<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period ___ to ___.
Commission File No. 1-10160
---------
UNION PLANTERS CORPORATION
(Exact name of registrant as specified in its charter)
Tennessee 62-0859007
- ------------------------- -------------------------------
(State of incorporation) (IRS Employer Identification No.)
Union Planters Administrative Center
7130 Goodlett Farms Parkway
Memphis, Tennessee 38018
(Address of principal executive offices)
Registrant's telephone number, including area code: (901) 580-6000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Class Outstanding at April 30, 1998
- ------------------------- ------------------------------
Common stock $5 par value 84,893,432
<PAGE> 2
UNION PLANTERS CORPORATION AND SUBSIDIARIES
FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 1998
INDEX
<TABLE>
<CAPTION>
Page
PART I. FINANCIAL INFORMATION
<S> <C> <C>
Item 1. Financial Statements (Unaudited)
a) Consolidated Balance Sheet - March 31, 1998,
March 31, 1997, and December 31, 1997............................................................3
b) Consolidated Statement of Earnings -
Three Months Ended March 31, 1998 and 1997.......................................................4
c) Consolidated Statement of Changes in Shareholders' Equity -
Three Months Ended March 31, 1998 ...............................................................5
d) Consolidated Statement of Cash Flows -
Three Months Ended March 31, 1998 and 1997.......................................................6
e) Notes to Unaudited Consolidated Financial Statements.............................................7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations...................................................14
Item 3. Quantitative and Qualitative Disclosures about
Market Risk.....................................................................................27
PART II. OTHER INFORMATION
Item 1. Legal Proceedings...............................................................................30
Item 2. Changes in Securities...........................................................................30
Item 3. Defaults Upon Senior Securities.................................................................30
Item 4. Submission of Matters to a Vote of Security Holders.............................................30
Item 5. Other Information...............................................................................30
Item 6. Exhibits and Reports on Form 8-K................................................................30
Signatures................................................................................................32
</TABLE>
2
<PAGE> 3
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31,
----------------------------- DECEMBER 31,
1998 1997 1997
------------- ------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Cash and due from banks ................................................... $ 660,528 $ 650,753 $ 816,472
Interest-bearing deposits at financial institutions ....................... 20,425 48,942 24,490
Federal funds sold and securities purchased under agreements to resell .... 309,415 73,271 109,192
Trading account assets .................................................... 163,698 209,979 187,419
Loans held for resale ..................................................... 253,021 134,214 170,742
Available for sale investment securities (Amortized cost: $3,237,613,
$3,426,554, and $3,185,002, respectively) ............................... 3,287,664 3,449,824 3,247,680
Loans ..................................................................... 12,754,653 12,594,929 12,687,089
Less: Unearned income ................................................... (26,994) (34,091) (28,525)
Allowance for losses on loans ..................................... (223,837) (192,943) (225,389)
------------- ------------- -------------
Net loans ............................................................ 12,503,822 12,367,895 12,433,175
Premises and equipment, net ............................................... 338,799 332,569 330,703
Accrued interest receivable ............................................... 196,595 228,013 204,504
FHA/VA claims receivable .................................................. 138,626 90,431 134,112
Mortgage servicing rights ................................................. 98,089 63,926 61,346
Goodwill and other intangibles ............................................ 78,927 63,172 52,655
Other assets .............................................................. 364,005 341,927 332,589
------------- ------------- -------------
TOTAL ASSETS ...................................................... $ 18,413,614 $ 18,054,916 $ 18,105,079
============= ============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest-bearing .................................................... $ 2,290,776 $ 2,188,123 $ 2,323,367
Certificates of deposit of $100,000 and over ........................... 1,417,728 1,384,986 1,426,751
Other interest-bearing ................................................. 9,872,723 9,813,288 9,690,151
------------- ------------- -------------
Total deposits .................................................... 13,581,227 13,386,397 13,440,269
Short-term borrowings ..................................................... 442,051 611,757 831,627
Short-and medium-term bank notes .......................................... 135,000 350,000 135,000
Federal Home Loan Bank advances ........................................... 846,291 902,285 703,996
Other long-term debt ...................................................... 1,022,644 594,782 710,908
Accrued interest, expenses, and taxes ..................................... 182,422 181,161 145,452
Other liabilities ......................................................... 394,537 365,171 390,961
------------- ------------- -------------
TOTAL LIABILITIES ................................................. 16,604,172 16,391,553 16,358,213
------------- ------------- -------------
Commitments and contingent liabilities .................................... -- -- --
Shareholders' equity
Convertible preferred stock ............................................. 36,972 71,937 54,709
Common stock, $5 par value; 300,000,000 shares authorized;
83,865,183 issued and outstanding (79,561,731 at March 31, 1997,
and 81,650,946 at December 31, 1997) ................................. 419,326 397,809 408,255
Additional paid-in capital .............................................. 272,157 168,258 193,032
Retained earnings ....................................................... 1,060,029 1,021,510 1,061,670
Unearned compensation ................................................... (9,550) (10,377) (9,529)
Unrealized gain on available for sale securities ........................ 30,508 14,226 38,729
------------- ------------- -------------
TOTAL SHAREHOLDERS' EQUITY ........................................ 1,809,442 1,663,363 1,746,866
------------- ------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ....................... $ 18,413,614 $ 18,054,916 $ 18,105,079
============= ============= =============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE> 4
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------------------------------
1998 1997
-------------------- --------------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C>
INTEREST INCOME
Interest and fees on loans ....................................................... $ 292,160 $ 287,605
Interest on investment securities
Taxable ........................................................................ 41,475 47,245
Tax-exempt ..................................................................... 7,066 7,310
Interest on deposits at financial institutions ................................... 424 438
Interest on federal funds sold and securities purchased under agreements to resell 2,710 2,423
Interest on trading account assets ............................................... 3,020 4,492
Interest on loans held for resale ................................................ 2,280 1,616
-------------------- --------------------
Total interest income .................................................... 349,135 351,129
-------------------- --------------------
INTEREST EXPENSE
Interest on deposits ............................................................. 124,085 122,366
Interest on short-term borrowings ................................................ 6,016 11,309
Interest on long-term debt ....................................................... 28,327 26,864
-------------------- --------------------
Total interest expense ................................................... 158,428 160,539
-------------------- --------------------
NET INTEREST INCOME ...................................................... 190,707 190,590
PROVISION FOR LOSSES ON LOANS ...................................................... 17,909 22,004
-------------------- --------------------
NET INTEREST INCOME AFTER PROVISION FOR LOSSES ON LOANS .................. 172,798 168,586
-------------------- --------------------
NONINTEREST INCOME
Service charges on deposit accounts .............................................. 25,746 26,242
Mortgage servicing income ........................................................ 16,191 14,921
Bank card income ................................................................. 7,498 7,781
Factoring commissions ............................................................ 7,304 6,824
Trust service income ............................................................. 2,407 2,413
Profits and commissions from trading activities .................................. 1,847 2,131
Investment securities gains ...................................................... 5,215 173
Other income ..................................................................... 29,510 22,499
-------------------- --------------------
Total noninterest income ................................................. 95,718 82,984
-------------------- --------------------
NONINTEREST EXPENSE
Salaries and employee benefits ................................................... 73,230 70,266
Net occupancy expense ............................................................ 10,644 10,737
Equipment expense ................................................................ 10,997 10,402
Other expense .................................................................... 58,753 57,241
-------------------- --------------------
Total noninterest expense ................................................ 153,624 148,646
-------------------- --------------------
EARNINGS BEFORE INCOME TAXES ............................................. 114,892 102,924
Applicable income taxes ............................................................ 40,320 36,479
-------------------- --------------------
NET EARNINGS ............................................................. $ 74,572 $ 66,445
==================== ====================
NET EARNINGS APPLICABLE TO COMMON SHARES ................................. $ 73,937 $ 64,949
==================== ====================
EARNINGS PER COMMON SHARE (NOTE 11)
Basic .................................................................... $ .89 $ .82
Diluted .................................................................. .86 .79
AVERAGE COMMON SHARES OUTSTANDING (IN THOUSANDS)
Basic .................................................................... 83,379 78,904
Diluted .................................................................. 86,974 84,465
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE> 5
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
UNREALIZED
GAIN ON
CONVERTIBLE ADDITIONAL AVAILABLE
PREFERRED COMMON PAID-IN RETAINED UNEARNED FOR SALE
STOCK STOCK CAPITAL EARNINGS COMPENSATION SECURITIES TOTAL
----------- ---------- ---------- ----------- ------------ ---------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1998 ........ $ 54,709 $ 408,255 $ 193,032 $ 1,061,670 $ (9,529) $ 38,729 $1,746,866
Comprehensive income
Net earnings .................. -- -- -- 74,572 -- -- 74,572
Other comprehensive income,
net of taxes:
Net change in the
unrealized gain on
available for sale
securities ................. -- -- -- -- -- (8,221) (8,221)
----------- ---------- ---------- ----------- ------------ ---------- ----------
Total comprehensive
income ................. -- -- -- 74,572 -- (8,221) 66,351
Cash dividends
Common stock, $.50 per share .. -- -- -- (41,891) -- -- (41,891)
Preferred stock, $.50 per share -- -- -- (635) -- -- (635)
Common stock issued under
employee benefit plans and
dividend reinvestment plan,
net of stock exchanged ........ -- 4,009 12,692 -- (21) -- 16,680
Issuance of common stock for
acquisitions .................. -- 5,763 55,151 -- -- -- 60,914
Conversion of preferred stock ... (17,737) 4,435 13,302 -- -- -- --
Common stock repurchased for
use in business combinations .... -- (3,136) (2,020) (33,687) -- -- (38,843)
----------- ---------- ---------- ----------- ------------ ---------- ----------
BALANCE, MARCH 31, 1998 ......... $ 36,972 $ 419,326 $ 272,157 $ 1,060,029 $ (9,550) $ 30,508 $1,809,442
=========== ========== ========== =========== ============ ========== ==========
</TABLE>
<TABLE>
<CAPTION>
TAX NET OF
BEFORE-TAX (EXPENSE) TAX
AMOUNT BENEFIT AMOUNT
---------- ---------- ---------
<S> <C> <C> <C>
DISCLOSURE OF RECLASSIFICATION AMOUNT:
Net change in the unrealized gains on
available for sale securities arising
during the period ................... $ (8,240) $ 3,205 $ (5,035)
Less: reclassification for gains
included in net income ......... 5,215 (2,029) 3,186
---------- ---------- ----------
Net change in the unrealized gain on
available for sale securities ........... $ (13,455) $ 5,234 $ (8,221)
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE> 6
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------------------------
1998 1997
----------------- -----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
OPERATING ACTIVITIES
Net earnings....................................................................... $ 74,572 $ 66,445
Reconciliation of net earnings to net cash provided by operating activities:
Provision for losses on loans, other real estate, and FHA/VA foreclosure claims.. 19,153 22,983
Depreciation and amortization of premises and equipment.......................... 8,611 8,559
Amortization and write-off of intangibles........................................ 7,067 6,980
Net accretion of investment securities........................................... (1,095) (2,436)
Net realized gains on sales of investment securities............................. (5,215) (116)
Deferred income tax (benefit) expense............................................ (1,099) 2,594
(Increase) decrease in assets
Trading account assets and loans held for resale............................. (58,558) 67,588
Other assets................................................................. (56,388) 54,015
Increase in accrued interest, expenses, taxes, and other liabilities............. 37,257 13,887
Other, net....................................................................... 221 65
----------- -----------
Net cash provided by operating activities 24,526 240,564
----------- -----------
INVESTING ACTIVITIES
Net decrease (increase) in short-term investments.................................. 4,065 (28,454)
Proceeds from sales of available for sale securities............................... 445,270 18,219
Proceeds from maturities, calls, and prepayments of available for sale securities.. 348,971 365,771
Purchases of available for sale securities......................................... (816,816) (441,606)
Net decrease (increase) in loans................................................... 215,794 (67,157)
Net cash received from acquisitions of financial institutions...................... 2,591 218
Purchases of premises and equipment, net........................................... (10,372) (6,507)
----------- -----------
Net cash provided (used) by investing activities........................... 189,503 (159,516)
----------- -----------
FINANCING ACTIVITIES
Net decrease in deposits........................................................... (58,951) (127,747)
Net decrease in short-term borrowings.............................................. (389,576) (133,068)
Proceeds from long-term debt, net.................................................. 454,563 239,017
Repayment of long-term debt........................................................ (109,574) (314,485)
Proceeds from issuance of common stock............................................. 15,393 9,446
Purchase and retirement of common stock............................................ (38,843) --
Cash dividends paid................................................................ (42,762) (25,227)
----------- -------------
Net cash used by financing activities...................................... (169,750) (352,064)
----------- -----------
Net increase (decrease) in cash and cash equivalents............................... 44,279 (271,016)
Cash and cash equivalents at the beginning of the period........................... 925,664 995,040
----------- -----------
Cash and cash equivalents at the end of the period................................. $ 969,943 $ 724,024
=========== ===========
SUPPLEMENTAL DISCLOSURES
Cash paid for
Interest......................................................................... $ 147,531 $ 152,785
Income taxes..................................................................... 3,168 4,730
Unrealized gain on available for sale securities................................... 50,051 23,270
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
6
<PAGE> 7
UNION PLANTERS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. PRINCIPLES OF ACCOUNTING
The consolidated financial statements have been prepared in accordance
with generally accepted accounting principles. The foregoing financial
statements are unaudited, however, in the opinion of management, all
adjustments, including normal recurring adjustments, necessary for a fair
presentation of the consolidated financial statements have been included.
The accounting policies followed by Union Planters Corporation and its
subsidiaries (collectively, the Corporation) for interim financial reporting are
consistent with the accounting policies followed for annual financial reporting
except as noted below. The notes included herein should be read in conjunction
with the notes to the consolidated financial statements included in the
Corporation's 1997 Annual Report to Shareholders, (1997 Annual Report), a copy
of which is Exhibit 13 to the Corporation's Annual Report on Form 10-K for the
year ended December 31, 1997 (1997 10-K). Certain 1997 amounts have been
reclassified to be consistent with the 1998 financial reporting presentation.
Effective January 1, 1998, the Corporation adopted the provisions of
Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive Income," which are reflected in the Consolidated Statement of
Changes in Shareholders' Equity.
NOTE 2. ACQUISITIONS
CONSUMMATED ACQUISITIONS
In a transaction accounted for as a purchase, the Corporation acquired
Sho-Me Financial Corporation (Sho-Me) on January 1, 1998, exchanging 1,153,459
shares of the Corporation's common stock for all of the outstanding common stock
of Sho-Me. Total assets were $373.8 million at the date of acquisition. Goodwill
of $29.2 million resulted from the transaction.
Reference is made to Note 2 of the consolidated financial statements on
pages 49 through 50 of the 1997 Annual Report for information regarding
acquisitions completed in 1997.
RECENTLY COMPLETED ACQUISITION - CONSUMMATED SUBSEQUENT TO MARCH 31, 1998
<TABLE>
<CAPTION>
APPROXIMATE
DATE OF APPROXIMATE METHOD OF TOTAL ASSETS
INSTITUTION CONSUMMATION CONSIDERATION ACCOUNTING AT MARCH 31, 1998
- -------------------------------------------- ---------------- ---------------- ----------------- --------------------
(DOLLARS IN
MILLIONS)
<S> <C> <C> <C> <C>
Security Bancshares, Inc............ 4/1/98 490,821 shares Pooling of $146
Des Arc, Arkansas of common stock interests
</TABLE>
7
<PAGE> 8
PENDING ACQUISITIONS
Through its acquisition program, the Corporation has the following pending
acquisitions which are considered probable of consummation.
<TABLE>
<CAPTION>
ANTICIPATED
APPROXIMATE METHOD OF APPROXIMATE
INSTITUTION CONSIDERATION ACCOUNTING TOTAL ASSETS (1)
- ------------------------------------------------------ -------------------- -------------------- --------------------
(DOLLARS IN
MILLIONS)
<S> <C> <C> <C>
Magna Group, Inc. (MGR).............................. 35,446,000 shares Pooling of $ 7,630
St. Louis, Missouri (2) of common stock interests
Peoples First Corporation............................ 6,338,000 shares Pooling of 1,493
Paducah, Kentucky of common stock interests
Purchase of 24 branches and assumption............... $110 million Purchase 1,465
of $1.5 billion of deposits of deposit premium
California Federal Bank in Florida in cash
AMBANC Corporation................................... 3,398,000 shares Pooling of 734
Vincennes, Indiana of common stock interests
Merchants Bancshares, Inc............................ 1,952,000 shares Pooling of 552
Houston, Texas of common stock interests
Transflorida Bank.................................... 1,655,000 shares Pooling of 318
Boca Raton, Florida of common stock interests
C B & T, Inc......................................... 1,450,000 shares Pooling of 271
McMinnville, Tennessee of common stock interests
Capital Savings Bancorp, Inc......................... 801,000 shares Pooling of 232
Jefferson City, Missouri of common stock interests
First National Bancshares of Wetumpka, Inc........... 836,000 shares Pooling of 217
Wetumpka, Alabama of common stock interests
Alvin Bancshares, Inc................................ 424,000 shares Pooling of 121
Alvin, Texas of common stock interests
First Community Bancshares, Inc...................... 126,000 shares Pooling of 41
Middleton, Tennessee of common stock interests
Duck Hill Bank....................................... 42,000 shares Purchase 20
Duck Hill, Mississippi of common stock ----------
TOTAL...................................... $ 13,094
==========
</TABLE>
- ----------------------
(1) Approximate total assets at March 31, 1998.
(2) MGR entered into a definitive agreement to acquire Charter Financial, Inc.
and its wholly owned thrift subsidiary CharterBank, S.B. (collectively,
"Charter"), headquartered in Sparta, Illinois. The acquisition was
consummated May 1, 1998. At March 31, 1998 Charter had total assets of
approximately $379 million, total deposits of approximately $280 million,
and total shareholders' equity of approximately $60.3 million. The
acquisition was accounted for as a purchase. The approximate total assets
of Charter are included in the MGR total assets shown above.
8
<PAGE> 9
NOTE 3. LOANS
Loans are summarized by type as follows:
<TABLE>
<CAPTION>
MARCH 31,
------------------------------------- DECEMBER 31,
1998 1997 1997
---------------- ---------------- -----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Commercial, financial, and agricultural.............. $ 1,979,718 $ 1,880,293 $ 1,940,781
Foreign.............................................. 180,255 139,333 207,343
Accounts receivable - factoring...................... 572,585 483,216 579,067
Real estate - construction........................... 663,664 532,459 639,696
Real estate - mortgage
Secured by 1-4 family residential.................. 3,725,745 3,673,620 3,603,097
FHA/VA government-insured/guaranteed............... 1,228,769 1,592,665 1,319,553
Other mortgage..................................... 2,125,086 1,854,608 2,055,420
Home equity.......................................... 294,110 238,933 290,634
Consumer
Credit cards and related plans..................... 515,616 629,098 558,705
Other consumer..................................... 1,401,940 1,500,023 1,427,756
Direct lease financing............................... 67,165 70,681 65,037
----------- ----------- -----------
TOTAL LOANS................................ $12,754,653 $12,594,929 $12,687,089
=========== =========== ===========
</TABLE>
Nonperforming loans are summarized as follows:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
---------------- ----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
NONACCRUAL LOANS
Domestic.................................................... $ 91,227 $ 94,488
Foreign..................................................... 51 96
RESTRUCTURED LOANS............................................ 1,862 10,021
----------- -----------
TOTAL NONPERFORMING LOANS........................... $ 93,140 $ 104,605
=========== ===========
FHA/VA GOVERNMENT-INSURED/GUARANTEED LOANS ON NONACCRUAL STATUS $ 13,606 $ 14,794
=========== ===========
</TABLE>
NOTE 4. ALLOWANCE FOR LOSSES ON LOANS
The changes in the allowance for losses on loans for the three months
ended March 31, 1998 are summarized as follows (Dollars in thousands):
<TABLE>
<S> <C>
BALANCE, JANUARY 1, 1998......................................................................... $ 225,389
Provision for losses on loans.................................................................... 17,909
Recoveries of loans previously charged off....................................................... 4,881
Loans charged off................................................................................ (27,744)
Increase due to acquisitions..................................................................... 3,402
-----------
BALANCE, MARCH 31, 1998.......................................................................... $ 223,837
===========
</TABLE>
As of March 31, 1998, the amount of the Corporation's impaired loans and
the disclosures related thereto were not significant.
9
<PAGE> 10
NOTE 5. INVESTMENT SECURITIES
The amortized cost and fair value of investment securities are summarized
as follows:
<TABLE>
<CAPTION>
MARCH 31, 1998
----------------------------------------------------------------------------
UNREALIZED
AMORTIZED --------------------------------------
COST GAINS LOSSES FAIR VALUE
----------------- ----------------- ----------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
AVAILABLE FOR SALE SECURITIES
U.S. Government obligations
U.S. Treasury................................... $ 598,697 $ 3,680 $ 146 $ 602,231
U.S. Government agencies
Collateralized mortgage obligations........... 146,305 1,262 90 147,477
Mortgage-backed............................... 401,770 12,073 267 413,576
Other......................................... 1,390,270 9,051 834 1,398,487
---------- --------- --------- ----------
Total U.S. Government obligations....... 2,537,042 26,066 1,337 2,561,771
Obligations of states and political subdivisions.. 483,574 25,299 520 508,353
Other stocks and securities....................... 216,997 748 205 217,540
---------- --------- --------- ----------
TOTAL AVAILABLE FOR SALE SECURITIES..... $3,237,613 $ 52,113 $ 2,062 $3,287,664
========== ========= ========= ==========
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1997
----------------------------------------------------------------------------
UNREALIZED
AMORTIZED --------------------------------------
COST GAINS LOSSES FAIR VALUE
----------------- ----------------- ----------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
AVAILABLE FOR SALE SECURITIES
U.S. Government obligations
U.S. Treasury................................... $ 727,600 $ 4,045 $ 205 $ 731,440
U.S. Government agencies
Collateralized mortgage obligations........... 101,236 1,302 100 102,438
Mortgage-backed............................... 633,184 20,260 269 653,175
Other......................................... 1,074,061 9,268 764 1,082,565
---------- --------- --------- ----------
Total U.S. Government obligations....... 2,536,081 34,875 1,338 2,569,618
Obligations of states and political subdivisions.. 480,702 28,871 431 509,142
Other stocks and securities....................... 168,219 983 282 168,920
---------- --------- --------- ----------
TOTAL AVAILABLE FOR SALE SECURITIES..... $3,185,002 $ 64,729 $ 2,051 $3,247,680
========== ========= ========= ==========
</TABLE>
Investment securities having a fair value of approximately $1.4 billion
and $1.5 billion at March 31, 1998 and December 31, 1997, respectively, were
pledged to secure public and trust funds on deposit, securities sold under
agreements to repurchase, and Federal Home Loan Bank advances.
The following table presents the gross realized gains and losses on
available for sale investment securities for the three months ended March 31,
1998 and 1997.
<TABLE>
<CAPTION>
REALIZED GAINS REALIZED LOSSES
-------------------------------------- ----------------------------------
1998 1997 1998 1997
----------- ----------- ------------ -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Available for sale securities............... $ 5,286 $ 188 $ (71) $ (15)
=========== =========== =========== ===========
</TABLE>
10
<PAGE> 11
NOTE 6. OTHER NONINTEREST INCOME AND EXPENSE
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
--------------------------------------
1998 1997
----------------- -----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
OTHER NONINTEREST INCOME
Gain on sale of branches/deposits and other selected assets.......... $ 1,026 $ 500
Gain on sale of residential mortgages................................ 3,129 1,043
Customer ATM usage fees.............................................. 3,036 2,993
Insurance commissions................................................ 3,072 2,641
Annuity sales income................................................. 1,087 1,831
Brokerage fee income................................................. 2,138 1,302
Letters of credit fees............................................... 1,057 1,208
VSIBG partnership earnings........................................... 1,005 679
Other income......................................................... 13,960 10,302
----------- -----------
TOTAL OTHER NONINTEREST INCOME............................... $ 29,510 $ 22,499
=========== ===========
OTHER NONINTEREST EXPENSE
Amortization of mortgage servicing rights............................ $ 4,126 $ 4,256
Amortization of goodwill and other intangibles....................... 2,941 2,724
Other contracted services............................................ 4,456 5,612
Stationery and supplies.............................................. 5,276 5,085
Postage and carrier.................................................. 4,577 4,255
Advertising and promotion............................................ 3,379 3,637
Communications....................................................... 4,320 3,507
Other personnel services............................................. 2,566 2,354
Other real estate expense............................................ 1,542 1,504
Miscellaneous charge-offs............................................ 2,397 2,193
Legal fees........................................................... 1,922 1,890
Provision for losses on FHA/VA foreclosure claims.................... 326 706
Taxes other than income.............................................. 1,772 1,621
Travel............................................................... 1,495 1,334
Consultant fees...................................................... 838 1,079
Merchant credit card charges......................................... 1,323 1,209
Dues, subscriptions, and contributions............................... 1,226 1,167
Brokerage and clearing fees on trading activities.................... 1,491 1,284
Accounting and audit fees............................................ 1,074 826
Insurance............................................................ 471 850
FDIC insurance....................................................... 827 784
Federal Reserve fees................................................. 818 711
Other expense........................................................ 9,590 8,653
----------- -----------
TOTAL OTHER NONINTEREST EXPENSE.............................. $ 58,753 $ 57,241
=========== ===========
</TABLE>
NOTE 7. INCOME TAXES
Applicable income taxes for the three months ended March 31, 1998, were
$40.3 million, resulting in an effective tax rate of 35.1%. Applicable income
taxes for the same period in 1997 were $36.5 million, resulting in an effective
tax rate of 35.4%. The variances from federal statutory rates (35% for both
years) are attributable to the level of tax-exempt income from investment
securities and loans and the effect of state income taxes. The tax expense
applicable to investment securities gains for the three months ended March 31,
1998 and 1997 were $2.0 million and $67,000, respectively.
