSSC or any GSSC Subsidiary
or members of a controlled group or entities under common control with GSSC or
its Subsidiaries in the manner defined and further described in Section 414(b),
(c), or (m) of the Internal Revenue Code. Such plans are hereinafter referred
to collectively as the "Employee Welfare Benefit Plans", and each such Employee
Welfare Benefit Plan is listed in Schedule 5.25(b) hereto.
GSSC has also provided to UPC true and complete
copies of documents establishing all funding instruments for such Employee
Welfare Benefit Plans, including but not limited to, trust agreements,
cafeteria plans (pursuant to Internal Revenue Code Section 125), and voluntary
employee beneficiary associations (pursuant to Internal Revenue Code Section
501(c)(9)). Each of the Employee Welfare Benefit Plans has been operated in
substantial conformity with the written provisions of the plan documents which
have been delivered to UPC and in compliance with the requirements prescribed
by all statutes, orders, rules, and regulations including, but not limited to,
ERISA and the Internal Revenue Code, which are applicable to such Employee
Welfare Benefit Plans. Any deviation in the operation of such plans from the
requirements of the plan documents or of applicable laws have been listed in
Schedule 5.25(b) hereto. GSSC has provided any notification required by law to
any participant covered under any Employee Welfare Benefit Plan which has
failed to comply with the requirements of any Internal Revenue Code section
which results in the imposition of a tax on benefits provided to such
participants under such plan.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 52
<PAGE> 372
With respect to all Employee Welfare Benefit Plans
which are subject to the annual report requirement of ERISA Section 103 or to
the annual return requirement of Internal Revenue Code Section 6039D, all
annual reports and annual returns as were required to be filed pursuant to such
sections have been timely filed. Copies of all such annual returns/reports,
including all attachments and Schedules, for the three (3) plan years
immediately preceding the current date for all plans subject to such
requirements have been delivered to UPC. With respect to all Employee Welfare
Benefit Plans which are subject to the summary plan description requirement of
ERISA Section 102, all such summary plan descriptions as were required to be
filed with the Department of Labor and distributed to participants and
beneficiaries have been timely filed and distributed. Copies of all such
summary plan descriptions have been delivered to UPC.
Except as disclosed in Schedule 5.25(b) hereto, all
Employee Welfare Benefit Plans which are in effect were in effect for
substantially all of calendar year 1993. Except as disclosed in Schedule
5.25(b) hereto, there has been with respect to such Employee Welfare Benefit
Plans no material amendment thereof or material increase in the cost thereof or
benefits payable thereunder on or after December 31, 1993.
To the best of the knowledge, information and belief
of GSSC, SBM and SBL, no Employee Welfare Benefit Plan or any trust created
thereunder, nor any "party in interest" with respect to the plan (as defined in
Section 3(14) of ERISA), has engaged in a "prohibited transaction", as such
term is defined in Section 406 of ERISA, which could subject such Employee
Welfare Benefit Plan, any such trust, or any party in interest (other than a
person for whom neither GSSC nor any GSSC Subsidiary is directly or indirectly
responsible) to the imposition of a penalty for such prohibited transaction
under Section 502(i) of ERISA. The Department of Labor has not assessed any
such penalty or served notice to GSSC or any of its Subsidiaries that such a
penalty may be imposed upon any Employee Welfare Benefit Plan.
Neither GSSC nor any GSSC Subsidiary has failed to
make any contribution to, or pay any amount due and owing by GSSC or an GSSC
Subsidiary under the terms of, an Employee Welfare Benefit Plan. Except as
disclosed in Section 5.25(b) hereto, no claims have been incurred with respect
to any Employee Welfare Benefit Plan which may, to the best knowledge,
information and belief of GSSC, constitute a liability for GSSC or any GSSC
Subsidiary after the application of any insurance, trust or other funds which
are applicable to the payment of such claims.
Except as disclosed in Schedule 5.25(b) hereto, to
the best knowledge, information and belief of GSSC, no condition
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exists that could subject any Employee Welfare Benefit Plan or any person
(other than a person for whom neither GSSC nor any GSSC Subsidiary is directly
or indirectly responsible) to liabilities, damages, losses, taxes, or sanctions
that arise under Section 4980B of the Internal Revenue Code or Sections 601
through 608 of ERISA for failure to comply with the continuation health care
coverage requirements of ERISA Sections 601 through 608 and Internal Revenue
Code Section 4980B with respect to any current or former employee of GSSC or
any GSSC Subsidiary, or the beneficiaries of such employee.
(c) GSSC has furnished to UPC true and complete copies
and/or descriptions of each plan or arrangement maintained or otherwise
contributed to by GSSC or any GSSC Subsidiary which is not an Employee Pension
Benefit Plan and is not an Employee Welfare Benefit Plan and which (exclusive
of base salary and base wages) provides for any form of current or deferred
compensation, bonus, stock option, profit sharing, retirement, group health or
insurance, welfare benefits, fringe benefits, or similar plan or arrangement
for the benefit of any employee or class of employees, whether active or
retired, or independent contractors of GSSC or any GSSC Subsidiary. Such plans
and arrangements shall collectively be referred to herein as "Benefit
Arrangements" and all such Benefit Arrangements of GSSC and GSSC's Subsidiaries
are listed on Schedule 5.25(c) hereto. Except as disclosed in Schedule 5.25(c)
hereto, there are no other benefit arrangements of the GSSC companies and all
Benefit Arrangements which are in effect were in effect for substantially all
of calendar year 1993. Except as disclosed in Schedule 5.25(c) hereto, there
has been with respect to Benefit Arrangements no material amendment thereof or
material increase in the cost thereof or benefits payable thereunder on or
after December 31, 1993. There has been no material increase in the base
salary and wage levels of GSSC or any GSSC Subsidiary and, except in the
ordinary course of business, no change in the terms or conditions of employment
(including severance benefits) compared, in each case, to those prevailing for
substantially all of calendar year 1993. Except as disclosed in Schedule
5.25(c) hereto, there has been no material increase in the compensation of, or
benefits payable to, any senior executive employee of GSSC or any GSSC
Subsidiary on or after December 31, 1993, nor has any employment, severance, or
similar contract been entered into with any such employee, nor has any
amendment to any such contract been made on or after December 31, 1993.
With respect to all Benefit Arrangements which are
subject to the annual return requirement of Internal Revenue Code Section
6039D, all annual returns as were required to be filed have been timely filed.
Copies of all such annual returns for
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 54
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the three (3) plan years immediately preceding the current date have been
delivered to UPC.
(d) Listed on Schedule 5.25(d) hereto are all Employee
Pension Benefit Plans, Employee Welfare Benefit Plans, and Benefit Arrangements
which provide compensation or benefits which become effective upon a change in
control of GSSC or any GSSC Subsidiary, including, but not limited to,
additional compensation or benefits, or acceleration in the amount or timing of
payment of compensation or benefits which had become effective prior to the
date of such acceleration. Except as disclosed in Schedule 5.25(d) hereto,
there is no Employee Pension Benefit Plan, Employee Welfare Benefit Plan, or
Benefit Arrangement covering any employee of GSSC or any GSSC Subsidiary which
individually or collectively could give rise to the payment of any amount which
would constitute an "excess parachute payment", as such term is defined in
Section 280G of the Internal Revenue Code and Regulations proposed pursuant to
that section.
(e) Except as described in Schedule 5.25(e) hereto, each
Employee Pension Benefit Plan, Employee Welfare Benefit Plan, or Benefit
Arrangement and each personal services contract, fringe benefit, consulting
contract or similar arrangement with or for the benefit of any officer,
director, employee, or other person may be terminated by GSSC (or by GSSC as
the Surviving Corporation) within a period of no more than thirty (30) days
following the effective time of the merger, without payment of any amount as a
penalty, bonus, premium, severance pay, or other compensation for such
termination. No limitation on the right to terminate any such plan has been
communicated by GSSC or its Subsidiaries to employees, former employees, or
retirees who are or may be participants in or beneficiaries of such plans or
arrangements. Except as described in Schedule 5.25(e) hereto, each Employee
Pension Benefit Plan which is qualified under Section 401(a) of the Internal
Revenue Code as a qualified defined benefit pension plan permits the reversion
of excess assets to the employer maintaining the plan or its successors or
assigns upon a plan termination and such provision has been included in the
Employee Pension Benefit Plan for the period required under ERISA Section
4044(d).
(f) Except as disclosed in Schedule 5.25(f) hereto,
neither GSSC nor any GSSC Subsidiary has received notice from any governmental
agency of any alleged violation of applicable laws or of any prospective audit
or other investigation for the purpose of reviewing compliance with applicable
laws with respect to any Employee Pension Benefit Plan, Employee Welfare
Benefit Plan or Benefit Arrangement.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 55
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Except as disclosed in Schedule 5.25(f) hereto, no
suits, actions or claims have been filed in any court of law or with any
governmental agency regarding the operation of any Employee Pension Benefit
Plan, Employee Welfare Benefit Plan, or Benefit Arrangement and no such
additional suits, actions, or claims are, to the best information, knowledge
and belief of GSSC, anticipated to be filed.
5.26 Material Contracts. Except as reflected in the
Audited Financial Statements of GSSC, or as described in Schedule 5.26 hereto,
neither GSSC nor any GSSC Subsidiary, nor any of their respective assets,
businesses, or operations, is as of the date of this Reorganization Agreement a
party to, or is bound or obligated by, or receives benefits under any contract
or agreement or amendment thereto that in each case would (assuming that each
were a reporting company under the 1934 Act, whether or not it is so
registered) be required to be filed as an exhibit to an Annual Report on Form
10-K filed by GSSC as of the date of this Reorganization Agreement that has not
already been filed as an exhibit to GSSC's Form 10-K filed for the fiscal year
ended December 31, 1993, or in any other SEC Document filed prior to the date
of this Reorganization Agreement. Set forth on Schedule 5.26 hereto is an
accurate and complete list and true and complete copies of all contracts to
which GSSC, SBM or SBL are a party and having a value in excess of $100,000.
5.27 Material Contract Defaults. To the best of the
knowledge, information and belief of GSSC, SBM and SBL, neither GSSC nor any
GSSC Subsidiary is in default in any respect under any contract, agreement,
commitment, arrangement, lease, insurance policy, or other instrument to which
it is a party or 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 which default is reasonably expected to have
either individually or in the aggregate a material adverse effect on GSSC or
any GSSC Subsidiary on a consolidated basis, 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.
5.28 Reports. Since December 31, 1989, GSSC, SBM and SBL
have filed all reports and statements, together with any amendments required to
be made with respect thereto, that they were required to file with (i) the MSBD
or the LOFI; (ii) the Federal Reserve, including, but not limited to, Reports
on FR Y-6 and FR Y-9; (iii) the FDIC, (iv) the SEC, including, but not limited
to, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and proxy
statements; and (vi) any other applicable federal or state securities or
banking authorities (except, in the case of federal or state securities
authorities, filings that
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 56
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are not material). As of their respective dates, each of such reports and
documents, including the financial statements, exhibits and schedules thereto,
complied in all material respects with all of the requirements of their
respective forms and all of the statutes, rules, and regulations enforced or
promulgated by the Regulatory Authority with which they were filed. All such
reports were true and complete in all material respects and did not contain any
untrue statement as stated including any amendments thereto of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading. GSSC has previously provided to UPC true and
correct copies of all such reports filed by GSSC, SBM or SBL after December 31,
1989.
5.29 Exchange Act and Listing Filings.
(a) The outstanding shares of GSSC Common Stock are registered
with the SEC pursuant to the 1934 Act and GSSC has filed with the SEC all
material forms and reports required by law to be filed by GSSC with the SEC,
which forms and reports, taken as a whole, are true and correct in all material
respects, and do not misstate a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading.
(b) The outstanding shares of GSSC Common Stock are listed for
trading on the NASDAQ (under the symbol "GSSC") pursuant to the listing rules
of the NASDAQ and GSSC has filed with the NASDAQ all material forms and reports
required by law to be filed by GSSC with the NASDAQ, which forms and reports,
taken as a whole, are true and correct in all material respects, and do not
misstate a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading.
5.30 Statements True and Correct. None of the information
prepared by, or on behalf of, GSSC or any GSSC Subsidiary regarding GSSC, SBM
or any other GSSC Subsidiary included or to be included in the Proxy Statement
to be mailed to GSSC's Stockholders in connection with the GSSC Stockholders
Meeting, and any other documents to be filed with the SEC, or any other
Regulatory Authority in connection with the transactions contemplated herein,
at the respective times such documents are filed, and, with respect to the
Proxy Statement, when first mailed to the GSSC Stockholders, be false or
misleading with respect to any material fact, or omit to state any material
fact necessary to make the statements therein, in light of the
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 57
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circumstances under which they were made, not misleading, or, in the case of
the Proxy Statement or any amendment thereof or supplement thereto, at the time
of the GSSC Stockholders Meeting, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of any
proxy for the GSSC Stockholders Meeting. All documents which GSSC or any GSSC
Subsidiary is responsible for filing with the SEC or any other Regulatory
Authority in connection with the transactions contemplated hereby will comply
as to form in all material respects with the provisions of applicable law,
including applicable provisions of the Securities Laws and the rules and
regulations issued thereunder.
ARTICLE 6
COVENANTS OF UPC
6.1 Proxy Statement; UPC Shareholder Approval. UPC shall
call the UPC Shareholders Meeting to be held as soon as reasonably practicable
after the date of this Reorganization Agreement and the Federal Reserve shall
have entered its Order approving the transactions contemplated in this
Reorganization Agreement, for the purpose of (i) approving this Reorganization
Agreement and the Plan of Merger, and (ii) such other related matters as it
deems appropriate. In connection with the UPC Shareholders Meeting, (i) UPC
shall, with GSSC's assistance, prepare a Proxy Statement to be filed with the
SEC and with any other appropriate Regulatory Authority; shall mail or cause to
be mailed such Proxy Statement to the UPC Shareholders and shall provide GSSC
the opportunity to review and comment on the Proxy Statement at least five (5)
business days prior to the filing of the Proxy Statement with the Regulatory
Authorities for prior review and at least five (5) business days prior to the
mailing of the Proxy Statement to the UPC Shareholders; (ii) the Parties shall
furnish to each other all information concerning them that the other Party may
reasonably request in connection with the preparation of such Proxy Statement;
(iii) the Board of Directors of UPC shall recommend (subject to compliance with
its legal and fiduciary duties as advised by counsel) to UPC Shareholders the
approval of this Reorganization Agreement and the Plan of Merger; and (iv) UPC
shall use its best efforts, subject to compliance with its legal and fiduciary
duty as advised by counsel, to obtain such UPC Shareholders' approvals.
