<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 8, 1996
-------------
UNION PLANTERS CORPORATION
--------------------------
(Exact name of registrant as specified in its charter)
Tennessee 1-10160 62-0859007
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
Union Planters Administrative Center
7130 Goodlett Farms Parkway, Memphis, Tennessee 38018
----------------------------------------------------------------
(Address, including zip code, of principal executive office)
(901) 383-6000
------------------------------------------------
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
On March 8, 1996, Union Planters Corporation ("UPC") and Leader
Financial Corporation ("Leader") entered into an Agreement and Plan of Merger
(the "Agreement"), pursuant to which Leader will be acquired by UPC.
In accordance with the terms of the Agreement and a related Plan
of Merger, UPC will acquire Leader pursuant to a merger (the "Merger") of a
newly formed, wholly owned subsidiary of UPC with and into Leader, with Leader
as the surviving entity resulting from the Merger.
Upon consummation of the Merger, each share of the $1.00 par value
common stock of Leader ("Leader Common Stock") (excluding shares held by any
Leader company or by any UPC company, in each case other than in a fiduciary
capacity or as a result of debts previously contracted) issued and outstanding
at the effective time of the Merger (as described in the Agreement, the
"Effective Time") shall be converted into and exchanged for the right to
receive 1.525 shares (subject to possible adjustment as described below, the
"Exchange Ratio") of the $5.00 par value common stock of UPC ("UPC Common
Stock").
In addition, at the Effective Time, all rights with respect to
Leader Common Stock, pursuant to stock options, stock appreciation rights, or
other rights granted by Leader under the existing stock plans of Leader, which
are outstanding at the Effective Time, whether or not exercisable, shall be
converted into and become rights with respect to UPC Common Stock on a basis
that reflects the Exchange Ratio.
The Merger is intended to constitute a tax-free transaction under
the Internal Revenue Code of 1986, as amended, and be accounted for as a
pooling of interests.
In connection with the Agreement, UPC has agreed to elect four
individuals who are members of the Board of Directors of Leader at the
Effective Time (two of whom shall include Edgar H. Bailey and Ronald W.
Stimpson) to the Board of Directors of UPC. Such individuals who are elected
to the Board of Directors of UPC shall serve on committees of the Board of
Directors as determined by the Board in accordance with the practice and
policies applicable to all other directors of UPC. In addition, all members of
the Board of Directors of Leader Federal Bank for Savings at the Effective Time
(other than the two non-employee directors elected to the Board of Directors of
UPC as described above) will be elected to serve on the Board of Directors of
Union Planters National Bank ("UPNB").
At the Effective Time, the following officers of Leader shall be
appointed to the designated officer positions in UPC: (i) Edgar H. Bailey -
Vice Chairman of the Board of Directors; (ii) Ronald W. Stimpson - Senior
Executive Vice President and Chief Administrative Officer; (iii) Catherine C.
Stallings - Executive Vice President and General Counsel; and (iv) David C.
Wadlington - Senior Vice President and Chief Financial Officer of
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Specialty Banking Operations. Further, the following officers of Leader shall
be appointed to the designated officer positions in UPNB: (i) Kirk P. Bailey -
President and Chief Operating Officer; (ii) Ronald W. Stimpson - Vice Chairman
with Functional Responsibility for Specialty Banking Operations; and (iii) Brad
L. Champlin - Executive Vice President of Retail Branches.
Consummation of the Merger is subject to various conditions,
including: (i) receipt of the approval by the stockholders of UPC and Leader
of appropriate matters relating to the Agreement and the Merger required to be
approved under applicable law; (ii) receipt of certain regulatory approvals
from the Board of Governors of the Federal Reserve System (the "FRB"), the
Office of Thrift Supervision (the "OTS"), and other applicable regulatory
authorities; (iii) receipt of an opinion of counsel as to the tax-free nature
of certain aspects of the Merger; (iv) receipt by UPC of a letter from Price
Waterhouse LLP to the effect that the Merger will qualify for
pooling-of-interests accounting treatment; and (v) satisfaction of certain
other conditions.
Under the Agreement, Leader has the right to terminate the
Agreement if the Average Closing Price (as defined below) of UPC Common
Stock (i) is less than $26.39 and (ii) reflects a decline of more than 15%
below a weighted index of the stock prices of a group of 16 bank holding
companies designated in the Agreement, on the date that the last of the
approvals of the FRB and the OTS is received (the "Determination Date"). In the
event that Leader gives notice of its intention to terminate the Agreement
based on such provision, UPChas the right to elect to adjust the Exchange
Ratio in accordance with the terms of the Agreement, and thereby remove
Leader's right to terminate.
For purposes of the Agreement, the Average Closing Price shall
mean the average of the daily closing sales prices of UPC Common Stock as
reported on the New York Stock Exchange, Inc. ("NYSE") - Composite Transactions
List (as reported by The Wall Street Journal or, if not reported thereby,
another authoritative source as chosen by UPC) for the 20 consecutive full
trading days in which such shares are traded on the NYSE ending at the close of
trading on the Determination Date.
In connection with and as an inducement to executing the
Agreement, UPC and Leader entered into a stock option agreement (the "Stock
Option Agreement") pursuant to which Leader granted to UPC an option to
purchase, subject to certain limitations, up to 1,973,600 shares of Leader
Common Stock, at a purchase price of $41.50 per share, upon certain terms and
in accordance with certain conditions.
Certain matters relating to the Agreement and the Merger will be
submitted for approval at separate meetings of the stockholders of UPC and
Leader. Prior to the stockholders' meetings, UPC will file a registration
statement with the Securities and Exchange Commission registering under the
Securities Act of 1933, as amended, the shares of UPC Common Stock to be issued
in exchange for the outstanding shares of Leader Common Stock. Such shares of
stock of UPC will be offered to the Leader stockholders pursuant to a
prospectus that will also serve
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as a joint proxy statement for the meetings of the stockholders of UPC and
Leader to consider and vote upon appropriate matters relating to the Agreement
and the Merger.
For additional information regarding the Agreement and the Stock
Option Agreement, please refer to the copies of those documents which are
incorporated herein by reference and included as Exhibits to this Current
Report on Form 8-K. The foregoing discussion is qualified in its entirety by
reference to such documents.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
UNION PLANTERS CORPORATION
(Registrant)
By: /S/ M. Kirk Walters
-------------------------------
M. Kirk Walters
Senior Vice President,
Treasurer and Chief
Accounting Officer
Date: March 12, 1996
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
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2.1 Agreement and Plan of Merger, dated as of March 8, 1996, by and between
Union Planters Corporation and Leader Financial Corporation
2.2 Stock Option Agreement, dated as of March 9, 1996, issued by Leader
Financial Corporation to Union Planters Corporation
99.1 Text of joint press release, dated March 8, 1996, issued by Union
Planters Corporation and Leader Financial Corporation
</TABLE>
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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
LEADER FINANCIAL CORPORATION
AND
UNION PLANTERS CORPORATION
DATED AS OF MARCH 8, 1996
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TABLE OF CONTENTS
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Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Preamble . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 1 - TRANSACTIONS AND TERMS OF MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Time and Place of Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Execution of Stock Option Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2 - TERMS OF MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Charter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 By-laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.3 Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 3 - MANNER OF CONVERTING SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.1 Conversion of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.2 Anti-Dilution Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.3 Shares Held by Leader or UPC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.4 Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.5 Conversion of Stock Options; Restricted Stock . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 4 - EXCHANGE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.1 Exchange Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.2 Rights of Former Leader Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF LEADER . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.1 Organization, Standing, and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.2 Authority; No Breach By Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.3 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.4 Leader Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.5 SEC Filings; Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.6 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.7 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.8 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.9 Allowance for Possible Loan Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.10 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.11 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.12 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.13 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.14 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.15 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>
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5.16 Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.17 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.18 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.19 Statements True and Correct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.20 Accounting, Tax, and Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.21 State Takeover Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.22 Charter Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF UPC . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.1 Organization, Standing, and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.2 Authority; No Breach By Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.3 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.4 SEC Filings; Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.5 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.6 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.7 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.8 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.9 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.10 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.11 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.12 Statements True and Correct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.13 Accounting, Tax, and Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE 7 - CONDUCT OF BUSINESS PENDING CONSUMMATION . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.1 Affirmative Covenants of Leader . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.2 Negative Covenants of Leader . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.3 Covenants of UPC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.4 Adverse Changes in Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.5 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 8 - ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.1 Registration Statement; Joint Proxy Statement; Shareholder Approvals . . . . . . . . . . . . 27
8.2 Exchange Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.3 Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.4 Filings with State Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.5 Agreement as to Efforts to Consummate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.6 Investigation and Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.7 Press Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.8 Certain Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.9 Accounting and Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.10 State Takeover Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.11 Charter Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.12 Agreements of Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.13 Employee Benefits and Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.14 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.15 UPC Merger Subsidiary Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
</TABLE>
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ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE . . . . . . . . . . . . . . . . . . . . . . 32
9.1 Conditions to Obligations of Each Party . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
9.2 Conditions to Obligations of UPC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.3 Conditions to Obligations of Leader . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE 10 - TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
10.3 Non-Survival of Representations and Covenants . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE 11 - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
11.3 Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
11.4 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
11.5 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
11.6 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
11.7 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
11.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
11.9 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
11.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
11.11 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
11.12 Interpretations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
11.13 Enforcement of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
11.14 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
</TABLE>
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LIST OF EXHIBITS
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EXHIBIT NUMBER DESCRIPTION
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1. Plan of Merger. (Section 1.1).
2. Form of Stock Option Agreement. (Sections 1.4, 11.1).
3. Form of Supplemental Letter. (Sections 7.2, 11.1).
4. Form of agreement of affiliates of Leader. (Sections 8.12, 9.2(d)).
</TABLE>
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<PAGE> 6
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of March 8, 1996, by and between LEADER FINANCIAL CORPORATION
("Leader"), a Tennessee corporation having its principal office located in
Memphis, Tennessee; and UNION PLANTERS CORPORATION ("UPC"), a Tennessee
corporation having its principal office located in Memphis, Tennessee.
PREAMBLE
The Boards of Directors of Leader and UPC are of the opinion
that the transactions described herein are in the best interests of the parties
and their respective shareholders. This Agreement provides for the acquisition
of Leader by UPC pursuant to the merger of a wholly owned subsidiary of UPC to
be organized under the Laws of the State of Tennessee ("UPC Merger Subsidiary")
with and into Leader. At the effective time of such merger, the outstanding
shares of the common stock of Leader shall be converted into the right to
receive shares of the common stock of UPC (except as provided in Sections 3.3
and 3.4 of this Agreement). As a result, shareholders of Leader shall become
shareholders of UPC and Leader shall continue to conduct its business and
operations as a wholly owned subsidiary of UPC. The transactions described in
this Agreement are subject to the approvals of the shareholders of UPC and
Leader, the Board of Governors of the Federal Reserve System, the Office of
Thrift Supervision, and other applicable federal and state regulatory
authorities, and the satisfaction of certain other conditions described in this
Agreement. It is the intention of the parties to this Agreement that the
Merger for federal income tax purposes shall qualify as a "reorganization"
within the meaning of Section 368(a) of the Internal Revenue Code, and for
accounting purposes shall qualify for treatment as a pooling of interests.
Immediately after the execution and delivery of this Agreement,
as a condition and inducement to UPC's willingness to enter into this
Agreement, Leader and UPC are entering into a stock option agreement pursuant
to which Leader is granting to UPC an option to purchase shares of Leader
Common Stock.
Certain terms used in this Agreement are defined in Section 11.1
of this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, the
parties agree as follows:
<PAGE> 7
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time, UPC Merger Subsidiary shall be merged with
and into Leader in accordance with the provisions of Section 48-21-102 of the
TBCA and with the effect provided in Section 48-21-108 of the TBCA (the
"Merger"). Leader shall be the Surviving Corporation resulting from the Merger
and shall continue to be governed by the Laws of the State of Tennessee. The
Merger shall be consummated pursuant to the terms of this Agreement, which has
been approved and adopted by the respective Boards of Directors of Leader and
UPC and the Plan of Merger, in substantially the form of Exhibit 1, which has
been approved and adopted by the Board of Directors of Leader and will be
approved and adopted by the Board of Directors of UPC Merger Subsidiary and UPC
(in its capacity as sole shareholder of UPC Merger Subsidiary) upon the
organization of UPC Merger Subsidiary.
1.2 TIME AND PLACE OF CLOSING. The Closing will take place
at 9:00 A.M. on the date that the Effective Time occurs (or the immediately
preceding day if the Effective Time is earlier than 9:00 A.M.), or at such
other time as the Parties, acting through their chief executive officers or
chief financial officers, may mutually agree. The Closing shall be held at
such place as may be mutually agreed upon by the Parties.
1.3 EFFECTIVE TIME. The Merger and other transactions
contemplated by this Agreement shall become effective on the date and at the
time the Articles of Merger reflecting the Merger shall become effective with
the Secretary of State of the State of Tennessee (the "Effective Time").
Subject to the terms and conditions hereof, unless otherwise mutually agreed
upon in writing by the chief executive officers or chief financial officers of
each Party, the Parties shall use their reasonable efforts to cause the
Effective Time to occur on such date as may be designated by UPC within 30 days
following the last to occur of (i) the effective date (including expiration of
any applicable waiting period) of the last required Consent of any Regulatory
Authority having authority over and approving or exempting the Merger, (ii) the
date on which the shareholders of UPC and Leader approve this Agreement and the
Plan of Merger to the extent such approval is required by applicable Law, and
(iii) the date on which all other conditions precedent to each Party's
obligations hereunder shall have been satisfied or waived (to the extent
waivable by such Party), provided the Effective Time may not occur prior to
October 1, 1996.
1.4 EXECUTION OF STOCK OPTION AGREEMENT. Simultaneously with
the execution of this Agreement by the Parties and as a condition thereto,
Leader is executing and delivering to UPC a stock option agreement (the "Stock
Option Agreement"), in substantially the form of Exhibit 2, pursuant to which
Leader is granting to UPC an option to purchase shares of Leader Common Stock.
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ARTICLE 2
TERMS OF MERGER
2.1 CHARTER. The Charter of Leader in effect immediately
prior to the Effective Time shall be the Charter of the Surviving Corporation
until otherwise amended or repealed.
2.2 BY-LAWS. The By-laws of Leader in effect immediately
prior to the Effective Time shall be the By-laws of the Surviving Corporation
until otherwise amended or repealed.
2.3 DIRECTORS AND OFFICERS. The directors of Leader in
office immediately prior to the Effective Time, together with such additional
persons as may thereafter be elected, shall serve as the directors of the
Surviving Corporation from and after the Effective Time in accordance with the
By-laws of the Surviving Corporation. The officers of Leader in office
immediately prior to the Effective Time, together with such additional persons
as may thereafter be elected, shall serve as the officers of the Surviving
Corporation from and after the Effective Time in accordance with the By-laws of
the Surviving Corporation.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 CONVERSION OF SHARES. Subject to the provisions of this
Article 3, at the Effective Time, by virtue of the Merger and without any
action on the part of UPC, UPC Merger Subsidiary, Leader, or the shareholders
of either of the foregoing, the shares of the constituent corporations shall be
converted as follows:
(a) Each share of UPC Capital Stock, including any
associated UPC Rights, issued and outstanding immediately prior to the
Effective Time shall remain issued and outstanding from and after the
Effective Time.
(b) Each share of UPC Merger Subsidiary Common Stock
issued and outstanding immediately prior to the Effective Time shall cease
to be outstanding and shall be converted into and exchanged for one share
of UPC Common Stock.
(c) Each share of Leader Common Stock (excluding
shares held by any Leader Company or any UPC Company, in each case other
than in afiduciary capacity or as a result of debts previously contracted)
issued and outstanding at the Effective Time shall cease to be outstanding
and shall be converted into and exchanged for the right to receive 1.525 of
a share of UPC Common Stock (as subject to possible adjustment as set forth
in Section 10.1(i) of this Agreement, the "Exchange Ratio"). Pursuant to
the UPC Rights Agreement, each share of UPC Common Stock issued in
connection with the Merger upon conversion of Leader Common Stock shall be
accompanied by a UPC Right.
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3.2 ANTI-DILUTION PROVISIONS. In the event UPC changes
the number of shares of UPC Common Stock issued and outstanding prior to the
Effective Time as a result of a stock split, stock dividend, or similar
recapitalization with respect to such stock and the record date therefor (in
the case of a stock dividend) or the effective date thereof (in the case of a
stock split or similar recapitalization for which a record date is not
established) shall be prior to the Effective Time, the Exchange Ratio shall be
proportionately adjusted.
3.3 SHARES HELD BY LEADER OR UPC. Each of the shares of
Leader Common Stock held by any Leader Company or by any UPC Company, in each
case other than in a fiduciary capacity or as a result of debts previously
contracted, shall be canceled and retired at the Effective Time and no
consideration shall be issued in exchange therefor.
3.4 FRACTIONAL SHARES. Notwithstanding any other
provision of this Agreement, each holder of shares of Leader Common Stock
exchanged pursuant to the Merger who would otherwise have been entitled to
receive a fraction of a share of UPC Common Stock (after taking into account
all certificates delivered by such holder) shall receive, in lieu thereof, cash
(without interest) in an amount equal to such fractional part of a share of UPC
Common Stock multiplied by the market value of one share of UPC Common Stock at
the Effective Time. The market value of one share of UPC Common Stock at the
Effective Time shall be the closing price of such common stock on the
NYSE-Composite Transactions List (as reported by The Wall Street Journal or, if
not reported thereby, any other authoritative source selected by UPC) on the
last trading day preceding the Effective Time. No such holder will be entitled
to dividends, voting rights, or any other rights as a shareholder in respect of
any fractional shares.
3.5 CONVERSION OF STOCK OPTIONS; RESTRICTED STOCK.
(a) At the Effective Time, each option to
purchase or other right with respect to shares of Leader Common Stock pursuant
to stock options, stock appreciation rights or other rights, including stock
awards ("Leader Options") granted by Leader under the Leader Stock Plans, which
are outstanding at the Effective Time, whether or not exercisable, shall be
converted into and become rights with respect to UPC Common Stock, and UPC
shall assume each Leader Option, in accordance with the terms of the Leader
Stock Plan and stock option or other agreement by which it is evidenced, except
that from and after the Effective Time, (i) UPC and its Salary and Benefits
Committee shall be substituted for Leader and the Committee of Leader's Board
of Directors (including, if applicable, the entire Board of Directors of
Leader) administering such Leader Stock Plan, (ii) each Leader Option assumed
by UPC may be exercised solely for shares of UPC Common Stock (or cash in the
case of stock appreciation rights), (iii) the number of shares of UPC Common
Stock subject to such Leader Option shall be equal to the number of shares of
Leader Common Stock subject to such Leader Option immediately prior to the
Effective Time multiplied by the Exchange Ratio, and (iv) the per share
exercise price under each such Leader Option shall be adjusted by dividing the
per share exercise price under each such Leader Option by the Exchange Ratio
and rounding up to the nearest cent. Notwithstanding the provisions of clause
(iii) of the preceding sentence, UPC shall not be obligated to issue any
fraction of a share of UPC Common Stock upon exercise of Leader Options and any
fraction of a share of UPC Common Stock that otherwise would be subject to a
converted Leader Option shall
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<PAGE> 10
represent the right to receive a cash payment upon exercise of such converted
Leader Option equal to the product of such fraction and the difference between
the market value of one share of UPC Common Stock at the time of exercise of
such Option and the per share exercise price of such Option. The market value
of one share of UPC Common Stock at the time of exercise of an Option shall be
the closing price of such common stock on the NYSE-Composite Transactions List
(as reported by The Wall Street Journal or, if not reported thereby, any other
authoritative source selected by UPC) on the last trading day preceding the
date of exercise. In addition, notwithstanding the clauses (iii) and (iv) of
the first sentence of this Section 3.5, each Leader Option which is an
"incentive stock option" shall be adjusted as required by Section 424 of the
Internal Revenue Code, and the regulations promulgated thereunder, so as not to
constitute a modification, extension or renewal of the option, within the
meaning of Section 424(h) of the Internal Revenue Code. UPC and Leader agree
to take all necessary steps to effectuate the foregoing provisions of this
Section 3.5.
(b) As soon as practicable after the Effective
Time, UPC shall deliver to the participants in each Leader Stock Plan an
appropriate notice setting forth such participant's rights pursuant thereto and
the grants subject to such Leader Stock Plan shall continue in effect on the
same terms and conditions (subject to the adjustments required by Section
3.5(a) after giving effect to the Merger), and UPC shall comply with the terms
of each Leader Stock Plan to ensure, to the extent required by, and subject to
the provisions of, such Leader Stock Plan, that Leader Options which qualified
as incentive stock options prior to the Effective Time continue to qualify as
incentive stock options after the Effective Time. Within 30 days after the
Effective Time, UPC shall file a registration statement on Form S-3 or Form
S-8, as the case may be (or any successor or other appropriate forms), with
respect to the shares of UPC Common Stock subject to such options and shall use
its reasonable efforts to maintain the effectiveness of such registration
statements (and maintain the current status of the prospectus or prospectuses
contained therein) for so long as such options remain outstanding.
(c) All contractual restrictions or limitations
on transfer with respect to Leader Common Stock awarded under the Leader Stock
Plans or any other plan, program, or Contract of any Leader Company, to the
extent that such restrictions or limitations shall not have already lapsed
(whether as a result of the Merger or otherwise), and except as otherwise
expressly provided in such plan, program, or Contract, shall remain in full
force and effect with respect to shares of UPC Common Stock into which such
restricted stock is converted pursuant to Section 3.1 of this Agreement.
(d) In approving this Agreement, Leader and the
Stock Option Committee appointed by the Board of Directors of Leader in
accordance with paragraph 5(a) of the Leader Financial Corporation 1993 Stock
Option and Incentive Plan agree not to permit the holders of options
outstanding under such plan to receive cash upon the "Change in Control" of
Leader in an amount equal to the excess of the "Market Value" of the Leader
Common Stock subject to such option over the "Exercise Price" of the shares
subject to such option in accordance with Section 12 of the Leader Financial
Corporation 1993 Stock Option and Incentive Plan.
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ARTICLE 4
EXCHANGE OF SHARES
4.1 EXCHANGE PROCEDURES. Promptly after the Effective
Time, UPC and Leader shall cause the exchange agent selected by UPC (the
"Exchange Agent") to mail to the former shareholders of Leader appropriate
transmittal materials (which shall specify that delivery shall be effected, and
risk of loss and title to the certificates theretofore representing shares of
Leader Common Stock shall pass, only upon proper delivery of such certificates
to the Exchange Agent). The Exchange Agent may establish reasonable and
customary rules and procedures in connection with its duties. After the
Effective Time, each holder of shares of Leader Common Stock (other than shares
to be canceled pursuant to Section 3.3 of this Agreement) issued and
outstanding at the Effective Time shall surrender the certificate or
certificates representing such shares to the Exchange Agent and shall promptly
upon surrender thereof receive in exchange therefor the consideration provided
in Section 3.1 of this Agreement, together with all undelivered dividends or
distributions in respect of such shares (without interest thereon) pursuant to
Section 4.2 of this Agreement. To the extent required by Section 3.4 of this
Agreement, each holder of shares of Leader Common Stock issued and outstanding
at the Effective Time also shall receive, upon surrender of the certificate or
certificates representing such shares, cash in lieu of any fractional share of
UPC Common Stock to which such holder may be otherwise entitled (without
interest). UPC shall not be obligated to deliver the consideration to which
any former holder of Leader Common Stock is entitled as a result of the Merger
until such holder surrenders such holder's certificate or certificates
representing the shares of Leader Common Stock for exchange as provided in this
Section 4.1. The certificate or certificates of Leader Common Stock so
surrendered shall be duly endorsed as the Exchange Agent may require. Any
other provision of this Agreement notwithstanding, neither UPC nor the Exchange
Agent shall be liable to a holder of Leader Common Stock for any amounts paid
or property delivered in good faith to a public official pursuant to any
applicable abandoned property Law. Adoption of this Agreement by the
shareholders of Leader shall constitute ratification of the appointment of the
Exchange Agent.