At March 31, 1998, the Corporation had a net deferred tax asset of $99.5
million compared to $94.8 million at December 31, 1997. The net deferred tax
asset includes a deferred liability related to the net unrealized gain on
available for sale securities of $19.5 million and $24.2 million at those dates,
respectively. Management continues to believe that, based upon historical
earnings, normal operations will continue to generate sufficient taxable income
to realize the portion of the deferred tax asset that is dependent upon the
generation of future taxable income.
11
<PAGE> 12
NOTE 8. BORROWINGS
SHORT-TERM BORROWINGS
Short-term borrowings include federal funds purchased and securities sold
under agreements to repurchase and other short-term borrowings. Federal funds
purchased arise primarily from the Corporation's market activity with its
correspondent banks and generally mature in one business day. Securities sold
under agreements to repurchase are secured by U. S. Government and agency
securities.
Short-term borrowings are summarized as follows:
<TABLE>
<CAPTION>
MARCH 31,
------------------------------------- DECEMBER 31,
1998 1997 1997
---------------- ---------------- ----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Balances at quarter end:
Federal funds purchased and securities sold under agreements to $ 440,896 $ 376,582 $ 754,939
repurchase....................................................
FHLB advances................................................. 77 232,977 75,060
Other short-term borrowings................................... 1,078 2,198 1,628
----------- ----------- -----------
Total short-term borrowings......................... $ 442,051 $ 611,757 $ 831,627
=========== =========== ===========
Federal funds purchased and securities sold under agreements to
repurchase
Daily average balance....................................... $ 480,873 $ 435,474 $ 503,514
Weighted average interest rate.............................. 4.86% 4.70% 4.92%
</TABLE>
SHORT- AND MEDIUM-TERM BANK NOTES
The Corporation's principal subsidiary, Union Planters Bank, National
Association (UPB), has a $1 billion short- and medium-term bank note program to
supplement UPB's funding sources. Under the program UPB may from time to time
issue bank notes having maturities ranging from 30 days to one year from their
respective issue dates (Short-Term Bank Notes) and bank notes having maturities
of more than one year to 30 years from their respective dates of issue
(Medium-Term Bank Notes). At March 31, 1998 and December 31, 1997, UPB had no
Short-Term Bank Notes outstanding. A summary of the Medium-Term Bank Notes
follows.
<TABLE>
<CAPTION>
MARCH 31, 1998 DECEMBER 31, 1997
---------------- ------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Balances at period end............................... $ 135,000 $ 135,000
Variable-rate notes.................................. -- --
Fixed-rate notes..................................... 135,000 135,000
Range of maturities.................................. 8/98 - 10/01 8/98 - 10/01
</TABLE>
FEDERAL HOME LOAN BANK (FHLB) ADVANCES
Certain of the Corporation's banking and thrift subsidiaries had
outstanding advances from the FHLB under Blanket Agreements for Advances and
Security Agreements (the Agreements). The Agreements enable these subsidiaries
to borrow funds from the FHLB to fund mortgage loan programs and to satisfy
certain other funding needs. The value of the mortgage-backed securities and
mortgage loans pledged under the Agreements must be maintained at not less than
115% and 150%, respectively, of the advances outstanding. At March 31, 1998, the
Corporation had an adequate amount of mortgage-backed securities and loans to
satisfy the collateral requirements. A summary of the advances is as follows.
<TABLE>
<CAPTION>
MARCH 31,
------------------------------------- DECEMBER 31,
1998 1997 1997
---------------- ---------------- ----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Balance at period end......................................... $ 846,291 $ 902,285 $ 703,996
Range of interest rates....................................... 3.25%-8.95% 3.25%-9.00% 3.25%-8.95%
Range of maturities........................................... 1998-2017 1998-2025 1998-2017
</TABLE>
12
<PAGE> 13
OTHER LONG-TERM DEBT
The Corporation's other long-term debt is summarized as follows:
<TABLE>
<CAPTION>
MARCH 31,
-------------------------------- DECEMBER 31,
1998 1997 1997
------------ ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Corporation-Obligated Mandatorily Redeemable Capital Pass-through
Securities of Subsidiary Trust holding solely a Corporation-Guaranteed
Related Subordinated Note (Trust Preferred Securities)...... $ 198,982 $ 198,947 $ 198,973
Variable-rate asset-based certificates........................ 275,000 175,000 275,000
6 3/4% Subordinated Notes due 2005............................ 99,551 99,492 99,536
6.25% Subordinated Notes due 2003............................. 74,709 74,657 74,696
6.5% Putable/Callable Subordinated Notes due 2018............. 301,856 -- --
Other long-term debt.......................................... 72,546 46,686 62,703
----------- ----------- ----------
TOTAL OTHER LONG-TERM DEBT.......................... $ 1,022,644 $ 594,782 $ 710,908
=========== =========== ==========
</TABLE>
On March 18, 1998, UPB issued $300 million of 6.5% Putable/ Callable
Subordinated Notes, due March 15, 2018, putable or callable March 15, 2008. The
call option in this transaction can be exercised by the callholder to acquire
the notes on March 15, 2008, at face value, and resell them to a dealer selected
through a bidding process, at a premium based on the amount by which the 10-year
Treasury rate at that time is less than 5.3636%. The deadline for exercising the
call option is February 29, 2008.
If the call option is exercised and the notes are acquired by the
callholder, the interest rate will adjust to a new fixed rate, and the notes
will remain outstanding until March 15, 2018. If the call option is not
exercised or the callholder fails to pay the purchase price for the notes, UPB
will be required to pay the notes in full on March 15, 2008. The net proceeds
from issuing the subordinated notes were $301.6 million.
NOTE 9. SHAREHOLDERS' EQUITY
COMMON STOCK
At the Corporation's annual meeting April 16, 1998, shareholders approved
an increase in the number of authorized common shares from 100 million to 300
million.
PREFERRED STOCK
The Corporation's outstanding preferred stock, all of which is convertible
into shares of the Corporation's common stock, is summarized as follows:
<TABLE>
<CAPTION>
MARCH 31,
-------------------------------- DECEMBER 31,
1998 1997 1997
----------- ------------ -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Preferred stock, without par value, 10,000,000 shares authorized
Series A Preferred Stock,
750,000 shares authorized, none issued.................... $ -- $ -- $ --
Series E, 8% Cumulative, Convertible,
Preferred Stock (stated at liquidation value of $25 per share),
1,478,888 shares issued and outstanding (2,877,474 at March 31, 1997 and
2,188,358 at December 31, 1997)........................... 36,972 71,937 54,709
----------- ----------- -----------
TOTAL PREFERRED STOCK............................... $ 36,972 $ 71,937 $ 54,709
=========== =========== ===========
</TABLE>
NOTE 10. CONTINGENT LIABILITIES
The Corporation and/or various subsidiaries are parties to certain pending
or threatened civil actions which are described in Item 3, Part I of the
Corporation's 1997 10-K and in Note 19 to the Corporation's consolidated
financial statements on page 71 of the 1997 Annual Report. Various other legal
proceedings pending against the Corporation and/or its subsidiaries have arisen
in the ordinary course of business.
13
<PAGE> 14
Based upon present information, including evaluations of certain actions
by outside counsel, management believes that neither the Corporation's financial
position, results of operations, nor liquidity will be materially affected by
the ultimate resolution of pending or threatened legal proceedings. There were
no significant developments during the first quarter of 1998 in any of the
pending or threatened actions which affected such opinion.
NOTE 11. EARNINGS PER SHARE
The calculation of net earnings per share is summarized as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
--------------------------------------------
1998 1997
---------------------- ------------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C>
BASIC:
Net earnings................................................ $ 74,572 $ 66,445
Less preferred dividends.................................. 635 1,496
------------ ------------
Net earnings applicable to common shares.................... $ 73,937 $ 64,949
============ ============
Average common shares outstanding........................... 83,378,664 78,903,936
============ ============
Net earnings per common share--basic........................ $ .89 $ .82
============ ============
DILUTED:
Net earnings................................................ $ 74,572 $ 66,445
============ ============
Average common shares outstanding........................... 83,378,664 78,903,936
Stock option adjustment..................................... 1,258,014 1,501,288
Preferred stock adjustment.................................. 2,337,596 4,060,006
------------ ------------
Average common shares outstanding........................... 86,974,274 84,465,230
============ ============
Net earnings per common share-- diluted..................... $ .86 $ .79
============ ============
</TABLE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following provides a narrative discussion and analysis of significant
changes in the Corporation's results of operations and financial condition. This
discussion should be read in conjunction with the consolidated financial
statements and related financial analysis set forth in the Corporation's 1997
Annual Report, the interim unaudited consolidated financial statements and notes
for the three months ended March 31, 1998 included in Part I hereof, and the
supplemental financial data included in this discussion.
Certain of the information included in this discussion constitutes
forward-looking statements and information that are based on management's belief
as well as certain assumptions made by, and information currently available to,
management. Specifically, this Quarterly Report contains forward-looking
statements with respect to the adequacy of the allowance for losses on loans;
the effect of legal proceedings on the Corporation's financial condition,
results of operations, and liquidity; estimated charges related to pending
acquisitions; estimated cost savings related to the integration of completed
acquisitions and the consolidation of banking subsidiaries; and Year 2000 data
systems compliance issues. When used in this discussion, the words "anticipate,"
"project," "expect," "believe," and similar expressions are intended to identify
forward-looking statements. Although management of the Corporation believes that
the expectations reflected in such forward-looking statements are reasonable, it
can give no assurance that such expectations and projections will prove to have
been correct. Such forward-looking statements are subject to certain risks,
uncertainties, and assumptions. Should one or more of these risks materialize,
or should such underlying assumptions prove to be incorrect, actual results may
vary materially from those anticipated, estimated, projected, or expected. Among
key factors that may have a direct bearing on the Corporation's operating
results are fluctuations in the economy; the relative strengths and weaknesses
in the consumer and commercial credit sectors and in the real estate market; the
actions taken by the Federal Reserve for the purpose of managing the economy;
the Corporation's ability to realize anticipated cost savings related to both
recently completed and pending acquisitions, and the consolidation of subsidiary
banks; the ability of the Corporation to achieve anticipated revenue
enhancements; its success in assimilating acquired operations into the
Corporation's culture, including its ability to instill the Corporation's credit
culture and approach to operating efficiencies into acquired operations; the
continued growth of the markets in which the Corporation operates consistent
with recent historical experience; the absence of undisclosed material
contingencies inherent in acquired operations including asset quality and
litigation contingencies; the enactment of legislation impacting the operations
of the Corporation; and the Corporation's ability to expand into new markets and
to maintain profit margins in the face of pricing pressure. Moreover, the
outcome of litigation is inherently uncertain and depends on judicial discretion
and the findings of judges and juries.
14
<PAGE> 15
SELECTED FINANCIAL DATA
The following table presents selected financial highlights for the
three-month periods ended March 31, 1998 and 1997.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
------------------------------------- PERCENTAGE
1998 1997 CHANGE
---------------- ---------------- -----------------
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
Net earnings ..................................................... $ 74,572 $ 66,445 12%
Basic earnings per common share .................................. .89 .82 9
Diluted earnings per common share .86 .79 9
Return on average assets ......................................... 1.68% 1.49%
Return on average common equity .................................. 17.50 17.16
Dividends per common share ....................................... $ .50 $ .32 56
Net interest margin (FTE) ........................................ 4.80% 4.80%
Interest rate spread (FTE) ....................................... 3.96 4.03
Expense ratio .................................................... 1.38 1.44
Efficiency ratio ................................................. 52.99 52.63
Book value per common share ...................................... $ 21.13 $ 20.00 6
Leverage ratio ................................................... 10.72% 10.05%
Common share prices
High closing price ............................................. $ 67.31 $ 47.75
Low closing price .............................................. 58.38 38.38
Closing price at quarter end ................................... 62.19 40.63
</TABLE>
- --------------------
Net interest margin = Net interest income as a percentage of earning assets
Interest rate spread = Difference in the yield on average earning assets and the
rate on average interest-bearing liabilities
Expense ratio = Operating net noninterest expense [noninterest expense minus
noninterest income, excluding significant nonrecurring revenues/expenses,
investment securities gains (losses) and goodwill and other intangibles
amortization] divided by average assets
Efficiency ratio = Operating noninterest expense (excluding significant
nonrecurring expenses and goodwill and other intangibles amortization) divided
by net interest income (FTE) plus noninterest income, excluding significant
nonrecurring revenues and investment securities gains (losses)
FTE = Fully taxable-equivalent basis
15
<PAGE> 16
OPERATING RESULTS - THREE MONTHS ENDED MARCH 31, 1998
The table which follows presents the contributions to diluted earnings per
common share. A discussion of the operating results follows this table.
UNION PLANTERS CORPORATION
CONTRIBUTIONS TO DILUTED EARNINGS PER COMMON SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, EPS
--------------------------------------- INCREASE
1998 1997 (DECREASE)
----------------- ------------------ -----------------
<S> <C> <C> <C>
Net interest income-FTE....................................... $ 2.24 $ 2.31 $(0.07)
Provision for losses on loans................................. (0.21) (0.26) 0.05
------ ------ ------
Net interest income after provision for losses on loans-FTE... 2.03 2.05 (0.02)
------ ------ ------
Noninterest income
Service charges on deposit accounts......................... 0.30 0.31 (0.01)
Mortgage servicing income................................... 0.19 0.18 0.01
Bank card income............................................ 0.09 0.09 --
Factoring commissions....................................... 0.08 0.08 --
Trust service income........................................ 0.03 0.03 --
Profits and commissions from trading activities............. 0.02 0.03 (0.01)
Investment securities gains (losses)........................ 0.06 -- 0.06
Other income................................................ 0.33 0.26 0.07
------ ------ ------
TOTAL NONINTEREST INCOME............................ 1.10 0.98 0.12
------ ------ ------
Noninterest expense
Salaries and employee benefits.............................. 0.84 0.83 (0.01)
Net occupancy expense....................................... 0.12 0.13 0.01
Equipment expense........................................... 0.13 0.12 (0.01)
Other expense............................................... 0.67 0.68 0.01
------ ------ ------
TOTAL NONINTEREST EXPENSE........................... 1.76 1.76 --
------ ------ ------
Earnings before income taxes-FTE............................ 1.37 1.27 0.10
Applicable income taxes-FTE................................... 0.51 0.48 (0.03)
------ ------ ------
Net earnings................................................ 0.86 0.79 0.07
Less preferred stock dividends................................ -- -- --
------ ------ ------
DILUTED EARNINGS PER COMMON SHARE................... $ 0.86 $ 0.79 $ 0.07
====== ====== ======
Change in net earnings applicable to
diluted earnings per share using
previous year average shares outstanding.................... $ 0.10
Change in average shares outstanding.......................... (0.03)
------
Change in net earnings........................................ $ 0.07
======
Average diluted shares (in thousands)......................... 86,974 84,465
======= =======
</TABLE>
- --------------------
FTE = Fully taxable-equivalent basis
FIRST QUARTER EARNINGS OVERVIEW
For the first quarter of 1998, the Corporation reported record earnings of
$74.6 million, or $.86 per diluted common share. This compares to net earnings
for the same period in 1997 of $66.4 million, or $.79 per diluted common share.
The record earnings level resulted in an annualized return on average assets of
1.68% and an annualized return on average common equity of 17.50% for the first
quarter of 1998 which compares to 1.49% and 17.16% for the same period in 1997.
The improvement in net earnings in 1998 is attributable to an increase in
noninterest income along with a decrease in the provision for losses on loans
partially offset by an increase in noninterest expense. The following is a more
complete discussion and analysis of the first quarter of 1998 operating results
compared to the same period in 1997.
16
<PAGE> 17
EARNINGS ANALYSIS
NET INTEREST INCOME
Net interest income (FTE) for the first quarter of 1998 was $194.9
million, approximately the same as the first quarter of 1997 which was $194.8
million, and down $1.7 million from the fourth quarter of 1997 which was $196.6
million. The slight improvement for the first quarter of 1998 compared to the
same period in 1997 is attributable to lower interest expense resulting
primarily from a $276 million decline in average interest-bearing liabilities.
Additionally, higher loan volumes were funded by maturities and sales of lower
yielding investment securities. Trading account assets, primarily the
government-guaranteed portion of SBA loans and SBA participation certificates,
also declined $64 million due to a lower volume of activity. The decrease from
the fourth quarter of 1997 relates primarily to a $181 million decline in
average investment securities and a one-basis-point decline in the average yield
on loans. Partially offsetting these declines was a six-basis-point decline in
the average rate paid on interest-bearing liabilities. Reference is made to the
Corporation's average balance sheet and analysis of volume and rate changes
which follow this discussion for additional information regarding the changes in
net interest income.
The net interest margin for the first quarter of 1998 was 4.80% which
compares to 4.80% and 4.79%, respectively, for the first and fourth quarters of
1997. The interest-rate spread decreased to 3.96% for the first quarter of 1998
from 4.03% for the same period in 1997 and increased compared to 3.88% for the
fourth quarter of 1997.
INTEREST INCOME
The following table presents a breakdown of average earning assets for the
first quarter of 1998 and 1997.
<TABLE>
<CAPTION>
MARCH 31,
------------------------
1998 1997
---------- ---------
(DOLLARS IN BILLIONS)
<S> <C> <C>
Average earning assets ................................................ $ 16.5 $ 16.5
Comprised of:
Loans ............................................................. 79% 77%
Investment securities ............................................. 18 20
Other earning assets .............................................. 3 3
Fully taxable-equivalent yield on average earning assets............... 8.71% 8.75%
</TABLE>
Interest income (FTE) decreased $2.0 million for the first quarter of 1998
compared to the same period in 1997. The decrease is attributable primarily to
declines in average trading account securities and investment securities which
decreased interest income approximately $7.3 million for the quarter. This
decrease was partially offset by an increase in loan volume partially offset by
an 11- basis-point decline in the average yield on loans, the net effect of
which was an increase in interest income of approximately $5.3 million.
17
<PAGE> 18
INTEREST EXPENSE
The following table presents a breakdown of average interest-bearing
liabilities for the first quarters of 1998 and 1997.
<TABLE>
<CAPTION>
MARCH 31,
--------------------------------------
1998 1997
----------------- -----------------
(DOLLARS IN BILLIONS)
<S> <C> <C>
Average interest-bearing liabilities $ 13.5 $ 13.8
Comprised of:
Deposits........................................................... 83% 82%
Short-term borrowings.............................................. 4 6
FHLB advances and long-term debt................................... 13 12
Rate paid on average interest-bearing liabilities 4.75% 4.72%
</TABLE>
Interest expense decreased $2.1 million in the first quarter of 1998
compared to the same period in 1997. The decrease is due primarily to a decrease
of $276.3 million in average interest-bearing liabilities which accounted for
approximately $2.5 million of the decrease in interest expense. This decrease
related primarily to a net decrease in borrowings and other time deposits. This
decline in volume was partially offset by a three-basis-point increase in the
average rate paid on interest-bearing liabilities which increased interest
expense approximately $400,000.
PROVISION FOR LOSSES ON LOANS
The provision for losses on loans for the first quarter of 1998 was $17.9
million, or .62% of average loans on an annualized basis, compared to $22.0
million, or .81% of average loans, for the same period in 1997. This also
compares to a provision for losses on loans of $36.9 million, or 1.28% of
average loans, for the fourth quarter of 1997. The provision for losses on loans
in the first quarter of 1998 continued to be impacted by the level of credit
card charge-offs which accounted for 59% of the charge-offs during the quarter.
The higher provision for losses on loans in the fourth quarter of 1997 related
to the credit card portfolio and to higher provisions taken for entities
acquired during the fourth quarter to conform to the Corporation's loan review
methodology. Reference is made to the "Allowance for Losses on Loans" discussion
for additional information regarding loan charge-offs.
NONINTEREST INCOME
Noninterest income for the first quarter of 1998 was $95.7 million, an
increase of 15.3% over the same period in 1997 and an increase of approximately
$3.9 million from the fourth quarter of 1997. The major components of
noninterest income are presented on the face of the consolidated statement of
earnings and in Note 6 to the unaudited interim consolidated financial
statements included in Item 1, Part I of this report.
The increase in noninterest income for the quarter includes increases in
investment securities gains of $5.0 million and gains on sale of mortgage loans
of $2.1 million. The investment securities gains resulted from the sale of $296
million of securities ($109 million Treasury securities and $187 million of U.S.
government agency adjustable-rate mortgage (ARM) securities). The Treasury
securities were sold because of their low market yield and very short maturities
that resulted in a minimal gain. The ARM securities were sold because of the
prepayment risk of the underlying loans, given the current level of interest
rates. The gain on sale of mortgage loans resulted from the sale of
approximately $104 million of adjustable-rate mortgage loans. These loans were
sold because they were trading at relatively high historical levels and because
of their risk of prepayment in the current interest rate environment. Other
noninterest income categories increasing for the quarter were mortgage banking
income, brokerage income, and factoring commissions. The increase in noninterest
income from the fourth quarter of 1997 related primarily to a higher level of
investment securities gains, partially offset by a decrease in gains from the
sale of certain branch locations.
NONINTEREST EXPENSE
Noninterest expense for the first quarter of 1998 increased $5.0 million
to $153.6 million which compares to $148.6 million for the first quarter of 1997
and $179.5 million (excluding before merger-related and other significant
charges totaling $58.9 million)
18
<PAGE> 19
for the fourth quarter of 1997. The major components of noninterest expense are
detailed on the face of the consolidated statement of earnings and in Note 6 to
the unaudited interim consolidated financial statements included in Item 1, Part
I of this report.
The increase in noninterest expense for the first quarter of 1998 compared
to the same period in 1997 relates primarily to noninterest expenses of various
small acquisitions in 1997 and the Sho-Me Financial Corporation (Sho-Me)
acquisition effective January 1, 1998 which, in the aggregate, accounted for
approximately $4.8 million of the increase. Over one half of this increase
related to salaries and employee benefits of the acquired entities.
The largest component of noninterest expense, salaries and employee
benefits, was $73.2 million for the first quarter of 1998 compared to $70.3
million for the same quarter last year and compared to $74.6 million for the
fourth quarter of 1997. Full-time-equivalent employees at March 31, 1998 were
7,717 compared to 7,890 at March 31, 1997 and 7,711 at December 31, 1997.
EARNINGS CONSIDERATIONS RELATED TO PENDING ACQUISITIONS
Historically, as the Corporation acquires entities, merger-related and
other significant charges have been incurred. (Reference is made to Table 1 on
page 26 of the 1997 Annual Report). Typically, these charges include the
following: (i) salaries, employee benefits, and other employment-related charges
for employment contract payments, change in control agreements, early retirement
and involuntary separation and related benefits, postretirement expenses, and
assumed pension expenses of acquired entities; (ii) write-downs of office
buildings and equipment to be sold, lease buyouts, assets determined to be
obsolete or no longer of use, and equipment not compatible with the
Corporation's equipment; (iii) professional fees for legal, accounting,
consulting, and financial advisory services; (iv) additions to the provision for
losses on loans; and (v) other expenses such as asset write-offs, charge-offs of
prepaid assets, cancellation of vendor contracts, and other costs which normally
arise from consolidation of operational activities. These charges totaled $46.2
million, $52.8 million, and $11.9 million in 1997, 1996, and 1995, respectively.
