<PAGE> 1
As filed with the Securities and Exchange Commission on June 5, 1998
Registration No. 333-_____
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM S-4
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
--------------
UNION PLANTERS CORPORATION
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C> <C>
TENNESSEE 6712 62-0859007
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification No.)
Incorporation or Organization) Classification Code Number)
</TABLE>
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.
SECRETARY AND MANAGER OF THE LEGAL DEPARTMENT
UNION PLANTERS CORPORATION
7130 GOODLETT FARMS PARKWAY
MEMPHIS, TENNESSEE 38018
(901) 580-6596
(Name, address, including ZIP code, and telephone number, including area
code, of agent for service)
WITH COPIES TO:
Stewart E. Conner, Esq. John R. Zerkle
Wyatt, Tarrant & Combs Leagre Chandler & Millard
2800 Citizens Plaza 9100 Keystone Crossing, Suite 800
Louisville, Kentucky 40202 Indianapolis, Indiana 46240
(502) 562-7223 (317) 808-3000
Approximate date of commencement of proposed sale of securities to the public:
As soon as practicable after this Registration Statement becomes effective and
after conditions described in the Agreement and Plan of Merger have been
satisfied.
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. [ ]
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Title of each class Proposed maximum Proposed maximum
of securities Amount offering price aggregate Amount of
to be registered to be Registered per unit(1) offering price(1) registration fee
<S> <C> <C> <C> <C>
Common Stock, 3,398,000 shares $26.75 $90,896,500 $26,814.47
$5.00 par value (and associated Pre
(and associated ferred Share Rights)
Preferred Share
Rights)
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee
and based, pursuant to Rule 457(c) and (f) under the Securities Act of
1933, as amended, on the average of the high and low sales prices of
common stock of AMBANC Corp. as reported on the Nasdaq National Market
System on June 3, 1998.
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 SECTION 8(a), MAY
DETERMINE.
- -------------------------------------------------------------------------------
<PAGE> 2
AMBANC CORP.
302 MAIN STREET
VINCENNES, INDIANA 47591-0556
__________ __, 1998
TO THE SHAREHOLDERS OF AMBANC CORP.:
You are cordially invited to attend a special meeting of the
shareholders (the "Special Meeting") of AMBANC Corp. ("AMBANC") to be held at
Green Auditorium, Vincennes University, located at 1st and Harrison Streets,
Vincennes, Indiana at 10:30 a.m., local time, on __________ __, 1998.
At the Special Meeting, you will be asked to consider and vote
on a proposal to approve the Agreement and Plan of Reorganization (the
"Agreement"), between AMBANC and Union Planters Corporation, a Tennessee
corporation ("UPC"), and a related Plan of Merger (the "Plan of Merger").
Pursuant to the Agreement and Plan of Merger, AMBANC will merge (the "Merger")
with and into a wholly owned subsidiary of UPC, and each of your shares of
AMBANC common stock will be converted into and exchanged for the right to
receive 0.4841 of a share of UPC common stock and the associated "Preferred
Share Rights" (as defined in the accompanying Proxy Statement/Prospectus),
subject to possible adjustment as described in the accompanying Proxy
Statement/Prospectus, with cash being paid in lieu of issuing fractional shares.
If the closing price of UPC common stock during the 20 trading day period ending
on the later of the date the Federal Reserve approves the Merger or the date of
the Special Meeting both (i) falls below $49.95 (or $24.18 on a per AMBANC
equivalent per share basis), and (ii) falls by more than 15% below the relative
performance of a specified group of bank holding company common stocks, AMBANC
will have the right to terminate the Agreement and Plan of Merger unless UPC
elects to increase the exchange ratio. See pages 20-22 of the Proxy
Statement/Prospectus for a description. If shareholders approve the Merger, and
the termination right is triggered as a result of a decline in the market price
of UPC common stock, your Board of Directors could elect to proceed with the
Merger without resoliciting shareholders.
Enclosed are the (i) Notice of Special Meeting, (ii) Proxy
Statement/Prospectus, (iii) proxy card for the Special Meeting and (iv)
pre-addressed return envelope for the proxy card. The Proxy State
ment/Prospectus describes in more detail the Agreement, the Plan of Merger, and
the proposed Merger, including a description of the conditions to consummation
of the Merger and the effects of the Merger on your rights as a shareholder.
Please read these materials carefully and consider thoughtfully the information
set forth in them.
McDonald & Company Securities, Inc., AMBANC's financial
advisor, has issued its opinions to your Board of Directors regarding the
fairness, from a financial point of view, of the consideration to be paid by UPC
pursuant to the Agreement. A copy of the opinion is attached as Appendix C to
the Proxy State ment/Prospectus.
