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As filed with the Securities and Exchange Commission on DECEMBER 1, 1998
Registration No. 333-67699
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-4
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
UNION PLANTERS CORPORATION
(Exact Name of Registrant as Specified in its Charter)
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TENNESSEE 6712 62-0859007
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification No.)
Incorporation or Organization) Classification Code Number)
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7130 GOODLETT FARMS PARKWAY
MEMPHIS, TENNESSEE 38018
(901) 580-6000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
E. JAMES HOUSE, JR., ESQ.
SECRETARY AND MANAGER OF THE LEGAL DEPARTMENT OF
UNION PLANTERS CORPORATION
7130 GOODLETT FARMS PARKWAY
MEMPHIS, TENNESSEE 38018
(901) 580-6495
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
WITH COPIES TO:
LAWRENCE B. MANDALA, ESQ. VIRGINIA B. WILSON, ESQ.
Arter & Hadden LLP Wyatt, Tarrant & Combs
1717 Main Street 6075 Poplar Avenue
Suite 4100 Suite 650
Dallas, Texas 75201-4605 Memphis, Tennessee 38119
(214) 761-2100 (901) 537-2164
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF SECURITIES TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
DELAYING AMENDMENT
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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LAPLACE BANCSHARES, INC.
110 BELLE TERRE BLVD.
LAPLACE, LOUISIANA 70068-3340
December 1, 1998
Dear Shareholder:
You are cordially invited to attend a special meeting of shareholders of
LaPlace Bancshares, Inc. to be held at 5:30 PM, local time, on December 30,
1998 at the office of Bank of LaPlace of St. John the Baptist Parish, Louisiana,
110 Belle Terre Blvd., LaPlace, Louisiana.
At the special meeting, you will be asked to vote on a proposal to approve
a merger agreement between LaPlace, Union Planters Holding Corporation, a
subsidiary of Union Planters Corporation and Union Planters Corporation. The
merger agreement provides for the merger of LaPlace and Union Planters Holding
Corporation, a wholly-owned subsidiary of Union Planters. As a result of the
merger, each outstanding share of LaPlace common stock will be converted into
2.83 shares of Union Planters common stock. Cash (without interest) will be paid
in lieu of the issuance of fractional shares of Union Planters common stock. THE
ACCOMPANYING PROXY STATEMENT-PROSPECTUS CONTAINS DETAILED INFORMATION ABOUT THE
PROPOSED MERGER. YOU SHOULD READ IT CAREFULLY.
The closing price of Union Planters common stock on the New York Stock
Exchange on November 27, 1998 was $48.9375. If the merger had been consummated
on that date the value of the Union Planters shares to be received for each
share of LaPlace common stock, based on the closing price of Union Planters
common stock on November 27, 1998, would have been $138.49.
AFTER CAREFUL CONSIDERATION, YOUR BOARD OF DIRECTORS UNANIMOUSLY APPROVED
THE AGREEMENT AND THE RELATED PLAN OF MERGER. THE BOARD BELIEVES THE MERGER IS
IN THE BEST INTERESTS OF LAPLACE AND ITS SHAREHOLDERS AND UNANIMOUSLY RECOMMENDS
THAT YOU VOTE FOR APPROVAL OF THE AGREEMENT AND THE RELATED PLAN OF MERGER. THE
REASONS FOR THE BOARD OF DIRECTORS' RECOMMENDATION ARE STATED IN THE
ACCOMPANYING PROXY STATEMENT-PROSPECTUS. FURTHERMORE, LAPLACE'S FINANCIAL
ADVISOR, MERCER CAPITAL MANAGEMENT, INC., HAS ISSUED ITS OPINION TO THE EFFECT
THAT THE EXCHANGE RATIO OF UNION PLANTERS COMMON STOCK FOR LAPLACE COMMON STOCK
IN THE MERGER IS FAIR, FROM A FINANCIAL POINT OF VIEW, TO LAPLACE'S
SHAREHOLDERS.
The merger presents an exceptional opportunity for holders of LaPlace
common stock to join on favorable terms in a combined enterprise with greater
financial resources and a more geographically diversified business. As a result
of the proposed merger, you, as a new shareholder of Union Planters, will own
common stock in a bank holding company whose shares are actively traded on the
New York Stock Exchange.
We urge you to read the enclosed materials carefully so that you can
evaluate the merger for yourself.
All shareholders are invited to attend the special meeting in person.
However, in order to ensure that your shares will be represented at the special
meeting, please date, sign and promptly return the enclosed proxy card in the
enclosed postage-paid envelope, whether or not you plan to attend the special
meeting. If you attend the special meeting in person, you may, if you wish, vote
personally on all matters brought before the special meeting.
Very truly yours,
Thomas W. Smith, Jr.
President
YOUR VOTE IS IMPORTANT
PLEASE SIGN, DATE AND RETURN YOUR PROXY
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PROXY STATEMENT
FOR THE SPECIAL MEETING PROSPECTUS
OF SHAREHOLDERS OF UNION PLANTERS CORPORATION
LAPLACE BANCSHARES, INC.
MERGER PROPOSED
Your board of directors has agreed on a transaction which will result in
the acquisition of LaPlace Bancshares, Inc. by Union Planters Corporation, a
multi-state bank holding company headquartered in Memphis, Tennessee by means of
the merger of LaPlace into a subsidiary of Union Planters. In the proposed
merger, Union Planters will issue shares of its common stock in exchange for
shares of LaPlace common stock. At the special meeting, we will ask you to
approve the merger agreement, which sets out the terms of the merger. We cannot
complete the merger unless you approve the merger agreement.
If we complete the merger, you will receive 2.83 shares of Union Planters
common stock for each of your shares of LaPlace common stock. If the exchange
results in your owning any fraction of a share of Union Planters common stock,
you will receive cash (without interest) instead of stock for that fraction.
Union Planters common stock is traded on the New York Stock Exchange under the
symbol "UPC". Based on the closing price of Union Planters common stock on
November 27, 1998, and the 2.83 to 1 exchange ratio, you will receive shares of
Union Planters common stock that had a market value on November 27, 1998 of
$138.49 for each share of LaPlace common stock. The market value of the Union
Planters stock you will receive in the merger will go up or down depending on
the market price of Union Planters common stock.
Union Planters may increase the exchange ratio if the average closing price
of Union Planters stock during the 20 trading day period ending on the date of
the special meeting both falls below $48.45 and falls by more than 15% below the
relative performance of a group of comparable bank holding company common
stocks.
This proxy statement-prospectus provides you with detailed information
about the proposed merger. In addition, you may obtain information about Union
Planters from documents filed with the SEC. We encourage you to read carefully
this entire document and the other documents that we refer you to in this
document.
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR
DISAPPROVED OF THE SHARES OF UNION PLANTERS COMMON STOCK TO BE ISSUED IN THE
MERGER OR DETERMINED IF THIS PROXY STATEMENT-PROSPECTUS IS ACCURATE OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this proxy statement-prospectus is December 1, 1998. It is
first being mailed to shareholders on December 1, 1998.
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LAPLACE BANCSHARES, INC.
110 BELLE TERRE BLVD.
LAPLACE, LOUISIANA 70068-3340
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of LaPlace Bancshares, Inc.:
LaPlace Bancshares, Inc. will hold a special meeting of shareholders at the
office of Bank of LaPlace of St. John the Baptist Parish, Louisiana, 110 Belle
Terre Blvd., LaPlace, Louisiana on Wednesday, December 30, 1998 at 5:30 p.m.,
local time, to vote on:
1. MERGER. The agreement and plan of merger, dated as of July 1, 1998,
between LaPlace and Union Planters Holding Corporation and joined in by Union
Planters Corporation. The terms of the agreement and the related plan of merger
call for the merger of LaPlace into Union Planters Holding Corporation, a wholly
owned subsidiary of Union Planters Corporation.
2. OTHER BUSINESS. Any other matters that properly come before the special
meeting or any adjournment or postponement of the special meeting.
DISSENTING SHAREHOLDERS WHO COMPLY WITH THE PROCEDURAL REQUIREMENTS OF THE
BUSINESS CORPORATION LAW OF LOUISIANA WILL BE ENTITLED TO RECEIVE PAYMENT OF THE
FAIR CASH VALUE OF THEIR SHARES IF THE MERGER IS EFFECTED UPON APPROVAL BY LESS
THAN EIGHTY PERCENT (80%) OF THE TOTAL VOTING POWER OF LAPLACE. WE HAVE ATTACHED
A COPY OF THIS LAW AS AN APPENDIX TO THE ACCOMPANYING PROXY
STATEMENT-PROSPECTUS.
Two-thirds of the voting power present at the special meeting must approve
the Agreement and the related Plan of Merger. Shareholders of record of LaPlace
common stock at the close of business on November 16, 1998, will receive notice
of and may vote at the special meeting, and at any adjournments or postponements
of that meeting.
All shareholders are invited to attend the special meeting in person.
However, in order to ensure that your shares will be represented at the special
meeting, please date, sign and promptly return the enclosed proxy card in the
enclosed postage-paid envelope, whether or not you plan to attend the special
meeting. Your proxy may be revoked by notice to the Secretary-Treasurer of
LaPlace at any time prior to the vote at the special meeting or by delivery of a
later-dated proxy. If you attend the special meeting in person, you may withdraw
your proxy and vote personally on all matters brought before the special
meeting.
By Order of the Board of Directors.
Patrick M. Guidry
Secretary-Treasurer
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TABLE OF CONTENTS
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SUMMARY...........................................................................................................1
The Companies................................................................................................1
The Merger...................................................................................................2
What LaPlace Shareholders Will Receive in the Merger.........................................................2
Ownership of Union Planters After the Merger.................................................................3
Dissenters' Rights...........................................................................................3
Certain Federal Income Tax Consequences of the Merger........................................................3
Comparative Market Prices of Common Stock....................................................................4
Our Reasons for the Merger...................................................................................4
Fairness Opinion of LaPlace's Financial Advisor..............................................................5
Special Meeting of Shareholders..............................................................................5
Voting Rights at the Special Meeting.........................................................................5
Our Recommendation to Shareholders...........................................................................6
Shareholder Vote Required to Approve the Merger..............................................................6
Share Ownership of Management and Certain Shareholders; Voting Agreements....................................6
Interests of Certain Persons in the Merger That May Be Different From Yours..................................6
Effective Time...............................................................................................6
Exchange of Stock Certificates...............................................................................7
Termination Fee..............................................................................................7
Regulatory Approval and Other Conditions.....................................................................7
Waiver, Amendment, and Termination...........................................................................8
Accounting Treatment.........................................................................................8
Certain Differences in Shareholders' Rights..................................................................9
Historical and Pro Forma Comparative Per Share Data..........................................................9
Selected Financial Data.....................................................................................12
RISK FACTORS.....................................................................................................16
SPECIAL MEETING OF LAPLACE SHAREHOLDERS..........................................................................18
Date, Place, Time, and Purpose..............................................................................18
Record Date, Voting Rights, Required Vote, and Revocability Of Proxies......................................19
Solicitation of Proxies.....................................................................................20
Recommendation..............................................................................................20
DESCRIPTION OF TRANSACTION.......................................................................................20
General.....................................................................................................20
Possible Adjustment of Exchange Ratio.......................................................................21
Certain Federal Income Tax Consequences of the Merger.......................................................24
Background of and Reasons for the Merger....................................................................26
Union Planters' Reasons for the Merger......................................................................28
Opinion of LaPlace's Financial Advisor......................................................................29
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Effective Time of the Merger................................................................................34
Distribution of Union Planters Stock Certificates...........................................................34
Termination Fee.............................................................................................35
Conditions to Consummation of the Merger....................................................................36
Regulatory Approval.........................................................................................37
Waiver, Amendment, and Termination..........................................................................37
Conduct of Business Pending the Merger......................................................................38
Management and Operations After the Merger..................................................................39
Interests of Certain Persons in the Merger..................................................................39
Accounting Treatment........................................................................................41
Expenses and Fees...........................................................................................41
Resales of Union Planters Common Stock......................................................................41
EFFECT OF THE MERGER ON RIGHTS OF SHAREHOLDERS...................................................................43
Anti-Takeover Provisions Generally..........................................................................43
Authorized Capital Stock....................................................................................44
Amendment of Charter and Bylaws.............................................................................45
Classified Board of Directors and Absence of Cumulative Voting..............................................46
Director Removal............................................................................................47
Limitations on Director and Officer Liability...............................................................47
Indemnification.............................................................................................48
Special meeting of Shareholders.............................................................................49
Shareholder Nominations and Proposals.......................................................................49
Business Combinations.......................................................................................49
Takeover Statutes...........................................................................................50
Dissenters' Rights of Appraisal.............................................................................54
Shareholders' Rights to Examine Books and Records...........................................................57
Dividends...................................................................................................57
COMPARATIVE MARKET PRICES AND DIVIDENDS..........................................................................58
BUSINESS OF LAPLACE .............................................................................................59
Description of the Business.................................................................................59
Property....................................................................................................60
Employees...................................................................................................60
Competition.................................................................................................60
Market Prices and Dividends.................................................................................61
Legal Proceedings...........................................................................................62
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT......................................................63
Ownership of Principal Shareholders.........................................................................63
Ownership of Management.....................................................................................64
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LAPLACE BANCSHARES, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.........................................................................65
Overview....................................................................................................65
Results of Operations.......................................................................................66
Financial Condition.........................................................................................70
Year 2000 Compliance........................................................................................79
Recent Accounting Pronouncements............................................................................80
BUSINESS OF UNION PLANTERS.......................................................................................81
General.....................................................................................................81
Recent Developments.........................................................................................82
Fourth Quarter Earnings Considerations......................................................................83
CERTAIN REGULATORY CONSIDERATIONS................................................................................85
General.....................................................................................................85
Support of Subsidiary Institutions..........................................................................89
Prompt Corrective Action....................................................................................90
DESCRIPTION OF UNION PLANTERS CAPITAL STOCK......................................................................92
Union Planters Common Stock.................................................................................92
Union Platers Preferred Stock...............................................................................93
OTHER MATTERS....................................................................................................94
SHAREHOLDER PROPOSALS............................................................................................94
EXPERTS..........................................................................................................94
OPINIONS.........................................................................................................95
WHERE YOU CAN FIND MORE INFORMATION..............................................................................95
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HOW TO OBTAIN ADDITIONAL INFORMATION
THIS PROXY STATEMENT-PROSPECTUS INCORPORATES IMPORTANT BUSINESS AND
FINANCIAL INFORMATION ABOUT UNION PLANTERS THAT IS NOT INCLUDED IN OR DELIVERED
WITH THIS DOCUMENT. YOU CAN OBTAIN FREE COPIES OF THIS INFORMATION BY WRITING OR
CALLING:
E. James House, Jr.
Secretary and Manager of the Legal Department
Union Planters Corporation
7130 Goodlett Farms Parkway
Memphis, Tennessee 38018
(Telephone (901) 580-6584).
IN ORDER TO OBTAIN TIMELY DELIVERY OF THE DOCUMENTS, YOU MUST REQUEST THE
INFORMATION BY DECEMBER 23, 1998.
PLEASE NOTE
We have not authorized anyone to provide you with any information other
than the information included in this document and the documents we refer you
to. If someone provides you with other information, please do not rely on it as
being authorized by us.
This proxy statement-prospectus has been prepared as of December 1, 1998.
There may be changes in the affairs of Union Planters or LaPlace since that date
which are not reflected in this document.
As used in this Proxy Statement-Prospectus, the terms "Union Planters" and
"LaPlace" refer to Union Planters Corporation and LaPlace Bancshares, Inc.,
respectively, and, where the context requires, to Union Planters and LaPlace and
their respective subsidiaries.
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A WARNING ABOUT FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements about Union Planters and
LaPlace and about Union Planters following the merger and other acquisitions by
Union Planters. These statements can be identified by our use of words like
"expect", "may", "could", "intend", "project", "estimate" or "anticipate". These
forward-looking statements reflect our current views, but they are based on
assumptions and are subject to risks, uncertainties and other factors. These
factors include the possibility that:
(1) we may not fully realize the expected cost savings from the merger and
the other acquisitions;
(2) deposit attrition, customer loss, or revenue loss following the merger
and the other acquisitions may be greater than we expected;
(3) competitive pressure in the banking industry may increase
significantly;
(4) costs or difficulties related to the integration of the businesses of
Union Planters and the institutions to be acquired may be greater than
we expect;
(5) changes in the interest rate environment may reduce margins;
(6) general economic conditions, either nationally or regionally, may be
less favorable than we expect, resulting in, among other things,
deteriorating credit quality;
(7) changes may occur in the regulatory environment;
(8) changes may occur in business conditions and inflation;
(9) changes may occur in the securities markets; and
(10) disruptions of the operations of Union Planters, LaPlace or any of
their subsidiaries, or any other governmental or private entity may
occur as a result of the "Year 2000 Problem."
The forward-looking earnings estimates included in this proxy
statement-prospectus have not been examined or compiled by the independent
public accountants of Union Planters and LaPlace, nor have our independent
accountants applied any procedures to our estimates. Accordingly, such
accountants do not express an opinion or any other form of assurance on them.
Further information on other factors that could affect the financial results of
Union Planters after the merger and the other acquisitions is included in the
SEC filings incorporated by reference in this proxy statement-prospectus.
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SUMMARY
This summary highlights selected information from this proxy
statement-prospectus and may not contain all of the information that is
important to you. You should carefully read this entire document and the other
documents we refer to in this document. These will give you a more complete
description of the transaction we are proposing. We have included page
references in this summary to direct you to a more complete description of the
topics provided elsewhere in this proxy statement-prospectus.
THE COMPANIES (SEE PAGE 61 FOR LAPLACE, PAGE 81 FOR UNION PLANTERS)
LaPlace Bancshares, Inc.
110 Belle Terre Blvd.
LaPlace, Louisiana 70068-3340
(504)652-2200
LaPlace is a bank holding company incorporated in Louisiana. LaPlace
conducts its business activities through its wholly-owned subsidiary, Bank of
LaPlace. Bank of LaPlace is a full service commercial bank offering consumer and
commercial banking services in St. John the Baptist Parish, Louisiana. The bank
operates one banking office in LaPlace, Louisiana. As of September 30, 1998,
LaPlace had consolidated assets of approximately $67.7 million, consolidated
loans of approximately $46.4 million, consolidated deposits of approximately
$55.6 million, and consolidated shareholders' equity of approximately $8.3
million.
Union Planters Corporation
7130 Goodlett Farms Parkway
Memphis, Tennessee 38018
(901)580-6000
Union Planters is a registered bank holding company incorporated in
Tennessee. Through Union Planters Bank, National Association, its principal bank
subsidiary, and various other banking and banking-related subsidiaries, Union
Planters provides a diversified range of financial services in the communities
in which it operates. It maintains 801 banking offices and 1,000 automated
teller machines .
Union Planters considers acquisitions an important part of its business
strategy and expects that they will continue to be important in the future.
During the period beginning January 1, 1994 and ending September 30, 1998, Union
Planters has completed 43 acquisitions adding approximately $26.4 billion to
Union Planters' assets. Union Planters also has pending agreements to acquire
five financial institutions, in addition to LaPlace, in four states, and an
agreement to purchase 56 branches and assume deposit liabilities of
approximately $1.8 billion in Indiana ("Indiana Branch Purchase"). These other
pending acquisitions had combined total assets of approximately $3.5 billion at
September 30, 1998.
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On September 30, 1998, Union Planters had consolidated assets of
approximately $30.5 billion, consolidated loans of approximately $19.7 billion,
consolidated deposits of approximately $23.3 billion, and consolidated
shareholders' equity of approximately $2.9 billion.
THE MERGER (SEE PAGE 20)
Union Planters will acquire LaPlace by means of merging LaPlace with
Union Planters Holding Corporation, a wholly-owned subsidiary of Union Planters.
After the merger, Union Planters Holding Corporation, as the surviving
corporation in the merger, will continue to conduct LaPlace's business. The
merger agreement, which is an agreement between Union Planters Holding
Corporation and LaPlace and joined in by Union Planters, governs the whole
transaction. The plan of merger, which is attached to the agreement as an
exhibit, is an agreement between Union Planters Holding Corporation and LaPlace
that governs the merger of these two corporations. The merger agreement was
entered on July 1, 1998.
WHAT YOU WILL RECEIVE IN THE MERGER (SEE PAGE 20)
If the merger is completed, you will receive 2.83 shares of Union
Planters common stock for each share of your LaPlace common stock. Unless both
of the conditions described in the following paragraph exist, the number of
shares of Union Planters common stock you will receive in the merger will not
change, even if the market price of Union Planters common stock changes. As a
result, the market value of the Union Planters common stock you will receive in
the merger may be higher or lower than its current market value.
The number of shares of Union Planters common stock might be increased;
however, if two conditions are met:
(1) The average closing price of Union Planters common stock
during the 20 trading days ending on the date of the special
meeting falls below $48.45; and
(2) Based on that average closing price, the price of Union
Planters common stock must have underperformed the common
stock price of a comparable group of bank holding companies
common stock by more than 15% following the fourth full
trading day after the announcement of the proposed merger.
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If both of these conditions exist, then LaPlace's board of directors
may decide not to complete the merger unless Union Planters increases the number
of shares to be issued to each holder of LaPlace common stock. Alternatively,
LaPlace's board of directors may decide to complete the merger even though Union
Planters refuses to increase the number of shares. In making that decision,
LaPlace's board of directors would consult its financial and legal advisors and
evaluate the financial condition of Union Planters and LaPlace and all relevant
facts and circumstances that exist at the time.
Under no circumstances would the exchange ratio be less than 2.83
shares of Union Planters common stock for each share of LaPlace common stock.
Union Planters will not issue any fractions of a share of common stock.
Rather, Union Planters will pay cash (without interest) for any fractional share
a LaPlace shareholder would otherwise receive in the merger. The cash payment
will be in an amount equal to the fraction multiplied by the closing price of
one share of Union Planters common stock on the NYSE on the last trading day
before the merger is completed.
OWNERSHIP OF UNION PLANTERS AFTER THE MERGER
Union Planters will issue approximately 412,422 shares of Union
Planters common stock to LaPlace shareholders in the merger, assuming no
adjustment in the exchange ratio as discussed above. Based on that number, after
the merger, LaPlace shareholders will own approximately 0.30% of the outstanding
shares of Union Planters common stock. This information is based on the number
of shares of LaPlace and Union Planters common stock outstanding on October 31,
1998. It does not reflect shares that Union Planters may issue due to other
pending acquisitions or due to the exercise of Union Planters stock options, or
for other purposes.
DISSENTERS' RIGHTS (SEE PAGE 55)
If the agreement and plan of merger is not approved by 80% or more of
LaPlace's total voting power, LaPlace shareholders who file a written objection
to the merger, vote against approval of the agreement and plan of merger, and
follow certain procedures set forth in Louisiana law will be entitled to
exercise dissenters' rights under Louisiana law. If dissenters' rights are
available, a LaPlace shareholder who complies with the required procedures will
not receive Union Planters common stock in the merger. Instead, if the merger is
completed, a dissenting shareholder will be entitled to demand payment of the
fair cash value of his LaPlace shares.
3
<PAGE> 13
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER (SEE PAGE 24)
We expect that, for federal income tax purposes, you will not recognize
any gain or loss upon the exchange of your shares for shares of Union Planters
common stock. You may recognize taxable gain or loss however, related to any
cash you receive in lieu of a fractional share of Union Planters common stock.
See discussion under "What You Will Receive in the Merger." Before the merger
can be completed, Union Planters and LaPlace expect to receive an opinion of
Wyatt, Tarrant & Combs and Arter & Hadden LLP substantially to this effect.
Tax matters are very complicated and the tax consequences of the merger
to you will depend on your own situation. You should consult your own tax
advisors to determine the effect of the merger on you under federal, state,
local, and foreign tax laws.
COMPARATIVE MARKET PRICES OF COMMON STOCK
Shares of Union Planters common stock are traded on the New York Stock
Exchange under the symbol "UPC". Shares of LaPlace common stock are not traded
on any exchange or in any other established trading market. On June 30, 1998,
the last trading day before we executed the agreement, Union Planters common
stock closed at $58.81 per share. On November 27, 1998, the latest practicable
date before the mailing of this proxy statement-prospectus, Union Planters
common stock closed at $48.9375 per share.
The market value of 412,422 shares of Union Planters common stock would
be $24,254,538 based on Union Planters' June 30, 1998 closing price and
$20,182,902 based on Union Planters' November 27, 1998 closing price. We can
provide no assurance as to what the market price of the Union Planters common
stock will be if and when the merger is completed. You should obtain current
stock price quotations for Union Planters common stock. In addition, as
described below, the number of shares of Union Planters common stock to be
issued in connection with the merger may be subject to adjustment under certain
very limited circumstances.
OUR REASONS FOR THE MERGER (SEE PAGE 27)
The LaPlace board unanimously approved the merger agreement. Your board
of directors believes that the merger will provide significant value to you and
will enable you to participate in opportunities for growth that the merger makes
possible. In deciding to approve and recommend the merger agreement, the LaPlace
board considered the following factors, among other factors:
- the financial terms of the merger agreement;
- the liquidity the merger will afford LaPlace shareholders;
- the respective dividend policies of Union Planters and LaPlace;
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<PAGE> 14
- information concerning the financial condition, results of
operations and prospects of Union Planters and LaPlace;
- the market price of Union Planters common stock;
- the tax-free nature of the merger to LaPlace's shareholders, to
the extent Union Planters common stock is received, for federal
income tax purposes;
- the financial terms of other business combinations in the banking
industry; and
- the opinion of LaPlace's financial advisor, Mercer Capital
Management, Inc., that the exchange ratio of Union Planters
common stock for LaPlace common stock in the merger is fair to
LaPlace's shareholders from a financial point of view.
FAIRNESS OPINION OF LAPLACE'S FINANCIAL ADVISOR (SEE PAGE 29)
In deciding to approve the merger, we considered an opinion from our
financial advisor, Mercer Capital Management, Inc., that the exchange ratio of
Union Planters common stock for LaPlace common stock in the merger is fair to
LaPlace's shareholders from a financial point of view. The full text of this
opinion is attached as Appendix D to this proxy statement-prospectus. We
encourage you to read this opinion in its entirety to understand the procedures
followed, assumptions made and matters considered by Mercer Capital in providing
its opinion.
SPECIAL MEETING OF SHAREHOLDERS (SEE PAGE 18)
The special meeting will be held at Bank of LaPlace, located at 110
Belle Terre Blvd., LaPlace, Louisiana at 5:30 p.m., local time, on December 30,
1998. At the special meeting, we will ask you:
- to approve the merger agreement; and
- to act on any other matters that may be put to a vote at the
special meeting.
VOTING RIGHTS AT THE SPECIAL MEETING (SEE PAGE 19)
You are entitled to vote at the special meeting if you owned shares of
LaPlace common stock as of the close of business on November 16, 1998, the
record date. On the record date, there were 145,732 shares of LaPlace common
stock outstanding. You will be entitled to one vote for each share of LaPlace
common stock you owned on the record date. You may vote either by attending the
special meeting and voting your shares or by completing the enclosed proxy card
and mailing it to us in the enclosed envelope.
We are seeking your proxy for use at the special meeting. We have
prepared this proxy statement-prospectus to assist you in deciding how to vote
and whether or not to grant your proxy to us. If you sign a proxy, you may
revoke it at any time before the vote at the special meeting. If you have
elected not to attend the meeting, please indicate on your proxy card how you
want to vote. Then sign, date and mail it to us as soon as possible so that your
shares will be represented at the special meeting. If you sign, date and mail
your proxy card without indicating how you wish to vote, your proxy will be
counted as a vote for merger agreement. If you sign a proxy, you may revoke it
at any time before the special meeting or by attending and voting at the special
meeting. You cannot vote shares held in "street name"; only your broker can. If
you do not provide your broker with instructions on how to vote your shares,
your broker will not be permitted to vote them.
OUR RECOMMENDATION TO SHAREHOLDERS (SEE PAGE 20)
Your board of directors unanimously approved the merger agreement. We
believe that the proposed merger is fair to you and in your best interests. We
unanimously recommend that you vote to approve the merger agreement.
5
<PAGE> 15
SHAREHOLDER VOTE REQUIRED TO APPROVE THE MERGER (SEE PAGE 19)
To approve the merger agreement, shareholders who own two-thirds of the
LaPlace voting power present, in person or by proxy, at the special meeting,
must vote for the merger agreement. Union Planters shareholders will not vote on
the merger.
SHARE OWNERSHIP OF MANAGEMENT AND CERTAIN SHAREHOLDERS; VOTING AGREEMENTS (SEE
PAGE 64)
On the record date, your directors and executive officers
beneficially owned 58,062 shares, or approximately 39.84%, of the outstanding
shares of LaPlace common stock. As a condition to consummation of the merger,
each director and executive officer of LaPlace has executed a voting agreement
in which he agreed to vote all shares over which he has beneficial ownership for
approval of the agreement and plan of merger. On the record date, Bank of
LaPlace held no shares of LaPlace common stock in a fiduciary capacity for
others, or as a result of debts previously contracted.
On the record date, Union Planters' directors and executive officers
owned no shares of LaPlace common stock and Union Planters held no shares of
LaPlace common stock in a fiduciary capacity for others, or as a result of debts
previously contracted.
INTERESTS OF CERTAIN PERSONS IN THE MERGER THAT MAY BE DIFFERENT FROM YOURS (SEE
PAGE 39)
LaPlace's board of directors and certain officers may have interests in
the merger that differ from the interests of LaPlace shareholders generally.
Those interests include, among others, provisions in the merger agreement
regarding indemnification, insurance and eligibility to participate in certain
Union Planters employee benefit plans. Certain executive officers of LaPlace
also have interests in the merger that are different from other LaPlace
shareholders because they will terminate their existing employment agreements
with Bank of LaPlace and enter into employment agreements with a banking
subsidiary of Union Planters upon consummation of the merger. Your board of
directors was aware of these interests and considered them in approving and
recommending the merger.
6
<PAGE> 16
EFFECTIVE TIME (SEE PAGE 34)
The merger will become final when Articles of Merger become effective
with the Secretary of State of the State of Louisiana and the Secretary of State
of the State of Tennessee. If LaPlace shareholders approve the merger at the
special meeting, we currently anticipate that the merger will be completed on or
about December 31, 1998, or the day after the special meeting, although delays
could occur.
EXCHANGE OF STOCK CERTIFICATES (SEE PAGE 37)
Promptly after the merger is completed, you will receive a letter and
instructions on how to surrender your LaPlace stock certificates in exchange for
Union Planters stock certificates. You will need to carefully review and
complete these materials and return them as instructed along with your stock
certificates for LaPlace common stock. Please do not send LaPlace, Union
Planters or Union Planters' transfer agent any stock certificates until you
receive these instructions.
TERMINATION FEE (SEE PAGE 35)
Under certain circumstances, if the merger is not consummated and
LaPlace enters into a letter of intent or agreement with a third party
concerning an acquisition proposal other than the merger, or supports or
indicates an intention to support an acquisition proposal other than the merger,
it will be required to pay $800,000 to Union Planters.
REGULATORY APPROVAL AND OTHER CONDITIONS (SEE PAGE 37)
Union Planters is required to notify and get approvals from certain
government regulatory agencies, including the Board of Governors of the Federal
Reserve System, before the merger may be completed. The Federal Reserve approved
Union Planters' application to acquire LaPlace on September 24, 1998 provided
the merger is completed before December 24, 1998. By letter dated November 6,
1998, Union Planters has requested a 90-day extension of time in order to
complete the merger.
In addition to the required regulatory approvals, the merger will be
completed only if certain conditions, including but not limited to the
following, are met:
- LaPlace shareholders must approve the merger agreement at the
special meeting;
- LaPlace and Union Planters must receive an opinion of counsel
that the merger will qualify as a tax-free reorganization;
- Union Planters must receive a letter from its accountants
concerning the pooling-of-interests accounting treatment of the
merger (discussed below under "Accounting Treatment");
- neither Union Planters nor LaPlace may have materially breached
any of its representations or obligations under the merger
agreement; and
7
<PAGE> 17
- The New York Stock Exchange must have approved for listing the
shares of Union Planters common stock to be issued in the merger.
The agreement attached to this proxy statement-prospectus as Appendix A
describes other conditions that must be met before the merger may be completed.
Unless prohibited by law, either Union Planters or LaPlace could elect to waive
a condition that has not been satisfied and complete the merger anyway. We
cannot be certain whether or when any of these conditions will be satisfied, or
waived where permissible, or that we will complete the merger.
WAIVER, AMENDMENT, AND TERMINATION (SEE PAGE 37)
Union Planters and LaPlace may agree to terminate the merger agreement
and not complete the merger at any time before the merger is completed.
In addition, each of the parties can terminate the merger in certain
other circumstances, including the following:
- Either party may terminate the merger agreement if the merger is
not completed by March 31, 1999. A party may not terminate the
agreement; however, if (a) it willfully breached the agreement
and (b) its breach is the reason the merger has not been
completed.
- As previously noted, we can terminate the merger if Union
Planters' stock price falls below certain levels and Union
Planters does not increase the exchange ratio.
The parties may also terminate the merger if other conditions occur.
These conditions are described in the agreement, which is attached to this proxy
statement-prospectus as Appendix A.
The merger agreement may be amended by the written agreement of Union
Planters and LaPlace. The parties can amend the agreement without shareholder
approval, even if you have already approved the merger.
ACCOUNTING TREATMENT (SEE PAGE 41)
Union Planters intends to account for the merger as a
pooling-of-interests transaction for accounting and financial reporting
purposes.
Pooling-of-interests is an accounting method that assumes that each
company's shareholders have combined their ownership interests in such a manner
that each group becomes an owner of the combined, enlarged business. The key
differences between this method of accounting and the more common purchase
accounting method fall into two areas: income measurement and asset valuation.
Under pooling-of-interests, the earnings of each company are combined as though
the combination had occurred at the beginning of the earliest financial period
presented, or in the case of transactions which are not considered significant,
from the date of consummation forward. Under purchase accounting, the earnings
of the acquired company are included only after the closing of the merger. Under
pooling-of-interests, the assets of the acquired company are valued at their
historical cost. Under the purchase method, the
8
<PAGE> 18
assets are valued at their fair value. The excess of the consideration the
acquiring company pays over the fair value of the target's assets is recorded as
goodwill.
CERTAIN DIFFERENCES IN SHAREHOLDERS' RIGHTS (SEE PAGE 43)
When the merger is completed, unless dissenters' rights are available
and you exercise your right to dissent, you will automatically become a Union
Planters shareholder. The rights of Union Planters shareholders differ from the
rights of LaPlace shareholders in certain important ways. Many of these
differences have to do with provisions in Union Planters' charter and bylaws and
Tennessee law. These provisions are intended to make a takeover of Union
Planters harder if the Union Planters board of directors does not approve it.
9
<PAGE> 19
HISTORICAL AND PRO FORMA COMPARATIVE PER SHARE DATA
The following table shows certain comparative per share data relating
to earnings (before extraordinary items and accounting changes), cash dividends,
and book value. The equivalent pro forma information assumes an exchange ratio
of 2.83 to 1.
With the exception of the Indiana Branch Purchase and the pending
merger with First Mutual Bancorp, Inc. and First & Farmers Bancshares, Inc.,
which are expected to be accounted for using the purchase method of accounting,
the merger and the other acquisitions which Union Planters has pending are
expected to be accounted for using the pooling-of-interests method of
accounting. The LaPlace equivalent pro forma information reflects only the
acquisition of LaPlace because the other acquisitions which Union Planters
currently has pending are not considered significant to Union Planters from a
financial statement presentation standpoint. See "BUSINESS OF UNION
PLANTERS-RECENT DEVELOPMENTS for a discussion of Union Planters' other pending
acquisitions.
We present the pro forma and equivalent pro forma data for your
information only. It does not necessarily indicate the results of operations or
combined financial position that would have resulted had Union Planters
completed the merger or the other acquisitions at the times indicated, and it
does not necessarily indicate what future results of operations or combined
financial position will be.
You should read the information shown below in conjunction with the
historical consolidated financial statements of Union Planters and LaPlace and
the notes provided with them. In reviewing Union Planters' historical
information, please keep in mind that Union Planters has restated its historical
financial statements to reflect the impact of the several mergers completed in
the third quarter of 1998. You will find the restated numbers in Union Planters'
September 30, 1998 Quarterly Report on Form 10-Q, Exhibit 99.1. See "WHERE YOU
CAN FIND MORE INFORMATION," "-- Selected Financial Data," and "BUSINESS OF UNION
PLANTERS -- Recent Developments."
Pro forma information for Union Planters and the pending acquisitions,
including LaPlace, has not been presented because the pending acquisitions are
not individually, or in the aggregate, considered material to Union Planters.
10
<PAGE> 20
UNION PLANTERS CORPORATION
AND LAPLACE BANCSHARES, INC.
HISTORICAL AND PRO FORMA COMPARATIVE PER SHARE DATA
<TABLE>
<CAPTION>
Years Ended December 31 (1) Nine Months Ended
1995 1996 1997 September 30, 1998
--------- -------- --------- --------------------
<S> <C> <C> <C> <C>
EARNINGS BEFORE EXTRAORDINARY ITEMS
AND ACCOUNTING CHANGES
Union Planters
Basic $ 2.55 $ 2.24 $ 2.50 $ 1.44
Diluted 2.46 2.17 2.43 1.41
LaPlace
Basic 10.75 7.82 8.22 6.73
Diluted 10.75 7.82 8.22 6.73
Pro forma (Union Planters and LaPlace)
Basic 2.56 2.24 2.50 1.44
Diluted 2.47 2.17 2.43 1.42
LaPlace equivalent pro forma (Union Planters
only)(1)
Basic 7.24 6.34 7.08 4.08
Diluted 6.99 6.14 6.88 4.02
CASH DIVIDENDS PER SHARE
Union Planters .98 1.08 1.495 1.50
LaPlace 1.00 1.00 1.00 .75
LaPlace equivalent pro forma (1) 2.77 3.06 4.23 4.25
</TABLE>
<TABLE>
<CAPTION>
December 31, 1997 September 30, 1998
----------------- ------------------
<S> <C> <C>
BOOK VALUE PER COMMON SHARE
Union Planters $20.93 $21.43
LaPlace 50.92 56.70
Pro forma (Union Planters and LaPlace) 20.92 21.43
LaPlace equivalent pro forma (Union Planters only)(1) 59.20 60.65
</TABLE>
(1) The equivalent pro forma per share data for LaPlace is computed by
multiplying Union Planters' pro forma information by an exchange ratio
of 2.83.
11
<PAGE> 21
SELECTED FINANCIAL DATA
The following tables present selected consolidated historical data
for Union Planters and LaPlace. The information regarding Union Planters is
based on the historical financial information that is contained in reports Union
Planters has previously filed with the SEC, including its September 30, 1998
Quarterly Report on Form 10-Q. Union Planters' September 30, 1998 Quarterly
Report on Form 10-Q includes as Exhibit 99.1, restated 1997 audited financial
statements and restated Management Discussion and Analysis of Results of
Operation and Financial Condition for the three years ended December 31, 1997.
The financial information was restated for four significant acquisitions
completed in the third quarter of 1998 and accounted for as
pooling-of-interests. All of these documents are incorporated by reference in
this proxy statement-prospectus. See "WHERE YOU CAN FIND MORE INFORMATION" on
page 97.
The information for LaPlace is based on its historical financial
statements, including its unaudited financial statements for the nine months
ended September 30, 1998 and 1997, and its audited financial statements for the
years ended December 31, 1997, and December 31, 1996, all of which are included
in this proxy statement-prospectus. See "INDEX TO CONSOLIDATED FINANCIAL
STATEMENTS", attached as Appendix C.
You should read the information shown below in conjunction with the
historical consolidated financial statements of Union Planters and LaPlace and
the notes provided with them.
Historical results do not necessarily indicate the results that you
can expect for any future period. Union Planters and LaPlace believe that they
have included all adjustments (which include only normal recurring adjustments)
necessary to arrive at a fair statement of interim results of operations of
Union Planters and LaPlace. With respect to Union Planters and LaPlace, results
for the nine months ended September 30, 1998 do not necessarily indicate the
results which you can expect for any other interim period or for the year as a
whole. See "BUSINESS OF UNION PLANTERS -- Recent Developments" on page 83 for
information concerning Union Planters' other acquisitions.
12
<PAGE> 22
UNION PLANTERS AND SUBSIDIARIES
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Years Ended December 31, (1)
------------------------------------------------------------------------------
1993 1994 1995 1996 1997
----------- ------------ ----------- ----------- -----------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net interest income .................... $ 779,756 $ 881,875 $ 944,694 $ 1,043,942 $ 1,122,149
Provision for losses on loans .......... 49,267 23,000 47,393 84,198 150,606
Investment securities gains (losses) ... 12,160 (21,053) 2,008 4,942 4,781
Other noninterest income ............... 282,124 297,596 355,317 383,824 449,261
Noninterest expense .................... 737,608 845,217 818,944 942,733 950,986
----------- ------------ ----------- ----------- -----------
Earnings before income taxes, extra-
ordinary item, and accounting changes 287,165 290,201 435,682 405,777 474,599
Applicable income taxes ................ 86,669 92,325 145,485 139,649 162,302
----------- ------------ ----------- ----------- -----------
Earnings before extraordinary item and
accounting changes ................... 200,496 197,876 290,197 266,128 312,297
Extraordinary item and accounting
changes, net of taxes ................ 4,757 -- -- -- --
----------- ------------ ----------- ----------- -----------
Net earnings ........................... 205,253 197,876 290,197 266,128 312,297
=========== ============ =========== =========== ===========
PER COMMON SHARE DATA(4):
Basic
Earnings before extraordinary item and
accounting changes ................... $ 2.11 $ 1.74 $ 2.55 $ 2.25 $ 2.50
Net earnings ........................... 2.16 1.74 2.55 2.24 2.50
Diluted
Earnings before extraordinary item and
accounting changes ................... 1.97 1.71 2.46 2.17 2.43
Net earnings ........................... 2.02 1.71 2.46 2.17 2.43
Cash dividends ........................... .72 .88 .98 1.08 1.495
Book value ............................... 15.23 15.66 18.64 19.87 20.93
BALANCE SHEET DATA (AT PERIOD END):
Total assets ............................ $20,330,065 $ 22,260,487 $24,596,205 $26,427,236 $27,993,452
Loans, net of unearned income ........... 11,815,553 14,381,566 15,713,783 17,819,088 19,126,708
Allowance for losses on loans ........... 229,334 237,377 243,395 257,638 310,385
Investment securities ................... 5,970,140 5,810,934 5,976,297 5,667,251 5,840,704
Total deposits .......................... 16,989,720 17,954,001 19,014,248 19,899,772 21,203,147
Short-term borrowings ................... 432,461 980,935 1,074,673 1,732,437 1,784,347
Long-term debt(5)
Parent company ....................... 114,729 114,790 214,758 373,459 373,746
Subsidiary banks ..................... 530,810 937,160 1,193,861 1,426,433 1,327,451
Total shareholders' equity .............. 1,657,832 1,768,009 2,147,621 2,376,768 2,668,721
Average assets .......................... 19,462,599 21,796,952 23,261,530 26,003,849 27,366,896
Average shareholders' equity ............ 1,481,351 1,779,158 1,963,852 2,247,335 2,562,009
Average shares outstanding
(in thousands)(4)
Basic ................................... 90,360 107,981 110,255 115,794 122,812
Diluted ................................. 96,001 114,810 117,673 123,793 129,397
PROFITABILITY AND CAPITAL RATIOS:
Return on average assets ............... 1.05% .91% 1.25% 1.02% 1.14%
Return on average common equity ........ 14.65 11.89 15.60 12.32 12.51
Net interest income (taxable equivalent)
/average earning assets(6) ........... 4.28 4.53 4.52 4.45 4.57
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended
September 30, (2) and (3)
----------------------------
1997 1998
----------- ------------
(Dollars in thousands, except
per share data)
<S> <C> <C>
INCOME STATEMENT DATA:
Net interest income .................... $ 835,730 $ 858,506
Provision for losses on loans .......... 104,440 122,436
Investment securities gains (losses) ... 4,500 (15,111)
Other noninterest income ............... 333,146 375,596
Noninterest expense .................... 645,979 795,169
----------- ------------
Earnings before income taxes, extra-
ordinary item, and accounting changes 422,957 301,386
Applicable income taxes ................ 144,291 113,321
----------- ------------
Earnings before extraordinary item and
accounting changes ................... 278,666 188,065
Extraordinary item and accounting
changes, net of taxes ................ -- --
----------- ------------
Net earnings ........................... 278,666 188,065
=========== ============
PER COMMON SHARE DATA(4):
Basic
Earnings before extraordinary item and
accounting changes ................... $ 2.25 $ 1.44
Net earnings ........................... 2.25 1.44
Diluted
Earnings before extraordinary item and
accounting changes ................... 2.18 1.41
Net earnings ........................... 2.18 1.41
Cash dividends ........................... 1.095 1.50
Book value ............................... 21.13 21.43
BALANCE SHEET DATA (AT PERIOD END):
Total assets ............................ $ 7,939,458 $ 30,525,482
Loans, net of unearned income ........... 18,936,526 19,653,468
Allowance for losses on loans ........... 291,084 352,643
Investment securities ................... 5,709,842 7,867,587
Total deposits .......................... 20,800,890 23,288,899
Short-term borrowings ................... 1,827,953 1,829,275
Long-term debt(4)
Parent company ....................... 373,169 380,164
Subsidiary banks ..................... 1,588,764 1,362,894
Total shareholders' equity .............. 2,680,841 2,932,567
Average assets .......................... 27,240,642 28,724,000
Average shareholders' equity ............ 2,396,275 2,734,717
Average shares outstanding
(in thousands)(3)
Basic ................................. 122,068 129,561
Diluted ............................... 127,924 133,784
PROFITABILITY AND CAPITAL RATIOS:
Return on average assets ............... 1.37% .88%
Return on average common equity ........ 15.79 9.23
Net interest income (taxable equivalent)
/average earning assets(6) ........... 4.55 4.45
</TABLE>
13
<PAGE> 23
UNION PLANTERS AND SUBSIDIARIES
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Nine Months Ended
Years Ended December 31, (1) September 30, (2) and (3)
----------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1997 1998
----------------------------------------------------------------------------------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Loan/deposits ....................... 69.55% 80.10% 82.64% 89.54% 90.21% 91.04% 84.39%
Equity/assets (period end) .......... 8.15 7.82 8.73 8.99 9.53 9.60 9.61
Average shareholders' equity/average
total assets ................... 7.61 8.16 8.44 8.64 9.36 8.80 9.52
Leverage ratio ...................... 8.02 7.93 8.41 9.32 9.62 9.67 9.29
Tier 1 capital/risk-weighted assets . 13.47 12.75 13.32 14.39 14.25 14.05 13.49
Total capital/risk-weighted assets .. 15.41 14.57 15.71 16.63 16.39 16.20 17.07
Credit Quality Ratios (7):
Allowance/period end loans ......... 2.02 1.74 1.65 1.59 1.74 1.66 1.87
Nonperforming loans/total loan ..... 1.22 .76 .80 .81 .83 .83 .79
Allowance/nonperforming loans ...... 166 228 206 195 210 199 236
Nonperforming assets/loans and fore-
closed properties ................ 1.73 1.06 1.03 1.04 1.01 1.01 .93
Provision/average loans ............ .45 .18 .33 .54 .87 .80 .88
Net charge-offs/average loans ...... .38 .21 .31 .49 .66 .65 .75
</TABLE>
(1) Union Planters' audited financial statements for the three years ended
December 31, 1997 and the related management's discussion and analysis of
results of operations and financial condition were restated for four
acquisitions completed in the third quarter of 1998 and accounted for as
poolings-of-interests. The 1997 restated audited financial statements (the
"1997 Restated Financial Statements") and the restated management's
discussion and analysis of results of operations and financial condition
were filed as Exhibit 99.1 to Union Planters Quarterly Report on Form 10-Q
dated September 30, 1998. Additionally, the selected financial data for
1993 and 1994 has been restated to reflect the aforementioned four
acquisitions.
(2) Interim period ratios have been annualized where applicable.
(3) Reference is made to Union Planters' Quarterly Report on Form 10-Q dated
September 30, 1998 for a discussion of merger-related and other charges
that significantly impacted operating results for the nine months ended
September 30, 1998.
(4) Share and per share amounts have been retroactively restated for
significant acquisitions accounted for as poolings-of-interests and to
reflect the changes in presentation of Earnings Per Share as discussed in
Notes 2 and 16 to the 1997 Restated Financial Statements.
(5) Long-term debt includes Medium-Term Notes, Federal Home Loan Bank advances,
Trust Preferred Securities, variable rate asset-backed certificates,
subordinated notes and debentures, obligations under capital leases,
mortgage indebtedness, and notes payable with maturities greater than one
year.
(6) Average balances and calculations do not include the impact of the net
unrealized gain or loss on available for sale securities.
(7) FHA/VA government-insured/guaranteed loans have been excluded, since they
represent minimal credit risk to Union Planters.
14
<PAGE> 24
LAPLACE BANCSHARES, INC.
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------------------------------------- -------------------
1993 1994 1995 1996 1997 1997 1998
---- ---- ---- ---- ---- ---- ----
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Net interest income $ 2,059 $ 2098 $ 2434 $ 2828 $ 3195 $ 2389 $ 2506
Provision for losses on loans 20 15 40 100 120 90 90
Investment securities gains(losses) 60 -- -- 54 21 20 --
Other noninterest income 2342 2001 2695 1806 1836 1387 1703
-----------
Noninterest expense 2943 4309 2736 2867 3139 2336 2638
----------- ---------- --------- --------- -------- -------- --------
Income before income taxes 1498 (225) 2353 1721 1793 1370 1481
Income tax expense 500 (67) 786 582 596 467 501
----------- ---------- --------- --------- -------- -------- --------
Net income 998 (158) 1567 1139 1197 903 980
=========== ========== ========= ========= ======== ======== ========
PER COMMON SHARE DATA
Net income $ 6.76 $ (1.08) $ 10.75 $ 7.82 $ 8.22 $ 6.20 $ 6.73
Cash dividends -- -- -- 1.00 1.00 0.75 0.75
Book value 26.14 25.45 26.80 43.40 50.92 48.90 56.70
BALANCE SHEET DATA (AT PERIOD END)
Total assets $ 48,752 $ 49,457 $ 55,331 $ 61,806 $ 67,714 $ 65,962 $ 67,749
Loans net of unearned income 22,759 21,551 27,832 35,345 44,602 43,426 46,359
Allowance for losses on loans 442 434 415 443 513 477 559
Investment securities 21,506 23,398 22,864 21,571 17,690 17,805 16,160
Total/deposits 38,029 36,409 41,997 49,341 52,709 50,924 55,628
Short-term borrowings 2,775 4,600 2,890 25 3,107 3,068 --
Long-term debt 3,691 3,364 4,472 4,485 3,803 4,016 3,056
Total shareholders' equity 3,862 3,708 5,363 6,325 7,421 7,126 8,263
Average assets 45,862 47,997 51,975 59,006 64,306 63,309 67,902
Average shareholders' equity 3,460 3,749 4,213 5,862 6,894 6,248 8,039
Average shares outstanding 148 146 146 146 146 146 146
(in thousands)
PROFITABILITY AND CAPITAL RATIO
Return on average assets 2.18% -0.33% 3.01% 1.93% 1.86% 1.90% 1.92%
Return on average common equity 28.84% -4.21% 37.19% 19.43% 17.36% 19.27% 16.25%
Net interest margin-tax equivalent 5.10% 4.91% 5.19% 5.24% 5.37% 5.45% 5.28%
Loans/deposits 59.85% 59.19% 66.27% 71.63% 84.62% 85.28% 83.34%
Dividend payout 0.00% 0.00% 0.00% 12.79% 12.17% 12.10% 11.15%
Equity/assets (period end) 7.92% 7.50% 9.69% 10.23% 10.96% 10.80% 12.20%
Average equity/average assets 7.54% 7.81% 8.11% 9.93% 10.72% 9.87% 11.84%
Leverage ratio(1) 8.57% 7.85% 9.79% 9.28% 9.59% 9.60% 10.09%
Tier 1 capital/risk-weighted assets(1) 16.69% 15.41% 17.47% 15.69% 14.26% 15.58% 16.18%
Total capital/risk-weighted assets 17.94% 16.67% 18.72% 16.94% 15.45% 16.82% 17.43%
CREDIT QUALITY RATIOS(2)
Allowance/total loans 1.94% 2.01% 1.49% 1.25% 1.15% 1.10% 1.21%
Nonperforming loans/total loans 0.00% 0.03% 0.29% 0.30% 0.51% 0.73% 0.00%
Allowance/nonperforming loans N/A(3) 7,233.33% 518.75% 417.92% 225.00% 150.00% N/A(3)
Nonperforming assets/loans and 0.00% 0.03% 0.28% 0.30% 0.51% 0.73% 0.00%
foreclosed properties
Provision/average loans 0.11% 0.08% 0.17% 0.32% 0.30% 0.31% .027%
Net charge-offs/average loans -0.34% 0.11% 0.25% 0.23% 0.13% 0.20% 0.13%
</TABLE>
- ---------------------------------------------
1. Computed for Bank of LaPlace.
2. Interim period ratios have been annualized where applicable.
3. LaPlace had no nonperforming loans at September 30, 1998 and
December 31, 1993.
15
<PAGE> 25
RISK FACTORS
If the merger is consummated, you will receive shares of Union Planters
common stock in exchange for your shares of LaPlace common stock. You should be
aware of particular risks and uncertainties that are applicable to an investment
in Union Planters common stock. Specifically, there are risks and uncertainties
that bear on Union Planters' future financial results and that may cause Union
Planters' future earnings and financial condition to be less than Union
Planters' expectations.
Some of the risks and uncertainties relate to economic conditions generally
and would affect other financial institutions in similar ways. These aspects
are discussed above under the heading "A WARNING ABOUT FORWARD-LOOKING
STATEMENTS." This section addresses particular risks and uncertainties that are
specific to Union Planters.
Since December 31, 1997, Union Planters has acquired 14 financial
institutions and has pending seven acquisitions, including the proposed merger.
Union Planters' expectations concerning future earnings depend in part on Union
Planters being able to combine the operations of the acquired institutions with
Union Planters' own operations promptly and efficiently, and also on Union
Planters being correct in its assumptions about the financial impact of the
acquisitions.
The risks and uncertainties that may affect Union Planters' future
earnings and financial condition include the following:
- - Union Planters' restructuring charges in recent acquisitions may be higher
than expected.
Union Planters has recorded restructuring and merger related charges in
connection with the recently completed acquisitions and expects to record
additional charges in connection with the merger and the other pending
acquisitions. See "BUSINESS OF UNION PLANTERS" on page 81 for more
information about these acquisitions. There is a risk that there may be
additional costs and charges resulting from such transactions that exceed
the charges Union Planters has recorded for financial reporting and
accounting purposes.
- - Union Planters may have more difficulty integrating acquired businesses or
retaining key personnel than expected.
Converting the systems and procedures of each acquired institution to Union
Planters' system is an important part of Union Planters' acquisition
program. Notwithstanding the extensive experience that Union Planters has,
there is a risk that the conversion of an acquired institution may not be
completed on schedule or may be more difficult and costly than expected.
There is also a risk that Union Planters may not be able to retain key
personnel of an acquired institution, which could cause the acquired
operations to perform below expectations.
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- - Union Planters' operating costs after the merger and other recent
acquisitions may be greater than expected, and Union Planters' costs
savings from the merger and other recent acquisitions may be less than
expected, or Union Planters may be unable to obtain those cost savings as
soon as expected.
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INTRODUCTION
At the special meeting, holders of LaPlace common stock will be
asked to vote upon a proposal to approve the Agreement and Plan of Merger, dated
July 1, 1998, between Union Planters Holding Corporation and LaPlace, and joined
in by Union Planters. Pursuant to the Agreement and the Plan of Merger, LaPlace
will merge into Union Planters Holding Corporation, a wholly owned subsidiary of
Union Planters, and the outstanding shares of LaPlace common stock will be
converted into whole shares of Union Planters common stock, $5.00 par value per
share, and associated Preferred Share Rights. For information about Union
Planters' Preferred Share Rights, see page 95. LaPlace shareholders will
receive cash in lieu of any fractional shares.
SPECIAL MEETING OF LAPLACE SHAREHOLDERS
DATE, PLACE, TIME, AND PURPOSE
Union Planters and LaPlace are furnishing this proxy
statement-prospectus to holders of common stock, $1.00 par value, of LaPlace
("LaPlace Common Stock") in connection with the solicitation by the Board of
Directors of LaPlace of proxies for use at a special meeting of shareholders of
LaPlace to be held at p.m., local time, on Thursday, December 31, 1998 at
the office of Bank of LaPlace, 110 Belle Terre Blvd., LaPlace, Louisiana, and at
any adjournment or postponement thereof.
At the special meeting, shareholders will consider and vote upon a
proposal to approve an Agreement and Plan of Merger, dated July 1, 1998, between
Union Planters Holding Corporation and LaPlace, and joined in by Union Planters,
attached to this proxy statement-prospectus as Appendix A, and a related Plan of
Merger between LaPlace and Union Planters Holding Corporation, attached to this
proxy statement-prospectus as Appendix B, (the "Agreement" and the "Plan of
Merger" respectively). Pursuant to the Agreement and related Plan of Merger,
each share of LaPlace Common Stock outstanding immediately prior to the
effective time of the merger (except shares held by Dissenters, as hereinafter
defined), will be converted into and exchangeable for 2.83 shares of common
stock, $5.00 par value, of Union Planters ("Union Planters Common Stock"), and
associated Preferred Share Rights. For information about Union Planters'
Preferred Share Rights, see page 95. LaPlace shareholders will receive cash in
lieu of any fractional shares. As a result of the merger, the holders of LaPlace
Common Stock (other than shares held by Dissenters) will become shareholders of
Union Planters.
This proxy statement-prospectus constitutes a proxy statement of
LaPlace with respect to the special meeting and a prospectus of Union Planters
with respect to the shares of Union Planters Common Stock to be issued in
connection with the merger. The information in this proxy statement-prospectus
concerning Union Planters and its subsidiaries and LaPlace and its subsidiary
has been furnished by each of such entities, respectively.
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The principal executive office of Union Planters is located at 7130
Goodlett Farms Parkway, Memphis, Tennessee 38018, and its telephone number is
(901) 580-6000. The principal executive office of LaPlace is located at 110
Belle Terre Blvd., LaPlace, Louisiana 70068-3340, and its telephone number is
(504) 652-2200. As used in this proxy statement-prospectus, the terms "Union
Planters" and "LaPlace" refer to Union Planters Corporation and LaPlace
Bancshares, Inc., respectively, and where the context requires, to Union
Planters and LaPlace and their respective subsidiaries.
This Proxy Statement-Prospectus is first being mailed to holders of
LaPlace Common Stock on or about December 1, 1998.
RECORD DATE, VOTING RIGHTS, REQUIRED VOTE, AND REVOCABILITY OF PROXIES
The Board of Directors of LaPlace has fixed the close of business on
November 16, 1998 as the record date for determining holders of outstanding
shares of LaPlace Common Stock entitled to notice of and to vote at the special
meeting. Only holders of LaPlace Common Stock of record on the books of LaPlace
at the close of business on the record date are entitled to vote at the special
meeting or at any adjournment or postponement of the special meeting. As of the
record date, there were 145,732 shares of LaPlace Common Stock issued and
outstanding, each of which is entitled to one vote. The presence, in person or
by proxy, of a majority of the total voting power of LaPlace is necessary to
constitute a quorum of the shareholders to take action at the special meeting.
Approval of the Agreement and Plan of Merger requires the approval
of two-thirds of the voting power present at the special meeting. An abstention
by a shareholder present at the special meeting in person or by proxy will have
the same effect as a vote against the Agreement and Plan of Merger, but failure
to return a properly executed proxy, or a broker submitting a proxy without
exercising discretionary authority with respect to approval of the Agreement and
Plan of Merger will not.
Shares of LaPlace Common Stock represented by properly executed
proxies will be voted in accordance with the instructions indicated on the
proxies or, if no instructions are indicated, will be voted FOR the proposal to
approve the Agreement and Plan of Merger and in the discretion of the proxy
holders as to any other matter which may properly come before the special
meeting or any adjournment or postponement thereof.
A shareholder who has given a proxy may revoke it at any time before
it is voted by (a) filing with the Secretary-Treasurer of LaPlace a notice in
writing revoking it or a duly executed proxy bearing a later date, or (b) voting
in person at the special meeting.
On the record date, LaPlace's directors and executive officers,
including their immediate family members and affiliated entities owned 58,062
shares or approximately 39.84% of the outstanding shares of LaPlace Common
Stock. On the record date, Union Planters' directors and executive officers
owned no shares of LaPlace Common Stock.