4.2 RIGHTS OF FORMER LEADER SHAREHOLDERS. At the
Effective Time, the stock transfer books of Leader shall be closed as to
holders of Leader Common Stock immediately prior to the Effective Time and no
transfer of Leader Common Stock by any such holder shall thereafter be made or
recognized. Until surrendered for exchange in accordance with the provisions
of Section 4.1 of this Agreement, each certificate theretofore representing
shares of Leader Common Stock (other than shares to be canceled pursuant to
Section 3.3 of this Agreement) shall from and after the Effective Time
represent for all purposes only the right to receive the consideration provided
in Sections 3.1 and 3.4 of this Agreement in exchange therefor, subject,
however, to the Surviving Corporation's obligation to pay any dividends or make
any other distributions with a record date prior to the Effective Time which
have been declared or made by Leader in respect of such shares of Leader Common
Stock in accordance with the terms of this Agreement and which remain unpaid at
the Effective Time. Whenever a dividend or other distribution is declared by
UPC on the UPC Common Stock, the record date for which is at or after the
Effective Time, the declaration shall include dividends or other distributions
on all shares of UPC Common Stock issuable pursuant to this Agreement, but
beginning 30 days after the Effective Time no dividend or other distribution
payable to the holders of record of UPC
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<PAGE> 12
Common Stock as of any time subsequent to the Effective Time shall be delivered
to the holder of any certificate representing shares of Leader Common Stock
issued and outstanding at the Effective Time until such holder surrenders such
certificate for exchange as provided in Section 4.1 of this Agreement.
However, upon surrender of such Leader Common Stock certificate, both the UPC
Common Stock certificate (together with all such undelivered dividends or other
distributions without interest) and any undelivered dividends and cash payments
payable hereunder (without interest) shall be delivered and paid with respect
to each share represented by such certificate.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF LEADER
Leader hereby represents and warrants to UPC as follows:
5.1 ORGANIZATION, STANDING, AND POWER. Leader is a
corporation duly organized, validly existing, and in good standing under the
Laws of the State of Tennessee, and has the corporate power and authority to
carry on its business as now conducted and to own, lease, and operate its
Assets. Leader is duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of its
business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Leader.
5.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) Leader has the corporate power and authority
necessary to execute, deliver, and perform its obligations under this Agreement
and the Plan of Merger and to consummate the transactions contemplated hereby
and thereby. The execution, delivery, and performance of this Agreement and
the Plan of Merger, as appropriate, and the consummation of the transactions
contemplated herein and therein, including the Merger, have been duly and
validly authorized by all necessary corporate action in respect thereof on the
part of Leader, subject to the approval of this Agreement and the Plan of
Merger by the holders of a majority of the outstanding shares of Leader Common
Stock, which is the only shareholder vote required for approval of this
Agreement and the Plan of Merger and consummation of the Merger by Leader.
Subject to such requisite shareholder approval, this Agreement and the Plan of
Merger (which for purposes of this sentence shall not include the Stock Option
Agreement) represent legal, valid, and binding obligations of Leader,
enforceable against Leader in accordance with their respective terms (except in
all cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, conservatorship, moratorium, or
similar Laws affecting the enforcement of creditors' rights generally and
except that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceeding may be brought).
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<PAGE> 13
(b) Neither the execution and delivery of this
Agreement or the Plan of Merger, as appropriate, by Leader, nor the
consummation by Leader of the transactions contemplated hereby or thereby, nor
compliance by Leader with any of the provisions hereof or thereof, will (i)
conflict with or result in a breach of any provision of Leader's Charter or
By-laws, or (ii) except as disclosed in Section 5.2 of the Leader Disclosure
Memorandum, constitute or result in a Default under, or require any Consent
pursuant to, or result in the creation of any Lien on any material Asset of any
Leader Company under, any Contract or Permit of any Leader Company, or, (iii)
subject to receipt of the requisite Consents referred to in Section 9.1(b) of
this Agreement, violate any Law or Order applicable to any Leader Company or
any of their respective material Assets.
(c) Other than in connection or compliance with
the provisions of the Securities Laws, applicable state corporate and
securities Laws, and rules of the NASD, and other than Consents required from
Regulatory Authorities, and other than notices to or filings with the Internal
Revenue Service or the Pension Benefit Guaranty Corporation with respect to any
employee benefit plans, or under the HSR Act, and other than Consents, filings,
or notifications which, if not obtained or made, are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Leader, no
notice to, filing with, or Consent of, any public body or authority is
necessary for the consummation by Leader of the Merger and the other
transactions contemplated in this Agreement and the Plan of Merger.
5.3 CAPITAL STOCK.
(a) The authorized capital stock of Leader
consists of (i) 35,000,000 shares of Leader Common Stock, of which 9,917,916
shares are issued and outstanding as of the date of this Agreement (exclusive
of treasury shares) and not more than 10,879,697 shares will be issued and
outstanding at the Effective Time, and (ii) 15,000,000 shares of preferred
stock, $1.00 par value, of which no shares are, or will be, issued and
outstanding as of the date of this Agreement or at the Effective Time,
respectively. All of the issued and outstanding shares of capital stock of
Leader are duly and validly issued and outstanding and are fully paid and
nonassessable under the TBCA. None of the outstanding shares of capital stock
of Leader has been issued in violation of any preemptive rights of the current
or past shareholders of Leader. Leader has reserved 1,075,250 shares of Leader
Common Stock for issuance under the Leader Stock Plans, pursuant to which
options to purchase not more than 961,781 shares of Leader Common Stock are
outstanding.
(b) Except as set forth in Section 5.3(a) of this
Agreement, or as provided in the Stock Option Agreement there are no shares of
capital stock or other equity securities of Leader outstanding and no
outstanding Rights relating to the capital stock of Leader.
5.4 LEADER SUBSIDIARIES. Leader has disclosed in Section
5.4 of the Leader Disclosure Memorandum all of the Leader Subsidiaries that are
corporations (identifying its jurisdiction of incorporation, each jurisdiction
in which character of its Assets or the nature or conduct of its business
requires it to be qualified and/or licensed to transact business, and the
number of shares owned and percentage ownership interest represented by such
share ownership)
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<PAGE> 14
and all of the Leader Subsidiaries that are general or limited partnerships or
other non-corporate entities (identifying the Law under which such entity is
organized, each jurisdiction in which character of its Assets or the nature or
conduct of its business requires it to be qualified and/or licensed to transact
business, and the amount and nature of the ownership interest therein of all
Leader Companies). Leader or one of its wholly owned Subsidiaries owns all of
the issued and outstanding shares of capital stock (or other equity interests)
of each Leader Subsidiary. No capital stock (or other equity interest) of any
Leader Subsidiary are or may become required to be issued (other than to
another Leader Company) by reason of any Rights, and there are no Contracts by
which any Leader Subsidiary is bound to issue (other than to another Leader
Company) additional shares of its capital stock (or other equity interests) or
Rights or by which any Leader Company is or may be bound to transfer any shares
of the capital stock (or other equity interests) of any Leader Subsidiary
(other than to another Leader Company). There are no Contracts relating to the
rights of any Leader Company to vote or to dispose of any shares of the capital
stock (or other equity interests) of any Leader Subsidiary. All of the shares
of capital stock (or other equity interests) of each Leader Subsidiary held by
a Leader Company are fully paid and nonassessable under the applicable
corporation or similar Law of the jurisdiction in which such Subsidiary is
incorporated or organized and are owned by the Leader Company free and clear of
any Lien. Each Leader Subsidiary is either a bank, a savings association,
partnership, limited liability corporation, or a corporation, and each such
Subsidiary is duly organized, validly existing, and (as to corporations) in
good standing under the Laws of the jurisdiction in which it is incorporated or
organized, and has the corporate power and authority necessary for it to own,
lease, and operate its Assets and to carry on its business as now conducted.
Each Leader Subsidiary is duly qualified or licensed to transact business as a
foreign corporation in good standing in the States of the United States and
foreign jurisdictions where the character of its Assets or the nature or
conduct of its business requires it to be so qualified or licensed, except for
such jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Leader. The only Leader Subsidiary that is a depository institution
is Leader Federal. Leader Federal is an "insured institution" as defined in
the Federal Deposit Insurance Act and applicable regulations thereunder, and
the deposits in which are insured by the Savings Association Insurance Fund.
The minute book and other organizational documents for each Leader Subsidiary
have been made available to UPC for its review, and are true and complete as in
effect as of the date of this Agreement and accurately reflect all amendments
thereto and all proceedings of the Board of Directors and shareholders thereof.
5.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Leader has filed and made available to UPC
all SEC Documents required to be filed by Leader since December 31, 1992 (the
"Leader SEC Reports"). The Leader SEC Reports (i) at the time filed, complied
in all material respects with the applicable requirements of the Securities
Laws and (ii) did not, at the time they were filed (or, if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing) contain any untrue statement of a material fact or omit to state a
material fact required to be stated in such Leader SEC Reports or necessary in
order to make the statements in such Leader SEC Reports,
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<PAGE> 15
in light of the circumstances under which they were made, not misleading. None
of Leader's Subsidiaries is required to file any SEC Documents.
(b) Each of the Leader Financial Statements
(including, in each case, any related notes) contained in the Leader SEC
Reports, including any Leader SEC Reports filed after the date of this
Agreement until the Effective Time, complied as to form in all material
respects with the applicable published rules and regulations of the SEC with
respect thereto, was prepared in accordance with GAAP applied on a consistent
basis throughout the periods involved (except as may be indicated in the notes
to such financial statements or, in the case of unaudited interim statements,
as permitted by Form 10-Q of the SEC), and fairly presented in all material
respects the consolidated financial position of Leader and its Subsidiaries as
at the respective dates and the consolidated results of its operations and cash
flows for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not or are not expected to be material in amount or effect.
5.6 ABSENCE OF UNDISCLOSED LIABILITIES. No Leader
Company has any Liabilities that are reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Leader, except Liabilities which
are accrued or reserved against in the consolidated balance sheets of Leader as
of December 31, 1994 and September 30, 1995, included in the Leader Financial
Statements made available prior to the date of this Agreement or reflected in
the notes thereto. No Leader Company has incurred or paid any Liability since
September 30, 1995, except for such Liabilities incurred or paid (i) in the
ordinary course of business consistent with past business practice and which
are not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Leader or (ii) in connection with the transactions
contemplated by this Agreement.
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December
31, 1994, except as disclosed in the Leader Financial Statements made available
prior to the date of this Agreement, (i) there have been no events, changes, or
occurrences which have had, or are reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Leader, and (ii) the Leader
Companies have not taken any action, or failed to take any action, prior to the
date of this Agreement, which action or failure, if taken after the date of
this Agreement, would represent or result in a material breach or violation of
any of the covenants and agreements of Leader contained in this Agreement.
5.8 TAX MATTERS.
(a) All Tax Returns required to be filed by or on
behalf of any of the Leader Companies have been timely filed or requests for
extensions have been timely filed, granted, and have not expired for periods
ended on or before December 31, 1994, and on or before the date of the most
recent fiscal year end immediately preceding the Effective Time, and all Tax
Returns filed are complete and accurate. All Taxes shown on filed Tax Returns
have been paid. There is no audit examination, deficiency, or refund
Litigation with respect to any Taxes, except as reserved against in the Leader
Financial Statements made available prior to the date of this Agreement. All
Taxes and other Liabilities due with respect to completed and settled
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<PAGE> 16
examinations or concluded Litigation have been paid. There are no Liens with
respect to Taxes upon any of the Assets of the Leader Companies.
(b) None of the Leader Companies has executed an
extension or waiver of any statute of limitations on the assessment or
collection of any Tax due (excluding such statutes that relate to years
currently under examination by the Internal Revenue Service or other applicable
taxing authorities) that is currently in effect.
(c) Adequate provision for any Taxes due or to
become due for any of the Leader Companies for the period or periods through
and including the date of the respective Leader Financial Statements has been
made and is reflected on such Leader Financial Statements.
(d) Deferred Taxes of the Leader Companies have
been provided for in accordance with GAAP.
(e) Each of the Leader Companies is in compliance
with, and its records contain all information and documents (including properly
completed IRS Forms W-9) necessary to comply with, all applicable information
reporting and Tax withholding requirements under federal, state, and local Tax
Laws, and such records identify with specificity all accounts subject to backup
withholding under Section 3406 of the Internal Revenue Code.
(f) Except as set forth in Section 5.8 of the
Leader Disclosure Memorandum, none of the Leader Companies has made any
payments, is obligated to make any payments, or is a party to any Contract that
could obligate it to make any payments that would be disallowed as a deduction
under Section 280G or 162(m) of the Internal Revenue Code.
(g) There has not been an ownership change, as
defined in Internal Revenue Code Section 382(g), of the Leader Companies that
occurred during or after any Taxable Period in which the Companies incurred a
net operating loss that carries over to any Taxable Period ending after
December 31, 1994.
(h) Except as set forth in Section 5.8 of the
Leader Disclosure Memorandum, none of the Leader Companies is a party to any
tax allocation or sharing agreement and none of the Leader Companies has been a
member of an affiliated group filing a consolidated federal income tax return
(other than a group the common parent of which was Leader) has any Liability
for taxes of any Person (other than Leader and its Subsidiaries) under Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local, or
foreign law) as a transferee or successor or by Contract or otherwise.
5.9 ALLOWANCE FOR POSSIBLE LOAN LOSSES. The allowance
for possible loan or credit losses (the "Allowance") shown on the consolidated
balance sheets of Leader included in the most recent Leader Financial
Statements dated prior to the date of this Agreement was, and the Allowance
shown on the consolidated balance sheets of Leader included in the Leader
Financial Statements as of dates subsequent to the execution of this Agreement
will be, as of the dates thereof, in the reasonable opinion of management of
Leader adequate (within the meaning
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<PAGE> 17
of GAAP and applicable regulatory requirements or guidelines) to provide for
all known and reasonably anticipated losses relating to or inherent in the loan
and lease portfolios (including accrued interest receivables) of the Leader
Companies and other extensions of credit (including letters of credit and
commitments to make loans or extend credit) by the Leader Companies as of the
dates thereof.
5.10 ASSETS. Except as disclosed or reserved against in
the Leader Financial Statements made available prior to the date of this
Agreement, the Leader Companies have good and marketable title, free and clear
of all Liens, to all of their respective Assets. All tangible properties used
in the businesses of the Leader Companies are in good condition, reasonable
wear and tear excepted, and are usable in the ordinary course of business
consistent with Leader's past practices. All Assets which are material to
Leader's business on a consolidated basis, held under leases or subleases by
any of the Leader Companies, are held under valid Contracts enforceable in
accordance with their respective terms (except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium, or other Laws
affecting the enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceedings
may be brought), and each such Contract is in full force and effect. The
Leader Companies currently maintain insurance similar in amounts, scope, and
coverage to that maintained by other peer banking organizations. None of the
Leader Companies has received notice from any insurance carrier that (i) such
insurance will be canceled or that coverage thereunder will be reduced or
eliminated, or (ii) premium costs with respect to such policies of insurance
will be substantially increased. Except as set forth in Section 5.10 of the
Leader Disclosure Memorandum, there are presently no claims pending under any
such policies of insurance and no notices have been given by any Leader Company
under such policies.
5.11 INTELLECTUAL PROPERTY. All of the Intellectual
Property rights of the Leader Companies are in full force and effect and
constitute legal, valid, and binding obligations of the respective parties
thereto, and there have not been, and, to the Knowledge of Leader, there
currently are not, any Defaults thereunder by Leader. A Leader Company owns or
is the valid licensee of all such Intellectual Property rights free and clear
of all Liens or claims of infringement. None of the Leader Companies or, to
the Knowledge of Leader, their respective predecessors has misused the
Intellectual Property rights of others and none of the Intellectual Property
rights as used in the business conducted by any such Leader Company infringes
upon or otherwise violates the rights of any Person, nor has any Person
asserted a claim of such infringement. Except as disclosed in Section 5.11 of
the Leader Disclosure Memorandum, no Leader Company is obligated to pay any
royalties to any Person with respect to any such Intellectual Property. Each
Leader Company owns or has the valid right to use all of the Intellectual
Property rights which it is presently using, or in connection with performance
of any material Contract to which it is a party. No officer, director, or
employee of any Leader Company is party to any Contract which requires such
officer, director or employee to assign any interest in any Intellectual
Property or keep confidential any trade secrets, proprietary data, customer
information, or other business information or except as disclosed in Section
5.11 of the Leader Disclosure Memorandum, which restricts or prohibits such
officer, director, or employee from engaging in activities competitive with any
Person, including any Leader Company.
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5.12 ENVIRONMENTAL MATTERS. Except as set forth in
Section 5.12 of the Leader Disclosure Memorandum:
(a) To the Knowledge of Leader, each Leader
Company, its Participation Facilities, and its Operating Properties are, and
have been, in compliance with all Environmental Laws, except for violations
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Leader.
(b) To the Knowledge of Leader, there is no
Litigation pending or threatened before any court, governmental agency, or
authority or other forum in which any Leader Company or any of its Operating
Properties or Participation Facilities (or Leader in respect of such Operating
Property or Participation Facility) has been or, with respect to threatened
Litigation, may be named as a defendant (i) for alleged noncompliance
(including by any predecessor) with any Environmental Law or (ii) relating to
the release into the environment of any Hazardous Material, whether or not
occurring at, on, under, adjacent to, or affecting (or potentially affecting) a
site owned, leased, or operated by any Leader Company or any of its Operating
Properties or Participation Facilities, except for such Litigation pending or
threatened that is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Leader, nor is there any reasonable
basis for any Litigation of a type described in this sentence.
(c) During the period of (i) any Leader Company's
ownership or operation of any of their respective current properties, (ii) any
Leader Company's participation in the management of any Participation Facility,
or (iii) any Leader Company's holding of a security interest in a Operating
Property, to the Knowledge of Leader, there have been no releases of Hazardous
Material in, on, under, adjacent to, or affecting (or potentially affecting)
such properties, except such as are not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on Leader. Prior to the period
of (i) any Leader Company's ownership or operation of any of their respective
current properties, (ii) any Leader Company's participation in the management
of any Participation Facility, or (iii) any Leader Company's holding of a
security interest in a Operating Property, to the Knowledge of Leader, there
were no releases of Hazardous Material in, on, under, or affecting any such
property, Participation Facility or Operating Property, except such as are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Leader.
5.13 COMPLIANCE WITH LAWS. Leader is duly registered as a
savings and loan holding company under the HOLA. Each Leader Company has in
effect all Permits necessary for it to own, lease, or operate its material
Assets and to carry on its business as now conducted, and there has occurred no
Default under any such Permit. Except as set forth in Section 5.13 of the
Leader Disclosure Memorandum, none of the Leader Companies:
(a) is in violation of any Laws, Orders, or
Permits applicable to its business or employees conducting its business;
and
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(b) has received any notification or
communication from any agency or department of federal, state, or local
government or any Regulatory Authority or the staff thereof (i)
asserting that any Leader Company is not in compliance with any of the
Laws or Orders which such governmental authority or Regulatory Authority
enforces, (ii) threatening to revoke any Permits, or (iii) requiring any
Leader Company to enter into or consent to the issuance of a cease and
desist order, formal agreement, directive, commitment, or memorandum of
understanding, or to adopt any Board resolution or similar undertaking,
which restricts materially the conduct of its business, or in any manner
relates to its capital adequacy, its credit or reserve policies, its
management, or the payment of dividends.
5.14 LABOR RELATIONS. No Leader Company is the subject of
any Litigation asserting that it or any other Leader Company has committed an
unfair labor practice (within the meaning of the National Labor Relations Act
or comparable state law) or seeking to compel it or any other Leader Company to
bargain with any labor organization as to wages or conditions of employment,
nor is there any strike or other labor dispute involving any Leader Company,
pending or threatened, or to the Knowledge of Leader, is there any activity
involving any Leader Company's employees seeking to certify a collective
bargaining unit or engaging in any other organization activity.
5.15 EMPLOYEE BENEFIT PLANS.
(a) Leader has disclosed in Section 5.15 of the
Leader Disclosure Memorandum, and has delivered or made available to UPC prior
to the execution of this Agreement copies in each case of, all pension,
retirement, profit-sharing, deferred compensation, stock option, employee stock
ownership, severance pay, vacation, bonus, or other incentive plan, all other
written employee programs, arrangements, or agreements, all medical, vision,
dental, or other health plans, all life insurance plans, and all other employee
benefit plans or fringe benefit plans, including "employee benefit plans" as
that term is defined in Section 3(3) of ERISA, currently adopted, maintained
by, sponsored in whole or in part by, or contributed to by any Leader Company
or ERISA Affiliate thereof for the benefit of employees, retirees, dependents,
spouses, directors, independent contractors, or other beneficiaries and under
which employees, retirees, dependents, spouses, directors, independent
contractors, or other beneficiaries are eligible to participate (collectively,
the "Leader Benefit Plans"). Any of the Leader Benefit Plans which is an
"employee pension benefit plan," as that term is defined in Section 3(2) of
ERISA, is referred to herein as a "Leader ERISA Plan." Each Leader ERISA Plan
which is also a "defined benefit plan" (as defined in Section 414(j) of the
Internal Revenue Code) is referred to herein as a "Leader Pension Plan." No
Leader Pension Plan is or has been a multiemployer plan within the meaning of
Section 3(37) of ERISA.
(b) All Leader Benefit Plans are in compliance
with the applicable terms of ERISA, the Internal Revenue Code, and any other
applicable Laws the breach or violation of which are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Leader. Each
Leader ERISA Plan which is intended to be qualified under Section 401(a) of the
Internal Revenue Code has received a favorable determination letter from
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<PAGE> 20
the Internal Revenue Service, and Leader is not aware of any circumstances
likely to result in revocation of any such favorable determination letter. No
Leader Company has engaged in a transaction with respect to any Leader Benefit
Plan that, assuming the taxable period of such transaction expired as of the
date hereof, would subject any Leader Company to a Tax imposed by either
Section 4975 of the Internal Revenue Code or Section 502(i) of ERISA.