6.2 Regulatory Approvals. Within sixty (60) days after
execution of this Reorganization Agreement, UPC shall file any and all
applications with the appropriate government Regulatory Authorities in order to
obtain the Government
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 58
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Approvals and shall take such other actions as may be reasonably required to
consummate the transactions contemplated in this Reorganization Agreement and
the Plan of Merger with reasonable promptness. UPC shall pay all fees and
expenses arising in connection with such applications for regulatory approval.
UPC agrees to provide the appropriate Regulatory Authorities with the
information required by such authorities in connection with UPC's applications
for regulatory approval and UPC agrees to use its best efforts to obtain such
regulatory approvals, and any other approvals and consents as may be required
for the Closing, as promptly as practicable; provided, however, that nothing in
this Section 6.2 shall be construed to obligate UPC to take any action to meet
any condition required to obtain prior regulatory approval if UPC shall, in
UPC's reasonable judgment, deem such condition to be unreasonable or
inconsistent with previous regulatory approvals received by UPC in transactions
of this type and to constitute a significant impediment upon UPC's ability to
carry on its business or acquisition programs or to require UPC to increase
UPC's capital ratios to amounts in excess of the Federal Reserve's minimum
capital ratio guidelines which may be in effect from time to time. UPC shall
not knowingly take any action, or omit to take any action during the term of
this Reorganization Agreement which would adversely affect the receipt by UPC
of the Government Approvals or adversely affect the ability of UPC to perform
its obligations under this Reorganization Agreement. Subject to the terms and
conditions of this Reorganization Agreement, UPC and INTERIM agree to use all
reasonable efforts and to take, or to cause to be taken, all actions, and to
do, or to cause to be done, all things necessary, proper, or advisable under
applicable laws and regulations to consummate and make effective, with
reasonable promptness after the date of this Reorganization Agreement, the
transactions contemplated by this Reorganization Agreement, including, without
limitation, using reasonable efforts to lift or rescind any injunction or
restraining or other order adversely affecting the ability of the Parties to
consummate the transactions contemplated by this Reorganization Agreement. UPC
shall use, and shall cause each of its Subsidiaries to use, its best efforts to
obtain consents of all third parties and Regulatory Authorities necessary or
desirable for the consummation of each of the transactions contemplated by this
Reorganization Agreement.
6.3 Reservation, Listing and Registration of UPC Common Stock
under the Securities Laws. UPC shall reserve for issuance that number of
shares of UPC Common Stock necessary to (i) satisfy the Consideration to be
delivered to the GSSC Record Holders at the Effective Time of the Merger and
(ii) provide shares of UPC Common Stock which will be issued upon the exercise
of options granted under the GSSC Key Employees Stock Plan and
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 59
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which are outstanding immediately prior to Effective Time of the Merger. UPC
shall cooperate with GSSC in the preparation of the GSSC Proxy Statement to be
used at the GSSC Stockholders Meeting (and which shall serve also as UPC's
prospectus with respect to UPC's issuance of shares of the UPC Common Stock)
and shall cause a registration statement on the appropriate form of the SEC to
be prepared and filed so as to cause any shares of UPC Common Stock which may
be delivered to the GSSC Record Holders in payment of the Consideration to be
registered under the 1933 Act and to be duly qualified under appropriate state
securities laws. UPC shall also list for trading on the NYSE the shares of UPC
Common Stock so delivered. Such reservation, registration, qualification and
listing shall be effected prior to the Closing. As soon as practicable after
the issuance of all Governmental Approvals, but no later than thirty days
following such date, UPC shall file with the SEC a Registration Statement on
Form S-8 to register the shares of UPC Common Stock that will be issued to
holders of options granted under the GSSC Key Employees Stock Plan. UPC shall
use its best efforts to have such Registration Statement declared effective as
promptly as practicable.
6.4 Employee Benefits. Following the consummation of the
transactions contemplated herein, UPC shall not be obligated to make further
contributions to any of the Employee Plans or Benefit Arrangements of GSSC or
the GSSC Subsidiaries and all employees of GSSC and the GSSC Subsidiaries
immediately prior to the Effective Time of the Merger who shall continue as
employees of GSSC as the Surviving Corporation or as employees of any other UPC
Subsidiary will be afforded the opportunity to participate in any employee
benefit plans maintained by UPC or UPC's Subsidiaries, including but not
limited to, any "employee benefit plan," as that term is defined in ERISA, on
an equal basis with employees of UPC or any UPC Subsidiaries with comparable
positions, compensation, and tenure. Service with GSSC or with any GSSC
Subsidiary prior to the Effective Time of the Merger by former employees of
GSSC or any GSSC Subsidiary will be deemed service with UPC for purposes of
determining eligibility for participation and vesting in such employee benefit
plans of UPC and UPC's Subsidiaries. In its sole discretion, UPC may
elect to postpone until the first day of July next following the Effective Time
of the Merger the participation of the employees of GSSC and GSSC's
Subsidiaries in the employee benefit plans maintained by UPC or UPC's
Subsidiaries; provided, however, during any such postponement period, the GSSC
Employee Plans and all related employee benefit plans shall continue in full
force and effect, (including the continued receipt of all customary corporate
contributions in accordance with the past practice of GSSC, SBM and SBL for the
period prior to the termination of the plans), except as expressly modified or
amended by the terms of this
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 60
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Reorganization Agreement, or until such time as the plans are replaced by
benefit plans maintained by UPC.
6.5 Conduct of Business; Notice of Adverse Change. UPC shall
not knowingly engage in any activity which would (i) prohibit UPC or INTERIM
from delivering the Consideration to the Exchange Agent at Closing; (ii)
prevent UPC or INTERIM from consummating the transactions contemplated in this
Reorganization Agreement; (iii) prevent or impede the ability of UPC to account
for the Merger as a pooling of interests on the financial statements of UPC;
and (iv) prevent or impede the ability of UPC, GSSC and the GSSC Record Holders
to accomplish the Merger as a tax-free reorganization and, except with respect
to cash received in lieu of a fractional share of UPC Common Stock, on a
tax-free basis to the GSSC Record Holders. Upon receipt of UPC Shareholder
Approval and the satisfaction (or lawful waiver by UPC) of all conditions
precedent, UPC shall vote the shares of INTERIM in favor of the Merger. UPC
shall notify GSSC in writing immediately upon becoming aware of any material
adverse change in the financial condition or prospects of UPC or of any event
which would prohibit UPC's performance under the terms of this Reorganization
Agreement.
ARTICLE 7
COVENANTS OF GSSC, SBM AND SBL
7.1 Proxy Statement; GSSC Stockholder Approval. GSSC shall
call the GSSC Stockholders Meeting to be held as soon as reasonably practicable
after the date of this Reorganization Agreement and the Federal Reserve shall
have entered its Order approving the transactions contemplated in this
Reorganization Agreement, for the purpose of (i) approving this Reorganization
Agreement and the Plan of Merger, and (ii) such other related matters as it
deems appropriate. In connection with the GSSC Stockholders Meeting, (i) GSSC
shall, with UPC's assistance, prepare the Proxy Statement to be filed with the
SEC and with any other appropriate Regulatory Authority; shall mail or cause to
be mailed such Proxy Statement to the GSSC Stockholders and shall provide UPC
the opportunity to review and comment on the Proxy Statement at least five (5)
business days prior to the filing of the Proxy Statement with the Regulatory
Authorities for prior review and at least five (5) business days prior to the
mailing of the Proxy Statement to the GSSC Stockholders; (ii) the Parties shall
furnish to each other all information concerning them that the other Party may
reasonably request in connection with the preparation of such Proxy Statement;
(iii) the Board of Directors of GSSC shall recommend (subject to compliance
with its legal and fiduciary duties as advised by counsel) to the GSSC
Stockholders
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 61
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the approval of this Reorganization Agreement and the Plan of Merger; and (iv)
GSSC shall use its best efforts, subject to compliance with its legal and
fiduciary duty as advised by counsel, to obtain such GSSC Stockholders'
approvals.
7.2 Conduct of Business -- Affirmative Covenants. Unless
the prior written consent of UPC shall have been obtained, which consent will
not be unreasonably withheld by UPC and shall be forthcoming by UPC within five
(5) Business Days from the submission of a written request by GSSC therefor
and, except as otherwise contemplated herein:
(a) Except as may be required by statute, rule or
regulation, GSSC, SBM and SBL shall, and shall cause each GSSC Subsidiary to:
(i) Operate its business only in the
usual, regular, and ordinary course;
(ii) Preserve intact its business
organizations and assets and to maintain its rights and franchises;
(iii) Take no action, unless otherwise
required by law, rules or regulation, that would (A) adversely affect
the ability of any of them or UPC to obtain any necessary approvals of
Regulatory Authorities required to consummate the transactions
contemplated by this Reorganization Agreement, or (B) adversely affect
the ability of such Party to perform its covenants and agreements
under this Reorganization Agreement;
(iv) Except as they may terminate in
accordance with their terms, keep in full force and effect, and not
default in any of their obligations under, all material contracts;
(v) Keep in full force and effect
insurance coverage with responsible insurance carriers which is
reasonably adequate in coverage and amount for companies the size of
GSSC or such GSSC Subsidiary and for the businesses and properties
owned by each and in which each is engaged, to the extent that such
insurance is reasonably available;
(vi) Use its best efforts to retain SBM's
and SBL's present customer base and to facilitate the retention of
such customers by SBM and SBL and their branches after the Effective
Time of the Merger; and
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 62
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(vii) Maintain, renew, keep in full force
and effect, and preserve its business organization and material rights
and franchises, permits and licenses, and to use its best efforts to
maintain positive relations with its present employees so that such
employees will continue to perform effectively and will be available
to GSSC, SBM, SBL or UPC and UPC's Subsidiaries at and after the
Effective Time of the Merger, and to use its best efforts to maintain
its existing, or substantially equivalent, credit arrangements with
banks and other financial institutions and to assure the continuance
of SBM's and SBL's customer relationships;
(b) GSSC, SBM and SBL agree to use their best
efforts to assist UPC in obtaining the Government Approvals necessary to
complete the transactions contemplated hereby and do not know of any reason why
such Government Approvals can not be obtained, and GSSC, SBM and SBL shall
provide to UPC or to the appropriate governmental authorities all information
reasonably required to be submitted in connection with obtaining such
approvals;
(c) GSSC, SBM and SBL, at their own cost and
expense, shall use their best efforts to secure all necessary consents and all
consents and releases, if any, required of GSSC, SBM, SBL or third parties and
shall comply with all applicable laws, regulations and rulings in connection
with this Reorganization Agreement and the consummation of the transactions
contemplated hereby;
(d) At all times to and including, and as of, the
Effective Time of the Merger, GSSC, SBM and SBL shall inform UPC in writing of
any and all facts necessary to amend or supplement the representations and
warranties made herein and the Schedules attached hereto as necessary so that
the information contained herein and therein will accurately reflect the
current status of GSSC, SBM and SBL; provided, however, that any such updates
to Schedules shall be required prior to the Closing only with respect to
matters which represent material changes to the Schedules and the information
contained therein; and provided further, that before such amendment, supplement
or update may be deemed to be a part of this Reorganization Agreement, UPC
shall have agreed in writing to each amendment, supplement or update to the
Schedules made subsequent to the date of this Reorganization Agreement as an
amendment to this Reorganization Agreement;
(e) On and after the Closing Date, GSSC, SBM and
SBL shall give such further assistance to UPC and shall execute, acknowledge
and deliver all such documents and instruments as UPC may reasonably request
and take such further action as may be
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 63
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necessary or appropriate effectively to consummate the transactions
contemplated by this Reorganization Agreement;
(f) Between the date of this Reorganization
Agreement and the Closing Date, GSSC, SBM and SBL shall afford UPC and its
authorized agents and representatives reasonable access during normal business
hours to the properties, operations, books, records, contracts, documents, loan
files and other information of, or relating to GSSC, SBM and SBL. GSSC, SBM
and SBL shall provide reasonable assistance to UPC in its investigation of
matters relating to GSSC, SBM and SBL; and
(g) Subject to the terms and conditions of this
Reorganization Agreement, GSSC, SBM and SBL agree to use all reasonable efforts
and to take, or to cause to be taken, all actions, and to do, or to cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective, with reasonable promptness after
the date of this Reorganization Agreement, the transactions contemplated by
this Reorganization Agreement, including, without limitation, using reasonable
efforts to lift or rescind any injunction or restraining or other order
adversely affecting the ability of the Parties to consummate the transaction
contemplated by this Reorganization Agreement. GSSC shall use, and shall cause
each of its Subsidiaries to use, its best efforts to obtain consents of all
third parties and Regulatory Authorities necessary or desirable for the
consummation of each of the transactions contemplated by this Reorganization
Agreement.