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As a condition to consummation of the merger, each director and
executive officer of LaPlace has executed a voting agreement in which he agreed
to vote all shares over which he had beneficial ownership for approval of the
Agreement and Plan of Merger.
On the record date, Union Planters held no shares of LaPlace Common
Stock in a fiduciary capacity for others, or as a result of debts previously
contracted, and LaPlace held no shares of LaPlace Common Stock in a fiduciary
capacity for others or as a result of debts previously contracted with respect
to which it has sole or shared voting power.
Union Planters shareholders are not required to approve the
Agreement and Plan of Merger or the issuance of shares of Union Planters Common
Stock.
SOLICITATION OF PROXIES
LaPlace and Union Planters will share the costs of soliciting
proxies. In addition to the use of the mail, proxies may be solicited by the
directors, officers and employees of LaPlace in person, or by telephone,
telecopier or telegram. Directors, officers and employees will not be
additionally compensated for solicitation but may be reimbursed for
out-of-pocket expenses incurred in connection with solicitation. Arrangements
will also be made with custodians, nominees and fiduciaries for the forwarding
of solicitation material to the beneficial owners of LaPlace Common Stock held
of record by such persons, and LaPlace may reimburse custodians, nominees and
fiduciaries for reasonable out-of-pocket expenses incurred for these services.
RECOMMENDATION
LaPlace's board of directors has unanimously approved the Agreement
and Plan of Merger, and believes that the proposal to approve the Agreement and
the Plan of Merger is in the best interests of LaPlace and its shareholders.
LaPlace's board of directors recommends that the LaPlace shareholders vote FOR
approval of the Agreement and the Plan of Merger.
DESCRIPTION OF TRANSACTION
The following information describes material aspects of the merger.
This description does not provide a complete description of all the terms and
conditions of the Agreement and the Plan of Merger. It is qualified in its
entirety by the Appendices hereto, including the text of the Agreement and the
Plan of Merger, which are attached as Appendices A and B, respectively, to this
proxy statement-prospectus. The Agreement and Plan of Merger are incorporated
herein by reference. You are urged to read the Appendices in their entirety.
GENERAL
The Agreement provides for the acquisition of LaPlace by Union
Planters pursuant to the merger of LaPlace with and into Union Planters Holding
Corporation. Union Planters Holding Corporation is a Tennessee corporation and a
wholly-owned subsidiary of Union Planters. Union Planters Holding Corporation
will be the surviving corporation resulting from the merger.
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At the time the Merger becomes effective, each share of LaPlace common stock
then issued and outstanding (except shares held by LaPlace, Union Planters and
their subsidiaries other than shares held in a fiduciary capacity or as a result
of debts previously contracted) will be converted into and exchanged for the
right to receive 2.83 shares of Union Planters common stock and the associated
Preferred Share Rights (the "Exchange Ratio"). The Exchange Ratio is subject to
possible adjustment as described below.
No fractional shares of Union Planters common stock will be issued.
Rather, Union Planters will pay cash (without interest) in an amount equal to
such fractional part of a share of Union Planters common stock multiplied by the
closing price of Union Planters common stock on the NYSE (as reported by The
Wall Street Journal) on the last trading day before the merger becomes
effective.
On the record date, LaPlace had 145,732 shares of common stock
issued and outstanding. Based on an Exchange Ratio of 2.83 to 1, upon completion
of the merger, Union Planters will issue approximately 412,422 shares of its
common stock to LaPlace shareholders. After the merger, Union Planters would
then have outstanding approximately 136,475,457 shares of common stock based on
the number of shares of Union Planters common stock outstanding on October 31,
1998 (not including shares Union Planters may issue in its other pending
acquisitions and shares it may issue pursuant to the exercise of Union Planters
stock options or for other purposes).
POSSIBLE ADJUSTMENT OF EXCHANGE RATIO
Under certain circumstances, the Exchange Ratio could be adjusted
pursuant to certain provisions of the Agreement. UNDER NO CIRCUMSTANCES WOULD
THE EXCHANGE RATIO BE LESS THAN 2.83 SHARES OF UNION PLANTERS COMMON STOCK FOR
EACH SHARE OF LAPLACE COMMON STOCK. An adjustment could occur only if LaPlace 's
board of directors elects to terminate the Agreement pursuant to the provisions
of the Agreement, and if Union Planters then elects to avoid termination of the
Agreement by increasing the Exchange Ratio.
LaPlace may elect to terminate the Agreement if both:
(1) the Average Closing Price (as defined below) is less than
$48.45; and
(2) (a) the number obtained by dividing the Average Closing Price
by $60.5625 (the "Union Planters Ratio")
is less than
(b) the number obtained by dividing the weighted average of
the closing prices of the common stock of the bank
holding companies defined as the "Index Group" in the
Agreement (the "Index Price") on the date of the special
meeting, by the Index Price on July 13, 1998 (the
"Starting Date"), less 15% (the "Index Ratio").
Union Planters has the option to avoid termination of the Agreement
by LaPlace by
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increasing the Exchange Ratio to equal the lesser of (1) the number obtained by
dividing the product of $48.45 and the Exchange Ratio by the Average Closing
Price or (2) the number obtained by dividing the product of the Index Ratio and
the Exchange Ratio by the number obtained by dividing the Average Closing Price
by $60.5625. If the merger is approved by LaPlace's shareholders, LaPlace's
board of directors could elect not to terminate the Agreement and to consummate
the merger without seeking another vote of the LaPlace shareholders even if
LaPlace has the right to terminate.
The Average Closing Price is the average of the daily last sales
prices of Union Planters common stock as reported on the NYSE (as reported by
The Wall Street Journal, or, if not reported thereby, another authoritative
source as chosen by Union Planters) for 20 consecutive full trading days in
which such shares are traded on the NYSE ending at the close of trading on the
date of the special meeting.
These conditions reflect Union Planters' and LaPlace's agreement
that LaPlace's shareholders will assume the risk of declines in the value of
Union Planters common stock to $48.45. Any adjustment of the Exchange Ratio
related to a decline in the price of Union Planters common stock below $48.45
would depend on whether the Average Closing Price of Union Planters common stock
performs below the weighted average market prices of a group of comparable bank
holding company common stocks (the Index Group referenced above) by more than
15%.
In making its determination of whether to terminate the Agreement,
LaPlace's board of directors will take into account, consistent with its
fiduciary duties, all relevant facts and circumstances that exist at such time.
These factors may include information concerning the business, financial
condition, results of operations, and prospects of Union Planters (including the
recent performance of Union Planters common stock, the historical financial data
of Union Planters, customary statistical measurements of Union Planters'
financial performance, and the future prospects for Union Planters common stock
following the merger), and the advice of its financial advisors and legal
counsel. If LaPlace's board of directors elects to terminate the Agreement,
Union Planters would then determine whether to proceed with the merger at the
higher Exchange Ratio. In making this determination, the principal factors Union
Planters will consider include the projected effect of the merger on Union
Planters' pro forma earnings per share and whether Union Planters' assessment of
LaPlace's earning potential as part of Union Planters justifies the issuance of
an increased number of Union Planters' shares. If Union Planters declines to
adjust the Exchange Ratio, LaPlace may elect to proceed without the adjustment,
provided it does so within 12 days of the date the LaPlace shareholders approve
the merger. UNION PLANTERS IS UNDER NO OBLIGATION TO ADJUST THE EXCHANGE RATIO.
The operation of the adjustment mechanism can be illustrated by
three scenarios. For purposes of the scenarios, it has been assumed that the
initial Exchange Ratio is 2.83, the Starting Price of Union Planters common
stock is $60.5625, and the Index Price, as of the Starting Date, is $100.
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Scenario One: The first scenario occurs if the Average Closing Price is equal
to $48.45 or more. Under this scenario, there would be no possible
adjustment to the Exchange Ratio, even though the value of the
consideration to be received by LaPlace shareholders could have
fallen from a pro forma $60.5625 per share, as of the Starting Date,
to $48.45 per share, as of the date the LaPlace shareholders approve
the merger.
Scenario Two: The second scenario occurs if the Average Closing Price is less
than $48.45 but does not represent a decline from the Starting Price
of more than 15% more than the decline of the common stock prices of
the Index Group. Under this scenario, there also would be no
possible adjustment to the Exchange Ratio, even though the value of
the consideration to be received by LaPlace shareholders would have
fallen from a pro forma $60.5625 per share, as of the Starting Date,
to an amount based on the then lower Average Closing Price of Union
Planters common stock, as of the date the LaPlace shareholders
approve the merger.
Scenario Three: The third scenario occurs if the Average Closing Price
declines below $48.45, and the Union Planters Ratio is below the
Index Ratio. Under this scenario, the adjustment in the Exchange
Ratio is designed to ensure that the LaPlace shareholders receive
shares of Union Planters common stock having a value (based upon the
Average Closing Price) that corresponds to the lesser of $48.45 per
share, or a price reflecting a 15% decline from the stock price
performance reflected by the Index Group.
For example, if the Average Closing Price were $42.39, and the
ending Index Price, as of the date the LaPlace shareholders approve
the merger, were $90, the Union Planters Ratio (.70) would be below
the Index Ratio (.90 minus .15), LaPlace could terminate the
Agreement unless Union Planters elected within five days to increase
the Exchange Ratio to equal 3.03, which represents the lesser of (a)
3.234 (the result of dividing $137.11 (the product of $48.45 and the
2.83 Exchange Ratio) by the Average Closing Price ($42.39), rounded
to the nearest thousandth) and (b) 3.03 (the result of dividing the
Index Ratio (.75) times 2.83 by the Union Planters Ratio (.70),
rounded to the nearest thousandth). Based upon the assumed $42.39
Average Closing Price, the new Exchange Ratio would represent a
value to the LaPlace shareholders of $128.44 per share.
If the Average Closing Price were $42.39., and the ending Index
Price, as of the date the LaPlace shareholders approve the merger,
were $100, the Union Planters Ratio (.70) would be below the Index
Ratio (.85, or 1.00 minus .15), LaPlace could terminate the
Agreement unless Union Planters elected within five days to increase
the Exchange Ratio to equal 3.234, which represents the lesser of
(a) 3.234 (the result of dividing $137.11 (the product of $48.45 and
the 2.83 Exchange Ratio) by the Average Closing Price ($42.39),
rounded to the nearest thousandth), and (b) 3.436 (the result of
dividing the Index Ratio (.85) times 2.83 by the Union Planters
Ratio (.70), rounded to the nearest thousandth). Based upon the
assumed $42.39 Average Closing Price, the new Exchange Ratio would
represent a value to the LaPlace shareholders of $137.11 per share.
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Based on the $48.9375 closing price of Union Planters common stock
on November 27, 1998, the Exchange Ratio represents a value of $138.49 per share
of LaPlace common stock.
The actual market value of a share of Union Planters common stock at
the effective time of the merger and at the time certificates for those shares
are delivered to LaPlace shareholders may be more or less than the Average
Closing Price. You are urged to obtain current market quotations for Union
Planters common stock. See "COMPARATIVE MARKET PRICES AND DIVIDENDS."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
Union Planters and LaPlace have not and do not intend to seek a
ruling from the IRS as to the federal income tax consequences of the merger.
Instead, consummation of the merger is conditioned upon the receipt by Union
Planters of the opinion of its counsel, Wyatt, Tarrant & Combs, and the receipt
by LaPlace of the opinion of its counsel, Arter & Hadden LLP, as to the
following expected federal income tax consequences of the merger:
(1) The acquisition by Union Planters Holding Corporation of
substantially all of the assets of LaPlace in exchange for
shares of Union Planters common stock and the assumption of
liabilities of LaPlace pursuant to the merger will constitute
a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code.
(2) LaPlace, Union Planters and Union Planters Holding Corporation
will each be "a party to a reorganization" within the meaning
of Section 368(b) of the Internal Revenue Code.
(3) No gain or loss will be recognized by LaPlace as a result of
the merger.
(4) No gain or loss will be recognized by Union Planters Holding
Corporation or Union Planters as a result of the merger.
(5) No gain or loss will be recognized by the shareholders of
LaPlace as a result of the exchange of LaPlace common stock
for Union Planters common stock pursuant to the merger, except
that a gain or loss will be recognized on the receipt of any
cash in lieu of a fractional share. Assuming that the LaPlace
common stock is a capital asset in the hands of the respective
LaPlace shareholders, any gain or loss recognized as a result
of the receipt of cash in lieu of a fractional share will be a
capital gain or loss equal to the difference between the cash
received and that portion of the holder's tax basis in the
LaPlace common stock allocable to the fractional share.
(6) The tax basis of Union Planters common stock to be received by
the shareholders
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<PAGE> 34
of LaPlace will be the same as the tax basis of the LaPlace
common stock surrendered in exchange therefor (reduced by any
amount allocable to a fractional share interest for which cash
is received).
(7) The holding period of the Union Planters common stock to be
received by shareholders of LaPlace will include the holding
period of the LaPlace common stock surrendered in exchange
therefor, provided the LaPlace shares were held as a capital
asset by the shareholders of LaPlace on the date of the
exchange.
(8) A shareholder of LaPlace who perfects his dissenters' rights
and who receives payment of the fair market value of his
shares of LaPlace common stock will be treated as having
received such payment in redemption of such stock. Such
redemption will be subject to the conditions and limitations
of Section 302 of the Internal Revenue Code.
The tax opinions will not address, among other matters:
(1) state, local estate, foreign or other federal tax consequences
of the merger not specifically addressed in the opinion;
(2) federal income tax consequences to LaPlace shareholders who
are subject to special rules under the Internal Revenue Code,
such as foreign persons, tax-exempt organizations, insurance
companies, financial institutions, dealers in stocks and
securities, and persons corporations, who do not own such
stock as a capital asset;
(3) federal income tax consequence, affecting shares of LaPlace
common stock acquired as part of a hedge, straddle or
conversion transaction;
(4) the tax consequences of Union Planters, Union Planters Holding
Corporation and LaPlace of the inclusion in income of the
amount of the bad-debt reserve maintained by LaPlace and/or
its subsidiaries and any other amounts resulting from any
required change in accounting methods; and
(5) the tax consequences of Union Planters, Union Planters Holding
Corporation and LaPlace of any income and deferred gain
recognized pursuant to Treasury Regulations issued under
Section 1502 of the Internal Revenue Code.
The tax opinions will be based on the Internal Revenue Code, the
Treasury Regulations promulgated under the Internal Revenue Code by the Internal
Revenue Service ("IRS"), judicial decisions and administrative pronouncements of
the IRS, all existing and in effect on the date of such opinions and all of
which are subject to change at any time, possibly retroactively. Any such change
could have a material impact on the conclusions contained in the following
discussion. Moreover, the opinions will represent only such counsel's best
judgment as to the expected federal income tax consequences of the merger and
are not binding on the IRS or the courts. The IRS may challenge the conclusions
stated in the opinions and shareholders of
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<PAGE> 35
LaPlace may incur the cost and expense of defending positions taken by them with
respect to the merger. A successful challenge by the IRS could have material
adverse consequences to the parties to the merger, including shareholders of
LaPlace and Union Planters.
In rendering the tax opinions, counsel for Union Planters and
LaPlace have the right to rely, as to factual matters, solely on the continuing
accuracy of (1) the description of the facts relating to the merger contained in
the Agreement and this proxy statement-prospectus, (2) the factual
representations and warranties contained in the Agreement and this proxy
statement-prospectus and related documents and agreements, and (3) certain
factual matters addressed by representations made by certain executive officers
of LaPlace, Union Planters and Union Planters Holding Corporation, as further
described in the opinions. Events occurring after the date of the opinions could
alter the facts upon which the opinions are based. In such case, the conclusions
reached in the opinions and in this summary could be materially impacted.
Accordingly, for all of the above reasons, shareholders of LaPlace
are urged to consult their own tax advisors as to the specific tax consequences
to them of the merger, including the applicability and effect of federal, state,
local and other tax laws, and the implications of any proposed changes in the
tax laws.
The conditions relating to the receipt of the tax opinions may be
waived by both Union Planters and LaPlace. Neither Union Planters nor LaPlace
currently intends to waive the conditions relating to the receipt of tax
opinions. If the conditions relating to the receipt of tax opinions were waived
and the material federal income tax consequences of the merger were
substantially different from those described in this proxy statement-prospectus,
LaPlace would resolicit the approval of its shareholders prior to completing the
merger.
BACKGROUND OF AND REASONS FOR THE MERGER
BACKGROUND. In the last several years, there has been a sharp
increase in the level of interest in and the number of acquisitions of financial
institutions in Louisiana. One of the responsibilities of the LaPlace Board is
to consider various strategic alternatives, including whether to affiliate with
a larger, more diversified financial organization, as viable opportunities might
arise.
In late 1997 and early 1998, representatives of three regional bank
holding companies, including Union Planters, approached Thomas W. Smith, Jr.,
President of LaPlace, concerning whether the LaPlace Board would be interested
in discussing a possible business combination. The interest expressed by each of
these entities was unsolicited by LaPlace. Mr. Smith advised the LaPlace Board
of these preliminary inquiries, and, on January 26, 1998, LaPlace engaged Mercer
Capital Management, Inc. ("Mercer Capital") as its financial advisor to assist
it in evaluating its strategic alternatives and soliciting preliminary
indications of interest for the purchase of LaPlace from interested and capable
buyers.
Mercer Capital contacted six regional financial institutions,
including all that had previously expressed any interest in acquiring LaPlace.
Three institutions, including Union
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Planters, submitted preliminary indications of interest to Mercer Capital in
March 1998. Following discussions with Mercer Capital, Union Planters and
another financial institution submitted revised indications of interest to
Mercer Capital in which each company increased the consideration it was offering
to the LaPlace shareholders.
On April 21, 1998, the LaPlace Board held a special meeting to
consider its strategic alternatives and the acquisition proposals that had been
submitted. At this meeting, a representative of Mercer Capital advised the Board
regarding its strategic alternatives and the competing proposals. Mercer Capital
expressed its willingness to opine affirmatively on the fairness of either of
the transactions to LaPlace's shareholders, from a financial point of view.
Following the meeting, at the direction of the LaPlace Board, LaPlace management
and Mercer Capital engaged in additional negotiations with the two companies
that had submitted the indications of interest deemed most attractive to LaPlace
and its shareholders by the LaPlace Board. Later that day, representatives of
Union Planters and LaPlace reached a preliminary agreement on the terms of a
business combination, including the consideration to be received by shareholders
of LaPlace, subject to Union Planter's completion of preliminary due diligence,
approval by LaPlace's and Union Planter's respective boards of directors,
execution of a definitive agreement among the parties and certain other
conditions. Over the next two months, Union Planters conducted a review of
LaPlace's and Bank of LaPlace's books and records, and representatives of
LaPlace and Union Planters, and their respective advisors, negotiated the terms
of the Agreement and related Plan of Merger, subject to approval by each party's
board of directors.
The merger, Agreement and Plan of Merger were considered by the
Board of Directors of LaPlace at a special meeting held for that purpose on June
25, 1998. At the meeting, representatives of Mercer Capital advised the Board
regarding the proposed merger. Based upon the foregoing and their analysis of
the Merger and Agreement and Plan of Merger, the LaPlace Board determined that
the merger was in the best interests of LaPlace and its shareholders and
approved the merger, Agreement and Plan of Merger.
REASONS FOR THE MERGER. In reaching its decision that the merger is
in the best interests of LaPlace and its shareholders, the LaPlace Board
consulted with its financial and other advisors, as well as with LaPlace's
management, and considered a number of factors, including without limitation,
the following:
- the financial condition and results of operations of, and
prospects for, each of Union Planters and LaPlace, and the
market price of Union Planters Common Stock;
- the respective dividend policies of Union Planters and
LaPlace;
- the amount and type of consideration to be received by the
holders of LaPlace Common Stock pursuant to the Agreement and
related Plan of Merger, and the financial terms of other
business combinations in the banking industry;
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- the Union Planters Common Stock to be received pursuant to the
Agreement and related Plan of Merger will be listed for
trading on the New York Stock Exchange and provide holders of
LaPlace Common Stock with liquidity that presently is
unavailable to such holders because an active trading market
does not exist for the LaPlace Common Stock;
- the merger will allow holders of LaPlace Common Stock to
become shareholders of Union Planters, a regional bank holding
company that is one of the fifty largest bank holding
companies in the United States;
- the merger is expected to qualify as a tax-free reorganization
so that neither LaPlace nor its shareholders (except to the
extent that cash is received in respect of their shares) will
recognize any gain in the transaction (see "-- Certain Federal
Income Tax Consequences of the Merger"); and
- the opinion received from Mercer Capital that the
exchange ratio of Union Planters Common Stock for
LaPlace Common Stock in the merger is fair to LaPlace's
shareholders from a financial point of view (see
"Opinion of Financial Advisor").
The LaPlace Board did not assign any specific or relative weight to
the foregoing factors in its considerations. The LaPlace Board believes that the
merger will provide significant value to the holders of LaPlace Common Stock and
will enable them to participate in opportunities for growth that the LaPlace
Board believes the merger makes possible.
BASED ON THE FOREGOING, THE LAPLACE BOARD UNANIMOUSLY APPROVED THE
MERGER, AGREEMENT AND PLAN OF MERGER, AND UNANIMOUSLY RECOMMENDS THAT THE
HOLDERS OF LAPLACE COMMON STOCK VOTE "FOR" APPROVAL OF THE AGREEMENT AND PLAN OF
MERGER.
UNION PLANTERS' REASONS FOR THE MERGER.
In adopting the Agreement, the Plan of Merger, and the merger, the
Union Planters' board of directors considered a number of factors concerning the
benefits of the merger. Without assigning any relative or specific weights to
the factors, the Union Planters board of directors considered the following
additional material factors:
(1) a review, based in part on a presentation by Union Planters'
management, of
- The business, operations, earnings, and financial
condition, including the capital levels and asset
quality, of LaPlace on an historical, prospective, and
pro forma basis and in comparison to other financial
institutions in the area,
- The demographic, economic, and financial characteristics
of the markets in which LaPlace operates, including
existing competition, history of the market areas with
respect to financial institutions, and average demand
for credit, on historical and prospective basis, and
- The results of Union Planters' due diligence review of
LaPlace; and
(2) a variety of factors affecting and relating to the overall
strategic focus of Union Planters, including Union Planters'
desire to expand into markets in Louisiana and the business
lines pursued by LaPlace.
Union Planters' board of directors determined that the merger was in
the best interests of Union Planters and its stockholders and unanimously
approved the proposed merger on June 18, 1998.
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OPINION OF LAPLACE'S FINANCIAL ADVISOR
GENERAL. On January 26, 1998, LaPlace engaged Mercer Capital to act
as its financial advisor in connection with the possible sale of LaPlace. Mercer
Capital is a nationally recognized business valuation and financial advisory
consulting firm and is regularly engaged in the valuation of financial
institutions and other businesses in connection with mergers and other business
combinations, and in business valuations for corporate and other purposes.
LaPlace selected Mercer Capital as its financial advisor on the basis of its
experience and expertise in transactions similar to the merger and its
reputation in the banking community.
At the June 25, 1998 meeting of the LaPlace Board, Mercer Capital
delivered its oral opinion, subsequently confirmed in writing as of November 25,
1998, that the exchange ratio of Union Planters Common Stock for LaPlace Common
Stock in the merger is fair to LaPlace's shareholders from a financial point of
view. No limitations were imposed by LaPlace on Mercer Capital with respect to
the investigations made or procedures followed in rendering its opinion. The
full text of Mercer Capital's written opinion to the LaPlace Board, which sets
forth the assumptions made, matters considered, and limitations of the review by
Mercer Capital, is attached hereto as Appendix D and is incorporated herein by
reference and should be read carefully and in its entirety in connection with
this proxy statement-prospectus. The following summary of Mercer Capital's
opinion is qualified in its entirety by reference to the full text of the
opinion. Mercer Capital's opinion is addressed to the LaPlace Board of Directors
only and does not constitute a recommendation to any shareholder of LaPlace as
to how such shareholder should vote at the Special meeting.
In connection with its opinion, Mercer Capital, among other things
reviewed: (i) the Agreement and the Plan of Merger; (ii) LaPlace's audited
consolidated financial statements for the years ended December 31, 1995, 1996
and 1997, and certain unaudited financial information for LaPlace and Bank of
LaPlace for the years ended December 31, 1995, 1996 and 1997 and the three
months ended March 31, 1998, June 30, 1998, and September 30, 1998; (iii) Union
Planters' annual reports to shareholders for the years ended December 31, 1995,
1996 and 1997; (iv) Union Planters' Annual Report on Form 10-K for the years
ended December 31, 1995, 1996 and 1997 and Quarterly Reports on Form 10-Q for
the quarters ended March 31, 1998, June 30, 1998, and September 30, 1998; (v)
Union Planters' proxy statements for 1996, 1997 and 1998; (vi) LaPlace's 1998
budget prepared by LaPlace management; (vii) public market pricing data of
publicly traded banks which Mercer Capital deemed comparable to Union Planters;
and (viii) transaction data involving other banks which have been acquired.
Representatives of Mercer Capital also visited with LaPlace
management in LaPlace, Louisiana and Union Planters management in Memphis,
Tennessee. Factors considered by Mercer Capital in rendering its opinion
included: (i) the terms of the Agreement and the Plan of Merger; (ii) the arms'
length process by which the Agreement and the Plan of Merger were negotiated;
(iii) a review of Union Planters' historical financial performance, historical
stock pricing, the liquidity of its shares and pricing in relation to other
publicly traded bank holding companies; (iv) a review of LaPlace's historical
financial performance and projected financial performance; (v) tax consequences
of the merger for LaPlace shareholders; and (vi) the financial analysis of the
merger described below.
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In connection with its review, Mercer Capital did not independently
verify any of the foregoing information, and relied on such information and
assumed such information was complete and accurate in all material respects.
Mercer Capital did not compile nor audit LaPlace's or Union Planters' financial
statements, did not make an independent evaluation, appraisal or physical
inspection of the loan portfolio, adequacy of the allowance for loan losses or
other assets or liabilities of LaPlace or Union Planters, and did not review any
individual credit files. Further, Mercer Capital's opinion was based on the
assumption that the merger will be consummated in accordance with the terms of
the Agreement and the Plan of Merger, without any amendment thereto and without
waiver by LaPlace of any of the conditions to its obligations thereunder.
Set forth below is a brief summary of the valuation analysis and
report presented by Mercer Capital to the LaPlace Board on April 21, 1998 and
June 25, 1998 in connection with its opinion.
TRANSACTION SUMMARY. Mercer Capital noted that the exchange ratio in
the merger of 2.83 shares of Union Planters Common Stock for each share of
LaPlace Common Stock was determined through arms length negotiations between
LaPlace and Union Planters in which Union Planters agreed to pay $159.88 per
share in Union Planters Common Stock based upon Union Planters' 20 day average
closing price for the period ended immediately before the Agreement was
executed. The negotiated value of the transaction of $159.88 per share, or $23.3
million, represented 17.7x LaPlace's trailing twelve months earnings for the
period ended March 31, 1998 and 301% of LaPlace's reported book value at March
31, 1998. Mercer Capital cautioned, however, that because the exchange ratio in
the merger is fixed, the ultimate value of the Union Planters Common Stock to be
received by LaPlace shareholders in the merger will be contingent upon the value
of Union Planters Common Stock on the Effective Date of the merger.
PRO FORMA ANALYSIS OF PER SHARE DATA. Mercer Capital analyzed the
changes in pro forma dividends per share, earnings per share and book value per
share from the perspective of LaPlace's shareholders. Mercer Capital did not
represent or warrant that the pro forma data reflected in this proxy
statement-prospectus would reflect that which was developed in its analysis.
Mercer Capital noted that the proposed terms of the merger would result in an
increased book value per share and earnings per share based upon the consensus
estimate for Union Planters' operating earnings per share as compared to
LaPlace's budgeted 1998 earnings. In addition, Mercer Capital stated that
LaPlace shareholders would benefit from an increase in dividends to $5.66 per
share from $1.00 per share as a result of the merger, based upon Union Planters'
current annualized quarterly dividend of $2.00 per share and the exchange ratio
of 2.83 shares of Union Planters Common Stock for each share of LaPlace Common
Stock.
COMPARABLE TRANSACTION ANALYSIS. Mercer Capital reviewed the prices
paid for various banks which have been acquired based upon certain available
public information as compiled by SNL Securities. Mercer Capital noted that most
banking transactions are measured in terms of the price/book ("P/B"),
price/tangible book ("P/TB"), price/earnings ("P/E"), price/assets ("P/A") and
tangible book premium/core deposit ("TBP/CD") ratios.
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The bank acquisition data was divided into the following four
groups: (i) aggregate national acquisition data; (ii) banks based in the
Southwest; (iii) banks based in Louisiana; and (iv) banks with assets of $50
million to $100 million which produce a return on equity ("ROE") of 15%-20%. For
each group, average and median P/E, P/B, P/TB, P/A and TBP/CD ratios were
calculated for calendar years 1993-1997. The 1997 median P/E ratio and average
P/B, P/TB, P/A and TBP/CD ratios were then multiplied by LaPlace's respective
net income for the year ended December 31, 1997 and December 31, 1997 book
value, tangible book value, assets and core deposits to develop an overall
indicated range of value for LaPlace.
The range of indicated multiples and values as applied to LaPlace's
1997 year-end financial data were as follows: (i) P/E 15.0x-19.8x, $18.0-$23.7
million; (ii) P/B 223%-260%, $16.5-$19.3 million; (iii) P/TB 231%-263%,
$17.1-$19.5 million; (iv) P/A 19.4%-23.6%, $13.1-$15.9 million; and (v) TBP/CD
14.6%-21.9%, $14.4-$18.0 million. Mercer Capital's analysis indicated an overall
range of value for LaPlace of $14.4 million to $23.7 million. Mercer Capital
noted that the assumed value of the merger with Union Planters of $23.3 million,
based upon an assumed trading price for Union Planters Common Stock of $56.50
per share, fell at the upper end of the cited range.
DILUTION ANALYSIS. A dilution analysis was conducted whereby
hypothetical non-dilutive prices for LaPlace were generated under the assumption
that various potential buyers would structure an offer so that LaPlace's
pro-forma earnings per share would equal that of the assumed buyer based solely
on the shares issued to LaPlace's shareholders.
The valuation analysis was based upon hypothetical non-dilutive
mergers with Union Planters, Regions Financial Corporation, Whitney Holding
Corporation, Hancock Holding Company, First American Corporation and Trustmark
Corporation. The analysis calculated a range of values for each assumed buyer
based upon LaPlace's 1997 earnings, plus after-tax cost savings that a buyer
might realize, less revenues lost from some core deposit run off of 0% to 10%.
Expense savings were assumed to range from 0% to 35% of LaPlace's non-interest
operating expenses.
The analysis indicated a lower range of $19.4 million to $24.4
million assuming no expense savings and no core deposit run-off. The analysis
indicated a higher range of $28.9 million to $36.4 million assuming the buyer
credited LaPlace with a 35% reduction in overhead and a 10% run-off in core
deposits. In March 1998, at the time the valuation analysis was prepared, the
financial institutions in the analysis were trading at a range of 16x to 22x
estimated 1998 earnings. Union Planters was trading in the vicinity of $62 per
share and 16x estimated 1998 earnings, which resulted in an indicated range of
value for LaPlace of $19.4 million to $28.9 million. The negotiated price of
$23.3 million in the merger was based upon an average price of $56.50 per share
for Union Planters Common Stock, which would have produced a non-dilutive price
range for a Union Planters acquisition of LaPlace of $18.5 million to $26.6
million, based upon Union Planters' estimated 1998 earnings as reported in early
April. Mercer Capital observed that the assumed pricing of Union Planters' offer
of $23.3 million, based upon an assumed trading price for Union Planters Common
Stock of $56.50 per share, fell slightly above the midpoint of the range.
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Mercer Capital noted that the dilution analysis was predicated upon
the hypothetical buyer's earnings per share and public market stock price.
Mercer Capital explained that, the greater the buyer's P/E ratio, the higher the
price a buyer generally can pay without issuing additional shares and thereby
diluting its per share earnings. Mercer Capital also cautioned that the implicit
assumption in the analysis is that the buyer "pays" the seller for all expense
savings. Mercer Capital noted that in its opinion, buyers rarely credit the
seller with all expense savings, particularly when the seller is a small
community bank holding company.
DISCOUNTED CASH FLOW ANALYSIS. A discounted cash flow ("DCF")
analysis was prepared to develop an estimate of value LaPlace shareholders might
realize assuming a merger was delayed five years. Indications of value derived
using the DCF method reflect interim cash flows (dividends) and a terminal cash
flow (the value of LaPlace at the end of the projection period), both discounted
to the present at an appropriate required rate of return.
For purposes of its analysis, Mercer Capital prepared projections
which were reviewed by LaPlace management for overall reasonableness. Mercer
Capital did not warrant or represent that the projections could or would be
realized. The projections were prepared solely to derive a range of present
values for LaPlace based upon certain assumptions, including annual balance
sheet growth by LaPlace of 10%, return on assets ("ROA") of 1.85%-1.90%, and
distribution by LaPlace of approximately 45% of its earnings each year in order
to maintain LaPlace's equity-to-asset ratio at its then-current level.
The terminal value was based upon the product of projected earnings
for 2002 of $2.0 million and a range of P/E ratios of 15x to 20x. The terminal
values and interim dividends were discounted to present values at rates of 12%
to 17%. The overall indicated range of present values given the noted
assumptions was $16.0 million to $25.2 million. Mercer Capital noted that the
assumed value of the merger of $23.3 million, based upon an assumed trading
price for Union Planters Common Stock of $56.50 per share, compared favorably
with the range of value derived from the DCF analysis.
REVIEW OF UNION PLANTERS. Using public and other available
information, Mercer Capital compared the historical financial performance and
current market pricing of Union Planters with the following: (1) publicly traded
bank holding companies based in Mississippi, Alabama, Arkansas, Louisiana and
Tennessee; (2) publicly traded bank holding companies with $10 billion to $35
billion of assets; and (3) aggregate data for all publicly traded bank holding
companies. None of the companies considered in the comparison analysis are
identical to Union Planters.
Based upon pricing data as of mid-June 1998, Mercer Capital
calculated that Union Planters was trading at 21.3x reported twelve month
earnings for the period ended March 31, 1998 and 15.7x and 13.7x 1998 and 1999
earnings, respectively, based upon First Call's median analysts' estimates of
Union Planters' operating earnings of $3.58 per share for 1998 and $4.10 per
share for 1999. By way of comparison, the comparable groups were trading at the
following multiples: (a) Mid-South Group - 21.2x trailing twelve month earnings,
18.8x estimated 1998 earnings, and 16.8x estimated 1999 earnings; (b) $10-$35
Billion Group - 21.4x trailing twelve month earnings, 18.2x estimated 1998
earnings, and 16.2x estimated 1999 earnings; and (c)
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National Group - 22.4x trailing twelve month earnings, 18.4x estimated 1998
earnings, and 16.2x estimated 1999 earnings.
Mercer Capital noted that Union Planters' P/B ratio was 266% as
compared to median P/B multiples of 260% for the Mid-South Group, 316% for the
$10-$35 Billion Group, and 259% for the National Group. Union Planters' dividend
yield was 3.56% compared to median yields of 1.82% for the Mid-South Group,
2.03% for the $10-$35 Billion Group, and 1.55% for the National Group.
Union Planters' reported ROE and ROA for the twelve month period
ended March 31, 1998 were, respectively, 12.75% and 1.23% as compared to 13.29%
and 1.21% for the Mid-South Group, 16.29% and 1.32% for the $10-$35 Billion
Group, and 13.21% and 1.18% for the National Group. Mercer Capital noted that
Union Planters' historical financial statements included merger-related charges
for consummated acquisitions, and that growth through acquisitions had been a
key component of Union Planters' strategy. Mercer Capital stated that, in its
opinion, Union Planters has tended to trade at a discount to its peers in
relation to forward operating earnings estimates because of Union Planters'
active acquisition program.
The summary set forth above does not purport to be a complete
description of the presentation by Mercer Capital to the LaPlace Board or of the
analyses performed by Mercer Capital. The preparation of a fairness opinion is
not necessarily susceptible to partial analysis or summary description. Mercer
Capital believes that its analyses and the summary set forth above must be
considered as a whole and that selecting a portion of its analyses and factors
would create an incomplete view of the process underlying the analyses set forth
in its presentation to the LaPlace Board of Directors. In addition, Mercer
Capital may have given certain analyses more or less weight than other analyses,
and may have deemed various assumptions more or less probable than other
assumptions, so that the ranges of valuations resulting from any particular
analysis described above should not be taken to be Mercer Capital's view of the
actual value of LaPlace or the combined companies. The fact that any specific
analysis has been referred to in the summary above is not meant to indicate that
such analysis was given greater weight than any other analysis.
In performing its analyses, Mercer Capital made numerous assumptions
with respect to industry performance, general business and economic conditions
and other matters, many of which are beyond the control of LaPlace or Union
Planters. The analyses performed by Mercer Capital are not necessarily
indicative of actual values or actual future results, which may be significantly
more or less favorable than suggested by such analyses. Such analyses were
prepared solely as part of Mercer Capital's analysis of the fairness of the
exchange ratio to the holders of LaPlace Common Stock. The analyses do not
purport to be appraisals or to reflect the prices at which a company might
actually be sold or the prices at which any securities may trade at the present
time or any time in the future. Mercer Capital used in its analyses various
projections of future performance prepared by the management of LaPlace. The
projections are based on numerous variables and assumptions that are inherently
unpredictable and must be considered not certain of occurrence as projected.
Accordingly, actual results could vary significantly from those set forth in
such projections.
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As described above, Mercer Capital's opinion and presentation to the
LaPlace Board were among the many factors taken into consideration by the Board
in making its determination to approve the Agreement and the Plan of Merger.
Pursuant to its engagement letter with Mercer Capital, LaPlace paid
Mercer Capital an initial fee of $12,000. If the merger is consummated, Mercer
Capital will be paid an additional fee equal to 0.30% of the total consideration
involved in the merger. LaPlace has also agreed to reimburse Mercer Capital for
its reasonable out-of-pocket expenses in an amount not to exceed $5,000 without
the prior consent of LaPlace. LaPlace has agreed to indemnify Mercer Capital and
its partners, employees, consultants, agents and representatives against certain
liabilities, including liabilities under the federal securities laws. Neither
Union Planters nor LaPlace has paid Mercer Capital any other fees during the
last two years.
EFFECTIVE TIME OF THE MERGER
Subject to the conditions to the obligations of the parties to effect
the merger, the merger will become effective when Articles of Merger reflecting
the merger become effective with the Secretary of State of the State of
Louisiana and the Secretary of State of the State of Tennessee. Unless Union
Planters and LaPlace agree otherwise, they will use reasonable efforts to cause
the merger to become effective on the date designated by Union Planters that is
within 15 days after the later of (1) the effective date of the last consent of
any regulatory authority having authority over and approving or exempting the
merger (taking into account any required waiting period), and (2) the date on
which LaPlace's shareholders approve the Agreement and the Plan of Merger. Union
Planters and LaPlace anticipate that the merger will become effective on or
about December 31, 1998.
Union Planters and LaPlace cannot assure that the necessary
shareholder and regulatory approvals of the merger will be obtained or that
other conditions precedent to the merger can or will be satisfied. LaPlace and
Union Planters anticipate that all conditions to consummation of the merger will
be satisfied so that the merger can be completed on or about December 31, 1998.
However, completion of the merger could be delayed.
Either LaPlace's or Union Planters' board of directors may terminate
the Agreement and the Plan of Merger if the merger is not completed by March 31,
1999, unless it is not completed because of the willful breach of the Agreement
by the party seeking termination. See "-- Conditions to Consummation of the
Merger" and "-- Waiver, Amendment, and Termination."
DISTRIBUTION OF UNION PLANTERS STOCK CERTIFICATES
Promptly after the merger is completed, each former LaPlace
shareholder will be mailed a letter of transmittal and instructions for the
exchange of the certificates representing shares of LaPlace common stock for
certificates representing shares of Union Planters common stock. Union Planters
expects that one of its bank subsidiaries will serve as Exchange Agent.
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You should not send in your certificates until you receive a letter of
transmittal and instructions. After you surrender to the Exchange Agent
certificates for LaPlace common stock with a properly completed letter of
transmittal, the Exchange Agent will mail you a certificate or certificates
representing the number of shares of Union Planters common stock to which you
are entitled and a check for the amount to be paid in lieu of any fractional
share (without interest), if any, together with all undelivered dividends or
distributions in respect of the shares of Union Planters common stock (without
interest thereon), if any. Union Planters will not be obligated to deliver the
consideration to you, as a former LaPlace shareholder, until you have
surrendered your LaPlace common stock certificates.
Whenever a dividend or other distribution is declared by Union
Planters on Union Planters common stock with a record date after the date on
which the merger became effective, the declaration will include dividends or
other distributions on all shares of Union Planters common stock that may be
issued in the merger. However, Union Planters will not pay any dividend or other
distribution that is payable after the effective date of the merger to any
former LaPlace shareholder who has not surrendered his or her LaPlace common
stock certificate until the holder surrenders the certificate. If any LaPlace
shareholder's common stock certificate has been lost, stolen, or destroyed, the
Exchange Agent will issue the shares of Union Planters common stock and any cash
in lieu of fractional shares upon the shareholder's submission of an affidavit
claiming the certificate to be lost, stolen, or destroyed by the shareholder of
record and the posting of a bond in such amount as Union Planters will
reasonably direct as indemnity against any claim that may be made against Union
Planters with respect to the certificate.
At the time the merger becomes effective, the stock transfer books of
LaPlace will be closed to LaPlace's shareholders and no transfer of shares of
LaPlace common stock by any shareholder will thereafter be made or recognized.
If certificates for shares of LaPlace common stock are presented for transfer
after the merger becomes effective, they will be canceled and exchanged for
shares of Union Planters common stock, a check for the amount due in lieu of
fractional shares, if any, and any undelivered dividends on the Union Planters
common stock.
TERMINATION FEE
The agreement requires LaPlace to pay Union Planters $800,000 as
liquidated damages if LaPlace enters into a letter of intent, agreement in
principle, or definitive agreement with any third party with respect to an
acquisition proposal, or indicating an intent to support an acquisition
proposal, other than the merger. The sum is payable by LaPlace immediately upon
entering into a letter of intent, agreement in principle, or definitive
agreement concerning an acquisition proposal other than that contemplated in the
Agreement, unless the acquisition proposal results from a hostile takeover. In
that event the sum is due at the closing of the transaction. LaPlace's
obligation to pay these liquidated damages could extend to as late as September
30, 1999, in the event that the merger is not consummated or terminated for
certain specific reasons provided in the Agreement
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CONDITIONS TO CONSUMMATION OF THE MERGER
Union Planters and LaPlace are required to complete the merger only
after the satisfaction of various conditions. These conditions include:
(1) the holders of two-thirds of the voting power of LaPlace
present at the Special meeting must approve the Agreement and
the Plan of Merger;
(2) Union Planters and LaPlace must receive certain required
regulatory approvals;
(3) Union Planters and LaPlace must receive written opinions of
counsel as to the tax-free nature of the merger;
(4) the SEC must declare the registration statement, registering
the shares of Union Planters common stock to be issued to
LaPlace stockholders in the merger, effective under the
Securities Act of 1933, as amended;
(5) the shares of Union Planters common stock to be issued in the
merger must be approved for listing on the New York Stock
Exchange, subject to official notice of issuance;
(6) the representations and warranties of LaPlace and Union
Planters as set forth in the Agreement must be accurate as of
the date of the agreement and as of the date the merger
becomes effective;
(7) LaPlace and Union Planters must perform all agreements and
comply with all covenants of LaPlace and Union Planters as set
forth in the Agreement;
(8) LaPlace and Union Planters must receive all other consents
that may be required to complete the merger or to prevent any
default under any contract or permit which would be reasonably
likely to have, individually or in the aggregate, a material
adverse effect on LaPlace or Union Planters;
(9) Union Planters must receive a letter from
PricewaterhouseCoopers LLP to the effect that the merger will
qualify for pooling-of-interests accounting treatment;
(10) the absence of any law or order or any action taken by any
court, governmental, or regulatory authority of competent
jurisdiction prohibiting or restricting the merger or making
it illegal;
(11) Union Planters must receive agreements from each person
LaPlace reasonably believes may be deemed an affiliate of
LaPlace; and
(12) certain other conditions must be satisfied, including the
receipt of various certificates from the officers of LaPlace
and Union Planters.
Neither Union Planters nor LaPlace can assure LaPlace shareholders
as to when or if all of the conditions to the merger can or will be satisfied or
waived by the party permitted to do so. If the merger is not effected on or
before March 31, 1999, the board of directors of either LaPlace
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or Union Planters may terminate the Agreement and abandon the merger, unless the
failure to complete the merger was due to willful breach of the Agreement by the
party seeking to terminate. See "-- Waiver, Amendment, and Termination."
REGULATORY APPROVAL
Union Planters must receive certain regulatory approvals before the
merger can be completed. There is no assurance that these regulatory approvals
will be obtained or when they will be obtained.
It is a condition to the completion of the merger that Union Planters
and LaPlace receive all necessary regulatory approvals to the merger.
LaPlace and Union Planters are not aware of any material governmental
approvals or actions that are required to complete the merger, except as
described below. Should any other approval or action be required, Union Planters
and LaPlace contemplate that they would seek such approval or action.
The merger is subject to the prior approval of the Federal Reserve,
pursuant to Section 3 of the Bank Holding Company Act. Factors considered by the
Federal Reserve in evaluating the merger are discussed under the heading
"CERTAIN REGULATORY CONSIDERATIONS-General" on page 86. The merger may not
be completed until the 30th day following the date of the Federal Reserve
approval, although the Federal Reserve may reduce that period to 15 days. During
this period the United States Department of Justice is given the opportunity to
challenge the transaction on antitrust grounds. The commencement of any
antitrust action would stay the effectiveness of the approval of the agencies,
unless a court of competent jurisdiction specifically ordered otherwise. By
letter dated September 24, 1998, the Federal Reserve advised Union Planters that
it had approved the merger.
WAIVER, AMENDMENT, AND TERMINATION
To the extent permitted by law, the Boards of Directors of Union
Planters and LaPlace may agree in writing to amend the Agreement, whether before
or after LaPlace's shareholders have approved the Agreement and the Plan of
Merger. In addition, before or at the time the merger becomes effective, either
LaPlace or Union Planters, or both, may waive any default in the performance of
any term of the Agreement by the other party or may waive or extend the time for
the compliance or fulfillment by the other party of any and all of its
obligations under the Agreement. In addition, either Union Planters or LaPlace
may waive any of the conditions precedent to its obligations under the
Agreement, unless a violation of any law or governmental regulation would
result. To be effective, a waiver must be in writing and signed by a duly
authorized officer of LaPlace or Union Planters, as the case may be.
At any time before the merger becomes effective, the Boards of
Directors of Union Planters and LaPlace may agree to terminate the Agreement and
the Plan of Merger. In addition, either
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LaPlace's board of directors or the Union Planters board of directors may
terminate the Agreement in the following circumstances:
(1) in certain circumstances, upon the inaccuracy of any
representation or warranty of a party contained in the
Agreement if the inaccuracy cannot be or has not been
cured within 30 days after the giving of written notice to
the breaching party of such inaccuracy (provided that the
terminating party is not itself then in breach of the
Agreement),
(2) if a material breach by the other party of any covenant or
agreement contained in the Agreement cannot be or has not
been cured within 30 days after the giving of written
notice to the breaching party of such breach (provided
that the terminating party is not itself then in breach of
the Agreement),
(3) if any consent of any regulatory authority required to
complete the merger has been denied by final nonappealable
action, or if any action taken by such authority is not
appealed within the time limit for appeal,
(4) if the shareholders of LaPlace fail to approve the
Agreement and the Plan of Merger at the special meeting,
or
(5) if the merger is not consummated by March 31, 1999,
provided that the failure to consummate is not caused by
any willful breach of the Agreement by the party electing
to terminate; and
LaPlace's board of directors may also terminate the Agreement pursuant to the
relevant provisions of the Agreement described in " -- Possible Adjustment of
Exchange Ratio" on page 21.
If the merger is terminated, the Agreement and the Plan of Merger will
become void and have no effect, except that certain provisions of the Agreement,
including those relating to the obligations to share certain expenses and
maintain the confidentiality of certain information obtained, will survive.
Termination of the Agreement will not relieve any breaching party from liability
for any uncured willful breach of a representation, warranty, covenant, or
agreement. See "-- Expenses and Fees."
CONDUCT OF BUSINESS PENDING THE MERGER
The Agreement obligates LaPlace to conduct its business only in the
usual, regular, and ordinary course before the merger becomes effective and
imposes certain limitations on the operations of LaPlace and its banking
subsidiaries. These items are listed in Article 7 of the Agreement which is
attached as Appendix A to this proxy statement-prospectus. The Agreement
authorizes LaPlace to declare and pay regular quarterly dividends on the LaPlace
common stock in accordance with its past practice in an amount not to exceed
$.25 per share per quarter during 1998 and $.75 per share per quarter during
1999. The Agreement contemplates that the merger will be timed to occur at such
a time that the LaPlace shareholders will not fail to receive a dividend during
a quarterly period, nor will they receive a dividend on both their LaPlace
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common stock and the Union Planters common stock they receive in the merger
during the same quarterly period.
LaPlace has also agreed that neither it nor any of its representatives
will directly or indirectly solicit any proposal for the acquisition of LaPlace
or, except to the extent necessary to comply with the fiduciary duties of
LaPlace's board of directors as advised by its counsel, furnish any non-public
information concerning LaPlace that it is not legally obligated to furnish,
negotiate with respect to, or enter into any contract with respect to, any
proposal to acquire LaPlace.
Union Planters and LaPlace have also agreed not to take any action
that would (a) materially adversely affect their ability to obtain any consents
required for the merger or prevent the merger from qualifying for
pooling-of-interests accounting treatment or as a tax-free reorganization under
the Internal Revenue Code (see "-- Certain Federal Income Tax Consequences of
the Merger"), or (b) materially adversely affect their ability to perform their
covenants and agreements under the Agreement.
MANAGEMENT AND OPERATIONS AFTER THE MERGER
The merger will not change the present management team or board of
directors of Union Planters. Information concerning the management of Union
Planters is included in the documents incorporated by reference in this proxy
statement-prospectus. See "WHERE YOU CAN FIND MORE INFORMATION."
The current officers and directors of LaPlace's subsidiary bank may
continue to serve in their respective capacities on behalf of Bank of LaPlace.
Union Planters Holding Corporation, as the sole shareholder of Bank of LaPlace
after the merger, may change the composition of the bank's board of directors.
Union Planters currently expects that Bank of LaPlace will be merged into Union
Planters Bank, National Association as soon as practicable after the merger
becomes effective. At such time, executive officers of Bank of LaPlace could be
offered positions as regional officers and directors of Bank of LaPlace could be
offered positions as advisory directors of Union Planters Bank, National
Association. For additional information regarding the interests of certain
persons in the merger, see "-- Interests of Certain Persons in the Merger."
Union Planters Holding Corporation will be the surviving corporation
resulting from the merger and will continue to be governed by the laws of the
State of Tennessee and operate in accordance with its charter and bylaws.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
GENERAL. LaPlace's Board of Directors and certain officers may have
interests in the merger that differ from the interests of LaPlace shareholders
generally. The LaPlace Board was aware of these interests and considered them in
approving and recommending the merger.
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INDEMNIFICATION. The Agreement provides that Union Planters shall
indemnify the former directors, officers, employees and agents of LaPlace and
Bank of LaPlace against all claims to which they become subject arising out of
actions or omissions occurring at or prior to the Effective Date of the merger,
including the transactions contemplated by the Agreement to the full extent
permitted by Tennessee law, Louisiana law, LaPlace's Articles of Incorporation
and Bylaws, or any indemnity agreements previously entered into between LaPlace
or Bank of LaPlace and any present or former director, officer, employee or
agent of either of them.
EMPLOYEE BENEFITS. The Agreement provides that, after the Effective
Date of the merger, Union Planters will, subject to compliance with applicable
legal and regulatory requirements, provide coverage for all employees of LaPlace
and Bank of LaPlace under Union Planters' benefit plans for which they are
eligible, as soon as practicable after the merger is completed. There will be no
waiting period for coverage of participants under any health, group term life
benefit plan, or 401(k) plan, and no employee will be denied benefits under any
such plan for pre-existing conditions. All prior years of service of Bank of
LaPlace employees will be counted for vesting and eligibility purposes under all
applicable Union Planters employee benefit plans to the extent permitted by
applicable law. Any Bank of LaPlace employee who, immediately prior to the
Effective Date, is covered by or is a participant in a Bank of LaPlace employee
benefit plan, shall on the Effective Date, be covered by or participate in the
comparable Union Planters employee benefit plan if a comparable plan otherwise
is maintained by Union Planters and if the eligibility requirements of the Union
Planters plan are met.
EMPLOYMENT AGREEMENTS. Thomas W. Smith, Jr., who is the President of
LaPlace and Bank of LaPlace, and Patrick M. Guidry, who is the
Secretary-Treasurer of LaPlace and the Executive Vice President and Cashier of
Bank of LaPlace, currently have employment contracts (each, a "Prior Contract")
with Bank of LaPlace that provide for certain payments (each, a "Change in
Control Payment") to be made to them if they resign or are terminated without
cause (as defined in the agreements) within thirty days following a change of
control (such term, as defined in the agreements, includes the merger) of
LaPlace.
Messrs. Smith and Guidry each have agreed to terminate their
respective Prior Contract and enter into a new employment agreement with Union
Planters, effective upon completion of the merger. Under his new employment
contract, which has a three-year term, Mr. Smith will, among other things, be
entitled to receive an incentive bonus of $462,000 if he is still employed by
Union Planters one year after the Effective Date of the merger. Mr. Guidry's new
employment contract has a one-year term, and provides, among other things, that
Mr. Guidry will be entitled to receive a $222,000 incentive bonus if he is still
employed by Union Planters one year after the Effective Date of the merger. The
dollar amount of these bonuses are approximately equal to the dollar amount of
the Change in Control Payment each officer would have been entitled to receive
under his Prior Contract if he resigned or was terminated within 30 days after
completion of the merger. In the event Messrs. Smith's or Guidry's employment
with Union Planters is terminated prior to the first anniversary of the
Effective Date of the merger because of such officer's death, disability,
resignation or termination for any reason other than such officer's conviction
for (or entry of a guilty or nolo contendere plea with respect to) a felony, he
will be entitled to receive a termination payment from Union Planters in an
amount equal to the Change in Control Payment
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he would have been entitled to receive under his Prior Contract if he resigned
or was terminated within thirty days after completion of the merger.
ACCOUNTING TREATMENT
It is anticipated that the merger will be accounted for as a
pooling-of-interests. Under the pooling-of-interests method of accounting, the
recorded amounts of the assets and liabilities of LaPlace will be carried
forward at their previously recorded amounts. Since LaPlace is not considered
significant to Union Planters from a financial statement presentation
standpoint, the operating results will be included in Union Planters' results
from the Effective Time forward.
In order for the merger to qualify for pooling-of-interests
accounting treatment, substantially all (90% or more) of the outstanding LaPlace
common stock must be exchanged for Union Planters common stock with
substantially similar terms. There are certain other criteria that must be
satisfied in order for the merger to qualify as a pooling-of-interests. Some of
the criteria cannot be satisfied until after the merger becomes effective. In
addition, it is a condition to closing the merger that PricewaterhouseCoopers,
LLP deliver a letter to Union Planters to the effect the merger will qualify for
pooling-of-interests accounting treatment.
Certain conditions will be imposed on the exchange of LaPlace common
stock for Union Planters common stock in the merger by affiliates of LaPlace.
Certain restrictions will also be imposed on the transferability of the Union
Planters common stock received by those affiliates in the merger. These
conditions and restrictions will be imposed in order, among other things, to
ensure the availability of pooling-of-interests accounting treatment. For
information concerning these conditions and restrictions see "-- Resales of
Union Planters Common Stock."
EXPENSES AND FEES
Union Planters and LaPlace will each pay its own expenses in
connection with the merger, including filing, registration and application fees,
printing fees, and fees and expenses of its own financial or other consultants,
investment bankers, accountants, and counsel, except that each of Union Planters
and LaPlace will bear and pay the filing fees and the printing and mailing costs
in connection with the registration statement and this proxy
statement-prospectus based on the relative asset sizes of Union Planters and
LaPlace at December 31, 1997.
RESALES OF UNION PLANTERS COMMON STOCK
Union Planters common stock to be issued to shareholders of LaPlace
in the merger will be registered under the Securities Act of 1933, as amended
(the "Securities Act"). All shares of Union Planters common stock received by
shareholders of LaPlace in the merger will be freely transferable after the
merger by those shareholders of LaPlace who are not considered to be
"affiliates" of LaPlace or Union Planters. "Affiliates" generally are defined as
persons or entities who control, are controlled by, or are under common control
with LaPlace or Union Planters at the time of the special meeting (generally,
executive officers, directors, and 10% or greater shareholders).
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Rule 145 promulgated under the Securities Act of 1933, as amended,
restricts the sale of Union Planters common stock received in the merger by
affiliates of LaPlace and certain of their family members and related interests.
Under the rule, during the one year after the merger becomes effective,
affiliates of LaPlace or Union Planters may resell publicly the Union Planters
common stock they receive in the merger within certain limitations as to the
amount of Union Planters common stock they can sell in any three-month period
and as to the manner of sale. After the one-year period, affiliates of LaPlace
who are not affiliates of Union Planters may resell their shares without
restriction. Union Planters must continue to satisfy its reporting requirements
under the Securities Exchange Act of 1934, as amended (the "Exchange Act") in
order for affiliates to resell, under Rule 145, shares of Union Planters common
stock received in the merger. Affiliates also would be permitted to resell Union
Planters common stock received in the merger pursuant to an effective
registration statement under the Securities Act of 1933, as amended, or an
available exemption from the Securities Act of 1933, as amended, registration
requirements. This proxy statement-prospectus does not cover any resales of
Union Planters common stock received by persons who may be deemed to be
affiliates of LaPlace or Union Planters.
SEC guidelines regarding qualifying for the "pooling-of-interests"
method of accounting also limit sales of shares of Union Planters and LaPlace by
their affiliates in connection with the merger. SEC guidelines indicate that the
"pooling-of-interests" method of accounting generally will not be challenged on
the basis of sales by affiliates of the acquiring or acquired company if such
affiliates do not dispose of any of the shares of the corporation they own, or
shares of a corporation they receive in connection with a merger, during the
period beginning 30 days before the merger is consummated and ending when
financial results covering at least 30 days of post-merger operations of the
combined companies have been published.
LaPlace has agreed to use its reasonable efforts to cause each
person who may be deemed to be an affiliate of LaPlace to execute and deliver to
Union Planters not later than 30 days prior to the effective time of the merger,
an agreement intended to ensure compliance with the Securities Act of 1933, as
amended, and to preserve the ability of the merger to be accounted for as a
"pooling-of-interests." Each LaPlace affiliate must agree not to sell, pledge,
transfer, or otherwise dispose of any LaPlace common stock held by the affiliate
except as contemplated by the Agreement or the affiliate agreement. In addition,
each LaPlace affiliate must agree not to sell, pledge, transfer or otherwise
dispose of any Union Planters common stock received in the merger (1) except in
compliance with the Securities Act of 1933, as amended, and the rules and
regulations under the Securities Act of 1933, as amended, and (2) until such
time as financial results covering 30 days of combined operations of Union
Planters and LaPlace have been published. Prior to publication of such results,
Union Planters will not transfer on its books any shares of Union Planters
common stock received by an affiliate in the merger. The stock certificates
representing Union Planters common stock issued to affiliates in the merger may
bear a legend summarizing these restrictions on transfer. See "-- Conditions to
Consummation of the Merger."
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EFFECT OF THE MERGER ON RIGHTS OF SHAREHOLDERS
In the merger, shareholders of LaPlace will exchange their shares of
LaPlace for shares of Union Planters. LaPlace is a Louisiana corporation
governed by Louisiana law and LaPlace's articles of incorporation and bylaws.
Union Planters is a Tennessee corporation governed by Tennessee law and Union
Planters' charter and bylaws. There are significant differences between the
rights of LaPlace shareholders and Union Planters' shareholders. The following
is a summary of the principal differences between the current rights of LaPlace
shareholders and those of Union Planters' shareholders.
The following summary is not intended to be complete and is qualified
in its entirety by reference to the Louisiana Business Corporation Law (the
"Louisiana BCL") and the Tennessee Business Corporation Act as well as Union
Planters' charter and bylaws and LaPlace's articles of incorporation and bylaws.
Copies of the Union Planters charter and bylaws will be sent to holders of
LaPlace common stock upon request. See "WHERE YOU CAN FIND MORE INFORMATION" on
page 97.