During the first quarter of 1998 and 1997, the Corporation did not incur any
significant merger-related charges and there were no reversals of the charges
accrued in 1997. The level of the charges is directly related to the size of the
institutions being acquired. Charges of the type described in the range of $155
million to $165 million (pretax basis) are expected in connection with the
current pending acquisitions (see Note 2 to the interim consolidated financial
statements). To the extent that the Corporation's recognition of these charges
is contingent upon consummation of a particular transaction, those charges would
be recognized in the period in which such transaction closes. This range of
potential charges is based on currently available information as well as
preliminary estimates and will change if additional entities are acquired. This
range is provided as an estimate of the significant charges which may be in the
aggregate required and should be viewed accordingly.
CHARTER CONSOLIDATION
On page 12 of the 1997 Annual Report is a discussion of the legal merger
of the majority of the Corporation's banking subsidiaries effective January 1,
1998. In connection with the merger, the Corporation incurred in the fourth
quarter of 1997 charges related to the decision to merge the subsidiaries
totaling approximately $16.7 million. In the first quarter of 1998, no
additional significant charges were incurred and there were no reversals of the
charges accrued in 1997. The anticipated annual cost savings from the
consolidation, approximately $15 to $20 million on a pretax basis, are still
expected but have not yet been fully recognized. A major portion is expected to
be realized in the latter part of 1998; however, the full amount of savings and
revenue enhancements are not expected until mid-1999.
19
<PAGE> 20
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED DAILY AVERAGE BALANCE SHEET AND INTEREST RATES
<TABLE>
<CAPTION>
MARCH 31,
----------------------------------------------------------------------
1998 1997
---------------------------------- ---------------------------------
INTEREST FTE INTEREST FTE
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/
BALANCE EXPENSE RATE BALANCE EXPENSE RATE
----------- ----------- ------ ----------- --------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-bearing deposits at
financial institutions .................... $ 28,414 $ 424 6.05% $ 29,163 $ 438 6.09%
Federal funds sold and securities
purchased under agreements to resell ...... 189,854 2,710 5.79 177,938 2,423 5.52
Trading account assets ...................... 181,952 3,020 6.73 245,946 4,492 7.41
Investment securities (1) (2)
Taxable ................................... 2,518,984 41,475 6.68 2,872,352 47,245 6.67
Tax-exempt ................................ 476,483 10,617 9.04 481,814 10,931 9.20
------------ ----------- ----------- ---------
Total investment securities ......... 2,995,467 52,092 7.05 3,354,166 58,176 7.03
Loans, net of unearned income (1) (3) (4) ... 13,057,231 295,084 9.17 12,659,164 289,794 9.28
------------ ----------- ----------- ---------
TOTAL EARNING ASSETS (1) (2) (3) (4) 16,452,918 353,330 8.71 16,466,377 355,323 8.75
Cash and due from banks ..................... 611,771 ----------- 617,398
Premises and equipment ...................... 338,087 330,248
Allowance for losses on loans ............... (230,997) (191,938)
Other assets ................................ 834,015 809,563
------------ -----------
TOTAL ASSETS ........................ $ 18,005,794 $18,031,648
============ ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Money market accounts ....................... $ 2,023,460 $ 18,806 3.77% $ 1,851,360 $ 15,818 3.47%
Savings deposits ............................ 2,493,585 13,943 2.27 2,582,169 14,898 2.34
Certificates of deposit of
$100,000 and over ......................... 1,433,140 19,724 5.58 1,369,229 18,843 5.58
Other time deposits ......................... 5,336,242 71,612 5.44 5,458,047 72,807 5.41
Short-term borrowings
Federal funds purchased and securities
sold under agreements to repurchase ..... 480,873 5,764 4.86 435,474 5,045 4.70
Short-term bank notes ...................... -- -- -- 241,667 3,448 5.79
Other ...................................... 20,217 252 5.06 197,712 2,816 5.78
Long-term debt
Federal Home Loan Bank advances ........... 863,814 12,149 5.70 948,899 13,492 5.77
Subordinated capital notes ................ 221,199 3,684 6.75 174,131 2,932 6.83
Medium-term bank notes .................... 135,000 2,236 6.72 135,000 2,236 6.72
Trust Preferred Securities ................ 198,978 4,128 8.41 198,942 4,128 8.42
Other ..................................... 323,690 6,130 7.68 213,835 4,076 7.73
------------ --------- ----------- ---------
TOTAL INTEREST-BEARING LIABILITIES .. 13,530,198 158,428 4.75 13,806,465 160,539 4.72
Noninterest-bearing demand deposits ......... 2,196,359 -- 2,105,584 --
------------ --------- ----------- ---------
TOTAL SOURCES OF FUNDS .............. 15,726,557 158,428 15,912,049 160,539
Other liabilities ........................... 518,779 503,620
Shareholders' equity ........................
Preferred stock .......................... 46,752 81,200
Common equity ............................ 1,713,706 1,534,779
------------ -----------
Total shareholders' equity .......... 1,760,458 1,615,979
------------ -----------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY............................ $ 18,005,794 $18,031,648
============ ===========
NET INTEREST INCOME (1) ....................... $ 194,902 $ 194,784
=========== =========
INTEREST-RATE SPREAD (1) ...................... 3.96% 4.03%
==== ====
NET INTEREST MARGIN (1) ....................... 4.80% 4.80%
==== ====
TAXABLE-EQUIVALENT ADJUSTMENTS:
Loans ..................................... $ 644 $ 573
Investment securities ..................... 3,551 3,621
----------- ---------
TOTAL ............................... $ 4,195 $ 4,194
=========== =========
</TABLE>
(1) Taxable-equivalent yields are calculated assuming a 35% federal income tax
rate.
(2) Yields are calculated on historical cost and exclude the impact of the
unrealized gain (loss) on available for sale securities.
(3) Includes loan fees, immaterial in amount, in both interest income and the
calculation of the yield on loans.
(4) Includes loans on nonaccrual status.
20
<PAGE> 21
UNION PLANTERS CORPORATION AND SUBSIDIARIES
ANALYSIS OF VOLUME AND RATE CHANGES
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1998 VERSUS 1997
----------------------------------------------------------
INCREASE (DECREASE)
DUE TO CHANGE IN: (1)
------------------------------------ TOTAL
AVERAGE AVERAGE INCREASE
VOLUME RATE (DECREASE)
---------------- ---------------- ----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
INTEREST INCOME
Interest-bearing deposits at financial institutions......... $ (11) $ (3) $ (14)
Federal funds sold and securities purchased under agreements to 167 120 287
resell......................................................
Trading account assets...................................... (1,090) (382) (1,472)
Investment securities (FTE)................................. (6,237) 153 (6,084)
Loans, net of unearned income (FTE)......................... 9,030 (3,740) 5,290
----------- ----------- -----------
TOTAL INTEREST INCOME............................... 1,859 (3,852) (1,993)
----------- ----------- -----------
INTEREST EXPENSE
Money market accounts....................................... 1,537 1,451 2,988
Savings deposits............................................ (503) (452) (955)
Certificates of deposit of $100,000 and over................ 880 1 881
Other time deposits......................................... (1,632) 437 (1,195)
Short-term borrowings....................................... (3,771) (1,522) (5,293)
Long-term debt.............................................. 990 473 1,463
----------- ----------- -----------
TOTAL INTEREST EXPENSE.............................. (2,499) 388 (2,111)
----------- ----------- -----------
CHANGE IN NET INTEREST INCOME (FTE)........................... $ 4,358 $ (4,240) $ 118
=========== =========== ===========
PERCENTAGE INCREASE IN NET INTEREST INCOME OVER PRIOR PERIOD.. .06%
===========
</TABLE>
- --------------------
FTE - Fully taxable-equivalent basis
(1) The change due to both rate and volume has been allocated to change due to
volume and change due to rate in proportion to the relationship of the
absolute dollar amounts of the change in each.
FINANCIAL CONDITION
The Corporation's total assets were $18.4 billion at March 31, 1998
compared to $18.1 billion at both March 31, 1997 and December 31, 1997. Average
assets were $18.0 billion for both the first quarter of 1998 and the first
quarter of 1997.
INVESTMENT SECURITIES
The Corporation's investment securities portfolio of $3.3 billion at March
31, 1998 consisted entirely of available for sale securities which are carried
on the balance sheet at fair value. This compares to investment securities of
$3.4 billion and $3.2 billion at March 31, 1997 and December 31, 1997,
respectively. At March 31, 1998, March 31, 1997, and December 31, 1997, these
securities had net unrealized gains of $50.1 million, $23.3 million, and $62.7
million, respectively. Reference is made to Note 5 to the unaudited interim
consolidated financial statements which provides the composition of the
investment portfolio at March 31, 1998 and December 31, 1997.
U. S. Treasury and U. S. Government agency obligations represented
approximately 77.9% of the investment securities portfolio at March 31, 1998.
The Corporation has some credit risk in the investment portfolio; however,
management does not consider that risk to be significant and does not believe
that cash flows will be significantly impacted.
The REMIC and CMO issues in the investment portfolio are 90% U. S.
Government agency issues; the remaining 10% are readily marketable, nonagency
collateralized mortgage obligations backed by agency-pooled collateral or
whole-loan collateral. All nonagency issues currently held are rated "AAA" by
either Standard & Poor's or Moody's. Approximately 32% of the REMIC and CMO
portions of the investment securities portfolio are floating-rate issues, the
majority being indexed to LIBOR or PRIME. The
21
<PAGE> 22
Corporation's normal practice is to purchase investment securities at or near
par value to reduce the risk of premium write-offs on unexpected prepayments.
The limited credit risk in the investment portfolio at March 31, 1998 consisted
of 15.5% municipal obligations and 6.6% other stocks and securities (primarily
Federal Reserve Bank and Federal Home Loan Bank Stock).
At March 31, 1998, the Corporation had approximately $79.8 million of
structured notes, which constituted approximately 2.4% of the investment
securities portfolio. Structured notes have uncertain cash flows which are
driven by interest-rate movements and may expose a company to greater market
risk than traditional medium-term notes. All of the Corporation's investments of
this type are U. S. Government agency issues (primarily Federal Home Loan Bank
and Federal National Mortgage Association). The structured notes vary in type
but primarily include step-up bonds and index-amortizing notes. These securities
are carried in the Corporation's available for sale securities portfolio at fair
value. These securities had an unrealized gain of $111,000 at March 31, 1998.
The market risk associated with the structured notes is not considered material
to the Corporation's financial position, results of operations, or liquidity.
LOANS
Loans, net of unearned income, at March 31, 1998 were $12.7 billion
compared to $12.6 billion and $12.7 billion at March 31, 1997 and December 31,
1997, respectively. Average loans for the first quarter of 1998 were $13.1
billion, a 3.1% increase over $12.7 billion for the first quarter of 1997.
Excluding the FHA/VA government-insured/guaranteed loans, the impact of
acquisitions, and loan sales, average loans for the quarter grew approximately
6% compared to the same period in 1997. Note 3 to the unaudited interim
consolidated financial statements included in Part I. Item 1 of this report
presents the composition of the loan portfolio.
ALLOWANCE FOR LOSSES ON LOANS
The Corporation maintains the allowance for losses on loans at a level
which is believed adequate to absorb losses inherent in the loan portfolio. A
formal review is prepared quarterly to assess the risk in the portfolio and to
determine the adequacy of the allowance for losses on loans. The review includes
analyses of certain problem loans, historical loan loss experience, the level of
classified and nonperforming loans, reviews and evaluations of specific loans,
changes in the nature and volume of loans, the results of regulatory
examinations, and current economic conditions and the related impact on specific
borrowers and industry groups. The review is presented to, and approved by
senior management and a committee of the Board of Directors.
22
<PAGE> 23
The following table provides a reconciliation of the allowance for losses
on loans (the allowance) at the dates indicated and certain key ratios for the
three-month periods ended March 31, 1998 and 1997 and for the year ended
December 31, 1997.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEAR ENDED
------------------------------------- DECEMBER 31,
1998 1997 1997
---------------- ---------------- ----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
BALANCE AT THE BEGINNING OF PERIOD............................ $ 225,389 $ 189,118 $ 189,118
LOANS CHARGED OFF
Commercial, financial, and agricultural..................... 3,287 3,192 17,089
Foreign..................................................... -- -- --
Real estate - construction.................................. 1,385 49 192
Real estate - mortgage...................................... 1,233 977 5,714
Credit cards and related plans.............................. 16,330 12,946 50,070
Consumer.................................................... 5,505 5,602 25,971
Direct lease financing...................................... 4 1 30
----------- ----------- -----------
Total charge-offs................................... 27,744 22,767 99,066
----------- ----------- -----------
RECOVERIES ON LOANS PREVIOUSLY CHARGED OFF
Commercial, financial, and agricultural..................... 1,197 1,714 5,904
Foreign..................................................... -- -- 10
Real estate - construction.................................. 46 65 174
Real estate - mortgage...................................... 798 560 2,750
Credit cards and related plans.............................. 928 484 6,686
Consumer.................................................... 1,912 1,762 2,920
Direct lease financing...................................... -- 3 27
----------- ----------- -----------
Total recoveries.................................... 4,881 4,588 18,471
----------- ----------- -----------
Net charge-offs............................................... 22,863 18,179 80,595
Provision charged to expense.................................. 17,909 22,004 113,633
Increase due to acquisitions.................................. 3,402 -- 3,233
----------- ----------- -----------
BALANCE AT END OF PERIOD............................ $ 223,837 $ 192,943 $ 225,389
=========== =========== ===========
Total loans, net of unearned income, at end of period......... $12,727,659 $12,560,838 $12,658,564
Less: FHA/VA government insured/guaranteed loans.............. 1,228,769 1,592,665 1,319,553
----------- ----------- -----------
LOANS USED TO CALCULATE RATIOS...................... $11,498,890 $10,968,173 $11,339,011
=========== =========== ===========
Average total loans, net of unearned income, during period.... $13,057,231 $12,659,164 $12,706,965
Less: Average FHA/VA government-insured/guaranteed loans...... 1,274,161 1,583,016 1,487,085
----------- ----------- -----------
AVERAGE LOANS USED TO CALCULATE RATIOS.............. $11,783,070 $11,076,148 $11,219,880
=========== =========== ===========
RATIOS (1):
Allowance at end of period to loans, net of unearned income. 1.95% 1.76% 1.99%
Charge-offs to average loans, net of unearned income (2).... .96 .83 .88
Recoveries to average loans, net of unearned income (2)..... .17 .17 .16
Net charge-offs to average loans, net of unearned income (2) .79 .67 .72
Provision to average loans, net of unearned income (2)...... .62 .81 1.01
</TABLE>
- --------------------
(1) Ratio calculations exclude FHA/VA government-insured/guaranteed loans,
since they represent minimal credit risk.
(2) Amounts annualized for March 31, 1998 and 1997
The allowance at March 31, 1998, was $223.8 million, a decrease of $1.6
million from December 31, 1997, as compared to $192.9 million at March 31, 1997.
Net charge-offs for the first quarter of 1998 were $22.9 million compared to
$18.2 million and $25.5 million for the first and fourth quarters of 1997,
respectively. The majority of the increase in net charge-offs for the first
quarter of 1998 compared to the same period in 1997 relates primarily to the
credit card and other consumer loan portfolios.
23
<PAGE> 24
NONPERFORMING ASSETS
NONACCRUAL, RESTRUCTURED, AND PAST DUE LOANS AND FORECLOSED PROPERTIES
<TABLE>
<CAPTION>
MARCH 31,
------------------------------------- DECEMBER 31,
1998 1997 1997
---------------- ---------------- ----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
NONACCRUAL LOANS
Domestic.................................................... $ 91,227 $ 82,024 $ 94,488
Foreign..................................................... 51 96 96
RESTRUCTURED LOANS............................................ 1,862 10,998 10,021
----------- ----------- -----------
TOTAL NONPERFORMING LOANS........................... 93,140 93,118 104,605
----------- ----------- -----------
FORECLOSED PROPERTY
Other real estate owned, net................................ 20,862 29,935 22,059
Other foreclosed property................................... 1,805 1,834 1,993
----------- ----------- -----------
TOTAL FORECLOSED PROPERTIES......................... 22,667 31,769 24,052
----------- ----------- -----------
TOTAL NONPERFORMING ASSETS.......................... $ 115,807 $ 124,887 $ 128,657
=========== =========== ===========
LOANS 90 DAYS OR MORE PAST DUE AND NOT ON NONACCRUAL STATUS
Domestic.................................................... $ 27,119 $ 19,841 $ 24,063
Foreign..................................................... -- -- --
----------- ----------- -----------
TOTAL LOANS 90 DAYS OR MORE PAST DUE................ $ 27,119 $ 19,841 $ 24,063
=========== =========== ===========
FHA/VA GOVERNMENT-INSURED/GUARANTEED LOANS
Loans 90 days or more past due and not on nonaccrual status. $ 438,038 $ 599,723 $ 516,692
Nonaccrual.................................................. 13,606 -- 14,794
RATIOS (1):
Nonperforming loans as a percentage of loans................ .81% .85% .92%
Nonperforming assets as a percentage of loans plus foreclosed
properties.................................................. 1.01 1.14 1.13
Allowance for losses on loans as a percentage of nonperforming loans 240 207 215
Loans 90 days or more past due and not on nonaccrual status
as a percentage of loans.................................. .24 .18 .21
</TABLE>
- ------------------
(1) FHA/VA government-insured/guaranteed loans are excluded from loans in the
ratio calculations.
The breakdown of nonaccrual loans and loans 90 days or more past due and
not on nonaccrual status, both excluding FHA/VA loans, is as follows:
<TABLE>
<CAPTION>
LOANS 90 DAYS
NONACCRUAL LOANS (1) OR MORE PAST DUE (1)
---------------------------------- ---------------------------------
MARCH 31, DECEMBER 31, MARCH 31, DECEMBER 31,
LOAN TYPE 1998 1997 1998 1997
- ----------------------------------------------------- -------------- -------------- ------------- --------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Secured by single family residential.................... $ 49,093 $ 54,018 $ 2,401 $ 3,872
Secured by nonfarm nonresidential....................... 10,479 9,678 556 962
Other real estate....................................... 13,742 16,201 2,283 1,556
Commercial, financial, and agricultural,
including foreign loans and direct lease financing 12,251 8,770 6,137 1,164
Credit cards and related plans.......................... 630 -- 11,841 14,679
Other consumer.......................................... 5,083 5,917 3,901 1,830
----------- ----------- ------------ ------------
TOTAL......................................... $ 91,278 $ 94,584 $ 27,119 $ 24,063
=========== =========== ============ ============
</TABLE>
- --------------------
(1) See the preceding table for the amount of FHA/VA government-insured
guaranteed/loans on nonaccrual and 90 days or more past due and not on
nonaccrual status.
24
<PAGE> 25
LOANS OTHER THAN FHA/VA LOANS. As a percentage of loans and foreclosed
properties, nonperforming assets were 1.01% at March 31, 1998 compared to 1.14%
at March 31, 1997 and 1.13% at December 31, 1997. The coverage of nonperforming
loans (allowance for losses on loans as a percentage of nonperforming loans) was
240% at March 31, 1998, which compares to 207% at March 31, 1997 and 215% at
year end 1997.
Restructured loans decreased $8.2 million from December 31, 1997 to $1.9
million at March 31, 1998. The decline related to two loans which were removed
from restructured status since they have been and are currently paying in
accordance with contractual terms of the restructuring and had effective
interest rates, at the time of modification, equal to or greater than new loans
with comparable risk. Nonaccrual loans and the carrying value of foreclosed
properties also decreased $3.3 million and $1.4 million to $91.3 million and
$22.7 million, respectively.
Loans 90 days or more past due and still accruing interest totaled $27.1
million, or .24% of loans, at March 31, 1998. This compares to loans 90 days
past due of $24.1 million, or .21% of loans at December 31, 1997. The table
above details the composition of these loans.
FHA/VA LOANS. FHA/VA government-insured/guaranteed loans (FHA/VA loans) do
not, in management's opinion, have traditional credit risk inherent in the
balance of the loan portfolio and risk of principal loss is considered minimal.
FHA/VA loans 90 days or more past due and still accruing interest totaled $438.0
million at March 31, 1998 which compared to $516.7 million at December 31, 1998.
The decrease in past due loans relates primarily to a decline in the overall
size of the FHA/VA portfolio and to FHA loans being moved to foreclosure sooner
due to changed FHA requirements. The rate of foreclosure and loan payoffs
continues to exceed the acquisition and buyout of delinquent loans from GNMA
servicing pools. At March 31, 1998 and December 31, 1997, $13.6 million and
$14.8 million, respectively, of these loans were placed on nonaccrual status by
management because the contractual payment of interest by FHA/VA had stopped due
to missed filing dates. No loss of principal is expected from these loans.
POTENTIAL PROBLEM ASSETS
Potential problem assets consist of assets which are generally secured and
not currently considered nonperforming, but where information about possible
credit problems has caused management to have serious doubts as to the ability
of the borrowers to comply in the future with present repayment terms.
Historically, these assets have been loans which have become nonperforming. At
March 31, 1998, the Corporation had potential problem assets (all of which were
loans) of $24.6 million.
DEPOSITS
The Corporation's core deposit base is its most important and stable
funding source and consists of deposits from the communities served by the
Corporation.
<TABLE>
<CAPTION>
AVERAGE DEPOSITS
---------------------------------------------------------------------
THREE MONTHS ENDED
MARCH 31, THREE MONTHS ENDED
-------------------------------------------- DECEMBER 31,
1998 1997 1997
-------------------- -------------------- --------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Demand deposits................................... $ 2,196,359 $ 2,105,584 $ 2,306,222
Money market accounts (1)......................... 2,023,460 1,851,360 1,935,461
Savings deposits (2).............................. 2,493,585 2,582,169 2,421,726
Other time deposits (3)........................... 5,336,242 5,458,047 5,248,491
----------- ----------- -----------
Total core deposits..................... 12,049,646 11,997,160 11,911,900
Certificates of deposit of $100,000 and over...... 1,433,140 1,369,229 1,385,830
----------- ----------- -----------
Total average deposits ................. $13,482,786 $13,366,389 $13,297,730
=========== =========== ===========
</TABLE>
- --------------------
(1) Includes money market savings accounts, High Yield accounts, and super NOW
accounts.
(2) Includes regular and premium savings accounts and NOW accounts.
(3) Includes certificates of deposit under $100,000, investment savings
accounts, and other time deposits.
25
<PAGE> 26
Average deposits for the first quarter of 1998 were $13.5 billion, which
represents increases of $116.4 million and $185.1 million, respectively, from
the average deposits for the first quarter of 1997 and the fourth quarter of
1997. Small acquisitions in late 1997 and the Sho-Me Financial Corporation
acquisition January 1, 1998 increased total deposits approximately $415 million.
Also, during 1997 and the first quarter of 1998, the Corporation has sold
certain branch locations including related deposits which totaled approximately
$250 million.
LIQUIDITY
The Corporation requires liquidity sufficient to meet cash requirements
for deposit withdrawals, to make new loans and satisfy loan commitments, to take
advantage of attractive investment opportunities, and to repay borrowings at
maturity. Deposits, available for sale securities, and money market investments
are the Corporation's primary sources of liquidity. Liquidity is also achieved
through short-term borrowings, borrowings under available lines of credit, and
issuance of securities and debt instruments in the financial markets. The
Corporation has adequate liquidity to meet its operating requirements.
Parent company liquidity is achieved and maintained by dividends received
from subsidiaries, interest on advances to subsidiaries, and interest on its
available for sale investment securities portfolio. At March 31, 1998, the
parent company had cash and cash equivalents totaling $322.1 million and net
working capital of $379.0 million. At April 1, 1998, the Corporation's banking
subsidiaries could have paid dividends totaling $172.4 million without prior
regulatory approval. The actual amount of dividends that will be paid in the
second quarter of 1998 will be limited by management to approximately $44.0
million due to capital and liquidity requirements of individual financial
institutions. The payment of additional dividends by the Corporation's
subsidiaries will be dependent on the future earnings and growth of the
subsidiaries. Management believes that the parent company has adequate liquidity
to meet its cash needs, including the payment of its regular dividends,
servicing of its debt, and cash needed for acquisitions.
SHAREHOLDERS' EQUITY
The Corporation's total shareholders' equity increased by $62.6 million
from December 31, 1997 to $1.8 billion at March 31, 1998. The increase was due
to retained net earnings of $32.0 million and common stock issued in connection
with benefit plans and acquisitions of $77.6 million which was partially offset
by the repurchase of $38.8 million common stock in connection with the Sho-Me
acquisition and by the net change in the unrealized gain on available for sale
securities which reduced shareholders' equity $8.2 million.