7.3 Conduct of Business -- Negative Covenants. From the
date of this Reorganization Agreement until the earlier of the Effective Time
of the Merger or the termination of this Reorganization Agreement, GSSC, SBM
and SBL covenant and agree that they will neither do, nor agree or commit to
do, nor permit any GSSC Subsidiary to do or commit or agree to do, any of the
following without the prior written consent of the chief executive officer,
president, or chief financial officer of UPC, which consent will not be
unreasonably withheld, or except as expressly permitted by this Reorganization
Agreement:
(a) Except as expressly contemplated by this
Reorganization Agreement or the Plan of Merger, amend its Certificate of
Incorporation or Bylaws; or
(b) Impose, or suffer the imposition, on any
share of capital stock held by it or by any of its Subsidiaries of any lien,
charge, or encumbrance, or permit any such lien, charge, or encumbrance to
exist; or
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 64
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(c) (i) Repurchase, redeem, or otherwise acquire or
exchange, directly or indirectly, any shares of its capital stock or other
equity securities or any securities or instruments convertible into any shares
of its capital stock, or any rights or options to acquire any shares of its
capital stock or other equity securities, except in satisfaction of any
exercised GSSC Stock Options or as expressly permitted by this Reorganization
Agreement or the Plan of Merger; or (ii) split or otherwise subdivide its
capital stock; or (iii) recapitalize in any way; or (iv) declare a stock
dividend on the GSSC Common Stock; or (v) pay or declare a cash dividend or
make or declare any other type of distribution on the GSSC Common Stock except
as expressly permitted by Section 8.2(i)(vi) of this Reorganization Agreement
or the Plan of Merger; or
(d) Except as expressly permitted by this
Reorganization Agreement, acquire direct or indirect control over any
corporation, association, firm, organization or other entity, other than in
connection with (i) mergers, acquisitions or other transactions approved in
writing by UPC, (ii) internal reorganizations or consolidations involving
existing Subsidiaries, (iii) foreclosures in the ordinary course of business
and not knowingly exposing it to liability by reason of Hazardous Substances,
(iv) acquisitions of control in its fiduciary capacity, or (v) the creation of
new subsidiaries organized to conduct or continue activities otherwise
permitted by this Reorganization Agreement; or
(e) Except as expressly permitted by this
Reorganization Agreement or the Plan of Merger, to (i) issue, sell, agree to
sell, or otherwise dispose of or otherwise permit to become outstanding any
additional shares of GSSC Common Stock (except in satisfaction of any exercised
GSSC Stock Options), or any other capital stock of GSSC or of any GSSC
Subsidiary, or any stock appreciation rights, or any option, warrant,
conversion, call, scrip, or other right to acquire any such stock, or any
security convertible into any such stock, unless any such shares of such stock
are directly sold or otherwise directly transferred to GSSC or any GSSC
Subsidiary, or are issued in connection with any of the above-described
securities encompassed in the GSSC Option Plans, or (ii) sell, agree to sell,
or otherwise dispose of any substantial part of the assets or earning power of
GSSC or of any GSSC Subsidiary; or (iii) sell, agree to sell, or otherwise
dispose of any asset of GSSC or any GSSC Subsidiary other than in the ordinary
course of business for reasonable and adequate consideration; or (iv) buy,
agree to buy or otherwise acquire a substantial part of the assets or earning
power of any other Person or entity; or
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(f) Incur, or permit any GSSC Subsidiary to incur,
any additional debt obligation or other obligation for borrowed money other
than (i) in replacement of existing short-term debt with other short-term debt
of an equal or lesser amount, (ii) financing of banking related activities
consistent with past practices, or (iii) indebtedness of GSSC or any GSSC
Subsidiary to SBM, SBL or another GSSC Subsidiary in excess of an aggregate of
$50,000 (for GSSC and its Subsidiaries on a consolidated basis) except in the
ordinary course of the business of GSSC or such GSSC Subsidiary consistent with
past practices (and such ordinary course of business shall include, but shall
not be limited to, creation of deposit liabilities, entry into repurchase
agreements or reverse repurchase agreements, purchases or sales of federal
funds, Federal Reserve advances, FHLB advances, and sales of certificates of
deposit); or
(g) Except as expressly permitted by the terms of
this Reorganization Agreement, grant any increase in compensation or benefits
to any of its employees or officers, except in accordance with past practices
or as required by law; pay any bonus except in accordance with past practices;
enter into any severance agreements with any of its officers or employees;
grant any material increase in fees or other increases in compensation or other
benefits to any director of GSSC or of any GSSC Subsidiary; or effect any
change in retirement benefits for any class of its employees or officers,
unless such change is required by applicable law; or
(h) Except as expressly required by the terms of
this Reorganization Agreement, amend any existing employment contract between
it and any person having a salary thereunder in excess of $30,000 per year
(unless such amendment is required by law) to increase the compensation or
benefits payable thereunder; or to enter into any new employment contract with
any person having an annual salary thereunder in excess of $30,000 that GSSC,
SBM or SBL (or their respective successors) do not have the unconditional right
to terminate without liability (other than liability for services already
rendered), at any time on or after the Effective Time of the Merger; or
(i) Except as expressly required by the terms of
this Reorganization Agreement, adopt any new employee benefit plan or terminate
or make any material change in or to any existing employee benefit plan other
than any change that is required by law or that, in the opinion of counsel, is
necessary or advisable to maintain the tax-qualified status of any such plan;
or
(j) Enter into any new service contracts, purchase
or sale agreements or lease agreements having a value in
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 66
<PAGE> 386
excess of One Hundred Thousand Dollars ($100,000) to GSSC or any GSSC
Subsidiary; or
(k) Make any capital expenditure except for ordinary
purchases, repairs, renewals or replacements; or
(l) Enter into any transactions other than in the
ordinary course of business; or
(m) Other than in the ordinary course of business,
grant or commit to grant any new extension of credit to any officer, director
or known holder of 2% or more of the outstanding GSSC Common Stock, or to any
corporation, partnership, trust or other entity controlled by any such person,
if such extension of credit, together with all other credits then outstanding
to the same borrower and all affiliated persons of such borrower, would exceed
two percent (2%) of the capital of GSSC or amend the terms of any such credit
outstanding on the date hereof.
7.4 Conduct of Business -- Certain Actions.
(a) Except to the extent necessary to consummate the
transactions specifically contemplated by this Reorganization Agreement, GSSC,
SBM and SBL shall not, and shall use their respective best efforts to ensure
that their respective directors, officers, employees, and advisors do not,
directly or indirectly, institute, solicit, or knowingly encourage (including
by way of furnishing any information not legally required to be furnished) any
inquiry, discussion, or proposal, or participate in any discussions or
negotiations with, or provide any confidential or non-public information to,
any corporation, partnership, person or other entity or group (other than to
UPC or any UPC Subsidiary) concerning any "Acquisition Proposal" (as defined
below), except for actions reasonably considered by the Board of Directors of
GSSC, based upon the advice of outside legal counsel, to be required in order
to fulfill its fiduciary obligations. GSSC shall notify UPC immediately if any
Acquisition Proposal has been or should hereafter be received by GSSC, SBM or
SBL, such notice to contain, at a minimum, the identity of such persons, and,
subject to disclosure being consistent with the fiduciary obligations of GSSC's
Board of Directors, a copy of any written inquiry, the terms of any proposal or
inquiry, any information requested or discussions sought to be initiated, and
the status of any reports, negotiations or expressions of interest. For
purposes of this Section, "Acquisition Proposal" means any proposed tender
offer, agreement, understanding or other proposal pursuant to which any
corporation, partnership, Person or other entity or group, other than UPC or
any UPC Subsidiary, would directly or indirectly (i)
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acquire or participate in a merger, share exchange, consolidation or any other
business combination involving GSSC, SBM or SBL; (ii) acquire the right to vote
ten percent (10%) or more of the GSSC Common Stock, SBM Common Stock or SBL
Common Stock; (iii) acquire a significant portion of the assets or earning
power of GSSC, SBM or SBL; or (iv) acquire in excess of ten percent (10%) of
the outstanding GSSC Common Stock, SBM Common Stock or SBL Common Stock.
(b) As a condition of and as an inducement to UPC's
entering into this Reorganization Agreement, GSSC, SBM and SBL covenant,
acknowledge, and agree that it shall be a specific, absolute, and
unconditionally binding condition precedent to either GSSC's, SBM's or SBL's
entering into a letter of intent, agreement in principle, or definitive
agreement (whether or not considered binding, non-binding, conditional or
unconditional) with any third-party with respect to an Acquisition Proposal, or
supporting or indicating an intent to support an Acquisition Proposal, other
than this Reorganization Agreement and the transactions contemplated in this
Reorganization Agreement, regardless of whether GSSC, SBM or SBL has otherwise
complied with the provisions of Section 7.4(a) hereof, that GSSC or such
third-party which is a party to any Acquisition Proposal shall have paid UPC
the sum of Twelve Million and No/100 Dollars ($12,000,000), which sum
represents the (i) direct costs and expenses (including, but not limited to,
fees and expenses incurred by UPC's financial or other consultants, printing
costs, investment bankers, accountants, and counsel) incurred by or on behalf
of UPC in negotiating and undertaking to carry out the transactions
contemplated by this Reorganization Agreement; (ii) indirect costs and expenses
of UPC in connection with the transactions contemplated by this Reorganization
Agreement, including UPC's management time devoted to negotiation and
preparation for the transactions contemplated by this Reorganization Agreement;
and (iii) UPC's loss as a result of the transactions contemplated by this
Reorganization Agreement not being consummated. Accordingly, GSSC, SBM and SBL
hereby jointly and severally stipulate and covenant that prior to GSSC's, SBM's
or SBL's entering into a letter of intent, agreement in principle, or
definitive agreement, (whether binding or non-binding, conditional or
unconditional) with any third-party with respect to an Acquisition Proposal or
supporting or indicating an intent to support an Acquisition Proposal, either
GSSC or such third-party shall have paid to UPC the amount set forth above in
immediately available funds to satisfy the specific, absolute, and
unconditionally binding condition precedent imposed by this Section 7.4.
Notwithstanding anything in this Section 7.4(b) to the contrary, in the event
such Acquisition Proposal should be the result of an unsolicited offer or
takeover of GSSC, SBM or SBL, any sums due UPC by GSSC pursuant to the terms of
this
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 68
<PAGE> 388
Section 7.4 shall be paid by GSSC to UPC at the closing of the transactions set
forth in such Acquisition Proposal and all obligations of UPC to hold the
Closing by the Target Date shall be tolled until such time as the transactions
set forth in any such Acquisition Proposal shall have been consummated or until
such time as the Acquisition Proposal shall have expired plus such reasonable
time as UPC shall require. UPC and INTERIM each acknowledges that under no
circumstances shall any officer or director of GSSC, SBM or SBL (unless such
officer or director shall have an interest in a potential acquiring party in
any Acquisition Proposal) be held personally liable to UPC or INTERIM for any
amount of the foregoing payment. On payment of such amount to UPC, UPC and
INTERIM shall have no cause of action or claim (either in law or equity)
whatsoever against GSSC, SBM or SBL, or any officer or director of GSSC, SBM or
SBL, with respect to or in connection with such Acquisition Proposal, this
Reorganization Agreement or the Plan of Merger.
(c) The requirements, conditions, and obligations
imposed by this Section 7.4 shall continue in full force and effect from the
date of this Reorganization Agreement until October 1, 1995, unless and until
the earlier of any of the following events shall occur, in which event,
thereafter neither GSSC, SBM nor SBL shall be obligated to pay the amount
required by this Section 7.4 as a condition precedent to such transaction:
(1) This Reorganization Agreement shall have been terminated (i)
mutually by the Parties pursuant to Section 9.1(a) of this
Reorganization Agreement; (ii) by UPC and INTERIM pursuant to
Section 9.1(b) of this Reorganization Agreement; (iii) by UPC
and INTERIM or GSSC, SBM and SBL pursuant to Section 9.1(c) of
this Reorganization Agreement; (iv) by UPC and INTERIM or
GSSC, SBM and SBL pursuant to Section 9.1(d) of this
Reorganization Agreement; (v) by UPC and INTERIM or GSSC, SBM
and SBL pursuant to Section 9.1(e) of this Reorganization
Agreement, and in the case of termination pursuant to Section
9.1(e), only on the basis of the failure to satisfy the
conditions enumerated in subparagraph (2) below; (vi) by UPC
and INTERIM pursuant to Section 9.1(f) of this Reorganization
Agreement; (vii) by UPC and INTERIM or GSSC, SBM and SBL
pursuant to Section 9.1(g) of this Reorganization Agreement;
(viii) by UPC and INTERIM pursuant to Section 9.1(h) of this
Reorganization Agreement; (ix) by UPC and INTERIM pursuant to
Section 9.1(i) of this Reorganization Agreement; and (x) by
UPC and INTERIM or GSSC, SBM and SBL pursuant to Section
9.1(j) or Section 9.1(k) of this Reorganization Agreement; or
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 69
<PAGE> 389
(2) In the event the Merger should not be consummated as a result
of the failure to satisfy any of the following conditions:
(i) Material inaccuracy (without waiver thereof) of
representations and warranties of UPC as contemplated
by the provisions of Section 8.1(b) of this
Reorganization Agreement;
(ii) Noncompliance by UPC or INTERIM with their
respective obligations as required by the provisions
of Section 8.1(a) of this Reorganization Agreement;
(iii) The failure by UPC or INTERIM to effect all
corporate action necessary on their respective parts
as required by the provisions of Section 8.1 of this
Reorganization Agreement or to satisfy the conditions
set forth in Sections 8.1(d) or 8.1(g) of this
Reorganization Agreement;
(iv) The failure to receive the requisite approvals
as required by the provisions of Section 8.3(b) of
this Reorganization Agreement other than any such
failure arising out of any action or inaction on the
part of GSSC, SBM or SBL;
(v) The occurrence of material legal proceedings as
contemplated by the provisions of Section 8.3(a) of
this Reorganization Agreement;
(vi) The failure on the part of the appropriate
officers of UPC to deliver the certificates set forth
in Section 8.1(c) of this Reorganization Agreement,
or the failure on the part of counsel to UPC to
deliver the requisite opinion required by the
provisions of Section 8.1(e) of this Reorganization
Agreement;
(vii) UPC shall have determined not to consummate the
Merger pursuant to Sections 8.2(d), 8.2(f), 8.2(i),
8.2(k) or 8.2(l);
(viii) The failure to receive the fairness opinion of
either (a) GSSC's independent financial adviser as
required by the provisions of Section 8.1(f) of this
Reorganization Agreement except if such failure is
based on the receipt by GSSC of an Acquisition
Proposal from a third party or (b)
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 70
<PAGE> 390
UPC's independent financial adviser as required by
Section 8.2(n) of this Reorganization Agreement;
(ix) The failure to receive the approval of the UPC
Shareholders as required by the provisions of Section
8.3(d) of this Reorganization Agreement;
(x) The failure of the registration statement to be
declared effective or if the registration statement
is subject to a stop order of the SEC or any state
securities commission as required by Section 8.3(c)
of this Reorganization Agreement and such failure is
based solely on a review by the SEC of the material
presented by UPC in the registration statement or an
action or inaction on the part of UPC; or
(xi) The failure of any Affiliate of GSSC to execute
an Affiliate Letter as required by Section 8.3(m) of
this Reorganization Agreement (unless such
requirement is waived by UPC) but only if the failure
of any Affiliates of GSSC to execute the Affiliate
Letter would not potentially disqualify the
transactions contemplated by this Reorganization
Agreement from qualifying for pooling-of-interests
accounting treatment.