ANTI-TAKEOVER PROVISIONS GENERALLY
UNION PLANTERS. Union Planters' charter and bylaws contain certain
provisions designed to assist the Union Planters board of directors in playing
a role if any group or person attempts to acquire control of Union Planters so
that the Union Planters board of directors can further protect the interests of
Union Planters and its shareholders under the circumstances. These provisions
may help the Union Planters board of directors determine that a sale of control
is in the best interests of Union Planters' shareholders, or enhance the Union
Planters board of directors' ability to maximize the value to be received by
the shareholders upon a sale of control of Union Planters.
Although Union Planters' management believes that these provisions are
beneficial to Union Planters' shareholders, they also may tend to discourage
some takeover bids. As a result, Union Planters' shareholders may be deprived
of opportunities to sell some or all of their shares at prices that represent a
premium over prevailing market prices. On the other hand, defeating undesirable
acquisition offers can be a very expensive and time-consuming process. To the
extent that these provisions discourage undesirable proposals, Union Planters
may be able to avoid those expenditures of time and money.
These provisions also may discourage open market purchases by a company
that may desire to acquire Union Planters. Those purchases may increase the
market price of Union Planters Common Stock temporarily, and enable
shareholders to sell their shares at a price higher than that they might
otherwise obtain. In addition, these provisions may decrease the market price
of Union Planters Common Stock by making the stock less attractive to persons
who invest in securities in anticipation of price increases from potential
acquisition attempts. The provisions also may make it more difficult and time
consuming for a potential acquiror to obtain control of Union Planters through
replacing the board of directors and management. Furthermore, the provisions
may make it more difficult for Union Planters' shareholders to replace the
board of directors or management, even if a majority of the shareholders
believe that replacing the board of directors or management is in the best
interests of Union Planters. Because of these factors,
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these provisions may tend to perpetuate the incumbent board of directors and
management. For more information about these provisions, see "--Authorized
Capital Stock," "--Amendment of Charter and Bylaws," "--Classified Board of
Directors and Absence of Cumulative Voting," "--Director Removal,"
"--Limitations on Director Liability," "--Indemnification," "--Special meetings
of Shareholders," "--Actions by Shareholders Without a Meeting," "--Shareholder
Nominations and Proposals" and "--Business Combinations."
AUTHORIZED CAPITAL STOCK
UNION PLANTERS. Union Planters is authorized to issue 300,000,000
shares of Union Planters Common Stock, of which 136,063,035 shares were issued
and outstanding as of October 31, 1998, and 10,000,000 shares of no par value
preferred stock, of which 968,865 shares of Series E preferred stock were
issued and outstanding as of October 31, 1998. The Union Planters board of
directors may authorize the issuance of additional shares of Union Planters
Common Stock without further action by its shareholders, unless applicable laws
or regulations or a stock exchange on which Union Planters' capital stock is
listed requires shareholder action.
Union Planters may issue, without a shareholder vote, shares of its
preferred stock, in one or more classes or series, with voting, conversion,
dividend, and liquidation rights as it specifies in its charter. The Union
Planters board of directors may determine, among other things, the distinctive
designation and number of shares comprising a series of preferred stock, the
dividend rate or rates on the shares of such series and the relation of such
dividends to the dividends payable on other classes of stock, whether the
shares of such series shall be convertible into or exchangeable for shares of
any other class or series of Union Planters capital stock, the voting powers,
if any, of such series, and any other preferences, privileges, and powers of
such series.
In the event of the voluntary or involuntary liquidation, dissolution,
distribution of assets, or winding up of Union Planters, holders of preferred
stock will have priority over holders of Union Planters Common Stock.
The authority to issue additional shares of Union Planters Common
Stock or preferred stock provides Union Planters with the flexibility necessary
to meet its future needs without the delay resulting from seeking shareholder
approval. The authorized but unissued shares of Union Planters Common Stock and
preferred stock may be issued from time to time for any corporate purpose,
including, stock splits, stock dividends, employee benefit and compensation
plans, acquisitions, and public or private sales for cash as a means of raising
capital. The shares could be used to dilute the stock ownership of persons
seeking to obtain control of Union Planters. The sale of a substantial number
of shares of voting stock to persons who have an understanding with Union
Planters concerning the voting of such shares, or the distribution or
declaration of a dividend of shares of voting stock (or the right to receive
voting stock) to its shareholders, may have the effect of discouraging or
increasing the cost of unsolicited attempts to acquire control of Union
Planters.
Union Planters has a share purchase rights plan ("Preferred Share
Rights Plan") and distributed a dividend of one preferred share unit purchase
right ("Preferred Share Right") for
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each outstanding share of Union Planters Common Stock. Under the Plan, one
Preferred Share Right is automatically distributed for each share of Union
Planters Common Stock. The Preferred Share Rights may deter coercive takeover
tactics and encourage persons interested in potentially acquiring control of
Union Planters to treat each shareholder on a fair and equal basis. Each
Preferred Share Right trades on the same basis with the share of Union Planters
Common Stock to which it relates until the occurrence of certain events. Upon a
potential change in control of Union Planters, the Preferred Share Rights would
separate from Union Planters Common Stock and each holder of a Preferred Share
Right (other than the potential acquiror) would be entitled to purchase equity
securities of Union Planters at prices below their market value. Union Planters
has authorized 750,000 shares of Series A preferred stock for issuance under
the Preferred Share Rights Plan. No shares have been issued as of the date of
this proxy statement-prospectus.
LAPLACE. The authorized capital stock of LaPlace consists of 1,000,000
shares of LaPlace Common Stock, of which 145,732 shares were issued and
outstanding on the Record Date, and 1,000,000 shares of LaPlace preferred
stock, par value $1.00 per share, of which no shares were issued and
outstanding on the Record Date. The LaPlace Board is authorized to issue the
preferred stock in one or more series, and may fix and determine the relative
rights and preferences of such series, except that all series of preferred
stock must be identical except as to the rate of dividend; the price at, and
terms and conditions on which, shares of preferred stock may be redeemed; the
amount payable in the event of liquidation of LaPlace; sinking fund provisions;
the terms and conditions on which shares may be converted, if any; and voting
rights. The LaPlace board of directors is authorized to issue shares of its
capital stock for lawful consideration from time to time without a shareholder
vote.
AMENDMENT OF CHARTER AND BYLAWS
UNION PLANTERS. Union Planters may amend its charter in any manner
permitted by Tennessee law. The Tennessee Business Corporation Act provides
that a corporation's charter may be amended by a majority of votes entitled to
be cast on an amendment, subject to any condition the board of directors may
place on its submission of the amendment to the shareholders. Union Planters'
charter requires a vote of two-thirds or more of the shares of capital stock
entitled to vote in an election of directors to amend the articles of the
charter governing directors and to remove a director from office, whether with
or without cause. A two-thirds vote is also required to amend, alter, or repeal
the article of the charter relating to business combinations.
The Union Planters board of directors may adopt, amend, or repeal
Union Planters' bylaws by a majority vote of the entire board of directors. The
bylaws may also be amended or repealed by action of Union Planters'
shareholders.
LAPLACE. Except with respect to certain amendments relating to
preferred stock, LaPlace may amend its articles by a vote of two-thirds of the
LaPlace voting power present, in person or by proxy, at a shareholders meeting,
the notice of which sets forth the proposed amendment or a summary of the
changes to be made thereby. The LaPlace bylaws may be amended by the vote
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of a majority of a quorum of the LaPlace board, subject to the right of the
shareholders to change or repeal any bylaws.
CLASSIFIED BOARD OF DIRECTORS AND ABSENCE OF CUMULATIVE VOTING
UNION PLANTERS. The Union Planters charter provides that the Union
Planters board of directors is divided into three classes, with each class to
be as nearly equal in number as possible. The directors in each class serve
three-year terms of office. The effect of Union Planters having a classified
board of directors is that only approximately one-third of the members of the
Union Planters board of directors are elected each year. As a result, two
annual meetings are required for Union Planters' stockholders to change a
majority of the members of the Union Planters board of directors.
The purpose of dividing the Union Planters board of directors into
classes is to facilitate continuity and stability of leadership of Union
Planters by ensuring that experienced personnel familiar with Union Planters
will be represented on the board of directors at all times, and to permit Union
Planters' management to plan for the future for a reasonable amount of time.
However, by potentially delaying the time within which an acquirer could obtain
working control of the Union Planters board of directors, this provision may
discourage some potential mergers, tender offers, or takeover attempts.
Pursuant to the Union Planters charter, each holder of Union Planters
common stock is entitled to one vote for each share of Union Planters common
stock held in the election of directors, and is not entitled to cumulative
voting rights in the election of directors. With cumulative voting, a
stockholder has the right to cast a number of votes equal to the total number
of such holder's shares multiplied by the number of directors to be elected.
The stockholder has the right to distribute all of his or her votes in any
manner among any number of candidates or to accumulate such shares in favor of
one candidate.
Directors are elected by a plurality of the total votes cast by all
stockholders. With cumulative voting, it may be possible for minority
stockholders to obtain representation on the Union Planters board of directors.
Without cumulative voting, the holders of more than 50% of the shares of Union
Planters common stock generally have the ability to elect 100% of the Union
Planters board of directors. As a result, the holders of the remaining Union
Planters common stock effectively may not be able to elect any person to the
Union Planters board of directors. The absence of cumulative voting thus could
make it more difficult for a stockholder who acquires less than a majority of
the shares of Union Planters common stock to obtain representation on the Union
Planters board of directors.
LAPLACE. LaPlace does not have a classified board of directors and
does not permit its shareholders to cumulate votes for directors.
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DIRECTOR REMOVAL
UNION PLANTERS. Union Planters' charter provides that a director may
be removed by the shareholders only if the shareholders holding at least
two-thirds of the voting power entitled to vote generally in the election of
directors vote for such removal. The purpose of this provision is to prevent a
majority shareholder from circumventing the classified board system by removing
directors and filling the vacancies with new individuals selected by that
shareholder. This provision may have the effect of impeding efforts to gain
control of the board of directors by anyone who obtains a controlling interest
in Union Planters common stock.
LAPLACE. The bylaws of LaPlace provide that the shareholders may call
a meeting expressly for the purpose of removal of any director or the entire
Board of Directors, with or without cause, by a majority of the shares then
entitled to vote at an election of directors.
LIMITATIONS ON DIRECTOR AND OFFICER LIABILITY
UNION PLANTERS. Union Planters' charter does not address the issue of
a director's or officer's liability to the corporation. Section 48-18-301 of
the Tennessee Business Corporation Act provides that a director shall not be
liable for any action, or failure to take action if he discharges his duties:
(1) in good faith;
(2) with the care of an ordinary prudent person in a like
position under similar circumstances; and
(3) in a manner the director reasonably believes to be in the
best interests of the corporation.
In discharging his duties, a director may rely on the information, opinions,
reports, or statements, including financial statements, if prepared or
presented by officers or employees of the corporation whom the director
reasonably believes to be reliable. The director may also rely on such
information prepared or presented by legal counsel, public accountants or other
persons as to matters that the director reasonably believes are in the person's
competence.
LAPLACE. The LaPlace articles provide that no director or officer of
LaPlace may be held personally liable to LaPlace or its shareholders for
monetary damages for breach of his or her fiduciary duty as a director or
officer, except for liability for: (i) breach of the director's or officer's
duty of loyalty to LaPlace or its shareholders, (ii) acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) unlawful dividends or certain other unlawful distributions and (iv)
any transaction from which the director or officer derived an improper personal
benefit. The provisions of the Louisiana BCL do not differ substantially from
those of the Tennessee Business Corporation Act previously described.
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INDEMNIFICATION
UNION PLANTERS. Under the Tennessee Business Corporation Act, a
corporation may indemnify any director against liability if the director:
- conducted himself or herself in good faith;
- reasonably believed, in the case of conduct in his or her
official capacity with the corporation, that his or her
conduct was in the best interests of the corporation;
- reasonably believed, in all other cases, that his or her
conduct was at least not opposed to the corporation's best
interests; and
- in the case of any criminal proceeding, had no reasonable
cause to believe his or her conduct was unlawful.
Unless limited by its charter, a Tennessee corporation must indemnify,
against reasonable expenses incurred by him or her, a director who was wholly
successful, on the merits or otherwise, in defending any proceeding to which he
or she was a party because he or she is or was a director of the corporation.
Expenses incurred by a director in defending a proceeding may be paid by the
corporation in advance of the final disposition of the proceeding if three
conditions are met:
(1) First, the director must furnish the corporation a written
affirmation of the director's good faith belief that he or
she has met the standard of conduct as set forth above;
(2) Second, the director must furnish the corporation a written
undertaking by or on behalf of a director to repay such
amount if it is ultimately determined that he or she is not
entitled to be indemnified by the corporation against such
expenses; and
(3) Third, a determination must be made that the facts then known
to those making the determination would not preclude
indemnification.
A director may apply for court-ordered indemnification under certain
circumstances. Unless a corporation's charter provides otherwise,
(1) an officer of a corporation is entitled to mandatory
indemnification and is entitled to apply for court-ordered
indemnification to the same extent as a director;
(2) the corporation may indemnify and advance expenses to an
officer, employee, or agent of the corporation to the same
extent as to a director; and
(3) a corporation may also indemnify and advance expenses to an
officer, employee, or agent who is not a director to the
extent, consistent with public policy, that may be provided
by its charter, bylaws, general or specific action of its
board of directors, or contract.
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Union Planters' charter and bylaws provide for the indemnification of
its directors and officers to the fullest extent permitted by Tennessee law.
LAPLACE. Louisiana law provisions regarding indemnification of a
corporation's directors, officers, employees and agents are similar to the
comparable provisions of Tennessee law discussed above, except that there is no
specific provision for court-ordered indemnification. LaPlace's bylaws provide
for indemnification of its directors and officers to the fullest extent
permitted by applicable law.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors, officers, or
persons controlling Union Planters or LaPlace under the provisions described
above, Union Planters and LaPlace have been informed that, in the opinion of
the SEC, such indemnification is against public policy as expressed in the
Securities Act of 1933, as amended, and is therefore unenforceable.
SPECIAL MEETING OF SHAREHOLDERS
UNION PLANTERS. Special meetings of Union Planters' shareholders may
be called for any purpose or purposes at any time by the Chairman of the Board,
the President, the Secretary, or the holders of not less than one-tenth of the
shares entitled to vote at such meeting.
LAPLACE. Under the LaPlace bylaws, special meetings of the
shareholders, for any purpose or purposes, may be called by the President or
the Board of Directors, and shall be called by the Secretary upon the written
request of shareholder or shareholders holding in the aggregate not less than
one-fifth of the total voting power of LaPlace.
SHAREHOLDER NOMINATIONS AND PROPOSALS
UNION PLANTERS. Union Planters' charter and bylaws do not address
whether a shareholder may nominate members of the board of directors.
Holders of Union Planters common stock are entitled to submit
proposals to be presented at an annual meeting of Union Planters shareholders.
Union Planters' bylaws provide that any proposal of a shareholder which is to
be presented at any annual meeting of shareholders must be sent so it is be
received by Union Planters not less than 120 days in advance of the anniversary
date of the proxy statement issued in connection with the previous year's
annual meeting.
LAPLACE. LaPlace's articles and bylaws do not contain provisions
regarding shareholder nominations for the board of directors or the submission
of shareholder proposals at annual or special meetings.
BUSINESS COMBINATIONS
UNION PLANTERS. Holders of two-thirds or more of the Union Planters
Common Stock
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must approve a merger, consolidation, or a sale or lease of all or
substantially all of the assets of Union Planters if the other party to the
transaction is a beneficial owner of 10% or more of the outstanding shares of
Union Planters. A two-thirds vote is not required for any merger or
consolidation of Union Planters with or into any corporation or entity if a
majority of the outstanding shares of voting capital stock is owned by Union
Planters.
The requirement of a supermajority vote of shareholders to approve
certain business transactions may discourage a change in control of Union
Planters by allowing a minority of Union Planters' shareholders to prevent a
transaction favored by the majority of the shareholders. Also, in some
circumstances, the board of directors could cause a two-thirds vote to be
required to approve a transaction and thereby enable management to retain
control over the affairs of Union Planters. The primary purpose of the
supermajority vote requirement is to encourage negotiations with Union
Planters' management by groups or corporations interested in acquiring control
of Union Planters and to reduce the danger of a forced merger or sale of
assets.
As a Tennessee corporation, Union Planters is or could be subject to
certain restrictions on business combinations under Tennessee law, including,
but not limited to, combinations with interested shareholders. See the
discussion in the following section entitled "-- Takeover Statutes".
LAPLACE. The LaPlace articles do not contain provisions regarding
voting requirements for business combinations. The Louisiana BCL states that
mergers, consolidations and sales of all or substantially all of the assets of
a Louisiana corporation must be approved by the shareholders by vote of at
least two-thirds of the voting power present, or such larger or smaller vote
(not less than a majority) of the voting power present or the total voting
power as the corporation's articles may require. Under the Louisiana BCL, share
exchanges require a similar shareholder vote by each class or series included
in the exchange.
As a Louisiana corporation, LaPlace is or could be subject to certain
restrictions on business combinations under Louisiana law, including control
share acquisitions. See the discussion in the following section under
"--Takeover Statutes."
TAKEOVER STATUTES
UNION PLANTERS. Tennessee has three anti-takeover acts which are
applicable to Union Planters, the Tennessee Business Combination Act, the
Tennessee Greenmail Act, and the Tennessee Investor Protection Act. The
Tennessee Control Share Acquisition Act does not apply to Union Planters,
because Union Planters' charter does not include a provision electing to be
covered by that act.
The Tennessee Business Combination Act. The Tennessee Business
Combination Act generally prohibits a "business combination" by Union Planters
or a subsidiary with an "interested shareholder" within five years after the
shareholder becomes an interested shareholder. But Union Planters or a
subsidiary can enter into a business combination within that period if, before
the interested shareholder became such, the Union Planters board of
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directors approved:
- the business combination or
- the transaction in which the interested shareholder became an
interested shareholder.
After that five year moratorium, the business combination with the interested
shareholder can be consummated only if it satisfies certain fair price criteria
or is approved by two-thirds of the other shareholders.
For purposes of the Tennessee Business Combination Act, a "business
combination" includes mergers, share exchanges, sales and leases of assets,
issuances of securities, and similar transactions. An "interested shareholder"
is generally any person or entity that beneficially owns ten percent or more of
the voting power of any outstanding class or series of Union Planters stock.
Tennessee law also severely limits the extent to which Union Planters
or any of its officers or directors could be held liable for resisting any
business combination. Under the Tennessee Business Corporation Act, neither a
Tennessee corporation having any stock registered or traded on a national
securities exchange, nor any of its officers or directors, may be held liable
for:
- Failing to approve the acquisition of shares by an interested
shareholder on or before the date the shareholders acquired
such shares;
- Seeking to enforce or implement the provisions of Tennessee
law;
- Failing to adopt or recommend any charter or by-law amendment
or provision relating to such provisions of Tennessee law; or
- Opposing any merger, exchange, tender offer, or significant
asset sale because of a good faith belief that such
transaction would adversely affect the corporation's
employees, customers, suppliers, the communities in which the
corporation or its subsidiaries operate or any other relevant
factor. But the officers and directors can only consider such
factors if the corporation's charter permits the board to do
so in connection with the transaction.
The Tennessee Greenmail Act. The Tennessee Greenmail Act applies to a
Tennessee corporation that has a class of voting stock registered or traded on
a national securities exchange or registered with the SEC pursuant to Section
12(g) of the Exchange Act. Under the Tennessee Greenmail Act, Union Planters
may not purchase any of its shares at a price above the market value of such
shares from any person who holds more than 3% of the class of securities to be
purchased if such person has held such shares for less than two years, unless
the purchase has been approved by the affirmative vote of a majority of the
outstanding shares of each class of
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voting stock issued by Union Planters or Union Planters makes an offer, of at
least equal value per share, to all shareholders of such class.
The Tennessee Investor Protection Act. The Tennessee Investor
Protection Act generally requires the registration, or an exemption from
registration, before a person can make a tender offer for shares of a Tennessee
corporation which, if successful, would result in the offer or beneficially
owning more than 10% of any class. Registration requires the filing with the
Tennessee Commissioner of Commerce and Insurance of a registration statement, a
copy of which must be sent to the target company, and the public disclosure of
the material terms of the proposed offer. Additional requirements are imposed
under that act if the offer or beneficially owns 5% or more of any class of
equity securities of the target company, any of which was purchased within one
year prior to the proposed takeover offer. The Tennessee Investor Protection
Act also prohibits fraudulent and deceptive practices in connection with
takeover offers, and provides remedies for violations.
The Tennessee Investor Protection Act does not apply to an offer
involving a vote by holders of equity securities of the offered company,
pursuant to its charter, on a merger, consolidation or sale of corporate assets
in consideration of the issuance of securities of another corporation, or on a
sale of its securities in exchange for cash or securities of another
corporation. Also excepted from the Tennessee Investor Protection Act are
tender offers which are open on substantially equal terms to all shareholders,
are recommended by the board of directors of the target company and include
full disclosure of all terms.
The Tennessee Investor Protection Act applies to tender offers for
corporations with substantial ties in Tennessee, including corporations
incorporated in Tennessee or which have their principal offices in the state.
The Sixth Circuit Court of Appeals has held that the application of this act,
and Tennessee's other takeover statutes, to a target company that wasn't
organized under Tennessee law is unconstitutional. Tyson Foods, Inc. v.
McReynolds, 865 F.2d 99 (6th Cir. 1989).
The acts described above, along with the provisions of Union Planters'
charter regarding business combinations, might be deemed to make Union Planters
less attractive as a candidate for acquisition by another company than would
otherwise be the case in the absence of such provisions. For example, if
another company should seek to acquire a controlling interest of less than
66-2/3% of the outstanding shares of Union Planters common stock, the acquiror
would not thereby obtain the ability to replace a majority of the Union
Planters board of directors until at least the second annual meeting of
shareholders following the acquisition. Furthermore the acquiror would not
obtain the ability immediately to effect a merger, consolidation, or other
similar business combination unless the described conditions were met.
As a result, Union Planters' shareholders may be deprived of
opportunities to sell some or all of their shares at prices that represent a
premium over prevailing market prices in a takeover context. The provisions
described above also may make it more difficult for Union Planters'
shareholders to replace the Union Planters board of directors or management,
even if the holders of a majority of the Union Planters common stock should
believe that such replacement is in the
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interests of Union Planters. As a result, such provisions may tend to
perpetuate the incumbent Union Planters board of directors and management.
LAPLACE. Louisiana has one anti-takeover act which applies to LaPlace
- -- Louisiana's control share acquisition statute.
The control share acquisition statute, sections 135 through 140.2 of
the Louisiana BCL, applies to "issuing public corporations," as defined in the
statute. LaPlace is an issuing public corporation because (1) it has 100 or
more shareholders; (2) it has its principal place of business, principal
office, or substantial assets in Louisiana; and (3) more than 10% of its
shareholders are Louisiana residents or more than 10% of its shares are held by
Louisiana residents. The statute generally provides that, when a person
acquires shares of an issuing public corporation that, together with shares
already owned, give such person ownership of one-fifth to one-third, one-third
to one-half, or more than one-half of the oustanding voting securities of such
corporation, the acquired shares, and any others acquired in the past ninety
days (collectively known as "control shares"), lose their voting rights.
This voting power may be restored, however, in whole or in part, by a
vote of all shares other than Interested Shares (as defined below) at a meeting
called for the purpose of considering the voting power to be granted to the
acquiror's control shares. Interested Shares include all shares as to which the
acquiror, any officer of the issuing public corporation, and any director of
the issuing public corporation who is also an employee of the issuing public
corporation, may exercise or direct the exercise of voting power. If a meeting
of shareholders is held to consider the voting rights to be granted to an
acquiror's control shares and the shareholders do not vote to restore voting
rights to such shares, the issuing public corporation may have the right to
redeem the shares held by the acquiror for their fair market value. If such a
meeting is held and the shareholders vote to restore full voting rights to the
acquiror's control shares, all shareholders of the issuing public corporation
voting against the restoration of such voting rights gain dissenters' rights if
the acquiror, following the control share acquisition, owns a majority of the
issuing public corporation's voting shares.
The control share acquisition statute does not apply to all
acquisitions of control shares. For example, the statute does not apply to
acquisitions by employee benefit plans or related trusts of the issuing public
corporation, or acquisitions pursuant to (i) succession law, (ii) the
satisfaction of a pledge or other security interest created in good faith and
not for the purpose of circumventing the statute, or (iii) a merger,
consolidation or share exchange effected under the Louisiana BCL if the issuing
public corporation, or a wholly-owned subsidiary of such corporation, is a
party to the agreement of merger or consolidation or plan of exchange.
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<PAGE> 63
DISSENTERS' RIGHTS OF APPRAISAL
UNION PLANTERS. Under the Tennessee Business Corporation Act, a
shareholder is generally entitled to dissent from a corporate action and obtain
payment of the fair value of his shares in certain events. These events
generally include:
(1) mergers, share exchanges and sales of substantially all of
the corporation's assets other than in the usual and regular
course of business, if the shareholder is entitled to vote on
the transaction;
(2) certain types of amendments of the corporation's charter that
materially and adversely affects a shareholder's rights; or
(3) other corporate actions taken pursuant to a shareholder vote,
to the extent the charter, bylaws, or a resolution of the
board of directors provide for dissenters' rights. Union
Planters' charter and bylaws do not provide for any such
additional dissenters' rights.
Under the Tennessee Business Corporation Act, a shareholder will not have the
right to dissent as to any shares which are listed on a national securities
exchange registered under Section 6 of the Exchange Act or are national market
system securities under the Exchange Act rules. Union Planters common stock is
currently listed on the NYSE. Accordingly, shareholders of Union Planters will
NOT be able to assert dissenters' rights with respect to their shares of Union
Planters common stock even if Union Planters were to engage in one of the
actions listed above.
LAPLACE. Shareholders of a Louisiana corporation are entitled to
dissenters' rights under Louisiana law in the event of certain mergers,
consolidations, share exchanges, or sale, lease or exchange of all of its
assets, where such transaction is approved by a vote of less than eighty
percent of the corporation's total voting power. A copy of Louisiana BCL ss.
131, which governs dissenters' rights under Louisiana law, is attached to this
proxy statement-prospectus as Appendix E. A discussion of such section follows.
Under Section 131 of the Louisiana BCL, any holder of record of shares
of LaPlace Common Stock who files a written objection to the merger prior to or
at the Special meeting at which the vote on the merger is taken, and who votes
against the merger, may demand in writing to be paid in cash the fair cash value
of such shares, as of the day before the Special meeting, as determined by
agreement between the shareholder and Union Planters Holding Corporation or by a
state district court in St. John the Baptist Parish, Louisiana, if the
shareholder and Union Planters Holding Corporation are unable to agree upon the
fair cash value ("Dissenters' Rights"). IF THE MERGER AGREEMENT IS APPROVED BY
EIGHTY PERCENT (80%) OR MORE OF THE OUTSTANDING SHARES OF LAPLACE COMMON STOCK,
SECTION 131 OF THE LOUISIANA BCL PROVIDES THAT NO LAPLACE SHAREHOLDER WILL HAVE
DISSENTERS' RIGHTS. A person who is a beneficial owner, but not a registered
owner, of shares
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<PAGE> 64
of LaPlace Common Stock who wishes to exercise the rights of a dissenting
shareholder under the Louisiana BCL cannot do so in his own name and should
have the record ownership of the shares transferred to his or her name or
instruct the record owner thereof to take all required action to comply on his
behalf with the procedures under Section 131 of the Louisiana BCL.
Any shareholder of record contemplating exercising Dissenters' Rights
is urged to review carefully the provisions of Section 131 of the Louisiana
BCL, particularly the procedural steps required to perfect Dissenters' Rights
thereunder. DISSENTERS' RIGHTS WILL BE LOST IF THE PROCEDURAL REQUIREMENTS OF
SECTION 131 ARE NOT FULLY SATISFIED.
Set forth below is a summary of the procedures relating to the
exercise of Dissenters' Rights. The following summary does not purport to be a
complete statement of the provisions of Section 131 of the Louisiana BCL and is
qualified in its entirety by reference to Appendix E hereto and to any
amendments to such sections as may be adopted after the date of this proxy
statement-prospectus.
FILING WRITTEN OBJECTION AND VOTE AGAINST THE MERGER. To exercise the
right of dissent, a shareholder (each a "Dissenter") must (i) deliver to
LaPlace a written objection to the Agreement and Plan of Merger prior to or at
the Special meeting AND ALSO (ii) vote the shares of LaPlace Common Stock held
by him (in person or by proxy) against the Agreement and Plan of Merger at the
Special meeting. Neither a vote against the Agreement and Plan of Merger nor a
specification in a proxy to vote against the Agreement and Plan of Merger will
in and of itself constitute the necessary written objection to the Agreement
and Plan of Merger. Moreover, by voting in favor of, or abstaining from voting
on, the Agreement and Plan of Merger, or by returning the enclosed proxy
without instructing the proxy holders to vote against the Agreement and Plan of
Merger, a shareholder waives his or her rights under Section 131 of the
Louisiana BCL.
NOTICE OF THE EFFECTIVE DATE. If the Agreement and Plan of Merger are
approved by less than eighty percent (80%) of the outstanding shares of LaPlace
Common Stock, then, promptly after the Effective Date, notice will be given to
each Dissenter that the merger has become effective. The notice shall be sent
by registered mail addressed to the Dissenter at such Dissenter's last address
on LaPlace's records immediately prior to the Effective Date.
WRITTEN DEMAND. Within twenty (20) days after the mailing of such
notice, a Dissenter must file with Union Planters Holding Corporation a demand
in writing (the "Demand") for payment of the fair cash value of such
Dissenter's shares as of the day prior to the Special meeting, stating the
amount demanded and a post office address to which Union Planters Holding
Corporation may reply. Simultaneously with the filing of the Demand, the
Dissenter shall also deposit the certificate(s) representing his shares of
LaPlace Common Stock (duly endorsed and transferred to Union Planters Holding
Corporation upon the sole condition that the certificate(s) will be delivered
to Union Planters Holding Corporation upon payment of the value of the shares
in accordance with Section 131 of the Louisiana BCL) in escrow with a chartered
bank or trust company located in St. John the Baptist Parish, Louisiana (the
"Escrow Bank"). Along with the Demand, the Dissenter shall deliver to Union
Planters Holding Corporation a written acknowledgment of the Escrow Bank that
it holds such certificate(s), endorsed as specified above.
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A Dissenter who fails to satisfy any of the foregoing conditions
within the proper time periods will conclusively be presumed to have acquiesced
to the merger and will forfeit any right to seek payment pursuant to Section
131 of the Louisiana BCL.
APPRAISAL. If Union Planters Holding Corporation does not agree to the
amount demanded by the Dissenter, or does not agree that any payment is due, it
will within twenty (20) days after receipt of such Demand and acknowledgment,
notify such Dissenter in writing of either (i) the value it will agree to pay,
or (ii) its belief that no payment is due. If the Dissenter does not agree to
accept the offered amount, or disagrees with Union Planters Holding
Corporation's assertion that no payment is due, he must within sixty (60) days
after the receipt of such notice file suit against Union Planters Holding
Corporation in state court in St. John the Baptist Parish, Louisiana for a
judicial determination of the fair cash value of his shares. Any Dissenter who
is entitled to file such suit may, within such 60-day period but not
thereafter, intervene as a plaintiff in any suit filed against Union Planters
Holding Corporation by another former shareholder of LaPlace for a judicial
determination of the fair cash value of such other shareholder's shares. If a
Dissenter fails to bring or to intervene in such a suit within the applicable
sixty-day period, the Dissenter will be deemed to have consented to accept
either Union Planters Holding Corporation's statement that no payment is due
or, if Union Planters Holding Corporation does not contend that no payment is
due, to accept the value of his shares specified by Union Planters Holding
Corporation in its notice of disagreement (the "Notice of Disagreement").
Shareholders considering exercising Dissenters' Rights should bear in
mind that the fair cash value of their shares determined under Section 131 of
the Louisiana BCL could be more than, the same as or less than the
consideration they would otherwise receive pursuant to the Agreement and
related Plan of Merger if they do not seek such rights, and that opinions of
financial advisors as to fairness are not opinions as to fair cash value under
Section 131 of the Louisiana BCL.
Any Dissenter who has duly filed a Demand in compliance with Section
131 of the Louisiana BCL will, after filing the Demand, cease to have any of
the rights of a shareholder, except those rights generally provided to
Dissenters under Section 131 of the Louisiana BCL.
A Dissenter has the right to voluntarily withdraw his or her Demand
and to accept the terms offered in the Agreement and related Plan of Merger at
any time before Union Planters Holding Corporation gives its Notice of
Disagreement, but thereafter the Dissenter may withdraw his or her Demand only
with the consent of Union Planters Holding Corporation. If a Demand is properly
withdrawn, or the Dissenter otherwise loses his Dissenters' Rights, the
Dissenter shall only be entitled to receive the consideration offered pursuant
to the Agreement and related Plan of Merger.
PAYMENT AND COSTS. If upon the filing of a suit or intervention
against Union Planters Holding Corporation by a Dissenter pursuant to Section
131 of the Louisiana BCL, Union Planters Holding Corporation deposits with the
court the amount, if any, which it specified in its Notice of Disagreement, and
if in that notice Union Planters Holding Corporation offered to pay such amount
to the Dissenter on demand, then the costs (not including legal fees) of the
suit or intervention will be taxed against the Dissenter if the amount finally
awarded to the Dissenter, exclusive of interest and costs, is equal to or less
than the amount so deposited; otherwise, the costs (not including legal
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fees) will be assessed against Union Planters Holding Corporation.
NOTICES. Prior to the Effective Date, dissenting shareholders of
LaPlace should send any communications regarding their rights to Patrick M.
Guidry, Secretary-Treasurer, LaPlace Bancshares, Inc., 110 Belle Terre Blvd.,
LaPlace, Louisiana 70068-3340. On or after the Effective Date, dissenting
shareholders should send any communications regarding their rights to E. James
House, Jr., Secretary, Union Planters Holding Corporation, 7130 Goodlett Farms
Parkway, Memphis, Tennessee 38018. All such communications should be signed by
or on behalf of the dissenting shareholder in the form in which his or her
shares are registered on the books of LaPlace. UNION PLANTERS HAS THE RIGHT TO
TERMINATE THE AGREEMENT AND PLAN OF MERGER IF THE NUMBER OF SHARES OF LAPLACE
COMMON STOCK AS TO WHICH HOLDERS THEREOF ARE LEGALLY ENTITLED TO ASSERT
DISSENTERS' RIGHTS EXCEEDS TEN PERCENT (10%) OF THE OUTSTANDING SHARES OF
LAPLACE COMMON STOCK.
ANY LAPLACE SHAREHOLDER WHO DESIRES TO EXERCISE DISSENTERS' RIGHTS SHOULD
CAREFULLY REVIEW THE LOUISIANA BCL AND IS URGED TO CONSULT HIS LEGAL ADVISOR
BEFORE EXERCISING OR ATTEMPTING TO EXERCISE SUCH RIGHTS.
SHAREHOLDERS' RIGHTS TO EXAMINE BOOKS AND RECORDS
UNION PLANTERS. The Tennessee Business Corporation Act provides that a
shareholder of a Tennessee corporation may inspect and copy books and records
of the corporation during regular business hours, if he or she gives the
corporation written notice of his or her demand at least five business days
before the date of the inspection. In order to inspect certain records, written
demand must also be made in good faith and for a proper purpose and must
describe with reasonable particularity the purpose of the request and the
records the stockholder desires to inspect.
LAPLACE. The Louisiana BCL states that a shareholder, other than a
business competitor, who is and has been the owner of record of at least five
percent of the outstanding shares of any class of stock of a Louisiana
corporation for at least six months may inspect the records and accounts of the
corporation, and make extracts thereof. A shareholder who is a business
competitor may only examine the books and records of a Louisiana corporation if
he is and has been the owner of record for at least six months of at least 25%
of all outstanding shares of the corporation's stock. In either case, the
inspection must be at a reasonable time, for a proper and reasonable purpose,
and upon at least five days' written notice to the corporation.
DIVIDENDS
UNION PLANTERS. Union Planters' ability to pay dividends on its common
stock is governed by Tennessee corporate law. Under Tennessee corporate law,
dividends may be paid so long as the corporation would be able to pay its debts
as they become due in the ordinary course of business and the corporation's
total assets would not be less than the sum of its total liabilities plus the
amount that would be needed, if the corporation were to be dissolved at the
time of the
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distribution, to satisfy the preferential rights upon dissolution to
shareholders whose preferential rights are superior to those receiving the
distribution.
There are various statutory limitations on the ability of the Union
Planters' banking subsidiaries to pay dividends to Union Planters. See "CERTAIN
REGULATORY CONSIDERATIONS -- Payment of Dividends."
LAPLACE. LaPlace may pay dividends out of its surplus, unless it is
insolvent or the dividend payment would render it insolvent. In the absence of
surplus, it may pay dividends out of its net profits for the current year or
previous year or both, unless (i) its assets are, or would upon payment of the
dividend be, exceeded by its liabilities or (ii) its net assets are below or
the dividend would reduce its net assets below the aggregate amount payable on
liquidation based upon the issued shares, if any, which have a preferential
right to participate in the corporation's assets in the event of liquidation.
Substantially all of the funds available to LaPlace to pay dividends
to its shareholders are derived from dividends paid to it by Bank of LaPlace,
which are subject to certain legal restrictions. See "BUSINESS OF LAPLACE -
Market Prices and Dividends" and "CERTAIN REGULATORY CONSIDERATIONS - Payment
of Dividends."
COMPARATIVE MARKET PRICES AND DIVIDENDS
Union Planters common stock is traded on the NYSE under the symbol
"UPC". LaPlace common stock is not traded on any exchange or in any other
established market. There are no bid or asked prices available for LaPlace
Common Stock. The following table sets forth, for the indicated periods, the
high and low closing sale prices for the Union Planters common stock as
reported by the NYSE and the cash dividends declared per share on Union
Planters Common Stock. The stock prices and dividend amounts have been restated
to give effect to stock splits and stock dividends. The stock prices do not
include retail mark-ups, mark-downs or commissions.
<TABLE>
<CAPTION>
UNION PLANTERS
-----------------------------------------------------
Cash Dividends
--------------
Price Range Declared Per
------------------------- ------------
High Low Share
---- --- -----
<S> <C> <C> <C>
1996
First Quarter $31.75 $29.00 $ .27
Second Quarter 31.25 29.63 .27
Third Quarter 36.25 28.63 .27
Fourth Quarter 41.38 34.63 .27
------
Total $ 1.08
======
1997
First Quarter $47.75 $38.38 $ .320
Second Quarter 52.13 41.25 .375
Third Quarter 56.50 49.25 .400
Fourth Quarter 67.88 57.00 .400
------
Total $1.495
======
1998
First Quarter $67.31 $58.38 $ .50
Second Quarter 62.56 53.94 .50
Third Quarter 61.94 40.25 .50
Fourth Quarter (through
November, 1998) .50
------ ------ ------
Total $ 2.00
======
</TABLE>
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On November 27, 1998, the last sale prices of Union Planters Common
Stock as reported on the NYSE was $48.9375 per share. On July 6, 1998, the
last business day prior to public announcement of the proposed merger, the last
sale price of the Union Planters Common Stock as reported by the NYSE was
$59.25.
LaPlace has paid dividends of $1.00 per share for the years ended 1996
and 1997 and has paid dividends of $.75 per share through the three quarters
ended September 30, 1998.
The holders of Union Planters Common Stock are entitled to receive
dividends when and if declared by the board of directors out of funds legally
available for the payment of such dividends. Although Union Planters currently
intends to continue to pay quarterly cash dividends on the Union Planters
Common Stock, there is no assurance that Union Planters' dividend policy will
remain unchanged after completion of the merger. The declaration and payment of
dividends thereafter will depend upon business conditions, operating results,
capital and reserve requirements, and the board of directors' consideration of
other relevant factors. The Agreement provides that LaPlace may not declare and
pay cash dividends, other than regular quarterly cash dividends, on the shares
of LaPlace Common Stock, without the consent of Union Planters.
Union Planters and LaPlace are each legal entities separate and
distinct from their subsidiaries and their revenues depend in significant part
on the payment of dividends from their subsidiary depository institutions.
Union Planters' and LaPlace's subsidiary depository institutions are subject to
certain legal restrictions on the amount of dividends they are permitted to
pay. See "CERTAIN REGULATORY CONSIDERATIONS -- Payment of Dividends."
BUSINESS OF LAPLACE
DESCRIPTION OF THE BUSINESS
LaPlace, a Louisiana corporation and a registered bank holding company
under the Federal Bank Holding Company Act of 1956 (the "BHC Act"), was
incorporated in 1982 to acquire the outstanding stock of Bank of LaPlace.
LaPlace has no other subsidiaries. At September 30, 1998, LaPlace had total
consolidated assets of approximately $67.7 million and total consolidated
shareholders' equity of approximately $8.3 million. LaPlace's principal
executive office is located at 110 Belle Terre Drive, LaPlace, Louisiana
70068-3340, and its
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telephone number is (504) 652-2200.
Bank of LaPlace was organized as a Louisiana state bank in 1980. Bank
of LaPlace provides full-service consumer and commercial banking services in
St. John the Baptist Parish in the State of Louisiana, through its main banking
office at 110 Belle Terre Drive, PaPlace, Louisiana. Deposits of Bank of
LaPlace are insured by the Federal Deposit Insurance Corporation ("FDIC") up to
applicable legal limits. Bank of LaPlace offers an array of deposit services,
including demand accounts, NOW accounts, certificates of deposit, and money
market accounts, and provides safe deposit boxes, night depository, individual
retirement accounts, and electronic and drive-in banking services. Bank of
LaPlace's lending activities consist principally of real estate, consumer and
commercial loans. At September 30, 1998, Bank of LaPlace had total deposits of
approximately $55.6 million and total loans of approximately $46.4 million.
Bank of LaPlace's deposits and loans represent a cross-section of the
area's economy and there is no material concentration of deposits from any
single customer or group of customers. A concentration is defined as amounts
loaned to a multiple number of borrowers engaged in similar activities, which
could cause them to be similarly impacted by economic or other conditions,
where the amount exceeds 10% of total loans. Bank of LaPlace's loan portfolio
contains a concentration of loans to the real estate construction industry. At
September 30, 1998, Bank of LaPlace had outstanding approximately $8.6 million
of loans to borrowers in such industry, which represented approximately 18.5% of
total outstanding loans on that date. A significant portion of Bank of LaPlace's
loans are secured by mortgages on residential real estate located in St. John
the Baptist Parish, and may be susceptible to changes in local market
conditions.
PROPERTY
The executive offices of LaPlace and Bank of LaPlace, located at 110
Belle Terre Drive, LaPlace, Louisiana are owned by LaPlace and are not subject
to mortgage. Bank of LaPlace leases approximately 22,021 square feet of office
space from LaPlace under a lease that expires in June 2004, subject to one
option to renew the lease for an additional ten-year term. A law firm that
provides professional services to Bank of LaPlace subleases 1,800 square feet
of this office space on a month-to-month basis under the terms of a lease that
expired in August 1995.
EMPLOYEES
LaPlace has approximately 33 full-time and five part-time employees
and considers its relationship with its employees to be good. None of LaPlace's
employees are subject to a collective bargaining agreement.
COMPETITION
LaPlace's general market area consists of St. John the Baptist Parish
in the State of Louisiana. This parish has an approximate population of 42,000
and contains five banks and two credit unions. As of June 30, 1997, the most
recent date for which information was available,
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Bank of LaPlace was the second largest bank operating in St. John the Baptist
Parish, with approximately 20.4% of bank deposits. Hibernia National Bank and
First National Bank of Commerce, the largest and third largest banks with
offices in St. John the Baptist Parish, held approximately 58% and 18.1% of
parish bank deposits, respectively. The Bank experiences substantial
competition in attracting and retaining deposits and making loans.
The primary factors in competing for deposits are interest rates, the
quality and range of financial services offered, convenience of office
locations and office hours. Competition for loan customers is generally a
function of interest rates, loan origination fees and other charges,
restrictive covenant and compensating balances and other services offered.
LaPlace competes with numerous other commercial banks, savings associations and
credit unions for customer deposits, as well as with a broad range of financial
institutions in consumer and commercial lending activities. In addition to
banks and savings associations, other businesses in the financial services
industry compete with LaPlace for retail and commercial deposit funds and for
retail and commercial loan business.
Competition for loans and deposits is intense among the financial
institutions in the area. Several holding companies with greater resources than
LaPlace have established one or more branches in LaPlace's market area. The
size of these institutions allows certain economies of scale that permit their
operation on a narrower profit margin than would be appropriate for LaPlace.
MARKET PRICES AND DIVIDENDS
MARKET PRICES. LaPlace Common Stock is not traded on any exchange or
in any other established public trading market. There are no bid or asked
prices available for LaPlace Common Stock.
At November 16, 1998, there were 294 shareholders of LaPlace.
CASH DIVIDENDS. LaPlace paid cash dividends of $1.00 per share in each
of 1997 and 1996, and did not pay cash dividends in 1995. The Merger Agreement
provides that LaPlace may not declare and pay cash dividends on LaPlace Common
Stock, other than regular cash dividends of up to $.25 per share during 1998
and $.75 per share during 1999, prior to the Effective Time or the termination
of the Merger Agreement, without the consent of Union Planters.
LaPlace may pay dividends out of its surplus, unless it is insolvent
or the dividend payment would render it insolvent. In the absence of surplus,
it may pay dividends out of its net profits for the current year or previous
year or both, unless (i) its assets are, or would upon payment of the dividend
be, exceeded by its liabilities or (ii) its net assets are below or the
dividend would reduce its net assets below the aggregate amount payable on
liquidation based upon the issued shares, if any, which have a preferential
right to participate in the corporation's assets in the event of liquidation.
61
<PAGE> 71
Substantially all of the funds available to LaPlace to pay dividends
to its shareholders are derived from dividends paid to it by Bank of LaPlace,
which are subject to certain legal restrictions. With respect to Bank of
LaPlace, the prior approval of the Louisiana Commissioner of Financial
Institutions (the "Commissioner") is required if the total of all dividends
declared in any one year will exceed the sum of its net profits of that year
and net profits of the immediately preceding year. Additionally, dividends may
not be declared or paid by a Louisiana state bank unless the bank has
unimpaired surplus equal to 50% of the outstanding capital stock of the bank,
and no dividend payment may reduce the bank's unimpaired surplus below 50%. At
September 30, 1998, Bank of LaPlace had approximately $1,923,000 available for
the payment of dividends to LaPlace without prior approval of the Commissioner.
LEGAL PROCEEDINGS
LaPlace and Bank of LaPlace normally are parties to and have pending
routine litigation arising from their regular business activities of furnishing
financial services, including providing credit and collecting secured and
unsecured indebtedness. In some instances, such litigation involves claims or
counterclaims against LaPlace and Bank of LaPlace, or either of them.
On March 22, 1998, Robert J. Guidry ("R. Guidry") filed a petition in
the Civil District Court of Orleans Parish, Louisiana against Bank of LaPlace
and First National Bank of Commerce ("FNBC"). The petition sought to nullify a
January 1996 reversal by the Louisiana Fourth Circuit Court of Appeal of a 1994
judgment against Bank of LaPlace, FNBC and Patrick M. Guidry, an officer and
director of LaPlace and Bank of LaPlace. In the 1994 judgment, Bank of LaPlace
and Patrick Guidry were, collectively, found liable by the trial court for 15%
of a $4,540,000 judgment, or $681,000. After an appeal by all parties, with R.
Guidry seeking to have the judgment increased and Bank of LaPlace and Patrick
Guidry seeking to have it set aside, the judgment was reversed and rendered in
favor of Bank of LaPlace and Patrick Guidry by the Louisiana Fourth Circuit
Court of Appeal. The nullity petition sought to have the judgment of the Court
of Appeal nullified, and the original appeal reinstated, under Article 2004 of
the Louisiana Code of Civil Procedure, which allows for nullification of
judgments obtained by fraud or ill practices. The petition also alleged
violations of due process under the federal and state constitutions. Factually,
R. Guidry contends that there was an appearance of partiality because the
family of the son-in-law of one of the members of the three-judge appellate
panel is a shareholder in FNBC's holding company and because the same member of
the appellate panel has substantial loans from FNBC. Bank of LaPlace filed an
exception of no cause of action in response to the nullity petition. After a
hearing on June 19, 1998, the trial court granted Bank of LaPlace's exception
and dismissed the suit against both Bank of LaPlace and FNBC. R. Guidry has
appealed the dismissal of his nullity action. Bank of LaPlace intends to
vigorously defend this matter.
Except as set forth above, as of September 30, 1998, LaPlace and Bank
of LaPlace did not have any litigation pending other than ordinary routine
litigation incidental to their business that was not material in amount in
respect of LaPlace's consolidated assets.
62
<PAGE> 72
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
OWNERSHIP OF PRINCIPAL SHAREHOLDERS
The following table sets forth, as of the Record Date, certain
information concerning each person known by LaPlace to be the beneficial owner
of more than five percent of the outstanding LaPlace Common Stock, LaPlace's
only class of voting securities.
<TABLE>
<CAPTION>
Number of
Name and Address Shares Owned Percentage
of Beneficial Owner Beneficially(1) of Class
------------------- --------------- ----------
<S> <C> <C>
S. J. St. Martin, M.D 17,368 11.92%
P.O. Box 548
LaPlace, Louisiana 70068
Patrick Guidry 10,594(2) 7.27%
513 Mimosa Street
LaPlace, Louisiana 70068
Thomas W. Smith, Jr 10,244 7.03%
2385 Country Club Drive
LaPlace, Louisiana 70068
NTM Limited 10,000 6.86%
P.O. Box 339
Lutcher, Louisiana 70071
Joseph Accardo, Jr 9,716(3) 6.67%
52 Holly Drive
LaPlace, Louisiana 70068
- -----------------
</TABLE>
(1) Except as otherwise noted, the shareholders listed possess sole voting and
investment power, subject to applicable community property laws.
(2) Includes 1,250 shares held of record by Mr. Guidry, 1,250 shares held of
record by Barbara Guidry, Mr. Guidry's wife, 7,994 shares held of record
by Mr. and Mrs. Guidry and 100 shares held of record by Mr. Guidry as
custodian for Jane Guidry.
(3) Includes 8,746 shares held of record by Mr. Accardo and 972 shares held of
record by Catherine Accardo, Mr. Accardo's wife, as custodian for Justin
M. Accardo.
63
<PAGE> 73
OWNERSHIP OF MANAGEMENT
The following table sets forth, as of the Record Date, certain
information with respect to the beneficial ownership of the outstanding shares
of LaPlace Common Stock by: (i) each director of LaPlace; (ii) the Chief
Executive Officer of LaPlace (who is also a director); (iii) each executive
officer of LaPlace whose total annual salary and bonus exceeds $100,000; and
(iv) all directors and executive officers of LaPlace as a group.
<TABLE>
<CAPTION>
Number of
Shares Owned Percentage
Name of Beneficial Owner Beneficially(1) of Class
------------------------ --------------- --------
<S> <C> <C>
Joseph Accardo, Jr 9,718(2) 6.67%
Samuel J. Accardo, Jr 2,432 1.67%
Patrick Guidry 10,594(3) 7.27%
Jack V. Harvey 3,706 2.54%
Emile D. Hotard, Jr 2,000 1.37%
Thomas W. Smith, Jr 10,244 7.03%
S.J. St. Martin, M.D 17,368 11.92%
Thomas R. St. Martin 2,000 1.37%
All Directors and 58,062 39.84%
Executive Officers as a
Group (8 persons)
</TABLE>
- -----------------
(1) Except as otherwise noted, the shareholders listed possess sole voting and
investment power, subject to applicable community property laws.
(2) Includes 8,746 shares held of record by Mr. Accardo and 972 shares held of
record by Catherine Accardo, Mr. Accardo's wife, as custodian for Justin
M. Accardo.
(3) Includes 1,250 shares held of record by Mr. Guidry, 1,250 shares held of
record by Barbara Guidry, Mr. Guidry's wife, 7,994 shares held of record
by Mr. and Mrs. Guidry and 100 shares held of record by Mr. Guidry as
custodian for Jane Guidry.
64
<PAGE> 74
LAPLACE BANCSHARES, INC. MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
LaPlace reported net income of $980,000 for the nine months ended
September 30, 1998, which represents an 8.5% increase from the net income of
$903,000 for the comparable period in 1997. Net income per share was $6.73 for
the nine months ended September 30, 1998 and $6.20 for the same period in 1997.
LaPlace's net income for 1997 was $1,197,000, a 5.1% increase from 1996 net
income of $1,139,000. Net income per share was $8.22 in 1997 and $7.82 in 1996.
The improvements in net income between the first nine months of 1998
and the first nine months of 1997, and over the two years ended December 31,
1997, were principally attributable to increases in average earning assets,
improved net interest margin, and changes in the mix of earning assets.
Net interest income during the first nine months of 1998 increased
$117,000 to $2,506,000, which represents a 4.9% increase over the same period of
1997. Net interest income in 1997 increased 13.0% from 1996, from $2,828,000 to
$3,195,000. The primary reasons for the increase from the first nine months of
1997 to the comparable period in 1998 were increases in average earning assets
and improved net interest margin. The increase from 1996 to 1997 is principally
attributable to volume change, although improved yields on earning assets and
changes in the mix of earning assets also contributed favorably.
At September 30, 1998, LaPlace had total assets and deposits of
$67,749,000 and $55,628,000, respectively. Although total assets were
approximately the same as were reported at December 31, 1997, total deposits
increased 5.54% from amounts reported at December 31, 1997. Loans, net of the
reserve for possible loan losses, were $45,800,000 at September 30, 1998, an
increase of 3.9% from the amount reported at the end of 1997.
The following table sets forth certain information regarding LaPlace's
results of operations for the periods indicated.
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
---------------------- -----------------------
1998 1997 1997 1996
---------- --------- -------- -----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Net income per share * $ 6.73 $ 6.20 $ 8.22 $ 7.82
Return on average assets 1.92% 1.90% 1.86% 1.93%
Return on average equity 16.25% 19.27% 17.36% 19.43%
Average equity to average assets 11.84% 9.87% 10.72% 9.93%
Dividend pay-out ratio 11.15% 12.10% 12.17% 12.79%
</TABLE>
- --------------------------------
* Per share data are based upon a weighted average number of shares outstanding
of 145,732 shares for all periods indicated.
65
<PAGE> 75
A more detailed review of LaPlace's financial condition and results of
operations for the years ended December 31, 1997 and 1996 and the nine months
ended September 30, 1998 and 1997 follows. This discussion and analysis should
be read in conjunction with LaPlace's financial statements and the notes thereto
appearing elsewhere in this Proxy Statement/Prospectus.
RESULTS OF OPERATIONS
NET INTEREST INCOME. The principal component of LaPlace's net
earnings is net interest income, which is the difference between interest and
fees earned on interest-earning assets and interest paid on deposits and
borrowed funds. Net interest income, when expressed as a percentage of total
average interest-earning assets, is referred to as net interest margin. Net
interest income for the nine months ended September 30, 1998 increased to
$2,506,000 from $2,389,000 recorded for the comparable period in 1997, an
increase of 4.9%. 1997 net interest income of $3,195,000 represents an increase
of $367,000, or 13.0%, from net interest income of $2,828,000 reported for the
year ended December 31, 1996. The improvements over these periods were primarily
the result of increases in average earning assets, improved net interest margin,
and changes in the mix of earning assets.
66
<PAGE> 76
Average interest-earning assets were $63,364,000 for the nine months
ended September 30, 1998, $59,677,000 for the year ended December 31, 1997 and
$54,494,000 for the year ended December 31, 1996. Interest-earning assets were
up significantly in 1998 due to strong loan demand. Average loans, the Company's
highest yielding asset, rose 25.7% from 1996 to 1997 and 14.8% from the year
ended December 31, 1997 to the nine months ended September 30, 1998. Net
interest margin decreased 8 basis points to 5.27% for the nine months ended
September 30, 1998 from 5.35% recorded for 1997. 1997 net interest margin
represented a 16 basis point increase from 1996 net interest margin of 5.19%.
LaPlace's net interest income is affected by the change in the
amount and mix of interest-earning assets and interest-bearing liabilities, and
by changes in yields earned on assets and rates paid on deposits and other
borrowed funds. The following table sets forth certain information concerning
average interest-earning assets and interest-bearing liabilities and the yields
and rates thereon for the periods presented. Average balances are computed using
year to date average balances.
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, 1997 December 31, 1996
----------------------------------- -----------------------------------
Average Interest Average Average Interest Average
Balance Income/ Yield/Rate Balance Income/ Yield/Rate
------- Expense --------- ------- Expense ----------
------- --------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
INTEREST-EARNING ASSETS:
Loans $39,346 $3,940 10.01% $31,306 $ 3,174 10.145%
Interest-bearing deposits with 310 16 5.16% 67 4 5.97%
financial institutions
Investment securities 20,000 1,463 7.32% 23,120 1,730 7.48%
Federal funds sold 21 1 4.76% 1 -- 0.00%
Total interest-earning assets $59,677 $5,420 9.08% $54,494 $ 4908 9.01%
======= ------ ======= -------
INTEREST-BEARING LIABILITIES:
DEPOSITS:
Interest-bearing checking $ 8,815 $ 279 3.17% $ 7,845 $ 2,239 2.84%
Savings 3,761 84 2.23% 4,143 21,351 2.22%
Time deposits 26,599 1,475 5.55% 24,004
BORROWINGS:
Short-term borrowings $ 2,313 $ 131 5.66% $ 3,189 $ 172 5.39%
Long-term borrowings 4,145 256 6.18% 3,858 242 6.27%
------- ------ ------- -------
Total interest-bearing liabilities $45,633 $2,225 4.88% $43,039 $ 2,080 4.83%
======= ====== ======= -------
Net interest income $3,195 $ 2,828
====== =======
Net interest margin 5.35% 5.19%
</TABLE>
The following table sets forth changes in interest income and
interest expense for each major category of interest-earning assets and
interest-bearing liabilities and the amount of change attributable to volume
change and rate change for the periods indicated. The change in interest income
due to both volume change and rate change has been allocated to volume change.
67
<PAGE> 77
<TABLE>
<CAPTION>
YEARS ENDED YEARS ENDED
DECEMBER 31, 1997 VERSUS 1996 DECEMBER 31, 1996 VERSUS 1995
INCREASE (DECREASE) DUE TO CHANGES IN INCREASE (DECREASE) DUE TO CHANGES IN
------------------------------------- --------------------------------------
NET NET
VOLUME RATE CHANGE VOLUME RATE CHANGE
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
INTEREST-EARNING ASSETS:
Loans $ 805 $(39) $ 766 $ 749 $ (54) $ 695
Interest-bearing deposits
with financial institutions 13 (1) 12 (1) (1) (2)
Investment securities (228) (39) (267) (10) (17) (27)
Federal funds sold 1 -- 1 -- -- --
----- ---- ----- ----- ----- -----
Total 591 (79) 512 738 (72) 666
===== ==== ===== ===== ===== =====
INTEREST-BEARING LIABILITIES:
DEPOSITS:
Interest-bearing checking 31 25 56 32 3 35
Savings (9) 1 (8) -- -- --
Time deposits 144 (20) 124 127 53 180
BORROWINGS:
Short-term borrowings (50) 9 (41) 87 (10) 77
Long-term borrowings 18 (4) 14 (13) (7) (20)
----- ---- ----- ----- ----- -----
Total 134 11 145 233 39 272
----- ---- ----- ----- ----- -----
Interest differential $ 457 $(90) $ 367 $ 505 $(111) $ 394
===== ==== ===== ===== ===== =====
</TABLE>
PROVISION FOR LOAN LOSSES. The provision for loan losses is the
periodic charge to earnings for potential losses in the loan portfolio. The
amounts provided for loan losses are determined by management after evaluations
of the loan portfolio. This evaluation process requires that management apply
various judgments, assumptions and estimates concerning the impact certain
factors may have on amounts provided. Factors considered by management in its
evaluation process include known and inherent losses in the loan portfolio, the
current economic environment, the composition of and risk in the loan portfolio,
prior loss experience and underlying collateral values. While management
considers the amounts provided through September 30, 1998 to be adequate,
subsequent changes in these factors and related assumptions may warrant
significant adjustments in amounts provided, based on conditions prevailing at
the time. In addition, various regulatory agencies, as an integral part of the
examination process, review LaPlace's allowance for loan losses. Such agencies
may require LaPlace to make additions to the allowance based on their judgments
of information available to them at the time of their examinations.