CAPITAL ADEQUACY
The following table presents capital adequacy information for the Corporation:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------------------- DECEMBER 31,
1998 1997 1997
--------------- -------------- ---------------
CAPITAL ADEQUACY DATA
<S> <C> <C> <C>
Total shareholders' equity/total assets (at period end).............. 9.83% 9.21% 9.65%
Average shareholders' equity/average total assets.................... 9.78 8.96 9.40
Tier 1 capital/unweighted average assets (leverage ratio) (1)........ 10.72 10.05 10.48
Dividend payout ratio................................................ 57.03 37.71 54.96
</TABLE>
- --------------------
(1) Based on period-end capital and quarterly adjusted average assets.
26
<PAGE> 27
The following table presents the Corporation's risk-based capital and
capital adequacy ratios. The Corporation's regulatory capital ratios qualify the
Corporation for the "well-capitalized" regulatory classification.
RISK-BASED CAPITAL
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
------------------------------------- DECEMBER 31,
1998 1997 1997
---------------- ---------------- ----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
TIER 1 CAPITAL
Shareholders' equity............................................. $ 1,809,442 $ 1,663,363 $ 1,746,866
Trust Preferred Securities and minority interest in consolidated 216,433 212,079 214,460
subsidiaries.....................................................
Less: Goodwill and other intangibles............................ (71,954) (53,290) (44,570)
Disallowed deferred tax asset............................. (1,415) (1,777) (1,601)
Unrealized gain on available for sale securities.......... (30,508) (14,226) (38,729)
----------- ----------- -----------
TOTAL TIER 1 CAPITAL 1,921,998 1,806,149 1,876,426
TIER 2 CAPITAL
Allowance for losses on loans ................................... 154,265 152,269 152,177
Qualifying long-term debt........................................ 476,116 174,149 174,232
----------- ----------- -----------
TOTAL CAPITAL BEFORE DEDUCTIONS.......................... 2,552,379 2,132,567 2,202,835
Less investment in unconsolidated subsidiaries................... (10,752) (2,207) (10,628)
------------ ----------- -----------
TOTAL CAPITAL............................................ $ 2,541,627 $ 2,130,360 $ 2,192,207
=========== =========== ===========
RISK-WEIGHTED ASSETS............................................... $12,271,662 $12,136,529 $12,100,939
=========== =========== ===========
RATIOS AS A PERCENT OF END OF PERIOD RISK-WEIGHTED ASSETS..........
Tier 1 capital................................................... 15.66% 14.88% 15.51%
Total capital.................................................... 20.71 17.55 18.12
</TABLE>
At March 31, 1998, total shareholders' equity was 9.83% of total assets
and the leverage ratio was 10.72% compared to 9.65% and 10.48%, respectively, at
December 31, 1997. The improvement in the Tier I capital ratio and leverage
ratio is attributable primarily to the Corporation's retained net earnings. The
increase in the total capital to risk-weighted assets ratio is primarily
attributable to the issuance, by UPB, of $300 million of 6.5% Putable/Callable
Subordinated Notes, due March 15, 2018, putable or callable on March 15, 2008,
which qualify as Tier II capital for regulatory purposes. Reference is made to
Note 8 to the interim consolidated financial statements included in Part I. Item
1 of this report for additional information regarding these subordinated notes.
YEAR 2000 RISK FACTORS
The 1997 Annual Report contained a discussion of the potential problems
that may occur related to the "Year 2000," the Corporation's plans to address
"Year 2000" problems, and the estimated costs for the Corporation to become
"Year 2000" compliant. The estimated costs disclosed did not include computer
equipment that is scheduled to be replaced in the normal course of business. The
Corporation is currently on schedule to be fully compliant and tested by
December 31, 1998 as is discussed in the 1997 Annual Report. With the number of
pending acquisitions, it is expected that either the Corporation or the target
acquisition will incur additional costs in excess of the Corporation's
originally estimated costs to become "Year 2000" compliant. The amount of those
costs cannot be estimated at this time; however they are not expected to be
material to the Corporation's results of operation or financial condition.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ASSET LIABILITY AND MARKET RISK MANAGEMENT
The Corporation's assets and liabilities are principally financial in
nature and the resulting earnings thereon, primarily net interest income, are
subject to changes as a result of changes in market interest rates and the mix
of the various assets and liabilities. Interest rates in the financial markets
affect the Corporation's decisions on pricing its assets and liabilities which
impacts net interest income, the Corporation's primary cash flow stream. As a
result, a substantial part of the Corporation's risk management activities is
devoted to managing interest-rate risk. Currently, the Corporation does not have
any significant risks related to foreign exchange, commodities or equity risk
exposure.
27
<PAGE> 28
INTEREST-RATE RISK. One of the most important aspects of management's efforts to
sustain long-term profitability for the Corporation is the management of
interest-rate risk. Management's goal is to maximize net interest income within
acceptable levels of interest-rate risk and liquidity. To achieve this goal, a
proper balance must be maintained between assets and liabilities with respect to
size, maturity, repricing date, rate of return, and degree of risk. Reference is
made to the "Investment Securities," "Loans," and "Other Earning Assets"
discussions in the 1997 Annual Report and in this discussion for additional
information regarding risks related to these items.
The Corporation's Funds Management Committee oversees the conduct of
global asset/liability management. The Committee reviews the asset/liability
structure and interest-rate risk monthly for the lead bank and quarterly for the
Corporation's other subsidiaries.
The Corporation uses interest-rate sensitivity (GAP) analysis to monitor
the amounts and timing of balances exposed to changes in interest rates, as
shown in the following table. The analysis presented has been made at a point in
time and could change significantly on a daily basis. The GAP Report is not
relied upon exclusively to evaluate the impact of, or predict how the
Corporation is positioned to react to, changing interest rates. Other methods
such as simulation analysis are also considered in evaluating the Corporation's
interest-rate risk. Key assumptions in the simulation analysis include
prepayment speeds on mortgage-related assets, cash flows and maturities of
financial instruments held for purposes other than trading, changes in volumes
and pricing, deposit sensitivity, and management's financial capital plan. These
assumptions are inherently uncertain and, as a result, the simulation cannot
precisely estimate net interest income or precisely predict the impact of higher
or lower interest rates on net interest income. Actual results will differ from
simulated results due to timing, magnitude, and frequency of interest rate
changes and changes in market conditions and management strategies, among
others.
At March 31, 1998, the GAP analysis indicated that the Corporation was
asset sensitive with $902 million more assets than liabilities repricing within
one year. At 5% of total assets, this position was within management's policy
limit of 10% of total assets.
Balance sheet simulation analysis has been conducted at March 31, 1998 to
determine the impact on net interest income for the coming twelve months under
several interest-rate scenarios. One such scenario uses rates at March 31, 1998,
and holds the rates and volumes constant for simulation. When this position is
subjected to immediate and parallel shifts in interest rates ("rate shocks") of
200 basis points rising and 200 basis points falling, the annual impact on the
Corporation's net interest income is a positive $30 million and a negative $40
million pretax, respectively. Another simulation uses management's conclusions
as to a "most likely" scenario of interest rates remaining constant until the
latter part of 1998 and then gradually declining 50 basis points resulting in a
$2 million pretax decrease in net interest income from the constant rate/volume
projection. These scenarios are consistent with the Corporation's policy of
limiting the projected impact on net interest income of changes in interest
rates to 5% of shareholders' equity.
28
<PAGE> 29
UNION PLANTERS CORPORATION AND SUBSIDIARIES
RATE SENSITIVITY ANALYSIS AT MARCH 31, 1998
<TABLE>
<CAPTION>
INTEREST-SENSITIVE WITHIN (1) AND (7)
--------------------------------------------------------------------------------------------
NON-
0-90 91-365 1-3 3-5 5-15 OVER 15 INTEREST-
DAYS DAYS YEARS YEARS YEARS YEARS BEARING TOTAL
-------- -------- -------- -------- -------- -------- -------- --------
(DOLLARS IN MILLIONS)
ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Loans and leases(2)(3)(4).......... $4,938 $2,937 $2,732 $1,331 $ 481 $ 12 $ 324 $12,755
Investment securities(5)(6)........ 762 417 803 427 730 149 -- 3,288
Other earning assets............... 678 67 1 -- -- -- -- 746
Other assets....................... -- -- -- -- -- -- 1,625 1,625
------ ------ ------ ------ ------ ------ ------- -------
Total Assets............... $6,378 $3,421 $3,536 $1,758 $1,211 $ 161 $ 1,949 $18,414
====== ====== ====== ====== ====== ====== ======= =======
SOURCES OF FUNDS
Money market deposits(7)(8)........ $ 656 $ 656 $ 875 $ -- $ -- $ -- $ -- $2,187
Other savings and time deposits.... 2,159 2,659 1,699 186 974 9 -- 7,686
Certificates of deposit of
$100,000 and over................ 492 720 173 31 1 1 -- 1,418
Short-term borrowings.............. 440 2 -- -- -- -- -- 442
Short- and medium-term bank notes.. -- 30 85 20 -- -- -- 135
Federal Home Loan Bank advances.... 734 11 30 22 49 -- -- 846
Other long-term debt............... 331 7 -- 10 675 -- -- 1,023
Noninterest-bearing deposits....... -- -- -- -- -- -- 2,291 2,291
Other liabilities.................. -- -- -- -- -- -- 577 577
Shareholders' equity............... -- -- -- -- -- -- 1,809 1,809
------ ------ ------ ------ ------ ------ ------- -------
Total sources of funds $4,812 $4,085 $2,862 $ 269 $1,699 $ 10 $ 4,677 $18,414
====== ====== ====== ====== ====== ====== ======= =======
Interest-rate sensitivity gap $1,566 $ (664) $ 674 $1,489 $ (488) $ 151 $(2,728)
Cumulative interest-rate
sensitivity gap(8)............... 1,566 902 1,576 3,065 2,577 2,728 --
Cumulative gap as a percentage
of total assets(R) 9% 5% 9% 17% 14% 15% --
- --------------------
</TABLE>
Management has made the following assumptions in presenting the above analysis:
(1) Assets and liabilities are generally scheduled according to their earliest
repricing dates regardless of their contractual maturities.
(2) Nonaccrual loans and accounts receivable-factoring are included in the
noninterest-bearing category.
(3) Fixed-rate mortgage loan maturities are estimated based on the currently
prevailing principal-prepayment patterns of comparable mortgage-backed
securities.
(4) Delinquent FHA/VA loans are scheduled based on foreclosure and repayment
patterns.
(5) The scheduled maturities of mortgage-backed securities and CMOs assume
principal prepayment of these securities on dates estimated by management,
relying primarily upon current and consensus interest-rate forecasts in
conjunction with the latest three-month historical prepayment schedules.
(6) Securities are generally scheduled according to their call dates when
valued at a premium to par.
(7) Money market deposits and savings deposits that have no contractual
maturities are scheduled according to management's best estimate of their
repricing in response to changes in market rates. The impact of changes in
market rates would be expected to vary by product type and market.
(8) If all money market, NOW, and savings deposits had been included in the
0-90 Days category above, the cumulative gap as a percentage of total
assets would have been negative (8%) and (8%) for the 0-90 Days and 91-365
Days categories and positive 4%, 12%, 15%, and 15%, respectively, for the
1-3 Years, 3-5 Years, 5-15 Years, and over 15 Years categories at March
31, 1998.
29
<PAGE> 30
PART II -- OTHER INFORMATION
ITEM 1 -- LEGAL PROCEEDINGS
During the period covered by this report, there have been no new material
legal proceedings or material developments in pending material litigation to
which the Corporation or any of its subsidiaries is a party or of which any of
their property is subject, other than ordinary routine litigation incidental to
their business. Information concerning legal proceedings is contained in Item 3,
Part I of the Corporation's 1997 Form 10-K , Note 19 to the Corporation's
consolidated financial statements on page 71 of the 1997 Annual Report, and Note
10 to the Corporation's unaudited interim consolidated financial statements
included herein under Item 1 of Part I.
ITEM 2 -- CHANGES IN SECURITIES
(a) Following the receipt of shareholder approval at the annual meeting of
shareholders of the Corporation held April 16, 1998, the Corporation amended its
charter to increase the number of shares of common stock the Corporation is
authorized to issue from 100 million shares to 300 million shares. The charter
amendment did not otherwise affect the rights of holders of the Corporation's
common stock.
ITEM 3 -- DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5 -- OTHER INFORMATION
None
ITEM 6 -- EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
2(a) Agreement and Plan of Reorganization By and Between Magna
Group, Inc. and Union Planters Corporation, dated as of
February 22, 1998 (incorporated by reference to Appendix A
to the Corporation's Registration Statement on Form S-4
filed with the Securities and Exchange Commission on April
7, 1998, Registration Statement No. 333-49617)
2(b) Agreement and Plan of Reorganization dated March 31, 1998,
between Union Planters Corporation and AMBANC Corp.
(incorporated by reference to Exhibit 1 to Schedule
13D, dated March 31, 1998, filed by Union Planters
Corporation (Commission File No. 1-10160) with respect to
the common stock of AMBANC Corp. (Commission File No.
0-10710) )
3(a) Restated Charter of Incorporation, as most recently amended
on April 16, 1998 (filed herewith)
4(a) All instruments defining the rights of the holders of the
Union Planters Bank, National Association 6.50%
Putable/Callable Subordinated Notes Due March 15, 2018,
putable or callable on March 15, 2008 which instruments are
not being filed herewith in reliance upon item
601(b)(4)(iii)(A) of Regulation S-K and the related
AGREEMENT PURSUANT TO ITEM 601(b)(4)(iii)(A) and 601 (b)
(4) (v) OF REGULATION S-K dated May 8, 1998 of Union
Planters Corporation filed with the Commission, a copy of
which is Exhibit 4(b) hereto
30
<PAGE> 31
4(b) Copy of Registrant's AGREEMENT PURSUANT TO ITEM 601(b)(4)
(iii)(A) OF REGULATION S-K dated May 8, 1998 (filed
herewith)
11 Computation of Per Share Earnings (incorporated by
reference to Note 11 to the Corporation's unaudited interim
consolidated financial statements included herein)
27 Financial Data Schedule (for SEC use only)
b) Reports on Form 8-K:
<TABLE>
<CAPTION>
Date of Current Report. Subject
- -------------------------------- ---------------------------
<S> <C>
1. January 15, 1998 Press release announcing year ended
December 31, 1997 net earnings, reported
under Item 5
2. February 23, 1998 Announcement of definitive agreement to
acquire Magna Group, Inc., reported under
Item 5
3. April 16, 1998 Press release announcing first quarter 1998
net earnings, reported under Item 5
</TABLE>
31
<PAGE> 32
SIGNATURES
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 thereunto duly authorized.
UNION PLANTERS CORPORATION
-------------------------------
(Registrant)
Date: May 8, 1988
-----------
By: /s/ Benjamin W. Rawlins, Jr.
--------------------------------------
Benjamin W. Rawlins, Jr.
Chairman and Chief Executive Officer
By: /s/ John W. Parker
--------------------------------------
John W. Parker
Executive Vice President and
Chief Financial Officer
By: /s/ M. Kirk Walters
--------------------------------------
M. Kirk Walters
Senior Vice President, Treasurer,
and Chief Accounting Officer
32
<PAGE> 33
UNION PLANTERS CORPORATION
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ------------------- ------------------------------------------------
<S> <C>
2(a) Agreement and Plan of Reorganization By and Between
Magna Group, Inc. and Union Planters Corporation dated
as of February 22, 1998 (incorporated by reference to
Appendix A to the Corporation's Registration Statement
on Form S-4 filed with the Securities and Exchange
Commission on April 7, 1998, Registration Statement No.
333-49617)
2(b) Agreement and Plan of Reorganization dated March 31,
1998, between Union Planters Corporation and AMBANC
Corp.(incorporated by reference to Exhibit 1 to Schedule
13D, dated March 31, 1998, filed by Union Planters
Corporation (Commission File No. 1-10160) with respect
to the common stock of AMBANC Corp. (Commission File No.
0-10710) )
3(a) Restated Charter of Incorporation, as most recently
amended on April 16, 1998 (filed herewith)
4(a) All instruments defining the rights of the holders of
the Union Planters Bank, National Association 6.50%
Putable/Callable Subordinated Notes Due March 15, 2018,
putable or callable on March 15,2008 which instruments
are not being filed herewith in reliance upon item
601(b)(4)(iii)(A) of Regulation S-K and the related
AGREEMENT PURSUANT TO ITEM 601(b)(4)(iii)(A) and 601 (b)
(4) (v) OF REGULATION S-K dated May 8, 1998 of Union
Planters Corporation filed with the Commission, a copy
of which is Exhibit 4(b) hereto
4(b) Copy of Registrant's AGREEMENT PURSUANT TO ITEM 601(b)
(4)(iii)(A) OF REGULATION S-K dated May 8, 1998 (filed
herewith)
11 Computation of Per Share Earnings (incorporated by
reference to Note 11 to the Corporation's unaudited
interim consolidated financial statements included
herein)
27 Financial Data Schedule (for SEC use only)
</TABLE>
<PAGE> 1
Exhibit 3(a)
Amended and Restated Charter
of
Union Planters Corporation
<PAGE> 2
AMENDED AND RESTATED CHARTER
OF
UNION PLANTERS CORPORATION
--------------------------
FIRST: CORPORATE NAME:
The name of the Corporation is:
* * * UNION PLANTERS CORPORATION * * *
(hereinafter sometimes referred to as the "Corporation").
SECOND: DURATION:
The duration of the Corporation is perpetual.
THIRD: PRINCIPAL OFFICE:
The address of the principal office of the Corporation in the State of
Tennessee shall be 7130 Goodlett Farms Parkway, in the City of Cordova, County
of Shelby. The registered agent is E. James House, Jr., 7130 Goodlett Farms
Parkway, Cordova, Shelby County, Tennessee 38018.
FOURTH: TYPE OF CORPORATION:
The corporation is for profit.
FIFTH: CORPORATE PURPOSES:
Subject to any limitations which may be imposed upon its activities by
applicable law, the Corporation is formed to engage in any lawful act or
activity for which corporations may be organized under the Tennessee Business
Corporation Act. Specifically, but not by way of limitation, the Corporation is
formed for the following purposes:
(a) To acquire by purchase; by subscription; by exchange; in exchange for
its Common Stock, Preferred Stock, bonds, debentures or other obligations; or to
acquire in any other manner; or to organize de novo; and to take, receive, hold,
own, sell, assign, transfer, exchange, pledge, hypothecate, dispose of or
otherwise deal with any interest in any business whether or not represented by
shares of stock, shares, bonds, debentures, notes, participation certificates,
warrants, rights, options, and without limitation any securities or instruments
evidencing rights or options to receive, purchase or subscribe for any interest
in any business (wherever located or organized) or any securities, whether
issued by or created by any person, firm, association, corporation, national
banking association, state-chartered bank, trust company, savings bank, business
trust, syndicate, limited partnership, organization, or by any other entity; and
to possess and exercise in respect thereof any and all of the rights, powers and
privileges of owners or holders who are natural persons including, without
limitation, the exercise of any voting rights pertaining thereto;
(b) To purchase or otherwise acquire any property, tangible or intangible,
whether real, personal or mixed and wherever located and to receive, hold,
manage, use, dispose of and otherwise exercise all rights, powers and privileges
of ownership thereof;
(c) To promote, finance, advise, counsel and assist in any way, any person
or any business entity in which the Corporation shall have any interest of any
kind;
(d) To do all things necessary or desirable to enhance the value of or to
protect or preserve the interest of the Corporation in any business entity,
securities or other property of any type which it may own or in which it may
have any interest of any kind; and
(e) To render assistance, counsel and advice to any person or entity and
to serve or represent the same in any capacity whatsoever, whether or not the
Corporation shall have any ownership interest in such person or entity.
SIXTH: CAPITAL STOCK:
The total number of shares of all classes of stock to which the
Corporation shall have authority to issue is hundred and ten million
(110,000,000) shares, which shall be divided into two classes as follows: ten
million (10,000,000) shares of Preferred Stock without par value (Preferred
Stock) and three hundred million (300,000,000) shares of Common Stock of the par
value of $5.00 per share (Common Stock). The designations, voting powers,
preferences and relative, participating, optional or other special rights and
qualifications, limitations or restrictions of the above classes of stock and
other general provisions relating thereto shall be as follows:
PREFERRED STOCK
(a) Shares of Preferred Stock may be issued in one or more series at such
time or times and for such consideration or considerations as the Board of
Directors may determine. All shares of any one series shall be of equal rank and
identical in all respects except the dates from which dividends accrue or
accumulate with respect thereto may vary.
Page 1 of Union Planters Corporation Charter
<PAGE> 3
(b) The Board of Directors is expressly authorized at any time, and from
time to time, to provide for the issuance of shares of Preferred Stock in one or
more series, with such voting powers, full or limited, but not to exceed one
vote per share, or without voting powers and with such designations, preferences
and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, as shall be stated and
expressed in the resolution or resolutions providing for the issuance thereof
adopted by the Board of Directors, and as are not stated and expressed in this
Charter, or any Amendment thereto, including, (but without limiting the
generality of the foregoing) the following:
(1) The distinctive designation and number of shares comprising such
series, which number may (except where otherwise provided by the Board of
Directors in creating such series) be increased or decreased (but not below the
number of shares then outstanding) from time to time by action of the Board of
Directors;
(2) The dividend rate or rates on the shares of such series and the
relation which such dividends shall bear to the dividends payable on any other
class or classes of capital stock; the terms and conditions upon which and the
periods in respect of which dividends shall be payable; whether and upon what
conditions such dividends shall be cumulative, non-cumulative or partially
cumulative and, if cumulative or partially cumulative, the date or dates from
which dividends shall accumulate;
(3) Whether the shares of such series shall be callable or
redeemable, the limitations and restrictions with respect to such call or
redemption, the time or times when, the price or prices at which, and the manner
in which such shares shall be callable or redeemable, including the manner of
selecting shares of such series for call or redemption if less than all shares
are to be called or redeemed;
(4) The amount payable upon shares of such series upon the voluntary
or involuntary liquidation, dissolution, distribution of assets or winding up of
the Corporation;
(5) Whether the shares of such series shall be subject to the
operation of a purchase, retirement or sinking fund, and, if so, whether and
upon what conditions such purchase, retirement sinking fund shall be cumulative,
partially cumulative or non-cumulative, the extent to which and the manner in
which such fund shall be applied to the purchase, call or redemption of the
shares or such series for retirement or to other corporate purposes and the
terms and provisions relative to the operation thereof;
(6) Whether the shares of such series shall be convertible into or
exchangeable for shares of any other class or classes or of any other series of
any class or classes of capital stock of the Corporation, and, if so convertible
or exchangeable, the price or prices or the rate or rates of conversion or
exchange, and the method, if any, of adjusting the same, and any other terms and
conditions of such conversion or exchange, provided, however, that no shares of
any such series shall be convertible into shares of any other class or series
having prior or superior rights and preferences as to dividends or distributions
of assets upon liquidation, and provided further that shares without par value
shall not be convertible into shares with par value unless that part of the
stated capital of the Corporation represented by such shares without par value
is, at the time of conversion, at least equal to the aggregate par value of the
shares into which the shares without par value are to be converted;
(7) The voting powers, full and/or limited, if any, of the shares of
such series; and whether and under what conditions the shares of such series
(alone or together with the shares of one or more other series having similar
provisions) shall be entitled to vote separately as a single class, for the
election of one or more additional directors of the Corporation in case of
dividend arrearage or other specified events, or upon other specified matters;
(8) Whether the issuance of any additional shares of such series, or
of any shares of any other series, shall be subject to restrictions as to
issuance, or as to the powers, preferences or rights of any such other series;
and
(9) Any other preferences, privileges and powers, and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions of such series, as the Board of Directors may deem advisable and
as shall be consistent with the provisions of the laws of the State of Tennessee
and of this Charter.
(c) No dividends shall be paid or declared or set apart on any particular
series of Preferred Stock in respect of any period unless accumulated dividends
shall be or shall have been paid, or declared and set apart for payment, pro
rata on all shares of Preferred Stock at the time outstanding of each other
series, so that the amount of dividends declared on such particular series shall
bear the same ratio to the amount declared on each such other series as the
dividend rate of such particular series shall bear to the dividend rate of such
other series.
(d) Unless and except to the extent otherwise required by law or provided
in the resolution or resolutions of the Board of Directors creating any series
of Preferred Stock pursuant to this ARTICLE SIXTH, the holders of the Preferred
Stock shall have no voting power with respect to any matter whatsoever.
(e) Shares of Preferred Stock called, redeemed, converted, exchanged,
purchased, retired or surrendered to the Corporation, or which have been issued
and reacquired in any manner, shall, upon compliance with any applicable
provisions of the Tennessee Business Corporation Act, have the status of
authorized and unissued shares of Preferred Stock and may be reissued by the
Board of Directors as part of the series of which they were originally a part or
may be reclassified into and reissued as part of a new series or as a part of
any other series, all subject to the protective conditions or restrictions of
any outstanding series of Preferred Stock.