ARTICLE 8
CONDITIONS TO CLOSING
8.1 Conditions to the Obligations of GSSC. Unless waived
in writing by GSSC, the obligation of GSSC to consummate the transaction
contemplated by this Reorganization Agreement is subject to the satisfaction at
or prior to the Closing Date of the following conditions:
(a) Performance. Each of the material acts and
undertakings of UPC and INTERIM to be performed at or prior to the Closing Date
pursuant to this Reorganization Agreement shall have been duly performed,
except for breaches of acts and undertakings which would not have, or would not
reasonably be expected to have, any material adverse effect on the business or
operations of UPC and the UPC Subsidiaries taken as a whole;
(b) Representations and Warranties. The
representations and warranties of UPC and INTERIM contained in Article 4 of
this Reorganization Agreement shall be true and complete, in all material
respects, on and as of the Effective
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 71
<PAGE> 391
Time of the Merger with the same effect as though made on and as of the
Effective Time of the Merger, except (i) for any such representations and
warranties made as of a specified date, which shall be true and correct in all
material respects as of such date and (ii) for breaches of representations and
warranties which would not have, or would not reasonably be expected to have, a
material adverse effect on the business or operations of UPC and the UPC
Subsidiaries taken as a whole;
(c) Documents. In addition to the other
deliveries of UPC or INTERIM described elsewhere in this Reorganization
Agreement, GSSC shall have received the following documents and instruments:
(i) a certificate signed by the
Secretary or an assistant secretary of UPC and INTERIM dated as of the
Closing Date certifying that:
(A) UPC's and INTERIM's respective
Boards of Directors, shareholders and stockholders have duly
adopted resolutions (copies of which shall be attached to such
certificate) approving the substantive terms of this
Reorganization Agreement (including the Plan of Merger) and
authorizing the consummation of the transactions contemplated
by this Reorganization Agreement and certifying that such
resolutions have not been amended or modified and remain in
full force and effect;
(B) each person executing this
Reorganization Agreement on behalf of UPC or INTERIM is an
officer of UPC or INTERIM, as the case may be, holding the
office or offices specified therein, with full power and
authority to execute this Reorganization Agreement and any and
all other documents in connection with the Merger, and that
the signature of each person set forth on such certificate is
his or her genuine signature;
(C) the charter documents of UPC
and INTERIM attached to such certificate remain in full force
and effect; and
(D) UPC and INTERIM are in good
standing under their respective corporate charters; and
(ii) a certificate signed respectively by
duly authorized officers of UPC and INTERIM stating that the
conditions set forth in Section 8.1(a) and Section 8.1(b) of this
Reorganization Agreement have been fulfilled;
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 72
<PAGE> 392
(d) Consideration. GSSC shall have received a
certificate executed by an authorized officer of the Exchange Agent to the
effect that the Exchange Agent has received and holds in its possession proper
authorization to issue certificates evidencing shares of UPC Common Stock and
cash or other good funds sufficient to meet the obligations of UPC or INTERIM
to the GSSC Record Holders to deliver the Consideration under this
Reorganization Agreement and the Plan of Merger;
(e) Opinion of UPC's and INTERIM's Counsel. GSSC
shall have been furnished with an opinion of counsel to UPC and INTERIM, dated
as of the Closing Date, addressed to and in form and substance satisfactory to
GSSC, to the effect that:
(i) UPC is a Tennessee corporation duly
organized, validly existing and in good standing under the laws of the
State of Tennessee; and INTERIM is a Delaware corporation duly
organized, validly existing, and in good standing under the laws of
the State of Delaware;
(ii) this Reorganization Agreement has
been duly and validly authorized, executed and delivered by UPC, and
INTERIM and (assuming this Reorganization Agreement is a binding
obligation of GSSC, SBM and SBL) constitutes a valid and binding
obligation of UPC and INTERIM enforceable in accordance with its
terms, subject as to enforceability to applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and to the application of
equitable principles and judicial discretion;
(iii) neither the execution and delivery
by UPC or INTERIM of this Reorganization Agreement nor the execution,
delivery and performance of any of the documents to be executed and
delivered by UPC or INTERIM in connection herewith violates or
conflicts with UPC's, or INTERIM's corporate charters or bylaws or, to
the best of the knowledge, information and belief (without making
special inquiry) of such counsel, any material contracts, agreements
or other commitments of UPC or INTERIM;
(iv) to the knowledge of such counsel
after due inquiry, no consent or approval by any Governmental
Authority which has not already been obtained is required for
execution and delivery by UPC and INTERIM of this Reorganization
Agreement or any of the documents to be executed and delivered by UPC
or INTERIM in connection herewith; and
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 73
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(v) the shares of UPC Common Stock to be
issued in the names of the GSSC Record Holders and delivered in
exchange for their GSSC Common Stock will be duly authorized, validly
issued, fully paid and non-assessable.
Such opinion may (i) expressly rely as to matters of fact upon certificates
furnished by appropriate officers of UPC or INTERIM or appropriate government
officials; and (ii) in the case of matters of law governed by the laws of the
states in which they are not licensed, reasonably rely upon the opinions of
legal counsel duly licensed in such states and may be limited, in any event, to
Federal Law and the law of the State of Tennessee;
(f) Fairness Opinion. GSSC shall have received a
"fairness opinion" letter from its independent financial adviser to the effect
that, in the opinion of such adviser the Consideration to be received by the
GSSC Record Holders is fair to the GSSC Stockholders from a financial point of
view, and such "fairness opinion" shall not have been withdrawn prior to the
Closing Date, and GSSC shall have received an updated "fairness opinion" letter
from such advisers within five (5) days prior to the Closing Date reconfirming
the opinions provided in the initial "fairness opinion" letter; and
(g) Tax Opinion of McDonnell Boyd. GSSC shall
have received a written opinion substantially in the form of opinion set forth
in Schedule 8.1(g) hereto from the law firm of McDonnell Boyd to the effect
that the transactions contemplated by this Reorganization Agreement and the
Plan of Merger will constitute one or more tax-free reorganizations under
Section 368 of the Internal Revenue Code.
8.2 Conditions to the Obligations of UPC and INTERIM.
Unless waived in writing by UPC and INTERIM, the obligation of UPC and INTERIM
to consummate the transactions contemplated by this Reorganization Agreement is
subject to the satisfaction at or prior to the Closing Date of the following
conditions:
(a) Performance. Each of the material acts and
undertakings of GSSC, SBM and SBL to be performed at or before the Closing Date
pursuant to this Reorganization Agreement shall have been duly performed,
except for breaches of acts and undertakings which would not have, or would not
reasonably be expected to have, any material adverse effect on the business or
operations of GSSC and the GSSC Subsidiaries taken as a whole;
(b) Representations and Warranties. The
representations and warranties of GSSC, SBM and SBL contained in Article 5 of
this Reorganization Agreement shall be true and correct, in all material
respects, on and as of the Effective
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 74
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Time of the Merger with the same effect as though made on and as of the
Effective Time of the Merger, except (i) for any such representations and
warranties made as of a specified date, which shall be true and correct in all
material respects as of such date and (ii) for breaches or representations and
warranties which would not have, or would not reasonably be expected to have, a
material adverse effect on the business or operations of GSSC and the GSSC
Subsidiaries taken as a whole;
(c) Documents. In addition to the documents
described elsewhere in this Reorganization Agreement, UPC shall have received
the following documents and instruments:
(i) a certificate signed by the
Secretary or an assistant secretary of GSSC and SBL, and a certificate
signed by the Cashier of SBM dated as of the Closing Date certifying
that:
(A) GSSC's, SBM'S and SBL's
respective Boards of Directors and stockholders and
shareholders have duly adopted resolutions (copies of which
shall be attached to such certificate) approving the
substantive terms of this Reorganization Agreement (including
the Plan of Merger) and authorizing the consummation of the
transactions contemplated by this Reorganization Agreement and
certifying that such resolutions have not been amended or
modified and remain in full force and effect;
(B) each person executing this
Reorganization Agreement on behalf of GSSC, SBM or SBL, is an
officer of GSSC, SBM or SBL, as the case may be, holding the
office or offices specified therein, with full power and
authority to execute this Reorganization Agreement and any and
all other documents in connection with the Merger, and that
the signature of each person set forth on such certificate is
his or her genuine signature;
(C) the charter documents of GSSC,
SBM and SBL attached to such certificate remain in full force
and effect; and
(D) GSSC, SBM and SBL are in good
standing under their respective corporate charters; and
(ii) a certificate signed by the
respective President, Chief Executive Officer or an Executive Vice
President of each of GSSC, SBM and SBL stating that the
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 75
<PAGE> 395
conditions set forth in Section 8.2(a), Section 8.2(b) and 8.2(f) this
Reorganization Agreement have been satisfied;
(d) Destruction of Property. Between the date of
this Reorganization Agreement and the Closing Date, there shall have been no
damage to or destruction of real property, improvements or personal property of
GSSC, SBM or SBL which materially reduces the market value of such property,
and no zoning or other order, limitation or restriction imposed against the
same that might have a material adverse impact upon the operations, business or
prospects of GSSC, SBM or SBL; provided, however, that the availability of
insurance coverage shall be taken into account in determining whether there has
been such a material adverse impact or material reduction in market value. In
the event of such damage, destruction, order, limitation or restriction, UPC
and INTERIM may elect either (i) to close the contemplated transactions in
accordance with the terms of this Reorganization Agreement or (ii) to terminate
this Reorganization Agreement without penalty;
(e) Inspections Permitted. Between the date of
this Reorganization Agreement and the Closing Date, GSSC, SBM and SBL shall
have afforded UPC and its authorized agents and representatives reasonable
access during normal business hours to the properties, operations, books,
records, contracts, documents, loan files and other information of or relating
to GSSC, SBM and SBL. GSSC, SBM and SBL shall have caused all GSSC, SBM or SBL
personnel to provide reasonable assistance to UPC in its investigation of
matters relating to GSSC, SBM and SBL;
(f) No Material Adverse Change. No material
adverse change in the business, property, assets (including loan portfolios),
liabilities (whether absolute, contingent or otherwise), prospects, operations,
liquidity, income, or condition (financial or otherwise) of GSSC, SBM and SBL
taken as a whole shall have occurred since the date of this Reorganization
Agreement. In the event of such a material adverse change with respect to
GSSC, SBM or SBL, UPC may elect either (i) to close the contemplated
transactions in accordance with the terms of this Reorganization Agreement or
(ii) to terminate this Reorganization Agreement without penalty;
(g) Opinion of GSSC's Counsel. UPC shall have
been furnished with an opinion of legal counsel to GSSC, SBM and SBL, dated the
Closing Date, addressed to and in form and substance satisfactory to UPC, to
the effect that:
(i) GSSC is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware;
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 76
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(ii) SBM is a Mississippi banking
corporation, duly organized, validly existing, and in good standing
under the laws of the State of Mississippi; SBL is a Louisiana banking
corporation, duly organized, validly existing, and in good standing
under the laws of the State of Louisiana;
(iii) this Reorganization Agreement has
been duly and validly authorized, executed and delivered by GSSC, SBM
and SBL and (assuming that this Reorganization Agreement is a binding
obligation of UPC and INTERIM and the Plan of Merger is a binding
obligation of UPC and INTERIM) constitutes a valid and binding
obligation of GSSC, SBM and SBL enforceable in accordance with its
terms, subject as to enforceability to applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and to the application of
equitable principles and judicial discretion; and
(iv) to the knowledge of such counsel
after due inquiry, no consent or approval, which has not already been
obtained, by any governmental authority is required for execution,
delivery and performance by GSSC, SBM or SBL of this Reorganization
Agreement or any of the documents to be executed and delivered by
GSSC, SBM and SBL in connection herewith.
Such opinion may (i) expressly rely as to matters of fact upon certificates
furnished by appropriate officers of GSSC, SBM or SBL or appropriate government
officials; and (ii) in the case of matters of law governed by the laws of the
states in which they are not licensed, reasonably rely upon the opinions of
legal counsel duly licensed in such states and may be limited, in any event, to
Federal Law and the law of the State of Delaware;
(h) Other Business Combinations, Etc. Neither GSSC,
SBM nor SBL shall have entered into any agreement, letter of intent,
understanding or other arrangement pursuant to which GSSC, SBM or SBL would
merge; consolidate with; effect a business combination with; sell any
substantial part of GSSC's, SBM's or SBL's assets; acquire a significant part
of the shares or assets of any other Person or entity (financial or otherwise);
adopt any "poison pill" or other type of anti-takeover arrangement, any
shareholder rights provision, any "golden parachute" or similar program after
the date hereto which would have the effect of materially decreasing the value
of GSSC, SBM or SBL or the benefits of acquiring the GSSC Common Stock;
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 77
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(i) Maintenance of Certain Covenants, Etc. At
the time of Closing (i) the total assets of GSSC shall be not less than
$2,300,000,000; (ii) the consolidated equity capital of GSSC shall have been
not less than $178,000,000 as of March 31, 1994, and shall have increased since
that date through normal earnings growth; (iii) the consolidated tangible
equity capital of GSSC shall have been not less than $171,000,000 as of March
31, 1994, and shall have increased since that date through normal earnings
growth; (iv) neither GSSC, SBM nor SBL shall have issued or repurchased from
the date hereof any additional equity or debt securities, or any rights to
purchase or repurchase such securities, except as set forth in this Agreement
(therefore, there shall be not more than 9,600,000 shares of GSSC Common Stock
validly issued and outstanding at the Effective Time of the Merger); (iv) from
December 31, 1993, there shall have been no extraordinary sale of assets, nor
any investment portfolio restructuring by either GSSC, SBM or SBL; (v) neither
GSSC, SBM nor SBL shall have issued or granted since December 31, 1993, through
the Closing Date any additional GSSC Stock Options other than stock options
which could be issued pursuant to the various GSSC stock option and incentive
plans consistent with the terms and conditions of this Reorganization
Agreement, and all validly issued and outstanding GSSC Stock Options shall have
been fully exercised prior to the Closing or tendered to GSSC for conversion
into options to purchase shares of UPC Common Stock as contemplated in Section
2.7 of this Reorganization Agreement and none shall have been repurchased by
GSSC, SBM or SBL prior to the Closing; (vi) from the date hereof, GSSC shall
not have declared or paid any cash dividends except its customary and
historical quarterly cash dividend prior to Closing; and (vii) the Merger can
be accounted for as a "pooling of interests" on the financial statements of
UPC. The criteria and calculations set forth above shall be determined in
accordance with GAAP assuming that GSSC, SBM and SBL shall have been operated
consistently in the normal course of their business; provided, however, that
the effects of any balance sheet expansion through abnormal, unusual,
nonrecurring or out of the ordinary borrowings or by the realization of
extraordinary or nonrecurring gains or other income from the disposition of
assets or liabilities or through similar transactions shall be eliminated from
the calculations;
(j) Non-Compete Agreements. Each member of the
Boards of Directors of GSSC, SBM and SBL shall have entered into a non-compete
agreement with UPC and GSSC substantially in the form of UPC's standard form of
non-compete agreement, a copy which is annexed hereto as Exhibit 8.2(j),
providing for a term of not less than two (2) years and covering the general
geographic region(s) in which GSSC, SBM and SBL currently operate and do
business or in which any of them have a present intention to do business;
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 78
<PAGE> 398
(k) Tax Opinion. UPC shall have received a
written opinion from its counsel to the effect that the transactions
contemplated by this Reorganization Agreement and the Plan of Merger will
constitute one or more tax-free reorganizations under Section 368 of the
Internal Revenue Code;
(l) Pooling of Interests Accounting Treatment.