The provision for loan losses for the nine months ended September
30, 1998 and 1997 was $90,000 and $90,000, respectively. The provision for loan
losses for the years ended December 31, 1997 and 1996 was $120,000 and $100,000,
respectively.
NON-INTEREST INCOME. Non-interest income, excluding securities
transactions, was $1,703,000 for the nine months ended September 30, 1998,
compared to $1,387,000 for the comparable period of 1997. Non-interest income,
excluding securities transactions, was $1,836,000 for the year ended December
31, 1997, compared to $1,806,000 for 1996. The increase in non-interest income
from September 30, 1997 to the comparable period in 1998 was attributable
primarily to increased deposit service charges and mortgage banking fees.
68
<PAGE> 78
NON-INTEREST EXPENSE. Non-interest expense for the nine months ended
September 30, 1998 and 1997 was $2,638,000 and $2,336,000, respectively, a 12.9%
increase. Non-interest expense for the year ended December 31, 1997 increased to
$3,139,000 from $2,867,000 in 1996. The increase in non-interest expense during
these periods was attributable principally to significant expenditures made to
upgrade Bank of LaPlace's data processing capabilities.
INCOME TAXES. LaPlace's provision for income taxes was $501,000 for
the nine months ended September 30, 1998, compared to $467,000 for the nine
months ended September 30, 1997.
Such provision was $596,000 for 1997 compared to $582,000 for 1996.
IMPACT OF INFLATION. The effects of inflation on the local economy
and on LaPlace's operating results have been relatively modest for the past
several years. Because substantially all of LaPlace's assets and liabilities are
monetary in nature, such as cash, securities, loans and deposits, their values
are less sensitive to the effects of inflation than to changing interest rates,
which do not necessarily change in accordance with inflation rates. LaPlace
attempts to control the impact of interest rate fluctuations by managing the
relationship between its interest rate sensitive assets and liabilities.
69
<PAGE> 79
FINANCIAL CONDITION
The following table sets forth LaPlace's average assets, liabilities
and shareholders' equity and the percentage distribution of these items as of
the dates indicated.
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------------------------------
SEPTEMBER 30, 1998 1997 1996
----------------------- ---------------------- ------------------------
AVERAGE AVERAGE AVERAGE
BALANCE PERCENT BALANCE PERCENT BALANCE PERCENT
--------- --------- --------- --------- ---------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Cash and due from banks $ 1,986 2.93% $ 1,911 2.97% $ 1,735 2.94%
Interest-bearing deposits with
financial institutions 34 0.05% 310 0.48% 67 0.11%
Investment securities 18,144 26.72% 20,000 31.10% 23,120 39.18%
Federal funds sold 10 0.01% 21 0.03% 1 0.00%
Loans (net of allowance for
credit losses) 44,628 65.72% 38,872 60.46% 30,875 52.33%
Other assets 3,100 4.57% 3,192 4.96% 3,208 5.44%
------- ------- ------- ------- ------- ------
Total assets $67,902 100.00% $64,306 100.00% $59,006 100.00%
======= ======= ======= ======= ======= ======
LIABILITIES AND SHAREHOLDERS'
EQUITY:
Demand deposits $12,099 17.82% $10,969 17.06% $ 9,420 15.96%
Interest-bearing deposits 40,754 60.02% 39,175 60.92% 35,992 61.00%
Other liabilities 7,010 10.32% 7,268 11.30% 7,732 13.11%
------- ------- ------- ------- ------- ------
Total liabilities 59,863 88.16% 57,412 89.28% 53,144 90.07%
Shareholders' equity 8,039 11.84% 6,894 10.72% 5,862 9.93%
------- ------- ------- ------- ------- ------
Total liabilities and
shareholders' equity $67,902 100.00% $64,306 100.00% $59,006 100.00%
======= ======= ======= ======= ======= ======
</TABLE>
TOTAL ASSETS. At September 30, 1998, total assets were approximately
$67,749,000, compared to $67,714,000 at December 31, 1997 and $61,806,000 at
December 31, 1996. Total average assets as of September 30, 1998 were
$67,902,000, an increase of 5.6% from the $64,306,000 average for the year ended
December 31, 1997. Total average assets increased 9.0% from 1996 to 1997, from
$59,006,000 for the year ended December 31, 1996 to $64,306,000 for the year
ended December 31, 1997. The increases in average assets over these periods
reflect increased loan demand.
SECURITIES. At September 30, 1998, LaPlace's securities portfolio
aggregated $16,160,000, a decrease of $1,530,000 from the $17,690,000 reported
at December 31, 1997, which reflects a decrease of $3,881,000 from the
$21,571,000 reported at December 31, 1996. The decrease in securities from 1996
to 1997 was principally attributable to increases in loan demand over the
period.
70
<PAGE> 80
The following table sets forth the composition of LaPlace's
portfolio at the end of each period presented.
<TABLE>
<CAPTION>
SEPTEMBER 30, 1998
----------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE
---------- ---------- ---------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Available for Sale
Mortgage-backed securities $8,766 $136 $(23) $8,879
------ ---- ---- ------
Total $8,766 $136 $(23) $8,879
====== ==== ==== ======
Held to Maturity
Municipal securities $ 191 $ 13 $-- $ 204
Mortgage-backed securities 6,642 192 (64) 6,770
Other securities 448 -- -- 448
------ ---- ---- ------
Total $7,281 $205 $(64) $7,422
====== ==== ==== ======
<CAPTION>
DECEMBER 31, 1997
----------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE
---------- ---------- ---------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Available for Sale
Mortgage-backed securities $7,936 $163 $ (5) $8,094
------ ---- ---- ------
Total $7,936 $163 $ (5) $8,094
====== ==== ==== ======
Held to Maturity
Municipal securities $ 201 $ 11 $ -- $ 212
Mortgage-backed securities 8,809 246 (53) 9,002
Other securities 586 -- -- 586
------ ---- ---- ------
Total $9,596 $257 $(53) $9,800
====== ==== ==== ======
<CAPTION>
DECEMBER 31, 1996
----------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE
---------- ---------- ---------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Available for Sale
Mortgage-backed securities $ 7,107 $103 $(13) $ 7,197
------ ---- ---- -------
Total $ 7,107 $103 $(13) $ 7,197
====== ==== ==== =======
Held to Maturity
U.S. government agencies $ 1,151 $ 21 -- $ 1,172
Municipal securities 685 5 -- 690
Mortgage-backed securities 11,985 265 $(30) 12,220
Other securities 553 -- -- 553
------- ---- ---- -------
Total $14,374 $291 $(30) $14,635
======= ==== ==== =======
</TABLE>
71
<PAGE> 81
The following table presents selected contractual maturity data
(amortized cost) for the available-for-sale securities in LaPlace's portfolio at
December 31, 1997.
<TABLE>
<CAPTION>
AFTER ONE YEAR AFTER FIVE YEARS
ONE YEAR OR LESS THROUGH FIVE YEARS THROUGH TEN YEARS AFTER TEN YEARS
---------------- ------------------ ----------------- ---------------
AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD
------ ----- ------ ----- ------ ----- ------ -----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Mortgage-
backed securities $ -- $ 622 8.08% $ 166 9.10% $ 7,148 6.91%
------------ ------------ ------------- --------
Total $ -- $ 622 $ 166 $ 7,148
============ ============ ============= ========
</TABLE>
LOANS. LaPlace engages in real estate, commercial and consumer
lending. The lending activities of LaPlace are guided by the basic lending
policy established by its Board of Directors. Each loan is evaluated based on,
among other things, character and leverage capacity of the borrower, cash flow,
collateral, market conditions for the borrower's business or project and
prevailing economic trends and conditions.
The following table sets forth the type and amount of loans
outstanding as of the dates indicated:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
--------------- -------------------------------------
1998 1997 1996
--------------- ----------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Commercial $ 25,961 $ 23,157 $ 17,358
Real Estate 16,330 17,466 14,627
Consumer/Installment 4,068 3,979 3,360
------------- ----------- -----------
Total loans $ 46,359 $ 44,602 $ 35,345
============= =========== ===========
</TABLE>
At September 30, 1998, LaPlace had a concentration of loans to the
real estate construction industry. A concentration is defined as amounts loaned
to a multiple number of borrowers engaged in similar activities, which could
cause them to be similarly impacted by economic or other conditions, where the
amount exceeds 10% of total loans. At September 30, 1998, Bank of LaPlace had
outstanding approximately $8.6 million of loans to borrowers in such industry,
which represented approximately 18.5% of total outstanding loans on that date. A
significant portion of Bank of LaPlace's loans are secured by residential real
estate located in St. John the Baptist Parish, and may be susceptible to changes
in local market conditions.
At September 30, 1998, loans were $46,359,000, as compared to
$44,602,000 at December 31, 1997 and $35,345,000 at December 31, 1996. Average
loans have increased over these periods as well, from $31,306,000 and
$39,346,000, respectively, for 1996 and 1997, to $45,176,000 for the nine months
ended September 30, 1998. These increases in the amount of outstanding loans are
attributable principally to increased loan demand in the market served by
LaPlace. These increases were the result of a strengthening local economy.
LaPlace's average loan to deposit ratio was 85.47% during the first nine months
of 1998 as compared to 78.47% and 68.94% during 1997 and 1996, respectively.
At September 30, 1998, commercial, real estate and
consumer/installment loans comprised approximately 56.0%, 35.2% and 8.8%,
respectively, of total outstanding loans. This compares to 51.9%, 39.2% and 8.9%
categorized as commercial, real estate and consumer/installment loans,
respectively, at December 31, 1997 and 49.1%, 41.4% and 9.5% categorized as
commercial, real estate and consumer/installment loans, respectively, at
December 31, 1996.
72
<PAGE> 82
The following table provides information concerning loan portfolio
maturity as of December 31, 1997. Loan portfolio maturity by type of loan as
presented in the table above is not readily available (in thousands).
<TABLE>
<S> <C>
One year or less:
Floating interest rate $ 655
Fixed interest rate 21,145
After one year through five years:
Floating interest rate 22
Fixed interest rate 10,547
After five years:
Floating interest rate 175
Fixed interest rate 8,504
Mortgage loans to be sold 3,554
-----------
Total $ 44,602
===========
</TABLE>
NONACCRUAL, PAST DUE AND MODIFIED LOANS. The performance of
LaPlace's loan portfolio is evaluated regularly by Senior Management and the
Board of Directors. Interest on loans is accrued daily as earned. A loan is
generally placed on nonaccrual status when principal or interest is past due 90
days or more, except on government guaranteed loans or when management
determines the loan remains likely to be fully collectible. Upon being placed on
nonaccrual status, the accrual of income from a loan is discontinued and
previously accrued but unpaid interest is reversed against income. Each loan
that is 90 days or more past due is evaluated to determine its collectibility
and the adequacy of its collateral.
The following table sets forth the amount of LaPlace's nonperforming
loans (nonaccrual loans and loans past due 90 days or more and still accruing
interest) and loans with modified terms as of the dates indicated:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------
1997 1996
----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Nonaccrual loans $ 232 $ 108
Loans past due 90 days or more and
still accruing interest $ 1 $ 4
Renegotiated debt, still accruing
interest $ -- $ --
</TABLE>
As a percent of total loans, loans past due 90 days or more and not
on nonaccrual status were 0% and .01% of total loans at December 31, 1997 and
1996, respectively. Nonaccrual loans were .52% of total loans at December 31,
1997 and .31% of total loans at December 31, 1996. There were no loans with
modified terms at December 31, 1997 and 1996. If loans classified as
nonperforming at December 31, 1997 and 1996 had performed in accordance with
their original terms, interest income would not have increased by material
amounts. Income recognized on nonaccrual loans was immaterial for both 1997 and
1996.
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<PAGE> 83
As of September 30, 1998, LaPlace was not aware of any other loans
where known information about possible credit problems of the borrower caused
management to have serious doubts as to the ability of such borrowers to comply
with the loan repayment terms. LaPlace's primary regulators and external
auditors review the loan portfolio as part of their regular examinations and
their assessment of specific credits, based on information available to them at
the time of their examination, may affect the level of LaPlace's nonperforming
loans. Additionally, the loan portfolio is regularly monitored by Senior
Management and the Board. Accordingly, there can be no assurance that other
loans will not be placed on nonaccrual, become 90 days or more past due, or have
terms modified in the future.
ALLOWANCE FOR LOAN LOSSES. A certain degree of risk is inherent in
the extension of credit. Management has credit policies in place to monitor and
attempt to control the level of loan losses and nonperforming loans. One product
of LaPlace's credit risk management is the maintenance of the allowance for loan
losses at a level considered by management to be adequate to absorb estimated
known and inherent losses in the existing portfolio, including commitments and
standby letters of credit. The allowance for loan losses is established through
charges to operations in the form of provisions for loan losses.
The allowance is based upon a regular review of current economic
conditions which might affect a borrower's ability to pay, underlying collateral
values, risk in and the composition of the loan portfolio, and prior loss
experience. In addition, LaPlace's primary regulators and external auditors, as
an integral part of their examination process, periodically review LaPlace's
allowance for loan losses and may recommend additions to the allowance based on
their assessment of information available to them at the time of their
examination. Loans that are deemed to be uncollectible are charged-off and
deducted from the allowance. The provision for loan losses and recoveries on
loans previously charged-off are added to the allowance.
The following table sets forth LaPlace's loan loss experience and
certain information relating to its allowance for loan losses as of the dates
and for the periods indicated.
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
--------------------------------
1997 1996
-------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Average loans outstanding $ 39,346 $ 31,306
======== ========
Balance of allowance for credit losses at
beginning of period $ 443 $ 415
Charge offs:
Real estate loans (2) (2)
Commercial loans (39) --
Consumer loans (48) (85)
Recoveries 39 15
-------- --------
Net charge-offs (50) (72)
-------- --------
Provisions charged to expense 120 100
-------- --------
Balance of allowance for credit losses at end
of period $ 513 $ 443
======== ========
Ratio of net charge-offs to average loans
outstanding 0.13% 0.23%
</TABLE>
74
<PAGE> 84
The allowance for loan losses was $559,000 or 1.21% of total loans,
$513,000 or 1.15% of total loans, and $443,000 or 1.25% of total loans at
September 30, 1998, December 31, 1997 and December 31, 1996, respectively. Net
charged-off loans during this period were $44,000 during the first nine months
of 1998, compared to $50,000 and $72,000 in 1997 and 1996, respectively. The
allowance for loan losses should not be interpreted as an indication of future
charge-off trends.
Management believes that the allowance for loan losses at September
30, 1998 is adequate to absorb the known and inherent risks in the loan
portfolio at that time. However, no assurance can be given that future changes
in economic conditions that might adversely affect LaPlace's principal market
area, borrowers or collateral values, and other circumstances will not result in
increased losses in LaPlace's loan portfolio in the future.
LaPlace's lending activities involve loans with varying degrees of
credit risk. In underwriting residential real estate mortgage loans, LaPlace
evaluates both the borrower's ability to make monthly payments and the value of
the property securing the loan. Most properties securing real estate loans made
by LaPlace are appraised by independent appraisers. LaPlace generally requires
borrowers to obtain an attorney's title opinion and/or title insurance, and fire
and property insurance (including flood insurance, if necessary) in an amount
not less than the amount of the loan. Certain of such loans are sold by LaPlace
in the secondary mortgage market.
LaPlace's commercial lending activities generally involve
owner-occupied office buildings, equipment financing, and working capital loans.
Such loans may present a slightly higher level of risk than loans secured by
residential real estate. This greater risk is due to several factors, including
the concentration of principal in a limited number of loans and borrowers, and
the effect of general economic conditions. Furthermore, the repayment of
commercial loans is typically dependent upon the successful operation of and
cash flows generated by the borrower's business. If the cash flow from the
business is reduced, the borrower's ability to repay the loan may be impaired.
LaPlace's construction lending consists principally of interim
construction loans for one-to- four-family residential properties, the permanent
financing for which LaPlace typically sells in the secondary mortgage market. If
sold in the secondary market, underwriting criteria for such loans generally are
the same as the guidelines used by LaPlace for originating permanent residential
mortgage loans. Because of the relatively short (typically six-month) term of
LaPlace's construction loans, such loans are subject to less risk than longer
term construction loans where monitoring of the progress of the project may be
particularly difficult.
LaPlace offers a variety of consumer loans to individuals. Consumer
loans may entail greater credit risk than do residential mortgage loans,
particularly in the case of consumer loans which are unsecured or are secured by
rapidly depreciable assets, such as automobiles and boats. In such cases, any
repossessed collateral for a defaulted consumer loan may not provide an adequate
source of repayment of the outstanding loan balance as a result of the greater
likelihood of damage or loss or as a result of depreciation. In addition,
consumer loan collections are dependent on the borrower's continuing financial
stability, and thus are more likely to be affected by adverse personal
circumstances. Furthermore, the application of various federal and state laws,
including bankruptcy and insolvency laws, may limit the amount which can be
recovered on such loans.
LaPlace does not allocate the allowance for loan losses among its
various loan categories. The amount of the allowance should not be interpreted
as an indication of future credit trends or that losses in an amount comparable
to the allowance will occur.
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<PAGE> 85
DEPOSITS. Deposits are the primary source of funding for LaPlace's
earning assets. Total deposits at September 30, 1998 and at December 31, 1997
and 1996 were approximately $55,628,000, $52,709,000, and $49,341,000,
respectively. Time certificates of deposit of $100,000 or more, which were
approximately $4,259,000 at December 31, 1997, had remaining maturities as
follows:
76
<PAGE> 86
<TABLE>
<CAPTION>
DECEMBER 31, 1997
----------------------
(DOLLARS IN THOUSANDS)
MATURING WITHIN:
<S> <C>
Three months or less $ 978
Over three months to twelve months 1,756
Over twelve months 1,525
------
Total $4,259
======
</TABLE>
Average deposit balances are summarized for the periods indicated:
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------------------------------
1997 1996
AVERAGE AVERAGE AVERAGE AVERAGE
BALANCES RATE BALANCES RATE
-------- -------- -------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Demand deposits $ 10,969 0.00% $ 9,420 0.00%
Interest-bearing checking 8,815 3.17% 7,845 2.84%
Savings 3,761 2.23% 4,143 2.22%
Time deposits 26,599 5.55% 24,004 5.63%
-------- --------
Total $ 50,144 $ 45,412
======== ========
</TABLE>
At September 30, 1998, December 31, 1997 and December 31, 1996, LaPlace
had no brokered deposits.
INTEREST RATE SENSITIVITY. Interest rate risk is the potential impact
of changes in interest rates on net interest income and results from disparities
in repricing opportunities of assets and liabilities over a period of time.
Management estimates the effects of changing interest rates and various balance
sheet strategies on the level of net interest income. Management may alter the
mix of floating- and fixed-rate assets and liabilities, change pricing
schedules, and adjust maturities through sales and purchases of securities
available-for-sale as a means of limiting interest rate risk.
The degree of interest rate sensitivity is not equal for all types of
assets and liabilities. LaPlace's experience has indicated that the repricing of
interest-bearing demand, savings and money market accounts does not move with
the same magnitude as general market rates. Additionally, these deposit
categories, along with non-interest demand, have historically been stable
sources of funds to LaPlace, which indicates a much longer implicit maturity
than their contractual availability. LaPlace's cumulative gap to total assets at
September 30, 1998 was 10.5% within the three-month period and 1.7% within the
twelve-month period. A positive gap implies that earnings would increase in a
rising interest rate environment and decrease in a falling interest rate
environment.
LIQUIDITY. LaPlace seeks to manage its liquidity position to attempt to
ensure that sufficient funds are available to meet customers' needs for
borrowing and deposit withdrawals. Liquidity is derived from both the asset and
liability sides of the balance sheet. Asset liquidity arises from the ability to
convert assets to cash and self-liquidation or maturity of assets. Liquid asset
balances include cash, interest-bearing deposits with financial institutions,
short-term investments and federal funds sold. Liability liquidity arises from a
diversity of funding sources as well as from the ability of
77
<PAGE> 87
LaPlace to attract deposits of varying maturities. If LaPlace was limited to
only one source of funding or all its deposits had the same maturity, its
liquidity position would be adversely impacted.
LaPlace's funding source is primarily its deposit base which is
comprised of interest-bearing and noninterest-bearing accounts, augmented
through federal funds purchased, Federal Home Loan Bank borrowings, and other
short-term borrowings, which are interest-bearing. LaPlace's non-interest
bearing demand deposits are, by their very nature, subject to withdrawal upon
demand. Declines in one form of funding source require LaPlace to obtain funds
from another source. If LaPlace was to experience a decline in
noninterest-bearing demand deposits and was to have a significant increase in
loan volume without a commensurate increase in such deposits, it would utilize
alternative sources of funds, probably at higher cost, to maintain its liquidity
and to meet its loan funding needs. This would place downward pressure on
LaPlace's net interest margin and might have a negative impact on LaPlace's
liquidity position.
LaPlace's liquidity expressed as a percentage of net liquid assets to
net liabilities was 35.08% and 37.36% at September 30, 1998 and December 31,
1997, respectively.
CAPITAL ADEQUACY. At September 30, 1998, LaPlace's total shareholders'
equity was $8,263,000, an increase of 11.35% from $7,421,000 at December 31,
1997. Book value per common share is presented in the table below.
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
------------- -----------------------
1998 1997 1996
------------- ------ ------
(Amounts in thousands, except per share amounts)
<S> <C> <C> <C>
Shares outstanding 146 146 146
Shareholders' equity $8,263 $7,421 $6,325
Book value per common share $56.70 $50.92 $43.40
</TABLE>
78
<PAGE> 88
Adequate levels of capital are necessary over time to sustain growth
and absorb losses. In the case of banks and bank holding companies, capital
levels must also meet minimum regulatory requirements. All risk-based and other
capital ratios (which are computed for LaPlace's wholly-owned subsidiary, Bank
of LaPlace) improved from December 31, 1996 to December 31, 1997 and from
December 31, 1997 to September 30, 1998, and remain well above regulatory
minimums. At September 30, 1998, Tier I capital was 16.18% of risk-weighted
assets and total capital was 17.43% of risk-weighted assets, compared to the
regulatory minimums of 4.0% and 8.0%, respectively. Bank of LaPlace's regulatory
leverage ratio, which compares Tier I capital to adjusted total assets, was
10.09% at September 30, 1998, compared to the regulatory minimum of 4.0%. Under
present regulations, Bank of LaPlace was classified as "well capitalized" based
upon its capital ratios at September 30, 1998, December 31, 1997 and December
31, 1996. The following table sets forth Bank of LaPlace's risk based capital
and capital ratios at December 31, 1997 and December 31, 1996.
<TABLE>
<CAPTION>
Regulatory
"Well
Capitalized"
DECEMBER 31, Requirement
------------------------- -----------
1997 1996
-------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
CAPITAL:
Tier I $ 6,135 $ 5,515
Tier II 513 439
-------- ---------
Total capital $ 6,648 $ 5,954
======== =========
Risk-weighted assets $ 43,016 $ 35,152
RATIOS:
Tier I capital to risk-weighted assets 14.26% 15.69% 6.00%
Tier II capital to risk-weighted assets 1.19% 1.25% --
-------- ---------
Total capital to risk-weighted assets 15.45% 16.94% 10.00%
======== =========
Leverage ratio 9.59% 9.28% 5.00%
</TABLE>
YEAR 2000 COMPLIANCE
The inability of computers, software and other equipment utilizing
microprocessors to recognize and properly process data fields containing a four
digit year is commonly referred to as the "Year 2000 problem." As the year 2000
approaches, such systems may be unable to accurately process certain date-based
information.
LaPlace believes it has identified all significant systems that may
require modification to ensure Year 2000 compliance. Internal and external
resources are being used to test Year 2000 compliance and make any required
modifications. The testing of all significant systems by outside hardware and
software suppliers is substantially complete, and several of LaPlace's critical
systems already have been certified by their vendor or third party testing
agencies to be Year 2000 compliant. LaPlace intends to complete the testing of
all significant systems by December 31, 1998 and to implement any required
modifications before June 30, 1999, as required by FDIC guidelines.
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<PAGE> 89
The total cost to LaPlace of Year 2000 compliance activities has not
been and is not anticipated to be material to LaPlace's financial position or
results of operations in any given year. Year 2000 compliance costs and the date
on which LaPlace plans to complete Year 2000 testing and modification processes
are based on management's best estimates, which were derived utilizing numerous
assumptions of future events, including the continued availability of certain
resources, third party modification plans and other factors. There can be no
assurance, however, that these estimates will be achieved and actual results
could differ from those plans.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1997, the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income" ("FAS 130"). FAS 130 establishes standards for reporting
and display of comprehensive income and its components (revenues, expenses,
gains and losses) in a full set of general purpose financial statements. FAS 130
requires that all items that are required to be recognized under accounting
standards as components of comprehensive income be reported in a financial
statement that is displayed with the same prominence as other financial
statements. LaPlace adopted FAS 130 beginning January 1, 1998. The adoption of
this pronouncement did not have a material impact on the financial statements of
LaPlace.
80
<PAGE> 90
BUSINESS OF UNION PLANTERS
GENERAL
Union Planters, a Tennessee corporation, is a bank holding company
registered with the Federal Reserve under the Bank Holding Company Act. As of
September 30, 1998, Union Planters had total consolidated assets of
approximately $30.5 billion, total consolidated loans of approximately $19.7
billion, total consolidated deposits of approximately $23.3 billion, and total
consolidated shareholders' equity of approximately $2.9 billion.
Union Planters conducts its business activities through Union Planters
Bank, National Association, its principal bank subsidiary, and a number of other
banking and banking-related subsidiaries. Through its various subsidiaries,
Union Planters provides a diversified range of financial services, maintaining
at September 30, 1998, 801 banking offices and approximately 1,000 ATMs in the
states in which it operates, as follows:
<TABLE>
<CAPTION>
Full Service and
Limited Service
State Branches ATMs
- --------------------- ---------------- -----
<S> <C> <C>
Alabama 22 22
Arkansas 48 37
Florida 65 47
Illinois 95 104
Indiana 17 18
Iowa 30 33
Kentucky 28 26
Louisiana 22 17
Mississippi 151 170
Missouri 98 123
Tennessee 209 375
Texas 16 28
---- -----
801 1,000
==== =====
</TABLE>
Acquisitions have been, and are expected to continue to be, an
important part of the expansion of Union Planters' business. During the period
beginning January 1, 1994 and ending September 30, 1998, Union Planters
completed the acquisition of 43 institutions with approximately $26.4 billion in
total assets. The restated consolidated financial statements of Union Planters
included in Exhibit 99.1 to its September 20, 1998 Quarterly Report on Form 10-Q
and filed with the SEC, and the financial information relating to Union Planters
included under "Selected Financial Data" in this proxy statement-prospectus,
reflect the financial impact of all of such acquisitions, including the
acquisitions completed during 1998.
In addition, as of September 30, 1998, Union Planters was a party to
definitive agreements to acquire five financial institutions in addition to
LaPlace, and to purchase 56 branch locations and assume deposit liabilities of
approximately $1.8 billion in Indiana (the "Indiana Branch Purchase"
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<PAGE> 91
and, together with all other pending acquisitions, the "Other Pending
Acquisitions"). The Other Pending Acquisitions had aggregate total assets of
approximately $3.5 billion at September 30, 1998. For information with respect
to these acquisitions, see "--Recent Developments" below.
Union Planters expects to continue to take advantage of the
consolidation of the financial services industry by further developing its
franchise through the acquisition of financial institutions. Future acquisitions
may entail the payment by Union Planters of consideration in excess of the book
value of the underlying net assets acquired, may result in the issuance of
additional shares of Union Planters capital stock or the incurring of additional
indebtedness by Union Planters, and could have a dilutive effect on the earnings
or book value per share of Union Planters common stock. Moreover, significant
charges against earnings are sometimes required incidental to acquisitions. For
a description of the acquisitions in addition to the merger which are currently
pending, see "--Recent Developments."
The principal executive offices of Union Planters are located at 7130
Goodlett Farms Parkway, Memphis, Tennessee 38018, and its telephone number at
such address is (901) 580-6000. Additional information with respect to Union
Planters and its subsidiaries is included in documents incorporated by reference
in this proxy statement-prospectus. See "WHERE YOU CAN FIND MORE INFORMATION."
RECENT DEVELOPMENTS
RECENT SALE OF CREDIT CARD PORTFOLIO. On October 15, 1998, Union
Planters sold substantially all of its credit card portfolio to MBNA Bank
America, N.A. Union Planters also entered into an agreement with MBNA Bank
America, N.A. to sell it a large majority of the credit card portfolios of Union
Planters Bank of Kentucky, a wholly owned subsidiary of Union Planters, and of
Magna Bank, N.A. which merged into UPB on October 9, 1998. The value of the
credit card portfolio sold totaled $460 million. In the fourth quarter of 1998,
Union Planters expects to recognize a net gain of $65 to $70 million on a pretax
basis and approximately $40 to $43 million after taxes as a result of the sale.
Certain estimated costs related to selling the credit card portfolios, including
employee severance, equipment write-offs and other fees, h ave been netted
against the gain. Union Planters also expects to charge off approximately $10
million to $15 million of credit card receivables that will not be purchased by
MBNA Bank America, N.A. in the fourth quarter of 1998. A smaller portion of the
transaction will settle in the first quarter of 1999.
RECENTLY COMPLETED ACQUISITIONS. Since December 31, 1997, Union
Planters has completed 14 acquisitions, representing approximately $13.5 billion
in assets. The financial impact of all of such acquisitions deemed material are
reflected in the consolidated financial statements of Union Planters included in
its Exhibit 99.1 to the September 30, 1998 Quarterly Report on Form 10-Q and
filed with the SEC, and in the financial information relating to Union Planters
included under "Summary--Selected Financial Data" in this proxy
statement-prospectus.
OTHER PENDING ACQUISITIONS. Union Planters has entered into definitive
agreements to acquire the following financial institutions in addition to
LaPlace (collectively, the "Other Pending Acquisitions") which Union Planters'
management considers probable of consummation and which are expected to close in
1998.
82
<PAGE> 92
<TABLE>
<CAPTION>
Asset Size Projected
Institution (in Millions)(1) Type of Consideration(2) Closing Date
----------- ---------------- ------------------------ ------------
<S> <C> <C> <C>
First Mutual Bancorp, Inc. and its $ 370 Approximately 1,100,000 shares 12/31/98
subsidiary First Mutual Bank, S.D., of Union Planters common stock(3)
Decatur, Illinois
FSB , Inc. and its subsidiary, First 145 Approximately 907,000 shares of 12/31/98
State Bank of Covington, Union Planters common stock
Tennessee
Purchase of 56 branches and 1,800 $294 million deposit premium in 02/12/99
assumption of $1.8 billion of cash(4)
deposits of First Chicago NBD
Corporation in Indiana ("Indiana
Branch Purchase")
Southeast Bancorp, Inc. and 335 Approximately 1,250,000 shares 1/31/99
subsidiaries First National Bank & of Union Planters common stock.
Trust Company, Corbin, Kentucky,
and First State Bank of East
Tennessee N.A., LaFolette,
Tennessee
First & Farmers Bancshares, Inc. 275 $76 million in cash 12/31/98
and subsidiaries First & Farmers
Bank of Somerset, Somerset,
Kentucky, and Bank of
Cumberland, Burkesville, Kentucky
Ready State Bank and its subsidiary 595 Approximately 3,214,000 shares 12/31/98
Ready Holding, Inc., Hialeah, of Union Planters common stock
Florida
------
TOTAL $3,520
======
</TABLE>
- ---------------------------------------
(1) Approximate total assets on September 30, 1998.
(2) Assumes no adjustment to shares pursuant to exchange rates adjustment
mechanisms.
(3) Union Planters intends to purchase in the open market, approximately one
million Union Planters common shares to facilitate its purchase of First
Mutual Bancorp, Inc.
(4) The purchase price of the premises and equipment to be purchased has not yet
been determined.
FOURTH QUARTER EARNINGS CONSIDERATIONS. It is expected that either Union
Planters or the institutions acquired or to be acquired in connection with the
merger and the Other Pending Acquisitions will incur charges arising from such
acquisitions and from the assimilation of those institutions into the Union
Planters organization. Anticipated charges would normally arise from matters
such as, but not limited to:
o legal, accounting, financial advisory and consulting fees;
o payment of contractual benefits triggered by a change of control,
early retirement and involuntary separation and related benefits;
83
<PAGE> 93
o costs associated with elimination of duplicate facilities and branch
consolidations;
o data processing charges;
o cancellation of vendor contracts; and
o other contingencies and similar costs which normally arise from the
consolidation of operational activities.
For a discussion of Union Planters' acquisition program and the
significant charges Union Planters has incurred over the past three years
incidental to its acquisition program, see the caption "Acquisitions" on pages
A-3, A-4 and A-5 in Union Planters' restated financial statements filed in Union
Planters' September 30, 1998 Quarterly Report filed on Form 10-Q, and Note 2 to
Union Planters' audited consolidated financial statements for the years ended
December 31, 1997, 1996, and 1995 also contained in Union Planters' September
30, 1998 Quarterly Report filed on Form 10-Q, Exhibit 99.1. Reference is also
made to pages 17,18, 20, and 21 to Union Planters September 30, 1998 Quarterly
Report on Form 10-Q for a discussion of significant charges incurred in the nine
months ended September 30, 1998.
The merger and the Other Pending Acquisitions (with the exception of
the Indiana Branch Purchase, the Somerset Purchase and the First Mutual
Purchase) are expected to be accounted for as pooling-of-interests. Union
Planters currently estimates incurring aggregate pre-tax and after-tax charges
in the range of $5 million to $6 million in connection with completing the
merger and the Other Pending Acquisitions. Union Planters also expects to incur
expenses of approximately $30 million in the fourth quarter of 1998, both as a
pretax and after-tax basis, primarily in connection with the settlement of
employment agreements related to entities acquired in the third quarter of 1998.
To the extent that Union Planters' recognition of these acquisition-related
charges is contingent upon consummation of a particular transaction, those
charges would be recognized in the period in which such transaction closes. See
"SUMMARY--Historical and Pro Forma Per Share Data".
The range of anticipated charges to be incurred in connection with
consummating the merger and the Other Pending Acquisitions is a preliminary
estimate of the significant charges which may, in the aggregate, be required and
should be viewed accordingly. Moreover, this range has been based on the due
diligence that has been performed to date in connection with the merger and the
Other Pending Acquisitions. The range may be subject to change, and the actual
charges incurred may be higher or lower than what is currently contemplated,
once the acquired institutions are assimilated from an operational perspective
and various contingencies are either satisfied or eliminated. Furthermore, the
range of anticipated charges will change if additional entities are acquired.
Union Planters regularly evaluates the potential acquisition of, and holds
discussions with, various potential acquisition candidates. As a general rule,
Union Planters will publicly announce such acquisitions only after a definitive
agreement has been reached, and only then if Union Planters considers the
acquisition to be of such a size as to be a significant acquisition. Since the
range of anticipated acquisition-related charges is likely to change with
additional acquisitions, and since Union Planters regularly engages in
acquisitions, such range could change, and you should view such information
accordingly.
Since September 30, 1998, Union Planters has expensed that portion of
certain restricted stock grants that would otherwise have remained unrecognized
at the recipients earliest possible retirement age. This will have the effect of
increasing benefits expense in the fourth quarter of 1998 by approximately $8.9
million pretax and $5.5 million on an after tax basis. Additionally, in
84
<PAGE> 94
connection with the consolidation of certain loan and deposit functions, Union
Planters is implementing a plan to image all documents related to loans and
deposits. During the fourth quarter of 1998, Union Planters will engage a third
party to image all of its current documents. The total expenses estimated to be
incurred in the fourth quarter of 1998 related to this project is approximately
$4.8 million pretax and $3.29 million on an after tax basis.
Certain acquisitions during 1998 have significantly increased the
goodwill and other intangible costs to $361 million at September 30, 1998. Given
changing market conditions, primarily interest rate and the related volatility
of the mortgage markets, Union Planters plans to perform a review of the
realization of these intangibles and other related assets such as investment
securities premiums during the fourth quarter of 1998. The impact of this review
cannot be quantified at this time.
CERTAIN REGULATORY CONSIDERATIONS
GENERAL
Union Planters and LaPlace are bank holding companies registered with
the Federal Reserve. As such, Union Planters and LaPlace and their non-bank
subsidiaries are subject to the supervision, examination, and reporting
requirements of the Bank Holding Company Act and the regulations of the Federal
Reserve. The following discussion summarizes the regulatory framework applicable
to banks and bank holding companies and provides certain specific information
related to Union Planters. A more complete discussion is included in Union
Planters' 1997 Annual Report on Form 10-K. See "WHERE YOU CAN FIND MORE
INFORMATION."
Bank holding companies are required to obtain the prior approval of the
Federal Reserve before they may:
o acquire direct or indirect ownership or control of more than 5% of the
voting shares of any bank;
o acquire all or substantially all of the assets of any bank; or
o merge or consolidate with any other bank holding company.
The Federal Reserve generally may not approve any transaction that
would result in a monopoly or that would further a combination or conspiracy to
monopolize banking in the United States. Nor can the Federal Reserve approve a
transaction that could substantially lessen competition in any section of the
country, that would tend to create a monopoly in any section of the country, or
that would be in restraint of trade. But the Federal Reserve may approve any
such transaction if it determines that the public interest in meeting the
convenience and needs of the community served clearly outweigh the
anticompetitive effects of the proposed transaction. The Federal Reserve is also
required to consider the financial and managerial resources and future prospects
of the bank holding companies and banks concerned, as well as the convenience
and needs of the community to be served. Consideration of financial resources
generally focuses on capital adequacy, which is discussed below. And
consideration of convenience and needs includes the parties' performance under
the Community Reinvestment Act of 1977.
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Another factor that is gaining increasing scrutiny in the application
process is the Year 2000 readiness of the parties involved in acquisition
transactions. Banking organizations whose Year 2000 readiness is in less than
satisfactory condition are undergoing special scrutiny in connection with
acquisition transactions requiring regulatory approval, and may not be eligible
to use expedited application procedures for acquisition transactions.
Under the Riegle-Neal Interstate Banking and Branching Efficiency Act
of 1994 ("Interstate Banking Act"), Union Planters and any other bank holding
company may now acquire a bank located in any state, subject to certain
deposit-percentage limitations, aging requirements, and other restrictions. The
Interstate Banking Act also generally permits a bank to branch interstate
through acquisitions of banks in other states. By adopting legislation prior to
June 1, 1997, a state had the ability either to "opt in" and accelerate the date
after which interstate branching is permissible or "opt out" and prohibit
interstate branching altogether. Texas, where Union Planters recently completed
an acquisition, elected to "opt out," in legislation that expires September 2,
1999. Union Planters has used the Interstate Banking Act to merge substantially
all of Union Planters' banking subsidiaries with and into Union Planters Bank,
National Association. As a result, that bank is now a multi-state national bank
with branches in Alabama, Arkansas, Florida, Illinois, Indiana, Iowa, Kentucky,
Louisiana, Mississippi, Missouri, and Tennessee.
The Bank Holding Company Act prohibits Union Planters from:
(1) engaging in activities other than banking, managing, or
controlling banks or other permissible subsidiaries; and
(2) acquiring or retaining direct or indirect control of any company
engaged in any activities other than those activities determined
by the Federal Reserve to be so closely related to banking or
managing or controlling banks as to be a proper incident thereto.
In determining whether a particular activity is permissible, the Federal
Reserve must consider whether the performance of such an activity reasonably can
be expected to produce benefits to the public that outweigh possible adverse
effects. Possible benefits the Federal Reserve considers include greater
convenience, increased competition, or gains in efficiency. Possible adverse
effects include undue concentration of resources, decreased or unfair
competition, conflicts of interest, or unsound banking practices. The Federal
Reserve has determined the following to be permissible activities of bank
holding companies:
o factoring accounts receivable,
o acquiring or servicing loans,
o easing personal property,
o conducting discount securities brokerage activities,
o performing certain data processing services,
o acting as agent or broker in selling credit life insurance and certain
other types of insurance in connection with credit transactions, and
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o performing certain insurance underwriting activities.
There are no territorial limitations on permissible non-banking
activities of bank holding companies. Despite prior approval, the Federal
Reserve has the power to order a holding company or its subsidiaries to
terminate any activity or to terminate its ownership or control of any
subsidiary when it has reasonable cause to believe that a serious risk to the
financial safety, soundness, or stability of any bank subsidiary of that bank
holding company may result from such activity.
The banks owned by Union Planters are members of the FDIC. Their
deposits are insured by the FDIC to the extent provided by law. Each bank is
also subject to numerous state and federal statutes and regulations that affect
its business, activities, and operations, and each is supervised and examined by
one or more state or federal bank regulatory agencies.
The FDIC and the applicable state authority in the case of
state-chartered nonmember banks, the Office of Thrift Supervision ("OTS") in the
case of federally chartered thrift institutions, the Federal Reserve in the case
of state-chartered member banks, and the Office of the Comptroller of the
Currency ("OCC") in the case of national banks supervise the subsidiaries of
Union Planters and LaPlace and regularly examine the operations of such
institutions. They have authority to approve or disapprove mergers,
consolidations, the establishment of branches, and similar corporate actions.
The federal and state banking regulators also have the power to prevent the
continuance or development of unsafe or unsound banking practices or other
violations of law.
PAYMENT OF DIVIDENDS
Union Planters is a legal entity separate and distinct from its
banking, thrift, and other subsidiaries. The principal sources of cash flow of
Union Planters, including cash flow to pay dividends to its shareholders, are
dividends from its subsidiary depository institutions. There are statutory and
regulatory limitations on the payment of dividends by these subsidiary
depository institutions to Union Planters, as well as by Union Planters and
LaPlace to their shareholders.
As to the payment of dividends, each of Union Planters' state-chartered
banking subsidiaries is subject to the laws and regulations of the state in
which the bank is located, and to the regulations of the bank's primary federal
regulator. Union Planters' subsidiaries that are thrift institutions are subject
to the OTS' capital distributions regulations, and those that are national banks
are subject to the regulations of the OCC.
If the federal banking regulator determines that a depository
institution under its jurisdiction is engaged in or is about to engage in an
unsafe or unsound practice, the regulator may require, after notice and hearing,
that the institution cease and desist from such practice. Depending on the
financial condition of the depository institution, an unsafe or unsound practice
could include the payment of dividends. The federal banking agencies have
indicated that paying dividends that deplete a depository institution's capital
base to an inadequate level would be an unsafe and unsound banking practice.
Under the Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA"), a depository institution may not pay any dividend if
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payment would cause it to become undercapitalized or if it already is
undercapitalized. See "--Prompt Corrective Action." The federal agencies have
also issued policy statements that provide that bank holding companies and
insured banks should generally only pay dividends out of current operating
earnings.
At September 30,1998, under dividend restrictions imposed under federal
and state laws, Union Planters' banking subsidiaries, without obtaining
governmental approvals, could declare aggregate dividends to Union Planters of
approximately $119 million.
The payment of dividends by Union Planters and its bank subsidiaries
may also be affected or limited by other factors, such as the requirement to
maintain adequate capital above regulatory guidelines.
CAPITAL ADEQUACY
Union Planters and its banking subsidiaries are required to comply with
the capital adequacy standards established by the Federal Reserve in the case of
Union Planters, and the appropriate federal banking regulator in the case of
each Union Planters bank. There are two basic measures of capital adequacy for
bank holding companies and the depository institutions that they own: a
risk-based measure and a leverage measure. All applicable capital standards must
be satisfied for a bank holding company to be considered in compliance.
The risk-based capital standards are designed to make regulatory
capital requirements more sensitive to differences in risk profile among
depository institutions and bank holding companies, to account for
off-balance-sheet exposure, and to minimize disincentives for holding liquid
assets. Assets and off-balance-sheet items are assigned to broad risk
categories, each with appropriate weights. The resulting capital ratios
represent capital as a percentage of total risk-weighted assets and
off-balance-sheet items.
The minimum guideline for the ratio ("Total Capital Ratio") of total
capital ("Total Capital") to risk-weighted assets (including certain
off-balance-sheet items, such as standby letters of credit) is 8.0%. At least
half of Total Capital must be composed of common equity, undivided profits,
minority interests in the equity accounts of consolidated subsidiaries,
noncumulative perpetual preferred stock, and a limited amount of cumulative
perpetual preferred stock, less goodwill and certain other intangible assets
("Tier 1 Capital"). The remainder may consist of subordinated debt, other
preferred stock, and a limited amount of loan loss reserves ("Tier 2 Capital").
At September 30, 1998, Union Planters' consolidated Total Capital Ratio and its
Tier 1 Capital Ratio (i.e., the ratio of Tier 1 Capital to risk-weighted assets)
were 17.07% and 13.49%, respectively.
In addition, the Federal Reserve has established minimum leverage
ratio guidelines for bank holding companies. These guidelines provide for a
minimum ratio (the "Leverage Ratio") of Tier 1 Capital to average assets, less
goodwill and certain other intangible assets, of 3.0% for bank holding companies
that meet certain specified criteria, including having the highest regulatory
rating. All other bank holding companies generally are required to maintain a
Leverage Ratio of at least 3.0%, plus an additional cushion of 100 to 200 basis
points. Union Planters' Leverage
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Ratio at September 30, 1998, was 9.29%. The guidelines also provide that bank
holding companies that experience internal growth or make acquisitions will be
expected to maintain strong capital positions substantially above the minimum
supervisory levels without significant reliance on intangible assets. The
Federal Reserve will consider a "tangible Tier 1 Capital Leverage Ratio"
(deducting all intangibles) and other indicia of capital strength in evaluating
proposals for expansion or new activities.
Each of the Union Planters' banks is subject to risk-based and leverage
capital requirements adopted by its federal banking regulator. Those
requirements are similar to those adopted by the Federal Reserve for bank
holding companies. Banking regulators may establish higher capital requirements
for a particular institution based upon the institution's risk profile
including, without limitation, exposure to interest rate risk. Each of Union
Planters' banks was in compliance with those minimum capital requirements as of
September 30, 1998. No federal banking agency has advised Union Planters or its
bank subsidiaries of any specific minimum capital ratio requirement applicable
to it.
A bank or thrift that fails to meet its capital guidelines may be
subject to a variety of enforcement remedies and certain other restrictions on
its business. Remedies could include the issuance of a capital directive, the
termination of deposit insurance by the FDIC, and a prohibition on the taking of
brokered deposits. As described below, substantial additional restrictions can
be imposed upon FDIC-insured depository institutions that fail to meet their
capital requirements. See "--Prompt Corrective Action."
The federal bank regulators continue to indicate their desire to raise
the capital requirements that apply to banks beyond their current levels. The
Federal Reserve, the FDIC, and the OCC have proposed an amendment to the
risk-based capital standards that would calculate the change in a bank's net
economic value attributable to increases and decreases in market interest rates
and would require banks with excessive interest rate risk exposure to hold
additional amounts of capital against such exposures. The OTS has already
included an interest-rate risk component in its risk-based capital guidelines
for savings associations that it regulates.
SUPPORT OF SUBSIDIARY INSTITUTIONS
Under Federal Reserve policy, Union Planters is expected to act as a
source of financial strength for, and commit its resources to support, each
Union Planters bank. This support may be required at times when Union Planters
may not be inclined to provide it. In addition, any capital loans by a bank
holding company to any of its bank subsidiaries are subordinate to the payment
of deposits and to certain other indebtedness. In the event of a bank holding
company's bankruptcy, any commitment by the bank holding company to a federal
bank regulatory agency to maintain the capital of a bank subsidiary will be
assumed by the bankruptcy trustee and entitled to a priority of payment.
A depository institution insured by the FDIC can be held liable for any
loss incurred by, or reasonably expected to be incurred by, the FDIC in
connection with the default of a commonly controlled FDIC-insured depository
institution or any assistance provided by the FDIC to any commonly controlled
FDIC-insured depository institution "in danger of default." "Default" is
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defined generally as the existence of certain conditions indicating that a
default is likely to occur in the absence of regulatory assistance. The FDIC's
claim for damages is superior to claims of shareholders of the insured
depository institution or its holding company, but is subordinate to claims of
depositors, secured creditors, and holders of subordinated debt (other than
affiliates) of the commonly controlled insured depository institution. Union
Planters' banks are subject to these cross-guarantee provisions. As a result,
any loss suffered by the FDIC in respect of any of Union Planters' banks would
likely result in assertion of the cross-guarantee provisions, the assessment of
estimated losses against Union Planters' banking or thrift affiliates, and a
potential loss of Union Planters' investments in its other banks.
PROMPT CORRECTIVE ACTION
FDICIA establishes a system of prompt corrective action to
resolve the problems of undercapitalized institutions. Under this system, which
became effective in December 1992, the federal banking regulators are required
to establish five capital categories (well capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized, and critically
undercapitalized). With respect to institutions in the three undercapitalized
categories, the regulators must take certain supervisory actions, and are
authorized to take other discretionary actions. The severity of the actions
will depend upon the capital category in which the institution is placed.
Generally, subject to a narrow exception, FDICIA requires the banking regulator
to appoint a receiver or conservator for an institution that is critically
undercapitalized. The federal banking agencies have specified the relevant
capital level for each category.
An institution is deemed to be well capitalized if it
- has a Total Capital Ratio of 10% or greater,
- has a Tier 1 Capital Ratio of 6.0% or greater,
- has a Leverage Ratio of 5.0% or greater, and
- is not subject to any written agreement, order,
capital directive, or prompt corrective action
directive issued by its federal banking agency
An institution is considered to be adequately capitalized if it
has
- a Total Capital Ratio of 8.0% or greater,
- a Tier 1 Capital Ratio of 4.0% or greater, and
- a Leverage Ratio of 4.0% or greater.
A depository institution is considered to be undercapitalized if
it has
- a Total Capital Ratio of less than 8.0%,
- a Tier 1 Capital Ratio of less than 4.0%, or
- a Leverage Ratio of less than 4.0%.
A depository institution is considered to be significantly
undercapitalized if it has
- a Total Capital Ratio of less than 6.0%,
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- a Tier 1 Capital Ratio of less than 3.0%, or
- a Leverage Ratio of less than 3.0%.
An institution that has a tangible equity capital to assets
ratio equal to or less than 2.0% is deemed to be critically undercapitalized.
"Tangible equity" includes core capital elements counted as Tier 1 Capital for
purposes of the risk-based capital standards, plus the amount of outstanding
cumulative perpetual preferred stock (including related surplus), minus all
intangible assets, with certain exceptions. A depository institution may be
deemed to be in a capitalization category that is lower than is indicated by
its actual capital position if it receives an unsatisfactory examination
rating.
An institution that is categorized as undercapitalized,
significantly undercapitalized, or critically undercapitalized is required to
submit an acceptable capital restoration plan to its appropriate federal
banking agency. In addition, a bank holding company must guarantee that a
subsidiary bank meet its capital restoration plan. This obligation to fund a
capital restoration plan is limited to the lesser of 5.0% of an
undercapitalized subsidiary's assets or the amount required to meet regulatory
capital requirements. Except in accordance with an accepted capital restoration
plan or with the approval of the FDIC, an undercapitalized institution is also
generally prohibited from increasing its average total assets, making
acquisitions, establishing any branches, or engaging in any new line of
business. In addition, its federal banking agency is given authority with
respect to any undercapitalized institution to take any of the actions it is
required to or may take with respect to a significantly undercapitalized
institution if it determines "that those actions are necessary to carry out the
purpose" of FDICIA.
For those institutions that are significantly undercapitalized
or undercapitalized and either fail to submit an acceptable capital restoration
plan or fail to implement an approved capital restoration plan, its federal
banking agency must require the institution to:
(1) sell enough shares, including voting shares, to
become adequately capitalized;
(2) merge with (or be sold to) another institution (or
holding company), but only if grounds exist for
appointing a conservator or receiver;
(3) restrict certain transactions with its banking
affiliates;
(4) restrict transactions with bank or non-bank
affiliates;
(5) restrict interest rates that the institution pays
on deposits to "prevailing rates" in the
institution's "region;"
(6) restrict asset growth or reduce total assets;
(7) alter, reduce, or terminate activities;
(8) hold a new election of directors;
(9) dismiss any director or senior executive officer
who held office for more than 180 days immediately
before the institution became undercapitalized,
provided that in requiring dismissal of a director
or senior officer, the agency must comply with
certain procedural requirements, including the
opportunity for an appeal in which
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the director or officer will have the burden of
proving his or her value to the institution;
(10) employ "qualified" senior executive officers;
(11) cease accepting deposits from correspondent
depository institutions;
(12) divest certain nondepository affiliates which pose
a danger to the institution; or
(13) be divested by a parent holding company. In
addition, without the prior approval of its federal
banking agency, a significantly undercapitalized
institution may not pay any bonus to any senior
executive officer or increase the rate of
compensation for such an officer.
DESCRIPTION OF UNION PLANTERS CAPITAL STOCK
Union Planters' charter currently authorizes the issuance of
300,000,000 shares of Union Planters common stock and 10,000,000 shares of
Union Planters Preferred Stock. On October 31, 1998, 136,063,035 shares of
Union Planters common stock were outstanding and approximately 11,819,841
shares were earmarked for issuance in connection with currently outstanding
Union Planters options, Union Planters' dividend reinvestment plan, two small
convertible debt issues, and with respect to conversion rights of currently
outstanding Union Planters Series E preferred stock. In addition, as of October
31, 1998, 968,865 shares of Union Planters' 8% Cumulative, Convertible Series E
preferred stock, were outstanding. On October 31, 1998, none of Union Planters'
750,000 authorized shares of Series A preferred stock were issued and
outstanding nor is management aware of the existence of circumstances from
which it may be inferred that such issuance is imminent. THE CAPITAL STOCK OF
UNION PLANTERS DOES NOT REPRESENT OR CONSTITUTE A DEPOSIT ACCOUNT AND IS NOT
INSURED BY THE FDIC, THE BANK INSURANCE FUND, THE SAVINGS ASSOCIATION INSURANCE
FUND, OR ANY GOVERNMENTAL AGENCY.
UNION PLANTERS COMMON STOCK
GENERAL. Shares of Union Planters common stock may be issued at
such time or times and for such consideration (not less than the par value
thereof) as the Union Planters board of directors may deem advisable, subject
to such limitations as may be set forth in the laws of the State of Tennessee,
Union Planters' charter or bylaws or the rules of the NYSE. Union Planters
Bank, N.A., a wholly owned, first-tier subsidiary of Union Planters, is the
Registrar, Transfer Agent and Dividend Disbursing Agent for shares of Union
Planters common stock. Its address is Union Planters Bank, National Association
Corporate Trust Department,1 South Church Street, Belleville, Illinois 62220.
DIVIDENDS. Subject to the preferential dividend rights
applicable to outstanding shares of the Union Planters preferred stock and
subject to applicable requirements, if any, with respect to the setting aside
of sums for purchase, retirement, or sinking funds, if any, for all outstanding
Union Planters preferred stock, the holders of the Union Planters common stock
are entitled to
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receive, to the extent permitted by law, only such dividends as may be declared
from time to time by the Union Planters board of directors.
Union Planters has the right to, and may from time to time, enter
into borrowing arrangements or issue other debt instruments, the provisions of
which may contain restrictions on payment of dividends and other distributions
on Union Planters common stock and Union Planters preferred stock. Union
Planters has no such arrangements in effect at the date hereof. In December
1996, Union Planters caused to be issued $200,000,000 in aggregate liquidation
amount of 8.20% Capital Trust Pass-through Securities ("Union Planters Capital
Securities") through a Delaware trust subsidiary. Pursuant to the terms of the
governing instruments, Union Planters would be prohibited from paying dividends
on any Union Planters common stock or Union Planters preferred stock if all
quarterly payments on the Union Planters Capital Securities had not been paid
in full. The Union Planters Capital Securities mature in 2026 and may be
redeemed under certain circumstances prior to maturity.
LIQUIDATION RIGHTS. In the event of the voluntary or involuntary
liquidation, dissolution, distribution of assets, or winding-up of Union
Planters, after distribution in full of the preferential amounts required to be
distributed to the holders of Union Planters preferred stock, holders of Union
Planters common stock will be entitled to receive all of the remaining assets
of Union Planters, of whatever kind, available for distribution to shareholders
ratably in proportion to the number of shares of Union Planters common stock
held. The Union Planters board of directors may distribute in kind to the
holders of Union Planters common stock such remaining assets of Union Planters
or may sell, transfer, or otherwise dispose of all or any part of such
remaining assets to any other person or entity and receive payment therefor in
cash, stock, or obligations of such other person or entity, and may sell all or
any part of the consideration so received and distribute any balance thereof in
kind to holders of Union Planters common stock. Neither the merger or
consolidation of Union Planters into or with any other corporation, nor the
merger of any other corporation into Union Planters, nor any purchase or
redemption of shares of stock of Union Planters of any class, shall be deemed
to be a dissolution, liquidation, or winding-up of Union Planters for purposes
of this paragraph.
Because Union Planters is a holding company, its right and the
rights of its creditors and shareholders, including the holders of Union
Planters preferred stock and Union Planters common stock, to participate in the
distribution of assets of a subsidiary on its liquidation or recapitalization
may be subject to prior claims of such subsidiary's creditors except to the
extent that Union Planters itself may be a creditor having recognized claims
against such subsidiary.
For a further description of Union Planters common stock, see
"EFFECT OF THE MERGER ON RIGHTS OF SHAREHOLDERS."
UNION PLANTERS PREFERRED STOCK
SERIES A PREFERRED STOCK. Union Planters' charter provides for
the issuance of up to 750,000 shares (subject to adjustment by action of the
Union Planters board of directors) of Series
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A preferred stock under certain circumstances involving a potential change in
control of Union Planters. None of such shares are outstanding and management
is aware of no facts suggesting that issuance of such shares may be imminent.
The Series A preferred stock is described in more detail in Union Planters'
registration statement on Form 8-A, dated January 19, 1989, and filed February
1, 1989 (SEC File No. 0-6919) which is incorporated by reference herein.
SERIES E PREFERRED STOCK. As of October 31, 1998, 968,865 shares
of Series E preferred stock were outstanding. All shares of Series E preferred
stock have a stated value of $25.00 per share. Dividends are payable at the
rate of $0.50 per share per quarter and are cumulative. The Series E preferred
stock is convertible at the rate of 1.25 shares of Union Planters common stock
for each share of Series E preferred stock. The Series E preferred stock is not
subject to any sinking fund provisions and has no preemptive rights. Such
shares have a liquidation preference of $25.00 per share plus unpaid dividends
accrued thereon and, at Union Planters' option and with the prior approval of
the Federal Reserve, are subject to redemption by Union Planters at any time at
a redemption price of $25.00 per share plus any unpaid dividends accrued
thereon. Holders of Series E preferred stock have no voting rights except as
required by law and in certain other limited circumstances. See "CERTAIN
REGULATORY CONSIDERATIONS -- Payment of Dividends."
OTHER MATTERS
As of the date of this proxy statement-prospectus, LaPlace 's
board of directors knows of no matters that will be presented for consideration
at the special meeting other than as described in this proxy
statement-prospectus. However, if any other matters properly come before the
special meeting or any adjournment or postponement of the special meeting and
are voted upon, the enclosed proxy will be deemed to confer discretionary
authority to the individuals named as proxies to vote the shares represented by
such proxy as to any such matters.
SHAREHOLDER PROPOSALS
Union Planters expects to hold its next annual meeting of
shareholders in April 1999, after the merger. Under SEC rules, proposals of
Union Planters shareholders intended to be presented at that meeting must be
received by Union Planters at its principal executive offices no later than
November 13, 1998.
EXPERTS
The consolidated financial statements of Union Planters and
subsidiaries incorporated in this proxy statement-prospectus by reference to
Exhibit 99.1 to Union Planters' September 30, 1998 Quarterly Report on Form
10-Q, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
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The audited consolidated financial statements of LaPlace and its
subsidiary included in this proxy statement-prospectus have been audited by
Roth Murphy Sanford LLP, independent accountants, as indicated in their report
with respect thereto, and have been included herein in reliance upon the
authority of such firm as experts in accounting and auditing.
OPINIONS
The legality of the shares of Union Planters common stock to be
issued in the merger will be passed upon by E. James House, Jr., Secretary and
Manager of the Legal Department of Union Planters. E. James House, Jr. is an
officer of, and receives compensation from, Union Planters.
Certain tax consequences of the transaction will be passed upon
by Wyatt, Tarrant & Combs for Union Planters and by Arter & Hadden LLP for
LaPlace.
WHERE YOU CAN FIND MORE INFORMATION
Union Planters files annual, quarterly and current reports, proxy
and information statements, and other information with the SEC (the "SEC")
under the Securities Exchange Act of 1934. You may read and copy this
information at the Public Reference Section at the SEC at 450 Fifth Street,
N.W., Judiciary Plaza, Washington, D.C. 20549. You may obtain information on
the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy
and information statements, and other information about issuers that file
electronically with the SEC. The address of that site is http://www.sec.gov. In
addition, you can read and copy this information at the regional offices of the
SEC at 7 World Trade Center, 13th Floor, New York, New York 10048 and Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. You can
also inspect reports, proxy and information statements, and other information
about Union Planters at the offices of the NYSE, 20 Broad Street, New York, New
York 10005.