THE BOARD OF DIRECTORS OF AMBANC HAS UNANIMOUSLY APPROVED AND
ADOPTED THE AGREEMENT AND THE PLAN OF MERGER AND RECOMMENDS THAT YOU VOTE FOR
APPROVAL OF THE AGREEMENT AND THE PLAN OF MERGER.
Whether or not you plan to attend the Special Meeting, you are
urged to complete, sign, and return promptly the enclosed proxy card. If you
attend the Special Meeting, you may vote in person even if you previously
returned your proxy card. The proposed Merger with UPC is a significant step for
AMBANC and your vote on this matter is of great importance.
<PAGE> 3
ON BEHALF OF THE BOARD OF DIRECTORS, WE URGE YOU TO VOTE FOR
ADOPTION OF THE AGREEMENT AND THE PLAN OF MERGER BY MARKING THE ENCLOSED PROXY
CARD "FOR" ITEM ONE.
We look forward to seeing you at the Special Meeting.
Sincerely,
ROBERT G. WATSON
CHAIRMAN, PRESIDENT, AND
CHIEF EXECUTIVE OFFICER
<PAGE> 4
AMBANC CORP.
302 MAIN STREET
VINCENNES, INDIANA 47591-0556
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD AT 10:30 A.M. ON __________ __, 1998
NOTICE IS HEREBY GIVEN that a special meeting of the
shareholders (the "Special Meeting") of AMBANC Corp. ("AMBANC") will be held at
Green Auditorium, Vincennes University located at 1st and Harrison Streets,
Vincennes, Indiana, on __________ __, 1998, at 10:30 a.m., local time, for the
following purposes:
1. MERGER. To consider and vote upon a proposal to approve the
Agreement and Plan of Reorganization, dated as of March 31, 1998 (the
"Agreement"), between AMBANC and Union Planters Corporation, a Tennessee
corporation ("UPC"), and the related Plan of Merger (the "Plan of Merger"),
between AMBANC and Union Planters Holding Corporation, a wholly owned subsidiary
of UPC organized under the laws of Tennessee ("UPC Merger Subsidiary"), pursuant
to which (i) AMBANC will merge (the "Merger") with and into UPC Merger
Subsidiary, with the effect that UPC Merger Subsidiary will be the surviving
corporation resulting from the Merger, (ii) each share of the common stock of
AMBANC ("AMBANC Common Stock") issued and outstanding at the effective time of
the Merger (excluding certain shares held by AMBANC or UPC, or their respective
subsidiaries, in each case 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 0.4841 of a share of the $5.00 par value common stock
of UPC, and the associated "Preferred Share Rights" (as defined in the
accompanying Proxy Statement/Prospectus), subject to possible adjustment, and
cash in lieu of issuing any fractional share, and (iii) UPC will assume the
obligations of AMBANC under its stock plan, all as more fully described in the
accompanying Proxy Statement/Prospectus. The text of the Agreement and the Plan
of Merger are set forth as Appendix A and Appendix B, respectively, to the
accompanying Proxy State ment/Prospectus and are incorporated by reference
herein.
2. OTHER BUSINESS. To transact such other business as may come properly
before the Special Meeting or any adjournments or postponements of the Special
Meeting.
Only shareholders of record at the close of business on
_________ __, 1998 will be entitled to receive notice of and to vote at the
Special Meeting or any adjournment or postponement thereof.
THE BOARD OF DIRECTORS OF AMBANC UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE FOR APPROVAL OF THE AGREEMENT AND THE PLAN OF MERGER.
BY ORDER OF THE BOARD OF DIRECTORS
ROBERT G. WATSON
CHAIRMAN, PRESIDENT, AND
CHIEF EXECUTIVE OFFICER
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DATE,
AND SIGN THE ENCLOSED FORM OF PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
POSTAGE PAID RETURN ENVELOPE IN ORDER TO ENSURE THAT YOUR SHARES WILL BE
REPRESENTED AT THE SPECIAL MEETING.
<PAGE> 5
PROSPECTUS
COMMON STOCK, $5.00 PAR VALUE
UNION PLANTERS CORPORATION
PROXY STATEMENT
FOR SPECIAL MEETING OF SHAREHOLDERS
OF AMBANC CORP.