UPC shall have received (i) from Price Waterhouse, or other independent
accountants acceptable to UPC, a letter dated within five (5) days prior to the
Closing Date, in form and substance acceptable to UPC, stating the accountants'
opinion that, based upon the information furnished to them, the Merger should
be accounted for by UPC as a "pooling of interests" for financial statement
purposes and that such accounting treatment is in accordance with generally
accepted accounting principles and (ii) from GSSC's regularly retained
independent accountants or other independent accountants acceptable to UPC, a
letter dated within five (5) days prior to the Closing Date stating that, upon
a review of GSSC's books and records, the accountants are aware of no reason
why the business combination contemplated in this Reorganization Agreement to
which GSSC is a party should not be accounted for as a "pooling of interests"
under GAAP;
(m) Receipt of Affiliate Letters. Pursuant to
the provisions of Section 2.6 of this Reorganization Agreement, UPC shall have
received a written commitment in form and substance satisfactory to UPC and its
counsel (an "Affiliate Letter") from each GSSC Record Holder who would be
deemed by GSSC to be an Affiliate of GSSC at the time of Closing under the
Securities Laws and who accepts shares of UPC Common Stock as Consideration for
the cancellation, exchange and conversion of his shares of GSSC Common Stock
pursuant to the terms and conditions of this Reorganization Agreement,
committing to UPC that such GSSC Record Holder shall not pledge, assign, sell,
transfer, devise, otherwise alienate or take any action which would eliminate
or diminish the risk of owning or holding the shares of UPC Common Stock to be
received by such GSSC Record Holder upon consummation of the Merger, nor enter
into any formal or informal agreement to pledge, assign, sell or transfer,
devise, or otherwise alienate his right, title and interests in any of the
shares of UPC Common Stock to be delivered by UPC to such GSSC Record Holder
pursuant to the terms and conditions of this Reorganization Agreement until
such time as UPC shall have publicly released a statement of UPC's consolidated
earnings reflecting the combined financial results of operations of UPC and
GSSC for a period of not less than thirty (30) days subsequent to the Effective
Time of the Merger; and
(n) Fairness Opinion. UPC shall have received a
"fairness opinion" letter from its independent financial adviser
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 79
<PAGE> 399
to the effect that, in the opinion of such adviser, the Consideration to be
received by the GSSC Record Holders is fair to the UPC Shareholders from a
financial point of view, and such "fairness opinion" shall not have been
withdrawn prior to the Closing Date, and UPC shall have received an updated
"fairness opinion" letter from such advisers within five (5) days prior to the
Closing Date reinforcing the opinions provided in the initial "fairness
opinion" letter.
8.3 Conditions to Obligations of All Parties. The
obligation of each party to effect the transactions contemplated hereby shall
be subject to the fulfillment, at or prior to the Closing, of the following
conditions:
(a) No Pending or Threatened Claims. That no
claim, action, suit, investigation or other proceeding shall be pending or
threatened before any court or governmental agency which presents a substantial
risk of the restraint or prohibition of the transactions contemplated by this
Reorganization Agreement or the obtaining of material damages or other relief
in connection therewith;
(b) Governmental Approvals and Acquiescence
Obtained. The Parties hereto shall have received all applicable Governmental
Approvals for the consummation of the transactions contemplated herein and all
waiting periods incidental to such approvals or notices given shall have
expired;
(c) Registration Statement. The registration
statement which includes the Proxy Statement shall have been declared effective
and shall not be subject to a stop order of the SEC and, if the offer and sale
of UPC Common Stock in the Merger pursuant to this Reorganization Agreement is
subject to the Blue Sky laws of any state, shall not be subject to a stop order
of any state securities commission; and
(d) GSSC Stockholder and UPC Shareholder
Approval. This Reorganization Agreement and the Plan of Merger shall have been
approved by the GSSC Stockholders by vote of at least the number of GSSC
Stockholders as required by applicable law and the Certificate of Incorporation
of GSSC. This Reorganization Agreement and the Plan of Merger shall have been
approved by the UPC Shareholders by vote of at least the number of UPC
Shareholders as required by applicable law and the Charter of UPC and shall
have been approved by UPC as sole stockholder of INTERIM as required by
applicable law and the Certificate of Incorporation of INTERIM.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 80
<PAGE> 400
ARTICLE 9
TERMINATION
9.1 Termination. This Reorganization Agreement and the
Plan of Merger may be terminated at any time prior to the Closing, as follows:
(a) By mutual consent in writing of the Parties
pursuant to actions of their respective Boards of Directors;
(b) By UPC or INTERIM, should GSSC or any GSSC
Subsidiary fail to conduct its business pursuant to GSSC's, SBM's and SBL's
Covenants made in Article 7;
(c) By UPC or INTERIM or by GSSC, SBM or SBL in
the event the Closing shall not have occurred on or before March 31, 1995 (the
"Target Date"), unless the failure of the Closing to occur shall be due to the
failure of the Party seeking to terminate this Agreement to perform its
obligations hereunder in a timely manner. If UPC shall have filed any and all
applications to obtain the requisite Government Approvals within sixty (60)
days of the date hereof, and if the Closing shall not have occurred solely
because of a delay caused by a government regulatory agency or authority in its
review of the application before it, then GSSC, SBM and SBL shall, upon UPC's
written request, extend the Closing Date until such time as all Government
Approvals have been obtained and any stipulated waiting periods have expired;
(d) By either UPC or INTERIM or by GSSC, SBM or
SBL, upon written notice to the other Party, upon denial of any Governmental
Approval necessary for the consummation of the Merger (or should such approval
be conditioned upon a substantial deviation from the transactions contemplated);
provided, however, that either UPC or GSSC may, upon written notice to
the other, extend the term of this Reorganization Agreement for only
one sixty (60) day period to prosecute diligently and overturn such denial,
provided that such denial has been appealed within ten (10) business days of
the receipt thereof;
(e) By UPC or INTERIM in the event the conditions
set forth in Sections 8.2 or 8.3 are not satisfied in all material respects as
of the Closing Date, or by GSSC, SBM or SBL if the conditions set forth in
Section 8.1 or 8.3 are not satisfied in all material respects as of the Closing
Date, and such failure has not been waived prior to the Closing or it is
determined that no such Closing Date shall occur;
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 81
<PAGE> 401
(f) By UPC or INTERIM in the event that there
shall have been, in UPC's good faith opinion, a material adverse change in the
business, property, assets (including loan portfolios), liabilities (whether
absolute, accrued, contingent or otherwise), prospects, operations, liquidity,
income, condition (financial or otherwise) or net worth of GSSC, SBM or SBL
taken as a whole, or upon the occurrence of any event or circumstance which may
have the effect of limiting or restricting UPC's voting power or other rights
normally enjoyed by the registered holders of the GSSC Common Stock which are
the subject of the instant transaction;
(g) By UPC or INTERIM or GSSC, SBM or SBL in the
event that there shall have been a material breach of any obligation of the
other Party hereunder and such breach shall not have been remedied within
thirty (30) days after receipt by the breaching Party of written notice from
the other Party specifying the nature of such breach and requesting that it be
remedied;
(h) By UPC or INTERIM should GSSC or any GSSC
Subsidiary enter into any letter of intent or agreement with a view to being
acquired by, or effecting a business combination with any other Person; or any
agreement to merge, to consolidate, to combine, or, other than in the ordinary
course of business consistent with past practices, to sell a material portion
of its assets; or to be acquired in any other manner by any other Person; or,
other than in the ordinary course of business consistent with past practices,
to acquire a material amount of assets or a material equity position in any
other Person, whether financial or otherwise;
(i) By UPC or INTERIM should GSSC, SBM or SBL or
any GSSC Subsidiary enter into any formal agreement, letter of understanding,
memorandum or other similar arrangement with any bank regulatory authority
establishing a formal capital plan requiring GSSC, SBM or SBL to raise
additional capital or to sell a substantial portion of its assets;
(j) By GSSC, SBM or SBL in the event the Current
Market Price Per Share of the UPC Common Stock should be less than $22.00 per
share of UPC Common Stock; By UPC or INTERIM in the event the Current Market
Price Per Share of the UPC Common Stock should be greater than $31.25 per share
of UPC Common Stock; provided, however, any such termination of this
Reorganization Agreement by GSSC, SBM or SBL or by UPC or INTERIM pursuant to
this Section 9.1(j) shall be subject to the limitations imposed on the Parties
by Section 3.1(e) of this Reorganization Agreement;
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 82
<PAGE> 402
(k) By either Party, within thirty (30) days from
the date of this Reorganization Agreement, in the event such Party, based on
the Party's opportunity to conduct a preliminary due diligence review of the
books, records and operations of the other Party as provided for in Section 2.3
of this Reorganization Agreement, in good faith determines in it sole
discretion that the results of the review conducted by such Party or its agents
do not support and reinforce the reviewing Party's preliminary expectations as
to the sustained growth and earnings prospects of the reviewed Party;
(l) By GSSC, SBM or SBL in the event that there
shall have been, in GSSC's good faith opinion, a material adverse change in the
business, property, assets (including loan portfolios), liabilities (whether
absolute, accrued, contingent or otherwise), prospects, operations, liquidity,
income, condition (financial or otherwise) or net worth of UPC taken as a
whole, or upon the occurrence of any event or circumstance which may have the
effect of limiting or restricting the GSSC Record Holder's voting power or
other rights normally enjoyed by the registered holders of the UPC Common Stock
which are the subject of the instant transaction; or
(m) By GSSC, SBM or SBL should UPC or INTERIM or
any UPC Subsidiary enter into any formal agreement, letter of understanding,
memorandum or other similar arrangement with any bank regulatory authority
establishing a formal capital plan requiring UPC to raise additional capital or
to sell a substantial portion of its assets.
If a Party should elect to terminate this Reorganization Agreement pursuant to
subsections (b), (c), (d), (e), (f), (g), (h), (i), (j), (k), (l) or (m) of
this Section 9.1, it shall give notice to the other Party, in writing, of its
election in the manner prescribed in Section 10.1 ("Notices") of this
Reorganization Agreement.
9.2 Effect of Termination. In the event that this
Reorganization Agreement should be terminated pursuant to Section 9.1 hereof,
all further obligations of the Parties under this Reorganization Agreement
shall terminate without further liability of any Party to another; provided,
however, that a termination under Section 9.1 hereof shall (i) not relieve any
Party of any liability for a breach of this Reorganization Agreement or for any
misstatement or misrepresentation made hereunder prior to such termination, or
be deemed to constitute a waiver of any available remedy for any such breach,
misstatement or misrepresentation; and (ii) shall not be deemed a termination
of the obligations of GSSC to UPC under Section 7.4 of this Reorganization
Agreement which are intended by the Parties hereto
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 83
<PAGE> 403
to survive a termination under Section 9.1 hereof, and any termination of this
Reorganization Agreement pursuant to Section 7.4 hereof shall give rise to
liability only to the extent therein provided.
ARTICLE 10
GENERAL PROVISIONS
10.1 Notices. Any notice, request, demand and other
communication which either Party hereto may desire or may be required hereunder
to give shall be in writing and shall be deemed to be duly given if delivered
personally or mailed by certified or registered mail (postage prepaid, return
receipt requested), air courier or facsimile transmission, addressed or
transmitted to such other Party as follows:
If to GSSC, SBM or SBL:
Grenada Sunburst System Corporation
2000 Gateway
Post Office Box 947
Grenada, Mississippi 38902-0947
Fax: (601) 227-2070
Attn: James T. Boone, Chairman, President and
Chief Executive Officer
With a copy to: Thompson & Mitchell
One Mercantile Center
St. Louis, Missouri
Fax: (314) 231-1717
Attn: Gerard K. Sandweg, Jr., Esq.
If to UPC or INTERIM:
Union Planters Corporation
P.O. Box 387 (mailing address)
Memphis, Tennessee 38147
or 7130 Goodlett Farms Parkway (deliveries)
Memphis, Tennessee 38018
Fax: (901) 383-2877
Attn: Jackson W. Moore, President
Gary A. Simanson, Associate General Counsel
or to such other address as any Party hereto may hereafter designate to the
other Parties in writing. Notice shall be deemed to have been given on the
date reflected in the proof or evidence of delivery, or if none, on the date
actually received.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 84
<PAGE> 404
10.2 Assignability and Parties in Interest. This
Reorganization Agreement shall not be assignable by any of the Parties hereto;
provided, however, that UPC may assign, set over and transfer all, or any part
of its rights and obligations under this Reorganization Agreement to any one or
more of its present or future Affiliates. This Reorganization Agreement shall
inure to the benefit of, and be binding only upon the Parties hereto and their
respective successors and permitted assigns and no other Persons.
10.3 Governing Law. This Reorganization Agreement shall
be governed by, and construed and enforced in accordance with, the internal
laws, and not the laws pertaining to choice or conflicts of laws, of the State
of Tennessee, unless and to the extent that federal law controls and in
accordance with the laws of the State of Delaware with respect to those
provisions of this Reorganization Agreement that reference the Delaware Code.
Any dispute arising between the Parties in connection with the transactions
which are the subject of this Reorganization Agreement shall be heard in a
court of competent jurisdiction located in Shelby County, Tennessee.
10.4 Counterparts. This Reorganization Agreement may be
executed simultaneously in one or more counterparts, each of which shall be
deemed an original, but all of which shall constitute but one and the same
instrument.
10.5 Best Efforts. GSSC, SBM, UPC and INTERIM each
agrees to use its best efforts to complete the transactions contemplated by
this Reorganization Agreement in accordance with the terms and provisions of
this Reorganization Agreement.
10.6 Publicity. The Parties agree that press releases
and other public announcements to be made by any of them with respect to the
transactions contemplated hereby shall be subject to mutual agreement.
Notwithstanding the foregoing, each of the Parties hereto may respond to
inquiries relating to this Reorganization Agreement and the transactions
contemplated hereby by the press, employees or customers without any notice or
further consent of the other Parties. Nothing in this Reorganization Agreement
shall be construed to prohibit GSSC or the Board of Directors of GSSC from
making any disclosure to the GSSC Stockholders which in the judgment of the
Board of Directors of GSSC (as advised by counsel) may be required in
connection with this Reorganization Agreement. GSSC shall promptly notify UPC
in writing if any such disclosure is made. Nothing in this Reorganization
Agreement shall be construed to prohibit UPC or the Board of Directors of UPC
from making any disclosure to the UPC Shareholders which in the judgment of the
Board of Directors of UPC (as advised by counsel) may be required in connection
with
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 85
<PAGE> 405
this Reorganization Agreement. UPC shall promptly notify GSSC in writing if
any such disclosure is made.