Union Planters filed a registration statement with the SEC under
the Securities Act, relating to the Union Planters common stock offered to the
LaPlace shareholders. The registration statement contains additional
information about Union Planters and the Union Planters common stock. The SEC
allows Union Planters to omit certain information included in the registration
statement from this proxy statement-prospectus. The registration statement may
be inspected and copied at the SEC's public reference facilities described
above.
This proxy statement-prospectus incorporates important business
and financial information about Union Planters that is not included in or
delivered with this proxy statement-prospectus. The following documents filed
with the SEC by Union Planters are incorporated by reference in this proxy
statement-prospectus (SEC File No. 1-10160):
(1) Union Planters' Annual Report on Form 10-K for the
year ended December 31, 1997 (provided that any
information included or incorporated by reference
in response to Items 402(a)(8), (i), (k), or (l) of
Regulation S-K of the SEC shall not
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be deemed to be incorporated herein and is not part
of the Registration Statement);
(2) Union Planters' Quarterly Report on Form 10-Q for
the three months ended March 31, 1998 and the
amendment thereto filed on Form 10-Q/A;
(3) Union Planters' Quarterly Report on Form 10-Q for
the six months ended June 30, 1998;
(4) Union Planters' Quarterly Report on Form 10-Q for
the nine months ended September 30, 1998 (which
includes restated historical consolidated financial
statements of Union Planters and related
management's discussion and analysis of financial
condition and results of operations of Union
Planters, giving effect to the significant
acquisitions Union Planters has consummated since
December 31, 1997);
(5) Union Planters' Current Reports on Form 8-K dated
January 15, 1998, February 22, 1998, April 16,
1998, July 10, 1998 July 16, 1998, September 1,
1998, September 8, 1998, October 15, 1998, and
October 16, 1998;
(6) The description of the current management and board
of directors of Union Planters contained in the
proxy statement of Union Planters filed pursuant to
Section 14(a) of the Exchange Act for UPC's Annual
Meeting of Shareholders held on April 16, 1998;
(7) Union Planters' Registration Statement on Form 8-A
dated January 19, 1989, filed on February 1, 1989;
(SEC File No. 0-6919) in connection with Union
Planters' designation and authorization of its
Series A Preferred Stock; and
(8) The description of the Union Planters common stock
contained in Union Planters' registration statement
under Section 12(b) of the Exchange Act and any
amendment or report filed for the purpose of
updating such description.
Union Planters also incorporates by reference additional
documents filed by it pursuant to Sections 13(a), 13(c), 14, or 15(d) of the
Exchange Act after the date of this proxy statement-prospectus and prior to
final adjournment of the special meeting. Any statement contained in this proxy
statement-prospectus or in a document incorporated or deemed to be incorporated
by reference in this proxy statement-prospectus shall be deemed to be modified
or superseded to the extent that a statement contained herein or in any
subsequently filed document which also is, or is deemed to be, incorporated by
reference herein modifies or supersedes such statement. In particular,
reference is made to th Union Planters' September 30, 1998 Quarterly Report on
Form 10-Q, which includes restated consolidated financial statements and ther
elated management's discussion and analysis of financial condition and results
of operations of Union Planters, giving effect to the acquisitions Union
Planters has consummated since December 31, 1997. See "BUSINESS OF UNION
PLANTERS-Recent Developments."
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You may obtain copies of the information incorporated by
reference in this proxy statement-prospectus upon written or oral request. The
inside front cover of this proxy statement-prospectus (page ii) contains
information about how such requests should be made.
All information contained in this proxy statement-prospectus or
incorporated herein by reference with respect to Union Planters was supplied by
Union Planters, and all information contained in this proxy
statement-prospectus or incorporated herein by reference with respect to
LaPlace was supplied by LaPlace.
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Appendix A
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
UNION PLANTERS CORPORATION,
UNION PLANTERS HOLDING CORPORATION
AND
LaPLACE BANCSHARES, INC.
DATED AS OF JULY 1, 1998
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ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER.............................. 1
1.1 Merger...................................................................... 1
1.2 Time and Place of Closing................................................... 1
1.3 Effective Time.............................................................. 1
1.4 Restructure of Transaction.................................................. 2
ARTICLE 2
TERMS OF MERGER...................................... 2
2.1 Charter..................................................................... 2
2.2 Bylaws...................................................................... 2
2.3 Directors and Officers...................................................... 2
ARTICLE 3
MANNER OF CONVERTING SHARES................................ 2
3.1 Conversion of Shares........................................................ 2
3.2 Anti-Dilution Provisions.................................................... 3
3.3 Shares Held by Subject Company or Parent.................................... 3
3.4 Fractional Shares........................................................... 3
ARTICLE 4
EXCHANGE OF SHARES..................................... 3
4.1 Exchange Procedures......................................................... 3
4.2 Rights of Former Subject Company Shareholders............................... 4
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SUBJECT COMPANY..................... 4
5.1 Organization, Standing, and Power........................................... 5
5.2 Authority; No Breach by Agreement........................................... 5
5.3 Capital Stock............................................................... 5
5.4 Subject Company Subsidiaries................................................ 6
5.5 Financial Statements........................................................ 6
5.6 Absence of Undisclosed Liabilities.......................................... 7
5.7 Absence of Certain Changes or Events........................................ 7
5.8 Tax Matters................................................................. 7
5.9 Assets...................................................................... 8
5.10 Intellectual Property....................................................... 9
5.11 Environmental Matters....................................................... 9
5.12 Compliance With Laws........................................................ 10
5.13 Labor Relations............................................................. 10
5.14 Employee Benefit Plans...................................................... 10
5.15 Material Contracts.......................................................... 11
5.16 Legal Proceedings........................................................... 12
5.17 Reports..................................................................... 12
5.18 Statements True and Correct................................................. 12
5.19 Accounting, Tax, and Regulatory Matters..................................... 13
5.20 Charter Provisions; Takeover Laws........................................... 13
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ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PARENT.......................... 13
6.1 Organization, Standing and Power............................................ 13
6.2 Authority; No Breach by Agreement........................................... 13
6.3 Capital Stock............................................................... 14
6.4 Parent Subsidiaries......................................................... 14
6.5 Financial Statements........................................................ 15
6.6 Absence of Undisclosed Liabilities.......................................... 15
6.7 Absence of Certain Changes or Events........................................ 15
6.8 Compliance With Laws........................................................ 16
6.9 Legal Proceedings........................................................... 16
6.10 Reports..................................................................... 16
6.11 Statements True and Correct................................................. 16
6.12 Accounting, Tax, and Regulatory Matters..................................... 17
6.13 Material Contracts.......................................................... 17
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION.......................... 17
7.1 Affirmative Covenants of Subject Company.................................... 17
7.2 Negative Covenants of Subject Company....................................... 17
7.3 Covenants of Parent......................................................... 19
7.4 Adverse Changes in Condition................................................ 19
7.5 Reports..................................................................... 19
ARTICLE 8
ADDITIONAL AGREEMENTS................................... 20
8.1 Registration Statement; Proxy Statement; Shareholder Approval............... 20
8.2 Exchange Listing............................................................ 20
8.3 Applications................................................................ 20
8.4 Filings With State Offices.................................................. 21
8.5 Agreement as to Efforts to Consummate....................................... 21
8.6 Investigation and Confidentiality........................................... 21
8.7 Press Releases.............................................................. 21
8.8 Certain Actions............................................................. 21
8.9 Accounting and Tax Treatment................................................ 23
8.10 Agreement of Affiliates..................................................... 23
8.11 Employee Benefits and Contracts............................................. 23
8.12 Indemnification............................................................. 24
8.13 Filing of Reports by Parent................................................. 25
8.14 Voting Agreement........................................................... 25
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE..................... 25
9.1 Conditions to Obligations of Each Party..................................... 25
9.2 Conditions to Obligations of Parent......................................... 26
9.3 Conditions to Obligations of Subject Company................................ 28
ARTICLE 10
TERMINATION........................................ 29
10.1 Termination................................................................. 29
10.2 Effect of Termination....................................................... 31
10.3 Non-Survival of Representations and Covenants............................... 31
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ARTICLE 11
MISCELLANEOUS....................................... 31
11.1 Definitions................................................................. 31
11.2 Expenses.................................................................... 38
11.3 Brokers and Finders......................................................... 38
11.4 Entire Agreement............................................................ 38
11.5 Amendments.................................................................. 38
11.6 Waivers..................................................................... 38
11.7 Assignment.................................................................. 39
11.8 Notices..................................................................... 39
11.9 Governing Law............................................................... 40
11.10 Counterparts................................................................ 40
11.11 Captions.................................................................... 40
11.12 Interpretations............................................................. 40
11.13 Enforcement of Agreement.................................................... 40
11.14 Severability................................................................ 40
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of July 1, 1998, by and between LaPlace Bancshares, Inc., a
Louisiana corporation having its principal office located in LaPlace, Louisiana
("Subject Company"), Union Planters Holding Corporation, a Tennessee corporation
having its principal office located in Memphis, Tennessee ("Merger Subsidiary"),
and joined in by Union Planters Corporation, a Tennessee corporation having its
principal office located in Memphis, Tennessee ("Parent").
PREAMBLE
The Board of Directors of each of Subject Company, Merger Subsidiary
and Parent is of the opinion that the transactions described herein are in the
best interests of such Party and its respective shareholders. This Agreement and
the Plan of Merger attached hereto at Exhibit 1 and incorporated herein by
reference provide for the acquisition of Subject Company by Parent pursuant to
the merger of Subject Company with and into Merger Subsidiary. At the Effective
Time, the outstanding shares of the common stock of Subject Company shall be
converted into the right to receive shares of the common stock of Parent (except
as provided in Sections 3.1, 3.3 and 3.4 of this Agreement). As a result,
shareholders of Subject Company shall become shareholders of Parent, and
Surviving Corporation shall continue to conduct its business and operations as a
wholly-owned subsidiary of Parent. The transactions described in this Agreement
are subject to the approvals of the shareholders of Subject Company, the FRB,
the LOFI, and other applicable federal and state regulatory authorities, and the
satisfaction of certain other conditions described in this Agreement. It is the
intention of the parties to this Agreement that (i) for federal income tax
purposes this Agreement shall constitute a plan of merger and the Merger shall
qualify as a "reorganization" within the meaning of Section 368(a) of the
Internal Revenue Code and (ii) for accounting purposes the Merger shall qualify
for treatment as a pooling-of-interests.
Certain terms used in this Agreement are defined in Section 11.1 of
this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, the
parties agree as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 Merger. Subject to the terms and conditions of this Agreement and
the Plan of Merger, at the Effective Time, Subject Company shall be merged with
and into Merger Subsidiary in accordance with the provisions of Section
48-21-109 of the TBCA and Section 112 of the LBCL, and with the effects provided
in Section 48-21-108 of the TBCA and Section 115 of the LBCL (the "Merger").
Merger Subsidiary shall be the Surviving Corporation resulting from the Merger
and shall continue to be governed by the Laws of the State of Tennessee. The
Merger shall be consummated pursuant to the terms of this Agreement and the Plan
of Merger, which have been approved and adopted by the respective Boards of
Directors of Subject Company, Parent and Merger Subsidiary.
1.2 Time and Place of Closing. The Closing will take place at 9:00 A.M.
on the date on which the Effective Time is to occur (or the immediately
preceding day if the Effective Time is to be earlier than 9:00 A.M.), or at such
other time as the Parties, acting through their chief executive officers, may
mutually agree. The Closing shall be held at such place as may be mutually
agreed upon by the Parties.
1.3 Effective Time. The Merger and other transactions contemplated by
this Agreement shall become effective at the time the Articles of Merger
reflecting the Merger shall become effective with the Secretary of State of the
State of Tennessee and the Secretary of State of the State of Louisiana (the
"Effective Time"). Subject to the terms and conditions hereof, unless otherwise
mutually agreed upon in writing by the chief executive officers of each Party,
the Parties shall use their reasonable efforts to cause the Effective Time to
occur as soon as is reasonably
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practicable, but in no event later than 30 days following the last to occur of
(i) the effective date of the last required Consent of any Regulatory Authority
having authority over and approving or exempting the Merger (taking into account
any requisite waiting period in respect thereof), (ii) the date on which the
shareholders of Subject Company approve this Agreement, and (iii) the date on
which all other conditions precedent (other than those conditions which relate
to actions to be taken at the Closing) to each Party's obligations hereunder
shall have been satisfied or waived (to the extent waivable by such Party).
1.4 Restructure of Transaction. Parent shall, in its reasonable
discretion, have the unilateral right to revise the structure of the Merger
contemplated by this Agreement in order to achieve tax benefits or for any other
reason which Parent may deem advisable; provided, however, that Parent shall not
have the right, without the approval of the Board of Directors of Subject
Company and, if required by the LBCL, the holders of the Subject Company Common
Stock, to make any revision to the structure of the Merger which: (i) changes
the amount of the consideration which the holders of shares of Subject Company
Common Stock are entitled to receive (determined in the manner provided in
Section 3.1 of this Agreement); (ii) changes the intended tax free effects of
the Merger to Parent, Subject Company or the holders of shares of Subject
Company Common Stock; (iii) would permit Parent to pay the consideration other
than by delivery of Parent Common Stock registered with the SEC (in the manner
described in Section 4.1 of this Agreement); (iv) would be adverse to the
interests of Subject Company or adverse to the holders of shares of Subject
Company Common Stock; (v) would impede or delay consummation of the Merger by
more than 30 days; or (vi) would require a vote of Parent's shareholders under
relevant state Law. Parent may exercise this right of revision by giving written
notice to Subject Company in the manner provided in Section 11.8 of this
Agreement which notice shall be in the form of an amendment to this Agreement
and the Plan of Merger or in the form of an Amended and Restated Agreement and
Plan of Merger.
ARTICLE 2
TERMS OF MERGER
2.1 Charter. The Charter of Merger Subsidiary in effect immediately
prior to the Effective Time shall be the Charter of the Surviving Corporation
until otherwise amended or repealed.
2.2 Bylaws. The Bylaws of Merger Subsidiary in effect immediately prior
to the Effective Time shall be the Bylaws of the Surviving Corporation until
otherwise amended or repealed.
2.3 Directors and Officers. The directors of Merger Subsidiary in
office immediately prior to the Effective Time, together with such additional
persons as may thereafter be elected, shall serve as the directors of the
Surviving Corporation from and after the Effective Time in accordance with the
Bylaws of the Surviving Corporation. The officers of Merger Subsidiary in office
immediately prior to the Effective Time, together with such additional persons
as may thereafter be elected, shall serve as the officers of the Surviving
Corporation from the Effective Time in accordance with the Bylaws of the
Surviving Corporation.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 Conversion of Shares. Subject to the provisions of this Article 3
(and Article 3 of the Plan of Merger), at the Effective Time, by virtue of the
Merger and without any action on the part of Parent, Merger Subsidiary, Subject
Company, or the shareholders of any of the foregoing, the shares of the
constituent corporations shall be converted as follows:
(a) Each share of Parent Capital Stock, including any
associated Parent Rights, issued and outstanding immediately prior to the
Effective Time shall remain issued and outstanding from and after the Effective
Time.
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(b) Each share of Merger Subsidiary Common Stock issued and
outstanding immediately prior to the Effective Time shall remain issued and
outstanding and shall represent one share of common stock of the Surviving
Corporation from and after the Effective Time.
(c) Except for Dissenting Shares, each share of Subject
Company Common Stock, (excluding shares held by Subject Company, any Subject
Company Subsidiary, Parent or any Parent Subsidiary, in each case other than in
a fiduciary capacity or as a result of debts previously contracted) issued and
outstanding at the Effective Time shall cease to be outstanding and shall be
converted into and exchanged for the right to receive 2.83 shares of Parent
Common Stock (subject to possible adjustment as set forth in Section 3.2 of this
Agreement, the "Exchange Ratio"). [exchange ratio to be determined by dividing
the average closing price for UPC Common Stock for the 20 trading days
immediately preceding the date this merger agreement is executed into $159.88]
Pursuant to the Parent Rights Agreement, each share of Parent Common Stock
issued in connection with the Merger upon conversion of Subject Company Common
Stock shall be accompanied by a Parent Right.
(d) Dissenting Shares shall not be converted pursuant to
Section 3.1(c) in the Merger but, at and after the Effective Time, shall
represent only the right to receive payment in accordance with the applicable
provisions of Section 131 of the LBCL. If a holder of Dissenting Shares becomes
ineligible for payment under Section 131 of the LBCL, then such holder's
Dissenting Shares shall cease to be Dissenting Shares and shall be converted in
the manner set forth in Section 3.1(c) effective as of the Effective Time.
3.2 Anti-Dilution Provisions. In the event Parent changes the number of
shares of Parent Common Stock issued and outstanding after the date of this
Agreement and prior to the Effective Time as a result of a stock split, stock
dividend, subdivision, reclassification, conversion or similar recapitalization
with respect to such stock and the record date therefor (in the case of a stock
dividend) or the effective date thereof (in the case of a stock split,
subdivision, reclassification, conversion or similar recapitalization for which
a record date is not established) shall be prior to the Effective Time, the
Exchange Ratio shall be proportionately adjusted.
3.3 Shares Held by Subject Company or Parent. Each of the shares of
Subject Company Common Stock held by Subject Company, any Subject Company
Subsidiary, Parent or any Parent Subsidiary, in each case other than in a
fiduciary capacity or as a result of debts previously contracted, shall be
canceled and retired at the Effective Time and no consideration shall be issued
in exchange therefor.
3.4 Fractional Shares. Notwithstanding any other provision of this
Agreement, each holder of shares of Subject Company Common Stock exchanged
pursuant to the Merger who would otherwise have been entitled to receive a
fractional share of Parent Common Stock (after taking into account all
certificates delivered by such holder which, immediately prior to the Effective
Time, represented shares of Subject Company Common Stock (each a "Subject
Company Certificate")) shall receive, in lieu thereof, cash (without interest)
in an amount equal to such fractional share of Parent Common Stock multiplied by
the closing price of Parent Common Stock on the NYSE- Composite Transactions
List (as reported by The Wall Street Journal or, if not reported thereby, any
other authoritative source reasonably selected by Parent) on the last trading
day preceding the Effective Time. No such holder will be entitled to dividends,
voting rights, or any other rights as a shareholder in respect of any fractional
shares.
ARTICLE 4
EXCHANGE OF SHARES
4.1 Exchange Procedures. As soon as reasonably practicable, after the
Effective Time, Parent and Subject Company shall cause the exchange agent
selected by Parent (the "Exchange Agent") to mail to each holder of record of a
Subject Company Certificate appropriate transmittal materials (which shall
specify that delivery shall be effected, and risk of loss and title to the
Subject Company Certificates shall pass, only upon proper delivery of such
Subject Company Certificates to the Exchange Agent). Subject Company shall have
the right to review and approve the transmittal materials. The Exchange Agent
may establish reasonable and customary rules and procedures
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in connection with its duties, provided such rules and procedures do not have
the effect of unreasonably delaying or limiting or eliminating the obligation of
Parent and/or Merger Subsidiary to deliver the consideration contemplated by
Article 3 of this Agreement. After the Effective Time, each holder of shares of
Subject Company Common Stock (other than Dissenting Shares or shares to be
canceled pursuant to Section 3.3 of this Agreement) issued and outstanding at
the Effective Time shall surrender the certificate or certificates representing
such shares to the Exchange Agent and shall promptly upon surrender thereof
receive in exchange therefor the consideration provided in Section 3.1(c) of
this Agreement, together with all undelivered dividends and other distributions,
if any, in respect of such shares (without interest thereon) pursuant to Section
4.2 of this Agreement. To the extent required by Section 3.4 of this Agreement,
each holder of shares of Subject Company Common Stock issued and outstanding at
the Effective Time also shall receive, upon surrender of the certificate or
certificates representing such shares, cash in lieu of any fractional share of
Parent Common Stock to which such holder may be otherwise entitled (without
interest). Parent shall not be obligated to deliver the consideration to which
any former holder of Subject Company Common Stock is entitled as a result of the
Merger until such holder surrenders such holder's Subject Company Certificates
for exchange as provided in this Section 4.1 or in Section 4.2 of this
Agreement. The Subject Company Certificates so surrendered shall be duly
endorsed as the Exchange Agent may reasonably require. Any other provision of
this Agreement notwithstanding, neither Parent, Merger Subsidiary nor the
Exchange Agent shall be liable to a holder of Subject Company Common Stock for
any amounts paid or property delivered in good faith to a public official
pursuant to any applicable abandoned property Law.
4.2 Rights of Former Subject Company Shareholders. At the Effective
Time, the stock transfer books of Subject Company shall be closed as to holders
of Subject Company Common Stock immediately prior to the Effective Time and no
transfer of Subject Company Common Stock by any such holder shall thereafter be
made or recognized. Until surrendered for exchange in accordance with the
provisions of Section 4.1 of this Agreement, each certificate theretofore
representing shares of Subject Company Common Stock (other than Dissenting
Shares or shares to be canceled pursuant to Section 3.3 of this Agreement) shall
from and after the Effective Time represent for all purposes only the right to
receive the consideration provided in Sections 3.1(c) and 3.4 of this Agreement
in exchange therefor, subject, however, to the Surviving Corporation's
obligations to pay any dividends or make any other distributions with a record
date prior to the Effective Time which have been declared or made by Subject
Company in respect of such shares of Subject Company Common Stock in accordance
with the terms of this Agreement and which remain unpaid at the Effective Time.
In addition, whenever a dividend or other distribution is declared by Parent on
the Parent Common Stock, the record date for which is at or after the Effective
Time, the declaration shall include dividends or other distributions on all
shares of Parent Common Stock issuable pursuant to this Agreement, but no
dividend or other distribution payable to the holders of record of Parent Common
Stock as of any time subsequent to the Effective Time shall be delivered to the
holder of any certificate representing shares of Subject Company Common Stock
issued and outstanding at the Effective Time until such holder surrenders such
certificate for exchange as provided in Section 4.1 of this Agreement. However,
upon surrender of such Subject Company Common Stock certificate, both a Parent
Common Stock certificate and any undelivered dividends and other distributions
payable hereunder (without interest) shall be delivered and paid with respect to
each share represented by such certificate. In the event any Subject Company
Common Stock certificate shall have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the person claiming such certificate to
be lost, stolen or destroyed and, if reasonably required by Parent, the posting
by such person of a bond in such amount as Parent may reasonably direct as
indemnity against any claim that may be made against it with respect to such
certificate, the Exchange Agent shall issue in exchange for such lost, stolen or
destroyed certificate the shares of Parent Common Stock and cash in lieu of
fractional shares and dividends and other distributions deliverable in respect
thereof pursuant to this Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SUBJECT COMPANY
Subject Company hereby represents and warrants to Parent, except as set
forth in the Subject Company Disclosure Memorandum, as follows:
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5.1 Organization, Standing, and Power. Subject Company is a corporation
duly organized, validly existing, and in good standing under the Laws of the
State of Louisiana, and has the corporate power and authority to carry on its
business as now conducted and to own, lease, and operate its Assets. Subject
Company is duly qualified or licensed to transact business as a foreign
corporation in good standing in each of the States of the United States and in
each foreign jurisdiction where the character of its Assets or the nature or
conduct of its business requires it to be so qualified or licensed, except for
such jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Subject Company.
5.2 Authority; No Breach by Agreement. (a) Subject Company has the
corporate power and authority necessary to execute, deliver, and perform its
obligations under this Agreement and the Plan of Merger and to consummate the
transactions contemplated hereby and thereby. The execution, delivery, and
performance of this Agreement and the Plan of Merger, and the consummation of
the transactions contemplated herein and therein, including the Merger, have
been duly and validly authorized by all necessary corporate action in respect
thereof on the part of Subject Company, subject to the approval of this
Agreement and the Plan of Merger by the holders of the number of outstanding
shares of Subject Company Common Stock required by the LBCL, which is the only
shareholder vote required for approval of this Agreement and consummation of the
Merger by Subject Company. Subject to such requisite shareholder approval, the
receipt of all Consents required from Regulatory Authorities and the expiration
of all mandatory waiting periods, and assuming due authorization, execution and
delivery of this Agreement and the Plan of Merger by each of Parent and Merger
Subsidiary, this Agreement and the Plan of Merger each represents a legal,
valid, and binding obligation of Subject Company, enforceable against Subject
Company in accordance with its terms (except in all cases as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
receivership, conservatorship, moratorium, or similar Laws (including provisions
of the U.S., Louisiana and Tennessee Constitutions) affecting the enforcement of
creditors' rights generally and except that the availability of equitable
remedies is subject to the discretion of the court before which any proceeding
may be brought).
(b) Neither the execution and delivery of this Agreement or
the Plan of Merger by Subject Company, nor the consummation by Subject Company,
of the transactions contemplated hereby, nor compliance by Subject Company with
any of the provisions hereof or thereof, will (i) conflict with or result in a
breach of any provision of the Articles of Incorporation or Bylaws of Subject
Company, or (ii) constitute or result in a Default under, or require any Consent
(excluding Consents required by Law or Order) pursuant to, or result in the
creation of any Lien on any material Asset of Subject Company or any Subject
Company Subsidiary under, any Contract or Permit of Subject Company or any
Subject Company Subsidiary, except for such Defaults and Liens which are not,
and for such Consents which, if not obtained, are not, reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Subject
Company, or (iii) subject to receipt of the requisite Consents referred to in
Section 9.1(b) of this Agreement, violate any Law or Order applicable to Subject
Company, its Subsidiaries or any of their respective material Assets.
(c) Other than in connection or compliance with the provisions
of the Securities Laws, applicable state corporate and securities Laws, and
other than Consents required from the FRB and from the LOFI, and other than
Consents, filings, or notifications which, if not obtained or made, are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Subject Company, no notice to, filing with, or Consent of, any public
body or authority is necessary for the consummation by Subject Company of the
Merger and the other transactions contemplated in this Agreement.
5.3 Capital Stock. (a) The authorized capital stock of Subject Company
consists solely of: (i) 1,000,000 shares of Subject Company Common Stock, of
which not more than 145,732 shares of Subject Company Common Stock are
outstanding as of the date of this Agreement (exclusive of treasury shares) and
not more than 145,732 shares of Subject Company Common Stock will be issued and
outstanding at the Effective Time, and (ii) 1,000,000 shares of Subject Company
Preferred Stock, of which no shares are outstanding as of the date of this
Agreement and no shares of Subject Company Preferred Stock will be issued and
outstanding at the Effective Time.
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All of the issued and outstanding shares of Subject Company Common Stock are
duly and validly issued and outstanding and are fully paid and nonassessable
under the LBCL and Subject Company's Articles of Incorporation and Bylaws. None
of the outstanding shares of Subject Company Common Stock has been issued in
violation of any preemptive rights of the current or past shareholders of
Subject Company.
(b) Other than as set forth in Section 5.3(a) of this
Agreement, there are no shares of capital stock or other equity securities of
Subject Company outstanding and no outstanding Rights relating to the capital
stock of Subject Company.
5.4 Subject Company Subsidiaries. Subject Company has disclosed in
Section 5.4 of the Subject Company Disclosure Memorandum all of the Subject
Company Subsidiaries that are corporations (identifying its jurisdiction of
incorporation) and all of the Subject Company Subsidiaries that are general or
limited partnerships or other non-corporate entities (identifying the Law under
which such entity is organized, and the amount and nature of the ownership
interest therein of Subject Company Subsidiaries). Except as set forth in
Section 5.4 of the Subject Company Disclosure Memorandum, Subject Company or one
of its wholly-owned Subsidiaries owns all of the issued and outstanding shares
of capital stock (or other equity interests) of each of the Subject Company
Subsidiaries. Except as set forth in Section 5.4 of the Subject Company
Disclosure Memorandum, no capital stock (or other equity interest) of any
Subject Company Subsidiary is or may become required to be issued (other than to
another Subject Company Subsidiary) by reason of any Rights, and there are no
Contracts by which Subject Company or any of the Subject Company Subsidiaries is
bound to issue (other than to Subject Company or another of the Subject Company
Subsidiaries) additional shares of its capital stock (or other equity interests)
or Rights or by which Subject Company or any of the Subject Company Subsidiaries
is or may be bound to transfer any shares of the capital stock (or other equity
interests) of any of Subject Company or any of the Subject Company Subsidiaries
(other than to Subject Company or any of the Subject Company Subsidiaries).
Except as set forth in Section 5.4 of the Subject Company Disclosure Memorandum,
there are no Contracts relating to the rights of Subject Company or any Subject
Company Subsidiary to vote or to dispose of any shares of the capital stock (or
other equity interests) of Subject Company or any Subject Company Subsidiary.
All of the shares of capital stock (or other equity interests) of each Subject
Company Subsidiary held by Subject Company or any Subject Company Subsidiary are
fully paid and are owned by Subject Company or a Subject Company Subsidiary free
and clear of any Liens. Each Subject Company Subsidiary is either a bank or a
corporation, and each such Subsidiary is duly organized, validly existing, and
(as to corporations) in good standing under the Laws of the jurisdiction in
which it is incorporated or organized, and has the corporate power and authority
necessary for it to own, lease, and operate its Assets and to carry on its
business as now conducted. Each Subject Company Subsidiary is duly qualified or
licensed to transact business as a foreign corporation in good standing in each
of the States of the United States and in each foreign jurisdiction where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Subject Company. The only Subject
Company Subsidiary that is a depository institution is Bank of LaPlace of St.
John the Baptist Parish, Louisiana (the "Bank"). The Bank is an "insured
depository institution" as defined in Section 3(c)(2) of the Federal Deposit
Insurance Act and applicable regulations thereunder. The deposits in the Bank
are insured by the Federal Deposit Insurance Corporation to the maximum extent
permitted by the Federal Deposit Insurance Act, as amended, and applicable
regulations thereunder. The Bank is a member of the Bank Insurance Fund. The
minute book and other organizational documents (and all amendments thereto) for
Subject Company and each Subject Company Subsidiary that is a "Significant
Subsidiary" (as such term is defined in Rule 1.02(w) of Regulation S-X
promulgated under the Securities Laws) have been or will be made available to
Parent for its review, and are true and complete (except as set forth in Section
5.4 of the Subject Company Disclosure Memorandum) in all material respects as in
effect as of the date of this Agreement.
5.5 Financial Statements. Subject Company has delivered to Parent (or
will deliver, when available, with respect to periods ended after the date of
this Agreement) true, correct and complete copies of (i) the audited
consolidated statements of financial position (including related notes and
schedules, if any) of Subject Company as of December 31, 1997, and as of
December 31, 1996 and December 31, 1995, and the related consolidated
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statements of operations, changes in stockholders' equity, and cash flows
(including related notes and schedules, if any) for the years ended December 31,
1997, 1996 and 1995 (the "Audited Subject Company Financial Statements"); and
(ii) the unaudited consolidated statements of financial position of Subject
Company (including related notes and schedules, if any) and related statements
of operations, changes in stockholders' equity, and cash flows (including
related notes and schedules, if any) of Subject Company with respect to any
period ending subsequent to December 31, 1997, and prior to the Closing Date
(the "Interim Subject Company Financial Statements" and, collectively with the
Audited Subject Company Financial Statements, the "Subject Company Financial
Statements"). Such Subject Company Financial Statements (i) were (or will be)
prepared from the records of Subject Company and/or each Subject Company
Subsidiary; (ii) were (or will be) prepared in accordance with GAAP (or, where
applicable, regulatory accounting principles) consistently applied (except that
substantially all of the disclosures and the statements of cash flows have been
omitted from the Interim Subject Company Financial Statements); (iii) fairly
present (or, when prepared, will fairly present) in all material respects
Subject Company's consolidated financial condition and the consolidated results
of its operations, changes in stockholders' equity and cash flows at the
relevant dates thereof and for the periods covered thereby, except that the
Interim Subject Company Financial Statements were or are subject to normal and
recurring year-end adjustments which were or are not expected to be material in
amount or effect; (iv) do contain or reflect (or, when prepared, will contain
and reflect) all necessary adjustments and accruals for a fair presentation of
Subject Company's consolidated financial condition and the consolidated results
of its operations and cash flows for the periods covered by such financial
statements; (v) do contain and reflect (or, when prepared, will contain and
reflect) adequate provisions or allowances for loan losses and for other real
estate and Taxes, with respect to the periods then ended; and (vi) do contain
and reflect (or, when prepared, will contain and reflect) adequate provisions
for all reasonably anticipated liabilities for Post Retirement Benefits Other
Than Pensions ("OPEB") pursuant to SFAS Nos. 106 and 112.
5.6 Absence of Undisclosed Liabilities. Neither Subject Company nor any
of the Subject Company Subsidiaries has any Liabilities that are reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Subject Company, except Liabilities which are accrued or reserved against in the
consolidated balance sheets of Subject Company as of December 31, 1997, or which
are included in the Subject Company Financial Statements made available prior to
the date of this Agreement or reflected in the notes and schedules, if any,
thereto. Neither Subject Company nor any of the Subject Company Subsidiaries has
incurred or paid any Liability since March 31, 1998, except for such Liabilities
incurred or paid (i) in the ordinary course of business consistent with past
business practice or which are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Subject Company or (ii) in
connection with the transactions contemplated by this Agreement.
5.7 Absence of Certain Changes or Events. Since March 31, 1998, except
as disclosed in Section 5.7 of the Subject Company Disclosure Memorandum, there
have been no events, changes, or occurrences which have had, or are reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Subject Company.
5.8 Tax Matters. Except as set forth in Section 5.8 of the Subject
Company Disclosure Memorandum:
(a) All material Tax Returns required to be filed by or on
behalf of Subject Company or any of the Subject Company Subsidiaries have been
timely filed or requests for extensions have been timely filed, granted, and
have not expired for periods ended on or before December 31, 1997, and, to the
knowledge of Subject Company, all such Tax Returns filed are complete and
accurate in all material respects. All Taxes shown on filed Tax Returns have
been paid. There is no audit examination or refund Litigation with respect to
any material Taxes, except as reserved against in the Subject Company Financial
Statements made available prior to the date of this Agreement. All Taxes and
other Liabilities due with respect to completed and settled examinations or
concluded Litigation related to Tax Returns and/or Taxes of Subject Company have
been paid. There are no Liens with respect to Taxes upon any of the Assets of
Subject Company or any of the Subject Company Subsidiaries.
(b) Neither Subject Company nor any of the Subject Company
Subsidiaries has executed an
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extension or waiver of any statute of limitations on the assessment or
collection of any Tax due (excluding such statutes that relate to years
currently under examination by the Internal Revenue Service or other applicable
taxing authorities) that is currently in effect.
(c) Adequate provision for any Taxes due or to become due for
Subject Company or the Subject Company Subsidiaries for the period or periods
through and including the date of the respective Subject Company Financial
Statements has been (or will be) made and is (or will be) reflected on such
Subject Company Financial Statements.
(d) Material deferred Taxes of Subject Company and the Subject
Company Subsidiaries have been provided for in accordance with GAAP.
(e) Subject Company and the Subject Company Subsidiaries are
in compliance with, and the records of Subject Company and each of the Subject
Company Subsidiaries contain all information and documents (including properly
completed Internal Revenue Service Forms W-9) necessary to comply with, all
applicable information reporting and Tax withholding requirements under federal,
state, and local Tax Laws, and such records identify with specificity all
accounts subject to backup withholding under Section 3406 of the Internal
Revenue Code, except for such instances of non-compliance and such omissions as
are not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Subject Company.
(f) Neither Subject Company nor any of the Subject Company
Subsidiaries has made any payments, is obligated to make any payments, or is a
party to any Contract that could obligate it to make any payments that would be
disallowed as a deduction under Section 280G or 162(m) of the Internal Revenue
Code.
(g) There has not been an ownership change, as defined in
Internal Revenue Code Section 382(g), of Subject Company or any of the Subject
Company Subsidiaries that occurred during or after any Taxable Period in which
Subject Company or any of the Subject Company Subsidiaries incurred a net
operating loss that carries over to any Taxable Period ending after December 31,
1997.
(h) Neither Subject Company nor any of the Subject Company
Subsidiaries is a party to any tax allocation or sharing agreement and neither
Subject Company nor any of the Subject Company Subsidiaries has been a member of
an affiliated group filing a consolidated federal income tax return (other than
a group the common parent of which was Subject Company) or has any Liability for
taxes of any Person (other than Subject Company and the Subject Company
Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, local, or foreign Law) as a transferee or successor or by
Contract or otherwise.
5.9 Assets. Except as disclosed or reserved against in the Subject
Company Financial Statements made available prior to the date of this Agreement,
Subject Company and the Subject Company Subsidiaries have good and indefeasible
title, free and clear of all Liens, to all of their respective material Assets
reflected on the balance sheet as of March 31, 1998 included in such Subject
Company Financial Statements, other than any of such Assets which have been sold
or otherwise disposed of since March 31, 1998. All tangible properties used in
the businesses of Subject Company and its Subsidiaries are in good condition,
reasonable wear and tear excepted, and are usable in the ordinary course of
business of Subject Company and its Subsidiaries, except for instances in which
the failure to so be is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Subject Company. All Assets which are
material to Subject Company's business on a consolidated basis, held under
leases or subleases by the Subject Company or any of the Subject Company
Subsidiaries, are held under valid Contracts enforceable in accordance with
their respective terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or other Laws (including
provisions of the U.S., Louisiana and Tennessee Constitutions) affecting the
enforcement of creditors' rights generally and except that the availability of
equitable remedies is subject to the discretion of the court before which any
proceedings may be brought), and each such Contract is in full force and effect.
Subject Company and the Subject Company Subsidiaries currently maintain
insurance in amounts and coverage which, in the reasonable opinion of management
of Subject Company, are
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adequate for the operations of Subject Company and the Subject Company
Subsidiaries. Neither Subject Company nor any of the Subject Company
Subsidiaries has received notice from any insurance carrier that (i) insurance
that is now in effect will be canceled or that coverage thereunder will be
reduced or eliminated, or (ii) premium costs with respect to policies of
insurance that are now in effect will be substantially increased. There are
presently no claims pending under any such policies of insurance and no notices
have been given by Subject Company or any of the Subject Company Subsidiaries
under such policies.
5.10 Intellectual Property. Subject Company or a Subject Company
Subsidiary owns, is the valid licensee of, or otherwise has the right to use,
all Intellectual Property material to the business of Subject Company. To the
Knowledge of Subject Company, none of the Intellectual Property material to the
business conducted by Subject Company or the Subject Company Subsidiaries
infringes upon or otherwise violates the rights of any Person, nor has any
Person asserted a claim of such infringement or violation. Except as set forth
in Section 5.10 of the Subject Company Disclosure Memorandum, neither Subject
Company nor the Subject Company Subsidiaries is obligated to pay any royalties
to any Person with respect to any such Intellectual Property. To the Knowledge
of Subject Company, no officer, director, or employee of Subject Company or the
Subject Company Subsidiaries is party to any Contract which requires such
officer, director, or employee to assign any interest in any Intellectual
Property or keep confidential any trade secrets, proprietary data, customer
information, or other business information or which restricts or prohibits such
officer, director, or employee from engaging in activities competitive with any
Person, including Subject Company or any of the Subject Company Subsidiaries.
5.11 Environmental Matters. Except as set forth in Section 5.11 of the
Subject Company Disclosure Memorandum:
(a) To the Knowledge of Subject Company, each of Subject
Company and the Subject Company Subsidiaries, its Participation Facilities, and
its Operating Properties are, and have been, in compliance with all applicable
Environmental Laws, except for instances of non-compliance which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Subject Company.
(b) To the Knowledge of Subject Company, there is no
Litigation pending or threatened before any court, governmental agency, or
authority or other forum in which Subject Company, any of the Subject Company
Subsidiaries or any of their respective Operating Properties or Participation
Facilities has been or, with respect to threatened Litigation, may be named as a
defendant (i) for alleged noncompliance (including by any predecessor) with any
Environmental Law or (ii) relating to the release into the environment of any
Hazardous Material, whether or not occurring at, on, under, adjacent to, or
affecting a site owned, leased, or operated by Subject Company or any of the
Subject Company Subsidiaries or any of their respective Operating Properties or
Participation Facilities, except for such Litigation pending or threatened that
is not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Subject Company, nor, to the Knowledge of Subject Company, is
there any reasonable basis for any Litigation of a type described in this
sentence.
(c) During the period of (i) Subject Company's or any of the
Subject Company Subsidiaries' ownership or operation of any of their respective
current properties, (ii) Subject Company's or any of the Subject Company
Subsidiaries' participation in the management of any Participation Facility, or
(iii) Subject Company's or any of the Subject Company Subsidiaries' holding of a
security interest in an Operating Property, to the Knowledge of Subject Company,
there have been no releases of Hazardous Material in, on, under, adjacent to, or
affecting such properties, except such as are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Subject Company.
Prior to the period of (i) Subject Company's or any of the Subject Company
Subsidiaries' ownership or operation of any of their respective current
properties, (ii) Subject Company's or any of the Subject Company Subsidiaries'
participation in the management of any Participation Facility, or (iii) Subject
Company's or any of the Subject Company Subsidiaries' holding of a security
interest in an Operating Property, to the Knowledge of Subject Company, there
were no releases of Hazardous Material in, on, under, or affecting any such
property, Participation Facility or Operating Property, except such as are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Subject Company.
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5.12 Compliance With Laws. Subject Company is duly registered as a bank
holding company under the BHC Act. Each of Subject Company and the Subject
Company Subsidiaries has in effect all Permits necessary for it to own, lease,
or operate its material Assets and to carry on its business as now conducted,
except where the failure to hold such Permits would not be reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Subject
Company. Neither Subject Company nor any of the Subject Company Subsidiaries:
(a) is in violation of any Laws, Orders, or Permits applicable
to its business or employees conducting its business, except for any such
violations as are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Subject Company; or
(b) has received any notification or communication since
January 1, 1996 from any agency or department of federal, state, or local
government or any Regulatory Authority or the staff thereof (i) asserting that
Subject Company or any of the Subject Company Subsidiaries is in violation of
any of the Laws or Orders which such governmental authority or Regulatory
Authority enforces (excluding violations which would not be reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Subject
Company), (ii) threatening to revoke any material Permits, or (iii) requiring
Subject Company or any of the Subject Company Subsidiaries to enter into or
consent to the issuance of a cease and desist order, formal agreement,
directive, commitment, or memorandum of understanding, or to adopt any Board of
Directors resolution or similar undertaking, which is still in effect and which
restricts materially the conduct of its business, or in any manner relates to
its capital adequacy, its credit or reserve policies, its management, or the
payment of dividends.
5.13 Labor Relations. Neither Subject Company nor any of the Subject
Company Subsidiaries is the subject of any Litigation asserting that Subject
Company or any of the Subject Company Subsidiaries has committed an unfair labor
practice (within the meaning of the National Labor Relations Act or comparable
state Law) or seeking to compel Subject Company or any of the Subject Company
Subsidiaries to bargain with any labor organization as to wages or conditions of
employment, nor is there any strike or other labor dispute (excluding matters
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Subject Company) involving Subject Company or any of
the Subject Company Subsidiaries, pending or, to the Knowledge of Subject
Company, threatened, nor to the Knowledge of Subject Company, is there any
activity involving Subject Company's or any of the Subject Company Subsidiaries'
employees seeking to certify a collective bargaining unit or engaging in any
other collective bargaining organizational activity.
5.14 Employee Benefit Plans. (a) Subject Company has disclosed in Section
5.14(a) of the Subject Company Disclosure Memorandum, and has delivered or made
available to Parent prior to the execution of this Agreement copies of, all
pension, retirement, profit sharing, deferred compensation, stock option,
employee stock ownership, severance pay, vacation, bonus, or other material
incentive plans, all other written employee programs, arrangements, or
agreements, all medical, vision, dental, or other health plans, all life
insurance plans, and all other material employee benefit or fringe benefit
plans, including "employee benefit plans" as that term is defined in Section
3(3) of ERISA, currently adopted, maintained by, sponsored in whole or in part
by, or contributed to by Subject Company, the Subject Company Subsidiaries or
any ERISA Affiliate thereof for the benefit of employees, retirees, dependents,
spouses, directors, independent contractors, or other beneficiaries of Subject
Company or any Subject Company Subsidiary and under which employees, retirees,
dependents, spouses, directors, independent contractors, or other beneficiaries
of Subject Company or any Subject Company Subsidiary are eligible to participate
(collectively, the "Subject Company Benefit Plans"). Any of the Subject Company
Benefit Plans which is an "employee pension benefit plan," as that term is
defined in Section 3(2) of ERISA, is referred to herein as a "Subject Company
ERISA Plan." Neither Subject Company nor any Subject Company Subsidiary
maintains any "defined benefit plan" (as defined in Section 414(j) of the
Internal Revenue Code). No Subject Company ERISA Plan is or has been a
multiemployer plan within the meaning of Section 3(37) of ERISA.
(b) All Subject Company Benefit Plans are in compliance in all
material respects with the applicable terms of ERISA, the Internal Revenue Code,
and any other applicable Laws the breach or violation of which are reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Subject Company.
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Each Subject Company ERISA Plan that is intended to be qualified under Section
401(a) of the Internal Revenue Code either is a standardized prototype plan or
has received a favorable determination letter from the Internal Revenue Service,
and Subject Company is not aware of any circumstances likely to result in
revocation of any such favorable determination letter. To the Knowledge of
Subject Company, neither Subject Company nor any of the Subject Company
Subsidiaries is subject to a Tax imposed by Section 4975 of the Internal Revenue
Code or a civil penalty imposed by Section 502(i) of ERISA.
(c) No "defined benefit plan" (as defined in Section 414(j) of
the Internal Revenue Code) or any "single-employer plan," within the meaning of
Section 4001(a)(15) of ERISA, formerly maintained by Subject Company or any of
the Subject Company Subsidiaries, or the single-employer plan of any entity
which is considered one employer with Subject Company under Section 4001 of
ERISA or Section 414 of the Internal Revenue Code or Section 302 of ERISA
(whether or not waived) (an "ERISA Affiliate") has an "accumulated funding
deficiency" within the meaning of Section 412 of the Internal Revenue Code or
Section 302 of ERISA. Neither Subject Company nor any of the Subject Company
Subsidiaries has provided, or, to Subject Company's knowledge, is required to
provide, security to any single-employer plan of an ERISA Affiliate pursuant to
Section 401(a)(29) of the Internal Revenue Code.
(d) Within the six year period preceding the Effective Time,
no material Liability under Subtitle C or D of Title IV of ERISA has been
incurred by Subject Company or any of the Subject Company Subsidiaries with
respect to any current, frozen, or terminated single-employer plan or the
single-employer plan of any ERISA Affiliate. Neither Subject Company nor any of
the Subject Company Subsidiaries has incurred any withdrawal Liability with
respect to a multiemployer plan under Subtitle E of Title IV of ERISA
(regardless of whether based on contributions of an ERISA Affiliate). No notice
of a "reportable event," within the meaning of Section 4043 of ERISA for which
the 30 day reporting requirement has not been waived, has been required to be
filed for any Subject Company Pension Plan or by any ERISA Affiliate within the
12 month period ending on the date hereof.
(e) Neither Subject Company nor any of the Subject Company
Subsidiaries has any material Liability for retiree health and life benefits
under any of the Subject Company Benefit Plans, and there are no restrictions on
the rights of Subject Company or any of the Subject Company Subsidiaries to
amend or terminate any such retiree health or benefit Plan without incurring
Liability thereunder.
(f) Except as set forth in Section 5.14(f) of the Subject
Company Disclosure Memorandum, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will (i)
result in any payment (including severance, unemployment compensation or golden
parachute) becoming due to any director or any employee of Subject Company or
any of the Subject Company Subsidiaries from Subject Company or any of the
Subject Company Subsidiaries under any Subject Company Benefit Plan, (ii)
increase any benefits otherwise payable under any Subject Company Benefit Plan,
or (iii) result in any acceleration of the time of payment or vesting of any
such benefit.
(g) The actuarial present values of all accrued deferred
compensation entitlements (including entitlements under any executive
compensation, supplemental retirement, or employment agreement) of employees and
former employees of any Subject Company Subsidiary and their respective
beneficiaries, other than entitlements accrued pursuant to funded retirement
plans subject to the provisions of Section 412 of the Internal Revenue Code or
Section 302 of ERISA, have been fully reflected on the Audited Subject Company
Financial Statements to the extent required by and in accordance with GAAP.
5.15 Material Contracts. Except as set forth in Section 5.15 of the
Subject Company Disclosure Memorandum, neither Subject Company, the Subject
Company Subsidiaries, nor any of their respective Assets, businesses or
operations, is a party to, or is bound or affected by, or receives benefits
under, (i) any employment, severance, termination, consulting, or retirement
Contract, (ii) any Contract relating to the borrowing of money by Subject
Company or any of the Subject Company Subsidiaries or the guarantee by Subject
Company or any of the Subject Company Subsidiaries of any such obligation (other
than Contracts evidencing deposit liabilities, purchases
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of federal funds, Federal Home Loan Bank advances, fully-secured repurchase
agreements, trade payables, and Contracts relating to borrowings or guarantees
made in the ordinary course of business), (iii) any Contracts which prohibit or
restrict Subject Company or any of the Subject Company Subsidiaries from
engaging in any business activities in any geographic area, line of business, or
otherwise in competition with any other Person, (iv) any Contracts between or
among Subject Company and the Subject Company Subsidiaries, (v) any
exchange-traded or over-the-counter swap, forward, future, option, cap, floor,
or collar financial Contract, or any other interest rate or foreign currency
protection Contract (not disclosed in the Subject Company Financial Statements
delivered prior to the date of this Agreement) which is a financial derivative
Contract (including various combinations thereof), and (vi) any other Contract
or amendment thereto that would be required to be filed as an exhibit to a
Subject Company SEC Document which would have been filed by Subject Company
prior to the date of this Agreement if Subject Company was required to file SEC
Documents (together with all Contracts referred to in Sections 5.9 and 5.14(a)
of this Agreement, the "Subject Company Contracts"). With respect to each
Subject Company Contract: (i) the Contract is in full force and effect; (ii)
neither Subject Company nor any Subject Company Subsidiary is in Default
thereunder, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Subject Company);
(iii) neither Subject Company nor any Subject Company Subsidiary has repudiated
or waived any material provision of any such Contract; and (iv) no other party
to any such Contract is, to the Knowledge of Subject Company, in Default in any
material respect or has repudiated or waived any material provision thereunder.
Except as set forth in Section 5.15 of the Subject Company Disclosure
Memorandum, all of the indebtedness of Subject Company or any Subject Company
Subsidiary for money borrowed is prepayable at any time by Subject Company or
the particular Subject Company Subsidiary without material penalty or premium.
5.16 Legal Proceedings. There is no Litigation instituted or pending,
or, to the Knowledge of Subject Company, threatened (or unasserted but
considered probable of assertion and which if asserted would have at least a
reasonable probability of an unfavorable outcome) against Subject Company or any
of the Subject Company Subsidiaries, or against any Asset, employee benefit
plan, interest, or right of any of them, that is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Subject Company,
nor are there any Orders of any Regulatory Authorities, other governmental
authorities, or arbitrators outstanding against Subject Company or any of the
Subject Company Subsidiaries. Section 5.16 of the Subject Company Disclosure
Memorandum includes a summary report of all material Litigation as of the date
of this Agreement which names Subject Company or a Subject Company Subsidiary as
a defendant or cross-defendant.
5.17 Reports. Since January 1, 1995, or the applicable date of
organization if later, Subject Company and each Subject Company Subsidiary has
timely filed all reports and statements, together with any amendments required
to be made with respect thereto, that it was required to file with (i) the SEC,
if any, (ii) other Regulatory Authorities, and (iii) any applicable state
securities or banking authorities, except untimely filings or failures to file
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Subject Company. As of its respective date (or, if
amended or superseded by a filing prior to the date of this Agreement, then on
the date of such filing), each of such reports and documents, including the
financial statements, exhibits, and schedules thereto, complied in all material
respects with all applicable Laws. As of its respective date (or, if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing), no Subject Company document or report contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading. None of the Subject
Company Subsidiaries is required to file any SEC Documents.
5.18 Statements True and Correct. None of the information supplied or
to be supplied by Subject Company expressly for inclusion in the Registration
Statement to be filed by Parent with the SEC will, when the Registration
Statement becomes effective, be false or misleading with respect to any material
fact, or omit to state any material fact necessary to make the statements
therein not misleading. None of the information supplied or to be supplied by
Subject Company expressly for inclusion in the Subject Company Proxy Statement
to be mailed to Subject Company's shareholders in connection with the Subject
Company Shareholders' Meeting, and any other documents to be filed by Subject
Company with the SEC or any other Regulatory Authority in connection with the
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transactions contemplated hereby, will, at the respective time such documents
are filed, and with respect to the Subject Company Proxy Statement, when first
mailed to the shareholders of Subject Company, be false or misleading with
respect to any material fact, or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, or, in the case of the Subject Company Proxy Statement or
any amendment thereof or supplement thereto, at the time of the Subject Company
Shareholders' Meeting, be false or misleading with respect to any material fact,
or omit to state any material fact necessary to correct any statement made by
Subject Company in any earlier communication with respect to the solicitation of
any proxy for the Subject Company Shareholders' Meeting. All documents that
Subject Company or any Subject Company Subsidiary is responsible for filing with
any Regulatory Authority in connection with the transactions contemplated hereby
will comply as to form in all material respects with the provisions of
applicable Law.
5.19 Accounting, Tax, and Regulatory Matters. Neither Subject Company
nor any of the Subject Company Subsidiaries has taken any action or has any
Knowledge of any fact or circumstance relating to Subject Company that is
reasonably likely to (i) prevent the transactions contemplated hereby, including
the Merger, from qualifying for pooling-of-interests accounting treatment or as
a reorganization within the meaning of Section 368(a) of the Internal Revenue
Code, or (ii) materially impede or delay receipt of any Consents of Regulatory
Authorities referred to in Section 9.1(b) of this Agreement.
5.20 Charter Provisions; Takeover Laws. Subject Company has taken all
action so that the entering into of this Agreement and the consummation of the
Merger and the other transactions contemplated by this Agreement do not and will
not result in the grant of any rights to any Person under the Articles of
Incorporation, Bylaws or other governing instruments of Subject Company or any
Subject Company Subsidiary or restrict or impair the ability of Parent or any of
the Parent Subsidiaries to vote, or otherwise to exercise the rights of a
shareholder with respect to, shares of Subject Company or any Subject Company
Subsidiary. Subject Company has taken all necessary action to exempt this
Agreement and the Plan of Merger from, and the transactions contemplated hereby
and thereby are exempt from, any "super-majority" voting requirements or the
requirements of any "moratorium," "fair price," "business combination," "control
share," or other anti-takeover provisions under applicable Laws, or the Articles
of Incorporation or Bylaws of the Subject Company or any Subject Company
Subsidiary (collectively, "Takeover Laws").
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent hereby represents and warrants to Subject Company,
except as set forth in Parent's Disclosure Memorandum, as follows:
6.1 Organization, Standing and Power. Parent is a corporation duly
organized, validly existing, and in good standing under the Laws of the State of
Tennessee, and has the corporate power and authority to carry on its business as
now conducted and to own, lease and operate its Assets. Parent is duly qualified
or licensed to transact business as a foreign corporation in good standing in
each of the States of the United States and in each foreign jurisdiction where
the character of its Assets or the nature or conduct of its business requires it
to be so qualified or licensed, except for such jurisdictions in which the
failure to be so qualified or licensed is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Parent.
6.2 Authority; No Breach by Agreement. (a) Parent and Merger Subsidiary
each have the corporate power and authority necessary to execute, deliver and
perform its respective obligations under this Agreement and the Plan of Merger
and to consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance of this Agreement and the Plan of Merger by
Parent and Merger Subsidiary and the consummation of the transactions
contemplated herein and therein, including the Merger, have been duly and
validly authorized by all necessary corporate action in respect thereof on the
part of Parent and Merger Subsidiary, subject to the adoption of an amendment to
the Restated Charter of Incorporation of Parent to increase the number of
authorized
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shares of Parent Common Stock. Subject to the receipt of all Consents required
from Regulatory Authorities and the expiration of all mandatory waiting periods,
assuming the due authorization, execution and delivery of this Agreement and the
Plan of Merger by Subject Company, this Agreement and the Plan of Merger each
represents a legal, valid, and binding obligation of each of Parent and Merger
Subsidiary, enforceable against each of them in accordance with its terms
(except in all cases as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or similar Laws (including
provisions of the U.S., Louisiana and Tennessee Constitutions) affecting the
enforcement of creditors' rights generally and except that the availability of
equitable remedies is subject to the discretion of the court before which any
proceeding may be brought).
(b) Neither the execution and delivery of this Agreement or
the Plan of Merger by Parent and/or Merger Subsidiary, nor the consummation by
Parent and Merger Subsidiary, of the transactions contemplated hereby or
thereby, nor compliance by Parent and Merger Subsidiary with any of the
provisions hereof or thereof will (i) conflict with or result in a breach of any
provision of Parent's Restated Charter of Incorporation or Bylaws or of Merger
Subsidiary's Charter of Incorporation or Bylaws, or (ii) constitute or result in
a Default under, or require any Consent (excluding Consents required by Law or
Order) pursuant to, or result in the creation of any Lien on any material Asset
of Parent or any Parent Subsidiary under, any Contract or Permit of Parent or
any Parent Subsidiary, except for such Defaults and Liens which are not, and for
such Consents which, if not obtained, are not, reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Parent or Merger
Subsidiary, or (iii) subject to receipt of the requisite Consents referred to in
Section 9.1(b) of this Agreement, violate any Law or Order applicable to Parent
or any Parent Subsidiary or any of their respective material Assets.
(c) Other than in connection or compliance with the provisions
of the Securities Laws, applicable state corporate and securities Laws, and
rules of the NYSE, and other than Consents required from the FRB under Sections
3 and 4 of the BHC Act and from the LOFI, and other than Consents, filings, or
notifications which, if not obtained or made, are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Parent, no notice
to, filing with, or Consent of, any public body or authority is necessary for
the consummation by Parent and Merger Subsidiary of the Merger and the other
transactions contemplated in this Agreement.
6.3 Capital Stock. The authorized capital stock of Parent consists
solely of (i) 300,000,000 shares of Parent Common Stock, of which 84,970,899
shares were issued and outstanding as of May 1, 1998, and (ii) 10,000,000 shares
of Parent Preferred Stock, of which 1,156,231 shares of Parent Series E
Preferred Stock were issued and outstanding as of May 1, 1998. All of the issued
and outstanding shares of Parent Capital Stock are, and all of the shares of
Parent Common Stock to be issued in exchange for shares of Subject Company
Common Stock upon consummation of the Merger, when issued in exchange for shares
of Subject Company Common Stock upon consummation of the Merger and in
accordance with the terms of this Agreement, will be, duly and validly
authorized, issued and outstanding, and fully paid and nonassessable under the
TBCA and Parent's Restated Charter of Incorporation and Bylaws. All shares of
Parent Common Stock to be issued upon consummation of the Merger, when issued in
accordance with this Agreement, will be, at the time of their delivery, free and
clear of all Liens. None of the outstanding shares of Parent Capital Stock has
been, and none of the shares of Parent Common Stock to be issued in exchange for
shares of Subject Company Common Stock upon consummation of the Merger will be,
issued in violation of any preemptive rights of any Person. As of the date
hereof and as of the Closing Date, to the Knowledge of Parent, none of the
issued and outstanding shares of Parent Capital Stock has been or will have been
issued in violation of the Securities Laws or any other applicable securities
Laws. To the Knowledge of Parent, there are no facts or circumstances that would
preclude the Parent Common Stock to be issued in the Merger from being approved
for listing on the NYSE.