(c) No Leader Pension Plan has any "unfunded
current liability," as that term is defined in Section 302(d)(8)(A) of ERISA,
and the fair market value of the assets of any such plan exceeds the plan's
"benefit liabilities," as that term is defined in Section 4001(a)(16) of ERISA,
when determined under actuarial factors that would apply if the plan terminated
in accordance with all applicable legal requirements. Since the date of the
most recent actuarial valuation, there has been (i) no material change in the
financial position of any Leader Pension Plan, (ii) no change in the actuarial
assumptions with respect to any Leader Pension Plan, and (iii) no increase in
benefits under any Leader Pension Plan as a result of plan amendments or
changes in applicable Law which is reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Leader or materially adversely
affect the funding status of any such plan. Neither any Leader Pension Plan
nor any "single-employer plan," within the meaning of Section 4001(a)(15) of
ERISA, currently or formerly maintained by any Leader Company, or the
single-employer plan of any entity which is considered one employer with Leader
under Section 4001 of ERISA or Section 414 of the Internal Revenue Code or
Section 302 of ERISA (whether or not waived) (an "ERISA Affiliate") has an
"accumulated funding deficiency" within the meaning of Section 412 of the
Internal Revenue Code or Section 302 of ERISA. No Leader Company has provided,
or is required to provide, security to a Leader Pension Plan or to any
single-employer plan of an ERISA Affiliate pursuant to Section 401(a)(29) of
the Internal Revenue Code.
(d) Within the six-year period preceding the
Effective Time, no Liability under Subtitle C or D of Title IV of ERISA has
been or is expected to be incurred by any Leader Company with respect to any
ongoing, frozen, or terminated single-employer plan or the single-employer plan
of any ERISA Affiliate. No Leader Company has incurred any withdrawal
Liability with respect to a multiemployer plan under Subtitle B of Title IV of
ERISA (regardless of whether based on contributions of an ERISA Affiliate). No
notice of a "reportable event," within the meaning of Section 4043 of ERISA for
which the 30-day reporting requirement has not been waived, has been required
to be filed for any Leader Pension Plan or by any ERISA Affiliate within the
12-month period ending on the date hereof.
(e) Except as disclosed in Section 5.15 of the
Leader Disclosure Memorandum, no Leader Company has any Liability for retiree
health and life benefits under any of the Leader Benefit Plans and there are no
restrictions on the rights of such Leader Company to amend or terminate any
such retiree health or benefit Plan without incurring Liability thereunder.
(f) Except as disclosed in Section 5.15 of the
Leader Disclosure Memorandum, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will (i)
result in any payment (including severance, unemployment compensation, golden
parachute, or otherwise) becoming due to any director or
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<PAGE> 21
any employee of any Leader Company from any Leader Company under any Leader
Benefit Plan or otherwise, (ii) increase any benefits otherwise payable under
any Leader Benefit Plan, or (iii) result in any acceleration of the time of
payment or vesting of any such benefit.
(g) The actuarial present values of all accrued
deferred compensation entitlements (including entitlements under any executive
compensation, supplemental retirement, or employment agreement) of employees
and former employees of any Leader Company and their respective beneficiaries,
other than entitlements accrued pursuant to funded retirement plans subject to
the provisions of Section 412 of the Internal Revenue Code or Section 302 of
ERISA, have been fully reflected on the Leader Financial Statements to the
extent required by and in accordance with GAAP.
5.16 MATERIAL CONTRACTS. Except as disclosed in the
Leader SEC Reports or as disclosed in Section 5.16 of the Leader Disclosure
Memorandum, none of the Leader Companies, nor any of their respective Assets,
businesses, or operations, is a party to, or is bound or affected by, or
receives benefits under, (i) any employment, severance, termination,
consulting, or retirement Contract providing for aggregate payments to any
Person in any calendar year in excess of $100,000, (ii) any Contract relating
to the borrowing of money by any Leader Company or the guarantee by any Leader
Company of any such obligation (other than Contracts evidencing deposit
liabilities, purchases of federal funds, fully-secured repurchase agreements,
and Federal Home Loan Bank advances of depository institution Subsidiaries,
trade payables, and Contracts relating to borrowings or guarantees made in the
ordinary course of business), (iii) any Contracts which prohibit or restrict
any Leader Company from engaging in any business activities in any geographic
area, line of business, or otherwise in competition with any other Person, (iv)
any Contracts between or among Leader Companies, (v) any exchange-traded or
over-the-counter swap, forward, future, option, cap, floor, or collar financial
Contract, or any other interest rate or foreign currency protection Contract
(not disclosed in the Leader Financial Statements delivered prior to the date
of this Agreement) which is a financial derivative Contract (including various
combinations thereof), and (vi) any other Contract or amendment thereto that
would be required to be filed as an exhibit to a Leader SEC Report filed by
Leader with the SEC prior to the date of this Agreement that has not been filed
as an exhibit to a Leader SEC Report (together with all Contracts referred to
in Sections 5.10 and 5.15(a) of this Agreement, the "Leader Contracts"). With
respect to each Leader Contract: (i) the Contract is in full force and effect;
(ii) no Leader Company is in Default thereunder; (iii) no Leader Company has
repudiated or waived any material provision of any such Contract; and (iv) no
other party to any such Contract is, to the Knowledge of Leader, in Default in
any respect or has repudiated or waived any material provision thereunder.
Except as set forth in Section 5.16 of the Leader Disclosure Memorandum, all of
the indebtedness of any Leader Company for money borrowed is prepayable at any
time by such Leader Company without penalty or premium.
5.17 LEGAL PROCEEDINGS. There is no Litigation instituted
or pending, or, to the Knowledge of Leader, threatened (or unasserted but
considered probable of assertion and which if asserted would have at least a
reasonable probability of an unfavorable outcome) against any Leader Company,
or against any Asset, employee benefit plan, interest, or right of any of them,
that is reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on
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<PAGE> 22
Leader, nor are there any Orders of any Regulatory Authorities, other
governmental authorities, or arbitrators outstanding against any Leader
Company. Section 5.17 of the Leader Disclosure Memorandum includes a summary
report of all material Litigation as of the date of this Agreement to which any
Leader Company is a party and which names a Leader Company as a defendant or
cross-defendant.
5.18 REPORTS. Since January 1, 1992, or the date of
organization if later, each Leader Company has timely filed all reports and
statements, together with any amendments required to be made with respect
thereto, that it was required to file with (i) the SEC, including, but not
limited to, Forms 10-K, Forms 10-Q, Forms 8-K, and proxy statements, (ii) other
Regulatory Authorities, and (iii) any applicable state securities or banking
authorities (except, in the case of state securities authorities, failures to
file which are not reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on Leader). As of their respective dates, each of
such reports and documents, including the financial statements, exhibits, and
schedules thereto, complied in all material respects with all applicable Laws.
As of its respective date, each such report and document did not, in all
material respects, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
5.19 STATEMENTS TRUE AND CORRECT. No statement,
certificate, instrument, or other writing furnished or to be furnished by any
Leader Company or any Affiliate thereof to UPC pursuant to this Agreement or
any other document, agreement, or instrument referred to herein contains or
will contain any untrue statement of material fact or will omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. None of the
information supplied or to be supplied by any Leader Company or any Affiliate
thereof for inclusion in the Registration Statement to be filed by UPC with the
SEC will, when the Registration Statement becomes effective, be false or
misleading with respect to any material fact, or omit to state any material
fact necessary to make the statements therein not misleading. None of the
information supplied or to be supplied by any Leader Company or any Affiliate
thereof for inclusion in the Joint Proxy Statement to be mailed to UPC's and
Leader's shareholders in connection with the Shareholders' Meetings, and any
other documents to be filed by a Leader Company or any Affiliate thereof with
the SEC or any other Regulatory Authority in connection with the transactions
contemplated hereby, will, at the respective time such documents are filed, and
with respect to the Joint Proxy Statement, when first mailed to the
shareholders of UPC and Leader, 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 Joint Proxy Statement or any amendment
thereof or supplement thereto, at the time of the Shareholders' Meetings, 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 Shareholders' Meetings.
All documents that any Leader Company or any Affiliate thereof is responsible
for filing with any Regulatory Authority in connection with the transactions
contemplated hereby will comply as to form in all material respects with the
provisions of applicable Law.
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<PAGE> 23
5.20 ACCOUNTING, TAX, AND REGULATORY MATTERS. No Leader
Company or any Affiliate thereof has taken any action or has any Knowledge of
any fact or circumstance relating to Leader that is reasonably likely to (i)
prevent the transactions contemplated hereby, including the Merger, from
qualifying for pooling-of-interests accounting treatment or as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code, or (ii)
materially impede or delay receipt of any Consents of Regulatory Authorities
referred to in Section 9.1(b) of this Agreement or result in the imposition of
a condition or restriction of the type referred to in the last sentence of such
section.
5.21 STATE TAKEOVER LAWS. Each Leader Company has taken
all necessary action to exempt the transactions contemplated by this Agreement
and the Plan of Merger from, or if necessary challenge the validity or
applicability of, any applicable "moratorium," "fair price," "business
combination," "control share," or other anti- takeover Laws (collectively,
"Takeover Laws"), including Section 48-35-101 through 48-35-406 of the TBCA.
5.22 CHARTER PROVISIONS. Each Leader Company has taken
all action so that the entering into of this Agreement and the Plan of Merger
and the consummation of the Merger and the other transactions contemplated by
this Agreement and the Plan of Merger do not and will not result in the grant
of any rights to any Person under the Charter, By-laws or other governing
instruments of any Leader Company or restrict or impair the ability of UPC or
any of its Subsidiaries to vote, or otherwise to exercise the rights of a
shareholder with respect to, shares of any Leader Company that may be directly
or indirectly acquired or controlled by it.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF UPC
Except as disclosed in the UPC Disclosure Memorandum, UPC
hereby represents and warrants to Leader as follows:
6.1 ORGANIZATION, STANDING, AND POWER. UPC is a
corporation duly organized, validly existing, and in good standing under the
Laws of the State of Tennessee, and has the corporate power and authority to
carry on its business as now conducted and to own, lease and operate its
material Assets. UPC is duly qualified or licensed to transact business as a
foreign corporation in good standing in the States of the United States and
foreign jurisdictions where the character of its Assets or the nature or
conduct of its business requires it to be so qualified or licensed, except for
such jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on UPC.
6.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) UPC has the corporate power and authority
necessary to execute, deliver and perform its obligations under this Agreement
and to consummate the transactions
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<PAGE> 24
contemplated hereby. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated herein, including the
Merger, have been duly and validly authorized by all necessary corporate action
in respect thereof on the part of UPC. Subject to such requisite shareholder
approval, this Agreement (which for purposes of this sentence shall not include
the Stock Option Agreement) represents a legal, valid, and binding obligation
of UPC, enforceable against UPC in accordance with its terms (except in all
cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar Laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this
Agreement by UPC, nor the consummation by UPC of the transactions contemplated
hereby, nor compliance by UPC with any of the provisions hereof, will (i)
conflict with or result in a breach of any provision of UPC's Restated Charter
of Incorporation or By-laws, or (ii) constitute or result in a Default under,
or require any Consent pursuant to, or result in the creation of any Lien on
any Asset of any UPC Company under, any Contract or Permit of any UPC Company,
or (iii) subject to receipt of the requisite approvals referred to in Section
9.1(b) of this Agreement, violate any Law or Order applicable to any UPC
Company or any of their respective material Assets.
(c) Other than in connection or compliance with
the provisions of the Securities Laws, applicable state corporate and
securities Laws, and rules of the NYSE, and other than Consents required from
Regulatory Authorities, and other than notices to or filings with the Internal
Revenue Service or the Pension Benefit Guaranty Corporation with respect to any
employee benefit plans, or under the HSR Act, and other than Consents, filings,
or notifications which, if not obtained or made, are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on UPC, no
notice to, filing with, or Consent of, any public body or authority is
necessary for the consummation by UPC of the Merger and the other transactions
contemplated in this Agreement.
6.3 CAPITAL STOCK. The authorized capital stock of UPC
consists of (i) 100,000,000 shares of UPC Common Stock, of which 45,565,914
shares are issued and outstanding as of February 29, 1996, and (ii) 10,000,000
shares of UPC Preferred Stock, of which no shares of UPC Series A Preferred
Stock, 44,000 shares of UPC Series B Preferred Stock, and 3,496,419 shares of
UPC Series E Preferred Stock are issued and outstanding. All of the issued and
outstanding shares of UPC Capital Stock are, and all of the shares of UPC
Common Stock to be issued in exchange for shares of Leader Common Stock upon
consummation of the Merger, when issued in accordance with the terms of this
Agreement, will be, duly and validly issued and outstanding and fully paid and
nonassessable under the TBCA. None of the outstanding shares of UPC Capital
Stock has been, and none of the shares of UPC Common Stock to be issued in
exchange for shares of Leader Common Stock upon consummation of the Merger will
be, issued in violation of any preemptive rights of the current or past
shareholders of UPC. UPC has reserved for issuance a sufficient number of
shares of UPC Common Stock for the purpose of issuing shares of UPC Common
Stock in accordance with the provisions of Sections 3.1 and 3.5 of this
Agreement.
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<PAGE> 25
6.4 SEC FILINGS; FINANCIAL STATEMENTS.
(a) UPC has filed and made available to Leader
all SEC Documents required to be filed by UPC since December 31, 1992 (the "UPC
SEC Reports"). The UPC SEC Reports (i) at the time filed, complied in all
material respects with the applicable requirements of the Securities Laws and
(ii) did not, at the time they were filed (or, if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a material fact or omit to state a material
fact required to be stated in such UPC SEC Reports or necessary in order to
make the statements in such UPC SEC Reports, in light of the circumstances
under which they were made, not misleading. Except for UPC Subsidiaries that
are registered as a broker, dealer, or investment advisor, none of UPC's
Subsidiaries is required to file any SEC Documents.
(b) Each of the UPC Financial Statements
(including, in each case, any related notes) contained in the UPC SEC Reports,
including any UPC SEC Reports filed after the date of this Agreement until the
Effective Time, complied as to form in all material respects with the
applicable published rules and regulations of the SEC with respect thereto, was
prepared in accordance with GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes to such financial
statements or, in the case of unaudited interim statements, as permitted by
Form 10-Q of the SEC), and fairly presented in all material respects the
consolidated financial position of UPC and its Subsidiaries as at the
respective dates and the consolidated results of its operations and cash flows
for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not or are not expected to be material in amount or effect.
6.5 ABSENCE OF UNDISCLOSED LIABILITIES. No UPC Company
has any Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on UPC, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of UPC as of
December 31, 1994 and September 30, 1995, included in the UPC Financial
Statements made available prior to the date of this Agreement or reflected in
the notes thereto. No UPC Company has incurred or paid any Liability since
September 30, 1995, except for such Liabilities incurred or paid (i) in the
ordinary course of business consistent with past business practice and which
are not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on UPC or (ii) in connection with the transactions contemplated
by this Agreement.
6.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December
31, 1994, except as disclosed in the UPC Financial Statements delivered prior
to the date of this Agreement or contemplated by pending federal legislation
applicable to financial institutions generally, (i) there have been no events,
changes, or occurrences which have had, or are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on UPC, and (ii)
the UPC Companies have not taken any action, or failed to take any action,
prior to the date of this Agreement, which action or failure, if taken after
the date of this Agreement, would represent or
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<PAGE> 26
result in a material breach or violation of any of the covenants and agreements
of UPC provided in Article 7 of this Agreement.
6.7 TAX MATTERS.
(a) All Tax Returns required to be filed by or on
behalf of any of the UPC Companies have been timely filed or requests for
extensions have been timely filed, granted, and have not expired for periods
ended on or before December 31, 1994, and on or before the date of the most
recent fiscal year end immediately preceding the Effective Time, and all Tax
Returns filed are complete and accurate. All Taxes shown on filed Tax Returns
have been paid. There is no audit examination, deficiency, or refund
Litigation with respect to any Taxes, except as reserved against in the UPC
Financial Statements delivered prior to the date of this Agreement. All Taxes
and other Liabilities due with respect to completed and settled examinations or
concluded Litigation have been paid. There are no Liens with respect to Taxes
upon any of the Assets of the UPC Companies.
(b) Adequate provision for any Taxes due or to
become due for any of the UPC Companies for the period or periods through and
including the date of the respective UPC Financial Statements has been made and
is reflected on such UPC Financial Statements.
(c) Deferred Taxes of the UPC Companies have been
provided for in accordance with GAAP.
6.8 ENVIRONMENTAL MATTERS.
(a) To the Knowledge of UPC, each UPC Company,
its Participation Facilities, and its Operating Properties are, and have been,
in compliance with all Environmental Laws, except for violations which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on UPC.
(b) To the Knowledge of UPC, there is no
Litigation pending or threatened before any court, governmental agency, or
authority or other forum in which any UPC Company or any of its Operating
Properties or Participation Facilities (or UPC in respect of such Operating
Property or Participation Facility) has been or, with respect to threatened
Litigation, may be named as a defendant (i) for alleged noncompliance
(including by any predecessor) with any Environmental Law or (ii) relating to
the release into the environment of any Hazardous Material, whether or not
occurring at, on, under, adjacent to, or affecting (or potentially affecting) a
site owned, leased, or operated by any UPC Company or any of its Operating
Properties or Participation Facilities, except for such Litigation pending or
threatened that is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on UPC, nor is there any reasonable basis
for any Litigation of a type described in this sentence.
(c) During the period of (i) any UPC Company's
ownership or operation of any of their respective current properties, (ii) any
UPC Company's participation in the management of any Participation Facility, or
(iii) any UPC Company's holding of a security
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interest in a Operating Property, to the Knowledge of UPC, there have been no
releases of Hazardous Material in, on, under, adjacent to, or affecting (or
potentially affecting) such properties, except such as are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
UPC. Prior to the period of (i) any UPC Company's ownership or operation of
any of their respective current properties, (ii) any UPC Company's
participation in the management of any Participation Facility, or (iii) any UPC
Company's holding of a security interest in a Operating Property, to the
Knowledge of UPC, there were no releases of Hazardous Material in, on, under,
or affecting any such property, Participation Facility or Operating Property,
except such as are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on UPC.
6.9 COMPLIANCE WITH LAWS. UPC is duly registered as a
bank holding company under the BHC Act and as a savings and loan holding
company under the HOLA. Each UPC Company has in effect all Permits necessary
for it to own, lease, or operate its material Assets and to carry on its
business as now conducted, and there has occurred no Default under any such
Permit. No UPC Company:
(a) is in violation of any Laws, Orders, or
Permits applicable to its business or employees conducting its business;
and
(b) has received any notification or
communication from any agency or department of federal, state, or local
government or any Regulatory Authority or the staff thereof (i)
asserting that any UPC Company is not in compliance with any of the Laws
or Orders which such governmental authority or Regulatory Authority
enforces, (ii) threatening to revoke any Permits, or (iii) requiring any
UPC Company to enter into or consent to the issuance of a cease and
desist order, formal agreement, directive, commitment or memorandum of
understanding, or to adopt any Board resolution or similar undertaking,
which restricts materially the conduct of its business, or in any manner
relates to its capital adequacy, its credit or reserve policies, its
management, or the payment of dividends.
6.10 LEGAL PROCEEDINGS. There is no Litigation instituted
or pending, or, to the Knowledge of UPC, threatened (or unasserted but
considered probable of assertion and which if asserted would have at least a
reasonable probability of an unfavorable outcome) against any UPC Company, or
against any Asset, interest, or right of any of them, that is reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on UPC,
nor are there any Orders of any Regulatory Authorities, other governmental
authorities, or arbitrators outstanding against any UPC Company.
6.11 REPORTS. Since January 1, 1992, or the date of
organization if later, each UPC Company has filed all reports and statements,
together with any amendments required to be made with respect thereto, that it
was required to file with (i) the SEC, including, but not limited to, Forms
10-K, Forms 10-Q, Forms 8-K, and proxy statements, (ii) other Regulatory
Authorities, and (iii) any applicable state securities or banking authorities
(except, in the case of state securities authorities, failures to file which
are not reasonably likely to have, individually or in the aggregate,
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a Material Adverse Effect on UPC). As of their respective dates, each of such
reports and documents, including the financial statements, exhibits, and
schedules thereto, complied in all material respects with all applicable Laws.
As of its respective date, each such report and document did not, in all
material respects, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
6.12 STATEMENTS TRUE AND CORRECT. No statement,
certificate, instrument or other writing furnished or to be furnished by any
UPC Company or any Affiliate thereof to Leader pursuant to this Agreement or
any other document, agreement, or instrument referred to herein contains or
will contain any untrue statement of material fact or will omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. None of the
information supplied or to be supplied by any UPC Company or any Affiliate
thereof for inclusion in the Registration Statement to be filed by UPC with the
SEC, will, when the Registration Statement becomes effective, be false or
misleading with respect to any material fact, or omit to state any material
fact necessary to make the statements therein not misleading. None of the
information supplied or to be supplied by any UPC Company or any Affiliate
thereof for inclusion in the Joint Proxy Statement to be mailed to UPC's and
Leader's shareholders in connection with the Shareholders' Meetings, and any
other documents to be filed by any UPC Company or any Affiliate thereof with
the SEC or any other Regulatory Authority in connection with the transactions
contemplated hereby, will, at the respective time such documents are filed, and
with respect to the Joint Proxy Statement, when first mailed to the
shareholders of UPC and Leader, 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 Joint Proxy Statement or any amendment
thereof or supplement thereto, at the time of the Shareholders' Meetings, 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 Shareholders' Meetings.
All documents that any UPC Company or any Affiliate thereof is responsible for
filing with any Regulatory Authority in connection with the transactions
contemplated hereby will comply as to form in all material respects with the
provisions of applicable Law.
6.13 ACCOUNTING, TAX, AND REGULATORY MATTERS. No UPC
Company or any Affiliate thereof has taken any action or has any Knowledge of
any fact or circumstance relating to UPC that is reasonably likely to (i)
prevent the transactions contemplated hereby, including the Merger, from
qualifying for pooling-of-interests accounting treatment or as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code, or (ii)
materially impede or delay receipt of any Consents of Regulatory Authorities
referred to in Section 9.1(b) of this Agreement or result in the imposition of
a condition or restriction of the type referred to in the last sentence of such
Section.
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ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 AFFIRMATIVE COVENANTS OF LEADER. Unless the prior
written consent of UPC shall have been obtained, and except as otherwise
expressly contemplated herein, Leader shall and shall cause each of its
Subsidiaries to (i) operate its business only in the usual, regular, and
ordinary course (which shall include matters of the type set forth in Section
7.1 of the Leader Disclosure Memorandum), (ii) preserve intact its business
organization and Assets and maintain its rights and franchises, and (iii) take
no action which would (a) materially adversely affect the ability of any Party
to obtain any Consents required for the transactions contemplated hereby
without imposition of a condition or restriction of the type referred to in the
last sentence of Section 9.1(b) of this Agreement or prevent the transactions
contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment or as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code, or (b) materially
adversely affect the ability of any Party to perform its covenants and
agreements under this Agreement.