10.7 Entire Agreement. This Reorganization Agreement,
together with the Plan of Merger which is Exhibit A hereto, the Confidentiality
Agreement described in Section 2.4 herein, the Schedules, Annexes, Exhibits and
certificates required to be delivered hereunder and any amendments or addenda
hereafter executed and delivered in accordance with Section 10.9 hereof
constitute the entire agreement of the Parties hereto pertaining to the
transaction contemplated hereby and supersede all prior written and oral (and
all contemporaneous oral) agreements and understandings of the Parties hereto
concerning the subject matter hereof. The Schedules, Annexes, Exhibits and
certificates attached hereto or furnished pursuant to this Reorganization
Agreement are hereby incorporated as integral parts of this Reorganization
Agreement. Except as provided herein, by specific language and not by mere
implication, this Reorganization Agreement is not intended to confer upon any
other person not a Party to this Reorganization Agreement any rights or
remedies hereunder.
10.8 Severability. If any portion or provision of this
Reorganization Agreement should be determined by a court of competent
jurisdiction to be invalid, illegal or unenforceable in any jurisdiction, such
portion or provision shall be ineffective as to that jurisdiction to the extent
of such invalidity, illegality or unenforceability, without affecting in any
way the validity or enforceability of the remaining portions or provisions
hereof in such jurisdiction or rendering that or any other portions or
provisions of this Reorganization Agreement invalid, illegal or unenforceable
in any other jurisdiction.
10.9 Modifications, Amendments and Waivers. At any time
prior to the Closing or termination of this Reorganization Agreement, the
Parties may, solely by written agreement executed by their duly authorized
officers:
(a) extend the time for the performance of any of
the obligations or other acts of the other Party hereto;
(b) waive any inaccuracies in the representations
and warranties made by the other Party contained in this Reorganization
Agreement or in the Annexes, Schedules or Exhibits hereto or any other document
delivered pursuant to this Reorganization Agreement;
(c) waive compliance with any of the covenants or
agreements of the other Party contained in this Reorganization Agreement; and
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 86
<PAGE> 406
(d) except as provided in Section 2.5 of this
Reorganization Agreement, amend or add to any provision of this Reorganization
Agreement or the Plan of Merger; provided, however, that no provision of this
Reorganization Agreement may be amended or added to except by an agreement in
writing signed by the Parties hereto or their respective successors in interest
and expressly stating that it is an amendment to this Reorganization Agreement.
10.10 Interpretation. The headings contained in this
Reorganization Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Reorganization Agreement.
10.11 Payment of Expenses. Except as set forth in Section
7.4 of this Reorganization Agreement, UPC and GSSC shall each pay its own fees
and expenses (including, without limitation, legal fees and expenses) incurred
by it in connection with the transactions contemplated hereunder.
10.12 Finders and Brokers. UPC, INTERIM, GSSC, SBM and SBL
represent and warrant to each other that except for the employment by GSSC of
The Robinson Humphrey Company, Inc. they have employed no broker or finder in
connection with the transactions described in this Reorganization Agreement
under an arrangement pursuant to which a fee is, or may be due to such broker
or finder as a result of the execution of this Reorganization Agreement or the
closing of the transactions contemplated herein. This section shall survive
the termination of this Reorganization Agreement.
10.13 Equitable Remedies. The Parties hereto agree that, in
the event of a breach of this Reorganization Agreement by GSSC, SBM or SBL, UPC
and INTERIM will be without an adequate remedy at law by reason of the unique
nature of GSSC, SBM and SBL. In recognition thereof, in addition to (and not
in lieu of) any remedies at law which may be available to UPC and INTERIM, UPC
and INTERIM shall be entitled to obtain equitable relief, including the
remedies of specific performance and injunction, in the event of a breach of
this Reorganization Agreement by GSSC, SBM or SBL, and no attempt on the part
of UPC or INTERIM to obtain such equitable relief shall be deemed to constitute
an election of remedies by UPC or INTERIM which would preclude UPC or INTERIM
from obtaining any remedies at law to which it would otherwise be entitled.
GSSC, SBM and SBL covenant that they shall not contend in any such proceeding
that UPC or INTERIM is not entitled to a decree of specific performance by
reason of having an adequate remedy at law. Nothing in this Section 10.13
shall be deemed to restrict any remedies which the Parties hereto may have
under law or equity.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 87
<PAGE> 407
10.14 Attorneys' Fees. If any Party hereto shall bring an
action at law or in equity to enforce its rights under this Reorganization
Agreement (including an action based upon a misrepresentation or the breach of
any warranty, covenant, agreement or obligation contained herein), the
prevailing Party in such action shall be entitled to recover from the other
Party its reasonable costs and expenses necessarily incurred in connection with
such action (including fees, disbursements and expenses of attorneys and costs
of investigation).
10.15 Survival of Representations and Warranties. All
representations and warranties made by the Parties hereto or in any instrument
or document furnished in connection herewith, shall survive the Closing and any
investigation at any time made by or on behalf of the Parties hereto and shall
expire at the Effective Time of the Merger except as to any matter which is
based upon willful fraud with respect to which the representations and
warranties set forth in this Reorganization Agreement shall expire on the
earlier of six months from the Effective Time of the Merger or the expiration
of the applicable statutes of limitation; provided, however, nothing herein
shall create any right of action as to any individual who has not personally
and individually engaged in any act of willful fraud giving rise to any breach
of the representations and warranties made by the Parties hereto. Nothing in
this Section 10.15 shall limit GSSC's, SBM's, SBL's, UPC's or INTERIM's rights
or remedies for misrepresentations, breaches of this Reorganization Agreement
or any other improper action or inaction by the other Party hereto prior to the
its termination. All obligations, agreements, covenants and undertakings of
the Parties hereto to be performed either in whole or in part after the
Effective Time of the Merger shall survive the Closing and shall not expire at
the Effective Time of the Merger.
10.16 No Waiver. No failure, delay or omission of or by any
Party in exercising any right, power or remedy upon any breach or default of
any other Party shall impair any such rights, powers or remedies of the Party
not in breach or default, nor shall it be construed to be a waiver of any such
right, power or remedy, or an acquiescence in any similar breach or default;
nor shall any waiver of any single breach or default be deemed a waiver of any
other breach or default theretofore or thereafter occurring. Any waiver,
permit, consent or approval of any kind or character on the part of any Party
of any provisions of this Reorganization Agreement must be in writing and must
be executed by the Parties to this Reorganization Agreement and shall be
effective only to the extent specifically set forth in such writing.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 88
<PAGE> 408
10.17 Remedies Cumulative. All remedies provided in this
Reorganization Agreement, by law or otherwise, shall be cumulative and not
alternative.
10.18 Materiality. For purposes of this Reorganization
Agreement, any determination of materiality shall be made based on the financial
condition of either GSSC and its Subsidiaries or UPC and its Subsidiaries taken
as a whole.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 89
<PAGE> 409
IN WITNESS WHEREOF, each of the Parties hereto has duly executed and
delivered this Reorganization Agreement or has caused this Reorganization
Agreement to be executed and delivered in its name and on its behalf by its
representative thereunto duly authorized, all as of the date first written
above.
GRENADA SUNBURST SYSTEM CORPORATION
By:
-------------------------------
James T. Boone
Its: Chairman of the Board
ATTEST:
- ------------------------------
Edwin T. Cofer, Secretary
SUNBURST BANK, MISSISSIPPI
By:
-------------------------------
James T. Boone
Its: President and Chief
Executive Officer
ATTEST:
- ------------------------------
Cashier
SUNBURST BANK
By:
-------------------------------
Jackson A. Huff
Its: President and Chief
Executive Officer
ATTEST:
- ------------------------------
Secretary
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 90
<PAGE> 410
UNION PLANTERS CORPORATION
By:
-------------------------------
Jackson W. Moore
Its: President
ATTEST:
- ------------------------------
Secretary
GSSC ACQUISITION COMPANY, INC.
By:
-------------------------------
Jackson W. Moore
Its: President
ATTEST:
- ------------------------------
Secretary
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 91
<PAGE> 411
PLAN OF MERGER EXHIBIT A
SETTING FORTH THE PLAN OF MERGER
OF
GSSC ACQUISITION COMPANY, INC.
(A DELAWARE CORPORATION)
WITH AND INTO
GRENADA SUNBURST SYSTEM CORPORATION
(A DELAWARE CORPORATION)
THIS PLAN OF MERGER ("Plan of Merger") is made and entered into as of
the 1st day of July, 1994, by and between GRENADA SUNBURST SYSTEM CORPORATION
("GSSC"), a corporation chartered and existing under the laws of the State of
Delaware which is a registered bank holding company and whose principal offices
are located at 2000 Gateway (Post Office Box 947), Grenada, Grenada County,
Mississippi 38901; UNION PLANTERS CORPORATION ("UPC"), a corporation organized
and existing under the laws of the State of Tennessee having its principal
office at 7130 Goodlett Farms Parkway, Memphis, Shelby County, Tennessee 38018
and which is registered as a bank holding company under the Bank Holding
Company Act; and GSSC ACQUISITION COMPANY, INC. ("INTERIM"), a corporation
chartered and existing under the laws of the State of Delaware, whose principal
place of business is located at 7130 Goodlett Farms Parkway, Memphis, Shelby
County, Tennessee 38018, and which is a wholly-owned subsidiary of UPC. All of
the authorized, issued and outstanding shares of capital stock of INTERIM are
owned and held of record by UPC.
PREAMBLE
WHEREAS, UPC, INTERIM and GSSC have entered into an Agreement and Plan
of Reorganization dated the 1st day of July, 1994 ("Reorganization Agreement")
to which this Plan of Merger is Exhibit A and is incorporated by reference as
an integral part thereof providing for the merger of INTERIM with and into GSSC
(which would be the Surviving Corporation) as a result of which UPC would
become the beneficial owner and holder of record of all of the GSSC Common
Stock outstanding immediately prior to the Effective Time of the Merger for the
Consideration set forth in the Reorganization Agreement and this Plan of
Merger; and
PLAN OF MERGER - EXHIBIT A TO AGREEMENT AND PLAN OF REORGANIZATION
PAGE 92
<PAGE> 412
WHEREAS, As provided in the Reorganization Agreement, UPC has caused
INTERIM to join in this Plan of Merger by executing and delivering same; and
WHEREAS, The Boards of Directors of UPC, INTERIM and GSSC are each of
the opinion that the interests of their respective corporations and their
corporations' respective stockholders and shareholders would best be served if
INTERIM were to be merged with and into GSSC, which would survive the Merger,
on the terms and conditions provided in the Reorganization Agreement and in
this Plan of Merger, and as a result of such Merger becoming effective, the
Surviving Corporation would become a wholly-owned subsidiary of UPC.
NOW, THEREFORE, in consideration of the covenants and agreements of
the Parties contained herein, GSSC, UPC and INTERIM hereby make, adopt and
approve this Plan of Merger in order to set forth the terms and conditions for
the merger of INTERIM with and into GSSC (the "Merger").
ARTICLE I.
DEFINITIONS
1.1 As used in this Plan of Merger and in any amendments hereto,
all capitalized terms herein shall have the meanings assigned to such terms in
the Reorganization Agreement unless otherwise defined herein.
ARTICLE 2
CAPITALIZATION
2.1 GSSC ACQUISITION COMPANY, INC.. The authorized capital stock
of INTERIM consists of 1,000 shares of common stock having a par value of $.01
per share (the "INTERIM Common Stock") and no shares of preferred stock. As of
the date of this Plan of Merger, 1,000 shares of INTERIM Common Stock are
issued and outstanding, and no shares of INTERIM Common Stock are held by it as
treasury stock. All such issued and outstanding shares of INTERIM Common Stock
are owned beneficially and of record by UPC.
2.2 GRENADA SUNBURST SYSTEM CORPORATION The authorized capital
stock of GSSC consists of 15,000,000 shares of common stock having a par value
of $1.00 per share (the "GSSC Common Stock") and no shares of preferred stock
(the "GSSC Preferred Stock). As of the date hereof, 9,492,975 shares of GSSC
Common Stock were issued and outstanding, no shares of GSSC Common Stock were
held by GSSC as GSSC Treasury Stock and no shares of GSSC Preferred Stock were
issued and outstanding.
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ARTICLE 3
PLAN OF MERGER
3.1 Constituent Corporations. The name of each constituent
corporation to the Merger is:
GSSC ACQUISITION COMPANY, INC.
and
GRENADA SUNBURST SYSTEM CORPORATION
3.2 Surviving Corporation. The Surviving Corporation shall be:
GRENADA SUNBURST SYSTEM CORPORATION
which subsequent to the Effective Time of the Merger shall continue to be
named:
GRENADA SUNBURST SYSTEM CORPORATION
3.3 Terms and Conditions of Merger. The Merger shall be
consummated only pursuant to, and in accordance with this Plan of Merger and
the Reorganization Agreement. Conditioned upon the satisfaction or waiver (by
the Party or Parties entitled to the benefits thereof) of all conditions
precedent to consummation of the Merger, the Merger shall become effective on
the date and at the time (the "Effective Time of the Merger") of the filing of
a Certificate of Merger with the Secretary of State of the State of Delaware,
or at such later time and/or date as may be agreed upon by the parties and set
forth in the Certificate of Merger. At the Effective Time of the Merger,
INTERIM shall be merged with and into GSSC which will survive the Merger, and
the separate existence of INTERIM shall cease thereupon, and without further
action, GSSC shall thereafter possess all of the assets, rights, privileges,
appointments, powers, licenses, permits and franchises of both GSSC and
INTERIM, whether of a public or private nature, and shall be subject to all of
the liabilities, restrictions, disabilities, and duties of both GSSC and
INTERIM.
3.4 Certificate of Incorporation. At the Effective Time of the
Merger, the Certificate of Incorporation of GSSC, as in effect immediately
prior to the Effective Time of the Merger, shall constitute the Certificate of
Incorporation of GSSC as the Surviving Corporation, unless and until the same
shall be amended thereafter as provided by law and the terms of such
Certificate of Incorporation.
3.5 Bylaws. At the Effective Time of the Merger, the Bylaws of
GSSC, as in effect immediately prior to the Effective Time of the Merger, shall
continue to be its Bylaws as the
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Surviving Corporation, unless and until amended or repealed thereafter as
provided by law, its Certificate of Incorporation and such Bylaws.
3.6 Directors and Officers. The directors and officers of GSSC in
office immediately prior to the Effective Time of the Merger shall continue to
be the directors and officers of the Surviving Corporation, to hold office as
provided in the Certificate of Incorporation and Bylaws of the Surviving
Corporation, unless and until their successors shall have been elected or
appointed and shall have qualified or they shall have been removed as provided
therein.