SERIES A PREFERRED STOCK
(f) Pursuant to the authority vested in the Board of Directors in
accordance with the provisions of this ARTICLE SIXTH of the Charter, the Board
of Directors does hereby create, authorize and provide for the issuance of
Series A Preferred Stock out of the class of 10,000,000 shares of preferred
stock, no par value (the "Preferred Stock"), having the voting powers,
designation, relative, participating, optional and other special rights,
preferences, and qualifications, limitations and restrictions thereof that are
set forth as follows:
(1) Designation and Amount. The shares of such series shall be
designated as Series A Preferred Stock ("Series A Preferred Stock") and
Page 2 of Union Planters Corporation Charter
<PAGE> 4
the number of shares constituting such series shall be 750,000. Such number of
shares may be adjusted by appropriate action of the Board of Directors.
(2) Dividends and Distributions.
(a) Subject to the prior and superior rights of the holders of
any shares of any other series of Preferred Stock or any other shares of
preferred stock of the Corporation ranking prior and superior to the shares of
Series A Preferred Stock with respect to dividends, each holder of one
one-hundredth (1/100) of a share (a "Unit") of Series A Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for that purpose, (i) dividends payable in cash on the
1st day of January, April, July and October in each year (each such date being a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of such Unit of Series A Preferred Stock,
in an amount per Unit (rounded to the nearest cent) equal to the greater of (x)
$.01 or (y) subject to the provision for adjustment hereinafter set forth, the
aggregate per share amount of all cash dividends declared on shares of the
common stock of the Corporation, par value $5.00 per share, (the "Common Stock")
since the immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of a Unit of Series A Preferred Stock, and (ii) subject to the provision for
adjustment hereinafter set forth, quarterly distributions (payable in kind) on
each Quarterly Dividend Payment Date in an amount per Unit equal to the
aggregate per share amount of all non-cash dividends or other distributions
(other than a dividend payable in shares of Common Stock or a subdivision of the
outstanding share of Common Stock, by reclassification or otherwise) declared on
shares of Common Stock since the immediately preceding Quarterly Dividend
Payment Date, or with respect to the first Quarterly Dividend Payment Date,
since the first issuance of a Unit of Series A Preferred Stock. In the event
that the Corporation shall at any time after January 19, 1989 (the "Rights
Declaration Date") (i) declare or pay any dividend on outstanding shares of
Common Stock payable in shares of Common Stock, or (ii) subdivide outstanding
shares of Common Stock or (iii) combine outstanding shares of Common Stock into
a smaller number of shares, then in each such case the amount to which the
holder of a Unit of Series A Preferred Stock was entitled immediately prior to
such event pursuant to the preceding sentence shall be adjusted by multiplying
such amount of a fraction the numerator of which shall be the number of shares
of Common Stock that are outstanding immediately after such event and the
denominator of which shall be the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution on
Units of Series A Preferred Stock as provided in paragraph (a) above immediately
after it declares a dividend or distribution on the shares of Common Stock
(other than a dividend payable in shares of Common Stock); provided, however
that, in the event no dividend or distribution shall have been declared on the
Common Stock during the period between any Quarterly Dividend Payment Date and
the next subsequent Quarterly Dividend payment Date, a dividend of $.01 per Unit
on the Series A Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and shall be cumulative on
each outstanding Unit of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issuance of such Unit of Series A
Preferred Stock, unless the date of issuance of such Unit is prior to the record
date for the First Quarterly Dividend Payment Date, in which case, dividends on
such Unit shall begin to accrue from the date of issuance of such Unit, or
unless the date of issuance is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of Units of Series A
Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on Units of
Series A Preferred Stock in an amount less than the aggregate amount of all such
dividends at the time accrued and payable on such Units shall be allocated pro
rata on a unit-by-unit basis amount all Units of Series A Preferred Stock at the
time outstanding. The Board of Directors may fix a record date for the
determination of holders of Units of Series A Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be no more than 30 days prior to the date fixed for the payment
thereof.
(3) Voting Rights. The holders of Units of Series A Preferred Stock
shall have the following voting rights.
(a) Subject to the provision for adjustment hereinafter set
forth, each Unit of Series A Preferred Stock shall entitle the holder thereof to
one vote on all matters submitted to a vote of the shareholders of the
Corporation. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide outstanding shares of Common
Stock or (iii) combine the outstanding shares of Common Stock into a smaller
number of shares, then in each such case the number of votes per Unit to which
holders of Units of Series A Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying such number by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately after such event and the denominator of which shall be the number of
shares of Common Stock that were outstanding immediately prior to such event.
(b) Except as otherwise provided herein or by law, the holders
of Units of Series A Preferred Stock and the holders of shares of Common Stock
shall vote together as one class on all matters submitted to a vote of
shareholders of the Corporation.
(c) Except as set forth herein or required by law, holders of
Units of Series A Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of shares of Common Stock as set forth herein) for the taking of
any corporate action.
(4) Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or
distributions payable on Units of Series A Preferred Stock as provided in
paragraph 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on outstanding Units of
Series A Preferred Stock shall have been paid (or set aside for payment) in
full, the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions or redee or purchase or otherwise acquire for consideration any
shares of stock ranking junior to the Series A Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity as to dividends with
the Series A Preferred Stock, except for dividends paid ratably on Units of
Series A Preferred Stock and shares of all such parity stock on which dividends
are payable or in arrears in proportion to the total amounts to which the
holders of such Units and all such shares are then entitled;
Page 3 of Union Planters Corporation Charter
<PAGE> 5
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Preferred Stock,
provided, however, that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in exchange for shares of any
stock ranking junior (both as to dividends and upon liquidation, dissolution or
winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
Units of Series A Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board of Directors) to
all holders of such Units.
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (a) of
this paragraph 4, purchase or otherwise acquire such shares at such time and in
such manner.
(5) Reacquired Shares. Any Units of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
Units shall, upon their cancellation, become authorized but unissued Units of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
to be created by resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein.
(6) Liquidation, Dissolution or Winding Up.
(a) Upon any voluntary or involuntary liquidation, dissolution
or winding up of the Corporation, no distribution shall be made (i) to the
holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock unless
the holders of Units of Series A Preferred Stock shall have received, subject to
adjustment as hereinafter provided in paragraph (b), the greater of either (y)
$90.00 per Unit plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not earned or declared, to the date of such
payment, or (z) the amount equal to the aggregate per share amount to be
distributed to holders of shares of Common Stock, or (ii) to the holders of
shares of stock ranking on a parity upon liquidation, dissolution or winding up
with the Series A Preferred Stock, unless simultaneously therewith distributions
are made ratably on Units of Series A Preferred Stock and all other shares of
such parity stock in proportion to the total amounts to which the holders of
Units of Series A Preferred Stock are entitled under Clause (i)(y) of this
sentence and to which the holders of such shares of such parity stock are
entitled, in each case upon such liquidation dissolution or winding up.
(b) in the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on outstanding shares of Common
Stock payable in shares of Common Stock, or (ii) subdivide outstanding shares of
Common Stock, or (iii) combine outstanding shares of Common Stock into a smaller
number of shares, then in each such case the aggregate amount to which holders
of Units of Series A Preferred Stock were entitled immediately prior to such
event pursuant to clause (i)(z) of paragraph (1) of this paragraph 6 shall be
adjusted by multiplying such amount by a fraction the numerator of which shall
be the number of shares of Common Stock that are outstanding immediately after
such event and the denominator of which shall be the number of shares of Common
Stock that were outstanding immediately prior to such event.
(7) Share Exchange, Merger, Etc. In case the Corporation shall enter
into any share exchange, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or converted into other stock or
securities, cash and/or any other property, then in any such case Units of
Series A Preferred Stock shall at the same time be similarly exchanged for or
converted into an amount per Unit (subject to the provision for adjustment
hereinafter set forth) equal to the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be, into which or
for which each share of Common Stock is converted or exchanged. In the event the
Corporation shall at any time after the Rights Declaration Date (i) declare any
dividend on outstanding shares of Common Stock payable in shares of Common
Stock, or (ii) subdivide outstanding shares of Common Stock, or (iii) combine
outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the immediately preceding sentence with respect to the
exchange or conversion of shares of Series A Preferred Stock shall be adjusted
by multiplying such amount by a fraction the numerator of which shall be the
number of shares of Common Stock that are outstanding immediately after such
event and the denominator of which shall be the number of shares of Common Stock
that were outstanding immediately prior to such event.
(8) Redemption. The Units of Series A Preferred Stock shall not be
redeemable at the option of the Corporation or any holder thereof.
Notwithstanding the foregoing sentence of this Section, the Corporation may
acquire Units of Series A Preferred Stock in any other manner permitted by law
and the Charter or Bylaws of the Corporation.
(9) Ranking. The Units of Series A Preferred Stock shall rank junior
to all other series of the Preferred Stock and to any other class of preferred
stock that hereafter may be issued by the Corporation as to the payment of
dividends and the distribution of assets, unless the terms of any such series or
class shall provide otherwise.
(10) Amendment. The Charter, including without limitation the
provisions hereof, shall not hereafter be amended, either directly or
indirectly, or through merger or share exchange with another corporation, in any
manner that would alter or change the powers, preferences or special rights of
the Series A Preferred Stock so as to affect the holders thereof adversely
without the affirmative vote of the holders of a majority or more of the
outstanding Units of Series A Preferred Stock, voting separately as a class.
(11) Fractional Shares. The Series A Preferred Stock may be issued in
Units or other fractions of a share, which Units or fractions shall entitle the
holder, in proportion to such holder's fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have the benefit
of all other rights of holders of Series A Preferred Stock.
SERIES B PREFERRED STOCK
(g) Pursuant to the authority vested in the Board of Directors in
accordance with the provisions of this Article VI of the Charter, the Board of
Directors of Union Planters Corporation (the "Corporation") does hereby create,
authorize and provide for the issuance of a new series of preferred stock out of
the authorized class of 10,000,000 shares of preferred stock, no par value (the
"Preferred Stock"), having the voting powers, designations, relative
participating, optional and other special rights, preferences, qualifications,
limitations and restrictions thereof that are set forth as follows:
Page 4 of Union Planters Corporation Charter
<PAGE> 6
1. Designation and Amount. The shares of such series shall be
designated as Series B $8.00 Nonredeemable Cumulative Convertible Preferred
Stock (the "Series B Preferred Stock") and the number of shares constituting
such series shall be 44,000. Such number of shares may be adjusted by
appropriate action of this Board of Directors.
2. Dividends and Distributions.
(a) Subject to the prior and superior rights of the holders of
any shares of any other series of Preferred Stock of the Corporation ranking
prior and superior to the shares of Series B Preferred Stock with respect to
dividends, the holders of the Series B Preferred Stock, in preference to the
holders of the $5.00 par value common stock of the Corporation (the "UPC Common
Stock"), and any other capital stock of the Corporation ("Capital Stock")
ranking junior to the Series B Preferred Stock as to the payment of dividends,
shall be entitled to receive as and if declared by the Board of Directors out of
funds legally available for that purpose, cumulative cash dividends at, but not
exceeding, $8.00 per share per annum and no more.
(b) Dividends upon shares of Series B Preferred Stock shall be
cumulative so that if in respect of any past quarterly dividend period or
periods, full dividends accrued on the outstanding shares of Series B Preferred
Stock shall not have been paid, the aggregate deficiency shall be fully paid or
declared or set aside for payment before (i) any dividend shall be declared and
paid or set aside for payment on UPC Common Stock, or any other Capital Stock
ranking junior to the Series B Preferred Stock as to the payment of dividends,
(ii) any other distribution of assets shall be made with respect to UPC Common
Stock or any other Capital Stock ranking junior to the Series B Preferred Stock
as to the payment of dividends, and (iii) the redemption or purchase of any
shares of Series B Preferred Stock, UPC Common Stock, or any other Capital Stock
ranking on a parity with or junior to the Series B Preferred Stock as to the
payment of dividends by the Corporation.
(c) Cash dividends on the Series B Preferred Stock shall
commence to accrue and shall be cumulative from the Effective Date of the Merger
between Union Planters - Steiner Acquisition Company and Steiner Holdings
pursuant to that Merger Agreement dated June 9, 1989 between UPC, Subsidiary,
Steiner Bank, Arnold Steiner and Mary Steiner (the "Merger Agreement"); and,
otherwise, from the Quarterly Dividend Payment Date on which cash dividends were
paid on Series B Preferred Stock (in respect of a dividend on Series B Preferred
Stock) next preceding the date of issuance of such shares of Series B Preferred
Stock.
(d) Cash dividends on shares of Series B Preferred Stock shall
be payable quarterly on the third Friday of February, May, August and November
(a "Quarterly Dividend Payment Date") and will have the same record date for the
payment of dividends as the record date for payment of dividends on UPC Common
Stock, and, if there is no record date for the payment of dividends on UPC
Common Stock, then the record date for the payment of dividends of the Series B
Preferred Stock shall be that date which is 15 days prior to a given Quarterly
Dividend Payment Date.
3. No Preemptive Rights. No holders of Series B Preferred Stock shall
be entitled, as of right, to purchase or subscribe for any part of the unissued
Series B Preferred Stock, UPC Common Stock, or Capital Stock, or to purchase or
subscribe for any bonds, certificates of indebtedness, debentures, or other
securities convertible into or carrying options, warrants or rights to purchase
stock or other securities of the Corporation, or to purchase or subscribe for
any stock or any securities of the Corporation purchased by the Corporation or
by its nominee or nominees, or to have any other preemptive rights now or
hereafter defined by the laws of the State of Tennessee; provided, however, that
this section shall not be deemed to prohibit the exercise by the holders of UPC
Series B Preferred Stock of Rights issued pursuant to the UPC Share Purchase
Rights Agreement.
4. Liquidation. (a) In the event of the voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation, the
holders of Series B Preferred Stock shall be entitled to receive, after payment
or provision for payment of all debts, but before any distribution of assets may
be made to the holders of UPC Common Stock, or any other Capital Stock of the
Corporation ranking junior to the Series B Preferred Stock as to liquidation,
out of assets of the Corporation available for distributions to its
stockholders, $100 per share, plus, in each case, accrued and unpaid dividends
thereon to the date of payment thereof. After such payment has been made in full
to the holders of the outstanding shares of Series B Preferred Stock (or funds
necessary for the payment have been set aside in trust for the account of such
holders so as to be and continue to be available therefor), the holders of
Series B Preferred Stock shall be entitled to no further distribution, and the
remaining assets of the Corporation shall be divided and distributed among the
holders of UPC Common Stock (subject to any prior rights of any holders of any
other Capital Stock of the Corporation entitled to participate with the UPC
Common Stock as to the distribution of assets) then outstanding according to
their respective shares. If on liquidation, dissolution or winding up, the net
assets of the Corporation available for distribution among the holders of Series
B Preferred Stock are insufficient to permit full payment to them, the entire
net assets of the Corporation so available for distribution shall be distributed
ratably among the holders of Series B Preferred Stock and the holders of any
other Capital Stock ranking on a parity with the Series B Preferred Stock as to
liquidation and distribution of assets. Nothing herein contained shall be
construed to prohibit the retirement of Series B Preferred Stock by purchase,
and neither the purchase of Series B Preferred Stock, the consolidation or
merger of the Corporation, nor the sale or transfer of all or substantially all
of the assets of the Corporation as an entirety shall be deemed a "liquidation,
dissolution or winding up of the Corporation" within the meaning of this
paragraph 4.
5. Right to Vote. Except to the extent that the power or right to
vote is granted or required pursuant to the Tennessee Business Corporation Act,
as amended from time to time, the Series B Preferred Stock shall have no power
or right to vote.
6. Conversion of Series B Preferred Stock. The holders of shares of
Series B Preferred Stock shall have the right, at their option, any time after
that date which is five (5) years after the Effective Date of the Merger, to
convert such shares into shares of UPC Common Stock on the following terms and
conditions:
(a) Except as provided in subsection (c) of this Section 6, each
share of Series B Preferred Stock shall be convertible into that number of
shares of UPC Common Stock determined by dividing (i) the product of the
multiplication of the number of Series B Preferred Shares issued in the Merger
by $100, by (ii) $12.95, then dividing that number by the number of Series B
Preferred Shares issued in the Merger (the "Conversion Ratio").
Page 5 of Union Planters Corporation Charter
<PAGE> 7
(b) Except as provided in subsection (c) of this Section 6, the
estate of Arnold Steiner and the trustees of the trusts which receive assets of
the Estate of Bernard S. Steiner, Jr. pursuant to the provisions of the last
will and testament of Bernard S. Steiner, Jr., and which shall have received
Series B Preferred Stock pursuant to the Merger and such last will and
testament, shall have the right to convert the shares of Series B Preferred
Stock they own in accordance with the Conversion Ratio within five (5) years
from the Effective Date of the Merger, (i) as to the estate of Arnold Steiner,
upon the death of Arnold Steiner, and as to each such trust, upon the death(s)
of the oldest permissible income beneficiary of that particular trust; (ii)
should there be a change in control (as defined in Section 2(a) of the Bank
Holding Company Act of 1956, as amended, 12 U.S.C. ss.1841(a) of UPC; and (iii)
should UPC issue any other preferred stock having priority as to the payment of
dividends or as to liquidation preference over that of the Series B Preferred
Stock.
(c) If any Series B Preferred Stock shall be converted into UPC
Common Stock at a time when the UPC Common Stock into which such Series B
Preferred Stock is convertible has attached or attributable thereto Rights
issued pursuant to the UPC Share Purchase Rights Agreement, the surrender of
such Series B Preferred Stock shall effectively cancel all Rights attached or
attributable to the share(s) of Series B Preferred Stock so converted.
(d) If at any time, or from time to time, the Corporation shall
(i) declare and pay, on or in respect of, UPC Common Stock any dividend payable
in shares of UPC Common Stock, (ii) subdivide the outstanding shares of UPC
Common Stock into a greater number of shares, or contract the number of
outstanding shares of Series B Preferred Stock by combining such shares into a
smaller number of shares, or (iii) contract the number of outstanding shares of
UPC Common Stock by combining such shares into a smaller number of shares, or
subdivide the outstanding shares of Series B Preferred Stock into a greater
number of shares of Series B Preferred Stock, the Conversion Ratio shall be
proportionately adjusted as of such time.
(e) If the Corporation consolidates with or merges into any
corporation or reclassifies outstanding shares of UPC Common Stock (other than
by way of subdivision or contraction of such shares) each share of Series B
Preferred Stock shall thereafter be convertible into the number of shares of
stock or other securities or property of the Corporation, or of the entity
resulting from such consolidation or merger, to which a holder of the number of
shares of UPC Common Stock deliverable upon conversion of such share of Series B
Preferred Stock would have been entitled upon such consolidation, merger or
reclassification, had the holder of such share of Series B Preferred Stock
exercised his right of conversion and had such shares been issued and
outstanding and had such holder been the holder of record of such UPC Common
Stock at the time of such consolidation, merger or reclassification; and the
Corporation shall make lawful provision therefor as a part of such
consolidation, merger or reclassification.
(f) Whenever the Conversion Ratio is required to be adjusted, as
herein provided, the Corporation shall promptly file with the transfer agent for
the UPC Common Stock and simultaneously provide to each holder of record of
Series B Preferred Stock a statement signed by the President or a Vice President
or the Secretary or the Treasurer setting forth the adjusted Conversion Ratio,
determined as so provided. Such statement shall set forth in reasonable detail
such facts as may be necessary to show the reason for and the manner of
computing such adjustment.
(g) On presentation and surrender to the Corporation at any
office or agency maintained for the transfer of Series B Preferred Stock or the
certificates of Series B Preferred Stock so to be converted, duly endorsed for
transfer, the holder of such Series B Preferred Stock shall be entitled, subject
to the limitations herein contained, to receive in exchange therefor a
certificate or certificates for fully paid and nonassessable shares, and cash
for fractional shares of UPC Common Stock or other securities pursuant to
subsection (e) above, on the basis aforesaid. The Series B Preferred Stock shall
be deemed to have been converted and the person converting the same to have
become the holder of record of UPC Common Stock, for the purpose of receiving
dividends and for all other purposes whatever as of the date when the
certificate or certificates for such Series B Preferred Stock are surrendered to
the Corporation as aforesaid. The Corporation shall not be required to make any
such conversion, and no surrender of the Series B Preferred Stock shall be
effective for such purposes, while the books for the transfer of either class of
stock are closed for any purpose, but the surrender of such shares of Series B
Preferred Stock for conversion during any period while such books are closed
shall become effective for all purposes of conversion immediately upon the
reopening of such books, as if the conversion had been made on the date such
shares of Series B Preferred Stock were surrendered.
(h) The Corporation shall pay any and all taxes which may be
imposed upon it with respect to the issuance and delivery of UPC Common Stock
upon the conversion of the Series B Preferred Stock as herein provided. The
Corporation shall not be required in any event to pay any transfer or other
taxes by reason of the issuance of such UPC Common Stock in names other than
those in which the Series B Preferred Stock surrendered for conversion may
stand, and no such conversion or issuance of UPC Common Stock shall be made
unless and until the person requesting such issuance has paid to the Corporation
the amount of any such tax, or has established to the satisfaction of the
Corporation and its transfer agent, if any, that such tax has been paid or is
not required. Upon any conversion of Series B Preferred Stock as herein
provided, no adjustment or allowance shall be made for dividends on the Series B
Preferred Stock so converted, and all rights to dividends, if any, shall cease
and be deemed satisfied; however, except as provided in the next sentence
hereof, nothing in this section shall be deemed to relieve the Corporation from
its obligation to pay any dividends which shall have been declared and shall be
payable to holders of Series B Preferred Stock of record as of a date prior to
such conversion even though the payment date for such dividend is subsequent to
the date of conversion.
7. Reservation of UPC Common Stock. The Corporation shall, so long as
any of the Series B Preferred Stock is outstanding, reserve and keep available
out of its authorized and unissued UPC Common Stock, solely for the purpose of
effecting the conversion of the Series B Preferred Stock, such number of shares
of UPC Common Stock as shall, from time to time, be sufficient to effect the
conversion of all shares of the Series B Preferred Stock then outstanding. The
Corporation shall, from time to time, increase its authorized UPC Common Stock
and take such other actions as may be necessary to permit the issuance from time
to time of the shares of the UPC Common Stock, as fully paid and nonassessable
shares, upon the conversion of the Series B Preferred Stock as herein provided.
8. Definitions. For purposes hereof:
(a) The term "outstanding", when used in reference to shares of
stock, shall mean issued shares, excluding shares held by the Corporation or a
subsidiary thereof, and shares called for redemption, funds for the redemption
of which shall have been set aside by the Corporation or deposited in trust;
(b) The amount of dividends "accrued" on any share of Series B
Preferred Stock as of any quarterly dividend date shall be deemed to be the
amount of any unpaid dividends accumulated thereon to and including such
quarterly dividend date, whether or not earned or
Page 6 of Union Planters Corporation Charter
<PAGE> 8
declared, and the amount of dividends "accrued" on any shares of Series B
Preferred Stock as at any date other than a quarterly dividend date shall be
deemed to be (i) the amount of any unpaid dividends accumulated thereon to and
including the last preceding quarterly dividend date, whether or not earned or
declared, plus (ii) an amount calculated on the basis of the annual dividend
rate fixed for the shares of Series B Preferred Stock (8%) for the period after
such last preceding quarterly dividend date to and including the date as of
which the calculation is made, based on a 360-day year or 12 consecutive 30-day
months.
9. Redemption. The shares of Series B Preferred Stock shall not be
redeemable at the option of the Corporation or any holder thereof.
Notwithstanding the foregoing sentence of this Section, the Corporation may
acquire Series B Preferred Stock in any other manner permitted by law and its
Charter or Bylaws.
10. Ranking. The Series B Preferred Stock shall rank superior to that
of the Corporation's Series A Preferred Stock as well as to all other series of
the Corporation's preferred stock, unless the designation of rights and
preferences for any other series of the Corporation's preferred stock expressly
provides otherwise.
11. Amendment. The Charter, including without limitations the
provisions hereof, shall not hereafter be amended, either directly or
indirectly, or through merger or share exchange with another corporation, in any
manner that would alter or change the powers, preferences or special rights of
the Series B Preferred Stock so as to affect the holders thereof adversely
without the affirmative vote of the holders of a majority or more of the
outstanding shares of Series B Preferred Stock, voting separately as a class;
provided, however, that this paragraph shall have no affect on the ability of
the Corporation to amend the Rights Agreement or redeem the UPC Preferred Share
Purchase Rights in accordance therewith.