7.2 NEGATIVE COVENANTS OF LEADER. Except as specifically
permitted by this Agreement or the Supplemental Letter, from the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement, Leader covenants and agrees that it will not do or agree or commit
to do, or permit any of its Subsidiaries to do or agree or commit to do, any of
the following without the prior written consent of the chief executive officer,
president, or chief financial officer of UPC, which consent shall not be
unreasonably withheld:
(a) amend the Charter, By-laws, or other
governing instruments of any Leader Company, or
(b) incur any additional debt obligation or other
obligation for borrowed money (other than indebtedness of a Leader
Company to another Leader Company) in excess of an aggregate of $250,000
(for the Leader Companies on a consolidated basis) except in the
ordinary course of the business of Leader Subsidiaries consistent with
past practices (which shall include, for Leader Subsidiaries that are
depository institutions, creation of deposit liabilities, purchases of
federal funds, advances from the Federal Reserve Bank or Federal Home
Loan Bank, and entry into repurchase agreements fully secured by U.S.
government or agency securities), or impose, or suffer the imposition,
on any Asset of any Leader Company of any Lien or permit any such Lien
to exist (other than in connection with deposits, repurchase agreements,
bankers acceptances, "treasury tax and loan" accounts established in the
ordinary course of business, the satisfaction of legal requirements in
the exercise of trust powers, and Liens in effect as of the date hereof
that are disclosed in the Leader Disclosure Memorandum); or
(c) repurchase, redeem, or otherwise acquire or
exchange (other than exchanges in the ordinary course under employee
benefit plans), directly or indirectly, any shares, or any securities
convertible into any shares, of the capital stock of any Leader Company,
or declare or pay any dividend or make any other distribution in respect
of Leader's capital stock, provided that Leader may (to the extent
legally and contractually
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permitted to do so), but shall not be obligated to, declare and pay
regular quarterly cash dividends on the shares of Leader Common Stock at
a rate not in excess of $.18 per share with usual and regular record and
payment dates in accordance with past practice disclosed in Section
7.2(c) of the Leader Disclosure Memorandum and such dates may not be
changed without the prior written consent of UPC, provided, that,
notwithstanding the provisions of Section 1.3, the Parties shall
cooperate in selecting the Effective Time to ensure that, with respect
to the quarterly period in which the Effective Time occurs, the holders
of Leader Common Stock do not become entitled to receive both a dividend
in respect of their Leader Common Stock and a dividend in respect of UPC
Common Stock or fail to be entitled to receive any dividend; or
(d) except for this Agreement, or pursuant to the
exercise of stock options outstanding as of the date hereof and pursuant
to the terms thereof in existence on the date hereof, or pursuant to the
Stock Option Agreement, issue, sell, pledge, encumber, authorize the
issuance of, enter into any Contract to issue, sell, pledge, encumber,
or authorize the issuance of, or otherwise permit to become outstanding,
any additional shares of Leader Common Stock or any other capital stock
of any Leader Company, or any stock appreciation rights, or any option,
warrant, conversion, or other right to acquire any such stock, or any
security convertible into any such stock; or
(e) adjust, split, combine or reclassify any
capital stock of any Leader Company or issue or authorize the issuance
of any other securities in respect of or in substitution for shares of
Leader Common Stock, or sell, lease, mortgage or otherwise dispose of or
otherwise encumber any shares of capital stock of any Leader Subsidiary
(unless any such shares of stock are sold or otherwise transferred to
another Leader Company) or any Asset having a book value in excess of
$200,000 other than in the ordinary course of business for reasonable
and adequate consideration; or
(f) except for purchases of U.S. Treasury
securities or U.S. Government agency securities, which in either case
have maturities of three years or less or Federal Home Loan Bank Stock,
purchase any securities or make any material investment, either by
purchase of stock of securities, contributions to capital, Asset
transfers, or purchase of any Assets, in any Person other than a wholly
owned Leader Subsidiary, or otherwise acquire direct or indirect control
over any Person, other than in connection with (i) foreclosures in the
ordinary course of business, (ii) acquisitions of control by a
depository institution Subsidiary in its fiduciary capacity, or (iii)
the creation of new wholly owned Subsidiaries organized to conduct or
continue activities otherwise permitted by this Agreement; or
(g) grant any increase in compensation or
benefits to the employees or officers of any Leader Company, except in
accordance with past practice disclosed in Section 7.2(g) of the Leader
Disclosure Memorandum or as required by Law; pay any severance or
termination pay or any bonus other than pursuant to written policies or
written Contracts in effect on the date of this Agreement and disclosed
in Section 7.2(g) of the Leader Disclosure Memorandum; and enter into or
amend any severance agreements with
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officers of any Leader Company; grant any material increase in fees or
other increases in compensation or other benefits to directors of any
Leader Company except in accordance with past practice disclosed in
Section 7.2(g) of the Leader Disclosure Memorandum; or voluntarily
accelerate the vesting of any stock options or other stock-based
compensation or employee benefits (other than the acceleration of
vesting which occurs under a benefit plan upon a change of control of
Leader); or
(h) enter into or amend any employment Contract
between any Leader Company and any Person (unless such amendment is
required by Law) that the Leader Company does not have the unconditional
right to terminate without Liability (other than Liability for services
already rendered), at any time on or after the Effective Time; or
(i) adopt any new employee benefit plan of any
Leader Company or terminate or withdraw from, or make any material
change in or to, any existing employee benefit plans of any Leader
Company other than any such change that is required by Law or that, in
the opinion of counsel, is necessary or advisable to maintain the tax
qualified status of any such plan, or make any distributions from such
employee benefit plans, except as required by Law, the terms of such
plans or consistent with past practice; or
(j) make any significant change in any Tax or
accounting methods or systems of internal accounting controls, except as
may be appropriate to conform to changes in Tax Laws or regulatory
accounting requirements or GAAP; or
(k) commence any Litigation other than in
accordance with past practice, settle any Litigation involving any
Liability of any Leader Company for material money damages or
restrictions upon the operations of any Leader Company; or
(l) enter into, modify, amend, or terminate any
material Contract (excluding any loan Contract) or waive, release,
compromise, or assign any material rights or claims.
7.3 COVENANTS OF UPC. From the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement,
UPC covenants and agrees that it shall (i) continue to conduct its business and
the business of its Subsidiaries in a manner designed in its reasonable
judgment, to enhance the long-term value of the UPC Common Stock and the
business prospects of the UPC Companies, and (ii) take no action which would
(a) materially adversely affect the ability of any Party to obtain any Consents
required for the transactions contemplated hereby without imposition of a
condition or restriction of the type referred to in the last sentence of
Section 9.1(b) of this Agreement or prevent the transactions contemplated
hereby, including the Merger, from qualifying for pooling-of- interests
accounting treatment or as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code, (b) materially adversely affect the
ability of any Party to perform its covenants and agreements under this
Agreement, or (c) result in UPC entering into an agreement with respect to an
Acquisition Proposal with a third party which would result in the Merger not
being consummated; provided, that the foregoing shall not prevent any UPC
Company from acquiring any other Assets or businesses or from
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discontinuing or disposing of any of its Assets or business if such action is,
in the judgment of UPC, desirable in the conduct of the business of UPC and its
Subsidiaries and would not, in the judgment of UPC, likely delay the Effective
Time to a date subsequent to the date set forth in Section 10.1(e) of this
Agreement.
7.4 ADVERSE CHANGES IN CONDITION. Each Party agrees to
give written notice promptly to the other Party upon becoming aware of the
occurrence or impending occurrence of any event or circumstance relating to it
or any of its Subsidiaries which (i) is reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on it or (ii) would cause or
constitute a material breach of any of its representations, warranties, or
covenants contained herein, and to use its reasonable efforts to prevent or
promptly to remedy the same.
7.5 REPORTS. Each Party and its Subsidiaries shall file
all reports required to be filed by it with Regulatory Authorities between the
date of this Agreement and the Effective Time and shall deliver to the other
Party copies of all such reports promptly after the same are filed. If
financial statements are contained in any such reports filed with the SEC, such
financial statements will fairly present the consolidated financial position of
the entity filing such statements as of the dates indicated and the
consolidated results of operations, changes in shareholders' equity, and cash
flows for the periods then ended in accordance with GAAP (subject in the case
of interim financial statements to normal recurring year-end adjustments that
are not material). As of their respective dates, such reports filed with the
SEC will comply in all material respects with the Securities Laws and will not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Any financial statements contained in any other reports to another
Regulatory Authority shall be prepared in accordance with Laws applicable to
such reports.
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 REGISTRATION STATEMENT; JOINT PROXY STATEMENT;
SHAREHOLDER APPROVALS. UPC shall file the Registration Statement with the SEC,
and shall use its reasonable efforts to cause the Registration Statement to
become effective under the 1933 Act and take any action required to be taken
under the applicable state Blue Sky or securities Laws in connection with the
issuance of the shares of UPC Common Stock upon consummation of the Merger.
Leader shall furnish all information concerning it and the holders of its
capital stock as UPC may reasonably request in connection with such action.
Leader shall call a Shareholders' Meeting, to be held as soon as reasonably
practicable after the Registration Statement is declared effective by the SEC,
for the purpose of voting upon approval of this Agreement and the Plan of
Merger and such other related matters as it deems appropriate. UPC shall call
a Shareholders' Meeting, to be held as soon as reasonably practicable after the
Registration Statement is declared effective by the SEC, for the purpose of
voting upon the issuance of shares of UPC Common Stock pursuant to the Merger
and such other related matters as it deems appropriate. In connection with the
Shareholders' Meetings, (i) UPC and Leader shall prepare and file with the SEC
a Joint Proxy
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Statement and mail such Joint Proxy Statement to their respective shareholders,
(ii) the Parties shall furnish to each other all information concerning them
that they may reasonably request in connection with such Joint Proxy Statement,
(iii) the Boards of Directors of UPC and Leader shall recommend (subject to
compliance with their fiduciary duties as advised by counsel) to their
respective shareholders the approval of the matters submitted for approval, and
(iv) the Boards of Directors and officers of UPC and Leader shall (subject to
compliance with their fiduciary duties as advised by counsel) use their
reasonable efforts to obtain such shareholders' approvals.
8.2 EXCHANGE LISTING. UPC shall use its reasonable
efforts to list, prior to the Effective Time, on the NYSE, subject to official
notice of issuance, the shares of UPC Common Stock to be issued to the holders
of Leader Common Stock or Leader Options pursuant to the Merger, and UPC shall
give all notices and make all filings with the NYSE required in connection with
the transactions contemplated herein.
8.3 APPLICATIONS. UPC shall prepare and file, and Leader
shall cooperate in the preparation and, where appropriate, filing of,
applications with all Regulatory Authorities having jurisdiction over the
transactions contemplated by this Agreement seeking the requisite Consents
necessary to consummate the transactions contemplated by this Agreement. At
least three business days prior to filing, UPC shall provide Leader and its
counsel with copies of such applications. The Parties shall deliver to each
other copies of all filings, correspondence and orders to and from all
Regulatory Authorities in connection with the transactions contemplated hereby
as soon as practicable upon their becoming available.
8.4 FILINGS WITH STATE OFFICES. Upon the terms and
subject to the conditions of this Agreement, UPC and Leader shall execute and
file the Articles of Merger with the Secretary of State of the State of
Tennessee in connection with the Closing.
8.5 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to
the terms and conditions of this Agreement, each Party agrees to use, and to
cause its Subsidiaries to use, its reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, all things necessary,
proper, or advisable under applicable Laws to consummate and make effective, as
soon as practicable after the date of this Agreement, the transactions
contemplated by this Agreement, including using its reasonable efforts to lift
or rescind any Order adversely affecting its ability to consummate the
transactions contemplated herein and to cause to be satisfied the conditions
referred to in Article 9 of this Agreement; provided, that nothing herein shall
preclude either Party from exercising its rights under this Agreement or the
Stock Option Agreement. Each Party shall use, and shall cause each of its
Subsidiaries to use, its reasonable efforts to obtain all Consents necessary or
desirable for the consummation of the transactions contemplated by this
Agreement.
8.6 INVESTIGATION AND CONFIDENTIALITY.
(a) Prior to the Effective Time, each Party shall
keep the other Party advised of all material developments relevant to its
business and to consummation of the Merger and shall permit the other Party to
make or cause to be made such investigation of the business
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and properties of it and its Subsidiaries and of their respective financial and
legal conditions as the other Party reasonably requests, provided that such
investigation shall be reasonably related to the transactions contemplated
hereby and shall not interfere unnecessarily with normal operations. No
investigation by a Party shall affect the representations and warranties of the
other Party.
(b) Each Party shall, and shall cause its
advisers and agents to, maintain the confidentiality of all confidential
information furnished to it by the other Party concerning its and its
Subsidiaries' businesses, operations, and financial positions and shall not use
such information for any purpose except in furtherance of the transactions
contemplated by this Agreement. If this Agreement is terminated prior to the
Effective Time, each Party shall promptly return or certify the destruction of
all documents and copies thereof, and all work papers containing confidential
information received from the other Party.
(c) Leader shall use its reasonable efforts to
exercise its rights under confidentiality agreements entered into with Persons
which were considering an Acquisition Transaction with Leader to preserve the
confidentiality of the information relating to Leader provided to such Persons
and their Affiliates and Representatives.
8.7 PRESS RELEASES. Prior to the Effective Time, Leader
and UPC shall consult with each other as to the form and substance of any press
release or other public disclosure materially related to this Agreement or any
other transaction contemplated hereby; provided, that nothing in this Section
8.7 shall be deemed to prohibit any Party from making any disclosure which its
counsel deems necessary or advisable in order to satisfy such Party's
disclosure obligations imposed by Law.
8.8 CERTAIN ACTIONS. Except with respect to this
Agreement and the Plan of Merger and the transactions contemplated hereby and
thereby, after the date of this Agreement, no Leader Company nor any Affiliate
thereof nor any Representatives thereof retained by any Leader Company shall
directly or indirectly solicit any Acquisition Proposal by any Person. Except
to the extent necessary to comply with the fiduciary duties of Leader's Board
of Directors as advised by counsel, no Leader Company or any Affiliate or
Representative thereof shall furnish any non-public information that it is not
legally obligated to furnish, negotiate with respect to, or enter into any
Contract with respect to, any Acquisition Proposal, but Leader may communicate
information about such an Acquisition Proposal to its shareholders if and to
the extent that it is required to do so in order to comply with its legal
obligations as advised by counsel. Leader shall promptly notify UPC orally and
in writing in the event that it receives any inquiry or proposal relating to
any such transaction. Leader shall (i) immediately cease and cause to be
terminated any existing activities, discussions, or negotiations with any
Persons conducted heretofore with respect to any of the foregoing, and (ii)
direct and use its reasonable efforts to cause all of its Representatives not
to engage in any of the foregoing.
8.9 ACCOUNTING AND TAX TREATMENT. Each of the Parties
undertakes and agrees to use its reasonable efforts to cause the Merger, and to
take no action which would cause the Merger not, to qualify for
pooling-of-interests accounting treatment and treatment as a
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"reorganization" within the meaning of Section 368(a) of the Internal Revenue
Code for federal income tax purposes.
8.10 STATE TAKEOVER LAWS. Each Leader Company shall take
all necessary steps to exempt the transactions contemplated by this Agreement
from, or if necessary challenge the validity or applicability of, any
applicable Takeover Law.
8.11 CHARTER PROVISIONS. Each Leader Company shall take
all necessary action to ensure that the entering into of this Agreement and the
Plan of Merger and the consummation of the Merger and the other transactions
contemplated hereby and thereby do not and will not result in the grant of any
rights to any Person under the Charter, By-laws, or other governing instruments
of any Leader Company or restrict or impair the ability of UPC or any of its
Subsidiaries to vote, or otherwise to exercise the rights of a shareholder with
respect to, shares of any Leader Company that may be directly or indirectly
acquired or controlled by it.
8.12 AGREEMENT OF AFFILIATES. Leader has disclosed in
Section 8.12 of the Leader Disclosure Memorandum all Persons whom it reasonably
believes is an "affiliate" of Leader for purposes of Rule 145 under the 1933
Act. Leader shall use its reasonable efforts to cause each such Person to
deliver to UPC not later than 30 days prior to the Effective Time, a written
agreement, substantially in the form of Exhibit 4, providing that such Person
will not sell, pledge, transfer, or otherwise dispose of the shares of Leader
Common Stock held by such Person except as contemplated by such agreement or by
this Agreement and will not sell, pledge, transfer, or otherwise dispose of the
shares of UPC Common Stock to be received by such Person upon consummation of
the Merger except in compliance with applicable provisions of the 1933 Act and
the rules and regulations thereunder and until such time as financial results
covering at least 30 days of combined operations of UPC and Leader have been
published within the meaning of Section 201.01 of the SEC's Codification of
Financial Reporting Policies. If the Merger will qualify for
pooling-of-interests accounting treatment, shares of UPC Common Stock issued to
such affiliates of Leader in exchange for shares of Leader Common Stock shall
not be transferable until such time as financial results covering at least 30
days of combined operations of UPC and Leader have been published within the
meaning of Section 201.01 of the SEC's Codification of Financial Reporting
Policies, regardless of whether each such affiliate has provided the written
agreement referred to in this Section 8.12 (and UPC shall be entitled to place
restrictive legends upon certificates for shares of UPC Common Stock issued to
affiliates of Leader pursuant to this Agreement to enforce the provisions of
this Section 8.12). UPC shall not be required to maintain the effectiveness of
the Registration Statement under the 1933 Act for the purposes of resale of UPC
Common Stock by such affiliates.
8.13 EMPLOYEE BENEFITS AND CONTRACTS. Subject to the
terms of the Supplemental Letter following the Effective Time, UPC shall
provide to officers and employees of the Leader Companies employee benefits
under employee benefit and welfare plans, on terms and conditions which when
taken as a whole are substantially similar to those currently provided by the
UPC Companies to their similarly situated officers and employees. For purposes
of participation, vesting, and (except in the case of retirement plans) benefit
accrual under such employee benefit plans, the service of the employees of the
Leader Companies prior to the
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Effective Time shall be treated as service with a UPC Company participating in
such employee benefit plans.
8.14 INDEMNIFICATION.
(a) After the Effective Time, UPC shall
indemnify, defend and hold harmless the present and former directors, officers,
employees, and agents of the Leader Companies (each, an "Indemnified Party")
(including any person who becomes a director, officer, employee, or agent prior
to the Effective Time) against all Liabilities (including reasonable attorneys'
fees and amounts paid in settlement) arising out of actions or omissions
occurring at or prior to the Effective Time (including the transactions
contemplated by this Agreement and the Stock Option Agreement) to the full
extent permitted under Tennessee Law and by Leader's Charter and By-laws as in
effect on the date hereof, including provisions relating to advances of
expenses incurred in the defense of any Litigation. Without limiting the
foregoing, in any case in which approval by UPC is required to effectuate any
indemnification, UPC shall direct, at the election of the Indemnified Party,
that the determination of any such approval shall be made by independent
counsel mutually agreed upon between UPC and the Indemnified Party.
(b) UPC shall use its reasonable efforts (and
Leader shall cooperate prior to the Effective Time in these efforts) to
maintain in effect Leader's existing directors' and officers' liability
insurance policy (provided that UPC may substitute therefor (i) policies of at
least the same coverage and amounts containing terms and conditions which are
substantially no less advantageous or (ii) with the Consent of Leader given
prior to the Effective Time, any other policy) with respect to claims arising
from facts or circumstances which occur prior to the Effective Time and
covering persons who are currently covered by such insurance; provided that
neither UPC nor Leader shall be obligated to make premium payments in excess of
an aggregate of $100,000 for the entire period in which such policy or policies
are in effect.
(c) Any Indemnified Party wishing to claim
indemnification under paragraph (a) of this Section 8.14, upon learning of any
such Liability or Litigation, shall promptly notify UPC thereof, provided that
the failure so to notify shall not affect the obligations of UPC under this
Section 8.14 unless and to the extent such failure materially increases UPC's
liability under this Section 8.14. In the event of any such Litigation (whether
arising before or after the Effective Time), (i) UPC or the Surviving
Corporation shall have the right to assume the defense thereof and UPC shall
not be liable to such Indemnified Parties for any legal expenses of other
counsel or any other expenses subsequently incurred by such Indemnified Parties
in connection with the defense thereof, except that if UPC or the Surviving
Corporation elects not to assume such defense or counsel for the Indemnified
Parties advises that there are substantive issues which raise conflicts of
interest between UPC or the Surviving Corporation and the Indemnified Parties,
the Indemnified Parties may retain counsel satisfactory to them, and UPC or the
Surviving Corporation shall pay all reasonable fees and expenses of such
counsel for the Indemnified Parties promptly as statements therefor are
received; provided, that UPC shall be obligated pursuant to this paragraph (c)
to pay for only one firm of counsel for all Indemnified Parties in any
jurisdiction, (ii) the Indemnified Parties will cooperate in the defense of any
such Litigation, and (iii) UPC shall not be liable for any settlement effected
without its prior written consent; and
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provided further that the Surviving Corporation shall not have any obligation
hereunder to any Indemnified Party when and if a court of competent
jurisdiction shall determine, and such determination shall have become final,
that the indemnification of such Indemnified Party in the manner contemplated
hereby is prohibited by applicable Law.
(d) The Surviving Corporation shall not be liable
for any settlement effected without its prior written consent which shall not
be unreasonably withheld. The Surviving Corporation shall not have any
obligation hereunder to any Indemnified Party when and if a court of competent
jurisdiction shall determine, and such determination shall have become final,
that the indemnification of such Indemnified Party in the manner contemplated
hereby is prohibited by applicable Law.
(e) If the Surviving Corporation or any of its
successors or assigns shall consolidate with or merge into any other Person and
shall not be the continuing or surviving Person of such consolidation or merger
or shall transfer all or substantially all of its assets to any Person, then
and in each case, proper provision shall be made so that the successors and
assigns of the Surviving Corporation shall assume the obligations set forth in
this Section 8.14.
(f) UPC shall pay all reasonable costs, including
attorneys' fees, that may be incurred by any Indemnified Party in enforcing the
indemnity and other obligations provided for in this Section 8.14. The rights
of each Indemnified Party hereunder shall be in addition to any other rights
such Indemnified Party may have under applicable Law.
8.15 UPC MERGER SUBSIDIARY ORGANIZATION. UPC shall
organize UPC Merger Subsidiary under the Laws of the State of Tennessee. Prior
to the Effective Time, the outstanding capital stock of UPC Merger Subsidiary
shall consist of 1,000 shares of UPC Merger Subsidiary Common Stock, all of
which shares shall be owned by UPC. Prior to the Effective Time, UPC Merger
Subsidiary shall not (i) conduct any business operations whatsoever or (ii)
enter into any Contract or agreement of any kind, acquire any assets or incur
any Liability, except as may be specifically contemplated by this Agreement or
the Plan of Merger or as the Parties may otherwise agree. UPC, as the sole
stockholder of UPC Merger Subsidiary, shall vote prior to the Effective Time
the shares of UPC Merger Subsidiary Common Stock in favor of the Plan of
Merger.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The
respective obligations of each Party to perform this Agreement and consummate
the Merger and the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by both Parties
pursuant to Section 11.6 of this Agreement:
(A) SHAREHOLDER APPROVALS. The shareholders of
Leader shall have approved this Agreement and the Plan of Merger, and
the consummation of the transactions
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<PAGE> 38
contemplated hereby and thereby, including the Merger, as and to the
extent required by Law, by the provisions of any governing instruments,
or by the rules of the NASD. The shareholders of UPC shall have
approved the issuance of shares of UPC Common Stock pursuant to the
Merger, as and to the extent required by Law, by the provisions of any
governing instruments, or by the rules of the NYSE or the NASD.