3.7 Name. The name of GSSC as the Surviving Corporation following
the Merger, shall remain:
GRENADA SUNBURST SYSTEM CORPORATION
or such other name as GSSC shall thereafter adopt.
ARTICLE 4
DESCRIPTION OF THE TRANSACTION
4.1 Conversion of the INTERIM Common Stock. At the Effective Time
of the Merger, each share of $.01 par value common stock of INTERIM (the
"INTERIM Common Stock") issued and outstanding immediately prior to the
Effective Time of The Merger shall, by virtue of the Merger becoming effective
and without any further action on the part of anyone, be converted into and
become one share of the issued and outstanding common stock of the Surviving
Corporation.
4.2 Conversion and Cancellation of Shares of GSSC. At the
Effective Time of the Merger, each share of $1.00 par value common stock of
GSSC issued and outstanding immediately prior to the Effective Time of the
Merger shall, by virtue of the Merger becoming effective and without any
further action on the part of anyone, be converted, exchanged and cancelled as
provided in Section 4.3 hereof.
4.3 Exchange of GSSC Shares; Exchange Ratio. At the Effective
Time of the Merger, the outstanding shares of GSSC Common Stock held by the
GSSC Record Holders immediately prior to the Effective Time of the Merger
shall, without any further action on the part of anyone, cease to represent any
interest (equity, shareholder or otherwise) in GSSC and shall automatically be
converted exclusively into, and constitute only the right of the GSSC Record
Holders to receive in exchange for their shares of GSSC Common Stock, whole
shares of UPC Common
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Stock and a cash payment in settlement of any remaining fractional share of UPC
Common Stock in accordance with the terms and conditions of this Section 4.3.
The shares of UPC Common Stock and the cash settlement of any remaining
fractional share of UPC Common Stock deliverable by UPC or INTERIM to the GSSC
Record Holders pursuant to the terms of this Reorganization Agreement are
sometimes collectively referred to herein as the "Consideration."
The number of shares of UPC Common Stock to be exchanged for each share of GSSC
Common Stock issued and outstanding immediately prior to the Effective Time of
the Merger shall be based on an exchange ratio (the "Exchange Ratio") as
determined and set forth in this Section 4.3. The Exchange Ratio shall be
determined as follows:
(A) In the event the Current Market Price
Per Share of UPC Common Stock should be greater than or equal to
$24.00 per share of UPC Common Stock but less than or equal to $29.25
per share of UPC Common Stock (the "Primary Collar"), the Exchange
Ratio shall be fixed at 1.4206 shares of UPC Common Stock for each
share of GSSC Common Stock validly issued and outstanding immediately
prior to the Effective Time of the Merger;
(B) In the event the Current Market Price
Per Share of UPC Common Stock should be greater than $29.25 per share
of UPC Common Stock but less than or equal to $31.25 per share of UPC
Common Stock (the "Upper Secondary Collar"), the Exchange Ratio shall
be based on (a) a fixed price of $41.55 per share of GSSC Common Stock
divided by (b) the Current Market Price Per Share of UPC Common Stock
for each share of GSSC Common Stock validly issued and outstanding
immediately prior to the Effective Time of the Merger;
(C) In the event the Current Market Price
Per Share of UPC Common Stock should be greater than $31.25 per share
of UPC Common Stock (the "Ceiling"), the Exchange Ratio shall be fixed
at 1.3296 shares of UPC Common Stock for each share or GSSC Common
Stock validly issued and outstanding immediately prior to the
Effective Time of the Merger; provided, however, that UPC would have
the right to either deliver shares of UPC Common Stock based on the
fixed Exchange Ratio of 1.3296 or to terminate the
transaction;provided, however, should UPC elect to terminate the
transaction under this provision, GSSC shall have the unilateral right
to reinstate the transaction by accepting in exchange for each share
of GSSC Common Stock validly issued and outstanding immediately prior
to the Effective
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Time of the Merger that number of shares of UPC Common Stock at the
Current Market Price Per Share sufficient to equal $41.55 per share of
GSSC Common Stock;
(D) In the event the Current Market Price
Per Share of UPC Common Stock should be greater than or equal to
$22.00 per share of UPC Common Stock but less than $24.00 per share of
UPC Common Stock (the "Lower Secondary Collar"), the Exchange Ratio
shall be based on (a) a fixed price of $34.09 per share of GSSC Common
Stock divided by (b) the Current Market Price Per Share of UPC Common
Stock for each share of GSSC Common Stock validly issued and
outstanding immediately prior to the Effective Time of the Merger; and
(E) In the event the Current Market Price
Per Share of UPC Common Stock should be less than $22.00 per share of
UPC Common Stock (the "Floor"), the Exchange Ratio shall be fixed at
1.5495 shares of UPC Common Stock for each share of GSSC Common Stock
validly issued and outstanding immediately prior to the Effective Time
of the Merger; provided, however, that subject to the terms and
provisions of Section 3.3 of this Reorganization Agreement, GSSC shall
have the right to either accept the fixed Exchange Ratio of 1.5495 or
terminate the transaction in accordance with the terms and provisions
of Section 3.3 of the Reorganization Agreement, provided, however,
that should GSSC elect to terminate the transaction under this
provision and the Current Market Price Per Share of UPC Common Stock
should be greater than or equal to $18.50, UPC shall have the
unilateral right to reinstate the transaction by delivering in
exchange for each share of GSSC Common Stock validly issued and
outstanding immediately prior to the Effective Time of the Merger
shares of UPC Common Stock based on that number of shares of UPC
Common Stock at the Current Market Price Per Share sufficient to equal
$34.09 per share of GSSC Common Stock.
The Exchange Ratio as determined in this Section 4.3 shall be based on an
aggregate of no more than 9,600,000 shares of GSSC Common Stock being validly
issued and outstanding immediately prior to the Effective Time of the Merger
and, for purposes of this paragraph, counting all unexercised GSSC Stock
Options issued and outstanding immediately prior to the Effective Time of the
Merger as issued and outstanding shares of GSSC Common Stock so converted and
exchanged; provided, however, that no fractional shares of UPC Common Stock
shall be issued and if, after aggregating all of the shares of UPC Common Stock
to which a GSSC Record Holder is entitled based upon the Exchange Ratio, there
shall be a fractional share of UPC Common Stock remaining, such
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fractional share shall be settled by a cash payment therefor pursuant to the
Mechanics of Payment of the Consideration set forth in Section 4.4 hereof,
which shall be calculated based upon the Current Market Price Per Share of one
(1) full share of UPC Common Stock.
(1) DEFINITION OF "CURRENT MARKET PRICE
PER SHARE." The "Current Market Price Per Share" shall be the average
closing price per share of the "last" real time trades (i.e., closing
price) of the UPC Common Stock on the NYSE (as published in The Wall
Street Journal, Eastern Edition) for each of the twenty (20) NYSE
general market trading days on which the NYSE was open for business
next preceding the issuance of all necessary Regulatory Approvals (the
"Pricing Period"). In the event the UPC Common Stock should not trade
on one or more of the trading days during the Pricing Period (a "No
Trade Date"), any such No Trade Date shall be disregarded in computing
the average closing price per share of UPC Common Stock and the
average shall be based upon the "last" real time trades and number of
days on which the UPC Common Stock actually traded during the Pricing
Period.
(2) EFFECTS OF APPRAISAL RIGHTS ON THE
EXCHANGE RATIO. The Exchange Ratio shall be unaffected by appraisal
rights as granted under Delaware law because the GSSC Common Stock is
listed for trading on the NASDAQ National Market System, which is a
"national securities exchange" as defined in rules promulgated by the
SEC pursuant to the 1934 Act, and therefore, pursuant to Delaware Code
Section 8-503-262, no GSSC Record Holder may assert appraisal rights
in connection with the Merger or the transactions contemplated in the
Reorganization Agreement.
(3) EFFECT OF STOCK SPLITS, REVERSE
STOCK SPLITS, STOCK DIVIDENDS AND SIMILAR CHANGES IN THE CAPITAL OF
GSSC OR UPC. Should GSSC or UPC effect any stock splits, reverse
stock splits, stock dividends or similar changes in their respective
capital accounts subsequent to the date of the Reorganization
Agreement but prior to the Effective Time of the Merger, the Exchange
Ratio shall be adjusted in such a manner as the Board of Directors of
UPC shall deem in good faith to be fair and reasonable in order to
give effect to such changes subject to GSSC's Board of Directors'
approval.
4.4 Mechanics of Payment of the Consideration. As soon as
reasonably practicable, but in any event no more than five (5) Business Days
after the Effective Time of the Merger, the Corporate Trust Department of Union
Planters National Bank, Memphis, Tennessee (the "Exchange Agent") shall deliver
to each
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of the GSSC Record Holders such materials and information deemed necessary by
the Exchange Agent to advise the GSSC Record Holders of the procedures required
for proper surrender of their certificates evidencing and representing shares
of the GSSC Common Stock in order for the GSSC Record Holders to receive the
Consideration. Such materials shall include, without limitation, a Letter of
Transmittal, an Instruction Sheet, and a return mailing envelope addressed to
the Exchange Agent (collectively the "Stockholder Materials"). All Stockholder
Materials shall be sent by United States mail to the GSSC Record Holders at the
addresses set forth on a certified stockholder list to be delivered by GSSC to
UPC at the Closing (the "Stockholder List") and shall also be made available at
the Corporate Trust Department offices of the Exchange Agent. As soon as
reasonably practicable thereafter, the GSSC Record Holders of all of the
outstanding shares of GSSC Common Stock, shall be requested by the Exchange
Agent to deliver, or cause to be delivered, by United States Postal Service,
hand delivery or any other means of delivery selected by such GSSC Record
Holders, to the Exchange Agent, pursuant to the Stockholder Materials, the
certificates formerly evidencing and representing all of the shares of GSSC
Common Stock which were validly issued and outstanding immediately prior to the
Effective Time of the Merger, and the Exchange Agent shall take prompt action
to process such certificates formerly evidencing and representing shares of
GSSC Common Stock received by it (including the prompt return of any defective
submissions with instructions as to those actions which may be necessary to
remedy any defects). Upon receipt of the proper submission of the
certificate(s) formerly representing and evidencing ownership of the shares of
GSSC Common Stock, the Exchange Agent shall, on or prior to the 30th day after
the Effective Time of the Merger but as soon as practicable mail, to the former
GSSC Record Holders in exchange for the certificate(s) surrendered by them, the
Consideration to be delivered for each such GSSC Record Holder's shares of GSSC
Common Stock evidenced by the certificate or certificates which were cancelled
and converted exclusively into the right to receive the Consideration upon the
Merger becoming effective. After the Effective Time of the Merger and until
properly surrendered to the Exchange Agent, each outstanding certificate or
certificates which formerly evidenced and represented the shares of GSSC Common
Stock of a GSSC Record Holder, subject to the provisions of this Section, shall
be deemed for all corporate purposes to represent and evidence only the right
to receive the Consideration into which such GSSC Record Holder's shares of
GSSC Common Stock were converted and aggregated at the Effective Time of the
Merger. Unless and until the outstanding certificate or certificates, which
immediately prior to the Effective Time of the Merger evidenced and represented
the GSSC Record Holder's GSSC Common Stock shall have been properly surrendered
as provided above, the
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Consideration payable to the GSSC Record Holder(s) of the cancelled shares as
of any time after the Effective Date shall not be delivered to the GSSC Record
Holder(s) of such certificate(s) until such certificates shall have been
surrendered in the manner required. Each GSSC Record Holder shall be
responsible for all federal, state and local taxes which may be incurred by
such holder on account of the receipt of any Consideration. The GSSC Record
Holder(s) of any certificate(s) which shall have been lost or destroyed may
nevertheless, subject to the provisions of this Section, receive the
Consideration to which each such GSSC Record Holder is entitled, provided that
each such GSSC Record Holder shall deliver to UPC and to the Exchange Agent:
(i) a sworn statement certifying the fact of such loss or destruction and
specifying the circumstances thereof and (ii) a lost instrument bond in form
satisfactory to UPC and the Exchange Agent which has been duly executed by a
corporate surety satisfactory to UPC and the Exchange Agent, indemnifying the
Surviving Corporation, UPC, the Exchange Agent (and their respective
successors) to their satisfaction against any loss or expense which any of them
may incur as a result of such lost or destroyed certificates being thereafter
presented. Any costs or expenses which may arise from such replacement
procedure, including the premium on the lost instrument bond, shall be for the
account of the GSSC Record Holder.
4.5 Stock Transfer Books. At the Effective Time of the Merger,
the stock transfer books of GSSC shall be closed and no transfer of shares of
GSSC Common Stock shall be made thereafter.
4.6 Effects of the Merger. At the Effective Time of the Merger,
the separate existence of INTERIM shall cease, and INTERIM shall be merged with
and into GSSC which, as the Surviving Corporation, shall thereupon and
thereafter possess all of the assets, rights, privileges, appointments, powers,
licenses, permits and franchises of GSSC and INTERIM, whether of a public or a
private nature, and shall be subject to all of the liabilities, restrictions,
disabilities and duties of both GSSC and INTERIM.
4.7 Transfer of Assets. At the Effective Time of the Merger, all
rights, assets, licenses, permits, franchises and interests of GSSC and INTERIM
in and to every type of property, whether real, personal, or mixed, whether
tangible or intangible, and to choses in action shall be deemed to be vested in
GSSC as the Surviving Corporation by virtue of the Merger and without any deed
or other instrument or act of transfer whatsoever.
4.8 Assumption of Liabilities. At the Effective Time of the
Merger, the Surviving Corporation shall become and be liable for all debts,
liabilities, obligations and contracts of INTERIM
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as well as those of the Surviving Corporation, whether the same shall be
matured or unmatured; whether accrued, absolute, contingent or otherwise; and
whether or not reflected or reserved against in the balance sheets, other
financial statements, books of account or records of INTERIM or the Surviving
Corporation.
4.9 Appraisal Rights of GSSC Stockholders. Pursuant to the
provisions of Section 8-503-262 of the Delaware Code, GSSC Stockholders shall
not be entitled to assert appraisal rights in connection with the Merger or to
seek those appraisal remedies afforded by the Delaware Code because the GSSC
Common Stock is listed for trading on the NASDAQ National Market System, which
is a "national securities exchange" as defined in rules promulgated by the SEC
pursuant to the 1934 Act, and therefore, pursuant to Delaware Code Section
8-503-262, no GSSC Record Holder may assert appraisal rights in connection with
the Merger or the transactions contemplated in the Reorganization Agreement.