6.4 Parent Subsidiaries. Except as set forth in Section 6.4 of the
Parent Disclosure Memorandum, Parent owns all of the issued and outstanding
capital stock of Merger Subsidiary, and Parent or one of its wholly-owned
Subsidiaries owns all of the issued and outstanding shares of capital stock (or
other equity interests) of each of the other Parent Subsidiaries which would
qualify as a "Significant Subsidiary" (as such term is defined in Rule 1.02(w)
of Regulation S-X promulgated under the Securities Laws) of Parent. No capital
stock (or other equity interest) of any Parent Subsidiary which would qualify as
a Significant Subsidiary of Parent, is or may become
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required to be issued (other than to another Parent Subsidiary) by reason of any
Rights, and there are no Contracts by which Parent or any of the Parent
Subsidiaries which is a Significant Subsidiary of Parent, is bound to issue
(other than to Parent or any of the Parent Subsidiaries) additional shares of
its capital stock (or other equity interests) or Rights or by which Parent or
any of such significant Parent Subsidiaries is or may be bound to transfer any
shares of the capital stock (or other equity interests) of any of Parent or any
of the Parent Subsidiaries (other than to Parent or any of the Parent
Subsidiaries). There are no Contracts relating to the rights of Parent or any
Parent Subsidiary which would qualify as a Significant Subsidiary of Parent, to
vote or to dispose of any shares of the capital stock (or other equity
interests) of any of the Parent Subsidiaries. All of the shares of capital stock
(or other equity interests) of each Parent Subsidiary which would qualify as a
Significant Subsidiary of Parent and held by Parent or any Parent Subsidiary
have been duly and validly authorized and issued and are fully paid and
nonassessable (except pursuant to 12 U.S.C. Section 55 in the case of national
banks and comparable, applicable state Law, if any, in the case of state
depository institutions) under the applicable corporation or similar Law of the
jurisdiction in which such Subsidiary is incorporated or organized and are owned
by Parent or a Parent Subsidiary free and clear of any Liens. None of the issued
and outstanding shares of capital stock of Merger Subsidiary, and none of the
issued and outstanding stock of any other Parent Subsidiary which qualifies as a
Significant Subsidiary of Parent, has been issued in violation of any preemptive
rights of any Person. Each Parent Subsidiary is either a bank, federal savings
bank, or a savings association, partnership, limited liability company or a
corporation, and each such Parent Subsidiary which qualifies as a Significant
Subsidiary of Parent is duly organized, validly existing and (as to
corporations) in good standing under the Laws of the jurisdiction in which it is
incorporated or organized, and has the corporate power and authority necessary
for it to own, lease, and operate its Assets and to carry on its business as now
conducted. Each Parent Subsidiary which qualifies as a Significant Subsidiary of
Parent is duly qualified or licensed to transact business as a foreign
corporation in good standing in each of the States of the United States and in
each foreign jurisdiction where the character of its Assets or the nature or
conduct of its business requires it to be so qualified or licensed, except for
such jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Parent.
6.5 Financial Statements. Each of the Parent Financial Statements
(including, in each case, any related notes) contained in the Parent SEC
Documents, including any Parent SEC Document filed after the date of this
Agreement until the Effective Time,: (i) complied, or will comply, as to form in
all material respects with the applicable published rules and regulations of the
SEC with respect thereto, (ii) was prepared, or will be prepared, in accordance
with GAAP applied on a consistent basis throughout the periods involved (except
as may be indicated in the notes to such financial statements or, in the case of
unaudited interim statements, as permitted by Regulation S-X promulgated under
the Securities Laws), (iii) fairly presented, or will fairly present, in all
material respects the consolidated financial position of Parent and the Parent
Subsidiaries as at the respective dates and the consolidated results of its
operations and cash flows for the periods indicated, except that the unaudited
interim financial statements were or are subject to normal and recurring
year-end adjustments which were not or are not expected to be material in amount
or effect.
6.6 Absence of Undisclosed Liabilities. Neither Parent nor any of the
Parent Subsidiaries has any Liabilities that are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Parent, except
Liabilities which are accrued or reserved against in the consolidated balance
sheets of Parent as of December 31, 1997, or which are included in the Parent
Financial Statements made available prior to the date of this Agreement, or
reflected in the notes and schedules, if any, thereto. Neither Parent nor any of
the Parent Subsidiaries has incurred or paid any Liability since March 31, 1998,
except for such Liabilities incurred or paid (i) which are not reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on Parent
or (ii) in connection with the transactions contemplated by this Agreement.
6.7 Absence of Certain Changes or Events. Since March 31, 1998, except
as disclosed in the Parent SEC Documents made available prior to the date of
this Agreement, there have been no events, changes, or occurrences which have
had, or are reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Parent.
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6.8 Compliance With Laws. Parent is duly registered as a bank holding
company under the BHC Act. Each of Parent and the Parent Subsidiaries has in
effect all Permits necessary for it to own, lease, or operate its material
Assets and to carry on its business as now conducted, except where the failure
to hold such permits would not be reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Parent. Neither Parent nor any of
the Parent Subsidiaries:
(a) is in violation of any Laws, Orders, or Permits applicable
to its business or employees conducting its business, except for such violations
which would not be reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on Parent; or
(b) has received any notification or communication since
January 1, 1996 from any agency or department of federal, state, or local
government or any Regulatory Authority or the staff thereof (i) asserting that
Parent or any Parent Subsidiary is in violation of any of the Laws or Orders
which such governmental authority or Regulatory Authority enforces (excluding
violations which would not be reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Parent), (ii) threatening to revoke any
material Permits, or (iii) requiring Parent or any Parent Subsidiary to enter
into or consent to the issuance of a cease and desist order, formal agreement,
directive, commitment or memorandum of understanding, or to adopt any Board
resolution or similar undertaking, which is still in effect and which restricts
materially the conduct of its business, or in any manner relates to its capital
adequacy, its credit or reserve policies, its management, or the payment of
dividends.
6.9 Legal Proceedings. There is no Litigation instituted or pending,
or, to the Knowledge of Parent, threatened (or unasserted but considered
probable of assertion and which if asserted would have at least a reasonable
probability of an unfavorable outcome) against Parent or any Parent Subsidiary,
or against any Asset, employee benefit plan, interest, or right of any of them,
that is reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Parent, nor are there any Orders of any Regulatory
Authorities, other governmental authorities, or arbitrators outstanding against
Parent or any Parent Subsidiary.
6.10 Reports. Since January 1, 1995, or the applicable date of
organization if later, Parent and each Parent Subsidiary has timely filed all
reports and statements, together with any amendments required to be made with
respect thereto, that it was required to file with (i) the SEC, including, but
not limited to, Forms 10-K, Forms 10-Q, Forms 8-K, and proxy statements, (ii)
other Regulatory Authorities, and (iii) any applicable state securities or
banking authorities, except untimely filings or failures to file which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Parent. As of its respective date (or, if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing),
each of such reports and documents, including the financial statements,
exhibits, and schedules thereto, complied in all material respects with all
applicable Laws. As of its respective date, no Parent document or report
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. Except for Parent Subsidiaries that are registered as a broker,
dealer, or investment advisor, no Parent Subsidiary is required to file any SEC
Documents.
6.11 Statements True and Correct. None of the information supplied or
to be supplied by Parent or any Parent Subsidiary expressly for inclusion in the
Registration Statement to be filed by Parent with the SEC, will, when the
Registration Statement becomes effective, be false or misleading with respect to
any material fact, or omit to state any material fact necessary to make the
statements therein not misleading. None of the information supplied or to be
supplied by Parent or any Parent Subsidiary expressly for inclusion in the
Subject Company Proxy Statement to be mailed to Subject Company's shareholders
in connection with the Subject Company Shareholders' Meeting, and any other
documents to be filed by Parent or any Parent Subsidiary with the SEC or any
other Regulatory Authority in connection with the transactions contemplated
hereby, will, at the respective time such documents are filed, and with respect
to the Subject Company Proxy Statement, when first mailed to the shareholders of
Subject Company, be false or misleading with respect to any material fact, or
omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, or, in
the case of the
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Subject Company Proxy Statement or any amendment thereof or supplement thereto,
at the time of the Subject Company Shareholders' Meeting, be false or misleading
with respect to any material fact, or omit to state any material fact necessary
to correct any information supplied or to be supplied by Parent or any Parent
Subsidiary which was contained in any earlier communication with respect to the
solicitation of any proxy for the Subject Company Shareholders' Meeting. All
documents that Parent or any Parent Subsidiary is responsible for filing with
any Regulatory Authority in connection with the transactions contemplated hereby
will comply as to form in all material respects with the provisions of
applicable Law.
6.12 Accounting, Tax, and Regulatory Matters. Neither Parent nor any
Parent Subsidiary has taken any action or has any Knowledge of any fact or
circumstance relating to Parent that is reasonably likely to (i) prevent the
transactions contemplated hereby, including the Merger, from qualifying for
treatment as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code, or (ii) materially impede or delay receipt of any
Consents of Regulatory Authorities referred to in Section 9.1(b) of this
Agreement, or (iii) prevent the transactions contemplated hereby, including the
Merger, from qualifying for pooling-of-interests accounting treatment.
6.13 Material Contracts. Except as set forth in Section 6.13 of the
Parent Disclosure Memorandum, neither Parent, the Parent Subsidiaries, nor any
of their respective Assets, businesses or operations is a party to, or is bound
or affected by, or receives benefits under, any Contract or amendment thereto
that falls within the definition of a "Material Contract" contained in Item 601
of Regulation S-K promulgated under the Securities Laws (the "Parent Material
Contracts") that has not been filed as an exhibit to a Parent SEC Document filed
by Parent prior to the date of this Agreement. With respect to each Parent
Material Contract: (i) the Contract is in full force and effect; (ii) neither
Parent nor any Parent Subsidiary is in Default thereunder, other than Defaults
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Parent; (iii) neither Parent nor any Parent
Subsidiary has repudiated or waived any material provision of any such Contract;
and (iv) no other party to any such Contract is, to the Knowledge of Parent, in
Default in any material respect or has repudiated or waived any material
provisions thereunder.
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 Affirmative Covenants of Subject Company. Unless the prior written
consent of Parent shall have been obtained, and except as otherwise expressly
contemplated herein or expressly provided for in the Subject Company Disclosure
Memorandum, from the date of this Agreement until the earlier of the Effective
Time or the termination of this Agreement, Subject Company shall and shall cause
each of the Subject Company Subsidiaries to (i) operate its business only in the
usual, regular, and ordinary course, (ii) use reasonable efforts to preserve
intact its business organization and Assets and maintain its rights and
franchises, and (iii) take no action which would (a) materially adversely affect
the ability of any Party to obtain any Consents required for the transactions
contemplated hereby or prevent the transactions contemplated hereby, including
the Merger, from qualifying for pooling-of-interests accounting treatment or as
a reorganization within the meaning of Section 368(a) of the Internal Revenue
Code, or (b) materially adversely affect the ability of any Party to perform its
covenants and agreements under this Agreement.
7.2 Negative Covenants of Subject Company. Except as specifically
permitted by this Agreement or as and to the extent expressly disclosed or
provided for in the Subject Company Disclosure Memorandum, from the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement, Subject Company covenants and agrees that it will not do or agree or
commit to do, or permit any of the Subject Company Subsidiaries to do or agree
or commit to do, any of the following without the prior written consent of the
chief executive officer, president, or chief financial officer of Parent, which
consent shall not be unreasonably withheld:
(a) amend the Articles of Incorporation, Bylaws, or other
governing instruments of Subject Company or any Subject Company Subsidiary; or
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(b) incur any additional debt obligation for borrowed money
(other than indebtedness of Subject Company or the Subject Company Subsidiaries
to each other) in excess of an aggregate of $50,000 (for Subject Company and the
Subject Company Subsidiaries on a consolidated basis) except in the ordinary
course of the business of the Subject Company Subsidiaries consistent with past
practices (which shall include, for the Subject Company Subsidiaries that are
depository institutions, creation of deposit liabilities, purchases of federal
funds, advances from the Federal Reserve Bank or Federal Home Loan Bank, and
entry into repurchase agreements fully secured by U.S. government or agency
securities), or impose, or suffer the imposition, on any material Asset of
Subject Company or any of the Subject Company Subsidiaries of any Lien or permit
any such Lien to exist (other than in connection with deposits, repurchase
agreements, bankers acceptances, "treasury tax and loan" accounts established in
the ordinary course of business and the satisfaction of legal requirements in
the exercise of trust powers and Liens in effect as of the date hereof that are
disclosed in the Subject Company Disclosure Memorandum); or
(c) repurchase, redeem, or otherwise acquire or exchange
(other than exchanges in the ordinary course under employee benefit plans),
directly or indirectly, any shares, or any securities convertible into any
shares, of the capital stock of Subject Company or any of the Subject Company
Subsidiaries, or declare or pay any dividend or make any other distribution in
respect of Subject Company's capital stock, provided that Subject Company may
(to the extent legally and contractually permitted to do so), but shall not be
obligated to, declare and pay regular cash dividends on the shares of Subject
Company Common Stock in an amount not in excess of $.25 per share per quarter
during 1998, and $.75 per share per quarter during 1999; provided, that,
notwithstanding the provisions of Section 1.3, the Parties shall cooperate in
selecting the Effective Time to ensure that, with respect to the period in which
the Effective Time occurs, the holders of Subject Company Common Stock do not
become entitled to receive both a dividend in respect of their Subject Company
Common Stock and a dividend in respect of Parent Common Stock or fail to be
entitled to receive any dividend; or
(d) except for this Agreement, issue, sell, pledge, encumber,
authorize the issuance of, enter into any Contract to issue, sell, pledge,
encumber, or authorize the issuance of, or otherwise permit to become
outstanding, any additional shares of common stock or any other capital stock of
Subject Company or any Subject Company Subsidiary, or any stock appreciation
rights, or any option, warrant, conversion, or other Right to acquire any such
stock, or any security convertible into any such stock; or
(e) adjust, split, combine or reclassify any capital stock of
Subject Company or any of the Subject Company Subsidiaries or issue or authorize
the issuance of any other securities in respect of or in substitution for shares
of Subject Company Common Stock, or sell, lease, mortgage or otherwise dispose
of or otherwise encumber any shares of capital stock of any Subject Company
Subsidiary (unless any such shares of stock are sold or otherwise transferred to
another Subject Company Subsidiary) or any Asset having a book value in excess
of $50,000 other than in the ordinary course of business for reasonable and
adequate consideration; or
(f) except for purchases of investment securities acquired in
the ordinary course of business consistent with past practice, purchase any
securities or make any material investment, either by purchase of stock or
securities, contributions to capital, Asset transfers, or purchase of any
Assets, in any Person other than a wholly-owned Subsidiary of Subject Company,
or otherwise acquire direct or indirect control over any Person, other than in
connection with (i) foreclosures in the ordinary course of business, (ii)
acquisitions of control by a depository institution Subsidiary in its fiduciary
capacity, or (iii) the creation of new wholly-owned Subsidiaries organized to
conduct or continue activities otherwise permitted by this Agreement; or
(g) grant any increase of more than 5% in annual compensation
or benefits to any employees or officers of Subject Company or the Subject
Company Subsidiaries whose total compensation after such increase would exceed
$25,000 per year, except in the ordinary course of business consistent with past
practice or as required by Law; pay any severance or termination pay or any
bonus other than pursuant to written policies or written Contracts in effect on
the date of this Agreement; enter into or amend any severance agreements with
officers of Subject Company or the Subject Company Subsidiaries; grant any
material increase in fees or other increases in
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compensation or other benefits to directors of Subject Company or the Subject
Company Subsidiaries; or voluntarily accelerate the vesting of any stock options
or other stock-based compensation or employee benefits (other than the
acceleration of vesting which occurs under a benefit plan upon a change of
control of Subject Company); or
(h) enter into or amend any employment Contract between
Subject Company or any Subject Company Subsidiary and any Person (unless such
amendment is required by Law) that Subject Company does not have the
unconditional right to terminate without Liability (other than Liability for
services already rendered), at any time on or after the Effective Time; or
(i) adopt any new employee benefit plan of Subject Company or
the Subject Company Subsidiaries or terminate or withdraw from, or make any
material change in or to, any existing employee benefit plans of Subject Company
or any of the Subject Company Subsidiaries, other than any such change that is
required by Law or that, in the opinion of counsel, is necessary or advisable to
maintain the tax qualified status of any such plan, nor shall Subject Company or
any Subject Company Subsidiary make any distributions from such employee benefit
plans, except as required by Law, by the terms of such plans, or in a manner
consistent with past practices with respect to the applicable plan; or
(j) make any material change in any Tax or accounting methods
or systems of internal accounting controls, except as may be appropriate to
conform to changes in Tax Laws or regulatory accounting requirements or GAAP; or
(k) commence any Litigation other than in accordance with past
practice, settle any Litigation involving any Liability of Subject Company or
any Subject Company Subsidiary for material money damages or restrictions upon
the operations of Subject Company or any Subject Company Subsidiary; or
(l) except in the ordinary course consistent with past
practice, enter into, modify, amend, or terminate any material Contract
(excluding any loan Contract) or waive, release, compromise, or assign any
material rights or claims.
7.3 Covenants of Parent. From the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement, Parent
covenants and agrees that it shall (i) continue to conduct its business and the
business of the Parent Subsidiaries in a manner designed in its reasonable
judgment to enhance the long-term value of the Parent Common Stock and the
business prospects of Parent and the Parent Subsidiaries, and (ii) take no
action which would (a) materially adversely affect the ability of any Party to
obtain any Consents required for the transactions contemplated hereby or prevent
the transactions contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment or as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code, (b) materially adversely
affect the ability of any Party to perform its covenants and agreements under
this Agreement.
7.4 Adverse Changes in Condition. Each Party agrees to give written
notice promptly to the other Party upon becoming aware of the occurrence or
impending occurrence of any event or circumstance relating to it or any of its
Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on it or (ii) would cause or constitute a
material breach of any of its representations, warranties, or covenants
contained herein or which would prevent the satisfaction of the conditions
precedent set forth in Article 9 of this Agreement, and to use its reasonable
efforts to prevent or promptly to remedy the same.
7.5 Reports. Each Party and its Subsidiaries shall file all reports
required to be filed by it with Regulatory Authorities between the date of this
Agreement and the Effective Time and, to the extent permitted by Law, shall
deliver to the other Party copies of all such reports promptly after the same
are filed.
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ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 Registration Statement; Proxy Statement; Shareholder Approval. As
soon as reasonably practicable after the execution of this Agreement, each of
Parent and Subject Company shall cooperate in the preparation and filing of, and
Parent will file, the Registration Statement, of which the Subject Company Proxy
Statement shall form a part, with the SEC. Each of the Parties will as promptly
as practicable after the date hereof furnish all such data and information
relating to it and its Subsidiaries as any of the other Parties may reasonably
request for the purpose of including such data and information in the
Registration Statement and the Subject Company Proxy Statement. Parent shall use
its reasonable efforts to cause the Registration Statement to become effective
under the 1933 Act as soon as reasonably practicable, and Parent shall take any
action required to be taken under the applicable state Blue Sky or securities
Laws in connection with the issuance of the shares of Parent Common Stock upon
consummation of the Merger. Subject Company shall furnish all information
concerning it and the holders of its capital stock as Parent may reasonably
request in connection with such action. Parent shall use all reasonable efforts
to have or cause the Registration Statement to become effective as soon as
reasonably practicable, and shall take any action required to be taken under any
applicable federal or state securities Laws in connection with the issuance of
shares of Parent Common Stock in the Merger. Parent shall use its commercially
reasonable best efforts to cause the Registration Statement to remain effective
through the Effective Time. No amendment or supplement to the Registration
Statement shall be made by Parent without the approval of Subject Company.
Parent and Subject Company each will advise the other, promptly after it
receives notice thereof, of the time when the Registration Statement has become
effective or any supplement or amendment has been filed, the issuance of any
stop order suspending the effectiveness of the Registration Statement, the
suspension of the qualification of the Parent Common Stock issuable in
connection with the Merger for offering or sale in any jurisdiction, any request
by the staff of the SEC for amendment of the Registration Statement or the
Subject Company Proxy Statement, the receipt from the staff of the SEC of
comments thereon or any request by the staff of the SEC for additional
information with respect thereto. All documents that Parent is responsible for
filing with the SEC in connection with the transactions contemplated hereby
shall at the time of filing comply as to form in all material respects with the
applicable requirements of the 1933 Act and the 1934 Act. Subject Company shall
call the Subject Company Shareholders' Meeting for the purpose of voting upon
approval of this Agreement and the Plan of Merger and such other related matters
as it deems appropriate. Subject Company shall call the Subject Company
Shareholders' Meeting as soon as practicable after the Registration Statement is
declared effective by the SEC. In connection with the Subject Company
Shareholders' Meeting, (i) the Board of Directors of Subject Company shall
recommend (subject to compliance with its fiduciary duties as advised by
counsel) to its shareholders the approval of the Merger, and (ii) the Board of
Directors (subject to compliance with its fiduciary duties as advised by
counsel) and officers of Subject Company shall use their reasonable efforts to
obtain shareholder approval of the Merger.
8.2 Exchange Listing. Parent shall use its reasonable efforts to list,
prior to the Effective Time, on the NYSE, subject to official notice of
issuance, the shares of Parent Common Stock to be issued to the holders of
Subject Company Common Stock pursuant to the Merger, and Parent shall give all
notices and make all filings with the NYSE required in connection with the
transactions contemplated herein.
8.3 Applications. As soon as reasonably practicable after the date
hereof, Parent shall prepare and file, and Subject Company shall cooperate in
the preparation and, where appropriate, filing of, applications with all
Regulatory Authorities having jurisdiction over the transactions contemplated by
this Agreement seeking the requisite Consents necessary to consummate the
transactions contemplated by this Agreement. Parent shall provide Subject
Company and its counsel with copies of such applications prior to filing. Each
of the Parties shall deliver to each of the other Parties copies of all filings,
correspondence and orders sent by such Party to and copies of all filings,
correspondence and orders received by such Party from all Regulatory Authorities
in connection with the transactions contemplated hereby as soon as practicable
upon their becoming available.
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8.4 Filings With State Offices. Upon the terms and subject to the
conditions of this Agreement, Parent, Merger Subsidiary and Subject Company each
agree to execute and file Articles of Merger with the Secretary of State of the
State of Tennessee and the Secretary of State of the State of Louisiana in
connection with the Closing.
8.5 Agreement as to Efforts to Consummate. Subject to the terms and
conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
practicable after the date of this Agreement, the transactions contemplated by
this Agreement, including using its reasonable efforts to lift or rescind any
Order adversely affecting its ability to consummate the transactions
contemplated herein and to cause to be satisfied the conditions referred to in
Article 9 of this Agreement. Each Party shall use, and shall cause each of its
Subsidiaries to use, its reasonable efforts to obtain all Consents necessary or
desirable for the consummation of the transactions contemplated by this
Agreement.
8.6 Investigation and Confidentiality. (a) Prior to the Effective Time,
each Party shall keep the other Parties advised of all material developments
relevant to its business and to consummation of the Merger and shall permit the
other Parties to make or cause to be made such investigation of the business and
properties of it and its Subsidiaries and of their respective financial and
legal conditions as any other Party reasonably requests, provided that such
investigation shall be reasonably related to the transactions contemplated
hereby and shall not interfere unnecessarily with normal operations. No Party
shall be required to provide access to or to disclose information where such
access or disclosure would violate or prejudice the rights of such Party's
customers, jeopardize any attorney-client privilege or contravene any Law, rule,
regulation, Order, judgment, decree, fiduciary duty or binding agreement entered
into prior to the date of this Agreement. The Parties will make appropriate
substitute disclosure arrangements under circumstances in which the restrictions
of the preceding sentence apply. No investigation by a Party shall affect the
representations and warranties of any other Party.
(b) Each Party will hold, and will cause its respective
Affiliates and their respective officers, directors, employees, agents,
consultants, and other representatives to hold, in strict confidence, unless
compelled to disclose by judicial or administrative process (including without
limitation in connection with obtaining the necessary Consents of Regulatory
Authorities) or by other requirements of Law, all confidential documents and
confidential or proprietary information concerning the other Parties gathered
from the other Parties, or their respective officers, directors, employees,
agents, consultants or Representatives, pursuant to this Agreement, except to
the extent that such documents or information can be shown to have been (i)
previously lawfully known by the Party receiving such documents or information,
(ii) in the public domain through no fault of such receiving Party, or (iii)
later acquired by the receiving party from other sources not themselves bound
by, and in breach of, a confidentiality agreement. Except as provided in
Sections 8.1, 8.2 and 8.3 hereof, no Party will disclose or otherwise provide
any confidential or proprietary documents or information of another Party to any
other Person, except to the Party's auditors, Representatives and other
consultants and advisors who need such documents or information in connection
with this Agreement and the transactions contemplated hereby, and the Parties
agree to cause each of the foregoing to be subject to and bound by the
confidentiality provisions hereof.
8.7 Press Releases. Prior to the Effective Time, Subject Company and
Parent shall consult with each other as to the form and substance of any press
release or other public disclosure materially related to this Agreement or any
other transaction contemplated hereby; provided, that nothing in this Section
8.7 shall be deemed to prohibit any Party from making any disclosure which its
counsel reasonably deems necessary or advisable in order to satisfy such Party's
disclosure obligations imposed by Law. Parent and Subject Company agree to use
their reasonable best efforts to issue a press release announcing the execution
and delivery of this Agreement within two (2) days after the date of this
Agreement.
8.8 Certain Actions. (a) Except with respect to this Agreement and the
transactions contemplated hereby, after the date of this Agreement, neither
Subject Company, the Subject Company Subsidiaries nor any Representatives
thereof retained by Subject Company or the Subject Company Subsidiaries shall
directly or indirectly
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solicit any Acquisition Proposal by any Person. Except to the extent necessary
to comply with the fiduciary duties of Subject Company's Board of Directors as
advised by counsel, Subject Company, the Subject Company Subsidiaries, or
Representatives thereof shall not furnish any non-public information that it is
not legally obligated to furnish, negotiate with respect to, or enter into any
Contract with respect to, any Acquisition Proposal, but Subject Company may
communicate information about such an Acquisition Proposal to its shareholders
if and to the extent that it is required to do so in order to comply with its
legal obligations as advised by counsel. Subject Company shall promptly notify
Parent orally and in writing in the event that it receives any Acquisition
Proposal or inquiry related thereto. Subject Company shall (i) immediately cease
and cause to be terminated any existing activities, discussions, or negotiations
with any Persons conducted heretofore with respect to any of the foregoing, and
(ii) direct and use its reasonable efforts to cause all of its Representatives
not to engage in any of the foregoing.
(b) As a condition of and as an inducement to Parent's
entering into this Agreement, Subject Company covenants, acknowledges, and
agrees that it shall be a specific, absolute, and unconditionally binding
condition precedent to Subject Company's entering into a letter of intent,
agreement in principle, or definitive agreement (whether or not considered
binding, non-binding, conditional or unconditional) with any third party with
respect to an Acquisition Proposal, or supporting or indicating an intent to
support an Acquisition Proposal, other than this Agreement and the transactions
contemplated in this Agreement, regardless of whether Subject Company has
otherwise complied with the provisions of Section 8.8(a) hereof, that Subject
Company or such third party which is a party of the Acquisition Proposal shall
have paid Parent, as liquidated damages, the sum of Eight Hundred Thousand
Dollars ($800,000), which sum represents the (i) direct costs and expenses
(including, but not limited to, fees and expenses incurred by Parent's financial
or other consultants, printing costs, investment bankers, accountants, and
counsel) incurred by or on behalf of Parent in negotiating and undertaking to
carry out the transactions contemplated by this Agreement; and (ii) indirect
costs and expenses of Parent in connection with the transactions contemplated by
this Agreement, including Parent's management time devoted to negotiation and
preparation for the transactions contemplated by this Agreement; and (iii)
Parent's loss as a result of the transactions contemplated by this Agreement not
being consummated. Accordingly, Subject Company hereby stipulates and covenants
that prior to Subject Company's entering into a letter of intent, agreement in
principle, or definitive agreement, (whether binding or non-binding, conditional
or unconditional) with any third party with respect to an Acquisition Proposal
or supporting or indicating an intent to support an Acquisition Proposal, either
Subject Company or such third party shall have paid to Parent the amount set
forth above in immediately available funds to satisfy the specific, absolute,
and unconditionally binding condition precedent imposed by this Section 8.8.
Notwithstanding anything to the contrary in this Section 8.8(b), in the event
such Acquisition Proposal should be the result of a hostile takeover of Subject
Company, any sums due Parent hereunder shall be paid only at the closing of the
transactions set forth in such Acquisition Proposal. Parent acknowledges that
under no circumstances shall any officer or director of Subject Company) (unless
such officer or director shall have an interest in a potential acquiring party
in any Acquisition Proposal) be held personally liable to Parent for any amount
of the foregoing payment. On payment of such amount to Parent, Parent shall have
no cause of action or claim (either in law or equity) whatsoever against Subject
Company, or any officer of director of Subject Company, with respect to or in
connection with such Acquisition Proposal or this Agreement.
(c) The requirements, conditions, and obligations imposed by
Section 8.8(b) shall continue in full force and effect from the date of this
Agreement until the earlier of (i) the Effective Time; (ii) September 30, 1999;
or (iii) the date on which this Agreement shall have been terminated (A)
mutually by the Parties pursuant to Section 10.1(a) of this Agreement; (B) by
Subject Company pursuant to Section 10.1(b) or 10.1(c) of this Agreement; (C) by
Subject Company pursuant to Section 10.1(e) or Section 10.1(f), unless the
failure to consummate the transactions contemplated by this Agreement by March
31, 1999, results from or is related to pending or threatened Litigation arising
out of or in connection with the Merger or an Acquisition Proposal related to
Subject Company or any Subject Company Subsidiary, in which case the date shall
be extended to that date which is thirty (30) days after the final termination
of such Litigation or threatened Litigation; (D) by either Party pursuant to
Section 10.1(d)(i) of this Agreement; or (E) by Subject Company and Parent
pursuant to Section 10.1(g) of this Agreement.
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8.9 Accounting and Tax Treatment. Each of the Parties undertakes and
agrees to use its reasonable efforts to cause the Merger, and to take no action
which would cause the Merger not, to qualify for pooling-of-interests accounting
treatment and treatment as a "reorganization" within the meaning of Section
368(a) of the Internal Revenue Code for federal income tax purposes.
8.10 Agreement of Affiliates. Subject Company has disclosed in Section
8.10 of the Subject Company Disclosure Memorandum each Person whom it reasonably
believes may be deemed to be an "affiliate" of Subject Company as of the date of
this Agreement for purposes of Rule 145 under the 1933 Act. Subject Company
shall use its reasonable efforts to cause each such Person to deliver to Parent,
not later than 40 days prior to the Effective Time, a written agreement,
substantially in the form of Exhibit 2, providing that such Person: (i) will not
sell, transfer, or otherwise dispose of the shares of Subject Company Common
Stock held by such Person, except as contemplated by such agreement or by this
Agreement, and (ii) will not sell, transfer, or otherwise dispose of the shares
of Parent Common Stock to be received by such Person upon consummation of the
Merger except in compliance with applicable provisions of the 1933 Act and the
rules and regulations thereunder and until such time as financial results
covering at least 30 days of combined operations of Parent and Subject Company
have been published within the meaning of Section 201.01 of the SEC's
Codification of Financial Reporting Policies. If the Merger will qualify for
pooling-of-interests accounting treatment, shares of Parent Common Stock issued
to such affiliates of Subject Company in exchange for shares of Subject Company
Common Stock shall not be transferable until such time as financial results
covering at least 30 days of combined operations of Parent and Subject Company
have been published within the meaning of Section 201.01 of the SEC's
Codification of Financial Reporting Policies, regardless of whether each such
affiliate has provided the written agreement referred to in this Section 8.10
(and Parent shall be entitled to place restrictive legends upon certificates for
shares of Parent Common Stock issued to affiliates of Subject Company pursuant
to this Agreement to enforce the provisions of this Section 8.10). Parent shall
not be required to maintain the effectiveness of the Registration Statement
under the 1933 Act for the purposes of resale of Parent Common Stock by such
affiliates.
8.11 Employee Benefits and Contracts. Following the Effective Time,
Parent shall provide to officers and employees of the Subject Company and any
Subject Company Subsidiary, employee benefits under employee benefit and welfare
plans of Parent or the Parent Subsidiaries on terms and conditions which when
taken as a whole are substantially similar to those currently provided by Parent
or a Parent Subsidiary to their similarly situated officers and employees. For
purposes of participation, vesting, and benefit accrual under such employee
benefit plans, the service of the employees of the Subject Company and any
Subject Company Subsidiary prior to the Effective Time shall be treated as
service with Parent or a Parent Subsidiary participating in such employee
benefit plans. At and after the Effective Time, all contributions under Subject
Company's 401(k) Plan ("Plan") as in effect on the date of the Agreement shall
cease and employees of Subject Company and the Subject Company Subsidiaries who
continue their employment with Parent or Parent's Subsidiaries after the
Effective Time shall be entitled to participate in Parent's 401(k) Plan to the
same extent as other employees of Parent as of immediately after the Effective
Time. Subject Company, in coordination with Parent's Human Resources Department,
shall take such steps as are necessary to merge Subject Company's 401(k) Plan
with and into Parent's 401(k) Plan as of the Effective Time or as soon as
reasonably practicable after the Effective Time, but any delay in effectuating
such merger shall not delay Subject Company's employees' right to participate in
Parent's 401(k) Plan as of the Effective Time; provided, however, that should a
merger of Subject Company's Plan be prohibited by law or not administratively
feasible, as determined by Parent's Human Resources Department and communicated
to Subject Company at least 60 days prior to the Effective Time of the Merger,
then Subject Company shall take such steps necessary to terminate its 401(k)
Plan as of or immediately prior to the Effective Time of the Merger. Prior to
the Effective Time, Subject Company shall fully reserve for all anticipated
costs and expenses related to its 401(k) Plan and the merger thereof into
Parent's 401(k) Plan, or termination thereof, whichever may be the case. Subject
Company, in coordination with Parent's Human Resources Department, shall obtain
such regulatory determinations regarding the termination of Subject Company's
401(k) Plan, if applicable, or regarding the merger of Subject Company's Plan
into the Parent 401(k) Plan, in either case as may be appropriate to ensure the
qualified status of such plans and related trusts under the Code. Additionally,
after the Effective Time, the continuing employees of Subject Company and any
Subject Company Subsidiary shall be immediately eligible to receive group
hospitalization, medical, life, disability, and other
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employee welfare benefits no less than those provided to other employees of
Parent or Parent Subsidiaries holding comparable positions. Notwithstanding
anything to the contrary above, beginning with the first calendar day of the
first calendar year following the Effective Time, Subject Company employees
shall become subject to Parent's policies and procedures relative to accrued
vacation, sick leave and other paid time-off benefits. For the remainder of the
calendar year in which the Effective Time of the Merger occurs, however, all
existing Subject Company vacation, sick leave and other paid time-off benefits
will remain in force and effect as to the then former Subject Company employees
and shall be administered in accordance with the terms of such plans and
consistent with past practices. On January 1st next following the Effective Time
of the Merger, the Subject Company vacation, sick leave and other paid time-off
benefit plans and arrangements shall terminate. In their place Parent's
vacation, sick leave and other paid time-off benefit plans, arrangements and
policies shall become effective and applicable to the then former Subject
Company employees who are still employed by Parent or any of its Subsidiaries.
The applicable then former Subject Company employees shall not be allowed to
carryover or carry forward any accrued vacation, sick leave or other paid
time-off benefits under the former Subject Company plans and neither Subject
Company, any Subject Company Subsidiary, Parent nor any Parent Subsidiary shall
pay for any of the accrued vacation, sick leave other paid time-off days or
benefits under the Subject Company plans unless payment for lost accrued days or
benefits is specifically provided for in the respective plans as they exist on
the date hereof. The agreement of Parent to provide Subject Company employees
with credit for prior service is based on the representation by Subject Company
that its vacation, sick leave and other paid time-off benefit plans do not
provide for payment of unused days or benefits upon termination of the plans or
should the employee's employment with Subject Company or any Subject Company
Subsidiary be terminated for any reason.
8.12 Indemnification. (a) After the Effective Time, Parent shall
indemnify, defend and hold harmless the present and former directors, officers,
employees, and agents of the Subject Company and any Subject Company Subsidiary
(each, an "Indemnified Party") (including any person who becomes a director,
officer, employee, or agent prior to the Effective Time) against all Liabilities
(including reasonable attorneys' fees, and expenses, judgments, fines and
amounts paid in settlement) arising out of actions or omissions occurring (or
alleged to have occurred) at or prior to the Effective Time to the full extent
permitted under any of Tennessee Law, Louisiana Law, Subject Company's Articles
of Incorporation and Bylaws as in effect on the date hereof, and any indemnity
agreements entered into prior to the date hereof between Subject Company or a
Subject Company Subsidiary and any Indemnified Party, whichever is greater.
Without limiting the foregoing, in any case in which approval by Parent is
required to effectuate any indemnification, Parent shall direct, at the election
of the Indemnified Party, that the determination of any such approval shall be
made by independent counsel mutually agreed upon between Parent and the
Indemnified Party.
(b) Any Indemnified Party wishing to claim indemnification
under paragraph (a) of this Section 8.12, upon learning of any such Liability or
Litigation, shall promptly notify Parent thereof, provided that the failure so
to notify shall not affect the obligations of Parent under this Section 8.12
unless and to the extent such failure materially increases Parent's Liability
under this Section 8.12. In the event of any such Litigation (whether arising
before or after the Effective Time), (i) Parent or the Surviving Corporation
shall have the right to assume the defense thereof and Parent shall not be
liable to such Indemnified Parties for any legal expenses of other counsel or
any other expenses subsequently incurred by such Indemnified Parties in
connection with the defense thereof, except that if Parent or the Surviving
Corporation elects not to assume such defense or counsel for the Indemnified
Parties advises that there are substantive issues which raise conflicts of
interest between Parent or the Surviving Corporation and the Indemnified Parties
or between the Indemnified Parties, the Indemnified Parties may retain counsel
satisfactory to them, and Parent or the Surviving Corporation shall pay all
reasonable fees and expenses of such counsel for the Indemnified Parties
promptly as statements therefor are received; provided, that Parent shall be
obligated pursuant to this paragraph (b) to pay for only two firms of counsel
for all Indemnified Parties in any jurisdiction, (ii) the Indemnified Parties
will cooperate in the defense of any such Litigation, and (iii) neither Parent
nor the Surviving Corporation shall be liable for any settlement effected
without its prior written consent or have any obligation hereunder to any
Indemnified Party when and if a court of competent jurisdiction shall determine,
and such determination shall have become final, that the indemnification of such
Indemnified Party in the manner contemplated hereby is prohibited by applicable
Law.
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(c) If either Parent or the Surviving Corporation or any of
their respective successors or assigns shall consolidate with or merge into any
other Person and shall not be the continuing or surviving Person of such
consolidation or merger or shall transfer all or substantially all of its Assets
to any Person, then and in each case, proper provision shall be made so that the
successors and assigns of Parent or the Surviving Corporation, as the case may
be, shall assume the obligations set forth in this Section 8.12.
(d) Parent shall pay all reasonable costs, including
attorneys' fees, that may be incurred by any Indemnified Party in enforcing the
indemnity and other obligations provided for in this Section 8.12.
(e) The provisions of this Section 8.12 are intended to be for
the benefit of, and shall be enforceable by, each Indemnified Party and his or
her heirs and representatives.
8.13 Filing of Reports by Parent. During the six-month period following
the Effective Time, Parent shall use its commercially reasonable best efforts to
timely file all SEC Documents required to be filed by it and will issue press
releases concerning earnings in accordance with its established practice. Parent
agrees, for a period of three years after the Effective Time of the Merger, to
file on a timely basis all reports required to be filed by it pursuant to
Section 13 of the Securities Exchange Act of 1934, as amended, so that the
public information provisions of Rule 145(d) promulgated by the SEC as the same
are presently in effect will be available to the shareholders of Subject Company
in the event such shareholders desire to transfer any shares of Parent issued
pursuant to the Merger.
8.14 Voting Agreement. Each of Subject Company's directors shall enter
into a voting agreement whereby each agrees to vote all stock of Subject
Company, owned of record or over which such director has voting control, in
favor of the Merger at the meeting of shareholders of Subject Company called for
the purpose of approving the Merger.
8.15 Employment Agreement. Parent and Merger Subsidiary agree to cause
Union Planters Bank, National Association to enter into a employment agreements,
no later than the Closing Date, with Thomas W. Smith and Patrick M. Guidry,
respectively, which agreements shall be substantially in the form of Exhibit 4
attached hereto.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 Conditions to Obligations of Each Party. The respective obligations
of each Party to perform this Agreement and consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by both Parties pursuant to Section 11.6 of
this Agreement:
(a) Shareholder Approval. The shareholders of Subject Company
shall have approved this Agreement and the consummation of the transactions
contemplated hereby and thereby, including the Merger, by the vote, as and to
the extent required by Law, or by the provisions of any governing instruments
(without regard to any shares which are voted pursuant to irrevocable proxies,
the validity of which has been contested by the underlying owner, unless the
underlying owner has given written instructions with respect to the voting of
such shares in connection with this Agreement).
(b) Regulatory Approvals. All Consents of, filings and
registrations with, and notifications to, all Regulatory Authorities required
for consummation of the Merger shall have been obtained or made and shall be in
full force and effect and all waiting periods required by Law shall have
expired. No Consent obtained from any Regulatory Authority which is necessary to
consummate the transactions contemplated hereby shall be conditioned or
restricted in any manner reasonably deemed to be material by Parent.
(c) Legal Proceedings. No court or governmental or regulatory
authority of competent jurisdiction shall have enacted, issued, promulgated,
enforced, or entered by Law or Order (whether temporary, preliminary, or
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permanent) or taken any other action which prohibits, restricts in any manner
reasonably deemed to be material by a party, or makes illegal consummation of
the transactions contemplated by this Agreement.
(d) Registration Statement. The Registration Statement shall
be effective under the 1933 Act, no stop orders suspending the effectiveness of
the Registration Statement shall have been issued, no action, suit, proceeding,
or investigation by the SEC to suspend the effectiveness thereof shall have been
initiated and be continuing, and all necessary approvals under state securities
Laws or the 1933 Act or 1934 Act relating to the issuance or trading of the
shares of Parent Common Stock issuable pursuant to the Merger shall have been
received.
(e) Exchange Listing. The shares of Parent Common Stock
issuable pursuant to the Merger shall have been approved for listing on the
NYSE, subject to official notice of issuance.
(f) Tax Matters. Parent shall have received a written opinion
of counsel from Wyatt, Tarrant & Combs, and Subject Company shall have received
a written opinion of counsel from McGlinchey Stafford, in form and substance
reasonably satisfactory to Parent and Subject Company, respectively, dated as of
the Closing Date, in each case substantially to the effect that (i) the Merger
will constitute a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code, (ii) Parent, Merger Subsidiary and Subject Company will
each be "a party to a reorganization" within the meaning of Section 368(b) of
the Internal Revenue Code; (iii) no gain or loss will be recognized by the
shareholders of Subject Company who exchange all of their Subject Company Common
Stock solely for Parent Common Stock pursuant to the Merger (except with respect
to cash received in lieu of a fractional share interest in Parent Common Stock),
(iv) the tax basis of the Parent Common Stock received by shareholders of
Subject Company who exchange Subject Company Common Stock solely for Parent
Common Stock in the Merger will be the same as the tax basis of the Subject
Company Common Stock surrendered in exchange therefor (reduced by any amount
allocable to a fractional share interest for which cash is received) (v) the
holding period of the Parent Common Stock received by shareholders of Subject
Company in the Merger will include the period during which the shares of Subject
Company Common Stock surrendered in exchange therefor were held, provided such
Subject Company Common Stock was held as a capital asset by the holder of such
Subject Company Common Stock at the Effective Time, and (vi) neither Subject
Company nor Parent will recognize gain or loss as a consequence of the Merger.
In rendering such Tax Opinion, such counsel shall require and be entitled to
rely upon representations and covenants of officers of Parent, Subject Company,
shareholders of Subject Company and others reasonably satisfactory in form and
substance to such counsel.
9.2 Conditions to Obligations of Parent. The obligations of Parent to
perform this Agreement and consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the following conditions,
unless waived by Parent pursuant to Section 11.6(a) of this Agreement:
(a) Representations and Warranties. For purposes of this
Section 9.2(a), the accuracy of the representations and warranties of Subject
Company set forth in this Agreement shall be assessed as of the date of this
Agreement and as of the Effective Time with the same effect as though all such
representations and warranties had been made immediately prior to the Effective
Time (provided that representations and warranties which are confined to a
specific date shall speak only as of such date). The representations and
warranties of Subject Company set forth in Sections 5.1, 5.2, 5.3, 5.19 and 5.20
of this Agreement shall each be true and correct in all material respects. There
shall not exist inaccuracies in the representations and warranties of Subject
Company set forth in this Agreement (including the representations and
warranties set forth in Sections 5.1, 5.2, 5.3, 5.19 and 5.20) such that the
aggregate effect of such inaccuracies has, or is reasonably likely to have, a
Material Adverse Effect on Subject Company, provided that, for purposes of this
sentence only, those representations and warranties which are qualified by
references to "material" or "Material Adverse Effect" or "Knowledge" shall be
deemed not to include such qualifications.
(b) Performance of Agreements and Covenants. Each and all of
the agreements and covenants of Subject Company to be performed and complied
with pursuant to this Agreement and the other agreements contemplated hereby
prior to the Effective Time shall have been duly performed and complied with in
all material
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respects.
(c) Certificates. Subject Company shall have delivered to
Parent (i) a certificate, dated as of the Effective Time and signed on its
behalf by its chief executive officer and its secretary/treasurer, to the effect
that the conditions of its obligations set forth in Sections 9.2(a) and 9.2(b)
of this Agreement have been satisfied, and (ii) certified copies of resolutions
duly adopted by Subject Company's Board of Directors and shareholders evidencing
the taking of all corporate action necessary to authorize the execution,
delivery, and performance of this Agreement, and the consummation of the
transactions contemplated hereby, all in such reasonable detail as Parent shall
request.
(d) Pooling Letter. Parent shall have received a letter, dated
as of the date of filing of the Registration Statement with the SEC and as of
the Closing Date, addressed to it and in a form reasonably acceptable to it,
from Price Waterhouse LLP to the effect that the Merger will qualify for
pooling-of-interests accounting treatment; provided, however, this shall not be
a condition precedent to Parent's obligation to perform this Agreement and
consummate the Merger and the other transactions contemplated hereby if Parent
takes actions which prevent the transactions contemplated by the Agreement,
including the Merger, from qualifying for such accounting treatment.
(e) Consents and Approvals. Subject Company shall have
obtained any and all Consents required to be obtained by it for consummation of
the Merger (other than those set forth in Section 9.1(b) of this Agreement) or
for the preventing of any Default under any Contract or Permit of such Party
which, if not obtained or made, is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Subject Company or Parent.
(f) Legal Opinion. Subject Company shall have delivered to
Parent an opinion of counsel, dated as of the Closing Date, addressed to and in
form and substance reasonably satisfactory to Parent, to the effect that:
(i) Subject Company is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Louisiana.
(ii) This Agreement, including the Plan of Merger
attached hereto as Exhibit 1, has been duly and validly authorized, executed and
delivered on behalf of Subject Company, and (assuming this Agreement is a
binding obligation of Parent and Merger Subsidiary) constitute a valid and
binding obligation of Subject Company, enforceable in accordance with its terms,
subject as to enforceability to applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and subject to the application of equitable
principles and judicial discretion;
(iii) The execution, delivery and performance of this
Agreement and the Plan of Merger, and the consummation of the transactions
contemplated herein and therein, including the Merger, have been duly and
validly authorized by all necessary corporate and shareholder action in respect
thereof on the part of Subject Company.
(f) Maintenance of Certain Covenants, Etc. At the time of
Closing, (i) the total consolidated stockholders' equity of Subject Company (the
"Closing Stockholders' Equity") shall be not less than $7,000,000 and (ii)
Subject Company shall own, free and clear of any Liens, all of the outstanding
capital stock of Bank. The Closing Stockholders' Equity shall be determined in
accordance with GAAP assuming that Subject Company and each of its Subsidiaries
had been operated consistently in the normal course of their respective
businesses; provided, however, that: (A) the effects of any balance sheet
expansion through abnormal, unusual, nonrecurring or out-of-the-ordinary
borrowings or by the realization of extraordinary or nonrecurring gains
otherwise than in the ordinary course of business or other income from the
disposition of assets or liabilities or through similar transactions shall be
disregarded in computing the Closing Stockholders' Equity; (B) any reduction in
stockholders' equity attributable to the application of FASB 115 shall be
disregarded in computing the Closing Stockholders' Equity; (C) any reduction in
stockholders' equity attributable to loss resulting from a Liability disclosed
in the Subject Company
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Disclosure Memorandum, and reviewed and acknowledged by Parent, shall be
disregarded in computing the Closing Stockholders' Equity; and (D) any reduction
in stockholders' equity resulting from any act or omission taken by Subject
Company or Bank at the request, or with the prior written consent, of Parent or
Merger Subsidiary shall be disregarded in computing the Closing Stockholders'
Equity.
(g) Non-Compete Agreements. Each director of Subject Company
and the Bank and the president and chief executive officer of Bank shall have
entered into a Non-Compete Agreement with Parent, Merger Subsidiary and Union
Planters Bank, National Association substantially in the form of Exhibit 3
attached hereto.
9.3 Conditions to Obligations of Subject Company. The obligations of
Subject Company to perform this Agreement and consummate the Merger and the
other transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by Subject Company pursuant to Section
11.6(b) of this Agreement.
(a) Representations and Warranties. For purposes of this
Section 9.3(a), the accuracy of the representations and warranties of Parent set
forth in this Agreement shall be assessed as of the date of this Agreement and
as of the Effective Time with the same effect as though all such representations
and warranties had been made immediately prior to the Effective Time (provided
that representations and warranties which are confined to a specified date shall
speak only as of such date). The representations and warranties of Parent set
forth in Sections 6.1, 6.2, 6.3 and 6.12 of this Agreement shall each be true
and correct in all material respects. There shall not exist inaccuracies in the
representations and warranties of Parent set forth in this Agreement (including
the representations and warranties set forth in Sections 6.1, 6.2, 6.3 and 6.12
such that the aggregate effect of such inaccuracies has, or is reasonably likely
to have, a Material Adverse Effect on Parent; provided that, for purposes of
this sentence only, those representations and warranties which are qualified by
references to "material" or "Material Adverse Effect" or "Knowledge" shall be
deemed not to include such qualifications.
(b) Performance of Agreements and Covenants. Each and all of
the agreements and covenants of Parent and/or Merger Subsidiary to be performed
and complied with by Parent and/or Merger Subsidiary pursuant to this Agreement
and the other agreements contemplated hereby prior to the Effective Time shall
have been duly performed and complied with in all material respects.
(c) Certificates. Parent shall have delivered to Subject
Company (i) a certificate, dated as of the Effective Time and signed on its
behalf by its chief executive officer and its chief financial officer, to the
effect that the conditions of its obligations set forth in Sections 9.3(a) and
9.3(b) of this Agreement have been satisfied, and (ii) certified copies of
resolutions duly adopted by Parent's and Merger Subsidiary's Boards of Directors
and Parent's Shareholders evidencing the taking of all corporate action
necessary to authorize the execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby, all in
such reasonable detail as Subject Company shall request.
(d) Consents and Approvals. Parent and/or Merger Subsidiary
shall have obtained any and all Consents required to be obtained by either of
them for consummation of the Merger (other than those set forth in Section
9.1(b) of this Agreement) or for the preventing of any Default under any
Contract or Permit of such Party which, if not obtained or made, is reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Parent.
(e) Legal Opinion. Parent and Merger Subsidiary shall have
delivered to Subject Company an opinion of counsel, dated as of the Closing
Date, addressed to and in form and substance reasonably satisfactory to Subject
Company, to the effect that:
(i) Parent and Merger Subsidiary each is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Tennessee.
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(ii) This Agreement, including the Plan of Merger
attached hereto as Exhibit 1, has been duly and validly authorized, executed and
delivered on behalf of Parent and Merger Subsidiary, and (assuming this
Agreement is a binding obligation of Subject Company) constitute a valid and
binding obligation of Parent and Merger Subsidiary, enforceable in accordance
with its terms, subject as to enforceability to applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and subject to the application of equitable
principles and judicial discretion;
(iii) The execution, delivery and performance of this
Agreement and the Plan of Merger, and the consummation of the transactions
contemplated herein and therein, including the Merger, have been duly and
validly authorized by all necessary corporate and shareholder action in respect
thereof on the part of Parent and Merger Subsidiary.
ARTICLE 10
TERMINATION
10.1 Termination. Notwithstanding any other provision of this
Agreement, and notwithstanding the approval of this Agreement by the
shareholders of Subject Company, this Agreement may be terminated and the Merger
abandoned at any time prior to the Effective Time:
(a) By mutual consent of the respective Boards of Directors
of Parent and Subject Company; or
(b) By the Board of Directors of Parent or the Board of
Directors of Subject Company (provided that the terminating Party is not then in
breach of any representation or warranty contained in this Agreement under the
applicable standard set forth in Section 9.2(a) of this Agreement in the case of
Subject Company and Section 9.3(a) in the case of Parent or in material breach
of any covenant or other agreement contained in this Agreement) in the event of
an inaccuracy of any representation or warranty of the other Party contained in
this Agreement which cannot be or has not been cured within 30 days after the
giving of written notice to the breaching Party of such inaccuracy and which
inaccuracy would provide the terminating Party the ability to refuse to
consummate the Merger under the applicable standard set forth in Section 9.2(a)
of this Agreement in the case of Subject Company and Section 9.3(a) of this
Agreement in the case of Parent; or
(c) By the Board of Directors of Parent or the Board of
Directors of Subject Company (provided that the terminating Party is not then in
breach of any representation or warranty contained in this Agreement under the
applicable standard set forth in Section 9.2(a) of this Agreement in the case of
Subject Company and Section 9.3(a) in the case of Parent or in material breach
of any covenant or other agreement contained in this Agreement) in the event of
a material breach by the other Party of any covenant or agreement contained in
this Agreement which cannot be or has not been cured within 30 days after the
giving of written notice to the breaching Party of such breach; or
(d) By the Board of Directors of Parent or the Board of
Directors of Subject Company in the event (i) any Consent of any Regulatory
Authority required for consummation of the Merger and the other transactions
contemplated hereby shall have been denied by final non-appealable action of
such authority or if any action taken by such authority is not appealed within
the time limit for appeal, or (ii) the shareholders of Subject Company fail to
vote their approval of this Agreement and the transactions contemplated hereby
as required by the LBCL and this Agreement at the Subject Company Shareholders'
Meeting where the transactions were presented to such shareholders for approval
and voted upon; or
(e) By the Board of Directors of Parent or the Board of
Directors of Subject Company in the event that the Merger shall not have been
consummated by March 31, 1999, if the failure to consummate the transactions
contemplated hereby on or before such date is not caused by any willful breach
of this Agreement by the Party electing to terminate pursuant to this Section
10.1(e);
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(f) By the Board of Directors of Parent or the Board of
Directors of Subject Company in the event that any condition to Closing set
forth in Article 9 hereof cannot be met by March 31, 1999 and has not been
waived by each Party in whose favor such condition inures; provided that the
inability to satisfy such condition to Closing on or before March 31, 1999 is
not caused by any willful breach of this Agreement by the Party electing to
terminate pursuant to this Section 10.1(f); or
(g) By the Board of Directors of Subject Company upon written
notice to Parent at any time during the ten-day period commencing two days after
the Determination Date, if both of the following conditions are satisfied:
a. the Average Closing Price shall be less
than the product of (i) 0.80 and (ii) the Starting Price; and
b. (i) the quotient obtained by dividing the
Average Closing Price by the Starting Price (such number being
referred to herein as the "UPC Ratio") shall be less than (ii)
the quotient obtained by dividing the Index Price on the
Determination Date by the Index Price on the Starting Date and
subtracting 0.15 from the quotient in this clause (2)(ii)
(such number being referred to herein as the "Index Ratio");
subject, however, to the following three sentences. If Subject
Company refuses to consummate the Merger pursuant to this
Section 10.1(g), it shall give prompt written notice thereof
to Parent; provided, that such notice of election to terminate
may be withdrawn at any time within the aforementioned ten-day
period. During the five-day period commencing with its receipt
of such notice, Parent shall have the option to elect to
increase the Exchange Ratio to equal the lesser of (i) the
quotient obtained by dividing (1) the product of 0.80, the
Starting Price, and the Exchange Ratio (as then in effect) by
(2) the Average Closing Price, and (ii) the quotient obtained
by dividing (1) the product of the Index Ratio and the
Exchange Ratio (as then in effect) by (2) the UPC Ratio. If
Parent makes an election contemplated by the preceding
sentence, within such five-day period, it shall give prompt
written notice to Subject Company of such election and the
revised Exchange Ratio, whereupon no termination shall have
occurred pursuant to this Section 10.1(g) and this Agreement
shall remain in effect in accordance with its terms (except as
the Exchange Ratio shall have been so modified), and any
references in this Agreement to "Exchange Ratio" shall
thereafter be deemed to refer to the Exchange Ratio as
adjusted pursuant to this Section 10.1(g).
For purposes of this Section 10.1(g), the following terms
shall have the meanings indicated:
"Average Closing Price" shall mean the average of the daily
last sales prices of UPC Common Stock as reported on the NYSE (as reported by
The Wall Street Journal or, if not reported thereby, another authoritative
source as chosen by UPC) for the 20 consecutive full trading days in which such
shares are traded on the NYSE ending at the close of trading on the
Determination Date.
"Determination Date" shall mean the later of the date (i) of
the Stockholders' Meeting and (ii) on which the Consent of the Board of
Governors of the Federal Reserve System shall be received (without regard to any
requisite waiting period thereof).
"Index Group" shall mean the 14 bank holding companies listed
below, the common stocks of all of which shall be publicly traded and as to
which there shall not have been, since the Starting Date and before the
Determination Date, any public announcement of a proposal for such company to be
acquired or for such company to acquire another company or companies in
transactions with a value exceeding 25% of the acquiror's market capitalization
as of the Starting Date. In the event that any such company or companies are
removed from the Index Group as a result of any of the events described in the
preceding sentence, the weights (which shall be determined based upon the number
of outstanding shares of common stock) shall be redistributed proportionately
for purposes of determining the Index Price. The 14 bank holding companies and
the weights attributed to them are as follows
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<TABLE>
<CAPTION>
Bank Holding Companies Weighting
- ---------------------------------------------- -------------------------
<S> <C>
AmSouth Bancorporation 6.89%
BB&T Corporation 8.03
Compass Bancshares 3.99
Crestar Financial Corporation 6.38
First Virginia Banks, Inc. 2.95
First Security Corporation 10.12
First Tennessee National Corporation 7.27
Hibernia Corporation 8.67
Huntington Bancshares, Inc. 10.94
Marshall & Ilsley Corporation 6.02
Mercantile Bancorporation, Inc. 7.58
National Commerce Bancorp 2.80
Old Kent Financial Corporation 5.17
SouthTrust Corporation 9.13
Trustmark Corporation 4.18
-------
Total 100.00%
=======
</TABLE>
"Index Price" on a given date shall mean the weighted average
(weighted in accordance with the factors listed above) of the closing prices of
the companies composing the Index Group.
"Starting Date" shall mean the fourth full trading day after
the announcement by press release of the Merger.
"Starting Price" shall mean the closing price per share of UPC
Common Stock as reported on the NYSE (as reported by The Wall Street Journal or,
if not reported thereby, another authoritative source as chosen by UPC) on the
Starting Date.
If Parent or any company belonging to the Index Group declares
or effects a stock dividend, reclassification, recapitalization, split-up,
combination, exchange of shares, or similar transaction between the date of this
Agreement and the Determination Date, the prices for the common stock of such
company or UPC shall be appropriately adjusted for the purposes of applying this
Section 10.1(g).
10.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 10.1 of this Agreement, this
Agreement and the Plan of Merger shall become void and have no effect, except
that (i) the provisions of this Section 10.2, Section 8.6(b), Section 8.8,
Section 11.2 and Section 11.3 of this Agreement shall survive any such
termination and abandonment, and (ii) a termination pursuant to the terms of
Sections 10.1(b) or 10.1(c) hereof shall not relieve the breaching Party from
Liability for an uncured breach of a representation, warranty, covenant, or
agreement.
10.3 Non-Survival of Representations and Covenants. The respective
representations, warranties, obligations, covenants, and agreements of the
Parties shall not survive the Effective Time except for those covenants and
agreements which by their terms apply in whole or in part after the Effective
Time.
ARTICLE 11
MISCELLANEOUS
11.1 Definitions. (a) Except as otherwise provided herein, the
capitalized terms set forth below shall have the following meanings:
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"Acquisition Proposal" with respect to a Party shall mean any tender
offer or exchange offer or any proposal for a merger, acquisition of all of the
stock or assets of, or other business combination involving such Party or any of
its Subsidiaries or the acquisition of a substantial equity interest in, or a
substantial portion of the Assets of, such Party or any of its Subsidiaries.
"Affiliate" of a Person shall mean any other Person, directly or
indirectly through one or more intermediaries, controlling, controlled by, or
under common control with such Person.
"Agreement" shall mean this Agreement and the Exhibits delivered
pursuant hereto and incorporated herein by reference.
"Articles of Merger" shall mean the Articles of Merger and Certificate
of Merger to be executed by Parent, Merger Subsidiary and Subject Company and
filed with the Secretary of State of the State of Tennessee and the Secretary of
State of the State of Louisiana, respectively, relating to the Merger as
contemplated by Section 1.1 of this Agreement.