This Prospectus of Union Planters Corporation, a bank holding
company organized and existing under the laws of the State of Tennessee ("UPC"),
relates to up to 3,398,000 shares of common stock, $5.00 par value, of UPC
(together with associated "Preferred Share Rights" (as defined herein), "UPC
Common Stock"), including shares to be subject to assumed options, which are
issuable to the shareholders of AMBANC Corp., a corporation organized and
existing under the laws of the State of Indiana ("AMBANC"), upon consummation of
the proposed merger (the "Merger") of AMBANC with and into Union Planters
Holding Corporation, a wholly owned subsidiary of UPC organized under the laws
of Tennessee ("UPC Merger Subsidiary"), with the effect that UPC Merger
Subsidiary will be the surviving corporation of the Merger. The Merger will be
consummated pursuant to the terms of the Agreement and Plan of Reorganization,
dated as of March 31, 1998 (the "Agreement"), between UPC and AMBANC, and the
related Plan of Merger (the "Plan of Merger"), between UPC Merger Subsidiary and
AMBANC.
At the effective time of the Merger (the "Effective Time"),
except as described herein, each issued and outstanding share of common stock of
AMBANC ("AMBANC Common Stock") will be converted into and exchanged for the
right to receive 0.4841 of a share of UPC Common Stock, subject to certain
possible adjustments described herein (the "Exchange Ratio"). Cash (without
interest) will be paid in lieu of the issuance of any fractional shares of UPC
Common Stock. The reported closing sales price of UPC Common Stock on June 3,
1998 was $56.44, resulting in an equivalent price per AMBANC share of $27.32.
See "SUMMARY-Comparative Market Prices of Common Stock."
The Exchange Ratio could be adjusted upward if the quoted
price of UPC Common Stock falls below certain minimum thresholds. Under the
Agreement, AMBANC may elect not to complete the Merger if the average closing
sales price of UPC Common Stock during the 20 trading day period ending on the
later of the date the Federal Reserve approves the Merger and the date of the
Special Meeting (the "Determination Date") both (i) falls below $49.95 (or
$24.18 on a per AMBANC share equivalent basis) and (ii) falls by more than 15%
below the relative performance of a specified group of bank holding company
common stocks, comparing closing sales prices on April 6, 1998 and on the
Determination Date. However, if AMBANC elects not to complete the Merger in
these circumstances, UPC may, but is not obligated to, elect to cause the Merger
to be completed. To do so, UPC must increase the Exchange Ratio by the amount
necessary so that each share of AMBANC Common Stock will be converted in the
Merger into shares of UPC Common Stock having a value, based on the average
closing price, of the lesser of $24.18 or the price that would reflect a decline
in the closing sales price of UPC Common Stock that is 15% below the relative
performance of the group of bank holding company common stocks between April 6,
1998 and the Determination Date. This adjustment formula is described in greater
detail under the heading "DESCRIPTION OF THE TRANSACTION--Possible Adjustment of
Exchange Ratio."
This Prospectus also serves as the Proxy Statement of AMBANC,
and is being furnished to the shareholders of AMBANC in connection with the
solicitation of proxies by the AMBANC Board for use at its special meeting of
shareholders (including any adjournment or postponement thereof, the "Special
Meeting"), to be held on ________ __, 1998, to consider and vote upon the
Agreement and the Plan of Merger and the transactions contemplated therein. This
Proxy Statement/Prospectus ("Proxy Statement") and related materials enclosed
herewith are being mailed to shareholders of AMBANC on or about _______ __,
1998.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROXY STATEMENT.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
THE SECURITIES OFFERED HEREBY ARE NOT DEPOSITS, SAVINGS ACCOUNTS, OR OTHER
OBLIGATIONS OF A DEPOSITORY INSTITUTION AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
--------------------
The date of this Proxy Statement is ________ __, 1998.
<PAGE> 6
AVAILABLE INFORMATION
Each of UPC and AMBANC is subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and, in accordance therewith, is required to file reports, proxy and
information statements, and other information with the Securities and Exchange
Commission (the "SEC"). Copies of such reports, proxy and information
statements, and other information can be obtained, at prescribed rates, from the
SEC by addressing written requests for such copies to the Public Reference
Section at the SEC at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C.
20549. In addition, such reports, proxy and information statements, and other
information can be inspected and copied at the public reference facilities
referred to above and at the regional offices of the SEC at 7 World Trade
Center, 13th Floor, New York, New York 10048 and Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. The SEC also maintains
a site on the World Wide Web at http://www.sec.gov that contains reports, proxy
and information statements, and other information regarding registrants. The
shares of UPC Common Stock are listed and traded on the New York Stock Exchange
(the "NYSE") under the symbol "UPC," and reports, proxy and information
statements, and other information concerning UPC also may be inspected at the
offices of the NYSE, 20 Broad Street, New York, New York 10005. The shares of
AMBANC Common Stock are traded on the Nasdaq National Market System (the "Nasdaq
National Market") under the symbol "AMBK," and reports, proxy and information
statements, and other information concerning AMBANC also may be inspected at the
offices of the National Association of Securities Dealers, Inc. (the "NASD"),
1735 K Street, N.W., Washington, D.C. 20006.
This Proxy Statement constitutes part of the Registration
Statement on Form S-4 of UPC (including any exhibits and amendments thereto, the
"Registration Statement") filed with the SEC under the Securities Act of 1933,
as amended (the "Securities Act"), relating to the securities offered hereby.