4.10 Approvals of Stockholders of GSSC, UPC and INTERIM. In order
to become effective, the Merger must be approved by the respective stockholders
of GSSC, UPC and of INTERIM at meetings to be called for that purpose by their
respective Boards of Directors, or by their unanimous action by written consent
complying fully with the laws of Delaware and Tennessee.
4.11 GSSC Stock Options. In the event and to the extent that there
are any GSSC Stock Options validly issued and outstanding at the time of
Closing, such GSSC Stock Options shall at the Effective Time of the Merger
automatically and without further action on the part of anyone be converted
into options to purchase shares of UPC Common Stock on the same terms and
conditions attributable to the GSSC Stock Options to purchase shares of GSSC
Common Stock adjusted by and in accordance with the Exchange Ratio as provided
in the Reorganization Agreement.
ARTICLE 5
AMENDMENTS AND WAIVERS
5.1 AMENDMENTS. To the extent permitted by law, this Plan of
Merger may be amended unilaterally by UPC and INTERIM as set forth in Section
2.5 and Section 10.9(d) of the Reorganization Agreement; provided, however,
that the provisions of Section 4.3 of this Plan of Merger relating to the
manner or basis upon which shares of GSSC Common Stock will be converted into
the exclusive right to receive the Consideration from UPC shall not be amended
in such a manner as to reduce the amount of the Consideration payable to the
GSSC Record Holders determined as provided in Section 4.3 of this Plan of
Merger nor shall this
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Plan of Merger be amended to permit UPC to utilize assets other than cash or
good funds to make payment of the Consideration as provided in Section 3.1(e)
of the Reorganization Agreement at any time after the GSSC Stockholders'
Meeting without the requisite approval (except as provided for in the
Reorganization Agreement) of the GSSC Record Holders, and that no amendment to
this Plan of Merger shall modify the requirements of regulatory approval as set
forth in Section 8.3(b) of the Reorganization Agreement.
5.2 AUTHORITY FOR AMENDMENTS AND WAIVERS. Prior to the
Effective Time of the Merger, UPC and INTERIM, acting through their respective
Boards of Directors or chief executive officers or presidents or other
authorized officers, shall have the right to amend this Plan of Merger to
postpone the Effective Time of the Merger to a date and time subsequent to the
time of filing of the Plan of Merger with the Delaware Secretary of State, to
waive any default in the performance of any term of this Plan of Merger by
GSSC, to waive or extend the time for the compliance or fulfillment by GSSC of
any and all of its obligations under this Plan of Merger, and to waive any or
all of the conditions precedent to the obligations of UPC and INTERIM under
this Plan of Merger, except any condition that, if not satisfied, would result
in the violation of any law or applicable governmental regulation. Prior to
the Effective Time of the Merger, GSSC, acting through its Board of Directors
or chief executive officer or president or other authorized officer, shall have
the right to amend this Plan of Merger to postpone the Effective Time of the
Merger to a date and time subsequent to the time of filing of the Plan of
Merger with the Delaware Secretary of State, to waive any default in the
performance of any term of this Plan of Merger by UPC or INTERIM, to waive or
extend the time for the compliance or fulfillment by UPC or INTERIM of any and
all of their obligations under this Plan of Merger, and to waive any or all of
the conditions precedent to the obligations of GSSC under this Plan of Merger
except any condition that, if not satisfied, would result in the violation of
any law or applicable governmental regulation.
ARTICLE 6
MISCELLANEOUS
6.1 NOTICES. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
by hand, by facsimile transmission, or by registered or certified mail, postage
pre-paid to the persons at the addresses set forth below (or at such other
addresses or facsimile numbers as may hereafter be designated as provided
below), and shall be deemed to have been delivered as of the date received by
the Party to which, or to whom it is addressed:
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If to UPC or INTERIM:
Union Planters Corporation
P.O. Box 387 (mailing)
Memphis, Tennessee 38147
7130 Goodlett Farms Parkway (deliveries)
Memphis, Tennessee 38018
Fax: (901) 383-2877
Attn: Mr. Jackson W. Moore, President
Gary A. Simanson,
Associate General Counsel
If to GSSC: Grenada Sunburst System Corporation
2000 Gateway
(P.O. Box 947)
Grenada, Mississippi 38902-0947
Fax: (601) 227-2070
Attn: Mr. James T. Boone, Chairman
President and Chief Executive Officer
With a copy to: Thompson & Mitchell
One Mercantile Center
St. Louis, Missouri
Fax: (314) 231-1717
Attn: Gerard K. Sandweg, Jr., Esq.
or at such other address as shall be furnished in writing by any of the Parties
to the others by notice given as provided in this section 6.1.
6.2 GOVERNING LAW. Except to the extent federal law shall be
controlling, this Plan of Merger shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware with respect to
those provisions of this Plan of Merger expressly required by Delaware law to
be included in this Plan of Merger, disregarding, however, the Delaware
conflicts of laws rules. In all other instances, this Plan of Merger shall be
governed by and construed and enforced in accordance with the laws of the State
of Tennessee disregarding, however, the Tennessee conflicts of laws rules.
6.3 CAPTIONS. The Captions heading the Sections in this Plan
of Merger are for convenience only and shall not affect the construction or
interpretation of this Plan of Merger.
6.4 COUNTERPARTS. This Plan of Merger may be executed in two
or more counterparts, each of which shall be deemed an
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original instrument, but all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, each of the Parties has caused this Plan of Merger
to be duly executed and delivered by its duly authorized officers as of the
date first above written.
ATTEST: UNION PLANTERS CORPORATION
__________________________ By:___________________________
J. F. Springfield Jackson W. Moore
Its: Secretary Its: President
ATTEST: GSSC ACQUISITION COMPANY, INC.
__________________________ By:___________________________
J. F. Springfield Jackson W. Moore
Its: Secretary Its: President
ATTEST: GRENADA SUNBURST SYSTEM
CORPORATION
_____________________________ By:___________________________
Edwin T. Cofer James T. Boone
Its: Secretary Its: Chairman, President and
Chief Executive Officer
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APPENDIX B
FAIRNESS OPINION OF THE ROBINSON-HUMPHREY COMPANY, INC.
<PAGE> 425
Appendix B
(THE ROBINSON-HUMPHREY COMPANY, INC. LETTERHEAD)
July 1, 1994
Board of Directors
Grenada Sunburst System Corporation
2000 Gateway
Grenada, Mississippi 38901
Gentlemen:
In connection with the proposed acquisition of Grenada Sunburst System
Corporation ("Grenada") by Union Planters Corporation ("UPC") (the "Merger"),
you have asked us to render an opinion as to whether the financial terms of the
Merger, as provided in the Agreement and Plan of Reorganization dated as of
July 1, 1994 among such parties (the "Merger Agreement"), are fair, from a
financial point of view, to the stockholders of GSSC. Under the terms of the
Merger, holders of all outstanding shares of GSSC stock will receive
consideration equal to 1.4206 UPC shares for each GSSC share, subject to
adjustment under certain circumstances.
Our firm, as part of its investment banking business, is frequently
involved in the valuation of the securities as related to public underwritings,
private placements, mergers, acquisitions, recapitalizations and other
purposes.
In connection with our study for rendering this opinion, we have reviewed
the Merger Agreement, GSSC's financial results for fiscal years 1989, 1990,
1991, 1992 and 1993 and March 31, 1994, and certain documents and information
we deem relevant to our analysis. We have also held discussions with senior
management of GSSC for the purpose of reviewing the historical and current
operations of, and outlook for GSSC, industry trends, the terms of the proposed
Merger, and related matters.
We have also studied published financial data concerning certain other
publicly traded banks which we deem comparable to GSSC as well as certain
financial data relating to acquisitions of other banks that we deem relevant or
comparable. In addition, we have reviewed other published information,
performed certain financial analyses and considered other factors and
information which we deem relevant.
As the proposed Merger Agreement entails the issuance of shares of UPC as
the consideration to be paid to GSSC stockholders, we have examined publicly
available information, as well as internal data, relating to UPC including its
historical financial statements, from 1989 up through and including the fiscal
year ended December 31, 1993, and the quarter ended March 31, 1994.
<PAGE> 426
We are generally familiar with UPC's business practices and in the
course of business, our firm publishes research coverage of UPC from time to
time.
In rendering this opinion, we have relied upon the accuracy of the Merger
Agreement, the financial information listed above, and other information
furnished to us by GSSC and UPC. We have not separately verified this
information nor have we made an independent evaluation of any of the assets or
liabilities of GSSC and UPC.
Based upon the foregoing, our experience as investment bankers, and upon
current market and economic conditions and such other facts as we deemed
relevant, we are of the opinion that, from a financial point of view, the terms
of the Merger as provided in the Merger Agreement are fair to the stockholders
of GSSC.
Very truly yours,
THE ROBINSON-HUMPHREY
COMPANY, INC
2
<PAGE> 427
APPENDIX C
FAIRNESS OPINION OF STIFEL, NICOLAUS & COMPANY, INCORPORATED
<PAGE> 428
Appendix C
(STIFEL, NICOLAUS & COMPANY, INCORPORATED LETTERHEAD)
October 20, 1994
Board of Directors
Union Planters Corporation
7130 Goodlett Farms Parkway
Memphis, Tennessee 38018
Gentlemen:
You have requested our opinion as to the fairness from a financial
point of view to the shareholders of Union Planters Corporation (the "Company")
of the consideration to be paid to the stockholders of Grenada Sunburst System
Corporation ("Grenada") by the Company pursuant to the terms of the Agreement
and Plan of Reorganization dated July 1, 1994 (the "Agreement"), and related
documents between Grenada and the Company. Pursuant to the Agreement, the
terms of which are more fully described in the Joint Proxy Statement/Prospectus
(the "Prospectus) to be furnished to the shareholders of the Company and
Grenada, at the Company's current stock price, the holder of each share of
common stock of Grenada would be entitled to receive 1.4206 shares of common
stock of the Company. Under the terms of the Agreement, the exchange ratio may
change based on changes in the Company's market price. For purposes of this
opinion, we have assumed that the exchange ratio will remain in the range from
1.3296 shares of common stock of the Company through 1.5495 shares of common
stock of the Company for each share of common stock of Grenada; no opinion is
expressed as to the fairness of the consideration outside that range.
Stifel, Nicolaus & Company, Incorporated ("Stifel"), as part of its
investment banking services, is regularly engaged in the valuation of
businesses and securities in connection with mergers, acquisitions,
underwritings, sales and distributions of listed and unlisted securities,
private placements and valuations for estate, corporate and other purposes. We
are familiar with the Company and Grenada and have completed our financial
analysis of this transaction.
In rendering our opinion, we have reviewed the Agreement and the
Prospectus in the form to be filed on November 1, 1994, with the Securities and
Exchange Commission. We also have reviewed financial and other information
that was publicly available or furnished to us by the Company and Grenada
including information provided during Stifel's discussions with their
respective managements. We conducted conversations with the Company's senior
management regarding recent developments and management's financial projections
for the Company and Grenada. In addition, we spoke to the Chief Financial
Officer and other members of the Company's management and Grenada's management
regarding factors which affect each entity's business. We have also compared
certain financial and securities data (as appropriate) of the Company and
Grenada with various other companies whose securities are traded in public
markets, reviewed the historical stock prices and trading volumes of the common
stock of the Company and Grenada, reviewed prices and premiums paid in other
business combinations and conducted such other financial studies, analyses and
investigations as we deemed appropriate for purposes of this opinion.
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In rendering our opinion, we have relied upon and assumed, without
independent verification, the accuracy and completeness of all of the financial
and other information that was provided to us or that was otherwise reviewed by
us. With respect to the financial projections supplied to us, we have assumed
that they were reasonably prepared on the basis reflecting the best currently
available estimates and judgments of the management of the Company and Grenada
as to the future operating and financial performance of the Company and Grenada
and that they provided a reasonable basis upon which we could form our opinion.
We also assumed that there were no material changes in the assets, liabilities,
financial condition, results of operations, business or prospects of either the
Company or Grenada since the date of the last financial statements made
available to us. We did not make or obtain any independent evaluation,
appraisal or physical inspection of the Company's or Grenada's assets or
liabilities nor did we review loan files of the Company. We have relied as to
all legal matters on advice of counsel to the Company.
Our opinion is necessarily based on economic, market, financial and
other conditions as they exist on, and on the information made available to us
as of, the date of this letter. It should be understood that, although
subsequent developments may affect this opinion, we do not have any obligation
to update, revise or reaffirm this opinion. Our opinion does not constitute a
recommendation to any shareholder as to how such shareholder should vote on the
proposed transaction, nor have we expressed any opinion as to the prices at
which any securities of the Company or Grenada might trade in the future.
Based upon the foregoing and such other factors as we deem relevant,
we are of the opinion that within the ranges discussed above the consideration
to be paid to the stockholders of Grenada pursuant to the Agreement is fair to
the shareholders of the Company from a financial point of view.
Very truly yours,
STIFEL, NICOLAUS & COMPANY,
INCORPORATED
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PROXY
GRENADA SUNBURST SYSTEM CORPORATION
No. of Shares
2000 GATEWAY
GRENADA, MISSISSIPPI 38901
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints D. L. Holland, Don W. Ayres and J. Daniel
Garrick, III, and each of them, with or without the others, with full power of
substitution, and hereby authorizes them to vote, as designated below, all of
the shares of common stock of Granada Sunburst System Corporation held of record
by the undersigned as of the close of business on October 31, 1994, at the
Special Meeting of Stockholders to be held on December 28, 1994, or at any
adjournments or postponements thereof.
1. ADOPTION OF THE AGREEMENT AND PLAN OF REORGANIZATION DATED JULY 1,
1994 BY AND BETWEEN UNION PLANTERS CORPORATION ("UPC"), GSSC
ACQUISITION COMPANY, INC. ("INTERIM"), GRENADA SUNBURST SYSTEM
CORPORATION ("GSSC"), SUNBURST BANK, MISSISSIPPI AND SUNBURST
BANK, LOUISIANA, AND THE RELATED PLAN OF MERGER, PROVIDING FOR THE
ACQUISITION BY UPC OF GSSC THROUGH THE MERGER OF INTERIM WITH AND
INTO GSSC.
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<S> <C> <C>
/ / / / / /
FOR AGAINST ABSTAIN
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(Continued on other side)
(Continued from other side)
2. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted FOR adoption of the Reorganization Agreement and the Plan of Merger
annexed thereto as Exhibit A.
Dated: , 1994
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Signature
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Signature
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(if held jointly)
Please sign exactly as name
appears to left. When shares
are hold by joint tenants,
both should sign, When
signing as attorney,
executor, administrator,
trustee or guardian, please
give full title as such. If a
corporation, please sign full
corporate name by President
or other authorized officer.
If a partnership, please sign
in partnership name by
authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