"Assets" of a Person shall mean all of the assets, properties,
businesses, and rights of such Person of every kind, nature, character and
description, whether real, personal or mixed, tangible or intangible, accrued or
contingent, or otherwise, wherever located.
"Bank" shall mean Bank of LaPlace of St. John The Baptist Parish,
Louisiana.
"BHC Act" shall mean the federal Bank Holding Company Act of 1956, as
amended.
"Closing Date" shall mean the date on which the Closing occurs.
"Consent" shall mean any consent, approval, authorization, clearance,
exemption, waiver, or similar affirmation by any Person pursuant to any
Contract, Law, Order or Permit.
"Contract" shall mean any legally binding written or oral agreement,
arrangement, authorization, commitment, contract, indenture, instrument, lease,
obligation, plan, practice, restriction, understanding, or undertaking of any
kind or character, or other document to which any Person is a party or that is
binding on any Person or its capital stock, Assets or business.
"Default" shall mean (i) any breach or violation of or default under
any Contract, Order, or Permit, (ii) any occurrence of any event that with the
passage of time or the giving of notice or both would constitute a breach or
violation of or default under any Contract, Order, or Permit, or (iii) any
occurrence of any event that with or without the passage of time or the giving
of notice would give rise to a right to terminate or revoke, change the current
terms of, or renegotiate, or to accelerate, increase or impose any Liability
under, any Contract, Order or Permit.
"Dissenting Shares" shall mean any shares of Subject Company Common
Stock with respect to which the record or beneficial holder has properly
perfected the holder's rights to dissent under Section 131 of the LBCL.
"Effective Time" shall have the meaning ascribed to such term in
Section 1.3 of this Agreement.
"Environmental Laws" shall mean all Laws relating to pollution or
protection of human health or the environment (including ambient air, surface
water, ground water, land surface or subsurface strata) and which are
administered, interpreted or enforced by the United States Environmental
Protection Agency and state and local agencies with jurisdiction over, and
including common law in respect of, pollution or protection of the environment,
including the Comprehensive Environmental Response Compensation and Liability
Act, as amended, 42 U.S.C. 9601 et seq. ("CERCLA"), the Resource Conservation
and Recovery Act, as amended, 42 U.S.C. 6901 et seq.("RCRA"), and other Laws
relating to emissions, discharges, releases, or threatened releases of any
Hazardous Material, or
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otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of any Hazardous Material.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate" shall mean any trade or business, whether or not
incorporated, that together with the entity under consideration would be deemed
a "single employer" within the meaning of section 4001(b) of ERISA.
"Exchange Agent" shall have the meaning ascribed to such term in
Section 4.1 of this Agreement.
"Exchange Ratio" shall have the meaning ascribed to such term in
Section 3.1(c) of this Agreement.
"Exhibits" shall mean the Exhibits so marked, copies of which are
attached to this Agreement. Such Exhibits are hereby incorporated by reference
herein and made a part hereof.
"FRB" shall mean the Board of Governors of the Federal Reserve System
or applicable Federal Reserve Bank.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"Hazardous Material" shall mean (i) any hazardous substance, hazardous
material, hazardous waste, regulated substance, or toxic substance (as those
terms are defined by any applicable Environmental Laws) and (ii) any chemicals,
pollutants, contaminants, petroleum, petroleum products, or oil (and
specifically shall include asbestos requiring abatement, removal, or
encapsulation pursuant to the requirements of governmental authorities and any
polychlorinated biphenyls).
"HSR Act" shall mean Section 7A of the Clayton Act, as added by Title
II of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and
the rules and regulations promulgated thereunder.
"Indemnified Party" shall have the meaning ascribed to such term in
Section 8.12 of this Agreement.
"Intellectual Property" shall mean copyrights, patents, trademarks,
service marks, service names, trade names, applications therefor, technology
rights and licenses, computer software (including any source or object codes
therefor or documentation relating thereto), trade secrets, franchises,
know-how, inventions, and other intellectual property rights.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
as amended, and the rules and regulations promulgated thereunder.
"Knowledge" as used with respect to a Person (including references to
such Person being aware of a particular matter) shall mean those facts that are
known by the Chairman, President, Chief Financial Officer, Chief Accounting
Officer, Chief Credit Officer, or General Counsel of such Person.
"Law" shall mean any code, law, ordinance, regulation, reporting or
licensing requirement, rule, or statute applicable to a Person or its Assets,
Liabilities or business, including those promulgated, interpreted, or enforced
by any Regulatory Authority.
"LBCL" shall mean the Louisiana Business Corporation Law.
"Liability" shall mean any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost, or expense (including costs
of investigation, collection, and defense), claim, deficiency, guaranty, or
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endorsement of or by any Person (other than endorsements of notes, bills,
checks, and drafts presented for collection or deposit in the ordinary course of
business) of any type, whether accrued, absolute or contingent, liquidated or
unliquidated, matured or unmatured, or otherwise.
"Lien" shall mean any conditional sale agreement, default of title,
easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, restriction, security interest, title retention,
or other security arrangement, or any adverse right or interest, charge, or
claim of any nature whatsoever of, on, or with respect to any property or
property interest, other than (i) Liens for current Taxes upon the assets or
properties of a Party or its Subsidiaries which are not yet delinquent, (ii) for
depository institution Subsidiaries of a Party, pledges to secure deposits, and
other Liens incurred in the ordinary course of banking business, (iii) minor
imperfections of title, and encumbrances, if any, which have arisen in the
ordinary course of business, which are not substantial in character, amount or
extent and which do not materially detract from the value of or interfere with
the present or contemplated use of any of the properties subject thereto or
affected thereby or otherwise materially impair the business operations
conducted or contemplated by a party, (iv) mortgages and encumbrances which
secure indebtedness, which is properly reflected in the Subject Company
Financial Statements or Parent Financial Statements delivered prior to the date
of this Agreement, and (v) liens arising as a matter of law in the ordinary
course of business with respect to obligations incurred after the date of such
Subject Company Financial Statements or Parent Financial Statements, provided
that such obligations are not delinquent or are being contested in good faith.
"Litigation" shall mean any action, arbitration, cause of action,
claim, complaint, criminal prosecution, demand letter, governmental or other
examination or investigation, hearing, inquiry, administrative or other
proceeding, or notice (written or oral) by any Person alleging potential
Liability or requesting information relating to or affecting a Party, its
business, its Assets (including Contracts related to it), or the transactions
contemplated by this Agreement, but shall not include regular, periodic
examinations of depository institutions and their Affiliates by Regulatory
Authorities.
"LOFI" shall mean the Louisiana Office of Financial Institutions
"Material Adverse Effect" on a Party shall mean an event, change, or
occurrence which, individually or together with any other event, change, or
occurrence, has a material adverse impact on (i) the financial condition,
business, or results of operations of such Party and its Subsidiaries, taken as
a whole, or (ii) the ability of such Party to perform its obligations under this
Agreement or to consummate the Merger or the other transactions contemplated by
this Agreement in accordance with applicable Law, provided that "Material
Adverse Effect" and "material adverse impact" shall not be deemed to include the
impact of (a) changes in banking and similar Laws of general applicability or
interpretations thereof by courts or governmental authorities, (b) changes in
GAAP or regulatory accounting principles generally applicable to banks and their
holding companies, (c) actions or omissions of a Party (or any of its
Subsidiaries) taken with the prior written consent of the other Party, (d)
changes in economic conditions or interest rates generally affecting financial
institutions, (e) the direct effects of compliance with this Agreement
(including the expense associated with the vesting of benefits under the various
employee benefit plans of Subject Company as a result of the Merger constituting
a change of control) on the operating performance of the Parties, including
expenses incurred by the Parties in consummating the transactions contemplated
by the Agreement or, (f) any Liability disclosed in the Subject Company
Disclosure Memorandum.
"Merger" shall mean the merger of Subject Company with and into Merger
Subsidiary.
"Merger Subsidiary" shall mean Union Planters Holding Corporation, a
wholly-owned subsidiary of Parent organized under the Laws of the State of
Tennessee.
"Merger Subsidiary Common Stock" shall mean the $1.00 par value common
stock of Merger Subsidiary.
"NASD" shall mean the National Association of Securities Dealers, Inc.
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"NYSE" shall mean the New York Stock Exchange, Inc.
"1933 Act" shall mean the Securities Act of 1933, as amended.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended.
"Operating Property" shall mean any property owned by the Party in
question or by any of its Subsidiaries or in which such Party or Subsidiary
holds a security interest, and, where required by the context, includes the
owner or operator of such property, but only with respect to such property.
"Order" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling, or writ
of any federal, state, local, or foreign or other court, arbitrator, mediator,
tribunal, administrative agency, or Regulatory Authority.
"Parent" shall mean Union Planters Corporation, a Tennessee
corporation.
"Parent Capital Stock" shall mean, collectively, the Parent Common
Stock, the Parent Preferred Stock and any other class or series of capital stock
of Parent.
"Parent Common Stock" shall mean the $5.00 par value common stock of
Parent.
"Parent Contracts" shall have the meaning ascribed to such term in
Section 6.11 of this Agreement.
"Parent Disclosure Memorandum" shall mean the written information
entitled "Parent Disclosure Memorandum" delivered prior to the date of this
Agreement to Subject Company describing in reasonable detail the matters
contained therein and, with respect to each disclosure made therein,
specifically referencing each Section of this Agreement under which such
disclosure is being made.
"Parent Financial Statements" shall mean (i) the consolidated balance
sheets (including related notes and schedules, if any) of Parent and related
statements of earnings, changes in stockholders' equity, and cash flows
(including related notes and schedules, if any), as of December 31, 1997 and for
each of the two years ended December 31, 1996 and 1995, as filed by Parent in
SEC Documents, and (ii) the consolidated balance sheets of Parent (including
related notes and schedules, if any) and related statements of earnings, changes
in shareholders' equity, and cash flows (including related notes and schedules,
if any) included in SEC Documents filed with respect to periods ended subsequent
to December 31, 1997.
"Parent Material Contracts" shall have the meaning ascribed to such
term in Section 6.13 of this Agreement.
"Parent Preferred Stock" shall mean the no par value preferred stock of
Parent and shall include the (i) Series A Preferred Stock and (ii) Series E 8%
Cumulative, Convertible Preferred Stock, of Parent ("Parent Series E Preferred
Stock").
"Parent Rights" shall mean the preferred stock purchase rights issued
pursuant to the Parent Rights Agreement.
"Parent Rights Agreement" shall mean that certain Rights Agreement,
dated January 19, 1989, between Parent and Union Planters Bank, National
Association, as Rights Agent.
"Parent Subsidiaries" shall mean the Subsidiaries of Parent and any
corporation, bank, or other organization acquired as a Subsidiary of Parent in
the future and owned by Parent at the Effective Time.
"Participation Facility" shall mean any facility or property in which
the Party in question or any of its
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Subsidiaries participates in the management and, where required by the context,
said term means the owner or operator of such facility or property, but only
with respect to such facility or property.
"Party" shall mean Subject Company, Merger Subsidiary or Parent, and
"Parties" shall mean, collectively, Subject Company, Merger Subsidiary and
Parent.
"Permit" shall mean any federal, state, local, and foreign governmental
approval, authorization, certificate, franchise, license, permit, or right to
which any Person is a party or that is or may be binding upon or inure to the
benefit of any Person or its securities, Assets or business.
"Person" shall mean a natural person or any legal, commercial, or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
trust, business association, group acting in concert, or any person acting in a
representative capacity.
"Plan of Merger" shall mean the Plan of Merger of even date herewith
entered into by Parent, Merger Subsidiary and Subject Company, in the form of
Exhibit 1.
"Registration Statement" shall mean the Registration Statement on Form
S-4, or other appropriate form, including any pre-effective or post-effective
amendments or supplements thereto, filed with the SEC by Parent under the 1933
Act with respect to the shares of Parent Common Stock to be issued to the
shareholders of Subject Company in connection with the transactions contemplated
by this Agreement.
"Regulatory Authorities" shall mean, collectively, the FRB, the
Department of Financial Institutions of the State of Tennessee, the LOFI, all
state regulatory agencies having jurisdiction over any of the Parties or their
respective Subsidiaries, the NYSE, the NASD, and the SEC.
"Representative" shall mean any investment banker, financial advisor,
attorney, accountant, consultant, or other representative of a Person.
"Rights" shall mean all arrangements, calls, commitments, Contracts,
options, rights to subscribe to, scrip, warrants, or other binding obligations
of any character whatsoever by which a Person is or may be bound to issue
additional shares of its capital stock or other rights, or securities or rights
convertible into or exchangeable for, shares of the capital stock of a Person.
"SEC" shall mean the Securities and Exchange Commission.
"SEC Documents" shall mean all forms, proxy statements, registration
statements, reports, schedules, and other documents filed, or required to be
filed, by a Party or any of its Subsidiaries with the SEC pursuant to the
Securities Laws.
"Securities Laws" shall mean the 1933 Act, the 1934 Act, the Investment
Company Act of 1940, as amended, the Investment Advisors Act of 1940, as
amended, the Trust Indenture Act of 1939, as amended, and the rules and
regulations of any Regulatory Authority promulgated thereunder.
"Significant Subsidiary" shall have the meaning ascribed such to such
term in Rule 1-02(w) of Regulation S-X promulgated under the Securities Laws.
"Subject Company" shall mean LaPlace Bancshares, Inc., a Louisiana
corporation.
"Subject Company Benefit Plans" shall have the meaning ascribed to such
term in Section 5.14(a) of this Agreement.
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"Subject Company Common Stock" shall mean the common stock, $1.00 par
value per share, of Subject Company.
"Subject Company Contracts" shall have the meaning ascribed to such
term in Section 5.15 of this Agreement.
"Subject Company Disclosure Memorandum" shall mean the written
information entitled "Subject Company Disclosure Memorandum" delivered prior to
the date of this Agreement to Parent describing in reasonable detail the matters
contained therein and, with respect to each disclosure made therein,
specifically referencing each Section of this Agreement under which such
disclosure is being made.
"Subject Company ERISA Plan" shall have the meaning ascribed to such
term in Section 5.14(a) of this Agreement.
"Subject Company Financial Statements" shall have the meaning ascribed
thereto in Section 5.5 of this Agreement.
"Subject Company Preferred Stock" shall mean the preferred stock, $1.00
par value per share, of Subject Company.
"Subject Company Proxy Statement" shall mean the proxy statement used
by Subject Company to solicit the approval of its shareholders of the
transactions contemplated by this Agreement, which shall include the prospectus
of Parent relating to the issuance of the Parent Common Stock to holders of
Subject Company Common Stock.
"Subject Company Shareholders' Meeting" shall mean the meeting of the
shareholders of Subject Company to be held pursuant to Section 8.1 of this
Agreement, including any adjournment or adjournments thereof.
"Subject Company Subsidiaries" shall mean the Subsidiaries of Subject
Company, which shall include Subject Company Subsidiaries described in Section
5.4 of this Agreement and any corporation, bank, or other organization acquired
as a Subsidiary of Subject Company in the future and owned by Subject Company at
the Effective Time.
"Subsidiaries" shall mean all those corporations, banks, associations,
or other entities of which the entity in question owns or controls 10% or more
of the outstanding equity securities either directly or through an unbroken
chain of entities as to each of which 10% or more of the outstanding equity
securities is owned directly or indirectly by its parent; provided, there shall
not be included any such entity acquired through foreclosure or any such entity
the equity securities of which are owned or controlled in a fiduciary capacity.
"Surviving Corporation" shall mean Merger Subsidiary as the surviving
corporation resulting from the Merger.
"Takeover Laws" shall have the meaning ascribed to such term in Section
5.20 of this Agreement.
"Tax" or "Taxes" shall mean all taxes, charges, fees, levies or other
assessments, including, without limitation, all net income, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits, license,
withholding, payroll, employment, excise, estimated, severance, stamp,
occupation, property or other taxes, customs duties, fees, assessments or
charges of any kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts imposed by any taxing authority (domestic
or foreign).
"Tax Returns" shall mean all returns and reports of or with respect to
any Tax which are required to be filed by or with respect to the applicable
Party.
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"TBCA" shall mean the Tennessee Business Corporation Act.
(b) Any singular term in this Agreement shall be deemed to include the
plural, and any plural term the singular. Whenever the words "include,"
"includes," or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation."
11.2 Expenses. (a) Except as otherwise provided in this Section 11.2
and in Section 8.8, each of the Parties shall bear and pay all direct costs and
expenses incurred by it or on its behalf in connection with the transactions
contemplated hereunder, including filing, registration and application fees,
printing fees, and fees and expenses of its own financial or other consultants,
investment bankers, accountants, and counsel, except that each of the Parties
shall bear and pay the filing fees payable in connection with the Registration
Statement and the Subject Company Proxy Statement and printing and mailing costs
incurred in connection with the printing and mailing of the Registration
Statement and the Subject Company Proxy Statement based on the relative Asset
sizes of the Parties at December 31, 1997.
(b) Nothing contained in this Section 11.2 shall constitute or
shall be deemed to constitute liquidated damages for the willful breach by a
Party of the terms of this Agreement or otherwise limit the rights of the
non-breaching Party.
11.3 Brokers and Finders. Each of the Parties represents and warrants
that neither it nor any of its officers, directors, employees, or Affiliates has
employed any broker or finder or incurred any Liability for any financial
advisory fees, investment bankers' fees, brokerage fees, commissions, or
finders' fees in connection with this Agreement or the transactions contemplated
hereby, except as disclosed in Section 11.3 of such Party's Disclosure
Memorandum. In the event of a claim by any broker or finder based upon his or
its representing or being retained by or allegedly representing or being
retained by Subject Company or Parent other than those disclosed in accordance
with the previous sentence, each of Subject Company and Parent, as the case may
be, agrees to indemnify and hold the other Party harmless of and from any
Liability incurred by such Party in respect of any such claim.
11.4 Entire Agreement. Except as otherwise expressly provided herein,
this Agreement (including the other documents and instruments referred to
herein) constitutes the entire agreement between the Parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral, between Parent and Subject
Company. Nothing in this Agreement expressed or implied is intended to confer
upon any Person, other than the Parties or their respective successors, any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement, other than as provided in Sections 8.11 and 8.12 of this Agreement.
11.5 Amendments. To the extent permitted by Law, this Agreement may be
amended by a subsequent writing signed by each of the Parties upon the approval
of the Boards of Directors of each of the Parties, whether before or after
shareholder approval of this Agreement has been obtained.
11.6 Waivers. (a) Prior to or at the Effective Time, Parent, acting
through its Board of Directors, chief executive officer, or other authorized
officer, shall have the right to waive any Default in the performance of any
term of this Agreement by Subject Company, to waive or extend the time for the
compliance or fulfillment by Subject Company of any and all of its obligations
under this Agreement, and to waive any or all of the conditions precedent to the
obligations of Parent under this Agreement, except any condition which, if not
satisfied, would result in the violation of any Law. No such waiver shall be
effective unless in writing signed by a duly authorized officer of Parent.
(b) Prior to or at the Effective Time, Subject Company, acting
through its Board of Directors, chief executive officer, or other authorized
officer, shall have the right to waive any Default in the performance of any
term of this Agreement by Parent and/or Merger Subsidiary, to waive or extend
the time for the compliance or
LaPlace Bancshares - Merger Agreement Page 38
<PAGE> 149
fulfillment by Parent and/or Merger Subsidiary of any and all of its obligations
under this Agreement, and to waive any or all of the conditions precedent to the
obligations of Subject Company under this Agreement, except any condition which,
if not satisfied, would result in the violation of any Law. No such waiver shall
be effective unless in writing signed by a duly authorized officer of Subject
Company.
(c) The failure of any Party at any time or times to require
performance of any provision hereof shall in no manner affect the right of such
Party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained in
this Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.
11.7 Assignment. Except in accordance with Section 1.4 of this
Agreement, neither this Agreement nor any of the rights, interests, or
obligations hereunder shall be assigned by any Party hereto (whether by
operation of Law or otherwise) without the prior written consent of the other
Party. Subject to the preceding sentence, this Agreement will be binding upon,
inure to the benefit of and be enforceable by the Parties and their respective
successors and assigns.
11.8 Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered by hand, by
facsimile transmission, by registered or certified mail, postage prepaid, or by
courier or overnight carrier, to the person at the addresses set forth below (or
at such other address as may be provided hereunder), and shall be deemed to have
been delivered as of the date so delivered:
Subject Company: LaPlace Bancshares, Inc.
110 Belle Terre Drive
LaPlace, Louisiana 70069-0610
Attention: Thomas W. Smith, Jr
President & CEO
Telephone Number: (504) 652-2200 (ext 202)
Telecopy Number: (504) 652-2427
Copy to Subject Company Counsel: McGlinchey Stafford
2777 Stemmons Freeway, Suite 925
Dallas, Texas 75207-2401
Attention: Lawrence B. Mandala, Esq.
Telephone Number: (214) 860-9731
Telecopy Number: (214) 860-9754
and
McGlinchey Stafford
643 Magazine Street
New Orleans, Louisiana 70130-3477
Attention: B. Franklin Martin, III, Esq.
Telephone Number: (504) 596-2714
Telecopy Number: (504) 596-2800
Parent: Union Planters Corporation
7130 Goodlett Farms Parkway
Memphis, Tennessee 38018
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<PAGE> 150
Attention: Jackson W. Moore
President and COO
Telephone Number: (901) 580-6093
Telecopy Number: (901) 580-2939
Copy to Parent Counsel: Union Planters Corporation
7130 Goodlett Farms Parkway
Memphis, Tennessee 38018
Attention: E. James House, Jr., Esq.
Manager, Legal Division
Telephone Number: (901) 590-6596
Telecopy Number: (901) 580-2939
and
Wyatt, Tarrant & Combs
6075 Poplar Avenue, Suite 650
Memphis, Tennessee 38017
Attention: Virginia B. Wilson, Esq.
Telephone Number: (901) 537-1023
Telecopy Number: (901) 537-1010
11.9 Governing Law. This Agreement shall be governed by and construed
in accordance with the Laws of the State of Tennessee, without regard to any
applicable conflicts of Laws.
11.10 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
11.11 Captions. The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.
11.12 Interpretations. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against any Party, whether under
any rule of construction or otherwise. No Party to this Agreement shall be
considered the draftsman. The Parties acknowledge and agree that this Agreement
has been reviewed, negotiated, and accepted by all Parties and their attorneys
and shall be construed and interpreted according to the ordinary meaning of the
words used so as fairly to accomplish the purposes and intentions of all Parties
hereto.
11.13 Enforcement of Agreement. The Parties agree that time is of the
essence in the performance of their respective obligations under this Agreement.
The Parties hereto agree that irreparable damage would occur in the event that
any of the provisions of this Agreement was not performed in accordance with its
specific terms or was otherwise breached. It is accordingly agreed that the
Parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
11.14 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
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<PAGE> 151
IN WITNESS WHEREOF, each of the Parties has caused this
Agreement to be executed on its behalf and its corporate seal to be hereunto
affixed and attested by officers thereunto as of the day and year first above
written.
LaPLACE BANCSHARES, INC.
By: /s/
------------------------------------
Thomas W. Smith, Jr., President
ATTEST:
By: /s/
-------------------------------------
Patrick Guidry, Secretary - Treasurer
UNION PLANTERS CORPORATION
By: /s/
------------------------------------
Jackson W. Moore
President & Chief Operating Officer
ATTEST:
By: /s/
-------------------------------
E. James House, Jr., Secretary
UNION PLANTERS HOLDING CORPORATION
By: /s/
------------------------------------
Jackson W. Moore
President & Chief Operating Officer
ATTEST:
By: /s/
-------------------------------
E. James House, Jr., Secretary
LaPlace Bancshares - Merger Agreement Page 41
<PAGE> 152
Appendix B
Exhibit 1
PLAN OF MERGER
OF
LAPLACE BANCSHARES, INC.
WITH AND INTO
UNION PLANTERS HOLDING CORPORATION
Pursuant to this Plan of Merger ("Plan of Merger"), LaPlace Bancshares,
Inc. ("Subject Company"), a corporation organized and existing under the laws of
the State of Louisiana, shall be merged with and into Union Planters Holding
Corporation ("Merger Subsidiary"), a corporation organized and existing under
the laws of the State of Tennessee and which is a wholly-owned subsidiary of
Union Planters Corporation ("Parent").
Except as otherwise provided herein, the capitalized terms set forth
below shall have the meanings ascribed thereto in that certain Agreement and
Plan of Merger dated as of July 1, 1998 between Parent, Merger Subsidiary and
Subject Company (the "Agreement"), of which this Plan of Merger is Exhibit 1.
ARTICLE 1
TERMS OF MERGER
1.1 Merger. Subject to the terms and conditions of the Agreement and
this Plan of Merger, at the Effective Time, Subject Company shall be merged with
and into Merger Subsidiary in accordance with the provisions of Section
48-21-109 of the TBCA and Section 112 of the LBCL, and with the effects provided
in Section 48-21-108 of the TBCA and Section 115 of the LBCL (the "Merger").
Merger Subsidiary shall be the Surviving Corporation resulting from the Merger
and shall continue to be governed by the Laws of the State of Tennessee. The
Merger shall be consummated pursuant to the terms of the Agreement and this Plan
of Merger, which have been approved and adopted by the respective Boards of
Directors of Subject Company, Parent and Merger Subsidiary.
1.2 Time and Place of Closing. The Closing will take place at 9:00 A.M.
on the date on which the Effective Time is to occur (or the immediately
preceding day if the Effective Time is to be earlier than 9:00 A.M.), or at such
other time as the Parties, acting through their chief executive officers, may
mutually agree. The Closing shall be held at such place as may be mutually
agreed upon by the Parties.
1.3 Effective Time. The Merger and other transactions contemplated by
the Agreement and this Plan of Merger shall become effective at the time the
Articles of Merger reflecting the Merger shall become effective with the
Secretary of State of the States of Tennessee and Louisiana (the "Effective
Time").
1.4 Restructure of Transaction. Subject to the terms of the Agreement,
Parent shall, in its reasonable discretion, have the unilateral right to revise
the structure of the Merger contemplated by the Agreement and this Plan of
Merger in order to achieve tax benefits or for any other reason which Parent may
deem advisable.
ARTICLE 2
TERMS OF MERGER
2.1 Charter. The Charter of Merger Subsidiary in effect immediately
prior to the Effective Time shall be the Charter of the Surviving Corporation
until otherwise amended or repealed.
2.2 Bylaws. The Bylaws of Merger Subsidiary in effect immediately prior
to the Effective Time shall be the Bylaws of the Surviving Corporation until
otherwise amended or repealed.
2.3 Directors and Officers. The directors of Merger Subsidiary in
office immediately prior to the
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<PAGE> 153
Effective Time, together with such additional persons as may thereafter be
elected, shall serve as the directors of the Surviving Corporation from and
after the Effective Time in accordance with the Bylaws of the Surviving
Corporation. The officers of Merger Subsidiary in office immediately prior to
the Effective Time, together with such additional persons as may thereafter be
elected, shall serve as the officers of the Surviving Corporation from the
Effective Time in accordance with the Bylaws of the Surviving Corporation.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 Conversion of Shares. Subject to the provisions of this Article 3
(and Article 3 of the Agreement), at the Effective Time, by virtue of the Merger
and without any action on the part of Parent, Merger Subsidiary, Subject
Company, or the shareholders of any of the foregoing, the shares of the
constituent corporations shall be converted as follows:
(a) Each share of Parent Capital Stock, including any
associated Parent Rights, issued and outstanding immediately prior to the
Effective Time shall remain issued and outstanding from and after the Effective
Time.
(b) Each share of Merger Subsidiary Common Stock issued and
outstanding immediately prior to the Effective Time shall remain issued and
outstanding and shall represent one share of common stock of the Surviving
Corporation from and after the Effective Time.
(c) Except for Dissenting Shares, each share of Subject
Company Common Stock (excluding shares held by Subject Company, any Subject
Company Subsidiary, Parent or any Parent Subsidiary, in each case other than in
a fiduciary capacity or as a result of debts previously contracted) issued and
outstanding at the Effective Time shall cease to be outstanding and shall be
converted into and exchanged for the right to receive 2.83 shares of Parent
Common Stock (subject to possible adjustment as set forth in Section 3.2 of the
Agreement, the "Exchange Ratio"). Pursuant to the Parent Rights Agreement, each
share of Parent Common Stock issued in connection with the Merger upon
conversion of Subject Company Common Stock shall be accompanied by a Parent
Right.
(d) Dissenting Shares shall not be converted pursuant to
Section 3.1(c) in the Merger but, at and after the Effective Time, shall
represent only the right to receive payment in accordance with the applicable
provisions of Section 131 of the LBCL. If a holder of Dissenting Shares becomes
ineligible for payment under Section 131 of the LBCL, then such holder's
Dissenting Shares shall cease to be Dissenting Shares and shall be converted in
the manner set forth in Section 3.1(c) effective as of the Effective Time.
3.2 Anti-Dilution Provisions. In the event Parent changes the number of
shares of Parent Common Stock issued and outstanding after the date of this Plan
of Merger and prior to the Effective Time as a result of a stock split, stock
dividend, subdivision, reclassification, conversion or similar recapitalization
with respect to such stock and the record date therefor (in the case of a stock
dividend) or the effective date thereof (in the case of a stock split,
subdivision, reclassification, conversion or similar recapitalization for which
a record date is not established) shall be prior to the Effective Time, the
Exchange Ratio shall be proportionately adjusted.
3.3 Shares Held by Subject Company or Parent. Each of the shares of
Subject Company Common Stock held by Subject Company, any Subject Company
Subsidiary, Parent or any Parent Subsidiary, in each case other than in a
fiduciary capacity or as a result of debts previously contracted, shall be
canceled and retired at the Effective Time and no consideration shall be issued
in exchange therefor.
3.4 Fractional Shares. Notwithstanding any other provision of this Plan
of Merger, each holder of shares of Subject Company Common Stock exchanged
pursuant to the Merger who would otherwise have been entitled to receive a
fractional share of Parent Common Stock (after taking into account all
certificates delivered by such holder which, immediately prior to the Effective
Time, represented shares of Subject Company Common Stock
LaPlace Bancshares - Plan of Merger Page 2
<PAGE> 154
(each a "Subject Company Certificate")) shall receive, in lieu thereof, cash
(without interest) in an amount equal to such fractional share of Parent Common
Stock multiplied by the closing price of Parent Common Stock on the
NYSE-Composite Transactions List (as reported by The Wall Street Journal or, if
not reported thereby, any other authoritative source reasonably selected by
Parent) on the last trading day preceding the Effective Time. No such holder
will be entitled to dividends, voting rights, or any other rights as a
shareholder in respect of any fractional shares.
ARTICLE 4
EXCHANGE OF SHARES
4.1 Exchange Procedures. As soon as reasonably practicable after the
Effective Time, Parent and Subject Company shall cause the exchange agent
selected by Parent (the "Exchange Agent") to mail to each holder of record of a
Subject Company Certificate appropriate transmittal materials (which shall
specify that delivery shall be effected, and risk of loss and title to the
Subject Company Certificates shall pass, only upon proper delivery of such
Subject Company Certificates to the Exchange Agent). Subject Company shall have
the right to review and approve the transmittal materials. The Exchange Agent
may establish reasonable and customary rules and procedures in connection with
its duties, provided such rules and procedures do not have the effect of
unreasonably delaying or limiting or eliminating the obligation of Parent and/or
Merger Subsidiary to deliver the consideration contemplated by Article 3 of this
Plan of Merger. After the Effective Time, each holder of shares of Subject
Company Common Stock (other than Dissenting Shares or shares to be canceled
pursuant to Section 3.3 of this Plan of Merger) issued and outstanding at the
Effective Time shall surrender the certificate or certificates representing such
shares to the Exchange Agent and shall promptly upon surrender thereof receive
in exchange therefor the consideration provided in Section 3.1(c) of this Plan
of Merger, together with all undelivered dividends and other distributions, if
any, in respect of such shares (without interest thereon) pursuant to Section
4.2 of this Plan of Merger. To the extent required by Section 3.4 of this Plan
of Merger, each holder of shares of Subject Company Common Stock issued and
outstanding at the Effective Time also shall receive, upon surrender of the
certificate or certificates representing such shares, cash in lieu of any
fractional share of Parent Common Stock to which such holder may be otherwise
entitled (without interest). Parent shall not be obligated to deliver the
consideration to which any former holder of Subject Company Common Stock is
entitled as a result of the Merger until such holder surrenders such holder's
Subject Company Certificates for exchange as provided in this Section 4.1 or in
Section 4.2 hereof. The Subject Company Certificates so surrendered shall be
duly endorsed as the Exchange Agent may reasonably require. Any other provision
of the Agreement or this Plan of Merger notwithstanding, neither Parent, Merger
Subsidiary nor the Exchange Agent shall be liable to a holder of Subject Company
Common Stock for any amounts paid or property delivered in good faith to a
public official pursuant to any applicable abandoned property Law.
4.2 Rights of Former Subject Company Shareholders. At the Effective
Time, other than with respect to Dissenting Shares, the stock transfer books of
Subject Company shall be closed as to holders of Subject Company Common Stock
immediately prior to the Effective Time and no transfer of Subject Company
Common Stock by any such holder shall thereafter be made or recognized. Until
surrendered for exchange in accordance with the provisions of Section 4.1 of
this Plan of Merger, each certificate theretofore representing shares of Subject
Company Common Stock (other than Dissenting Shares or shares to be canceled
pursuant to Section 3.3 of this Plan of Merger) shall from and after the
Effective Time represent for all purposes only the right to receive the
consideration provided in Sections 3.1(c) and 3.4 of this Plan of Merger in
exchange therefor, subject, however, to the Surviving Corporation's obligations
to pay any dividends or make any other distributions with a record date prior to
the Effective Time which have been declared or made by Subject Company in
respect of such shares of Subject Company Common Stock in accordance with the
terms of this Plan of Merger and which remain unpaid at the Effective Time. In
addition, whenever a dividend or other distribution is declared by Parent on the
Parent Common Stock, the record date for which is at or after the Effective
Time, the declaration shall include dividends or other distributions on all
shares of Parent Common Stock issuable pursuant to this Plan of Merger, but no
dividend or other distribution payable to the holders of record of Parent Common
Stock as of any time subsequent to the Effective Time shall be delivered to the
holder of any certificate representing shares of Subject Company Common Stock
issued and outstanding at the Effective Time until such holder surrenders such
certificate for exchange as
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<PAGE> 155
provided in Section 4.1 of this Plan of Merger. However, upon surrender of such
Subject Company Common Stock certificate, both a Parent Common Stock certificate
and any undelivered dividends and other distributions payable hereunder (without
interest) shall be delivered and paid with respect to each share represented by
such certificate. In the event any Subject Company Common Stock certificate
shall have been lost, stolen or destroyed, upon the making of an affidavit of
that fact by the person claiming such certificate to be lost, stolen or
destroyed and, if reasonably required by Parent, the posting by such person of a
bond in such amount as Parent may reasonably direct as indemnity against any
claim that may be made against it with respect to such certificate, the Exchange
Agent shall issue in exchange for such lost, stolen or destroyed certificate the
shares of Parent Common Stock and cash in lieu of fractional shares and
dividends and other distributions deliverable in respect thereof pursuant to
this Plan of Merger.
ARTICLE 5
MISCELLANEOUS
5.1 Conditions Precedent. Consummation of the Merger by Merger
Subsidiary shall be conditioned on the satisfaction of or waiver by Parent of
the conditions precedent to the Merger set forth in Sections 9.1 and 9.2 of the
Agreement. Consummation of the Merger by Subject Company shall be conditioned on
the satisfaction of, or waiver by Subject Company of, the conditions precedent
to the Merger set forth in Sections 9.1 and 9.3 of the Agreement.
5.2 Termination. This Plan of Merger may be terminated at any time
prior to the Effective Time by the Parties hereto as provided in Article 10 of
the Agreement.
5.3 Amendments. To the extent permitted by Law, this Plan of Merger may
be amended by a subsequent writing signed by each of the Parties upon the
approval of the Boards of Directors of each of the Parties, whether before or
after shareholder approval of the Agreement and this Plan of Merger has been
obtained; provided, that after any such approval by the holders of Subject
Company Common Stock, there shall be made no amendment that modifies in any
material respect the consideration to be received by the Subject Company
shareholders.
5.4 Assignment. Except as expressly contemplated hereby, neither this
Plan of Merger nor the Agreement, nor any of the rights, interests, or
obligations hereunder or thereunder shall be assigned by any Party hereto
(whether by operation of Law or otherwise) without the prior written consent of
the other Parties. Subject to the preceding sentence, the Agreement and this
Plan of Merger will be binding upon, inure to the benefit of and be enforceable
by the Parties and their respective successors and assigns.
5.5 Governing Law. This Plan of Merger shall be governed by and
construed in accordance with the Laws of the State of Tennessee, without regard
to any applicable conflicts of Laws.
5.6 Counterparts. This Plan of Merger may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same document.
5.7 Captions. The captions contained in this Plan of Merger are for
reference purposes only and are not part of this Plan of Merger.
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<PAGE> 156
IN WITNESS WHEREOF, each of the Parties hereto has duly
executed and delivered this Plan of Merger or has caused this Plan of Merger to
be executed and delivered in its name and on its behalf by its representatives
thereunto duly authorized, all as of the date first written above.
LAPLACE BANCSHARES, INC.
By Its Board Of Directors:
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
ATTEST:
- ---------------------------------------
- -------------------------, -------------
UNION PLANTERS CORPORATION
By: /s/
------------------------------
Jackson W. Moore
President & Chief Operating Officer
ATTEST:
By: /s/
------------------------------
E. James House, Jr., Secretary
UNION PLANTERS HOLDING CORPORATION
By: /s/
------------------------------
Jackson W. Moore
President & Chief Operating Officer
ATTEST:
By: /s/
------------------------------
E. James House, Jr., Secretary
LaPlace Bancshares - Plan of Merger Page 5
<PAGE> 157
Exhibit 2
AFFILIATE AGREEMENT
Union Planters Corporation
7130 Goodlett Farms Parkway
Memphis, Tennessee 38108
Attention: Jackson W. Moore, President
and Chief Operating Officer
Gentlemen:
The undersigned is a shareholder of LaPlace Bancshares, Inc., ("Subject
Company") a corporation organized and existing under the laws of the State of
Louisiana, and will become a shareholder of Union Planters Corporation
("Parent") pursuant to the transactions described in the Agreement and Plan of
Merger, dated as of July 1, 1998 (the "Agreement"), by and between Parent, Union
Planters Holding Corporation ("Merger Subsidiary"), and Subject Company. Under
the terms of the Agreement, Subject Company will be merged with and into Merger
Subsidiary (the "Merger"), and shares of the $1.00 par value common stock of
Subject Company ("Subject Company Common Stock") will be converted into and
exchanged for shares of the $5.00 par value common stock of Parent ("Parent
Common Stock"). This Affiliate Agreement represents an agreement between the
undersigned and Parent regarding rights and obligations of the undersigned in
connection with the shares of Parent Common Stock to be received by the
undersigned as a result of the Merger. Except as otherwise provided herein,
capitalized terms set forth below shall have the meanings ascribed thereto in
the Agreement.
In consideration of the Merger and the mutual covenants contained
herein, the undersigned and Parent hereby agree as follows:
1. Affiliate Status. The undersigned understands and agrees that as to
Subject Company the undersigned may be deemed to be an "affiliate" under Rule
145(c) as defined in Rule 405 of the Rules and Regulations of the Securities and
Exchange Commission ("SEC") under the Securities Act of 1933, as amended ("1933
Act"), and the undersigned anticipates that the undersigned may be deemed to be
such an "affiliate" at the time of the Merger.
2. Initial Restriction on Disposition. The undersigned agrees that the
undersigned will not sell, transfer, or otherwise dispose of the undersigned's
interest in, or reduce the under-signed's risk relative to, any of the shares of
Parent Common Stock into which the undersigned's shares of Subject Company
Common Stock are converted upon consummation of the Merger until such time as
the requirements of SEC Accounting Series Release Nos. 130 and 135 ("ASR 130 and
135") have been met. The undersigned understands that ASR 130 and 135 relate to
publication of financial results of post-Merger combined operations of Parent
and Subject Company. Parent agrees that it will publish such results within 45
days after the end of the first fiscal quarter of Parent containing the required
period of post-Merger combined operations and that it will notify the
undersigned promptly following such publication.
3. Covenants and Warranties of Undersigned. The undersigned represents,
warrants, and agrees that:
(a) During the 30 days immediately preceding the Effective Time of the
Merger, the undersigned will not sell, transfer or otherwise dispose of the
undersigned's interest in, or reduce the undersigned's risk relative to, any of
the shares of Subject Company Common Stock beneficially owned by the undersigned
as of the date of the Subject Company Shareholders' Meeting held to approve the
Merger.
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<PAGE> 158
(b) The Parent Common Stock received by the undersigned as a result of
the Merger will be taken for the undersigned's own account and not for others,
directly or indirectly, in whole or in part.
(c) Parent has informed the undersigned that any distribution by the
undersigned of Parent Common Stock has not been registered under the 1933 Act
and that shares of Parent Common Stock received pursuant to the Merger can only
be sold by the undersigned (1) following registration under the 1933 Act, or (2)
in conformity with the volume and other requirements of Rule 145(d) promulgated
by the SEC as the same now exists or may hereafter be amended, or (3) to the
extent some other exemption from registration under the 1933 Act might be
available. The undersigned understands that, except as set forth in the
Agreement and in paragraph 6 hereof, Parent is under no obligation to file a
registration statement with the SEC covering the disposition of the
undersigned's shares of Parent Common Stock or to take any other action
necessary to make compliance with an exemption from such registration available.
(d) The undersigned will register, and will cause each of the other
parties whose shares may be deemed to be beneficially owned by the undersigned
pursuant to Section 8 hereof to have all shares of Subject Company Common Stock
beneficially owned by the undersigned registered in the name of the undersigned
or such parties, as applicable, prior to the Effective Date of the Merger and
not in the name of any bank, broker-dealer, nominee, or clearinghouse.
(e) The undersigned is aware that Parent intends to treat the Merger as
a tax-free reorganization under Section 368 of the Internal Revenue Code
("Code") for federal income tax purposes. The undersigned agrees to treat the
transaction in the same manner as Parent for federal income tax purposes. The
undersigned acknowledges that Section 1.368-1(b) of the Income Tax Regulations
requires "continuity of interest" in order for the Merger to be treated as
tax-free under Section 368 of the Code. This requirement is satisfied if, taking
into account those Subject Company shareholders who receive cash in exchange for
their stock, who receive cash in lieu of fractional shares, or who dissent from
the Merger, there is no plan or intention on the part of the Subject Company
shareholders to sell or otherwise dispose of the Parent Common Stock to be
received in the Merger.
4. Restrictions on Transfer. The undersigned understands and agrees
that stop order instructions with respect to the shares of Parent Common Stock
received by the undersigned pursuant to the Merger will be given to Parent's
transfer agent and that there will be placed on the certificates for such
shares, or shares issued in substitution thereof, a legend stating in substance:
"The shares represented by this certificate were issued pursuant to a
business combination which is accounted for as a "pooling-of-interests"
and may not be sold, nor may the owner thereof reduce his risks
relative thereto in any way, until such time as Union Planters
Corporation ("Parent") has published the financial results covering at
least 30 days of combined operations after the effective date of the
merger through which the business combination was effected. In
addition, the shares represented by this certificate may not be sold,
transferred, or otherwise disposed of except or unless (1) covered by
an effective registration statement under the Securities Act of 1933,
as amended, (2) in accordance with (i) Rule 145(d) (in the case of
shares issued to an individual who is not an affiliate of Parent) or
(ii) Rule 144 (in the case of shares issued to an individual who is an
affiliate of Parent) of the Rules and Regulations of such Act, or (3)
in accordance with a legal opinion satisfactory to counsel for Parent
that such sale or offer is otherwise exempt from the registration
requirements of such Act."
Such legend will also be placed on any certificate representing Parent
securities issued subsequent to the original issuance of the Parent Common Stock
pursuant to the Merger as a result of any exchange of such shares or any stock
dividend, stock split, or other recapitalization as long as the Parent Common
Stock issued to the undersigned pursuant to the Merger has not been transferred
in such manner to justify the removal of the legend therefrom. Upon the request
of the undersigned, Parent shall cause the certificates representing the shares
of Parent Common Stock issued to the undersigned in connection with the Merger
to be reissued free of any legend relating
LaPlace Bancshares - Affiliate Agreement Page 2
<PAGE> 159
to restrictions on transfer by virtue of ASR 130 and 135 as soon as practicable
after the requirements of ASR 130 and 135 have been met. In addition, if the
provisions of Rules 144 and 145 are amended to delete restrictions applicable to
the Parent Common Stock received by the undersigned pursuant to the Merger, or
at the expiration of the restrictive period set forth in Rule 145(d), Parent,
upon the request of the undersigned, will cause the certificates representing
the shares of Parent Common Stock issued to the undersigned in connection with
the Merger to be reissued free of any legend relating to the restrictions set
forth in Rules 144 and 145(d) upon receipt by Parent of an opinion of its
counsel to the effect that such legend may be removed.
5. Understanding of Restrictions on Dispositions. The undersigned has
carefully read the Agreement and this Affiliate Agreement and discussed their
requirements and impact upon his ability to sell, transfer, or otherwise dispose
of the shares of Parent Common Stock received by the undersigned, to the extent
he believes necessary, with his counsel or counsel for Subject Company.
6. Filing of Reports by Parent. Parent agrees, for a period of three
years after the Effective Time of the Merger, to file on a timely basis all
reports required to be filed by it pursuant to Section 13 of the Securities
Exchange Act of 1934, as amended, so that the public information provisions of
Rule 145(d) promulgated by the SEC as the same are presently in effect will be
available to the undersigned in the event the undersigned desires to transfer
any shares of Parent Common Stock issued to the undersigned pursuant to the
Merger.
7. Transfer Under Rule 145(d). If the undersigned desires to sell or
otherwise transfer the shares of Parent Common Stock received by him in
connection with the Merger at any time during the restrictive period set forth
in Rule 145(d), the undersigned will provide the necessary representation letter
to the transfer agent for Parent Common Stock together with such additional
information as the transfer agent for Parent Common Stock may reasonably
request. If Parent's counsel concludes that such proposed sale or transfer
complies with the requirements of Rule 145(d), Parent shall cause such counsel
to provide such opinions as may be necessary to Parent's transfer agent so that
the undersigned may complete the proposed sale or transfer.
8. Acknowledgments. The undersigned recognizes and agrees that the
foregoing provisions also apply to all shares of the capital stock of Subject
Company and Parent received by him in connection with the Merger that are deemed
to be beneficially owned by the undersigned pursuant to applicable federal
securities laws, which the undersigned agrees may include, without limitation,
shares owned or held in the name of (i) the undersigned's spouse, (ii) any
relative of the undersigned or of the undersigned's spouse who has the same home
as the undersigned, (iii) any trust or estate in which the undersigned, the
undersigned's spouse, and any such relative collectively own at least a 10%
beneficial interest or of which any of the foregoing serves as trustee,
executor, or in any similar capacity, and (iv) any corporation or other
organization in which the undersigned, the undersigned's spouse and any such
relative collectively own at least 10% of any class of equity securities or of
the equity interest. The undersigned further recognizes that, in the event that
the undersigned is a director or officer of Parent or becomes a director or
officer of Parent upon consummation of the Merger, among other things, any sale
of Parent Common Stock by the undersigned within a period of less than six
months following the Effective Time of the Merger may subject the undersigned to
liability pursuant to Section 16(b) of the Securities Exchange Act of 1934, as
amended.
9. Miscellaneous. This Affiliate Agreement is the complete agreement
between Parent and the undersigned concerning the subject matter hereof. Any
notice required to be sent to any party hereunder shall be sent by registered or
certified mail, return receipt requested, using the addresses set forth herein
or such other address as shall be furnished in writing by the parties. This
Affiliate Agreement shall be governed by the laws of the State of Tennessee.
LaPlace Bancshares - Affiliate Agreement Page 3
<PAGE> 160
This Affiliate Agreement is executed as of the __ day of
_____________, 199_.
Very truly yours,
------------------------------
Affiliate Signature
------------------------------
Printed Name
------------------------------
------------------------------
------------------------------
Add below the signatures of all registered owners of shares
which may be deemed to be beneficially owned by the Affiliate.
------------------------------
Name:
-------------------------
------------------------------
Name:
-------------------------
------------------------------
Name:
-------------------------
AGREED TO AND ACCEPTED as of ______________________, 1998.
UNION PLANTERS CORPORATION
By: /s/
--------------------------------
Jackson W. Moore
President & Chief Operating Officer
LaPlace Bancshares - Affiliate Agreement Page 4
<PAGE> 161
Exhibit 3
NONCOMPETITION AGREEMENT
This Non-Competition Agreement made and entered into as of the _ day
of____________, 1998, by and between Union Planters Corporation ("UPC"), a
Tennessee Corporation, having its principal offices located in Memphis,
Tennessee; Union Planters Bank, National Association ("UPBNA") a national
banking association with its main office located in Memphis, Tennessee and
_______________________, an adult resident citizen of the State of Louisiana and
who serves as an executive officer or director of LaPlace Bancshares, Inc., a
Louisiana corporation ("LBI").
WHEREAS, UPC, Union Planters Holding Corporation ("UP Holding") and LBI
have entered into that certain Agreement and Plan of Merger dated as of July 1,
1998 (the "Merger Agreement"), providing for the acquisition by UPC of all of
the outstanding common stock, $1.00 par value per share, of LBI ("LBI Common
Stock") through the merger of LBI with and into UP Holding, with UP Holding
surviving the merger (the "Merger"); and
WHEREAS, _____________________ was a shareholder as well as a director
or executive officer of LBI and has long been associated with {LBI and Bank} and
has developed a relationship with the customer base of {LBI and Bank} and
possesses confidential information regarding the direct and indirect business
operation of {LBI and Bank}; and
WHEREAS, as a condition precedent to the obligations of UPC and UP
Holding to consummate the proposed Merger, ___________________ has agreed to,
and does hereby, enter into this Non-Competition Agreement as set forth below.
NOW THEREFORE, for and in consideration of the cash consideration set
forth below, the receipt and sufficiency of which as consideration for this
Non-Competition Agreement is hereby acknowledged by _____________________, and
in consideration of UPC's agreement to acquire LBI pursuant to the Merger
Agreement, the parties hereto intending to be legally bound hereby agree as
follows:
1. Consideration. UPC shall pay to _______________ the sum of Ten
Dollars ($10.00) on the date hereof.
2. Covenant Not to Compete/Term. (a) UPC, UP Holding, UPBNA and
_____________________ acknowledge and agree that: (i) various business
connections, clientele and customers of UPC and its subsidiaries, including but
not limited to, UP Holding and UPBNA, (collectively, the "Union Planters
Companies"), have been established and are maintained at a great expense to the
Union Planters Companies; (ii) by virtue of his or her close relationship with,
and service as a member of the Board of Directors or executive officer of, {LBI
and/or Bank}, and in connection with the Merger, _____________________ has
become familiar with the names and lists, and the business needs of the
customers and clientele of certain of the Union Planters Companies, including,
but not limited to, {Bank}; (iii) __________________, through his or her
representation of or association with {LBI and Bank} and his or her business
dealings with {LBI or Bank} has become personally acquainted with such customers
and prospective customers of the Union Planters Companies; and (iv) UP Holding,
UPBNA and the other Union Planters Companies, will sustain great loss and damage
if _________________ violates the covenants and agreements hereinafter set
forth, for which loss and damage none of the Union Planters Companies has an
adequate remedy at law.
(b) Based on the foregoing, _____________ hereby expressly covenants
and agrees, which covenants and agreement are the essence of this
Non-Competition Agreement, that for a period of two (2) years from the later of
the date hereof or the date ______________ ceases to serve on the Board of
Directors of, or as an officer of, or as a consultant or advisory director for
any of the Union Planters Companies, including, but not limited to UPBNA,
LaPlace Bancshares, Inc. - - Form of Noncompetition Agreement - - Page 5
<PAGE> 162
_________________ shall not, unless acting with the prior written consent of UPC
and UPBNA, directly or indirectly, for himself or herself or on behalf of or in
conjunction with any other person, firm, corporation or entity, own, manage,
operate, join, control, finance or participate in the ownership, management
operation or control of, or be connected with as a director, officer, employee,
consultant, partner, stockholder (other than to the extent he is a stockholder
therein as of the date of the Merger Agreement, and further excepting any
ownership, solely as an investment and through market purchases, of securities
of any issuer that are registered under Section 12(b) or 12(g) of the Securities
Exchange Act of 1934, as amended, and that are listed or admitted for trading on
any United States national securities exchange or that are quoted on the
National Association of Securities Dealers Automated Quotations System, or any
similar system for automated dissemination of quotations of securities prices in
common use, so long as ________________ is not a member of any control group
(within the meaning of the rules and regulations of the Securities and Exchange
Commission or the Federal Reserve Board) of any such issuer, of any business
engaged in the business of banking or that of managing or controlling a bank or
banks (which term shall include savings and loan associations), in St John the
Baptist Parish, Louisiana. [Notwithstanding anything to the contrary in this
Agreement, it shall not be a violation hereof for Joseph Accardo, Jr. to provide
legal services to banks or other financial institutions, wherever located.
(c) Further, ________________covenants and agrees that for the same
period of time described in the immediately preceding paragraph, ______________
will not solicit the business of any Person known by _____________ to be a
customer of UPBNA or any of the Union Planters Companies with respect to any
products or activities which compete in whole or in part with the products or
activities of UPBNA or the Union Planters Companies, in St John the Baptist
Parish, Louisiana. [Notwithstanding anything to the contrary in this Agreement,
it shall not be a violation hereof for Joseph Accardo, Jr. to provide legal
services to banks or other financial institutions, wherever located.]
(d) For purposes of this Agreement, participation by _______ in the
ownership, management, operation, control, or ____________'s employment or
service as a director, officer, consultant, partner, or stockholder for a
business located in a parish other than St. John the Baptist Parish (as
determined by the presence of ________'s principal place of business) shall not
violate this Agreement, notwithstanding the fact that any bank or banks with
which _______ is involved also may engage in the business of banking or managing
or controlling a bank or banks in St. John the Baptist Parish. The prohibition
against solicitation of customers described in the immediately preceding
paragraph (c) is not intended, and shall not be construed, as being negated,
diminished, or altered in any way by the exception stated in this paragraph.
(e) _________________ further acknowledges and agrees that during his
or her employment with and service on the Board of Directors or as an officer of
{LBI and or Bank} prior to the date hereof, as well as after the Effective Time
of the Merger with or for any of the Union Planters Companies, including but not
limited to, UPBNA and/or {Bank}, that certain highly confidential information,
including, but not being limited to, customer lists, individual customer habits,
and other confidential customer and corporate information has been, and will be
in the event of continued employment or service, imparted to him or her. Due to
the highly confidential nature of said information, _______________ covenants
and agrees that he or she will not, during or for a period of two (2) years
after the term of his or her employment or service with or for any of the Union
Planters Companies, disclose any such confidential information to any person or
entity not employed by UPC, or any of the Union Planters Companies, and
authorized by UPC to receive such information. This provision shall not apply to
the extent that confidential information can be shown (i) to have been disclosed
pursuant to judicial or administrative process, (ii) to have been previously
lawfully known to _________, (iii) to be in the public domain through no fault
of _________, or (iv) to have been later acquired by ____ from other sources
either not subject to a confidentiality agreement or without violating any such
agreement.
(f) Notwithstanding anything to the contrary in this Agreement, the
provisions of this Section 2 shall terminate immediately if __________ is
terminated from his employment with any of the Union Planters Companies
LaPlace Bancshares, Inc. - - Form of Noncompetition Agreement - - Page 6
<PAGE> 163
without "Cause" (as herein defined), or if ____________ voluntarily terminates
such employment for "Good Reason" (as herein defined).
For purposes of this Agreement, "Cause" means (i) ________'s commission
of a felony or crime involving moral turpitude; (ii) action or conduct of
________ which is detrimental to the interest of any of the Union Planters
Companies, including a willful or intentional violation of bank policy or
federal or state laws or regulations: (iii) ___________'s wrongful disclosure of
confidential or proprietary information of any of the Union Planters Companies;
or (iv) gross misconduct or malfeasance on the part of ____________.
As used herein, "Good Reason" means a modification in the terms of
____________'s employment such that his employment, as modified, (i) becomes
temporary or known to be of a limited duration, (ii) involves a reduction in
base salary; or (iii) requires ________ to work outside of St. John the Baptist
Parish (excluding reasonable business travel consistent with __________'s
employment prior to such modification).
(g) ________________ acknowledges and agrees that any violation by him
or her of the covenants set forth in this Non-Competition Agreement would cause
irreparable injury to the Union Planters Companies. _______________ further
acknowledges and agrees that in the event of a breach or threatened breach of
the provisions of this confidentiality covenant, _____________ or UPC shall be
entitled to injunctive relief against him or her by any court of competent
jurisdiction having the authority to grant such relief. Nothing herein, however,
shall be construed as prohibiting any of the Union Planters Companies from
pursuing any other remedies which may be available to them for such a breach or
threatened breach, including the recovery of damages from ______________ to any
other person or entity.
3. Successors and Assigns. This Non-Competition Agreement shall inure
to the benefit of UPC, UP Holding, and UPBNA, and their respective successors
and assigns, including, without limitation, any corporation or agency which may
acquire all or substantially all of UPC's, UP Holding's or UPBNA's assets and
businesses or with which UPC, UP Holding or UPBNA may be consolidated or merged.
4. Entire Agreement. This Non-Competition Agreement contains the entire
understanding of the parties. It may not be changed orally but only by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, notification or discharge is sought.
5. Severability. The invalidity or unenforceability of any provision
hereof in no way affects the validity or enforceability of any other provision.
6. Waiver of Breach. Failure to insist upon strict compliance with any
terms, covenants or conditions hereof shall not be deemed a waiver or
relinquishment of such right or power at any other time or times.
7. Applicable Law. This Non-Competition Agreement shall be governed by
the laws of the State of Louisiana.
UNION PLANTERS CORPORATION
By: /s/
-------------------------------------
Jackson W. Moore
President and Chief Operating Officer
LaPlace Bancshares, Inc. - - Form of Noncompetition Agreement - - Page 7
<PAGE> 164
UNION PLANTERS BANK, NATIONAL ASSOCIATION
By: /s/
----------------------------------
Jackson W. Moore
President
{OFFICER}
-----------------------------------------
LaPlace Bancshares, Inc. - - Form of Noncompetition Agreement - - Page 8
<PAGE> 165
Appendix C
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
OF
LAPLACE BANCSHARES, INC. AND SUBSIDIARY
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditor's Report........................................ F-2
Consolidated Statements of Financial Condition
as of December 31, 1997 and 1996
and June 30, 1998 (unaudited).................................. F-3
Consolidated Statements of Income for the
Years Ended December 31, 1997 and 1996
and the Six Months Ended September 30, 1998
and 1997 (unaudited)........................................... F-4
Consolidated Statements of Changes in Stockholders' Equity
for the Years Ended December 31, 1997 and 1996 and
the Six Months Ended September 30, 1998 (unaudited)............ F-5
Consolidated Statements of Cash Flows
for the Years Ended December 31, 1997 and 1996 and
the Six Months Ended September 30, 1998 and 1997 (unaudited)... F-6
Notes to Consolidated Financial Statements.......................... F-8
</TABLE>
F-1
<PAGE> 166
INDEPENDENT AUDITOR'S REPORT
The Board of Directors and Stockholders
LaPlace Bancshares, Inc.
LaPlace, Louisiana
We have audited the accompanying consolidated statements of financial condition
of LaPlace Bancshares, Inc. and Subsidiary as of December 31, 1997 and 1996, and
the related consolidated statements of income, changes in stockholders' equity,
and cash flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of LaPlace
Bancshares, Inc. and Subsidiary at December 31, 1997 and 1996, and the results
of their operations and their cash flows for the years then ended in conformity
with generally accepted accounting principles.
/s/ Roth Murphy Sanford L.L.P.