(B) REGULATORY APPROVALS. All Consents of,
filings and registrations with, and notifications to, all Regulatory
Authorities required for consummation of the Merger shall have been
obtained or made and shall be in full force and effect and all waiting
periods required by Law shall have expired. No Consent obtained from
any Regulatory Authority which is necessary to consummate the
transactions contemplated hereby shall be conditioned or restricted in a
manner (other than matters relating to the raising of additional capital
or the disposition of Assets or deposit Liabilities) which in the
reasonable judgment of the Board of Directors of UPC would so materially
adversely impact the financial or economic benefits of the transactions
contemplated by this Agreement that, had such condition or requirement
been known, UPC would not, in its reasonable judgment, have entered into
this Agreement.
(C) CONSENTS AND APPROVALS. Each Party shall
have obtained any and all Consents required for consummation of the
Merger (other than those referred to in Section 9.1(b) of this
Agreement) or for the preventing of any Default under any Contract or
Permit of such Party which, if not obtained or made, is reasonably
likely to have, individually or in the aggregate, a Material Adverse
Effect on such Party.
(D) LEGAL PROCEEDINGS. No court or governmental
or regulatory authority of competent jurisdiction shall have enacted,
issued, promulgated, enforced, or entered any Law or Order (whether
temporary, preliminary, or permanent) or taken any other action which
prohibits, restricts, or makes illegal consummation of the transactions
contemplated by this Agreement and the Plan of Merger.
(E) REGISTRATION STATEMENT. The Registration
Statement shall be effective under the 1933 Act, no stop orders
suspending the effectiveness of the Registration Statement shall have
been issued, no action, suit, proceeding, or investigation by the SEC to
suspend the effectiveness thereof shall have been initiated and be
continuing, and all necessary approvals under state securities Laws or
the 1933 Act or 1934 Act relating to the issuance or trading of the
shares of UPC Common Stock issuable pursuant to the Merger shall have
been received.
(F) EXCHANGE LISTING. The shares of UPC Common
Stock issuable pursuant to the Merger shall have been approved for
listing on the NYSE, subject to official notice of issuance.
(G) POOLING LETTERS. Each of the Parties shall
have received copies of the letters, dated as of the date of filing of
the Registration Statement with the SEC and as
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<PAGE> 39
of the Effective Time, addressed to UPC, from Price Waterhouse LLP to
the effect that the Merger will qualify for pooling-of-interests
accounting treatment.
(H) TAX MATTERS. Each Party shall have received
a written opinion of counsel from Alston & Bird, in form reasonably
satisfactory to such Parties (the "Tax Opinion"), to the effect that (i)
the Merger will constitute a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code, (ii) the exchange in the
Merger of Leader Common Stock for UPC Common Stock will not give rise to
gain or loss to the shareholders of Leader with respect to such exchange
(except to the extent of any cash received), and (iii) none of Leader or
UPC will recognize gain or loss as a consequence of the Merger (except
for the inclusion in income of the amount of the bad-debt reserve
maintained by Leader and any other amounts resulting from any required
change in accounting methods and any income and deferred gain recognized
pursuant to Treasury regulations issued under Section 1502 of the
Internal Revenue Code). In rendering such Tax Opinion, such counsel
shall be entitled to rely upon representations of officers of Leader and
UPC reasonably satisfactory in form and substance to such counsel.
9.2 CONDITIONS TO OBLIGATIONS OF UPC. The obligations of
UPC to perform this Agreement and consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by UPC pursuant to Section 11.6(a) of this
Agreement:
(A) REPRESENTATIONS AND WARRANTIES. For purposes
of this Section 9.2(a), the accuracy of the representations and
warranties of Leader set forth in this Agreement shall be assessed as of
the date of this Agreement and as of the Effective Time with the same
effect as though all such representations and warranties had been made
on and as of the Effective Time (provided that representations and
warranties which are confined to a specified date shall speak only as of
such date). The representations and warranties of Leader set forth in
Section 5.3 of this Agreement shall be true and correct (except for
inaccuracies which are de minimus in amount). The representations and
warranties of Leader set forth in Sections 5.20, 5.21, and 5.22 of this
Agreement shall be true and correct in all material respects. There
shall not exist inaccuracies in the representations and warranties of
Leader set forth in this Agreement (including the representations and
warranties set forth in Sections 5.3, 5.20, 5.21, and 5.22) such that
the aggregate effect of such inaccuracies has, or is reasonably likely
to have, a Material Adverse Effect on Leader; provided that, for
purposes of this sentence only, those representations and warranties
which are qualified by references to "material" or "Material Adverse
Effect" shall be deemed not to include such qualifications.
(B) PERFORMANCE OF AGREEMENTS AND COVENANTS.
Each and all of the agreements and covenants of Leader to be performed
and complied with pursuant to this Agreement and the other agreements
contemplated hereby prior to the Effective Time shall have been duly
performed and complied with in all material respects.
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<PAGE> 40
(C) CERTIFICATES. Leader shall have delivered to
UPC (i) a certificate, dated as of the Effective Time and signed on its
behalf by its chief executive officer and its chief financial officer,
to the effect that the conditions of its obligations set forth in
Section 9.2(a) and 9.2(b) of this Agreement have been satisfied, and
(ii) certified copies of resolutions duly adopted by Leader's Board of
Directors and shareholders evidencing the taking of all corporate action
necessary to authorize the execution, delivery, and performance of this
Agreement and the Plan of Merger, and the consummation of the
transactions contemplated hereby and thereby, all in such reasonable
detail as UPC and its counsel shall request.
(D) AFFILIATES AGREEMENTS. UPC shall have
received from each affiliate of Leader the affiliates letter referred to
in Section 8.12 of this Agreement, to the extent necessary to assure in
the reasonable judgment of UPC that the transactions contemplated hereby
will qualify for pooling-of-interests accounting treatment.
9.3 CONDITIONS TO OBLIGATIONS OF LEADER. The obligations
of Leader to perform this Agreement and the Plan of Merger and consummate the
Merger and the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by Leader pursuant to
Section 11.6(b) of this Agreement:
(A) REPRESENTATIONS AND WARRANTIES. For purposes
of this Section 9.3(a), the accuracy of the representations and
warranties of UPC set forth in this Agreement shall be assessed as of
the date of this Agreement and as of the Effective Time with the same
effect as though all such representations and warranties had been made
on and as of the Effective Time (provided that representations and
warranties which are confined to a specified date shall speak only as of
such date). The representations and warranties of UPC set forth in
Section 6.3 of this Agreement shall be true and correct (except for
inaccuracies which are de minimus in amount). The representations and
warranties of UPC set forth in Section 6.13 of this Agreement shall be
true and correct in all material respects. There shall not exist
inaccuracies in the representations and warranties of UPC set forth in
this Agreement (including the representations and warranties set forth
in Sections 6.3 and 6.13) such that the aggregate effect of such
inaccuracies has, or is reasonably likely to have, a Material Adverse
Effect on UPC; provided that, for purposes of this sentence only, those
representations and warranties which are qualified by references to
"material" or "Material Adverse Effect" shall be deemed not to include
such qualifications.
(B) PERFORMANCE OF AGREEMENTS AND COVENANTS.
Each and all of the agreements and covenants of UPC to be performed and
complied with pursuant to this Agreement and the other agreements
contemplated hereby prior to the Effective Time shall have been duly
performed and complied with in all material respects.
(C) CERTIFICATES. UPC shall have delivered to
Leader (i) a certificate, dated as of the Effective Time and signed on
its behalf by its chief executive officer and its chief financial
officer, to the effect that the conditions of its obligations set forth
in Section 9.3(a) and 9.3(b) of this Agreement have been satisfied, and
(ii) certified copies of
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<PAGE> 41
resolutions duly adopted by UPC's Board of Directors evidencing the
taking of all corporate action necessary to authorize the execution,
delivery and performance of this Agreement, and the consummation of the
transactions contemplated hereby, all in such reasonable detail as
Leader and its counsel shall request.
(D) EXCHANGE AGENT CERTIFICATION. The Exchange
Agent shall have delivered to Leader a certificate, dated as of the
Effective Time, to the effect that the Exchange Agent has received from
UPC appropriate instructions and authorization for the Exchange Agent to
issue a sufficient number of shares of UPC Common Stock in exchange for
all outstanding shares of Leader Common Stock and has deposited with the
Exchange Agent sufficient funds to pay a reasonable estimate of the cash
payments necessary to make all fractional share payments as required by
Section 3.4 of this Agreement.
ARTICLE 10
TERMINATION
10.1 Termination. Notwithstanding any other provision of
this Agreement, and notwithstanding the approval of this Agreement by the
shareholders of UPC or Leader, this Agreement and the Plan of Merger may be
terminated and the Merger abandoned at any time prior to the Effective Time:
(a) By mutual consent of the Board of Directors
of UPC and the Board of Directors of Leader; or
(b) By the Board of Directors of either Party
(provided that the terminating Party is not then in breach of any
representation or warranty contained in this Agreement under the
applicable standard set forth in Section 9.2(a) of this Agreement in the
case of Leader and Section 9.3(a) in the case of UPC or in material
breach of any covenant or other agreement contained in this Agreement)
in the event of an inaccuracy of any representation or warranty of the
other Party contained in this Agreement which cannot be or has not been
cured within 30 days after the giving of written notice to the breaching
Party of such inaccuracy and which inaccuracy would provide the
terminating Party the ability to refuse to consummate the Merger under
the applicable standard set forth in Section 9.2(a) of this Agreement in
the case of Leader and Section 9.3(a) of this Agreement in the case of
UPC; or
(c) By the Board of Directors of either Party
(provided that the terminating Party is not then in breach of any
representation or warranty contained in this Agreement under the
applicable standard set forth in Section 9.2(a) of this Agreement in the
case of Leader and Section 9.3(a) in the case of UPC or in material
breach of any covenant or other agreement contained in this Agreement)
in the event of a material breach by the other Party of any covenant or
agreement contained in this Agreement which cannot be or has not been
cured within 30 days after the giving of written notice to the breaching
Party of such breach; or
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<PAGE> 42
(d) By the Board of Directors of either Party in
the event (i) any Consent of any Regulatory Authority required for
consummation of the Merger and the other transactions contemplated
hereby shall have been denied by final nonappealable action of such
authority or if any action taken by such authority is not appealed
within the time limit for appeal, or (ii) the shareholders of UPC or
Leader fail to vote their approval of this Agreement and the
transactions contemplated hereby as required by the TBCA and the rules
of the NYSE or NASD at the Shareholders' Meetings where the transactions
were presented to such shareholders for approval and voted upon; or
(e) By the Board of Directors of either Party in
the event that the Merger shall not have been consummated by March 1,
1997, if the failure to consummate the transactions contemplated hereby
on or before such date is not caused by any willful breach of this
Agreement by the Party electing to terminate pursuant to this Section
10.1(e); or
(f) By the Board of Directors of either Party
(provided that the terminating Party is not then in breach of any
representation or warranty contained in this Agreement under the
applicable standard set forth in Section 9.2(a) of this Agreement in the
case of Leader and Section 9.3(a) in the case of UPC or in material
breach of any covenant or other agreement contained in this Agreement)
in the event that any of the conditions precedent to the obligations of
such Party to consummate the Merger cannot be satisfied or fulfilled by
the date specified in Section 10.1(e) of this Agreement; or
(g) By UPC, if a "Purchase Event" as such term is
defined in the Stock Option Agreement, shall have occurred or by Leader,
if UPC (or its assignee) exercises the Stock Option Agreement pursuant
to Section 3 thereof or exercises its repurchase rights pursuant to
Section 8 thereof; or
(h) By UPC, if, prior to 8:00 a.m. on March 9,
1996, Leader does not execute and deliver to UPC the Stock Option
Agreement; or
(i) By the Board of Directors of Leader, if it
determines by a vote of a majority of the members of its entire Board,
at any time during the ten-day period commencing two days after the
Determination Date, if both of the following conditions are satisfied:
(1) the Average Closing Price shall be less than
$26.39; and
(2) (i) the quotient obtained by dividing the
Average Closing Price by the Starting Price (such number being
referred to herein as the "UPC Ratio") shall be less than (ii)
the quotient obtained by dividing the Index Price on the
Determination Date by the Index Price on the Starting Date and
subtracting 0.15 from the quotient in this clause (2)(ii) (such
number being referred to herein as the "Index Ratio");
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<PAGE> 43
subject, however, to the following three sentences. If Leader refuses
to consummate the Merger pursuant to this Section 10.1(i), it shall give
prompt written notice thereof to UPC; provided, that such notice of
election to terminate may be withdrawn at any time within the
aforementioned ten-day period. During the five-day period commencing
with its receipt of such notice, UPC shall have the option to elect to
increase the Exchange Ratio to equal the lesser of (i) the quotient
obtained by dividing (1) the product of $26.39 and the Exchange Ratio
(as then in effect) by (2) the Average Closing Price, and (ii) the
quotient obtained by dividing (1) the product of the Index Ratio and the
Exchange Ratio (as then in effect) by (2) the UPC Ratio. If UPC makes
an election contemplated by the preceding sentence, within such five-day
period, it shall give prompt written notice to Leader of such election
and the revised Exchange Ratio, whereupon no termination shall have
occurred pursuant to this Section 10.1(i) and this Agreement shall
remain in effect in accordance with its terms (except as the Exchange
Ratio shall have been so modified), and any references in this Agreement
to "Exchange Ratio" shall thereafter be deemed to refer to the Exchange
Ratio as adjusted pursuant to this Section 10.1(i).
For purposes of this Section 10.1(i), the following terms
shall have the meanings indicated:
"Average Closing Price" shall mean the average of the
daily last sales prices of UPC Common Stock as reported on the
NYSE (as reported by The Wall Street Journal or, if not reported
thereby, another authoritative source as chosen by UPC) for the
20 consecutive full trading days in which such shares are traded
on the NYSE ending at the close of trading on the Determination
Date.
"Determination Date" shall mean the date on which the
last Consent of the Board of Governors of the Federal Reserve
System or the Office of Thrift Supervision shall be received.
"Index Group" shall mean the 16 bank holding
companies listed below, the common stocks of all of which shall
be publicly traded and as to which there shall not have been,
since the Starting Date and before the Determination Date, any
public announcement of a proposal for such company to be acquired
or for such company to acquire another company or companies in
transactions with a value exceeding 25% of the acquiror's market
capitalization. In the event that any such company or companies
are removed from the Index Group, the weights (which shall be
determined based upon the number of outstanding shares of common
stock) shall be redistributed proportionately for purposes of
determining the Index Price. The 16 bank holding companies and
the weights attributed to them are as follows:
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<PAGE> 44
<TABLE>
<CAPTION>
BANK HOLDING COMPANIES WEIGHTING
<S> <C>
AmSouth Bancorporation 7.66%
Central Fidelity Banks, Inc. 5.25
Compass Bancshares, Inc. 4.99
Crestar Financial Corporation 4.93
Deposit Guaranty Corporation 2.56
Fifth Third Bancorp 13.14
First American Corporation 3.65
First Commerce Corporation 4.95
First Tennessee National Corporation 4.53
First Virginia Banks, Inc. 4.44
Mercantile Bancorporation, Inc. 7.24
Mercantile Bancshares Corporation 6.14
National Commerce Bancorp 3.24
Regions Financial Corporation 6.03
Signet Banking Corporation 7.73
Southern National Corporation 13.52
Total 100.00%
=======
</TABLE>
"Index Price" on a given date shall mean the weighted
average (weighted in accordance with the factors listed above) of
the closing prices of the companies composing the Index Group.
"Starting Date" shall mean the fourth full trading
day after the announcement by press release of the Merger.
"Starting Price" shall mean the closing price per
share of UPC Common Stock as reported on the NYSE (as reported
by The Wall Street Journal or, if not reported thereby, another
authoritative source as chosen by UPC) on the Starting Date.
If any company belonging to the Index Group or UPC declares or
effects a stock dividend, reclassification, recapitalization, split-up,
combination, exchange of shares, or similar transaction between the date
of this Agreement and the Determination Date, the prices for the common
stock of such company or UPC shall be appropriately adjusted for the
purposes of applying this Section 10.1(i).
10.2 EFFECT OF TERMINATION. In the event of the
termination and abandonment of this Agreement pursuant to Section 10.1 of this
Agreement, this Agreement, the Plan of Merger, and the Supplemental Letter
shall become void and have no effect, except that (i) the
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<PAGE> 45
provisions of this Section 10.2 and Article 11 and Section 8.6(b) of this
Agreement shall survive any such termination and abandonment, and (ii) a
termination pursuant to Sections 10.1(b), 10.1(c) or 10.1(f) of this Agreement
shall not relieve the breaching Party from Liability for an uncured willful
breach of a representation, warranty, covenant, or agreement giving rise to
such termination. The Stock Option Agreement shall be governed by its own
terms as to its termination.
10.3 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS. The
respective representations, warranties, obligations, covenants, and agreements
of the Parties shall not survive the Effective Time except this Section 10.3
and Articles 2, 3, 4 and 11 and Sections 8.12, 8.13, and 8.14 of this Agreement
and the provisions of the Supplemental Letter.
ARTICLE 11
MISCELLANEOUS
11.1 DEFINITIONS.
(a) Except as otherwise provided herein, the
capitalized terms set forth below shall have the following meanings:
"ACQUISITION PROPOSAL" with respect to a Party shall mean any
tender offer or exchange offer or any proposal for a merger, acquisition
of all of the stock or assets of, or other business combination
involving such Party or any of its Subsidiaries or the acquisition of a
substantial equity interest in, or a substantial portion of the assets
of, such Party or any of its Subsidiaries.
"AFFILIATE" of a Person shall mean: (i) any other Person
directly, or indirectly through one or more intermediaries, controlling,
controlled by, or under common control with such Person; (ii) any
officer, director, partner, employer, or direct or indirect beneficial
owner of any 10% or greater equity or voting interest of such Person; or
(iii) any other Person for which a Person described in clause (ii) acts
in any such capacity.
"AGREEMENT" shall mean this Agreement and Plan of Merger,
including the Stock Option Agreement and the Exhibits delivered pursuant
hereto and incorporated herein by reference.
"ASSETS" of a Person shall mean all of the assets, properties,
businesses, and rights of such Person of every kind, nature, character
and description, whether real, personal or mixed, tangible or
intangible, accrued or contingent, or otherwise relating to or utilized
in such Person's business, directly or indirectly, in whole or in part,
whether or not carried on the books and records of such Person, and
whether or not owned in the name of such Person or any Affiliate of such
Person and wherever located.
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<PAGE> 46
"BHC ACT" shall mean the federal Bank Holding Company Act of
1956, as amended.
"ARTICLES OF MERGER" shall mean the Articles of Merger to be
executed by Leader and filed with the Secretary of State of the State of
Tennessee relating to the Merger as contemplated by Section 1.1 of this
Agreement.
"CLOSING DATE" shall mean the date on which the Closing
occurs.
"CONSENT" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person
pursuant to any Contract, Law, Order, or Permit.
"CONTRACT" shall mean any written or oral agreement,
arrangement, authorization, commitment, contract, indenture, instrument,
lease, obligation, plan, practice, restriction, understanding, or
undertaking of any kind or character, or other document to which any
Person is a party or that is binding on any Person or its capital stock,
Assets, or business.
"DEFAULT" shall mean (i) any breach or violation of or default
under any Contract, Order, or Permit, (ii) any occurrence of any event
that with the passage of time or the giving of notice or both would
constitute a breach or violation of or default under any Contract,
Order, or Permit, or (iii) any occurrence of any event that with or
without the passage of time or the giving of notice would give rise to a
right to terminate or revoke, change the current terms of, or
renegotiate, or to accelerate, increase, or impose any Liability under,
any Contract, Order or Permit.
"ENVIRONMENTAL LAWS" shall mean all Laws relating to pollution
or protection of human health or the environment (including ambient air,
surface water, ground water, land surface or subsurface strata) and
which are administered, interpreted or enforced by the United States
Environmental Protection Agency and state and local agencies with
jurisdiction over, and including common law in respect of, pollution or
protection of the environment, including the Comprehensive Environmental
Response Compensation and Liability Act, as amended, 42 U.S.C. 9601 et
seq. ("CERCLA"), the Resource Conservation and Recovery Act, as amended,
42 U.S.C. 6901 et seq. ("RCRA"), and other Laws relating to emissions,
discharges, releases, or threatened releases of any Hazardous Material,
or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of any Hazardous
Material.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"EXHIBITS" 1 through 4, inclusive, shall mean the Exhibits so
marked, copies of which are attached to this Agreement. Such Exhibits
are hereby incorporated by reference herein and made a part hereof, and
may be referred to in this Agreement and any other related instrument or
document without being attached hereto.
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<PAGE> 47
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"HAZARDOUS MATERIAL" shall mean (i) any hazardous substance,
hazardous material, hazardous waste, regulated substance, or toxic
substance (as those terms are defined by any applicable Environmental
Laws) and (ii) any chemicals, pollutants, contaminants, petroleum,
petroleum products, or oil (and specifically shall include asbestos
requiring abatement, removal, or encapsulation pursuant to the
requirements of governmental authorities and any polychlorinated
biphenyls).
"HOLA" shall mean the Home Owners' Loan Act of 1933, as
amended.
"HSR ACT" shall mean Section 7A of the Clayton Act, as added
by Title II of the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder.
"INTELLECTUAL PROPERTY" shall mean copyrights, patents,
trademarks, service marks, service names, trade names, applications
therefor, technology rights and licenses, computer software (including
any source or object codes therefor or documentation relating thereto),
trade secrets, franchises, know-how, inventions, and other intellectual
property rights.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code
of 1986, as amended, and the rules and regulations promulgated
thereunder.
"JOINT PROXY STATEMENT" shall mean the joint proxy statement
used by UPC and Leader to solicit the approval of their respective
shareholders of the transactions contemplated by this Agreement and the
Plan of Merger, which shall include the prospectus of UPC relating to
the issuance of the UPC Common Stock to holders of Leader Common Stock.
"KNOWLEDGE" as used with respect to a Person (including
references to such Person being aware of a particular matter) shall mean
those facts that are known by the Chairman, President, Chief Financial
Officer, Chief Accounting Officer, Chief Credit Officer, or General
Counsel of such Person.
"LAW" shall mean any code, law, ordinance, regulation,
reporting or licensing requirement, rule, or statute applicable to a
Person or its Assets, Liabilities or business, including those
promulgated, interpreted, or enforced by any Regulatory Authority.
"LEADER COMMON STOCK" shall mean the $1.00 par value common
stock of Leader.
"LEADER COMPANIES" shall mean, collectively, Leader and all
Leader Subsidiaries.