This Proxy Statement does not include all of the information in the Registration
Statement, certain portions of which have been omitted pursuant to the rules and
regulations of the SEC. For further information about UPC and the securities
offered hereby, reference is made to the Registration Statement. The
Registration Statement may be inspected and copied, at prescribed rates, at the
SEC's public reference facilities at the addresses set forth above.
All information contained in this Proxy Statement or
incorporated herein by reference with respect to UPC was supplied by UPC, and
all information contained in this Proxy Statement or incorporated herein by
reference with respect to AMBANC was supplied by AMBANC.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROXY
STATEMENT, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION SHOULD NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROXY STATEMENT DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO PURCHASE, THE
SECURITIES OFFERED BY THIS PROXY STATEMENT IN ANY JURISDICTION TO OR FROM ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROXY STATEMENT NOR ANY DISTRIBUTION
OF THE SECURITIES BEING OFFERED PURSUANT TO THIS PROXY STATEMENT SHALL, UNDER
ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF UPC OR AMBANC OR THE INFORMATION SET FORTH OR INCORPORATED BY
REFERENCE HEREIN SINCE THE DATE OF THIS PROXY STATEMENT.
THIS PROXY STATEMENT CONTAINS CERTAIN FORWARD-LOOKING
STATEMENTS WITH RESPECT TO THE FINANCIAL CONDITION, RESULTS OF OPERATIONS, AND
BUSINESS OF UPC AND AMBANC AND OF UPC FOLLOWING THE CONSUMMATION OF THE MERGER
AND THE OTHER ACQUISITIONS (AS DEFINED UNDER "BUSINESS OF UPC -- RECENT
DEVELOPMENTS"), INCLUDING STATEMENTS RELATING TO THE COST SAVINGS AND REVENUE
ENHANCEMENTS THAT ARE EXPECTED TO BE REALIZED FROM THE MERGER AND THE OTHER
ACQUISITIONS AND THE EXPECTED IMPACT OF THE MERGER AND THE OTHER ACQUISITIONS ON
UPC'S FINANCIAL PERFORMANCE. THESE FORWARD-LOOKING STATEMENTS INVOLVE CERTAIN
RISKS AND UNCERTAINTIES. FACTORS THAT MAY CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE CONTEMPLATED BY SUCH FORWARD-LOOKING STATEMENTS INCLUDE,
-ii-
<PAGE> 7
AMONG OTHER THINGS, THE FOLLOWING POSSIBILITIES: (I) EXPECTED COST SAVINGS FROM
THE MERGER AND THE OTHER ACQUISITIONS CANNOT BE FULLY REALIZED; (II) DEPOSIT
ATTRITION, CUSTOMER LOSS, OR REVENUE LOSS FOLLOWING THE MERGER AND THE OTHER
ACQUISITIONS IS GREATER THAN EXPECTED; (III) COMPETITIVE PRESSURE IN THE BANKING
INDUSTRY INCREASES SIGNIFICANTLY; (IV) COSTS OR DIFFICULTIES RELATED TO THE
INTEGRATION OF THE BUSINESSES OF UPC AND THE INSTITUTIONS TO BE ACQUIRED ARE
GREATER THAN EXPECTED; (V) CHANGES IN THE INTEREST RATE ENVIRONMENT REDUCE
MARGINS; (VI) GENERAL ECONOMIC CONDITIONS, EITHER NATIONALLY OR REGIONALLY, ARE
LESS FAVORABLE THAN EXPECTED, RESULTING IN, AMONG OTHER THINGS, A DETERIORATION
IN CREDIT QUALITY; (VII) CHANGES OCCUR IN THE REGULATORY ENVIRONMENT; (VIII)
CHANGES OCCUR IN BUSINESS CONDITIONS AND INFLATION; (IX) CHANGES OCCUR IN THE
SECURITIES MARKETS; AND (X) DISRUPTIONS OF THE OPERATIONS OF UPC, AMBANC OR ANY
OF THEIR SUBSIDIARIES, OR ANY OTHER GOVERNMENTAL OR PRIVATE ENTITY AS A RESULT
OF THE "YEAR 2000 PROBLEM." THE FORWARD-LOOKING EARNINGS ESTIMATES INCLUDED IN
THIS PROXY STATEMENT HAVE NOT BEEN EXAMINED OR COMPILED BY THE INDEPENDENT
PUBLIC ACCOUNTANTS OF UPC AND AMBANC, NOR HAVE SUCH ACCOUNTANTS APPLIED ANY
PROCEDURES THERETO. 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 UPC AFTER THE MERGER AND THE OTHER
ACQUISITIONS IS INCLUDED IN THE SEC FILINGS INCORPORATED BY REFERENCE HEREIN.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents previously filed with the SEC by UPC