12. Fractional Shares. The Series B Preferred Shares may be issued in
units or other fractions of a share, which units or fractions shall entitle the
holder, in proportion to such holder's fractional shares, to exercise such
rights, receive dividends, and participate in all distributions and derive the
benefit of all other rights of holders of Series B Preferred Stock.
SERIES C PREFERRED STOCK
(h) Pursuant to the authority vested in the Board of Directors of Union
Planters Corporation (the "Corporation") by the provisions of this Article Sixth
of the Charter and by the provisions of the Tennessee Business Corporation Act,
the Board of Directors of the Corporation does hereby create, authorize and
provide for the issuance of a new series of preferred stock out of the
Corporation's authorized class of 10,000,000 shares of no par value preferred
stock (the "Preferred Stock"), having the designation, relative participating,
optional and other special rights, preferences, qualifications, limitations and
restrictions provided hereafter:
1. Designation and Amount. The shares of such series shall be
designated as 10 3/8% Increasing Rate, Redeemable, Cumulative Preferred Stock,
Series C (the "Series C Preferred Stock") and the number of shares of Preferred
Stock constituting such Series C Preferred Stock shall be 690,000. Such number
of shares of Series C Preferred Stock may be adjusted hereafter by appropriate
action of the Board of Directors. The Series C Preferred Stock shall have a
stated value (the "Stated Value") of $25.00 per share.
2. Dividends and Distributions.
(a) The holders of shares of Series C Preferred Stock, in
preference to the holders of the $5.00 par value common stock of the Corporation
(the "UPC Common Stock") shall be entitled to receive when and as declared by
the Board of Directors, out of funds legally available for the purpose,
cumulative cash dividends payable quarterly at the rate per share set forth in
paragraph 2(c) below, on the fifteenth day (or, if such fifteenth day is not a
Business Day, on the next Business Day) of February, May, August and November in
each year (a "Quarterly Dividend Payment Date"), in respect of the Quarterly
Dividend Period next preceding such fifteenth day, and no other dividend or
dividends. Such dividends shall be payable to holders of the Series C Preferred
Stock on such date as is not more than 30 nor less than 10 days prior to the
particular Quarterly Dividend Payment Date. As used herein, a "Quarterly
Dividend Period" means a period of three months ending on the last day of
January, April, July or October. Subject to the provisions of paragraph (c) of
Section Sixth of the Charter, dividends on account of arrears for any past
Quarterly Dividend Period(s) may be declared and paid at any time, without
reference to any regular Quarterly Dividend Payment Date to holders of record on
such date not exceeding 30 or less than 10 days preceding the payment date
thereof as may be fixed by the Board of Directors. The amount of dividend per
share payable for any Quarterly Dividend Period less than a full Quarterly
Dividend Period shall be computed on the basis of a 360-day year of twelve
30-day months and the actual number of days elapsed in the period for which
payable.
(b) Preferred dividends upon shares of Series C Preferred Stock
shall commence to accrue and be cumulative from (but not including) the day upon
which the initial issuance of shares of Series C Preferred Stock occurs.
(c) For each Quarterly Dividend Period ending on or before
October 31, 1994, preferred dividends payable with respect to each such
Quarterly Dividend Period shall be $0.648438 per share. For each Quarterly
Dividend Period ending after November 1, 1994 and on or before October 31, 1995,
preferred dividends payable with respect to each such Quarterly Dividend Period
shall be $0.679688 per share. For each Quarterly Dividend Period ending after
November 1, 1995, and on or before October 31, 1996, preferred dividends payable
with respect to each such Quarterly Dividend Period shall be $0.710938 per
share. For each Quarterly Dividend Period ending after November 1, 1996,
preferred dividends payable with respect to such Quarterly Dividend Periods
shall be $0.742188 per share. No interest, or sum of money in lieu of interest,
shall be payable in respect of any dividend payment or payments which may be in
arrears.
(d) For purposes hereof, "Business Day" shall mean any day upon
which commercial banks in the City of Memphis, Tennessee, are required to be
open for the transaction of their general banking business.
3. No Preemptive Rights. Holders of shares of Series C Preferred
Stock shall not be entitled, as of right, to purchase or subscribe for any part
of the unissued Series C Preferred Stock, any UPC Common Stock, or any other
capital stock of the Corporation, or to purchase or subscribe for any bonds,
certificates of indebtedness, debentures, or other securities convertible into
or carrying options, warrants or rights to purchase any stock or other
securities of the Corporation, or to purchase or subscribe for any stock or any
securities of the Corporation purchased by the Corporation or by its nominee or
nominees, or to have any other preemptive rights now or hereafter defined by the
laws of the State of Tennessee.
Page 7 of Union Planters Corporation Charter
<PAGE> 9
4. Liquidation. In the event of the voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation, the
holders of Series C Preferred Stock shall be entitled to receive, after payment
or provision for payment of all debts, but before any distribution of assets may
be made to the holders of UPC Common Stock or any other stock of the Corporation
ranking junior to the Series C Preferred Stock as to the distribution of assets
on liquidation, dissolution or winding up of the Corporation, out of assets of
the Corporation available for distributions to its shareholders, $25.00 per
share (the "Liquidation Value"), plus, in each case, accrued and unpaid
dividends thereon from (but not including) the day of initial issuance to the
date of payment thereof. After such payment has been made in full to the holders
of the outstanding shares of Series C Preferred Stock (or funds necessary for
the payment have been set aside in trust for the account of such holders so as
to be and continue to be available therefor), the holders of Series C Preferred
Stock shall be entitled to no further distributions, and the remaining assets of
the Corporation shall be divided and distributed among the holders of UPC Common
Stock (subject to any prior rights of any holders of any other capital stock of
the Corporation entitled to participate with the UPC Common Stock as to the
distribution of assets) then outstanding according to their respective rights as
shareholders. If, upon any liquidation, dissolution or winding up of the
Corporation, the net assets of the Corporation, or proceeds thereof available
for distribution among the holders of Series C Preferred Stock should be
insufficient to permit payment in full of the preferential amount aforesaid and
liquidating payments on any other Preferred Stock ranking, as to liquidation,
dissolution or winding up, on a parity with the Series C Preferred Stock, then
such assets, or the proceeds thereof, shall be distributed among the holders of
Series C Preferred Stock and the holders of any such other Preferred Stock
ratably in accordance with the respective amounts which would be payable on such
shares of Series C Preferred Stock and on any such other Preferred Stock if all
amounts payable thereon were paid in full. Neither the consolidation or merger
of the Corporation with or into any other corporation or corporations, nor a
reorganization of the Corporation alone, nor the sale or transfer by the
Corporation of all or substantially all of its assets shall be deemed a
"liquidation, dissolution or winding up of the Corporation" within the meaning
of this paragraph 4.
5. Right to Vote.
(a) Except as hereinafter provided for and as otherwise from
time to time required by law, the Series C Preferred Stock shall have no voting
rights.
(b) So long as any shares of the Series C Preferred Stock remain
outstanding, the consents of the holders of at least two-thirds (2/3ds) of the
shares of Series C Preferred Stock outstanding at the time (voting separately as
a class together with all other series of Preferred Stock of the Corporation
ranking on a parity with the Series C Preferred Stock either as to payment of
dividends or the distribution of assets upon liquidation, dissolution or winding
up and upon which like voting rights have been conferred and are exercisable)
given in person or by proxy, either in writing or at any special or annual
meeting called for the purpose, shall be necessary to permit, effect or validate
any one or more of the following:
(i) the authorization, creation or issuance of a new class
or series of shares of capital stock having rights, preferences or privileges
prior to the Series C Preferred Stock, or any increase in the number of
authorized shares of any class or series having rights, preferences or
privileges prior to the Series C Preferred Stock; or
(ii) the amendment, alteration or repeal, whether by merger,
consolidation or otherwise, of any of the provisions of the Corporation's
Charter which would materially and adversely affect any right, preference,
privilege or voting power of the Series C Preferred Stock or of the holders
thereof; provided, however, that any increase in the amount of authorized UPC
Common Stock or Preferred Stock or the authorization, creation or issuance of
any other series of UPC Common Stock or Preferred Stock, in each case ranking on
a parity with or junior to the Series C Preferred Stock with respect to the
payment of dividends and the distribution of assets upon liquidation,
dissolution or winding up, shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting powers.
(c) The foregoing voting provisions shall not apply if, at or
prior to the time when the act with respect to which such vote would otherwise
be required shall be effected, all outstanding shares of Series C Preferred
Stock shall have been redeemed or called for redemption and funds shall have
been deposited in trust in an amount sufficient to effect such redemption.
6. Redemption.
(a) The shares of Series C Preferred Stock shall be redeemable,
in whole or in part, only at the option of the Corporation by resolution of its
Board of Directors and with the prior written consent of the Board of Governors
of the Federal Reserve System, or of the appropriate Federal Reserve Bank acting
under delegated authority, or their successors, at any time and from time to
time on or after October 31, 1994 at $25.00 per share, plus all dividends
accrued and unpaid on such Series C Preferred Stock from (but not including) the
day of issuance up to the day fixed for redemption. Notwithstanding the
foregoing sentence of this Section, the Corporation may acquire Series C
Preferred Stock in any other manner permitted by law and its Charter or Bylaws.
(b) In the event that less than the entire amount of the Series
C Preferred Stock outstanding is to be redeemed at any one time, the shares to
be redeemed shall be selected by lot or pro rata (as nearly as may be) or by any
other method determined by the Board of Directors of the Corporation in its sole
discretion to be equitable. Notice of any redemption shall be given by first
class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior
to the redemption date, to each holder of record of the shares selected for
redemption at such holders' respective addresses as the same shall appear on the
stock register of the Corporation. Each such notice shall state: (1) the
redemption date; (2) the number of shares of Series C Preferred Stock to be
redeemed and, if less than all the shares held by such holder are to be
redeemed, the number of such shares to be redeemed from such holder; (3) the
redemption price and the manner in which the redemption price is to be paid and
delivered; (4) the place or places where certificates for such shares are to be
surrendered for payment of the redemption price; and (5) that dividends on the
shares to be redeemed will cease to accrue on such redemption date. No failure
to mail such notice or any defect therein or in the mailing thereof shall affect
the validity of the proceedings for redemption. Any notice mailed in the manner
herein provided shall be conclusively presumed to have been duly given whether
or not the holder receives the notice. Upon such redemption date, or upon such
earlier date as the Board of Directors shall designate for payment of the
redemption price (unless the Corporation shall default in the payment of the
redemption price as set forth in such notice), the holders of shares of Series C
Preferred Stock selected for redemption and to whom notice has been duly given
shall cease to be shareholders with respect to such shares of Series C Preferred
Stock and shall have no interest in or claim against the Corporation by virtue
thereof and shall have no dividend, voting or other rights with respect to such
shares except the right to receive the moneys payable upon such redemption from
the Corporation or otherwise, without interest thereon, upon surrender (and
endorsement, if required by the Corporation) of the certificates, and the shares
evidenced and represented thereby shall no longer be deemed to be outstanding.
The Corporation's obligation to provide funds for redemption shall be deemed
fulfilled if, on or before the
Page 8 of Union Planters Corporation Charter
<PAGE> 10
redemption date, the Corporation shall deposit with a bank or trust company
(which may be an affiliate of the Corporation), having an office or agency in
Memphis, Tennessee and having a capital and surplus of at least $50,000,000, or
with any other such bank or trust company located in the continental United
States as may be designated from time to time by the Corporation, funds
necessary for such redemption, in trust, with irrevocable instructions that such
funds be applied to the redemption of the shares of Series C Preferred Stock so
called for redemption. Any interest accrued on such funds shall be paid to the
Corporation from time to time. Any funds so deposited and unclaimed at the end
of six years from such redemption date shall be repaid or released to the
Corporation, after which the holder or holders of such shares of Series C
Preferred Stock so called for redemption shall look only to the Corporation for
payment of the redemption price. Upon redemption of Series C Preferred Stock in
the manner set out herein, or upon the purchase of Series C Preferred Stock by
the Corporation, the Series C Preferred Stock so acquired by the Corporation
shall be retired and canceled and shall be restored to the status of authorized
but unissued shares of Preferred Stock, without designation as to series, and
may thereafter be issued, but not as shares of Series C Preferred Stock.
7. Ranking.
(a) Any class or series of stock of the Corporation shall be
deemed to rank:
(i) "prior to" the Series C Preferred Stock if the holders
of such class or series shall be entitled to the receipt of dividends or of
amounts distributable upon liquidation, dissolution or winding up, as the case
may be, in preference or priority to the holders of Series C Preferred Stock;
and
(ii) "on a parity with" the Series C Preferred Stock if the
holders of such class or series of stock and the holders of the Series C
Preferred Stock shall be entitled to the receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as the case may be,
in proportion to their respective dividend rates or liquidation prices, without
preference or priority one over the other whether or not the dividend rates,
dividend payment dates or redemption or liquidation prices per share of such
other class or series of stock are different from those of the Series C
Preferred Stock.
(b) The Series C Preferred Stock shall rank on a parity with
both the Corporation's Series B Preferred Stock and the Series A Preferred
Stock, if and when such Series A Preferred Stock should be issued.
8. Debt Obligations. The Corporation, at any time and from time to
time, may authorize the issue of debt obligations, whether or not subordinated,
without the approval of the shareholders.
9. Conversion or Exchange. The holders of the Series C Preferred
Stock shall not have any rights herein to convert such shares into, or exchange
such shares for, shares of any other class or classes or any other series of any
class or classes of capital stock (or any other equity or debt security) of the
Corporation.
SERIES D PREFERRED STOCK
(i) Pursuant to the authority vested in the Board of Directors of Union
Planters Corporation (the "Corporation") by the provisions of this Article Sixth
of its Charter and by the provisions of the Tennessee Business Corporation Act,
the Board of Directors of the Corporation does hereby create, authorize and
provide for the issuance of a new series of preferred stock out of the
Corporation's authorized class of 10,000,000 shares of preferred stock having no
par value (the "Preferred Stock"), having the designation, relative
participating, optional and other special rights, preferences, qualifications,
limitations and restrictions provided hereafter:
1. Designation and Amount. The shares of such series shall be
designated as the: 9.5% REDEEMABLE, CUMULATIVE, CONVERTIBLE, PREFERRED STOCK,
SERIES D (the "Series D Preferred Stock") and the number of shares of Preferred
Stock constituting such Series D Preferred Stock shall be 253,659. Such number
of shares of Series D Preferred Stock may be adjusted hereafter by appropriate
action of the Board of Directors. The Series D Preferred Stock shall have a
stated value of $20.50 per share (the "Stated Value").
2. Dividends and Distributions. (a) The holders of shares of Series D
Preferred Stock, in preference to the holders of the $5.00 par value common
stock of the Corporation (the "UPC Common Stock") shall be entitled to receive
when, as and if declared by the Board of Directors, out of funds legally
available for the purpose, cumulative cash dividends payable quarterly at the
annual rate of 9.5% of the Stated Value thereof on the fifteenth day (or, if
such fifteenth day should not be a Business Day, on the next Business Day) of
February, May, August and November in each year (a "Quarterly Dividend Payment
Date"), in respect of the Quarterly Dividend Period next preceding such
fifteenth day, and no other dividend or dividends. Such dividends shall be
payable to holders of record of the Series D Preferred Stock on such date as may
be fixed by the Board of Directors which date shall not be more than 30 nor less
than 10 days prior to the applicable Quarterly Dividend Payment Date. As used
herein, a "Quarterly Dividend Period" means a period of three calendar months
ending on the last day of January, April, July and October. Subject to the
provisions of paragraph (c) of Article Sixth of the Charter, dividends on
account of arrears for any past Quarterly Dividend Period(s) may be declared and
paid at any time designated by the Board of Directors, without reference to any
regular Quarterly Dividend Payment Date, to holders of record on such date as
may be fixed by the Board of Directors, which date shall not be more than 30 nor
less than 10 days preceding the designated payment date. The amount of dividend
per share payable for any Quarterly Dividend Period less than a full Quarterly
Dividend Period shall be computed on the basis of a 360-day year of twelve
30-day months and the actual number of days elapsed in the period with respect
to which it is payable.
(b) Preferred dividends upon shares of Series D Preferred Stock
shall commence to accrue and be cumulative from the day upon which the original
issuance of shares of Series D Preferred Stock shall occur which shall be deemed
to be the effective date of the merger of Southeastern Bancshares, Inc. with and
into Union Planters - SBI Acquisition Company, both of which are Tennessee
corporations.
(c) No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments which may be in arrears.
(d) For purposes hereof, a "Business Day" shall mean any day on
which commercial banks in the City of Memphis, Tennessee, are required to be
open for the transaction of their general banking businesses.
Page 9 of Union Planters Corporation Charter
<PAGE> 11
3. No Preemptive Rights. The holders of shares of Series D Preferred
Stock shall not be entitled, as of right, to purchase or subscribe for any part
of the unissued Series D Preferred Stock, any UPC Common Stock, or any other
capital stock of the Corporation, or to purchase or subscribe for any bonds,
certificates of indebtedness, debentures, or other securities convertible into,
or carrying options, warrants or rights to purchase, any stock or other
securities of the Corporation, or to purchase or subscribe for any stock or any
securities of the Corporation purchased by the Corporation or by its nominee or
nominees, or to have any other preemptive rights now or hereafter defined by the
laws of the State of Tennessee.
4. Liquidation. In the event of the voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation, the
holders of Series D Preferred Stock shall be entitled to receive, after payment
or provision for payment of all debts but before any distribution of assets may
be made to the holders of UPC Common Stock or any other stock of the Corporation
ranking junior to the Series D Preferred Stock as to the distribution of assets
on liquidation, dissolution or winding up of the Corporation, out of assets of
the Corporation available for distributions to its shareholders, $20.50 per
share (the "Liquidation Value"), plus, in each case, accrued and unpaid
dividends thereon from (but not including) the day of original issuance to the
date of payment thereof. After such payment has been made in full to the holders
of the outstanding shares of Series D Preferred Stock (or funds necessary for
such payment have been set aside in trust for the account of such holders so as
to be and to continue to be available therefor), the holders of Series D
Preferred Stock shall be entitled to no further distributions, and the remaining
assets of the Corporation shall be divided and distributed among the holders of
UPC Common Stock (subject to any senior rights of any holders of any other
capital stock of the Corporation entitled to participate with the UPC Common
Stock as to the distribution of assets) then outstanding according to their
respective rights as shareholders. If, upon any liquidation, dissolution or
winding up of the Corporation, the net assets of the Corporation, or proceeds
thereof available for distribution among the holders of Series D Preferred Stock
should be insufficient to permit payment in full of the preferential amount
aforesaid and liquidating payments on any other Preferred Stock ranking, as to
liquidation, dissolution or winding up, on a parity with the Series D Preferred
Stock, then such assets, or the proceeds thereof, shall be distributed among the
holders of Series D Preferred Stock and the holders of any such other Preferred
Stock ranking on a parity with the Series D Preferred Stock ratably in
accordance with the respective amounts which would be payable on such shares of
Series D Preferred Stock and on any such other Preferred Stock ranking on a
parity with the Series D Preferred Stock if all amounts payable thereon were
paid in full. Neither the consolidation or merger of the Corporation with or
into any other corporation or corporations, nor a reorganization of the
Corporation alone, nor the sale or transfer by the Corporation of all or
substantially all of its assets shall be deemed a "liquidation, dissolution or
winding up of the Corporation" within the meaning of this paragraph 4.
5. Right of Holders of Series D Shares to Vote.
(a) Except as hereinafter provided for and as otherwise from
time to time required by law, the Series D Preferred Stock shall have no voting
rights except for those which may be required by the laws of the State of
Tennessee.
(b) So long as any shares of Series D Preferred Stock remain
outstanding, the consents of the holders of at least two-thirds (2/3ds) of the
shares of Series D Preferred Stock outstanding at the time (voting separately as
a class together with all other series of Preferred Stock of the Corporation
ranking on a parity with the Series D Preferred Stock either as to dividends or
the distribution of assets upon liquidation, dissolution or winding up and upon
which like voting rights have been conferred and are exercisable) given in
person or by proxy, either in writing or at any special or annual meeting called
for the purpose, shall be necessary to permit, effect or validate any one or
more of the following actions:
(i) the authorization, creation or issuance of a new class
or series of shares of capital stock of the Corporation having rights,
preferences or privileges senior to the Series D Preferred Stock, or any
increase in the number of authorized shares of any class or series having
rights, preferences or privileges senior to the Series D Preferred Stock; or
(ii) the amendment, alteration or repeal, whether by merger,
consolidation or otherwise, of any of the provisions of the Corporation's
Charter which would materially and adversely affect any right, preference,
privilege or voting power of the Series D Preferred Stock or of the holders
thereof; provided, however, that any increase in the amount of authorized UPC
Common Stock or Preferred Stock or the authorization, creation or issuance of
any other series of UPC Common Stock or Preferred Stock, in each case ranking on
a parity with, or junior to the Series D Preferred Stock with respect to the
payment of dividends and the distribution of assets upon liquidation,
dissolution or winding up, shall not be deemed to "materially and adversely
affect" such rights, preferences, privileges or voting powers of the Series D
Preferred Stock.
(c) The foregoing voting provisions shall not apply if, at or
prior to the time when the act with respect to which such vote would otherwise
be required shall be effected (i) all outstanding shares of Series D Preferred
Stock shall have been redeemed or called for redemption and (ii) funds shall
have been deposited in trust in an amount sufficient to effect such redemption
as provided herein.
6. Redemption.
(a) The shares of Series D Preferred Stock shall be redeemable,
in whole or in part, only at the option of the Corporation by resolution of its
Board of Directors but only with the prior consent of the Board of Governors of
the Federal Reserve System, or of the appropriate Federal Reserve Bank acting
under delegated authority, or their successors, at any time and from time to
time on or after the third anniversary of the Effective Time of the Merger of
SBI with and into Union Planters - SBI Acquisition Company at Twenty and 50/100
Dollars ($20.50) per share (the "Redemption Price"), plus all dividends accrued
and unpaid on such Series D Preferred Stock from (but not including) the day of
original issuance up to the Redemption Date (as defined below). Notwithstanding
the foregoing sentence of this Section, the Corporation may acquire Series D
Preferred Stock in any other lawful manner permitted by its Charter or Bylaws.
(b) In the event that less than the entire amount of Series D
Preferred Stock outstanding is to be redeemed at any one time, the shares to be
redeemed shall be selected by lot or pro rata (as nearly as may be) or by any
other method determined by the Board of Directors of the Corporation in its sole
discretion to be equitable.
(c) Notice of any redemption, whether whole or partial, shall be
given by United States first class mail, postage prepaid, deposited in the mail
not less than 30 nor more than 60 days prior to the Redemption Date, addressed
to each holder of record of the shares selected for redemption at such holders'
respective addresses as the same shall appear on the stock register of the
Corporation. Each such notice shall state: (1) the date designated by the Board
of Directors as the "Redemption Date"; (2) the number of shares of Series D
Preferred Stock to be redeemed and, if less
Page 10 of Union Planters Corporation Charter
<PAGE> 12
than all the shares held by such holder are to be redeemed, the number of such
shares to be redeemed from such holder; (3) the Redemption Price and the manner
in which the Redemption Price is to be paid and delivered; (4) the place or
places where certificates representing and evidencing such shares are to be
surrendered for payment of the Redemption Price; and (5) that dividends on the
shares to be redeemed will cease to accrue on such Redemption Date. No failure
to mail such notice or any defect therein or in the mailing thereof shall affect
the validity of the proceedings for redemption. Any notice mailed in the manner
herein provided shall be conclusively presumed to have been duly given whether
or not the holder receives the notice. On the Redemption Date, or on such
earlier date as the Board of Directors shall designate for payment of the
Redemption Price (unless the Corporation shall default in the payment of the
Redemption Price as set forth in such notice), the holders of shares of Series D
Preferred Stock selected for redemption and to whom notice has been duly given
shall cease to be shareholders with respect to such shares of Series D Preferred
Stock and shall have no interest in, or claim against the Corporation by virtue
thereof and shall have no dividend, voting or other rights with respect to such
shares except the right to receive the moneys payable upon such redemption from
the Corporation or otherwise, without interest thereon, upon surrender (and
proper endorsement, if required by the Corporation) of the certificates, and the
shares represented thereby shall no longer be deemed to be outstanding. The
Corporation's obligation to provide funds for redemption shall be deemed
fulfilled if, on or before the Redemption Date, the Corporation shall have
deposited with a bank or trust company (which may be an affiliate of the
Corporation), having an office or agency in Memphis, Tennessee, having a capital
and surplus of at least $50,000,000, or with any other such bank or trust
company located in the continental United States as may be designated from time
to time by the Corporation, funds necessary for such redemption, in trust, with
irrevocable instructions that such funds be applied to the redemption of the
shares of Series D Preferred Stock so called for redemption. Any interest
accrued on such funds shall be paid to the Corporation from time to time. Any
funds so deposited and unclaimed at the end of six years from such Redemption
Date shall be repaid or released to the Corporation, after which the holder or
holders of such shares of Series D Preferred Stock so called for redemption
shall look only to the Corporation for payment of the Redemption Price. Upon
redemption of Series D Preferred Stock in the manner set out herein, or upon the
purchase of Series D Preferred Stock by the Corporation, the Series D Preferred
Stock so acquired by the Corporation shall be retired and canceled and shall be
restored to the status of authorized but unissued shares of Preferred Stock,
without designation as to series, and may thereafter be issued, but not as
shares of Series D Preferred Stock.