January 23, 1998
New Orleans, Louisiana
F-2
<PAGE> 167
LAPLACE BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
(Unaudited)
September 30, December 31,
------------- -------------------------------
1998 1997 1996
------------- ------------ ------------
<S> <C> <C> <C>
ASSETS
Cash and due from banks $ 2,462,653 $ 2,840,204 $ 2,191,573
Securities available for sale (Note B) 8,879,446 8,094,048 7,197,375
Securities held to maturity (Note B) 7,281,033 9,595,905 14,374,076
Loans held for sale 2,223,184 3,554,463 4,807,679
Loans - net (Notes C, J, and K) 43,577,204 40,534,513 30,093,013
Accrued interest receivable 457,652 442,000 495,430
Premises and equipment (Note D) 2,261,188 2,387,716 2,473,930
Other assets (Note E) 606,673 264,980 172,679
------------ ------------ ------------
Total assets $ 67,749,033 $ 67,713,829 $ 61,805,755
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits (Notes B and F) $ 55,628,136 $ 52,709,013 $ 49,340,863
Due to broker -- -- 1,008,222
Other liabilities (Note G) 543,704 436,603 387,925
Deferred income taxes (Note H) 257,879 237,072 234,167
Other borrowings (Note I) -- 3,107,000 25,000
Long-term debt (Notes C and J) 3,056,080 3,803,003 4,484,907
------------ ------------ ------------
Total liabilities 59,485,799 60,292,691 55,481,084
------------ ------------ ------------
Commitments and contingent liabilities (Note K)
Stockholders' equity (Notes B, H, and N)
Preferred stock, $1.00 par value;
1,000,000 shares authorized; none issued
Common stock, $1.00 par value;
1,000,000 shares authorized;
150,000 shares issued
Additional paid-in capital -- -- --
Less treasury stock, 4,268 shares at cost 150,000 150,000 150,000
Retained earnings 848 848 848
Net unrealized appreciation on (63,656) (63,656) (63,656)
securities available for sale, 8,101,149 7,229,779 6,177,976
net of tax of $53,663 and $30,656 -- 104,167 59,503
Accumulated other comprehensive income 74,893 -- --
------------ ------------ ------------
Total stockholders' equity 8,263,234 7,421,138 6,324,671
------------ ------------ ------------
Total liabilities and stockholders' equity $ 67,749,033 $ 67,713,829 $ 61,805,755
============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
F-3
<PAGE> 168
LAPLACE BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
(Unaudited)
Six Months Ended September 30, Years Ended December 31,
------------------------------ ------------------------
1998 1997 1997 1996
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Interest income:
Loans, including fees
Deposits $3,277,434 $2,846,149 $3,941,294 $3,174,088
Federal agencies' securities, mortgage 1,717 14,571 15,826 3,729
pools and stock dividends 921,116 1,134,891 1,443,028 1,686,355
Obligations of political subdivisions 8,821 16,408 19,449 44,191
---------- ---------- ---------- ----------
4,209,088 4,012,019 5,419,597 4,908,363
---------- ---------- ---------- ----------
Interest expense:
Deposits
Other borrowings and long-term debt (Notes I 1,430,005 1,327,530 1,837,660 1,666,190
and J) 272,984 295,123 386,914 414,094
---------- ---------- ---------- ----------
1,702,984 1,622,653 2,224,574 2,080,284
---------- ---------- ---------- ----------
Net interest income 2,506,104 2,389,366 3,195,023 2,828,079
Provision for loan losses (Note C) 90,000 90,000 120,000 100,000
---------- ---------- ---------- ----------
Net interest income after provision for loan losses 2,416,104 2,299,366 3,075,023 2,728,079
---------- ---------- ---------- ----------
Non-interest income:
Service charges on deposit accounts 500,509 385,299 563,119 446,737
Mortgage banking fees 999,551 823,667 1,136,142 1,153,949
Gain on sale of securities available for sale -- 19,954 21,388 54,012
Gain on sale of other real estate 48,478 14,449 14,749 56,658
Gain on sale of equipment -- 21,771 21,771 --
Other 154,688 141,559 99,979 148,932
---------- ---------- ---------- ----------
1,703,226 1,406,699 1,857,148 1,860,288
---------- ---------- ---------- ----------
Non-interest expenses:
Salaries and employee benefits 1,427,918 1,340,190 1,802,803 1,697,358
Occupancy expense (Note L) 80,921 94,530 142,865 125,005
Equipment expense 125,659 167,828 181,135 126,036
Ad valorem and other taxes 69,330 58,077 117,243 102,228
Advertising and promotion 84,112 90,309 118,539 155,896
Stationery and printing 50,770 67,199 88,237 69,374
Loss on sale of other real estate -- -- -- 1,880
Loss on sale of securities available for sale -- -- 1,434 --
Other 799,302 518,220 686,751 589,548
---------- ---------- ---------- ----------
2,638,012 2,336,353 3,139,007 2,867,325
---------- ---------- ---------- ----------
Income before provision for income tax 1,481,318 1,369,712 1,793,164 1,721,042
Provision for income tax (Note H) 500,649 467,000 595,629 581,600
---------- ---------- ---------- ----------
Net income $ 980,669 $ 902,712 $1,197,535 $1,139,442
========== ========== ========== ==========
Net income per share $ 6.73 $ 6.20 $ 8.22 $ 7.82
========== ========== ========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
F-4
<PAGE> 169
LAPLACE BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1997 AND 1996
AND SIX MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
Net
Unrealized Accumulated
Appreciation Other Total
Common Stock Additional on Securities Compre- Stock
----------------- Paid-in Treasury Retained Available for hensive -holders'
Shares Amount Capital Stock Earnings Sale Income Equity
-------- -------- ------- --------- --------- ------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1996 145,732 $150,000 $848 $(63,656) $5,184,266 $ 91,695 $-- $ 5,363,153
Net income -- -- -- -- 1,139,442 -- -- 1,139,442
Dividends declared -- -- -- -- (145,732) -- -- (145,732)
Net change in unrealized appreciation on
securities available for sale, net
of tax of $16,581 -- -- -- -- -- (32,192) -- (32,192)
------- -------- ---- -------- ---------- --------- -------- -----------
Balance at December 31, 1996 145,732 150,000 848 (63,656) 6,177,976 59,503 -- 6,324,671
Net income -- -- -- -- 1,197,535 -- -- 1,197,535
Dividends declared -- -- -- -- (145,732) -- -- (145,732)
Net change in unrealized appreciation on
securities available for sale, net
of tax of $23,008 -- -- -- -- -- 44,664 -- 44,664
------- -------- ---- -------- ---------- --------- -------- -----------
Balance at December 31, 1997 145,732 150,000 848 (63,656) 7,229,779 104,167 -- 7,421,138
Adoption of FASB 130 -- -- -- -- -- (104,167) 104,167 --
Comprehensive income:
Net income -- -- -- -- 980,669 -- -- 980,669
Other comprehensive income, net
of tax:
Net change in unrealized appreciation
on securities available for sale,
net of tax of $5,180 -- -- -- -- -- -- (29,274) (29,274)
Less: reclassification adjustment -- -- -- -- -- -- -- --
Other comprehensive income -- -- -- -- -- -- -- (29,274)
Total comprehensive income -- -- -- -- -- -- -- 951,395
Dividends declared -- -- -- -- (109,299) -- -- (109,299)
------- -------- ---- -------- ---------- --------- -------- -----------
Balance at June 30, 1998 145,732 $150,000 $848 $(63,656) $8,101,149 $ -- $ 74,893 $ 8,263,234
======= ======== ==== ======== ========== ========= ======== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
F-5
<PAGE> 170
LAPLACE BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(Unaudited)
Nine Months Ended September 30, Years Ended December 31,
------------------------------ ------------------------------
1998 1997 1997 1996
----------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 980,669 $ 902,712 $ 1,197,535 $ 1,139,442
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 137,162 144,285 195,194 128,221
Deferred income taxes 35,888 (13,000) (20,103) 13,000
Provision for loan losses 90,000 90,000 120,000 100,000
Federal Home Loan Bank stock dividends (21,500) (24,800) (33,500) (26,500)
Net decrease (increase) in loans held for sale 1,331,279 932,057 1,253,216 (1,603,033)
Gain on sale of other real estate, net (48,478) 14,449 (14,749) (54,778)
Net realized gain on sales of securities
available for sale -- (19,954) (19,954) (54,012)
(Gain) loss on sale of equipment -- (21,771) (21,771) 139
Decrease (increase) in accrued interest receivable (15,652) (26,154) 53,430 (55,518)
Increase in other assets, excluding other real estate 45,624 (3,812) (72,301) (49,710)
(Decrease) increase in due to broker -- (1,008,222) (1,008,222) 1,008,222
Increase in other liabilities 107,101 214,441 48,678 16,873
----------- ----------- ------------ -----------
Net cash provided by operating activities 2,642,093 1,151,333 1,677,453 562,346
----------- ----------- ------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Principal from securities available for sale 1,839,120 1,070,592 1,651,263 334,269
Principal from securities held to maturity 2,176,872 3,283,575 5,069,686 4,049,809
Purchases of securities available for sale (2,668,873) (4,282,292) (6,469,880) (1,645,127)
Proceeds from sale of securities available for sale -- 4,009,570 4,009,570 2,266,119
Purchases of securities held to maturity (50,300) (258,015) (258,015) (3,681,188)
Proceeds from redemption of securities held
to maturity 209,800 -- -- --
Purchases of equipment (10,634) (108,980) (108,980) (420,625)
Proceeds from sale of equipment -- 21,771 21,771 --
Net increase in loans (3,492,381) (9,090,882) (10,581,500) (6,046,981)
Investment in repossessed asset (46,013) -- -- --
Proceeds from sale of other real estate 66,864 14,449 14,749 507,623
----------- ----------- ------------ -----------
Net cash used in investing activities (1,975,545) (5,340,212) (6,651,336) (4,636,101)
----------- ----------- ------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits 2,919,123 (1,583,058) 3,368,150 7,344,138
Proceeds from long-term debt -- -- -- 1,000,000
Repayments of long-term debt (746,923) (468,430) (681,904) (986,969)
Proceeds from short-term borrowings, net of
repayments (3,107,000) 3,043,000 3,082,000 (2,865,000)
Dividends paid (109,299) (109,299) (145,732) (145,732)
----------- ----------- ------------ -----------
Net cash provided by financing activities 1,044,099 4,048,329 5,622,514 4,346,437
----------- ----------- ------------ -----------
</TABLE>
See accompanying notes to consolidated financial statements.
F-6
<PAGE> 171
LAPLACE BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)
<TABLE>
<CAPTION>
(Unaudited)
Six Months Ended September 30, Years Ended December 31,
------------------------------ ---------------------------
1998 1997 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
NET INCREASE (DECREASE) IN CASH AND DUE
FROM BANKS (377,551) (140,550) 648,631 272,682
CASH AND DUE FROM BANKS -
BEGINNING OF PERIOD 2,840,204 2,191,573 2,191,573 1,918,891
---------- ---------- ---------- ----------
CASH AND DUE FROM BANKS - END OF PERIOD $2,462,653 $2,051,023 $2,840,204 $2,191,573
========== ========== ========== ==========
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION:
Cash paid during the year for interest
on deposits and borrowed funds $1,734,712 $1,576,463 $2,203,161 $2,026,953
========== ========== ========== ==========
Income taxes paid $ 495,000 $ 435,000 $ 635,000 $ 612,278
========== ========== ========== ==========
NON-CASH INVESTING TRANSACTIONS:
Loan balance of properties on date
of foreclosure, transferred from
loans receivable to other real estate $ 359,690 $ -- $ 20,000 $ 65,845
========== ========== ========== ==========
Portion of sale proceeds from sale of foreclosed
real estate financed by the Bank $ -- $ -- $ 15,000 $ 494,100
========== ========== ========== ==========
Increase (decrease) in unrealized gain on securities
available for sale $ (44,355) $ 12,002 $ 67,672 $ (48,773)
(Increase) decrease in deferred tax on unrealized
gain on securities available for sale 15,180 (4,081) (23,008) 16,581
---------- ---------- ---------- ----------
Increase (decrease) in unrealized gain on securities
available for sale $ (29,274) $ 7,921 $ 44,664 $ (32,192)
========== ========== ========== ==========
Federal Home Loan Bank stock acquired by payment
of stock dividends $ 21,500 $ 24,800 $ 33,500 $ 26,500
========== ========== ========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
F-7
<PAGE> 172
LAPLACE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NATURE OF OPERATIONS
Principles of Consolidation and Nature of Operations
The consolidated financial statements include the accounts of LaPlace
Bancshares, Inc. and its wholly-owned subsidiary, Bank of LaPlace of St. John
the Baptist Parish, Louisiana, a corporation, (collectively, the Bank) after
elimination of all material intercompany transactions and balances.
The Bank provides a variety of financial services to individuals and
businesses primarily in St. John the Baptist Parish and surrounding parishes.
The Bank's office is located in LaPlace, Louisiana. The Bank's primary lending
products are commercial and mortgage loans; the primary deposit products are
savings accounts, certificates of deposit, and checking accounts. The Bank
operates under a state bank charter. As a state bank, the Bank is subject to
regulation by the Office of Financial Institutions of the State of Louisiana and
the Federal Deposit Insurance Corporation.
Basis of Financial Statement Presentation and Use of Estimates
The consolidated financial statements have been prepared in conformity
with generally accepted accounting principles. In preparing the consolidated
financial statements, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities as of the date of the financial statements and
the reported amounts of revenues and expenses for the reporting period.
Actual results could differ from those estimates.
Material estimates that are particularly susceptible to significant
changes relate to the determination of the allowance for loan losses and the
valuation of other real estate owned. Management determines the adequacy of the
allowance for loan losses based upon reviews of individual loans, recent loss
experience, current economic conditions, the risk characteristics of various
categories of loans, and other pertinent factors. In connection with the
determination of the allowance for loan losses and the valuation of other real
estate owned, management obtains independent appraisals for significant
collateral.
A significant portion of the Bank's loans are secured by residential
real estate mortgages located in St. John the Baptist Parish. In addition, other
real estate owned is located in this same market. The Bank's loan portfolio and
the recovery of the carrying amount of other real estate owned are susceptible
to changes in local market conditions.
While management uses available information to recognize losses on
loans and to value other real estate owned, future additions to the allowance or
changes to the valuation of other real estate owned may be necessary based on
changes in local economic conditions. In addition, regulatory agencies, as an
integral part of their examination process, periodically review the Bank's
allowance for loan losses and valuation of other real estate owned. Such
agencies may require the Bank to recognize additions to the allowance or changes
to the valuation of other real estate owned based on their judgments about
information available to them at the time of their examination. For statutory
purposes, other real estate owned is required to be written off after a period
of time and certain real estate has been written down under this method. Because
of these factors, it is reasonably possible that the estimated allowance for
loan losses or valuation of other real estate may change materially in the near
term. However, the amount of change that is reasonably possible cannot be
estimated.
Investment Securities
Debt securities are classified in two categories and accounted for as
follows:
Securities Held to Maturity - Securities for which the Bank
has the positive intent and ability to hold to maturity are
reported at cost, adjusted for amortization of premiums and
accretion of discounts which are recognized in interest income
using a method over the period to maturity which approximates
the interest method.
F-8
<PAGE> 173
LAPLACE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Securities Available for Sale - Securities that the Bank has
not classified as held to maturity are classified as
securities available for sale and reported at fair value.
Unrealized gains and losses, net of income tax, are excluded
from earnings and reported in a separate component of equity
until realized.
The Bank's investment policy precludes the trading of securities, i.e.,
the purchase of securities with the intent to resell in the near term. The Bank
classifies securities as held to maturity or available for sale based on
management's intent at the time of the purchase.
Declines in the fair value of individual held to maturity and available
for sale securities below their cost that are other than temporary result in
write-downs of the individual securities to their fair value. Such write-downs,
if any, would be included in earnings as realized losses.
Gains and losses on the sale of securities available for sale are
determined using the specific identification method.
Premises and Equipment
Premises and equipment are stated at cost less accumulated depreciation
and amortization.
Depreciation and amortization are computed using the straight-line
method using the following estimated useful lives:
<TABLE>
<S> <C>
Building 40 years
Building improvements 8 - 25 years
Furniture, fixtures and equipment 3 - 25 years
</TABLE>
Maintenance and repairs are expensed as incurred while major additions
and improvements are capitalized. Gains and losses on dispositions are included
in current operations.
Loans and Loans Held For Sale
Loans receivable that management has the intent and ability to hold for
the foreseeable future or until maturity or payoff are reported at their
outstanding principal amounts less unearned discounts and the allowance for loan
losses.
Interest income generally is not accrued on loans when, in management's
opinion, the circumstances are such that interest may not be collectible. It is
the general policy of the Bank to discontinue the accrual of interest when
principal or interest payments are delinquent 90 days or more, and to reverse
from income any unpaid amounts previously accrued on those loans. Cash payments
subsequently received are applied to interest and principal based on
management's judgment.
The loan portfolio is short-term in nature. Loan fees and certain
direct origination costs are recognized and included in current operations.
The Bank originates single-family residential loans primarily for sale
into the secondary market. By originating such loans for sale and generally
obtaining a commitment for the purchase of such loans at the time that the loan
applications are approved, the Bank avoids the interest rate risk associated
with holding fixed-rate mortgage loans.
Mortgage loans originated and intended for sale in the secondary market
are carried at the lower of cost or estimated market value in the aggregate. Net
unrealized losses are recognized through a valuation allowance by charges to
income.
F-9
<PAGE> 174
LAPLACE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Allowance for Loan Losses
The balance in the allowance for loan losses is based on an analysis by
management of the collectibility of the loan portfolio and is increased by
charges to income and decreased by charge-offs (net of recoveries). It reflects
an amount which, in management's judgment, is adequate to provide for potential
loan losses after giving consideration to known and inherent risks in the
portfolio, adverse situations that may affect the borrower's ability to repay,
the estimated value of any underlying collateral, and current economic
conditions.
Other Real Estate
Real estate properties acquired through, or in lieu of, loan
foreclosure are initially recorded at the lower of the Bank's carrying amount or
fair value less estimated selling cost at the date of foreclosure. Any
write-downs based on the asset's fair value at the date of acquisition are
charged to the allowance for loan losses. Valuations are periodically performed
by management, and any subsequent write-downs are recorded as a charge to
operations, if necessary, to reduce the carrying value of a property to the
lower of its cost or fair value less costs to sell.
Income Taxes
LaPlace Bancshares, Inc. and its subsidiary file a consolidated federal
income tax return. Benefit from or provision for income tax is based on amounts
reported in the statement of income (after exclusion of non-taxable income such
as interest on state and municipal securities) and includes deferred taxes on
temporary differences in the recognition of income and expense for tax and
financial statement purposes. Deferred taxes are computed using the liability
method. Deferred income taxes result primarily from differences between the
bases of allowance for loan losses, accumulated depreciation, and other real
estate for financial and income tax reporting. The deferred tax assets and
liabilities represent the future tax return consequences of those differences,
which will either be taxable or deductible when the assets and liabilities are
recovered or settled. Income taxes are allocated between the parent and
subsidiary in proportion to their share of income or loss.
Cash and Cash Equivalents
For purposes of reporting cash flows, cash and cash equivalents include
cash on hand, and amounts due from banks. The Bank considers all highly liquid
instruments purchased with a maturity of three months or less from the date of
acquisition to be cash equivalents.
The Bank maintains cash balances at various financial institutions.
Accounts are insured by the Federal Deposit Insurance Corporation (FDIC) up to
$100,000. At various times in 1997 and 1996, the Bank had funds on deposit at
these institutions which were in excess of the insured amount. Deposits at the
Federal Home Loan Bank are not subject to insurance coverage.
Advertising
The Bank expenses the production costs of advertising the first time
the advertising takes place, except for direct-response advertising which is
capitalized and amortized over its expected period of future benefits.
Advertising expense was $118,539 and $155,896 for 1997 and 1996. There was no
direct-response advertising in 1997 or 1996.
Net Income Per Share
Earnings per common share is computed based on the weighted average
number of shares outstanding during the year.
F-10
<PAGE> 175
LAPLACE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Derivative Financial Instruments
All derivative financial instruments issued by the Bank are issued for
purposes other than trading. In the ordinary course of business, the Bank enters
into off-balance-sheet financial instruments consisting of commitments to extend
credit. Such financial instruments are recorded in the financial statements when
they are funded.
Reclassifications
Certain reclassifications have been made to the 1996 financial
statements in order to conform to the 1997 presentation.
B. INVESTMENT SECURITIES
The carrying amounts of investment securities as shown in the consolidated
statements of financial condition of the Bank and their approximate fair values
at December 31, 1997 and 1996, were as follows:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
----------- -------- -------- -----------
<S> <C> <C> <C> <C>
December 31, 1997
Securities available for sale: $ 7,936,215 $162,699 $ (4,866) $ 8,094,048
=========== ======== ======== ===========
Mortgage-backed securities
December 31, 1996
Securities available for sale:
Mortgage-backed securities $ 7,107,216 $103,336 $(13,177) $ 7,197,375
=========== ======== ======== ===========
December 31, 1997
Securities held to maturity:
Mortgage-backed securities $ 8,808,777 $246,038 $(53,097) $ 9,001,718
Stock in FHLB (restricted) 586,400 -- -- 586,400
Obligations of states and
political subdivisions 200,728 10,800 -- 211,528
----------- -------- -------- -----------
$ 9,595,905 $256,838 $(53,097) $ 9,799,646
=========== ======== ======== ===========
December 31, 1996
Securities held to maturity:
U.S. Federal Agency obligations $ 1,150,429 $ 21,008 $ -- $ 1,171,437
Mortgage-backed securities 11,985,366 265,263 (29,890) 12,220,739
Stock in FHLB (restricted) 552,900 -- -- 552,900
Obligations of states and
political subdivisions 685,381 4,847 -- 690,228
----------- -------- -------- -----------
$14,374,076 $291,118 $(29,890) $14,635,304
=========== ======== ======== ===========
</TABLE>
Gross realized gains and gross realized losses on sales of securities
available for sale were $21,388 and $(1,434) in 1997. Gross realized gains on
sales of securities available for sale were $54,012 in 1996. There were no gross
realized losses in 1996 on sales of securities available for sale.
F-11
<PAGE> 176
LAPLACE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
The amortized cost and estimated fair value of debt securities at
December 31, 1997, by contractual maturity are shown below. Expected maturities
will differ from contractual maturities because issuers may have the right to
call or prepay obligations, with or without penalties.
<TABLE>
<CAPTION>
Amortized Fair
Cost Value
---------- ----------
<S> <C> <C>
Securities held to maturity:
One year or less $ 10,000 $ 10,058
After one through five years 50,000 52,303
After five through ten years 140,728 149,167
After ten years -- --
---------- ----------
200,728 211,528
Mortgage-backed securities 8,808,777 9,001,718
Stock in FHLB 586,400 586,400
---------- ----------
$9,595,905 $9,799,646
========== ==========
Securities available for sale:
Mortgaged backed securities $7,936,215 $8,094,048
========== ==========
</TABLE>
Certain investment securities were pledged to secure public deposits as
required by the governmental agencies which have established deposit
relationships with the Bank. The investment securities pledged to secure public
deposits were as follows:
<TABLE>
<CAPTION>
December 31,
--------------------------
1997 1996
---------- ----------
<S> <C> <C>
Carrying value $1,937,229 $3,337,557
Estimated market value $1,956,089 $3,379,762
</TABLE>
In July 1997, the Bank sold two bonds classified as held to maturity
with an amortized cost of $814,921 for a realized gain of $20,470. These
securities were pledged for public funds no longer on deposit.
C. LOANS
The composition of loans in the consolidated statements of financial
condition were as follows:
<TABLE>
<CAPTION>
December 31,
-------------------------------
1997 1996
------------ ------------
<S> <C> <C>
Commercial loans $ 23,156,705 $ 17,358,404
Installment and consumer loans 3,979,415 3,359,828
Real estate loans 13,912,006 9,818,790
------------ ------------
41,048,126 30,537,022
(1,042) (981)
Less: Unearned discounts (512,571) (443,028)
Allowance for loan losses -- --
------------ ------------
$ 40,534,513 $ 30,093,013
============ ============
</TABLE>
As of December 31, 1997, first collateral mortgages for 1-4
family dwellings totaling approximately $21,166,000 were pledged in a blanket
lien against loans at the FHLB totaling $3,343,316.
In the ordinary course of business, the Bank may make loans to its
directors and officers. These loans are made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time of
comparable transactions with other customers and did not, in the opinion of
management, involve more than the normal credit risk or other unfavorable
features. Loans made to directors and officers, including loans to companies in
which they exercise
F-12
<PAGE> 177
LAPLACE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
substantial control through direct or indirect ownership, amounted to $188,909
and $331,238 at December 31, 1997 and 1996.
The Bank had no commitments at December 31, 1997, to loan additional
funds to borrowers whose loans have been modified. As of December 31, 1997 and
1996, the Bank had no loans that were considered impaired.
A summary of changes in the allowance for loan losses was as follows:
<TABLE>
<CAPTION>
December 31,
-----------------------
1997 1996
-------- --------
<S> <C> <C>
Balance at beginning of year $443,028 $414,724
Provision for loan losses 120,000 100,000
-------- --------
563,028 514,724
Loan charged off (89,455) (86,509)
Recoveries 38,998 14,813
-------- --------
Balance at end of year $512,571 $443,028
======== ========
</TABLE>
D. PREMISES AND EQUIPMENT
Components of properties and equipment were summarized as follows:
<TABLE>
<CAPTION>
December 31,
--------------------------
1997 1996
---------- ----------
<S> <C> <C>
Cost:
Land $ 448,939 $ 448,939
Building and improvements 2,260,475 2,260,475
Furniture, fixtures and equipment 1,216,591 1,430,560
---------- ----------
Total cost 3,926,005 4,139,974
Less accumulated depreciation 1,538,289 1,666,044
---------- ----------
$2,387,716 $2,473,930
========== ==========
</TABLE>
E. OTHER ASSETS
The components of other assets were as follows:
<TABLE>
<CAPTION>
December 31,
----------------------
1997 1996
-------- --------
<S> <C> <C>
Other real estate $ 20,004 $ 5
Prepaid expenses 173,119 71,486
Miscellaneous 71,857 101,188
-------- --------
$264,980 $172,679
======== ========
</TABLE>
F-13
<PAGE> 178
LAPLACE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
A summary of changes in other real estate during the year was as
follows:
<TABLE>
<CAPTION>
December 31,
-----------------------
1997 1996
------- ---------
<S> <C> <C>
Balance at beginning of year $ 5 $ 387,005
Additions 20,000 65,845
Write-downs -- --
Improvements added -- --
Sales (1) (452,845)
------- ---------
Balance at end of year $20,004 $ 5
======= =========
</TABLE>
F. DEPOSITS
The composition of deposits was as follows:
<TABLE>
<CAPTION>
December 31,
----------------------------
1997 1996
----------- -----------
<S> <C> <C>
Demand $11,221,515 $10,916,847
NOW, Super NOW, CMA and IMF 11,806,256 8,398,641
Savings 3,220,250 3,911,862
Certificates of deposits:
Less than $100,000 19,211,616 19,546,200
$100,000 or more 2,830,966 2,669,020
Individual retirement accounts 4,418,410 3,898,293
----------- -----------
$52,709,013 $49,340,863
=========== ===========
</TABLE>
Demand, NOW, SuperNOW, CMA, IMF and savings accounts are all due on
demand. The maturities of certificates of deposits, including individual
retirement accounts, at December 31, 1997, were as follows:
<TABLE>
<CAPTION>
Certificates
of Deposit
-----------
<S> <C>
1998 $18,516,499
1999 5,810,129
2000 1,140,082
2001 994,282
2002 and thereafter --
-----------
$26,460,992
===========
</TABLE>
The Bank held deposits of $797,590 and $711,146 for directors and
officers at December 31, 1997 and 1996.
F-14
<PAGE> 179
LAPLACE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
G. OTHER LIABILITIES
The components of other liabilities were as follows:
<TABLE>
<CAPTION>
December 31,
----------------------
1997 1996
-------- --------
<S> <C> <C>
Accrued interest payable $377,575 $337,547
Other 59,028 50,378
-------- --------
$436,603 $387,925
======== ========
</TABLE>
H. FEDERAL INCOME TAXES
The components of the provision for income taxes were as follows:
<TABLE>
<CAPTION>
December 31,
-----------------------
1997 1996
-------- --------
<S> <C> <C>
Current federal tax payable $607,702 $606,000
Deferred federal tax expense (benefit) (12,073) (24,400)
-------- --------
Total income tax provision
$595,629 $581,600
======== ========
</TABLE>
The provision for federal income taxes differs from that computed by
applying the federal statutory rate of 34% in 1997 and 1996, as indicated in the
following analysis:
<TABLE>
<CAPTION>
December 31,
-----------------------
1997 1996
-------- --------
<S> <C> <C>
Tax based on statutory rate $609,676 $585,154
Effect of:
Tax-exempt income (5,916) (14,890)
Non-deductible expenses 3,942 3,087
Other (12,073) 8,249
-------- --------
$595,629 $581,600
======== ========
</TABLE>
The deferred tax accounts in the accompanying consolidated statements
of financial condition consisted of the following:
<TABLE>
<CAPTION>
December 31,
-------------------------
1997 1996
--------- ---------
<S> <C> <C>
Balance at beginning of year $ 234,167 $ 237,748
Current year deferred tax effect
included in statements of income (20,103) 13,000
Current year deferred tax effect due
to unrealized appreciation on
securities available for sale,
included in equity section of
statements of financial condition 23,008 (16,581)
--------- ---------
Balance at end of year $ 237,072 $ 234,167
========= =========
</TABLE>
F-15
<PAGE> 180
LAPLACE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
<TABLE>
<CAPTION>
December 31,
-------------------------
1997 1996
--------- ---------
<S> <C> <C>
The components of the deferred tax
account were as follows:
Deferred tax asset $(148,265) $ (55,867)
Deferred tax liability 385,337 290,034
Valuation account -- --
--------- ---------
$ 237,072 $ 234,167
========= =========
</TABLE>
I. OTHER BORROWINGS
Other borrowings consisted of the following:
<TABLE>
<CAPTION>
December 31,
--------------------------
1997 1996
---------- ----------
<S> <C> <C>
Advance from the Federal Home Loan
Bank (FHLB), maturing January 2, 1998; interest
rate of 6.8%. Secured by specific investment
securities with a carrying value of
approximately $2,872,000 at December 31,
1997 $3,082,000 $ --
========== ===========
</TABLE>
In addition to the above advance from the Federal Home Loan Bank, the
Bank has available Federal Funds lines of credit from two commercial banks to
manage its liquidity on a daily basis. The combined maximum amount available
under these two lines at December 31, 1997 is $3,500,000, and interest rates
fluctuate on a daily basis. At December 31, 1997 and 1996, the Bank had $25,000
outstanding under the lines of credit.
J. LONG TERM DEBT
Long-term debt consisted of the following:
<TABLE>
<CAPTION>
December 31,
--------------------------
1997 1996
---------- ----------
<S> <C> <C>
Advance from Federal Home Loan Bank of Dallas;
maturing October 1, 2003; interest at 5.27%;
principal and interest payments amortized monthly. $ 775,148 $ 885,757
Advance from Federal Home Loan Bank of Dallas;
maturing January 1, 2004; interest at 5.72%;
principal and interest payments amortized monthly. 424,929 481,721
Mortgage note payable to a commercial bank; maturing
June 2004; interest at 75% of prime rate (effective
rate of 7.125% at December 31, 1997). Secured by
mortgage on land and building and assignment of
leases and rents thereon. 459,687 777,642
</TABLE>
F-16
<PAGE> 181
LAPLACE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
<TABLE>
<CAPTION>
December 31,
--------------------------
1997 1996
---------- ----------
<S> <C> <C>
Advance from Federal Home Loan Bank of Dallas;
maturing July 1, 2005; interest at 6.231%; principal
and interest payments amortized monthly. 1,217,896 1,339,787
Advance from Federal Home Loan Bank of Dallas;
maturing December 1, 2006, interest at 6.261%;
principal and interest payments amortized monthly. 462,848 500,000
Advance from Federal Home Loan Bank of Dallas;
maturing December 1, 2006, interest at 6.071%;
principal and interest payments amortized monthly. 462,495 500,000
---------- ----------
$3,803,003 $4,484,907
========== ==========
</TABLE>
Scheduled maturities of long-term debt at December 31, 1997, were as
follows:
<TABLE>
<S> <C>
1998 $ 514,826
1999 550,106
2000 587,921
2001 494,810
2002 487,260
Thereafter 1,168,080
---------
$3,803,003
==========
</TABLE>
All Federal Home Loan Bank of Dallas (FHLB) advances are secured by
first collateral mortgages on one to four family residential dwellings and the
FHLB capital stock and deposit account.
K. COMMITMENTS AND CONTINGENT LIABILITIES
In the normal course of business, the Bank is a party to financial
instruments with off-balance-sheet risk to meet the financing needs of its
customers. These financial instruments include commitments to extend credit,
line of credit arrangements on credit cards, standby letters of credit, and
financial guarantees. These instruments involve elements of credit and interest
rate risk in excess of the amount recognized in the accompanying consolidated
statements of financial condition. The Bank uses the same credit policies in
making commitments and conditional obligations as it does for amounts recognized
in the consolidated statements of financial condition.
Financial instruments whose contract amounts represents credit risk
were approximately as follows:
<TABLE>
<CAPTION>
December 31,
--------------------------
1997 1996
---------- ----------
<S> <C> <C>
Commitments to extend credit $6,813,000 $6,150,000
Unused line of credit arrangements
on credit cards $ 567,000 $ 573,000
Standby letter of credit $ 61,000 $ 60,000
</TABLE>
Commitments to extend credit and line of credit arrangements on credit
cards are agreements to lend to a customer as long as there is no violation of
any condition established in the contract. Such commitments generally have fixed
expiration dates or other termination clauses and may require payment of a fee.
Since many of the commitments are expected to expire without being drawn upon,
the total commitment amounts do not necessarily represent future cash
requirements. The Bank evaluates each customer's credit worthiness on a
case-by-case basis. The amount of collateral
F-17
<PAGE> 182
LAPLACE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
obtained, if deemed necessary by the Bank upon extension of credit, is based on
management's credit evaluation. Collateral held varies but may include accounts
receivable, inventory, property and equipment, and income-producing commercial
properties.
Standby letters of credit are conditional commitments issued by the
Bank to guarantee the performance of a customer to a third party. Standby
letters of credit generally have fixed expiration dates or other termination
clauses and may require payment of a fee. The credit risk involved in issuing
letters of credit is essentially the same as that involved in extending loan
facilities to customers. The Bank's policy for obtaining collateral, and the
nature of such collateral, is essentially the same as those involved in making
commitments to extend credit.
The Bank has not been required to perform on any financial guarantees
during the past two years. The Bank has not incurred any losses on its
commitments in either 1997 or 1996.
The Bank has employment agreements with two executive officers. In
addition to their annual compensation, these agreements provide for special
payments to be made if there is a separation of employment under certain
conditions.
L. LEASES
The Subsidiary leases its main banking facilities under an operating
lease from the Parent Company. In June 1993, a new lease was negotiated, and the
term of the lease extends through June 2004. Rental income/expense of $229,200
for the years ended December 31, 1997 and 1996, have been eliminated in
consolidation.
The Subsidiary subleases office space to a law firm under an operating
lease agreement. The law firm provides professional services to the Bank. The
operating sublease, which expired in August 1995 provided for monthly rental
payments of $3,000. The lease has continued on a month-to-month basis. Total
rental income received under this lease was $36,000 for 1997 and 1996.
Additionally, the Subsidiary subleased another part of the building to
an unaffiliated investment company on a month-to-month basis. The sublessor
vacated the premises in July 1997.
Total rental income from subleases was $36,700 and $37,200 for 1997 and
1996, and is included in non-interest income-other on the accompanying
consolidated statements of income.
M. EMPLOYEE BENEFIT PLAN
The Bank has a retirement savings 401(k) plan in which substantially
all employees may participate. The Bank matches employees' contributions based
on a percentage of salary contributed by participants. The Bank's expense for
the plan was $36,263 and $35,929 in 1997 and 1996.
N. REGULATORY MATTERS
The Subsidiary is subject to certain restrictions on the amount of
dividends that it may pay without prior regulatory approval. The Bank normally
restricts dividends to amounts requiring no prior regulatory approval. At
December 31, 1997, retained earnings of approximately $1,000,000 was available
for the payment of dividends without prior regulatory approval.
The Bank is subject to various regulatory capital requirements
administered by its primary federal regulator, the Federal Deposit Insurance
Corporation (FDIC). Failure to meet the minimum regulatory capital requirements
can initiate certain mandatory, and possible additional discretionary actions by
regulators that, if undertaken, could have a direct material effect on the
Bank's financial statements. Under the regulatory capital adequacy guidelines
and the regulatory framework for prompt corrective action, the Bank must meet
specific capital guidelines involving quantitative measures of the Bank's
assets, liabilities, and certain off-balance-sheet items as calculated under
regulatory accounting practices. The Bank's capital amounts and classification
are also subject to qualitative judgments by the regulators about components,
risk weightings, and other factors.
F-18
<PAGE> 183
LAPLACE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Quantitative measures established by regulation to ensure capital
adequacy require the Bank to maintain minimum amounts and ratios (set forth in
the table below) of total risk-based capital and Tier I capital (as defined in
the regulations) to risk-weighted assets (as defined), and of Tier I capital (as
defined) to average assets (as defined) (leverage ratio). Management believes,
as of December 31, 1997, that the Bank meets all capital adequacy requirements
to which it is subject.
As of December 31, 1997, the most recent notification from FDIC
categorized the Bank as well capitalized under the regulatory framework for
prompt corrective action. To be categorized as well capitalized, the Bank must
maintain minimum total risk-based, Tier I risk-based, and Tier I leverage ratios
as disclosed in the table below. There are no conditions or events since the
notification that management believes have changed the Bank's prompt corrective
action category.
<TABLE>
<CAPTION>
To be Well Capitalized
For Capital under Prompt
Actual Adequacy Purposes Corrective Action Provisions
--------------------- ------------------------- ------------------------------
Amount Ratio Amount Ratio Amount Ratio
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
December 31, 1997
Total risk-based capital (to risk-
weighted assets) $6,648,009 15.45% >=$3,441,250 >=8.00% >=$4,301,562 >=10.00%
Tier I capital (to risk-
weighted assets) $6,135,438 14.26% >=$1,720,625 >=4.00% >=$2,580,937 >= 6.00%
Tier I capital (to average
assets) $6,135,438 9.59% >=$2,559,014 >=4.00% >=$3,198,767 >= 5.00%
December 31, 1996
Total risk-based capital (to risk-
weighted assets) $5,957,325 16.84% >=$2,828,455 >=8.00% >=$3,535,569 >=10.00%
Tier I capital (to risk-
weighted assets) $5,515,379 15.60% >=$1,414,228 >=4.00% >=$2,121,341 >= 6.00%
Tier I capital (to average
assets) $5,515,379 9.28% >=$2,376,123 >=4.00% >=$2,970,154 >= 5.00%
</TABLE>
F-19
<PAGE> 184
Appendix D
November 25, 1998
The Board of Directors
c/o Mr. Thomas Smith
Chief Executive Officer
LaPlace Bancshares, Inc.
110 Belle Terre Drive
LaPlace, Louisiana 70069-0610
Re: Fairness Opinion Regarding the Proposed Acquisition of LaPlace
Bancshares, Inc., by Union Planters Corporation
Dear Directors:
Mercer Capital Management, Inc. ("Mercer Capital") has been retained by the
Board of Directors of LaPlace Bancshares, Inc. ("LaPlace") to issue a fairness
opinion regarding the financial terms for the proposed merger between LaPlace
and Union Planters Corporation ("UPC"). A representative of Mercer Capital
previously provided an oral, preliminary fairness opinion to the Board of
Directors on June 25, 1998. The fairness opinion is issued from a financial
point of view on behalf of LaPlace shareholders.
Under the terms of the Agreement and Plan of Merger ("the Agreement") by and
among Union Planters Corporation, Union Planters Holding Corporation, and
LaPlace Bancshares, Inc., dated July 1, 1998, LaPlace shall be merged with and
into Union Planters Holding Corporation, a wholly owned subsidiary of UPC. At
the Effective Time (as defined in the Agreement), each outstanding LaPlace
common share shall be converted into 2.83 UPC common shares. The Exchange Ratio
(as defined in the Agreement) is based upon a negotiated value of $159.88 per
share for LaPlace and the average closing price for UPC for the twenty trading
days ended June 24, 1998. The ultimate value of the merger to LaPlace
stockholders, however, will be contingent upon the market value of UPC's Common
Stock on the Effective Date.
We understand that the Merger is conditioned upon, among other things, receipt
of opinions to the effect that the Merger will qualify for treatment as a
tax-free reorganization and as a pooling of interests for accounting purposes.
<PAGE> 185
Mr. Thomas Smith
November 25, 1998
Page 2
Mercer Capital, as part of its investment banking and general valuation
businesses, is engaged to assist financial institutions and businesses in
merging with and acquiring other entities, and to value businesses and their
securities in connection with mergers and acquisitions, private placements,
corporate reorganization, estate tax matters, and other purposes. We have acted
as LaPlace's Financial Advisor in connection with, and have participated in
certain negotiations leading to, the Agreement.
As part of the engagement, representatives of Mercer Capital visited with
LaPlace management in LaPlace, Louisiana and with UPC management in Memphis,
Tennessee. Factors considered in rendering the opinion include:
1. The terms of the Agreement, dated July 1, 1998;
2. The process by which the Board solicited offers for LaPlace
from various regional bank holding companies and the
subsequent arms' length negotiations which occurred between
representatives of LaPlace and UPC;
3. The valuation analysis of LaPlace as prepared by Mercer
Capital;
4. An analysis of the estimated pro-forma changes in book value
per share, earnings per share, and dividends per share from
the perspective of the LaPlace shareholders;
5. A review of LaPlace's audited financial statements, internally
prepared financial statements, and certain regulatory
financial data for the fiscal years ended December 31, 1993,
1994, 1995, 1996, and 1997 and the quarters ended March 31,
June 30, and September 30, 1998;
6. A review of UPC's Annual Report to Shareholders and Annual
Reports on Form 10-K for each of the years ended December 31,
1995, 1996, and 1997 and quarterly financial information for
the quarters ended March 31, June 30, and September 30, 1998
on Form 10-Q;
7. A review of UPC's historical trading price and volume on an
absolute basis and on a relative basis in comparisons to
companies deemed to be comparable to UPC;
8. A comparison of the financial terms, to the extent publicly
available, of certain acquisition transactions which we deemed
to be relevant for purposes of this opinion; and,
9. Tax consequences of the merger for LaPlace shareholders.
<PAGE> 186
Mr. Thomas Smith
November 25, 1998
Page 3
Mercer Capital neither compiled nor audited LaPlace's or UPC's financial
statements; nor have we independently verified the information reviewed. We have
relied upon such information as being complete and accurate in all material
respects. We have not made an independent valuation of the loan portfolio,
adequacy of the loan loss reserve or other assets or liabilities of either
institution.
Our opinion does not constitute a recommendation to any shareholder as to how
the shareholder should vote on the proposed merger; nor have we expressed any
opinion as to the prices at which any security of UPC or LaPlace might trade in
the future. The opinion is necessarily based on economic, market, financial and
other conditions as they exist on, and on the information made available to us,
as of the date of this letter.
Based upon our analysis of the proposed transaction, it is our opinion as of the
date hereof that the Exchange Ratio is fair from a financial point of view to
the common shareholders of LaPlace.
Sincerely yours,
MERCER CAPITAL MANAGEMENT, INC.
Jeff K. Davis, CFA, ASA
Vice President
<PAGE> 187
APPENDIX E
ss. 131. Rights of a shareholder dissenting from certain corporate actions
A. Except as provided in subsection B of this section, if a corporation
has, by vote of its shareholders, authorized a sale, lease or exchange of all of
its assets, or has, by vote of its shareholders, become a party to a merger or
consolidation, then, unless such authorization or action shall have been given
or approved by at least eighty per cent of the total voting power, a shareholder
who voted against such corporate action shall have the right to dissent. If a
corporation has become a party to a merger pursuant to R.S. 12:112(H), the
shareholders of any subsidiaries party to the merger shall have the right to
dissent without regard to the proportion of the voting power which approved the
merger and despite the fact that the merger was not approved by vote of the
shareholders of any of the corporations involved.
B. the right to dissent provided by this Section shall not exist in the
case of:
(1) A sale pursuant to an order of a court having jurisdiction in the
premises.
(2) A sale for cash on terms requiring distribution of all or substantially
all of the net proceeds to the shareholders in accordance with their respective
interests within one year after the date of the sale.
(3) Shareholders holding shares of any class of stock which, at the record
date fixed to determine shareholders entitled to receive notice of and to vote
at the meeting of shareholders at which a merger or consolidation was acted on,
were listed on a national securities exchange, or were designated as a national
market system security on an inter-dealer quotation system by the National
Association of Securities Dealers, unless the articles of the corporation
issuing such stock provide otherwise or the shares of such shareholders were not
converted by the merger or consolidation solely into shares of the surviving or
new corporation.
C. Except as provided in the last sentence of this subsection, any
shareholder electing to exercise such right of dissent shall file with the
corporation, prior to or at the meeting of shareholders at which such proposed
corporate action is submitted to a vote, a written objection to such proposed
corporate action, and shall vote his shares against such action. If such
proposed corporate action to be taken by the required vote, but by less than
eighty per cent of the total voting power, and the merger, consolidation or
sale, lease or exchange of assets authorized thereby be effected, the
corporation shall promptly thereafter give written notice thereof, by registered
mail, to each shareholder who filed such written objection to, and voted his
shares against, such action, at such shareholder's last address on the
corporation's records. Each such shareholder may, within twenty days after the
mailing of such notice to him, but not thereafter, file with the corporation a
demand in writing for the fair cash value of his shares as of the day before
such vote was taken, provided that he state in such demand the value demanded,
and a post office address to which the reply of the corporation may be sent, and
at the same time deposit in escrow in a chartered bank or trust company located
in the parish of the registered office of the corporation, the certificates
representing his shares, duly endorsed and transferred to the corporation upon
the sole condition that said certificates shall be delivered to the corporation
upon payment of the value of the shares determined in accordance
<PAGE> 188
with the provisions of this section. With his demand the shareholder shall
deliver to the corporation, the written acknowledgment of such bank or trust
company that it so holds his certificates of stock. Unless the objection,
demand and acknowledgment aforesaid be made and delivered by the shareholder
within the period above limited, he shall conclusively be presumed to have
acquiesced in the corporate action proposed to taken. In the case of a merger
pursuant to R.S. 12:112(H), the dissenting shareholder need not file an
objection with the corporation nor vote against the merger, but need only file
with the corporation, within twenty days after a copy of the merger certificate
was mailed to him, a demand in writing for the cash value of his shares as of
the day before the certificate was filed with the secretary of state, state in
such demand the value demanded and a post office address to which the
corporation's reply may be sent, deposit the certificates representing his
shares in escrow as hereinabove provided, and deliver to the corporation with
his demand the acknowledgment of the escrow bank or trust company as
hereinabove prescribed.
D. If the corporation does not agree to the value so stated and
demanded, or does not agree that a payment is due, it shall, within twenty days
after receipt of such demand and acknowledgment, notify in writing the
shareholder, at the designated post office address, of its disagreement, and
shall state in such notice the value it will agree to pay if any payment should
be held to be due; otherwise it shall be liable for, and shall pay to the
dissatisfied shareholder, the value demanded by him for his shares.
E. In case of disagreement as to such fair cash value, or as to whether
any payment is due, after compliance by the parties with the provisions of
subsections C and D of this section, the dissatisfied shareholder, within sixty
days after receipt of notice in writing of the corporation's disagreement, but
not thereafter, may file suit against the corporation, or the merged or
consolidated corporation, as the case may be, in the district court of the
parish in which the corporation or the merged or consolidated corporation, as
the case may be, has its registered office, praying the court to fix and decree
the fair cash value of the dissatisfied shareholder's shares as of the day
before such corporate action complained of was taken, and the court shall, on
such evidence as may be adduced in relation thereto, determine summarily whether
any payment is due, and, if so, such cash value and render judgement
accordingly. Any shareholder entitled to file such suit may, within such
sixty-day period but not thereafter, intervene as a plaintiff in such suit filed
by another shareholder, and recover therein judgement against the corporation
for the fair cash value of his shares. No order or decree shall be made by the
court staying the proposed corporation action, and any such corporate action may
be carried to completion notwithstanding any such suit. Failure of the
shareholder to bring suit, or to intervene in such a suit, within sixty days
after receipt of notice of disagreement by the corporation shall conclusively
bind the shareholder (1) by the corporation's statement that no payment is due,
or (2) if the corporation does not contend that no payment is due, to accept the
value of his shares as fixed by the corporation in its notice of disagreement.
F. When the fair value of the shares has been agreed upon between the
shareholder and corporation, or when the corporation has become liable for the
value demanded by the shareholder because of failure to give notice of
disagreement and of the value it will pay, or when the shareholder has become
bound to accept the value the corporation agrees is due because of his failure
to bring suit within sixty days after receipt of notice of the corporation's
disagreement, the action of the
<PAGE> 189
shareholder to recover such value must be brought within five years from the
date the value was agreed upon, or the liability of the corporation became
fixed.
G. If the corporation or the merged or consolidated corporation, as the
case may be, shall, in its notice of disagreement, have offered to pay to the
dissatisfied shareholder on demand an amount in cash deemed by it to be the fair
cash value of his shares, and if, on the institution of a suit by the
dissatisfied shareholder claiming an amount in excess of the amount so offered,
the corporation, or the merged or consolidated corporation, as the case may be,
shall deposit in the registry of the court, there to remain until the final
determination of the cause, the amount so offered, then, if the amount finally
awarded such shareholder, exclusive of interest and costs, be more than the
amount offered and deposited as aforesaid, the costs of the proceeding shall be
taxed against the corporation, or the merged or consolidated corporation, as the
case may be; otherwise the costs of the proceeding shall be taxed against such
shareholder.
H. Upon filing a demand for the value of his shares, the shareholder shall
cease to have any of the rights of a shareholder except the rights accorded by
this section. Such a demand may be withdrawn by the shareholder at any time
before the corporation gives notice of disagreement, as provided in subsection D
of this section. After such notice of disagreement is given withdrawal of a
notice of election shall require the written consent of the corporation. If a
notice of election is withdrawn, or the proposed corporate action is abandoned
or rescinded, or a court shall determine that the shareholder is not entitled to
receive payment for his shares, or the shareholder shall otherwise lose his
dissenter's rights, he shall not have the right to receive payment for his
shares, his share certificates shall be returned to him (and, on his request,
new certificates shall be issued to him in exchange for the old ones endorsed to
the corporation), and he shall be reinstated to all his rights as a shareholder
as of the filing of his demand for value, including any intervening preemptive
rights, and the right to payment of any intervening dividend or other
distribution, or, if any such rights have expired or any such dividend or
distribution other than in cash has been completed, in lieu thereof, at the
election of the corporation, the fair value thereof in cash as determined by the
board as of the time of such expiration or completion, but without prejudice
otherwise to any corporate proceedings that may have been taken in the interim.
<PAGE> 190
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Restated Charter of the Registrant provides as follows:
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.
Article V, INDEMNIFICATION, of the Registrant's Amended and Restated Bylaws
provides as follows:
The Corporation does hereby indemnify its directors and officers
to the fullest extent permitted by the laws of the State of Tennessee and by
ARTICLE TWELFTH of its Charter. The Corporation may indemnify any other person
to the extent permitted by the Charter and by applicable law.
Indemnification of corporate directors and officers is governed by
Sections 48-18-501 through 48-18-509 of the Tennessee Business Corporation Act
(the "Act"). Under the Act, a person may be indemnified by a corporation against
judgments, fines, amounts paid in settlement and reasonable expenses (including
attorneys' fees) actually and necessarily incurred by him in connection with any
threatened or pending suit or proceeding or any appeal thereof (other than an
action by or in the right of the corporation), whether civil or criminal, by
reason of the fact that he is or was a director or officer of the corporation or
is or was serving at the request of the corporation as a director or officer,
employee or agent of another corporation of any type or kind, domestic or
foreign, if such director or officer acted in good faith for a purpose which he
reasonably believed to be in the best interest of the corporation and, in
criminal actions or proceedings only, in addition, had no reasonable cause to
believe that his conduct was unlawful. A Tennessee corporation may indemnify a
director or officer thereof in a suit by or in the right of the corporation
against amounts paid in settlement and reasonable expenses, including attorneys'
fees, actually and necessarily incurred as a result of such suit unless such
director or officer did not act in good faith or with the degree of diligence,
care and skill which ordinarily prudent men exercise under similar circumstances
and in like positions.
A person who has been wholly successful, on the merits or
otherwise, in the defense of any of the foregoing types of suits or proceedings
is entitled to indemnification for the foregoing amounts. A person who has not
been wholly successful in any such suit or proceeding may be indemnified only
upon the order of a court or a finding that the director or officer met the
required statutory standard of conduct by (i) a majority vote of a disinterested
quorum of the
<PAGE> 191
Board of Directors, (ii) the Board of Directors based upon the written opinion
of independent legal counsel to such effect, or (iii) a vote of the
shareholders.
ITEM 21. EXHIBITS.
The following exhibits are filed herein or have been, as noted,
previously filed:
<TABLE>
<CAPTION>
Exhibit
No. Description
- ----------------------- ------------------------------------------------------------------
<S> <C>
2.1 Agreement and Plan of Merger, dated as of August 4, 1998,
by and between Union Planters Corporation, Union Planters
Holding Corporation and LaPlace Bancshares, Inc., Inc. (Included
as Appendix A to the Proxy Statement included as part of this
Registration Statement.)
2.2 Plan of Merger of LaPlace Bancshares, Inc., Inc. into and with
Union Planters Holding Corporation. (Included as Appendix B to
the Proxy Statement included as part of this Registration
Statement.)
4.1 Restated Charter of Union Planters Corporation.
(Incorporated by reference to Exhibit 3(a) to the Quarterly
Report on Form 10-Q of UPC for the fiscal quarter ended
March 31, 1998 File No. 1-10160.)
4.2 Amended and Restated Bylaws of Union Planters
Corporation. (Incorporated by reference to Exhibit 3(b) to the
Annual Report on Form 10-K of UPC for the fiscal year
ended December 31, 1996 (File No. 1-10160).)
5.1 Opinion of E. James House, Jr., Secretary and Manager of the
Legal Department of Union Planters Corporation, as to the
validity of the shares of UPC Common Stock. *
8.1 Opinion of Wyatt, Tarrant & Combs as to federal income tax
consequences. *
23.1 Consent of PricewaterhouseCoopers LLP. *
23.2 Consent of Roth Murphy Sanford LLP, independent
auditors for LaPlace Bancshares, Inc., Inc. *
23.3 Consent of Mercer Capital Management Inc. *
23.4 Consent of E. James House, Jr., Secretary and Manager of the
Legal Department of Union Planters Corporation (included in
Exhibit 5.1).
23.5 Consent of Wyatt Tarrant & Combs (included in Exhibit 8.1).
24.1 Power of Attorney (contained on the signature page hereof).
99.1 Form Proxy Appointment Card of LaPlace Bancshares, Inc., Inc. *
</TABLE>
* Previously Filed
<PAGE> 192
ITEM 22. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) That, for purposes of determining any liability under
the Securities Act of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(2) That for purposes of determining any liability under
the Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part
of this registration statement as of the time it was declared effective.
(3) That for the purpose of determining any liability
under the Securities Act of 1933, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(4) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(5) To respond to requests for information that is
incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or
13 of this Form S-4, within one business day of receipt of such request, and to
send the incorporated documents by first class mail or other equally prompt
means. This includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of responding to
the request.
(6) To supply by means of a post-effective amendment all
information concerning a transaction, and the company being acquired involved
therein, that was not the subject of and included in the registration statement
when it became effective.
(7) That prior to any public reoffering of the securities
registered hereunder through the use of a prospectus which is a part of this
registration statement, by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c), the issuer undertakes that such
reoffering prospectus will contain the information called for by the applicable
registration
<PAGE> 193
form with respect to reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other items of the applicable
form.
(8) That every prospectus: (i) that is filed pursuant to
Paragraph (7) immediately preceding, or (ii) that purports to meet the
requirements of Section 10(a)(3) of the Act and is used in connection with an
offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
<PAGE> 194
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Memphis,
State of Tennessee on this the 1st day of December, 1998.
REGISTRANT
UNION PLANTERS CORPORATION
By: /s/ Benjamin W. Rawlins, Jr.
-------------------------------------
Benjamin W. Rawlins, Jr.
Chairman of the Board and
Chief Executive Officer
We, the undersigned directors and officers of Union Planters
Corporation do hereby constitute and appoint E. James House, Jr. and M. Kirk
Walters, and each of them, our true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for us and in our name,
place and stead, in any and all capacities, to sign any and all amendments to
this Registration Statement and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and we do hereby ratify and confirm all that said attorneys-in-fact
and agents, or their substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this registration statement has been signed below by the following
persons in the capacities and at the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ Benjamin W. Rawlins, Jr.* Chairman of the Board, December 1, 1998
- ----------------------------- Chief Executive Officer, Director
Benjamin W. Rawlins, Jr. (Principal Executive Officer)
/s/ Jackson W. Moore* President, Chief Operating Officer, December 1, 1998
- ----------------------------- Director
Jackson W. Moore
/s/ John W. Parker* Executive Vice President and December 1, 1998
- ----------------------------- Chief Financial Officer
John W. Parker (Principal Financial Officer)
/s/ M. Kirk Walters* Senior Vice President, Treasurer, December 1, 1998
- ----------------------------- and Chief Accounting Officer
M. Kirk Walters
</TABLE>
<PAGE> 195
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ---------- ----- ----
<S> <C> <C>
- -----------------------------
Richard A. Trippeer, Jr.
/s/ Albert M. Austin* Director December 1, 1998
- -----------------------------
Albert M. Austin
/s/ Marvin E. Bruce* Director December 1, 1998
- -----------------------------
Marvin E. Bruce
/s/ George W. Bryan* Director December 1, 1998
- -----------------------------
George W. Bryan
/s/ James E. Harwood* Director December 1, 1998
- -----------------------------
James E. Harwood
/s/ Parnell S. Lewis, Jr.* Director December 1, 1998
- -----------------------------
Parnell S. Lewis, Jr.
/s/ C.J. Lowrance, III* Director December 1, 1998
- -----------------------------
C.J. Lowrance, III
/s/ Stanley D. Overton* Director December 1, 1998
- -----------------------------
Stanley D. Overton
/s/ Dr. V. Lane Rawlins* Director December 1, 1998
- -----------------------------
Dr. V. Lane Rawlins
/s/ Donald F. Schuppe* Director December 1, 1998
- -----------------------------
Donald F. Schuppe
/s/ David M. Thomas* Director December 1, 1998
- -----------------------------
David M. Thomas
</TABLE>
<PAGE> 196
<TABLE>
<S> <C> <C>
/s/ Spence L. Wilson* Director December 1, 1998
- -----------------------------
Spence L. Wilson
</TABLE>
*
By:/s/ E. James House, Jr.
------------------------
Attorney-In-Fact
<PAGE> 197
EXHIBIT INDEX
The following exhibits are filed herein or have been, as noted, previously
filed:
<TABLE>
<CAPTION>
Exhibit Description
No.
- ------------------ ---------------------------------------------------------------------
<S> <C>
2.1 Agreement and Plan of Merger, dated as of August 4, 1998, by and
between Union Planters Corporation, Union Planters Holding
Corporation and LaPlace Bancshares, Inc. (Included as Appendix A to
the Proxy Statement included as part of this Registration Statement.)
2.2 Plan of Merger of LaPlace Bancshares, Inc., Inc. into and with Union
Planters Holding Corporation. (Included as Appendix B to the Proxy
Statement included as part of this Registration Statement.)
4.1 Restated Charter of Union Planters Corporation. (Incorporated by
reference to Exhibit 3(a) to the Quarterly Report on Form 10-Q of UPC
for the fiscal quarter ended March 31, 1998 File No. 1-10160.)
4.2 Amended and Restated Bylaws of Union Planters Corporation.
(Incorporated by reference to Exhibit 3(b) to the Annual Report on
Form 10-Q of UPC for the quarter ended March 31, 1998 (File No. 1-10160).
5.1 Opinion of E. James House, Jr., Secretary and Manager of the Legal
Department of Union Planters Corporation, as to the validity of the
shares of UPC Common Stock. *
8.1 Opinion of Wyatt, Tarrant & Combs as to federal income tax
consequences. *
23.1 Consent of PricewaterhouseCoopers LLP. *
23.2 Consent of Roth Murphy Sanford LLP, independent auditors
for LaPlace Bancshares, Inc., Inc. *
23.3 Consent of Mercer Capital Management Inc. *
23.4 Consent of E. James House, Jr., Secretary and Manager of the Legal
Department of Union Planters Corporation (included in Exhibit 5.1).
23.5 Consent of Wyatt Tarrant & Combs (included in Exhibit 8.1).
24.1 Power of Attorney (contained on the signature page hereof).
99.1 Form Proxy Appoint Card of LaPlace Bancshares, Inc., Inc. *
</TABLE>
* Previously Filed