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<PAGE> 48
"LEADER DISCLOSURE MEMORANDUM" shall mean the written
information entitled "Leader Financial Corporation Disclosure
Memorandum" delivered prior to the date of this Agreement to UPC
describing in reasonable detail the matters contained therein and, with
respect to each disclosure made therein, specifically referencing each
Section of this Agreement under which such disclosure is being made.
Information disclosed with respect to one Section shall not be deemed to
be disclosed for purposes of any other Section not specifically
referenced with respect thereto.
"LEADER FEDERAL" shall mean Leader Federal Bank for Savings, a
federal stock savings bank and a Leader Subsidiary.
"LEADER FINANCIAL STATEMENTS" shall mean (i) the consolidated
statements of financial position (including related notes and schedules,
if any) of Leader as of September 30, 1995, and as of December 31, 1994
and 1993, and the related statements of operations, stockholders'
equity, and cash flows (including related notes and schedules, if any)
for the nine months ended September 30, 1995, and for each of the three
fiscal years ended December 31, 1994, 1993 and 1992, as filed by Leader
in SEC Documents, (ii) the consolidated statements of financial position
of Leader (including related notes and schedules, if any) and related
statements of operations, stockholders' equity, and cash flows
(including related notes and schedules, if any) included in SEC
Documents filed with respect to periods ended subsequent to September
30, 1995, and (iii) the consolidated statements of financial position
(including related notes) of Leader as of December 31, 1995 and 1994,
and the related statements of operations, stockholders' equity, and cash
flows (including related notes) for each of the three fiscal years ended
December 31, 1995, 1994 and 1993 included in the Leader Disclosure
Memorandum.
"LEADER STOCK PLANS" shall mean the existing stock option and
other stock-based compensation plans of Leader designated as follows:
(i) Leader Financial Corporation 1993 Stock Option and Incentive Plan
and (ii) Leader Financial Corporation Management Recognition Plans "A"
through "Q".
"LEADER SUBSIDIARIES" shall mean the Subsidiaries of Leader,
which shall include the Leader Subsidiaries described in Section 5.4 of
this Agreement and any corporation, bank, savings association, or other
organization acquired as a Subsidiary of Leader in the future and owned
by Leader at the Effective Time.
"LIABILITY" shall mean any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost, or
expense (including costs of investigation, collection, and defense),
claim, deficiency, guaranty, or endorsement of or by any Person (other
than endorsements of notes, bills, checks, and drafts presented for
collection or deposit in the ordinary course of business) of any type,
whether accrued, absolute or contingent, liquidated or unliquidated,
matured or unmatured, or otherwise.
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<PAGE> 49
"LIEN" shall mean any conditional sale agreement, default of
title, easement, encroachment, encumbrance, hypothecation, infringement,
lien, mortgage, pledge, reservation, restriction, security interest,
title retention, or other security arrangement, or any adverse right or
interest, charge, or claim of any nature whatsoever of, on, or with
respect to any property or property interest, other than (i) Liens for
current property Taxes not yet due and payable, and (ii) for depository
institution Subsidiaries of a Party, pledges to secure deposits and
other Liens incurred in the ordinary course of the banking business.
"LITIGATION" shall mean any action, arbitration, cause of
action, claim, complaint, criminal prosecution, demand letter,
governmental or other examination or investigation, hearing, inquiry,
administrative or other proceeding, or notice (written or oral) by any
Person alleging potential Liability or requesting information relating
to or affecting a Party, its business, its Assets (including Contracts
related to it), or the transactions contemplated by this Agreement, but
shall not include regular, periodic examinations of depository
institutions and their Affiliates by Regulatory Authorities.
"MATERIAL" for purposes of this Agreement shall be determined
in light of the facts and circumstances of the matter in question;
provided that any specific monetary amount stated in this Agreement
shall determine materiality in that instance.
"MATERIAL ADVERSE EFFECT" on a Party shall mean an event,
change, or occurrence which, individually or together with any other
event, change, or occurrence, has a material adverse impact on (i) the
financial position, business, or results of operations of such Party and
its Subsidiaries, taken as a whole, or (ii) the ability of such Party to
perform its obligations under this Agreement or to consummate the Merger
or the other transactions contemplated by this Agreement, provided that
"Material Adverse Effect" and "material adverse impact" shall not be
deemed to include the impact of (a) changes in banking and similar Laws
of general applicability or interpretations thereof by courts or
governmental authorities (including changes in insurance deposit
assessment rates and changes requiring the recapture of bad debt
reserves but excluding changes in Federal Housing Authority/Veterans
Association regulations or policies that have a material adverse impact
on the results of operations of a Party), (b) changes in GAAP or
regulatory accounting principles generally applicable to banks, savings
associations, and their holding companies, (c) actions and omissions of
a Party (or any of its Subsidiaries) taken with the prior informed
written consent of the other Party in contemplation of the transaction
contemplated hereby, (d) changes in economic conditions generally
affecting Southeastern financial institutions, and (e) the direct
effects of compliance with this Agreement (including the expense
associated with the vesting of benefits under the various employee
benefit plans of Leader as a result of the Merger constituting a change
of control) on the operating performance of the Parties, including
expenses incurred by the Parties in consummating the transactions
contemplated by the Agreement.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
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<PAGE> 50
"NASDAQ NATIONAL MARKET" shall mean the National Market System
of the National Association of Securities Dealers Automated Quotations
System.
"NYSE" shall mean the New York Stock Exchange, Inc.
"1933 ACT" shall mean the Securities Act of 1933, as amended.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"OPERATING PROPERTY" shall mean any property owned by the
Party in question or by any of its Subsidiaries or in which such Party
or Subsidiary holds a security interest, and, where required by the
context, includes the owner or operator of such property, but only with
respect to such property.
"ORDER" shall mean any administrative decision or award,
decree, injunction, judgment, order, quasi- judicial decision or award,
ruling, or writ of any federal, state, local, or foreign or other court,
arbitrator, mediator, tribunal, administrative agency, or Regulatory
Authority.
"PARTICIPATION FACILITY" shall mean any facility or property
in which the Party in question or any of its Subsidiaries participates
in the management and, where required by the context, said term means
the owner or operator of such facility or property, but only with
respect to such facility or property.
"PARTY" shall mean either Leader or UPC, and "PARTIES" shall
mean both Leader and UPC.
"PERMIT" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit, or right to which any Person is a
party or that is or may be binding upon or inure to the benefit of any
Person or its securities, Assets or business.
"PLAN OF MERGER" shall mean the plan of merger providing for
the Merger, in substantially the form of Exhibit 1.
"PERSON" shall mean a natural person or any legal, commercial,
or governmental entity, such as, but not limited to, a corporation,
general partnership, joint venture, limited partnership, limited
liability company, trust, business association, group acting in concert,
or any person acting in a representative capacity.
"REGISTRATION STATEMENT" shall mean the Registration Statement
on Form S-4, or other appropriate form, including any pre-effective or
post-effective amendments or supplements thereto, filed with the SEC by
UPC under the 1933 Act with respect to the shares of UPC Common Stock to
be issued to the shareholders of Leader in connection with the
transactions contemplated by this Agreement.
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<PAGE> 51
"REGULATORY AUTHORITIES" shall mean, collectively, the Federal
Trade Commission, the United States Department of Justice, the Board of
the Governors of the Federal Reserve System, the Office of Thrift
Supervision (including its predecessor, the Federal Home Loan Bank
Board), the Office of the Comptroller of the Currency, the Federal
Deposit Insurance Corporation, all state regulatory agencies having
jurisdiction over the Parties and their respective Subsidiaries, the
NYSE, the NASD, and the SEC.
"REPRESENTATIVE" shall mean any investment banker, financial
advisor, attorney, accountant, consultant, or other representative of a
Person.
"RIGHTS" shall mean all arrangements, calls, commitments,
Contracts, options, rights to subscribe to, scrip, understandings,
warrants, or other binding obligations of any character whatsoever
relating to, or securities or rights convertible into or exchangeable
for, shares of the capital stock of a Person or by which a Person is or
may be bound to issue additional shares of its capital stock or other
Rights.
"SEC DOCUMENTS" shall mean all forms, proxy statements,
registration statements, reports, schedules, and other documents filed,
or required to be filed, by a Party or any of its Subsidiaries with any
Regulatory Authority pursuant to the Securities Laws.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act
of 1940, as amended, the Trust Indenture Act of 1939, as amended, and
the rules and regulations of any Regulatory Authority promulgated
thereunder.
"SHAREHOLDERS' MEETINGS" shall mean the respective meetings of
the shareholders of UPC and Leader to be held pursuant to Section 8.1 of
this Agreement, including any adjournment or adjournments thereof.
"STOCK OPTION AGREEMENT" shall mean the Stock Option Agreement
of even date herewith issued to UPC by Leader, substantially in the form
of Exhibit 1.
"SUBSIDIARIES" shall mean all those corporations, banks,
associations, or other entities of which the entity in question owns or
controls 10% or more of the outstanding equity securities either
directly or through an unbroken chain of entities as to each of which
10% or more of the outstanding equity securities is owned directly or
indirectly by its parent; provided, there shall not be included any such
entity acquired through foreclosure or any such entity the equity
securities of which are owned or controlled in a fiduciary capacity.
"SUPPLEMENTAL LETTER" shall mean the supplemental letter of
even date herewith relating to certain understandings and agreements in
addition to those included in this Agreement, substantially in the form
of Exhibit 3.
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<PAGE> 52
"SURVIVING CORPORATION" shall mean Leader as the surviving
corporation resulting from the Merger.
"TAX" or "TAXES" shall mean any federal, state, county, local,
or foreign income, profits, franchise, gross receipts, payroll, sales,
employment, use, property, withholding, excise, occupancy, and other
taxes, assessments, charges, fares, or impositions, including interest,
penalties, and additions imposed thereon or with respect thereto.
"TBCA" shall mean the Tennessee Business Corporation Act.
"UPC CAPITAL STOCK" shall mean, collectively, the UPC Common
Stock, the UPC Preferred Stock and any other class or series of capital
stock of UPC.
"UPC COMMON STOCK" shall mean the $5.00 par value common stock
of UPC.
"UPC COMPANIES" shall mean, collectively, UPC and all UPC
Subsidiaries.
"UPC DISCLOSURE MEMORANDUM" shall mean the written information
entitled "Union Planters Corporation Disclosure Memorandum" delivered
prior to the date of this Agreement to Leader describing in reasonable
detail the matters contained therein and, with respect to each
disclosure made therein, specifically referencing each Section of this
Agreement under which such disclosure is being made. Information
disclosed with respect to one Section shall be deemed to be disclosed
for purposes of any other Section not specifically referenced with
respect thereto.
"UPC FINANCIAL STATEMENTS" shall mean (i) the consolidated
balance sheets (including related notes and schedules, if any) of UPC as
of September 30, 1995, and as of December 31, 1994 and 1993, and the
related statements of earnings, changes in shareholders' equity, and
cash flows (including related notes and schedules, if any) for the nine
months ended September 30, 1995, and for each of the three years ended
December 31, 1994, 1993 and 1992, as filed by UPC in SEC Documents, (ii)
the consolidated balance sheets of UPC (including related notes and
schedules, if any) and related statements of earnings, changes in
shareholders' equity, and cash flows (including related notes and
schedules, if any) included in SEC Documents filed with respect to
periods ended subsequent to September 30, 1995, and (iii) the
consolidated balance sheets (including related notes) of UPC as of
December 31, 1995 and 1994, and the related statements of earnings,
changes in shareholders' equity, and cash flows (including related
notes) for each of the three fiscal years ended December 31, 1995, 1994
and 1993 included in the UPC Disclosure Memorandum.
"UPC MERGER SUBSIDIARY" shall mean the wholly owned subsidiary
of UPC to be organized to effect the Merger under the Laws of the State
of Tennessee and with the name of UPC Merger Subsidiary, Inc.
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<PAGE> 53
"UPC MERGER SUBSIDIARY COMMON STOCK" shall mean the $1.00 par
value common stock of UPC Merger Subsidiary.
"UPC PREFERRED STOCK" shall mean the no par value preferred
stock of UPC and shall include the (i) Series A Preferred Stock, (ii)
Series B, $8.00 Nonredeemable, Cumulative, Convertible Preferred Stock
("UPC Series B Preferred Stock"), and (iii) Series E, 8% Cumulative,
Convertible Preferred Stock, of UPC ("UPC Series E Preferred Stock").
"UPC RIGHTS" shall mean the preferred stock purchase rights
issued pursuant to the UPC Rights Agreement.
"UPC RIGHTS AGREEMENT" shall mean that certain Rights
Agreement, dated January 19, 1989, between UPC and UPNB, as Rights
Agent.
"UPC SUBSIDIARIES" shall mean the Subsidiaries of UPC.
(b) The terms set forth below shall have the
meanings ascribed thereto in the referenced sections:
<TABLE>
<S> <C>
Allowance Section 5.9
Average Closing Price Section 10.1(i)
Bank Merger Section 1.5
Closing Section 1.2
Determination Date Section 10.1(i)
Effective Time Section 1.3
ERISA Affiliate Section 5.15(c)
Exchange Agent Section 4.1
Exchange Ratio Section 3.1(c)
Indemnified Party Section 8.14(a)
Index Group Section 10.1(i)
Index Price Section 10.1(i)
Index Ratio Section 10.1(i)
Leader Benefit Plans Section 5.15(a)
Leader Contracts Section 5.16
Leader ERISA Plan Section 5.15(a)
Leader Options Section 3.5(a)
Leader Pension Plan Section 5.15(a)
Leader SEC Reports Section 5.5(a)
Merger Section 1.1
Starting Date Section 10.1(i)
Starting Price Section 10.1(i)
Takeover Laws Section 5.21
Tax Opinion Section 9.1(h)
UPC Ratio Section 10.1(i)
UPC SEC Reports Section 6.4(a)
</TABLE>
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<PAGE> 54
(c) Any singular term in this Agreement shall be
deemed to include the plural, and any plural term the singular. Whenever the
words "include," "includes," or "including" are used in this Agreement, they
shall be deemed followed by the words "without limitation."
11.2 EXPENSES.
(a) Except as otherwise provided in this Section
11.2, each of the Parties shall bear and pay all direct costs and expenses
incurred by it or on its behalf in connection with the transactions
contemplated hereunder, including filing, registration and application fees,
printing fees, and fees and expenses of its own financial or other consultants,
investment bankers, accountants, and counsel, except that each of the Parties
shall bear and pay the filing fees payable in connection with the Registration
Statement and the Proxy Statement and printing costs incurred in connection
with the printing of the Registration Statement and the Proxy Statement based
on the relative Asset sizes of the Parties at December 31, 1995.
(b) Nothing contained in this Section 11.2 shall
constitute or shall be deemed to constitute liquidated damages for the willful
breach by a Party of the terms of this Agreement or otherwise limit the rights
of the nonbreaching Party.
11.3 BROKERS AND FINDERS. Except for Sandler O'Neill &
Partners, L.P. as to Leader and except for Stifel, Nicolaus & Company,
Incorporated as to UPC, each of the Parties represents and warrants that
neither it nor any of its officers, directors, employees, or Affiliates has
employed any broker or finder or incurred any Liability for any financial
advisory fees, investment bankers' fees, brokerage fees, commissions, or
finders' fees in connection with this Agreement or the transactions
contemplated hereby. In the event of a claim by any broker or finder based
upon his or its representing or being retained by or allegedly representing or
being retained by Leader or UPC, each of Leader and UPC, as the case may be,
agrees to indemnify and hold the other Party harmless of and from any Liability
in respect of any such claim.
11.4 ENTIRE AGREEMENT. Except as otherwise expressly
provided herein, this Agreement and the Supplemental Letter (including the
other documents and instruments referred to herein) constitutes the entire
agreement between the Parties with respect to the transactions contemplated
hereunder and supersedes all prior arrangements or understandings with respect
thereto, written or oral. Nothing in this Agreement expressed or implied, is
intended to confer upon any Person, other than the Parties or their respective
successors, any rights, remedies, obligations, or liabilities under or by
reason of this Agreement, other than as provided in Sections 8.14 of this
Agreement.
11.5 AMENDMENTS. To the extent permitted by Law, this
Agreement may be amended by a subsequent writing signed by each of the Parties
upon the approval of the Boards of Directors of each of the Parties, whether
before or after shareholder approval of this Agreement and the Plan of Merger
has been obtained; provided, that after any such approval by the holders of UPC
Common Stock or Leader Common Stock, there shall be made no amendment that
modifies
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<PAGE> 55
in any material respect the consideration to be received by the holders of
Leader Common Stock without the further approval of such shareholders.
11.6 WAIVERS.
(a) Prior to or at the Effective Time, UPC,
acting through its Board of Directors, chief executive officer, or other
authorized officer, shall have the right to waive any Default in the
performance of any term of this Agreement by Leader, to waive or extend the
time for the compliance or fulfillment by Leader of any and all of its
obligations under this Agreement, and to waive any or all of the conditions
precedent to the obligations of UPC under this Agreement, except any condition
which, if not satisfied, would result in the violation of any Law. No such
waiver shall be effective unless in writing signed by a duly authorized officer
of UPC.
(b) Prior to or at the Effective Time, Leader,
acting through its Board of Directors, chief executive officer, or other
authorized officer, shall have the right to waive any Default in the
performance of any term of this Agreement by UPC, to waive or extend the time
for the compliance or fulfillment by UPC of any and all of its obligations
under this Agreement, and to waive any or all of the conditions precedent to
the obligations of Leader under this Agreement, except any condition which, if
not satisfied, would result in the violation of any Law. No such waiver shall
be effective unless in writing signed by a duly authorized officer of Leader.
(c) The failure of any Party at any time or times
to require performance of any provision hereof shall in no manner affect the
right of such Party at a later time to enforce the same or any other provision
of this Agreement. No waiver of any condition or of the breach of any term
contained in this Agreement in one or more instances shall be deemed to be or
construed as a further or continuing waiver of such condition or breach or a
waiver of any other condition or of the breach of any other term of this
Agreement.
11.7 ASSIGNMENT. Except as expressly contemplated hereby,
neither this Agreement nor any of the rights, interests, or obligations
hereunder shall be assigned by any Party hereto (whether by operation of Law or
otherwise) without the prior written consent of the other Party. Subject to
the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the Parties and their respective successors
and assigns.
11.8 NOTICES. All notices or other communications which
are required or permitted hereunder shall be in writing and sufficient if
delivered by hand, by facsimile transmission, by registered or certified mail,
postage pre-paid, or by courier or overnight carrier, to the persons at the
addresses set forth below (or at such other address as may be provided
hereunder), and shall be deemed to have been delivered as of the date so
delivered:
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<PAGE> 56
Leader: Leader Financial Corporation
158 Madison Avenue
Memphis, Tennessee 38103
Telecopy Number: (901) 578-2049
Attention: Edgar H. Bailey
Chairman of the Board and
Chief Executive Officer
Copy to Counsel: Leader Financial Corporation
158 Madison Avenue
Memphis, Tennessee 38103
Telecopy Number: (901) 578-2049
Attention: Catherine C. Stallings
General Counsel
Housley, Kantarian & Bronstein
1220 19th Street, N.W., Suite 700
Washington, D.C. 20036
Telecopy Number: (202) 822-0140
Attention: Harry K. Kantarian
UPC: Union Planters Corporation
7130 Goodlett Farms Parkway
Memphis, Tennessee 38018
Telecopy Number: (901) 383-2877
Attention: Jackson W. Moore
President
Copy to Counsel: Alston & Bird
601 Pennsylvania Avenue
North Building, Suite 250
Washington, D.C. 20004
Telecopy Number: (202) 508-3333
Attention: Frank M. Conner III
11.9 GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the Laws of the State of Tennessee, without
regard to any applicable conflicts of Laws.
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<PAGE> 57
11.10 COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.
11.11 CAPTIONS. The captions contained in this Agreement
are for reference purposes only and are not part of this Agreement.
11.12 INTERPRETATIONS. Neither this Agreement nor any
uncertainty or ambiguity herein shall be construed or resolved against any
party, whether under any rule of construction or otherwise. No party to this
Agreement shall be considered the draftsman. The Parties acknowledge and agree
that this Agreement has been reviewed, negotiated, and accepted by all Parties
and their attorneys and shall be construed and interpreted according to the
ordinary meaning of the words used so as fairly to accomplish the purposes and
intentions of all parties hereto.
11.13 ENFORCEMENT OF AGREEMENT. The Parties hereto agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the Parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity.
11.14 SEVERABILITY. Any term or provision of this
Agreement which is invalid or unenforceable in any jurisdiction shall, as to
that jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
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<PAGE> 58
IN WITNESS WHEREOF, each of the Parties has caused this
Agreement to be executed on its behalf and its corporate seal to be hereunto
affixed and attested by officers thereunto as of the day and year first above
written.
ATTEST: LEADER FINANCIAL CORPORATION
By: /s/ Catherine C. Stallings By: /s/ Edgar H. Bailey
-------------------------- -------------------
Catherine C. Stallings Edgar H. Bailey
Secretary Chairman of the Board and
Chief Executive Officer
[CORPORATE SEAL]
ATTEST: UNION PLANTERS CORPORATION
By: /s/ E.J. House, Jr. By: /s/ Jackson W. Moore
------------------ --------------------
E.J. House, Jr. Jackson W. Moore
Secretary President
[CORPORATE SEAL]
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<PAGE> 1
EXHIBIT 2.2
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of March 9, 1996 (the "Agreement"), by
and between Leader Financial Corporation, a Tennessee corporation ("Issuer"),
and Union Planters Corporation, a Tennessee corporation ("Grantee").
WHEREAS, Grantee and Issuer have entered into that certain Agreement and
Plan of Merger, dated as of March 8, 1996 (the "Merger Agreement"), providing
for, among other things, the merger of Issuer with a wholly-owned subsidiary of
Grantee, with Issuer as the surviving entity; and
WHEREAS, as a condition and inducement to Grantee's execution of the
Merger Agreement, Grantee has required that Issuer agree, and Issuer has
agreed, to grant Grantee the Option (as defined below);
NOW, THEREFORE, in consideration of the respective representations,
warranties, covenants and agreements set forth herein and in the Merger
Agreement, and intending to be legally bound hereby, Issuer and Grantee agree
as follows:
1. DEFINED TERMS. Capitalized terms which are used but not defined
herein shall have the meanings ascribed to such terms in the Merger Agreement.
2. GRANT OF OPTION. Subject to the terms and conditions set forth
herein, Issuer hereby grants to Grantee an irrevocable option (the "Option") to
purchase up to 1,973,600 shares (as adjusted as set forth herein) (the "Option
Shares," which shall include the Option Shares before and after any transfer of
such Option Shares) of Common Stock, par value $1.00 per share ("Issuer Common
Stock"), of Issuer at a purchase price per Option Share (the "Purchase Price")
equal to $41.50.