7. Ranking.
(a) Any class or series of stock of the Corporation shall be
deemed to rank:
(i) "senior to" the Series D Preferred Stock if the holders
of such class or series shall be entitled to the receipt of dividends or of
amounts distributable upon liquidation, dissolution or winding up, as the case
may be, in preference or priority to the holders of Series D Preferred Stock;
and
(ii) "on a parity with" the Series D Preferred Stock if the
holders of such class or series of stock and the holders of the Series D
Preferred Stock shall be entitled to the receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as the case may be,
in proportion to their respective dividend rates or liquidation prices, without
preference or priority one over the other whether or not the dividend rates,
dividend payment dates or redemption or liquidation prices per share of such
other class or series of stock are different from those of the Series D
Preferred Stock.
(b) The Series D Preferred Stock shall rank on a parity with the
Corporation's Series B Preferred Stock, the Corporation's Series C Preferred
Stock and the Corporation's Series A Preferred Stock, if and when shares of such
Series A Preferred Stock should be issued.
8. Conversion of Series D Preferred Stock. The registered holders of
shares of Series D Preferred Stock shall have the right, at their option, to
convert such shares into shares of UPC Common Stock (and, upon the occurrence of
a certain type of merger, into other assets) on the following terms and
conditions:
(a) The registered holders of the Series D Preferred Stock shall
have the right at any time after the date of its original issuance but prior to
the Redemption Date designated in the notice of redemption given to such holders
in accordance with the provisions of Section 6, to convert each share of the
Corporation's Series D Preferred Stock registered in the name of such holders
into one (1) share of the Corporation's Common Stock having a par value of $5.00
per share. The Series D Preferred Stock shall not be convertible into any other
class or classes or any other series of any class or classes of capital stock
(or any other equity or debt security) of the Corporation.
(b) On presentation and surrender to the Corporation at any
office or agency maintained for the transfer of the Series D Preferred Stock
(the "Transfer Agent") of the certificates representing and evidencing Series D
Preferred Stock so to be converted, duly endorsed for conversion, the holder of
such Series D Preferred Stock shall be entitled, subject to the limitations
herein contained, to receive in exchange therefor a certificate or certificates
for fully paid and nonassessable shares, and cash for fractional shares (if any)
of UPC Common Stock or other securities pursuant to subsection (d) below on the
basis set forth. The Series D Preferred Stock shall be deemed to have been
converted and the person converting the same shall be deemed to have become the
holder of record of UPC Common Stock, for the purpose of receiving dividends and
for all other purposes whatsoever as of the date when the certificate or
certificates representing and evidencing such Series D Preferred Stock shall
have been surrendered to the Transfer Agent as aforesaid. The holder of Series D
Preferred Stock shall be responsible for selection of the method of delivery to
the Transfer Agent of any share certificates intended to be surrendered for
conversion and the Corporation shall have no risk or liability for the loss or
late delivery of certificates for conversion. Properly endorsed certificates
must be physically received by the Transfer Agent no later than the close of
business on the Business Day next preceding the designated Redemption Date in
order for the conversion to become effective. The Corporation shall not be
required to make any such conversion, and no surrender of the Series D Preferred
Stock shall be effective for such purposes, while the books for the transfer of
either class of stock are closed for any purpose, but the surrender of such
shares of Series D Preferred Stock for conversion during any period while such
books are closed shall become effective for all purposes of conversion
immediately upon the reopening of such books, as if the conversion had been made
on the date such shares of Series D Preferred Stock were surrendered.
(c) If at any time, or from time to time, the Corporation should
(i) declare and pay on, or in respect of, the UPC Common Stock any dividend
payable in shares of UPC Common Stock; or (ii) subdivide the outstanding shares
of UPC Common Stock into a greater number of shares, or contract the number of
outstanding shares of Series D Preferred Stock by combining such shares into a
smaller number of shares; or (iii) contract the number of outstanding shares of
the UPC Common Stock by combining such shares into a smaller number of shares,
or (iv) subdivide the outstanding shares of Series D Preferred Stock into a
greater number of shares of Series D Preferred Stock, the Conversion Ratio shall
be
Page 11 of Union Planters Corporation Charter
<PAGE> 13
proportionately adjusted as of such time.
(d) If the Corporation should consolidate with, or merge into
any corporation or reclassify outstanding shares of UPC Common Stock (other than
by way of subdivision or contraction of such shares), each share of Series D
Preferred Stock shall thereafter be convertible into the number of shares of
stock or other securities or property of the Corporation, or of the entity
resulting from such consolidation or merger, to which a holder of the number of
shares of UPC Common Stock deliverable upon conversion of such share of Series D
Preferred Stock would have been entitled upon such consolidation, merger or
reclassification, had the holder of such share of Series D Preferred Stock
exercised his right of conversion and had such shares been issued and
outstanding and had such holder been the holder of record of such UPC Common
Stock at the time of such consolidation, merger or reclassification and the
Corporation shall make lawful provision therefor as a part of such
consolidation, merger or reclassification.
(e) Whenever the conversion ratio or the type of consideration
other than UPC Common Stock receivable by the holder upon conversion of the
Series D Preferred Stock is required to be adjusted, as herein provided, the
Corporation shall promptly file with the transfer agent for the UPC Common Stock
and simultaneously provide to each holder of record of Series D Preferred Stock
a statement signed by the President or a Vice President or the Secretary or the
Treasurer setting forth the adjusted conversion ratio and, if applicable, a
description of the consideration receivable upon consummation, determined as so
provided. Such statement shall set forth in reasonable detail such facts as may
be necessary to show the reason for and the manner of computing such
adjustments.
(f) The Corporation shall pay any and all taxes which may be
imposed upon it with respect to the issuance and delivery of UPC Common Stock
upon the conversion of the Series D Preferred Stock as herein provided. The
Corporation shall not be required in any event to pay any transfer or other
taxes by reason of the issuance of such UPC Common Stock in names other than
those in which the Series D Preferred Stock surrendered for conversion may
stand, and no such conversion or issuance of UPC Common Stock shall be made
unless and until the person requesting such issuance has paid to the Corporation
the amount of any such tax, or has established to the satisfaction of the
Corporation and its transfer agent, if any, that such tax has been paid or is
not required. Upon any conversion of Series D Preferred Stock as herein
provided, no adjustment or allowance shall be made for dividends on the Series D
Preferred Stock so converted, and all rights to dividends, if any, shall cease
and be deemed satisfied; provided, however, that nothing in this section shall
be deemed to relieve the Corporation from its obligation to pay any dividends
which shall have been declared and shall be payable to holders of Series D
Preferred Stock of record as of a date prior to such conversion even though the
payment date for such dividend may be subsequent to the date of conversion.
(g) If any shares of Series D Preferred Stock should be
converted into UPC Common Stock at a time when the UPC Common Stock into which
such Series D Preferred Stock is convertible has attached or attributable
thereto Rights issued pursuant to the UPC Share Purchase Rights Agreement, the
surrender of such Series D Preferred Stock shall effectively cancel all Rights
attached or attributable to the share(s) of Series D Preferred Stock so
converted.
9. Reservation of UPC Common Stock. The Corporation shall, so long
as any of the Series D Preferred Stock shall remain outstanding, reserve and
keep available out of its authorized and unissued UPC Common Stock, solely for
the purpose of effecting the conversion of the Series D Preferred Stock, such
number of shares of UPC Common Stock as shall, from time to time, be sufficient
to effect the conversion of all shares of the Series D Preferred Stock then
outstanding. The Corporation shall, from time to time, increase its authorized
UPC Common Stock and take such other actions as may be necessary to permit the
issuance from time to time of the shares of the UPC Common Stock, as fully paid
and nonassessable shares, upon the conversion of the Series D Preferred Stock in
the manner herein provided.
10. Debt Obligations. The Corporation, at any time and from time to
time, may authorize the issuance of debt obligations, whether or not
subordinated, without the approval of any of its shareholders.
11. Definitions. For purposes of subparagraph (i) of Article Sixth of
the Charter:
(a) The term "outstanding", when used in reference to shares of
stock, shall mean shares which are authorized and issued, excluding shares held
by the Corporation or by a subsidiary of the Corporation (other than in a
fiduciary capacity), and excluding shares called for redemption, funds for the
redemption of which shall have been set aside by the Corporation or deposited in
trust in the manner provided herein;
(b) The amount of dividends "accrued" on any share of Series D
Preferred Stock as of the last day of the applicable Quarterly Dividend Period
(the "Quarterly Dividend Date") shall be deemed to be the amount of any unpaid
dividends accumulated thereon to and including such Quarterly Dividend Date,
whether or not earned or declared, and the amount of dividends "accrued" on any
shares of Series D Preferred Stock as at any date other than a Quarterly
Dividend Date shall be deemed to be (i) the amount of any unpaid dividends
accumulated thereon to and including the last preceding Quarterly Dividend Date,
whether or not earned or declared, plus (ii) an amount calculated on the basis
of the annual dividend rate fixed for the shares of Series D Preferred Stock
(9.5%) for the period subsequent to such last preceding Quarterly Dividend Date
to and including the date as of which the calculation is made, based on a
360-day year of 12 consecutive 30-day months and the actual number of days
elapsed in the latter period.
SERIES E PREFERRED STOCK
(j) Pursuant to the authority vested in the Board of Directors of Union
Planters Corporation (the "Corporation") by the provisions of this Article Sixth
of its Charter and by the provisions of the Tennessee Business Corporation Act,
the Board of Directors of the Corporation does hereby create, authorize and
provide for the issuance of a new series of preferred stock out of the
Corporation's authorized class of 10,000,000 shares of preferred stock having no
par value (the "Preferred Stock"), having the designation, relative
participating, optional and other special rights, preferences, qualifications,
limitations and restrictions provided hereafter:
1. Designation and Amount. The shares of such series shall be
designated as the: 8% CUMULATIVE, CONVERTIBLE, PREFERRED STOCK, SERIES E (the
"Series E Preferred Stock") and the number of shares of Preferred Stock
constituting such Series E Preferred Stock shall be 4,500,000. Such number of
shares of Series E Preferred Stock may be adjusted hereafter by appropriate
action of the Board of Directors. The Series E Preferred Stock shall have a
stated value of $25.00 per share (the "Stated Value").
Page 12 of Union Planters Corporation Charter
<PAGE> 14
2. Dividends and Distributions.
(a) The holders of shares of Series E Preferred Stock, in
preference to the holders of the $5.00 par value common stock of the Corporation
(the "UPC Common Stock") shall be entitled to receive when, as and if declared
by the Board of Directors, out of funds legally available for the purpose,
cumulative cash dividends payable quarterly at the annual rate of 8% of the
Stated Value thereof on the fifteenth day (or, if such fifteenth day should not
be a Business Day, on the next Business Day) of February, May, August and
November in each year (a "Quarterly Dividend Payment Date"), in respect of the
Quarterly Dividend Period next preceding such fifteenth day, and no other
dividend or dividends. Such dividends shall be payable to holders of record of
the Series E Preferred Stock on such date as may be fixed by the Board of
Directors which date shall not be more than 30 nor less than 10 days prior to
the applicable Quarterly Dividend Payment Date. As used herein, a "Quarterly
Dividend Period" means a period of three calendar months ending on the last day
of January, April, July and October. Subject to the provisions of paragraph (c)
of Article Sixth of the Charter, dividends on account of arrears for any past
Quarterly Dividend Period(s) may be declared and paid at any time designated by
the Board of Directors, without reference to any regular Quarterly Dividend
Payment Date, to holders of record on such date as may be fixed by the Board of
Directors, which date shall not be more than 30 nor less than 10 days preceding
the designated payment date. The amount of dividend per share payable for any
Quarterly Dividend Period less than a full Quarterly Dividend Period shall be
computed on the basis of a 360-day year of twelve 30-day months and the actual
number of days elapsed in the period with respect to which it is payable.
(b) Preferred dividends upon shares of Series E Preferred Stock
shall commence to accrue and be cumulative from the day upon which the original
issuance of shares of Series E Preferred Stock shall occur.
(c) No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments which may be in arrears.
(d) For purposes hereof, a "Business Day" shall mean any day on
which commercial banks in the City of Memphis, Tennessee, are required to be
open for the transaction of their general banking businesses.
3. No Preemptive Rights. The holders of shares of Series E Preferred
Stock shall not be entitled, as of right, to purchase or subscribe for any part
of the unissued Series E Preferred Stock, any UPC Common Stock, or any other
capital stock of the Corporation, or to purchase or subscribe for any bonds,
certificates of indebtedness, debentures, or other securities convertible into,
or carrying options, warrants or rights to purchase, any stock or other
securities of the Corporation, or to purchase or subscribe for any stock or any
securities of the Corporation purchased by the Corporation or by its nominee or
nominees, or to have any other preemptive rights now or hereafter defined by the
laws of the State of Tennessee.
4. Liquidation. In the event of the voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation, the
holders of Series E Preferred Stock shall be entitled to receive, after payment
or provision for payment of all debts but before any distribution of assets may
be made to the holders of UPC Common Stock or any other stock of the Corporation
ranking junior to the Series E Preferred Stock as to the distribution of assets
on liquidation, dissolution or winding up of the Corporation, out of assets of
the Corporation available for distributions to its shareholders, $25.00 per
share (the "Liquidation Value"), plus, in each case, accrued and unpaid
dividends thereon from (but not including) the day of original issuance to the
date of payment thereof. After such payment has been made in full to the holders
of the outstanding shares of Series E Preferred Stock (or funds necessary for
such payment have been set aside in trust for the account of such holders so as
to be and to continue to be available therefor), the holders of Series E
Preferred Stock shall be entitled to no further distributions, and the remaining
assets of the Corporation shall be divided and distributed among the holders of
UPC Common Stock (subject to any senior rights of any holders of any other
capital stock of the Corporation entitled to participate with the UPC Common
Stock as to the distribution of assets) then outstanding according to their
respective rights as shareholders. If, upon any liquidation, dissolution or
winding up of the Corporation, the net assets of the Corporation, or proceeds
thereof available for distribution among the holders of Series E Preferred Stock
should be insufficient to permit payment in full of the preferential amount
aforesaid and liquidating payments on any other Preferred Stock ranking, as to
liquidation, dissolution or winding up, on a parity with the Series E Preferred
Stock, then such assets, or the proceeds thereof, shall be distributed among the
holders of Series E Preferred Stock and the holders of any such other Preferred
Stock ranking on a parity with the Series E Preferred Stock ratably in
accordance with the respective amounts which would be payable on such shares of
Series E Preferred Stock and on any such other Preferred Stock ranking on a
parity with the Series E Preferred Stock if all amounts payable thereon were
paid in full. Neither the consolidation or merger of the Corporation with or
into any other corporation or corporations, nor a reorganization of the
Corporation alone, nor the sale or transfer by the Corporation of all or
substantially all of its assets shall be deemed a "liquidation, dissolution or
winding up of the Corporation" within the meaning of this paragraph 4.
5. Right of Holders of Series E Shares to Vote.
(a) Except as hereinafter provided for and as otherwise from
time to time required by law, the Series E Preferred Stock shall have no voting
rights except for those which may be required by the laws of the State of
Tennessee.
(b) So long as any shares of Series E Preferred Stock remain
outstanding, the consents of the holders of at least two-thirds (2/3ds) of the
shares of Series E Preferred Stock outstanding at the time (voting separately as
a class together with all other series of Preferred Stock of the Corporation
ranking on a parity with the Series E Preferred Stock either as to dividends or
the distribution of assets upon liquidation, dissolution or winding up and upon
which like voting rights have been conferred and are exercisable) given in
person or by proxy, either in writing or at any special or annual meeting called
for the purpose, shall be necessary to permit, effect or validate any one or
more of the following actions:
(i) the authorization, creation or issuance of a new class
or series of shares of capital stock of the Corporation having rights,
preferences or privileges senior to the Series E Preferred Stock, or any
increase in the number of authorized shares of any class or series having
rights, preferences or privileges senior to the Series E Preferred Stock; or
(ii) the amendment, alteration or repeal, whether by merger,
consolidation or otherwise, of any of the provisions of the Corporation's
Charter which would materially and adversely affect any right, preference,
privilege or voting power of the Series E Preferred Stock or of the holders
thereof; provided, however, that any increase in the amount of authorized UPC
Common Stock or Preferred Stock or the authorization, creation or issuance of
any other series of UPC Common Stock or Preferred Stock, in each case ranking on
a parity with, or junior to the Series E Preferred Stock with respect to the
payment of dividends and the distribution of assets upon liquidation,
dissolution or winding up, shall not be deemed
Page 13 of Union Planters Corporation Charter
<PAGE> 15
to "materially and adversely affect" such rights, preferences, privileges or
voting powers of the Series E Preferred Stock.
(c) The foregoing voting provisions shall not apply if, at or
prior to the time when the act with respect to which such vote would otherwise
be required shall be effected (i) all outstanding shares of Series E Preferred
Stock shall have been redeemed or called for redemption and (ii) funds shall
have been deposited in trust in an amount sufficient to effect such redemption
as provided herein.
6. Redemption.
(a) The shares of Series E Preferred Stock shall be redeemable,
in whole or in part, only at the option of the Corporation by resolution of its
Board of Directors but only with the prior consent of the Board of Governors of
the Federal Reserve System, or of the appropriate Federal Reserve Bank acting
under delegated authority, or their successors, at any time and from time to
time on or after March 31, 1997, at a price "Redemption Price" of $25.00 per
share, plus all dividends accrued and unpaid on such Series E Preferred Stock
from (but not including) the day of original issuance up to the Redemption Date
(as defined below). Notwithstanding the foregoing sentence of this Section, the
Corporation may acquire Series E Preferred Stock in any other lawful manner
permitted by its Charter or Bylaws.
(b) In the event that less than the entire amount of Series E
Preferred Stock outstanding is to be redeemed at any one time, the shares to be
redeemed shall be selected by lot or pro rata (as nearly as may be) or by any
other method determined by the Board of Directors of the Corporation in its sole
discretion to be equitable.
(c) Notice of any redemption, whether whole or partial, shall be
given by United States first class mail, postage prepaid, deposited in the mail
not less than 30 nor more than 60 days prior to the Redemption Date, addressed
to each holder of record of the shares selected for redemption at such holders'
respective addresses as the same shall appear on the stock register of the
Corporation. Each such notice shall state: (1) the date designated by the Board
of Directors as the "Redemption Date"; (2) the number of shares of Series E
Preferred Stock to be redeemed and, if less than all the shares held by such
holder are to be redeemed, the number of such shares to be redeemed from such
holder; (3) the Redemption Price and the manner in which the Redemption Price is
to be paid and delivered; (4) the place or places where certificates
representing and evidencing such shares are to be surrendered for payment of the
Redemption Price; and (5) that dividends on the shares to be redeemed will cease
to accrue on such Redemption Date. No failure to mail such notice or any defect
therein or in the mailing thereof shall affect the validity of the proceedings
for redemption. Any notice mailed in the manner herein provided shall be
conclusively presumed to have been duly given whether or not the holder receives
the notice. On the Redemption Date, or on such earlier date as the Board of
Directors shall designate for payment of the Redemption Price (unless the
Corporation shall default in the payment of the Redemption Price as set forth in
such notice), the holders of shares of Series E Preferred Stock selected for
redemption and to whom notice has been duly given shall cease to be shareholders
with respect to such shares of Series E Preferred Stock and shall have no
interest in, or claim against the Corporation by virtue thereof and shall have
no dividend, voting or other rights with respect to such shares except the right
to receive the moneys payable upon such redemption from the Corporation or
otherwise, without interest thereon, upon surrender (and proper endorsement, if
required by the Corporation) of the certificates, and the shares represented
thereby shall no longer be deemed to be outstanding. The Corporation's
obligation to provide funds for redemption shall be deemed fulfilled if, on or
before the Redemption Date, the Corporation shall have deposited with a bank or
trust company (which may be an affiliate of the Corporation), having an office
or agency in Memphis, Tennessee, having a capital and surplus of at least
$50,000,000, or with any other such bank or trust company located in the
continental United States as may be designated from time to time by the
Corporation, funds necessary for such redemption, in trust, with irrevocable
instructions that such funds be applied to the redemption of the shares of
Series E Preferred Stock so called for redemption. Any interest accrued on such
funds shall be paid to the Corporation from time to time. Any funds so deposited
and unclaimed at the end of six years from such Redemption Date shall be repaid
or released to the Corporation, after which the holder or holders of such shares
of Series E Preferred Stock so called for redemption shall look only to the
Corporation for payment of the Redemption Price. Upon redemption of Series E
Preferred Stock in the manner set out herein, or upon the purchase of Series E
Preferred Stock by the Corporation, the Series E Preferred Stock so acquired by
the Corporation shall be retired and canceled and shall be restored to the
status of authorized but unissued shares of Preferred Stock, without designation
as to series, and may thereafter be issued, but not as shares of Series E
Preferred Stock.
7. Ranking.
(a) Any class or series of stock of the Corporation shall be
deemed to rank:
(i) "senior to" the Series E Preferred Stock if the
holders of such class or series shall
be entitled to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of Series E Preferred Stock; and
(ii) "on a parity with" the Series E Preferred Stock if
the holders of such class or series of stock and the holders of the Series E
Preferred Stock shall be entitled to the receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as the case may be,
in proportion to their respective dividend rates or liquidation prices, without
preference or priority one over the other whether or not the dividend rates,
dividend payment dates or redemption or liquidation prices per share of such
other class or series of stock are different from those of the Series E
Preferred Stock.
(b) The Series E Preferred Stock shall rank on a parity with the
Corporation's Series B Preferred Stock, the Corporation's Series C Preferred
Stock, the Corporation's Series D Preferred Stock and the Corporation's Series A
Preferred Stock, if and when shares of such Series A Preferred Stock should be
issued.
8. Conversion of Series E Preferred Stock. The registered holders of
shares of Series E Preferred Stock shall have the right, at their option, to
convert such shares into shares of UPC Common Stock (and, upon the occurrence of
a certain type of merger, into other assets) on the following terms and
conditions:
(a) The registered holders of the Series E Preferred Stock shall
have the right at any time after the date of its original issuance but prior to
the Redemption Date designated in the notice of redemption given to such holders
in accordance with the provisions of Section 6, to convert each share of the
Corporation's Series E Preferred Stock registered in the name of such holders
into 1.25 shares of the Corporation's Common Stock
Page 14 of Union Planters Corporation Charter
<PAGE> 16
having a par value of $5.00 per share. The Series E Preferred Stock shall not be
convertible into any other class or classes or any other series of any class or
classes of capital stock (or any other equity or debt security) of the
Corporation.
(b) On presentation and surrender to the Corporation at any
office or agency maintained for the transfer of the Series E Preferred Stock
(the "Transfer Agent") of the certificates representing and evidencing Series E
Preferred Stock so to be converted, duly endorsed for conversion, the holder of
such Series E Preferred Stock shall be entitled, subject to the limitations
herein contained, to receive in exchange therefor a certificate or certificates
for fully paid and nonassessable shares, and cash for fractional shares (if any)
of UPC Common Stock or other securities pursuant to subsection (d) below on the
basis set forth. The Series E Preferred Stock shall be deemed to have been
converted and the person converting the same shall be deemed to have become the
holder of record of UPC Common Stock, for the purpose of receiving dividends and
for all other purposes whatsoever as of the date when the certificate or
certificates representing and evidencing such Series E Preferred Stock shall
have been surrendered to the Transfer Agent as aforesaid. The holder of Series E
Preferred Stock shall be responsible for selection of the method of delivery to
the Transfer Agent of any share certificates intended to be surrendered for
conversion and the Corporation shall have no risk or liability for the loss or
late delivery of certificates for conversion. Properly endorsed certificates
must be physically received by the Transfer Agent no later than the close of
business on the Business Day next preceding the designated Redemption Date in
order for the conversion to become effective. The Corporation shall not be
required to make any such conversion, and no surrender of the Series E Preferred
Stock shall be effective for such purposes, while the books for the transfer of
either class of stock are closed for any purpose, but the surrender of such
shares of Series E Preferred Stock for conversion during any period while such
books are closed shall become effective for all purposes of conversion
immediately upon the reopening of such books, as if the conversion had been made
on the date such shares of Series E Preferred Stock were surrendered.