3. EXERCISE OF OPTION.
(a) Provided that (i) Grantee shall not be in material breach of
the agreements or covenants contained in this Agreement or the Merger
Agreement, and (ii) no preliminary or permanent injunction or other order
against the delivery of shares covered by the Option issued by any court of
competent jurisdiction in the United States shall be in effect, Grantee may
exercise the Option, in whole or in part, at any time and from time to time
following the occurrence of a Purchase Event; provided that the Option shall
terminate and be of no further force and effect upon the earliest to occur of
(A) the Effective Time, (B) termination of the Merger Agreement in accordance
with the terms thereof prior to the occurrence of a Purchase Event or a
Preliminary Purchase Event (other than a termination of the Merger Agreement by
Grantee pursuant to Section 10.1(b) (but only if such termination was a result
of a willful breach by Issuer) or Section 10.1(c) thereof or by Grantee and
Issuer pursuant to Section 10.1(a) thereof if Grantee shall at that time have
been entitled to terminate the Merger Agreement pursuant to Section 10.1(b)
(but only if such termination was a result of a willful breach by Issuer) or
Section 10.1(c) thereof (each
<PAGE> 2
a "Default Termination"), (C) 12 months after the termination of the Merger
Agreement by Grantee pursuant to a Default Termination, and (D) 12 months after
termination of the Merger Agreement (other than pursuant to a Default
Termination) following the occurrence of a Purchase Event or a Preliminary
Purchase Event; and provided, further, that any purchase of shares upon
exercise of the Option shall be subject to compliance with applicable law,
including, without limitation, the Bank Holding Company Act of 1956, as amended
(the "BHC Act"), and the Home Owners' Loan Act of 1933, as amended (the
"HOLA"). The rights set forth in Section 8 shall terminate when the right to
exercise the Option terminates (other than as a result of a complete exercise
of the Option) as set forth herein.
(b) As used herein, a "Purchase Event" means any of the
following events subsequent to the date of this Agreement:
(i) without Grantee's prior written consent, Issuer shall
have authorized, recommended, publicly proposed or publicly announced an
intention to authorize, recommend or propose, or entered into an
agreement with any person (other than Grantee or any subsidiary of
Grantee) to effect an Acquisition Transaction (as defined below). As
used herein, the term Acquisition Transaction shall mean (A) a merger,
consolidation or similar transaction involving Issuer or any of its
subsidiaries (other than transactions solely between Issuer's
subsidiaries), (B) except as permitted pursuant to Section 7.1 of the
Merger Agreement, the disposition, by sale, lease, exchange or otherwise,
of assets of Issuer or any of its subsidiaries representing in either
case 25% or more of the consolidated assets of Issuer and its
subsidiaries, or (C) the issuance, sale or other disposition of
(including by way of merger, consolidation, share exchange or any similar
transaction) securities representing 25% or more of the voting power of
Issuer or any of its subsidiaries (any of the foregoing an "Acquisition
Transaction"); or
(ii) any person (other than Grantee or any subsidiary of
Grantee) shall have acquired beneficial ownership (as such term is
defined in Rule 13d-3 promulgated under the Exchange Act) of or the
right to acquire beneficial ownership of, or any "group" (as such term
is defined under the Exchange Act) shall have been formed which
beneficially owns or has the right to acquire beneficial ownership of,
25% or more of the then-outstanding shares of Issuer Common Stock.
(c) As used herein, a "Preliminary Purchase Event" means any of
the following events:
(i) any person (other than Grantee or any subsidiary of
Grantee) shall have commenced (as such term is defined in Rule 14d-2
under the Exchange Act), or shall have filed a registration statement
under the Securities Act with respect to, a tender offer or exchange
offer to purchase any shares of Issuer Common Stock such that, upon
consummation of such offer, such person would own or control 15% or more
of the then-outstanding shares of Issuer Common Stock (such an offer
being referred to herein as a "Tender Offer" or an "Exchange Offer,"
respectively); or
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<PAGE> 3
(ii) the holders of Issuer Common Stock shall not have
approved the Merger Agreement at the meeting of such shareholders held
for the purpose of voting on the Merger Agreement, such meeting shall
not have been held or shall have been canceled prior to termination of
the Merger Agreement, or Issuer's Board of Directors shall have
withdrawn or modified in a manner adverse to Grantee the recommendation
of Issuer's Board of Directors with respect to the Merger Agreement, in
each case after it shall have been publicly announced that any person
(other than Grantee or any subsidiary of Grantee) shall have (A) made,
or disclosed an intention to make, a proposal to engage in an
Acquisition Transaction, (B) commenced a Tender Offer or filed a
registration statement under the Securities Act with respect to an
Exchange Offer, or (C) filed an application (or given a notice), whether
in draft or final form, under the BHC Act, the HOLA, the Bank Merger
Act, or the Change in Bank Control Act of 1978, for approval to engage
in an Acquisition Transaction.
As used in this Agreement, "person" shall have the meaning specified in
Sections 3(a)(9) and 13(d)(3) of the Exchange Act.
(d) In the event Grantee wishes to exercise the Option, it
shall send to Issuer a written notice (the date of which being herein
referred to as the "Notice Date") specifying (i) the total number of Option
Shares it intends to purchase pursuant to such exercise and (ii) a place and
date not earlier than three business days nor later than 15 business days from
the Notice Date for the closing (the "Closing") of such purchase (the "Closing
Date"). If prior notification to or approval of the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board"), the Office of Thrift
Supervision (the "OTS") or any other regulatory authority is required in
connection with such purchase, Issuer shall cooperate with Grantee in the
filing of the required notice or application for approval and the obtaining of
such approval and the Closing shall occur immediately following such regulatory
approvals (and any mandatory waiting periods).
(e) Notwithstanding any other provision of this Agreement to
the contrary, in no event shall Grantee (together with any other holders
of the Option) purchase under the terms of this Agreement that number
of Option Shares which have a "Spread Value" in excess of $20,737,000. For
purposes of this Agreement, "Spread Value" shall mean the difference between
(i) the product of (1) the sum of the total number of Option Shares Grantee (x)
intends to purchase at the Closing Date pursuant to the exercise of the Option
and (y) previously purchased pursuant to the prior exercise of the Option, and
(2) the closing price of Issuer Common Stock as quoted on the Nasdaq National
Market on the last trading day immediately preceding the Closing Date, and (ii)
the product of (1) the total number of Option Shares Grantee (x) intends to
purchase at the Closing Date pursuant to the exercise of the Option and (y)
previously purchased pursuant to the prior exercise of the Option and (2) the
applicable Purchase Price of such Option Shares. In the event the Spread Value
exceeds $20,737,000 the number of Option Shares which Grantee (together with
any other holders of the Option) is entitled to purchase at the Closing Date
shall be reduced to that number of shares necessary such that the Spread Value
equals or is less than $20,737,000.
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<PAGE> 4
4. PAYMENT AND DELIVERY OF CERTIFICATES.
(a) On each Closing Date, Grantee shall (i) pay to Issuer,
in immediately available funds by wire transfer to a bank account designated by
Issuer, an amount equal to the Purchase Price multiplied by the number of
Option Shares to be purchased on such Closing Date, and (ii) present and
surrender this Agreement to the Issuer at the address of the Issuer specified
in Section 12(f) hereof.
(b) At each Closing, simultaneously with the delivery of
immediately available funds and surrender of this Agreement as provided in
Section 4(a), (i) Issuer shall deliver to Grantee (A) a certificate or
certificates representing the Option Shares to be purchased at such Closing,
which Option Shares shall be free and clear of all liens, claims, charges and
encumbrances of any kind whatsoever and subject to no pre-emptive rights, and
(B) if the Option is exercised in part only, an executed new agreement with the
same terms as this Agreement evidencing the right to purchase the balance of
the shares of Issuer Common Stock purchasable hereunder, and (ii) Grantee shall
deliver to Issuer a letter agreeing that Grantee shall not offer to sell or
otherwise dispose of such Option Shares in violation of applicable federal and
state law or of the provisions of this Agreement.
(c) In addition to any other legend that is required by
applicable law, certificates for the Option Shares delivered at each Closing
shall be endorsed with a restrictive legend which shall read substantially as
follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
PURSUANT TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF MARCH 9,
1996. A COPY OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF
WITHOUT CHARGE UPON RECEIPT BY THE ISSUER OF A WRITTEN REQUEST THEREFOR.
It is understood and agreed that the above legend shall be removed by delivery
of substitute certificate(s) without such legend if Grantee shall have
delivered to Issuer a copy of a letter from the staff of the SEC, or an opinion
of counsel in form and substance reasonably satisfactory to Issuer and its
counsel, to the effect that such legend is not required for purposes of the
Securities Act.
5. REPRESENTATIONS AND WARRANTIES OF ISSUER. Issuer hereby
represents and warrants to Grantee as follows:
(a) Issuer has all requisite corporate power and
authority to enter into this Agreement and, subject to any approvals
referred to herein, to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Issuer. This Agreement has
been duly executed and
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<PAGE> 5
delivered by Issuer. The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and compliance by
Issuer with any of the provisions hereof will not (i) conflict with or
result in a breach of any provision of its Articles of Incorporation or
By-laws or a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, condition or
provisions of any material note, bond, debenture, mortgage, indenture,
license, material agreement or other material instrument or obligation
to which Issuer is bound, or (ii) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to Issuer or any of its
properties or assets. No consent or approval by any governmental
authority, other than compliance with applicable federal and state
securities and banking laws, and regulations of the Federal Reserve
Board and the OTS, is required of Issuer in connection with the
execution and delivery by Issuer of this Agreement or the consummation
by Issuer of the transactions contemplated hereby.
(b) Issuer has taken all necessary corporate and other
action to authorize and reserve and to permit it to issue, and, at all
times from the date hereof until the obligation to deliver Issuer Common
Stock upon the exercise of the Option terminates, will have reserved for
issuance, upon exercise of the Option, the number of shares of Issuer
Common Stock necessary for Grantee to exercise the Option, and Issuer
will take all necessary corporate action to authorize and reserve for
issuance all additional shares of Issuer Common Stock or other
securities which may be issued pursuant to Section 7 upon exercise of
the Option. The shares of Issuer Common Stock to be issued upon due
exercise of the Option, including all additional shares of Issuer Common
Stock or other securities which may be issuable pursuant to Section 7,
upon issuance pursuant hereto, shall be duly and validly issued, fully
paid, and nonassessable, and shall be delivered free and clear of all
liens, claims, charges, and encumbrances of any kind or nature
whatsoever, including any preemptive rights of any stockholder of
Issuer.
6. REPRESENTATIONS AND WARRANTS OF GRANTEE. Grantee hereby
represents and warrants to Issuer that:
(a) Grantee has all requisite corporate power and
authority to enter into this Agreement and, subject to any approvals or
consents referred to herein, to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Grantee.
This Agreement has been duly executed and delivered by Grantee.
(b) This Option is not being, and any Option Shares or
other securities acquired by Grantee upon exercise of the Option will
not be, acquired with a view to the public distribution thereof and will
not be transferred or otherwise disposed of except in a transaction
registered or exempt from registration under the Securities Laws.
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<PAGE> 6
7. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.
(a) In the event of any change in Issuer Common Stock by
reason of a stock dividend, stock split, split-up, recapitalization,
combination, exchange of shares or similar transaction, the type and number of
shares or securities subject to the Option, and the Purchase Price therefor,
shall be adjusted appropriately, and proper provision shall be made in the
agreements governing such transaction so that Grantee shall receive, upon
exercise of the Option, the number and class of shares or other securities or
property that Grantee would have received in respect of Issuer Common Stock if
the Option had been exercised immediately prior to such event, or the record
date therefor, as applicable. If any additional shares of Issuer Common Stock
are issued after the date of this Agreement (other than pursuant to an event
described in the first sentence of this Section 7(a)), the number of shares of
Issuer Common Stock subject to the Option shall be adjusted so that, after such
issuance, it, together with any shares of Issuer Common Stock previously issued
pursuant hereto, equals 19.9% of the number of shares of Issuer Common Stock
then issued and outstanding, without giving effect to any shares subject to or
issued pursuant to the Option.
(b) In the event that Issuer shall enter in an agreement:
(i) to consolidate with or merge into any person, other than Grantee or one of
its Subsidiaries, and shall not be the continuing or surviving corporation of
such consolidation or merger; (ii) to permit any person, other than Grantee or
one of its Subsidiaries, to merge into Issuer and Issuer shall be the
continuing or surviving corporation, but, in connection with such merger, the
then outstanding shares of Issuer Common Stock shall be changed into or
exchanged for stock or other securities of Issuer or any other person or cash
or any other property or the outstanding shares of Issuer Common Stock
immediately prior to such merger shall after such merger represent less than
50% of the outstanding shares and share equivalents of the merged company; or
(iii) to sell or otherwise transfer all or substantially all of its Assets to
any person, other than Grantee or one of its Subsidiaries, then, and in each
such case, the agreement governing such transaction shall make proper
provisions so that the Option shall, upon the consummation of any such
transaction and upon the terms and conditions set forth herein, be converted
into, or exchanged for, an option (the "Substitute Option"), at the election of
Grantee, of either (x) the Acquiring Corporation (as defined below), (y) any
person that controls the Acquiring Corporation, or (z) in the case of a merger
described in clause (ii), the Issuer (in each case, such person being referred
to as the "Substitute Option Issuer").
(c) The Substitute Option shall have the same terms as
the Option, provided that, if the terms of the Substitute Option cannot, for
legal reasons, be the same as the Option, such terms shall be as similar as
possible and in no event less advantageous to Grantee. The Substitute Option
Issuer shall also enter into an agreement with the then-holder or holders of
the Substitute Option in substantially the same form as this Agreement, which
shall be applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such
number of shares of the Substitute Common Stock (as hereinafter defined) as is
equal to the Assigned Value (as hereinafter defined) multiplied by the number
of shares of the Issuer Common Stock for which the
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<PAGE> 7
Option was theretofore exercisable, divided by the Average Price (as
hereinafter defined). The exercise price of the Substitute Option per share of
the Substitute Common Stock (the "Substitute Purchase Price") shall then be
equal to the Purchase Price multiplied by a fraction in which the numerator is
the number of shares of the Issuer Common Stock for which the Option was
theretofore exercisable and the denominator is the number of shares for which
the Substitute Option is exercisable.
(e) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean (x) the
continuing or surviving corporation of a consolidation or merger with
Issuer (if other than Issuer), (y) Issuer in a merger in which Issuer
is the continuing or surviving person, and (z) the transferee of all
or any substantial part of the Issuer's assets (or the assets of its
Subsidiaries).
(ii) "Substitute Common Stock" shall mean the
common stock issued by the Substitute Option Issuer upon exercise of
the Substitute Option.
(iii) "Assigned Value" shall mean the highest of
(x) the price per share of the Issuer Common Stock at which a Tender
Offer or Exchange Offer therefor has been made by any person (other
than Grantee), (y) the price per share of the Issuer Common Stock to
be paid by any person (other than the Grantee) pursuant to an
agreement with Issuer, and (z) the highest closing sales price per
share of Issuer Common Stock quoted on the Nasdaq National Market (or
if Issuer Common Stock is not quoted on the Nasdaq National Market,
the highest bid price per share on any day as quoted on the principal
trading market or securities exchange on which such shares are traded
as reported by a recognized source chosen by Grantee) within the
six-month period immediately preceding the agreement; provided, that
in the event of a sale of less than all of Issuer's assets, the
Assigned Value shall be the sum of the price paid in such sale for
such assets and the current market value of the remaining assets of
Issuer as determined by a nationally recognized investment banking
firm selected by Grantee (or by a majority in interest of the Grantees
if there shall be more than one Grantee (a "Grantee Majority")),
divided by the number of shares of the Issuer Common Stock outstanding
at the time of such sale. In the event that an exchange offer is made
for the Issuer Common Stock or an agreement is entered into for a
merger or consolidation involving consideration other than cash, the
value of the securities or other property issuable or deliverable in
exchange for the Issuer Common Stock shall be determined by a
nationally recognized investment banking firm mutually selected by
Grantee and Issuer (or if applicable, Acquiring Corporation), provided
that if a mutual selection cannot be made as to such investment
banking firm, it shall be selected by Grantee. (If there shall be
more than one Grantee, any such selection shall be made by a Grantee
Majority.)
(iv) "Average Price" shall mean the average
closing price of a share of the Substitute Common Stock for the one
year immediately preceding the consolidation, merger or sale in
question, but in no event higher than the closing price of the shares
of the Substitute Common Stock on the day preceding such
consolidation, merger or sale;
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<PAGE> 8
provided that if Issuer is the issuer of the Substitute Option, the
Average Price shall be computed with respect to a share of common
stock issued by Issuer, the person merging into Issuer or by any
company which controls or is controlled by such merger person, as
Grantee may elect.
(f) In no event pursuant to any of the foregoing
paragraphs shall the Substitute Option be exercisable for more than 19.9% of
the aggregate of the shares of the Substitute Common Stock outstanding prior
to exercise of the Substitute Option. In the event that the Substitute Option
would be exercisable for more than 19.9% of the aggregate of the shares of
Substitute Common Stock but for this clause (f), the Substitute Option Issuer
shall make a cash payment to Grantee equal to the excess of (i) the value of
the Substitute Option without giving effect to the limitation in this clause
(f) over (ii) the value of the Substitute Option after giving effect to the
limitation in this clause (f). This difference in value shall be determined
by a nationally recognized investment banking firm selected by Grantee (or a
Grantee Majority).
(g) Issuer shall not enter into any transaction described
in subsection (b) of this Section 7 unless the Acquiring Corporation and any
person that controls the Acquiring Corporation assume in writing all the
obligations of Issuer hereunder and take all other actions that may be
necessary so that the provisions of this Section 7 are given full force and
effect (including, without limitation, any action that may be necessary so that
the shares of Substitute Common Stock are in no way distinguishable from or
have lesser economic value than other shares of common stock issued by the
Substitute Option Issuer).
(h) The provisions of Sections 8, 9, and 10 shall apply,
with appropriate adjustments, to any securities for which the Option becomes
exercisable pursuant to this Section 7 and, as applicable, references in such
sections to "Issuer," "Option," "Purchase Price" and "Issuer Common Stock"
shall be deemed to be references to "Substitute Option Issuer," "Substitute
Option," "Substitute Purchase Price" and "Substitute Common Stock,"
respectively.
8. REPURCHASE AT THE OPTION OF GRANTEE.
(a) Subject to the last sentence of Section 3(a), at the
request of Grantee at any time commencing upon the first occurrence of a
Repurchase Event (as defined in Section 8(d)) and ending 12 months immediately
thereafter, Issuer shall repurchase from Grantee the Option and all shares of
Issuer Common Stock purchased by Grantee pursuant hereto with respect to which
Grantee then has beneficial ownership. The date on which Grantee exercises
its rights under this Section 8 is referred to as the "Request Date." Such
repurchase shall be at an aggregate price (the "Section 8 Repurchase
Consideration") equal to the sum of:
(i) the aggregate Purchase Price paid by Grantee
for any shares of Issuer Common Stock acquired pursuant to the Option
with respect to which Grantee then has beneficial ownership;
(ii) the excess, if any, of (x) the Applicable
Price (as defined below) for each share of Issuer Common Stock over (y)
the Purchase Price (subject to adjustment
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<PAGE> 9
pursuant to Section 7), multiplied by the number of shares of Issuer
Common Stock with respect to which the Option has not been exercised;
and
(iii) the excess, if any, of the Applicable Price
over the Purchase Price (subject to adjustment pursuant to Section 7)
paid (or, in the case of Option Shares with respect to which the
Option has been exercised but the Closing Date has not occurred,
payable) by Grantee for each share of Issuer Common Stock with respect
to which the Option has been exercised and with respect to which
Grantee then has beneficial ownership, multiplied by the number of such
shares; provided, that the amount calculated pursuant to clause (ii)
and (iii) of this Section 8(a) shall not exceed $20,737,000.
(b) If Grantee exercises its rights under this Section 8,
Issuer shall, within ten business days after the Request Date, pay the Section 8
Repurchase Consideration to Grantee in immediately available funds, and
contemporaneously with such payment Grantee shall surrender to Issuer the
Option and the certificates evidencing the shares of Issuer Common Stock
purchased thereunder with respect to which Grantee then has beneficial
ownership, and Grantee shall warrant that it has sole record and beneficial
ownership of such shares and that the same are then free and clear of all
liens, claims, charges and encumbrances of any kind whatsoever.
Notwithstanding the foregoing, to the extent that prior notification to or
approval of the Federal Reserve Board, the OTS or other regulatory authority is
required in connection with the payment of all or any portion of the Section 8
Repurchase Consideration, Grantee shall have the ongoing option to revoke its
request for repurchase pursuant to Section 8, in whole or in part, or to
require that Issuer deliver from time to time that portion of the Section 8
Repurchase Consideration that it is not then so prohibited from paying and
promptly file the required notice or application for approval and expeditiously
process the same (and each party shall cooperate with the other in the filing
of any such notice or application and the obtaining of any such approval). If
the Federal Reserve Board, the OTS or any other regulatory authority
disapproves of any part of Issuer's proposed repurchase pursuant to this
Section 8, Issuer shall promptly give notice of such fact to Grantee. If the
Federal Reserve Board, the OTS or other agency prohibits the repurchase in part
but not in whole, then Grantee shall have the right (i) to revoke the
repurchase request or (ii) to the extent permitted by the Federal Reserve
Board, the OTS or other agency, determine whether the repurchase should apply
to the Option and/or Option Shares and to what extent to each, and Grantee
shall thereupon have the right to exercise the Option as to the number of
Option Shares for which the Option was exercisable at the Request Date less the
sum of the number of shares covered by the Option in respect of which payment
has been made pursuant to Section 8(a)(ii) and the number of shares covered by
the portion of the Option (if any) that has been repurchased. Grantee shall
notify Issuer of its determination under the preceding sentence within five
business days of receipt of notice of disapproval of the repurchase.
Notwithstanding anything herein to the contrary, all of
Grantee's rights under this Section 8 shall terminate on the date of
termination of this Option pursuant to Section 3(a).
(c) For purposes of this Agreement, the "Applicable
Price" means the highest of (i) the highest price per share of Issuer Common
Stock paid for any such share by the person or groups described in Section 8(d)
(i), (ii) the price per share of Issuer Common Stock received by
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<PAGE> 10
holders of Issuer Common Stock in connection with any merger or other business
combination transaction described in Section 7(b)(i), 7(b)(ii) or 7(b)(iii), or
(iii) the highest closing sales price per share of Issuer Common Stock quoted
on the Nasdaq National Market (or if Issuer Common Stock is not quoted on the
Nasdaq National Market, the highest bid price per share as quoted on the
principal trading market or securities exchange on which such shares are traded
as reported by a recognized source chosen by Grantee) during the 60 business
days preceding the Request Date; provided, however, that in the event of a sale
of less than all of Issuer's assets, the Applicable Price shall be the sum of
the price paid in such sale for such assets and the current market value of the
remaining assets of Issuer as determined by an independent nationally
recognized investment banking firm selected by Grantee and reasonably
acceptable to Issuer (which determination shall be conclusive for all purposes
of this Agreement), divided by the number of shares of the Issuer Common Stock
outstanding at the time of such sale. If the consideration to be offered, paid
or received pursuant to either of the foregoing clauses (i) or (ii) shall be
other than in cash, the value of such consideration shall be determined in good
faith by an independent nationally recognized investment banking firm selected
by Grantee and reasonably acceptable to Issuer, which determination shall be
conclusive for all purposes of this Agreement.