(c) If at any time, or from time to time, the Corporation should
(i) declare and pay on, or in respect of, the UPC Common Stock any dividend
payable in shares of UPC Common Stock; or (ii) subdivide the outstanding shares
of UPC Common Stock into a greater number of shares, or contract the number of
outstanding shares of Series E Preferred Stock by combining such shares into a
smaller number of shares; or (iii) contract the number of outstanding shares of
the UPC Common Stock by combining such shares into a smaller number of shares,
or (iv) subdivide the outstanding shares of Series E Preferred Stock into a
greater number of shares of Series E Preferred Stock, the Conversion Ratio shall
be proportionately adjusted as of such time.
(d) If the Corporation should consolidate with, or merge into
any corporation or reclassify outstanding shares of UPC Common Stock (other than
by way of subdivision or contraction of such shares), each share of Series E
Preferred Stock shall thereafter be convertible into the number of shares of
stock or other securities or property of the Corporation, or of the entity
resulting from such consolidation or merger, to which a holder of the number of
shares of UPC Common Stock deliverable upon conversion of such share of Series E
Preferred Stock would have been entitled upon such consolidation, merger or
reclassification, had the holder of such share of Series E Preferred Stock
exercised his right of conversion and had such shares been issued and
outstanding and had such holder been the holder of record of such UPC Common
Stock at the time of such consolidation, merger or reclassification and the
Corporation shall make lawful provision therefor as a part of such
consolidation, merger or reclassification.
(e) Whenever the conversion ratio or the type of consideration
other than UPC Common Stock receivable by the holder upon conversion of the
Series E Preferred Stock is required to be adjusted, as herein provided, the
Corporation shall promptly file with the transfer agent for the UPC Common Stock
and simultaneously provide to each holder of record of Series E Preferred Stock
a statement signed by the President or a Vice President or the Secretary or the
Treasurer setting forth the adjusted conversion ratio and, if applicable, a
description of the consideration receivable upon consummation, determined as so
provided. Such statement shall set forth in reasonable detail such facts as may
be necessary to show the reason for and the manner of computing such
adjustments.
(f) The Corporation shall pay any and all taxes which may be
imposed upon it with respect to the issuance and delivery of UPC Common Stock
upon the conversion of the Series E Preferred Stock as herein provided. The
Corporation shall not be required in any event to pay any transfer or other
taxes by reason of the issuance of such UPC Common Stock in names other than
those in which the Series E Preferred Stock surrendered for conversion may
stand, and no such conversion or issuance of UPC Common Stock shall be made
unless and until the person requesting such issuance has paid to the Corporation
the amount of any such tax, or has established to the satisfaction of the
Corporation and its transfer agent, if any, that such tax has been paid or is
not required. Upon any conversion of Series E Preferred Stock as herein
provided, no adjustment or allowance shall be made for dividends on the Series E
Preferred Stock so converted, and all rights to dividends, if any, shall cease
and be deemed satisfied; provided, however, that nothing in this section shall
be deemed to relieve the Corporation from its obligation to pay any dividends
which shall have been declared and shall be payable to holders of Series E
Preferred Stock of record as of a date prior to such conversion even though the
payment date for such dividend may be subsequent to the date of conversion.
(g) If any shares of Series E Preferred Stock should be
converted into UPC Common Stock at a time when the UPC Common Stock into which
such Series E Preferred Stock is convertible has attached or attributable
thereto Rights issued pursuant to the UPC Share Purchase Rights Agreement, the
surrender of such Series E Preferred Stock shall effectively cancel all Rights
attached or attributable to the share(s) of Series E Preferred Stock so
converted.
9. Reservation of UPC Common Stock. The Corporation shall, so long
as any of the Series E Preferred Stock shall remain outstanding, reserve and
keep available out of its authorized and unissued UPC Common Stock, solely for
the purpose of effecting the conversion of the Series E Preferred Stock, such
number of shares of UPC Common Stock as shall, from time to time, be sufficient
to effect the conversion of all shares of the Series E Preferred Stock then
outstanding. The Corporation shall, from time to time, increase its authorized
UPC Common Stock and take such other actions as may be necessary to permit the
issuance from time to time of the shares of the UPC Common Stock, as fully paid
and nonassessable shares, upon the conversion of the Series E Preferred Stock in
the manner herein provided.
10. Debt Obligations. The Corporation, at any time and from time to
time, may authorize the issuance of debt obligations, whether or not
subordinated, without the approval of any of its shareholders.
11. Definitions. For purposes of subparagraph (j) of Article Sixth of
the Charter:
(a) The term "outstanding", when used in reference to shares of
stock, shall mean shares which are authorized and issued, excluding shares held
by the Corporation or by a subsidiary of the Corporation (other than in a
fiduciary capacity), and excluding shares called for
Page 15 of Union Planters Corporation Charter
<PAGE> 17
redemption, funds for the redemption of which shall have been set aside by the
Corporation or deposited in trust in the manner provided herein;
(b) The amount of dividends "accrued" on any share of Series E
Preferred Stock as of the last day of the applicable Quarterly Dividend Period
(the "Quarterly Dividend Date") shall be deemed to be the amount of any unpaid
dividends accumulated thereon to and including such Quarterly Dividend Date,
whether or not earned or declared, and the amount of dividends "accrued" on any
shares of Series E Preferred Stock as at any date other than a Quarterly
Dividend Date shall be deemed to be (i) the amount of any unpaid dividends
accumulated thereon to and including the last preceding Quarterly Dividend Date,
whether or not earned or declared, plus (ii) an amount calculated on the basis
of the annual dividend rate fixed for the shares of Series E Preferred Stock
(8%) for the period subsequent to such last preceding Quarterly Dividend Date to
and including the date as of which the calculation is made, based on a 360-day
year of 12 consecutive 30-day months and the actual number of days elapsed in
the latter period.
COMMON STOCK
(a) Shares of Common Stock may be issued at such time or times and for
such consideration or considerations (not less than the par value thereof) as
the Board of Directors may deem advisable subject to such limitations as may be
set forth in the laws of the State of Tennessee or the Charter or the Bylaws of
the Corporation.
(b) Except as provided by law or this Charter, each holder of Common Stock
shall have one vote in respect of each share of stock held by him of record on
the books of the Corporation on all matters voted upon by the shareholders.
(c) Subject to the preferential dividend rights, if any, applicable to
shares of Preferred Stock and subject to applicable requirements, if any, with
respect to the setting aside of sums for purchase, retirement or sinking funds
for Preferred Stock, the holders of Common Stock shall be entitled to receive,
to the extent permitted by law, such dividends as may be declared from time to
time by the Board of Directors.
(d) In the event of the voluntary or involuntary liquidation, dissolution,
distribution of assets or winding up of the Corporation, after distribution in
full of the preferential amounts, if any, to be distributed to the holders of
shares of Preferred Stock, holders of Common Stock shall be entitled to receive
all of the remaining assets of the Corporation of whatever kind available for
distribution to stockholders ratably in proportion to the number of shares of
Common Stock held by them respectively. The Board of Directors may distribute in
kind to the holders of Common Stock such remaining assets of the Corporation or
may sell, transfer or otherwise dispose of all or any part of such remaining
assets to any other person, corporation, trust, or other entity and receive
payment therefor in cash, stock or obligations of such other corporation, trust
or entity, or any combination thereof, and may sell all or any part of the
consideration so received and distribute any balance thereof in kind to holders
of Common Stock. Neither the merger or consolidation of the Corporation into or
with any other corporation, nor the merger of any other corporation into it, nor
any purchase or redemption of shares of stock of the Corporation of any class,
shall be deemed to be a dissolution, liquidation or winding up of the
Corporation for the purposes of this paragraph.
(e) Such numbers of shares of Common Stock as may from time to time be
required for such purpose shall be reserved for issuance (i) upon conversion of
any shares of Preferred Stock or any other obligation of the Corporation
convertible into shares of Common Stock which is at the time outstanding or
issuable upon exercise of any options or warrants at the time outstanding, and
(ii) upon exercise of any options or warrants at the time outstanding to
purchase shares of Common Stock.
SEVENTH: MINIMUM CAPITAL TO COMMENCE BUSINESS:
The Corporation will not commence business until consideration of one
thousand dollars ($1,000) has been received for the issuance of shares.
EIGHTH: NO PREEMPTIVE RIGHTS:
Neither the holders of Common Stock, nor the holders of Preferred Stock
nor the holders of any securities convertible into, exchangeable for or carrying
any rights to subscribe to any class of capital stock of the Corporation shall,
as such holders, have any right to acquire, purchase or subscribe for any shares
of the Common Stock or Preferred Stock of the Corporation or any class of
capital stock or any securities convertible into, exchangeable for, or carrying
any rights to subscribe to, shares of Common Stock or any such other class of
capital stock of the Corporation, which it may hereafter issue or sell (whether
out of the number of shares now or hereafter authorized by this Charter, or out
of any shares of the Common Stock or other capital stock of the Corporation
acquired by it after the issuance thereof, or otherwise), other than such right,
if any, as the Board of Directors of the Corporation in its discretion may
determine.
NINTH: DIRECTORS:
The number of directors of the Corporation shall be such number, not less
than seven (7) nor more than twenty-five (25), as shall be provided from time to
time in the Bylaws, provided that no amendment to the Bylaws decreasing the
number of directors shall have the effect of shortening the term of any
incumbent director, and provided further that no action shall be taken by the
directors (whether through amendment of the Bylaws or otherwise) to increase the
number of directors as provided in the Bylaws from time to time unless at least
sixty-six and two-thirds percent (66-2/3%) of the directors then in office shall
concur in said action. Directors need not be shareholders of the Corporation nor
need they be residents of Tennessee.
The Board of Directors shall be divided into three classes of directors
which shall be designated Class I, Class II and Class III. Such classes shall be
as nearly equal in number as the then total number of directors constituting the
entire board shall permit, with the terms of office of all members of one class
expiring each year. Should the number of directors fixed by the Bylaws not be
equally divisible by three, the excess director or directors shall be assigned
to Classes III or II as follows: (i) if there shall be an excess of one
directorship over a number equally divisible by three, such extra directorship
shall be classified in Class III; and (ii) if there be an excess of two
directorships over a number equally divisible by three, one shall be classified
in Class II and the other in Class III. At the annual meeting of shareholders in
1981: directors of Class I shall be elected to hold office for a term expiring
at the next succeeding annual meeting; directors of Class II shall be elected to
hold office for a term expiring at the second succeeding annual meeting; and
directors of Class III shall be elected to hold office for a term expiring at
the third succeeding annual meeting. At each annual meeting of shareholders
after 1981, the successors to the members of the class of directors whose terms
shall then expire shall be elected to hold
Page 16 of Union Planters Corporation Charter
<PAGE> 18
office for a term expiring at the third succeeding annual meeting, except that
the successor to any director who shall have been elected by the directors to
fill a vacancy whose term shall expire at such meeting shall be elected by the
shareholders for a term expiring at the same time as the terms of other members
of the same class. Any director elected by the Board of Directors to fill a
vacancy (whether or not such vacancy shall have been created by an increase in
the number of directors) shall serve only until the next annual meeting of the
shareholders. Notwithstanding the foregoing, any director whose term shall
expire at any annual meeting shall continue to serve until such time as his
successor shall have been duly elected and shall have qualified unless his
position on the Board shall have been abolished by action taken to reduce the
size of the Board prior to said meeting.
Should the number of members of the Corporation's Board as fixed by the
Bylaws be reduced by amendment thereof, the Board shall designate, by the name
of the incumbent(s), the position(s) to be abolished, the first being selected
from Class II should the number of members of that Class exceed the number of
members of Class I, the second being selected from Class III should the number
of its members exceed the number of members of Class I, and others, in sequence
from Classes I, II, III, I, II, III, etc. in that order. Should additional
directorships be created pursuant to amendment of the Bylaws, they shall be
allocated first to Class II and then to Class I as may be required to make equal
the number of directorships in each class. Should the number of directorships be
equal as among the three classes, newly created positions shall be assigned
first to Class III, then to Class II, then to Class I, etc.
Notwithstanding any other provisions of this Charter or the Bylaws (and
notwithstanding the fact that some lesser percentage may be specified by law,
the Charter or the Bylaws of this Corporation), the affirmative vote of the
holders of sixty-six and two-thirds percent (66 2/3%) or more of the outstanding
shares of capital stock of this Corporation entitled to vote generally in the
election of directors (considered for this purpose as one class) shall be
required (a) to amend, alter, change or repeal this ARTICLE NINTH of the Charter
or (b) to remove from office any director of this Corporation whether with or
without cause.
TENTH: NO CUMULATIVE VOTING FOR DIRECTORS:
Directors shall be elected by a plurality of the votes cast in the
election. No cumulative voting shall be permitted with respect to the election
of directors.
ELEVENTH: CERTAIN POWERS DEFINED:
The following provisions are hereby adopted for the purpose of defining,
limiting and regulating the powers of the Corporation and of its directors and
shareholders:
(a) All corporate powers of the Corporation shall be exercised by its
Board of Directors except as otherwise provided by law, provided, however, that
the Board of Directors, by a resolution adopted by a majority of the entire
Board, may designate an Executive Committee consisting of five (5) or more
directors, and other committees, consisting of five (5) or more directors, and
may delegate to such committee or committees all such authority of the Board
that it deems desirable, except that no such committee or committees, unless
specifically so authorized by the Board, shall have and exercise the authority
of the Board to:
(1) adopt, amend or repeal the Bylaws;
(2) submit to the shareholders of the Corporation any action
requiring shareholders' authorization under the Tennessee
Business Corporation Act;
(3) fill vacancies in the Board or in any committee;
(4) declare dividends or make other corporate distributions;
nor
(5) issue or reissue any Common Stock, or Preferred Stock, or
any obligation of the Corporation exchangeable for or
convertible into its capital stock of any class or any warrant,
right or option to acquire the same.
The Board may designate one or more directors as alternate members of any
such committee, who may replace any absent member or members at any meeting of
such committee. Each such committee shall serve at the pleasure of the Board.
The designation of any such committee shall serve at the pleasure of the Board.
The designation of any such committee and the delegation thereto of authority
shall not relieve any director of any responsibility imposed by law. To the
extent consistent with law, this Charter and the Bylaws of the Corporation
relating to the conduct of meetings of the Board shall govern meetings of the
Executive and other committees.
(b) Whenever under the Tennessee Business Corporation Act shareholders are
required or permitted to take any action by vote, such action may be taken
without a meeting on written consent, setting forth the action so taken, signed
by all of the persons or entities entitled to vote thereon. Directors may take
any action which they are required or permitted to take under the Tennessee
Business Corporation Act without a meeting in the same manner.
(c) The Board of Directors shall have the power to adopt, amend or repeal
the Bylaws of the Corporation by a majority vote of the entire Board, but any
Bylaw so adopted by the Board may be further amended or repealed by action of
the shareholders of the Corporation. The Bylaws may contain any provision for
the regulation and management of the business or affairs of the Corporation not
inconsistent with law and this Charter.
(d) The Board of Directors shall have power from time to time to set apart
out of any funds of the Corporation available for dividends a reserve or
reserves for any proper purpose, and to abolish any such reserve.
(e) The Board of Directors from time to time shall determine whether and
to what extent and at what times and places and under what conditions and
regulations the accounts and books of the Corporation, or any of them, shall be
open to the inspection of the shareholders, and no shareholder shall have any
right to inspect any account, book or document of the Corporation except as
conferred by statute, the Bylaws or as authorized by resolution of the Board of
Directors.
Page 17 of Union Planters Corporation Charter
<PAGE> 19
(f) The Board of Directors of the Corporation, without the vote of the
shareholders, may distribute to its shareholders out of its capital surplus a
portion of its assets, in cash or in property, in accordance with and subject to
the limitations imposed by Section 48-16-401 of the Tennessee Business
Corporation Act, provided however, that no such distribution shall be made to
the holders of any class of shares until adequate provision shall be made for
any sinking fund requirements applicable to the retirement of Preferred Stock of
the Corporation.
(g) The Corporation shall have the right to purchase or otherwise acquire
its own shares in accordance with Section 48-16-302 of the Tennessee Business
Corporation Act to the extent of unreserved and unrestricted earned surplus
available therefor, or, if such unreserved and unrestricted earned surplus is
not available, to the extent of unreserved and unrestricted capital surplus
available therefor.
TWELFTH: INDEMNIFICATION OF CERTAIN PERSONS:
To the fullest extent permitted by Tennessee law, the Corporation may
indemnify or purchase and maintain insurance to indemnify any of its directors,
officers, employees or agents and any persons who may serve at the request of
the Corporation as directors, officers, employees, trustees or agents of any
other corporation, firm, association, national banking association,
state-chartered bank, trust company, business trust, organization or any other
type of entity whether or not the Corporation shall have any ownership interest
in such entity. Such indemnification(s) may be provided for in the Bylaws, or by
resolution of the Board of Directors or by appropriate contract with the person
involved.
THIRTEENTH: CHARTER AMENDMENTS:
The Corporation reserves the right to amend, alter, change or repeal any
provision made in this Charter, in the manner now or hereafter prescribed by the
laws of the State of Tennessee, and all rights conferred herein upon
shareholders and the Board of Directors are granted subject to this reservation.
FOURTEENTH: SPECIAL VOTE IN CERTAIN CASES:
(a) Except as otherwise expressly provided in Paragraph 4 of this ARTICLE
FOURTEENTH, the affirmative vote of the holders of sixty-six and two-thirds
percent (66 2/3%) or more of the outstanding shares of capital stock of this
Corporation entitled to vote generally in the election of directors, considered
for the purposes of this ARTICLE FOURTEENTH as one class, shall be required to
authorize:
(1) any merger or consolidation of this Corporation with or into any
other corporation, or other entity; or
(2) any sale, lease, exchange, or other disposition of all or
substantially all of the assets of this Corporation to or with any other
corporation, person, or other entity, if, as of the "Date of Determination" as
defined in this ARTICLE FOURTEENTH, such other corporation, person, or entity is
the "Beneficial Owner," directly or indirectly, of ten percent (10%) or more of
the outstanding shares of capital stock of this Corporation entitled to vote
generally in the election of directors, considered for the purposes of this
ARTICLE FOURTEENTH as one class. Such affirmative vote shall be required
notwithstanding the fact that some lesser percentage may be specified in law or
any agreement with any national securities exchange.
(b) For purposes of this ARTICLE FOURTEENTH, any corporation, person, or
other entity shall be deemed to be the "Beneficial Owner" of any shares of
capital stock of this Corporation (i) which it or any "Affiliate" or "Associate"
of it (as defined in this ARTICLE FOURTEENTH) has the right to acquire pursuant
to any agreement, or upon exercise of conversion rights, warrants, or options,
or otherwise, or (ii) which are "Beneficially Owned," directly or indirectly
(including shares being owned through application of clause (i) above), by any
other corporation, person or entity which is its "Affiliate" or "Associate" (as
defined in this ARTICLE FOURTEENTH) or with which it or any "Affiliate" or
"Associate" or it has any agreement, arrangement, or understanding for the
purpose of acquiring, holding, voting, or disposing of the capital stock of this
Corporation. For the purposes of this ARTICLE FOURTEENTH, the outstanding shares
of any class of capital stock of this Corporation shall include shares deemed
owned through the application of clauses (i) and (ii) above but shall not
include any other shares which may be issuable pursuant to any agreement, or
upon exercise of conversion rights, warrants, or options, or otherwise.
(c) The Board of Directors of this Corporation shall have the power and
duty to determine for the purposes of this ARTICLE FOURTEENTH, on the basis of
information then known to it, whether any corporation, person, or other entity
"Beneficially Owns" ten percent (10%) or more of the outstanding shares of
capital stock of the Corporation entitled to vote generally in the election of
directors, or is an "Affiliate" or an "Associate" (as defined in this ARTICLE
FOURTEENTH) or another. Any such determination by the Board of Directors made in
good faith shall be conclusive and binding for all purposes of this ARTICLE
FOURTEENTH.
(d) The provisions of this ARTICLE FOURTEENTH shall not apply to any
merger or consolidation of this Corporation with or into, or any sale, lease,
exchange, or other disposition of any assets of this Corporation to, any
corporation or entity of which a majority of the outstanding shares of all
classes of capital stock entitled to vote generally in the election of
directors, considered for this purpose as one class, is owned of record or
beneficially by this Corporation and its subsidiaries.
(e) As used in this ARTICLE FOURTEENTH, the following terms shall have the
following meanings:
(1) Affiliate. An "Affiliate" of, or a person "affiliated" with, a
specific person, means a person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the person specified.
(2) Associate. The term "Associate" used to indicate a relationship
with any person, means (i) any corporation or organization (other than this
Corporation or a majority-owned subsidiary of this Corporation) of which such
person is an officer or partner or is, directly or indirectly, the beneficial
owner of ten percent (10%) or more of any class of equity securities, (ii) any
trust or other estate in which such person has a substantial beneficial interest
or as to which such person serves as trustee or in a similar fiduciary capacity,
(iii) any relative or spouse of such person, or any relative of such spouse, who
has the same home as such person, or (iv) any investment company registered
under the Investment Company Act of 1940 for which such person or any affiliate
of such person serves as investment adviser.
Page 18 of Union Planters Corporation Charter
<PAGE> 20
(3) Date of Determination. The term "Date of Determination" means (i)
the date on which a binding agreement (except for the fulfillment of conditions
precedent, including, without limitation, votes of shareholders to approve such
transaction) is entered into by this Corporation, as authorized by its Board of
Directors, and another corporation, person or other entity providing for any
merger or consolidation of this Corporation or any sale, lease, exchange or
disposition of all or substantially all of the assets of this Corporation, as
referred to in Paragraph 1 in this ARTICLE FOURTEENTH; or, (ii) if such an
agreement as referred to in item (i) is amended so as to make it less favorable
to this Corporation and its shareholders, the date on which such amendment is
approved by the Board of Directors of this Corporation, or, (iii) in cases where
neither item (i) nor item (ii) shall be applicable, the record date for the
determination of shareholders of this Corporation entitled to notice of and to
vote upon the transaction in question. The Board of Directors of this
Corporation shall have the power and duty to determine for the purposes of this
ARTICLE FOURTEENTH the Date of Determination as to any transaction. Any such
determination by the Board of Directors made in good faith shall be conclusive
and binding for all purposes of this ARTICLE FOURTEENTH.
(f) The provisions of this ARTICLE FOURTEENTH as to the vote required for
any action described herein, shall apply in addition to any other provision for
a vote required with respect to such action by law or otherwise. Notwithstanding
any other provisions of this Charter or the Bylaws (and notwithstanding the fact
that some lesser percentage may be specified in law, the Charter, or the
Bylaws), the affirmative vote of the holders of sixty-six and two-thirds percent
(66 2/3%) or more of the outstanding shares of capital stock of this Corporation
entitled to vote generally in the election of directors (considered for this
purpose as one class) shall be required to amend, alter, or repeal this ARTICLE
FOURTEENTH.
Restated January 16, 1997
Amended April 16, 1998
Page 19 of Union Planters Corporation Charter
<PAGE> 1
Exhibit 4(b)
Agreement Pursuant to Item 601 (b) (4) (iii) (A) and 601 (b) (4) (v) of
Regulation S-K
<PAGE> 2
EXHIBIT 4(B)
AGREEMENT PURSUANT TO ITEM 601(B)(4)(III)(A) AND
601 (B) (4) (V) OF REGULATION S-K
The Registrant hereby undertakes and agrees to furnish to the Securities
and Exchange Commission upon request a copy of any instrument relating to, or
defining the rights of the holders of, any long-term debt of the Registrant
and/or its subsidiaries, a copy of which has not been filed in reliance upon
Item 601(b)(4)(iii)(A) and 601 (b) (4) (v) of Regulation S-K or which, although
previously filed, shall have become stale in the sense of Item 10(d) of
Regulation S-K or which shall have been disposed of by the Commission pursuant
to its Record Control Schedule. This Agreement and undertaking is intended to be
effective with respect to Registrant's Long-term Debt instruments whether
securities have been issued thereunder or are yet to be issued thereunder.
Date: May 8, 1998
-----------
By: /s/ Benjamin W. Rawlins, Jr.
-----------------------------------
Benjamin W. Rawlins, Jr.
Chairman and Chief Executive Officer
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF UNION PLANTERS CORPORATION FOR THE THREE MONTHS ENDED
MARCH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
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