(d) As used herein, "Repurchase Event" shall occur if (i)
any person (other than Grantee or any subsidiary of Grantee) shall have acquired
beneficial ownership (as such term is defined in Rule 13d-3 promulgated under
the Exchange Act), or the right to acquire beneficial ownership, or any "group"
(as such term is defined under the Exchange Act) shall have been formed which
beneficially owns or has the right to acquire beneficial ownership, of 50% or
more of the then-outstanding shares of Issuer Common Stock, or (ii) any of the
transactions described in Section 7(b)(i), 7(b)(ii) or 7(b)(iii) shall be
consummated.
9. REGISTRATION RIGHTS.
(a) Issuer shall, subject to the conditions of
subparagraph (c) below, if requested by Grantee (or if applicable, a Grantee
Majority), as expeditiously as possible prepare and file a registration
statement under the Securities Laws if necessary in order to permit the sale
or other disposition of any or all shares of Issuer Common Stock or other
securities that have been acquired by or are issuable to Grantee upon exercise
of the Option in accordance with the intended method of sale or other
disposition stated by Grantee in such request, including, without limitation,
a "shelf" registration statement under Rule 415 under the Securities Act or
any successor provision, and Issuer shall use its best efforts to qualify such
shares or other securities for sale under any applicable state securities laws.
(b) If Issuer at any time after the exercise of the Option
proposes to register any shares of Issuer Common Stock under the Securities
Laws in connection with an underwritten public offering of such Issuer Common
Stock, Issuer will promptly give written notice to Grantee (and any permitted
transferee) of its intention to do so and, upon the written request of Grantee
(or any such permitted transferee of Grantee) given within 30 days after
receipt of any such notice (which request shall specify the number of shares of
Issuer Common Stock intended to be included in such underwritten public
offering by Grantee (or such permitted transferee)), Issuer will cause all such
shares, the holders of which shall have requested participation in such
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<PAGE> 11
registration, to be so registered and included in such underwritten public
offering; provided, that Issuer may elect to not cause any such shares to be so
registered (i) if the underwriters in good faith object for valid business
reasons, or (ii) in the case of a registration solely to implement a dividend
reinvestment or similar plan, an employee benefit plan or a registration filed
on Form S-4; provided, further, that such election pursuant to clause (i) may
only be made one time. If some but not all the shares of Issuer Common Stock,
with respect to which Issuer shall have received requests for registration
pursuant to this subparagraph (b), shall be excluded from such registration,
Issuer shall make appropriate allocation of shares to be registered among
Grantee (and any such permitted transferee desiring to register their shares)
and any other person (other than Issuer) who or which is permitted to register
their shares of Issuer Common Stock in connection with such registration pro
rata in the proportion that the number of shares requested to be registered by
each such holder bears to the total number of shares requested to be registered
by all such holders then desiring to have Issuer Common Stock registered for
sale.
(c) Issuer shall use all reasonable efforts to cause each
registration statement referred to in subparagraph (a) above to become
effective and to obtain all consents or waivers of other parties which are
required therefor and to keep such registration statement effective, provided,
that Issuer may delay any registration of Option Shares required pursuant to
subparagraph (a) above for a period not exceeding 90 days provided Issuer shall
in good faith determine that any such registration would adversely affect an
offering or contemplated offering of other securities by Issuer, and Issuer
shall not be required to register Option Shares under the Securities Laws
pursuant to subparagraph (a) above:
(i) prior to the earliest of (a) termination of
the Merger Agreement pursuant to Section 10.1 thereof, (b) failure to
obtain the requisite stockholder approval pursuant to Section 9.1(a) of
the Merger Agreement, and (c) a Purchase Event or a Preliminary Purchase
Event;
(ii) on more than two occasions;
(iii) more than once during any calendar year;
(iv) within 90 days after the effective date of a
registration referred to in subparagraph (b) above pursuant to which the
holder or holders of the Option Shares concerned were afforded the
opportunity to register such shares under the Securities Laws and such
shares were registered as requested; and
(v) unless a request therefor is made to Issuer
by the holder or holders of at least 25% or more of the aggregate number
of Option Shares then outstanding.
In addition to the foregoing, Issuer shall not be required to
maintain the effectiveness of any registration statement after the expiration
of nine months from the effective date of such registration statement. Issuer
shall use all reasonable efforts to make any filings, and take all steps,
under all applicable state securities laws to the extent necessary to permit
the sale or other disposition of the Option Shares so registered in accordance
with the intended method of
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<PAGE> 12
distribution for such shares, provided, that Issuer shall not be required to
consent to general jurisdiction or qualify to do business in any state where it
is not otherwise required to so consent to such jurisdiction or to so qualify
to do business.
(d) Except where applicable state law prohibits such
payments, Issuer will pay all expenses (including without limitation
registration fees, qualification fees, blue sky fees and expenses (including
the fees and expenses of counsel), accounting expenses, legal expenses
including the reasonable fees and expenses of one counsel to the holders whose
Option Shares are being registered, printing expenses, expenses of
underwriters, excluding discounts and commissions but including liability
insurance if Issuer so desires or the underwriters so require, and the
reasonable fees and expenses of any necessary special experts) in connection
with each registration pursuant to subparagraph (a) or (b) above (including
the related offerings and sales by holders of Option Shares) and all other
qualifications, notifications or exemptions pursuant to subparagraph (a) or
(b) above. Underwriting discounts and commissions relating to Option Shares,
fees and disbursements of counsel to the holders of Option Shares being
registered and any other expenses incurred by such holders in connection with
any such registration shall be borne by such holders.
(e) In connection with any registration under
subparagraph (a) or (b) above Issuer hereby indemnifies the holder of the
Option Shares, and each underwriter thereof, including each person, if any,
who controls such holder or underwriter within the meaning of Section 15 of
the Securities Act, against all expenses, losses, claims, damages and
liabilities caused by any untrue, or alleged untrue, statement of a material
fact contained in any registration statement or prospectus or notification or
offering circular (including any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission, or alleged omission, to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such expenses,
losses, claims, damages or liabilities of such indemnified party are caused by
any untrue statement or alleged untrue statement that was included by Issuer
in any such registration statement or prospectus or notification or offering
circular (including any amendments or supplements thereto) in reliance upon
and in conformity with, information furnished in writing to Issuer by such
indemnified party expressly for use therein, and Issuer and each officer,
director and controlling person of Issuer shall be indemnified by such holder
of the Option Shares, or by such underwriter, as the case may be, for all such
expenses, losses, claims, damages and liabilities caused by any untrue, or
alleged untrue, statement, that was included by Issuer in any such
registration statement or prospectus or notification or offering circular
(including any amendments or supplements thereto) in reliance upon, and in
conformity with, information furnished in writing to Issuer by such holder or
such underwriter, as the case may be, expressly for such use.
Promptly upon receipt by a party indemnified under this
subparagraph (e) of notice of the commencement of any action against such
indemnified party in respect of which indemnity or reimbursement may be sought
against any indemnifying party under this subparagraph (e), such indemnified
party shall notify the indemnifying party in writing of the commencement of
such action, but the failure so to notify the indemnifying party shall not
relieve it of any liability which it may otherwise have to any indemnified
party under this subparagraph (e). In case notice of
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<PAGE> 13
commencement of any such action shall be given to the indemnifying party as
above provided, the indemnifying party shall be entitled to participate in and,
to the extent it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense of such action at its own expense, with counsel
chosen by it and reasonably satisfactory to such indemnified party. The
indemnified party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of
such counsel (other than reasonable costs of investigation) shall be paid by
the indemnified party unless (i) the indemnifying party either agrees to pay
the same, (ii) the indemnifying party fails to assume the defense of such
action with counsel' satisfactory to the indemnified party, or (iii) the
indemnified party has been advised by counsel that one or more legal defenses
may be available to the indemnifying party that may be contrary to the interest
of the indemnified party, in which case the indemnifying party shall be
entitled to assume the defense of such action notwithstanding its obligation to
bear fees and expenses of such counsel. No indemnifying party shall be liable
for any settlement entered into without its consent, which consent may not be
unreasonably withheld.
If the indemnification provided for in this subparagraph (e) is
unavailable to a party otherwise entitled to be indemnified in respect of any
expenses, losses, claims, damages or liabilities referred to herein, then the
indemnifying party, in lieu of indemnifying such party otherwise entitled to be
indemnified, shall contribute to the amount paid or payable by such party to be
indemnified as a result of such expenses, losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative
benefits received by Issuer, the selling shareholders and the underwriters from
the offering of the securities and also the relative fault of Issuer, the
selling shareholders and the underwriters in connection with the statements or
omissions which resulted in such expenses, losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
amount paid or payable by a party as a result of the expenses, losses, claims,
damages and liabilities referred to above shall be deemed to include any legal
or other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim; provided, that in no case shall
the holders of the Option Shares be responsible, in the aggregate, for any
amount in excess of the net offering proceeds attributable to its Option Shares
included in the offering. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation. Any obligation by any holder to indemnify shall be several
and not joint with other holders.
In connection with any registration pursuant to subparagraph
(a) or (b) above, Issuer and each holder of any Option Shares (other than
Grantee) shall enter into an agreement containing the indemnification
provisions of this subparagraph (e).
(f) Issuer shall comply with all reporting requirements
and will do all such other things as may be necessary to permit the
expeditious sale at any time of any Option Shares by the holder thereof in
accordance with and to the extent permitted by any rule or regulation
promulgated by the SEC from time to time, including, without limitation, Rules
144 and 144A. Issuer shall at its expense provide the holder of any Option
Shares with any information necessary in connection with the completion and
filing of any reports or forms required to be filed by them
- 13 -
<PAGE> 14
under the Securities Laws, or required pursuant to any state securities laws or
the rules of any stock exchange.
(g) Issuer will pay all stamp taxes in connection with
the issuance and the sale of the Option Shares and in connection with the
exercise of the Option, and will save Grantee harmless, without limitation as
to time, against any and all liabilities, with respect to all such taxes.
10. QUOTATION; LISTING. If Issuer Common Stock or any other
securities to be acquired upon exercise of the Option are then authorized for
quotation or trading or listing on the Nasdaq National Market or any securities
exchange, Issuer, upon the request of Grantee, will promptly file an
application, if required, to authorize for quotation or trading or listing the
shares of Issuer Common Stock or other securities to be acquired upon exercise
of the Option on the Nasdaq National Market or any securities exchange and will
use its best efforts to obtain approval, if required, of such quotation or
listing as soon as practicable.
11. DIVISION OF OPTION. This Agreement (and the Option granted
hereby) are exchangeable, without expense, at the option of Grantee, upon
presentation and surrender of this Agreement at the principal office of Issuer
for other Agreements providing for Options of different denominations entitling
the holder thereof to purchase in the aggregate the same number of shares of
Issuer Common Stock purchasable hereunder. The terms "Agreement" and "Option"
as used herein include any other Agreements and related Options for which this
Agreement (and the Option granted hereby) may be exchanged. Upon receipt by
Issuer of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Agreement, and (in the case of loss, theft or
destruction) of reasonably satisfactory indemnification, and upon surrender and
cancellation of this Agreement, if mutilated, Issuer will execute and deliver a
new Agreement of like tenor and date. Any such new Agreement executed and
delivered shall constitute an additional contractual obligation on the part of
Issuer, whether or not the Agreement so lost, stolen, destroyed or mutilated
shall at any time be enforceable by anyone.
12. MISCELLANEOUS.
(A) EXPENSES. Except as otherwise provided in Section
10, each of the parties hereto shall bear and pay all costs and expenses
incurred by it or on its behalf in connection with the transactions
contemplated hereunder, including fees and expenses of its own financial
consultants, investment bankers, accountants and counsel.
(B) WAIVER AND AMENDMENT. Any provision of this
Agreement may be waived at any time by the party that is entitled to the
benefits of such provision. This Agreement may not be modified, amended,
altered or supplemented except upon the execution and delivery of a written
agreement executed by the parties hereto.
(C) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARY;
SEVERABILITY. This Agreement, together with the Merger Agreement and the other
documents and instruments referred to herein and therein, between Grantee and
Issuer (a) constitutes the entire agreement and supersedes all prior agreements
and understandings, both written and oral, between the
- 14 -
<PAGE> 15
parties with respect to the subject matter hereof and (b) is not intended to
confer upon any person other than the parties hereto (other than any
transferees of the Option Shares or any permitted transferee of this Agreement
pursuant to Section 13(h)) any rights or remedies hereunder. If any term,
provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction or a federal or state regulatory agency to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated. If for any reason such court
or regulatory agency determines that the Option does not permit Grantee to
acquire, or does not require Issuer to repurchase, the full number of shares of
Issuer Common Stock as provided in Sections 3 and 8 (as adjusted pursuant to
Section 7), it is the express intention of Issuer to allow Grantee to acquire
or to require Issuer to repurchase such lesser number of shares as may be
permissible without any amendment or modification hereof.
(D) GOVERNING LAW. This Agreement shall be governed and construed
in accordance with the laws of the State of Tennessee without regard to any
applicable conflicts of law rules.
(E) DESCRIPTIVE HEADINGS. The descriptive headings contained
herein are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
(F) NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally, telecopied
(with confirmation) or mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
If to Issuer to: Leader Financial Corporation
158 Madison Avenue
Memphis, Tennessee 38103
Telecopy Number (901) 578-2049
Attention: Edgar H. Bailey
Chairman and Chief
Executive Officer
with a copy to: Leader Financial Corporation
158 Madison Avenue
Memphis, Tennessee 38103
Telecopy Number (901) 578-2049
Attention: Catherine C. Stallings
General Counsel
- 15 -
<PAGE> 16
Housley, Kantarian & Bronstein
1220 19th Street, N.W.
Suite 700
Washington, D.C. 20036
Telecopy Number: (202) 822-0140
Attention: Harry K. Kantarian
If to Grantee to: Union Planters Corporation
7130 Goodlett Farms Parkway
Memphis, Tennessee 38108
Telecopy Number: (901) 383-2877
Attention: Jackson W. Moore
President
with a copy to: Alston & Bird
601 Pennsylvania Avenue, N.W.
North Building, Suite 250
Washington, D.C. 20004-2601
Telecopy Number: (202) 508-3333
Attention: Frank M. Conner III
(G) COUNTERPARTS. This Agreement and any amendments
hereto may be executed in two counterparts, each of which shall be considered
one and the same agreement and shall become effective when both counterparts
have been signed, it being understood that both parties need not sign the same
counterpart.
(H) ASSIGNMENT. Neither this Agreement nor any of the
rights, interests or obligations hereunder or under the Option shall be
assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other party, except that
Grantee may assign this Agreement to a wholly owned subsidiary of Grantee and
Grantee may assign its rights hereunder in whole or in part after the
occurrence of a Purchase Event. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.
(I) FURTHER ASSURANCES. In the event of any exercise of
the Option by Grantee, Issuer and Grantee shall execute and deliver all other
documents and instruments and take all other action that may be reasonably
necessary in order to consummate the transactions provided for by such
exercise.
(J) SPECIFIC PERFORMANCE. The parties hereto agree that
this Agreement may be enforced by either party through specific performance,
injunctive relief and other equitable relief. Both parties further agree to
waive any requirement for the securing or posting of any
- 16 -
<PAGE> 17
bond in connection with the obtaining of any such equitable relief and that
this provision is without prejudice to any other rights that the parties hereto
may have for any failure to perform this Agreement.
IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock Option
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the day and year first written above.
ATTEST: LEADER FINANCIAL CORPORATION
By: /s/ Catherine C. Stallings By: /s/ Edgar H. Bailey
-------------------------- ------------------
Catherine C. Stallings Edgar H. Bailey
Secretary Chairman of the Board and
Chief Executive Officer
[CORPORATE SEAL]
ATTEST: UNION PLANTERS CORPORATION
By: /s/ E.J. House, Jr. By: /s/ Jackson W. Moore
------------------- --------------------
E.J. House, Jr. Jackson W. Moore
Secretary President
[CORPORATE SEAL]
- 17 -
<PAGE> 1
EXHIBIT 99.1
UNION PLANTERS TO ACQUIRE LEADER FEDERAL
MEMPHIS, TENNESSEE (NYSE:UPC)--March 8,1996--Union Planters Corporation, the
$11.3 billion asset Memphis-based bank holding company and Leader Financial
Corporation (NASDAQ:LFCT), the $3.1 billion asset parent company of Leader
Federal Bank announced today they have agreed to merge in a transaction that
would create Tennessee's largest bank holding company.
The announcement was made jointly by Benjamin W. Rawlins, Jr., Chairman and CEO
of Union Planters and Edgar H. Bailey, Chairman and CEO of Leader Financial.
The definitive agreement calls for Union Planters to acquire all of the
outstanding stock of Leader Financial in a transaction valued at approximately
$523 million or $48 per share based on Union Planters March 7 closing stock
price of $31 1/2. The agreement calls for Union Planters to exchange 1.525
shares of its common stock for each common share of Leader Financial. The
consideration to be received by Leader's shareholders represents approximately
two times fully diluted book value and thirteen times Leader's 1995 earnings.
The merger is to be tax free to Leader Financial's shareholders and will be
accounted for as a pooling of interests. The merger is subject to shareholder
approval of both companies, regulatory approval and normal contractual
conditions being met, and is expected to be completed during the fourth quarter
of this year. As part of the agreement, Leader Financial will grant to Union
Planters an option to acquire up to 19.9% of Leader's common stock.
In making the announcement, Ben Rawlins stated, "We are excited about the
opportunity provided by this classic in-market merger. The product line for the
combined company will be broadened and significant economies of scale can be
achieved. We expect the transaction to be accretive to per share earnings in
1997."
Edgar Bailey commented, " Leader has served our customers since 1928, and is
considered one of the nation's most successful thrift institutions. We are
especially pleased to provide our shareholders with the additional value they
will realize as a result of this merger, while at the same time further
enhancing the customer services which have been the hallmark of our success."
Ronald W. Stimpson, President and Chief Operating Officer of Leader Financial,
added "The combination of Union Planters and Leader Financial gives us the
additional resources to create even greater opportunities for our
shareholders."
After the merger, Edgar Bailey will become Vice Chairman of Union Planters
Corporation. Ronald W. Stimpson will assume the duties of Senior Executive Vice
<PAGE> 2
President and Chief Administrative Officer, becoming the number three ranking
officer behind Ben Rawlins and Jack Moore, President and Chief Operating
Officer at Union Planters Corporation.
Leader Federal Bank will be consolidated with Union Planters National Bank of
Memphis. Kenneth W. Plunk, currently president of the Memphis bank will be
named Chairman and Kirk P. Bailey, who presently serves as Leader Federal
Bank's Executive Vice President and Chief Operating Officer, will become
President and Chief Operating Officer of the Memphis bank.
Rawlins added, "It is truly a significant day for Memphis and the Mid-South
when two financial institutions with the size and heritage of Union Planters
and Leader Financial join forces to create one of the nation's leading
financial services companies. As a team we will continue to enhance Union
Planters' leadership role in the national financial arena."
An analysis is currently underway to determine which locations of the two
organizations that are in proximity to each other will best serve customers
needs. It is also anticipated that normal industry attrition of about 20% and
the fact that Union Planters presently has over 140 positions in Memphis to
fill will help minimize any positions that are reduced because of duplication
of services.
Leader Federal, which converted to a stock thrift from a mutual thrift in 1993,
was recently ranked the 43rd largest publicly held thrift institution in the
country with $3.1 billion in total assets, while Union Planters was recently
ranked the 66th largest commercial banking organization in the country. The
combination of the two organizations in addition to several pending Union
Planters acquisitions will create one of the nation's top 50 institutions with
almost $15 billion in total assets.
Leader Federal serves customers through 23 locations in Memphis, Nashville and
the Johnson City tri-cities area. Union Planters, founded in 1869, has 404
locations in Tennessee, Mississippi, Arkansas, Alabama, Louisiana, Missouri and
Kentucky.
<TABLE>
<S> <C>
For more information:
(Financial) (Leader Federal)
Jack W. Parker Ronald W. Stimpson
Chief Financial Officer President and COO
Union Planters Corporation Leader Financial
7130 Goodlett Farms Parkway 158 Madison Ave.
Cordova, TN 38018 Memphis, TN 38138
901-383-6781 901-578-4300
(Media)
Bill Andrews
Senior Vice President
Union Planters Corporation
7130 Goodlett Farms Parkway
Cordova, TN 38018
901-383-2892
</TABLE>
<PAGE> 3
UNION PLANTERS CORPORATION
CONDENSED PRO FORMA BALANCE SHEET
DECEMBER 31, 1995
<TABLE>
<CAPTION>
(in thousands) UNION RESULTING
PLANTERS UPC
CONSOLIDATED LEADER PRO FORMA
--------------------------------------------
<S> <C> <C> <C>
ASSETS
LOANS, NET OF UNEARNED INCOME 7,069,853 1,964,022 9,033,875
ALLOWANCE FOR LOSSES ON LOANS (133,487) (22,901) (156,388)
--------------------------------------------
NET LOANS 6,936,366 1,941,121 8,877,487
INVESTMENT SECURITIES 2,774,890 798,701 3,573,591
OTHER EARNING ASSETS 560,972 109,060 670,032
--------------------------------------------
TOTAL EARNING ASSETS 10,272,228 2,848,882 13,121,110
OTHER ASSETS 1,004,888 249,695 1,254,583
--------------------------------------------
TOTAL ASSETS 11,277,116 3,098,577 14,375,693
============================================
LIABILITIES & SHAREHOLDERS' EQUITY
DEPOSITS 9,447,736 1,577,230 11,024,966
OTHER INTEREST-BEARING LIABILITIES 726,281 1,138,578 1,864,859
--------------------------------------------
TOTAL DEPOSITS & INTEREST-BEARING LIABILITIES 10,174,017 2,715,808 12,889,825
OTHER LIABILITIES 136,768 135,939 272,707
--------------------------------------------
TOTAL LIABILITIES 10,310,785 2,851,747 13,162,532
EQUITY 966,331 246,830 1,213,161
--------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 11,277,116 3,098,577 14,375,693
============================================
EQUITY TO ASSETS 8.57% 7.97% 8.44%
UNION PLANTERS CORPORATION
CONDENSED PRO FORMA INCOME STATEMENT UNION RESULTING
DECEMBER 31, 1995 PLANTERS UPC
(in thousands) CONSOLIDATED LEADER PRO FORMA
--------------------------------------------
INTEREST INCOME 836,682 214,392 1,051,074
INTEREST EXPENSE 389,251 125,882 515,133
--------------------------------------------
NET INTEREST MARGIN 447,431 88,510 535,941
PROVISION FOR LOSSES ON LOANS 22,231 5,150 27,381
NONINTEREST INCOME 157,652 23,491 181,143
NONINTEREST EXPENSE 382,164 48,135 430,299
--------------------------------------------
EARNINGS BEFORE TAXES 200,688 58,716 259,404
TAXES 65,286 21,363 86,649
--------------------------------------------
NET INCOME 135,402 37,353 172,755
============================================
RETURN ON AVERAGE ASSETS 1.24% 1.38% 1.26%
RETURN ON AVERAGE COMMON EQUITY 15.92% 16.82% 16.12%
</TABLE>