pursuant to the Exchange Act are hereby incorporated by reference herein (SEC
File No. 1-10160):
(a) UPC's 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 be deemed to be incorporated
herein and is not part of the Registration Statement)
("UPC's 1997 Form 10-K");
(b) UPC's Quarterly Report on Form 10-Q for the three
months ended March 31, 1998 and the amendment thereto
filed on Form 10-Q/A ("UPC's March 31, 1998 Form 10-
Q");
(c) UPC's Current Reports on Form 8-K dated January 15,
February 23, and April 16, 1998;
(d) The description of the current management and Board
of Directors of UPC contained in the Proxy Statement
of UPC filed pursuant to Section 14(a) of the
Exchange Act for UPC's Annual Meeting of Shareholders
held on April 16, 1998;
(e) UPC's Registration Statement on Form 8-A dated
January 19, 1989, filed on February 1, 1989; (SEC
File No. 0-6919) in connection with UPC's designation
and authorization of its Series A Preferred Stock;
and
(f) The description of the UPC Common Stock contained in
UPC's Registration Statement under Section 12(b) of
the Exchange Act and any amendment or report filed
for the purpose of updating such description.
The following documents previously filed with the SEC by
AMBANC pursuant to the Exchange Act are hereby incorporated by reference herein
(SEC File No. 0-10710):
-iii-
<PAGE> 8
(a) AMBANC's Annual Report on Form 10-K for the fiscal
year ended December 31, 1997 and the amendment
thereto filed on Form 10-K/A ("AMBANC's 1997 Form 10-
K");
(b) AMBANC's Quarterly Report on Form 10-Q for the three
months ended March 31, 1998;
(c) The description of the current management and Board
of Directors of AMBANC contained in the Proxy
Statement of AMBANC filed on March 26, 1998 pursuant
to Section 14(a) of the Exchange Act; and
(d) The description of the AMBANC Common Stock contained
in AMBANC's Registration Statement under Section
12(b) of the Exchange Act and any amendment or report
filed for the purpose of updating such description.
All documents filed by UPC and/or AMBANC pursuant to Sections
13(a), 13(c), 14, or 15(d) of the Exchange Act after the date of this Proxy
Statement and prior to final adjournment of the Special Meeting shall be deemed
to be incorporated by reference in this Proxy Statement and to be a part hereof
from the date of filing of such documents. Any statement contained herein or in
a document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes hereof 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. Any such statement so modified or superseded shall not be deemed to
constitute a part hereof, except as so modified or superseded.
UPC WILL PROVIDE WITHOUT CHARGE, UPON THE WRITTEN OR ORAL
REQUEST OF ANY PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS PROXY
STATEMENT IS DELIVERED, A COPY OF ANY AND ALL INFORMATION (EXCLUDING CERTAIN
EXHIBITS) RELATING TO UPC THAT HAS BEEN INCORPORATED BY REFERENCE IN THE
REGISTRATION STATEMENT. SUCH REQUESTS SHOULD BE DIRECTED TO 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).
AMBANC WILL PROVIDE WITHOUT CHARGE, UPON THE WRITTEN OR ORAL REQUEST OF ANY
PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS PROXY STATEMENT IS
DELIVERED, A COPY OF ANY AND ALL INFORMATION (EXCLUDING CERTAIN EXHIBITS)
RELATING TO AMBANC THAT HAS BEEN INCORPORATED BY REFERENCE IN THE REGISTRATION
STATEMENT OF WHICH THIS PROXY STATEMENT IS A PART. SUCH REQUESTS SHOULD BE
DIRECTED TO TROY D. STOLL, SECRETARY, TREASURER AND CHIEF FINANCIAL OFFICER,
AMBANC CORP., 302 MAIN STREET, VINCENNES, INDIANA 47591 (TELEPHONE (812)
885-6418). IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST
SHOULD BE MADE BY _________ __, 1998.
-iv-
<PAGE> 9
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
SUMMARY .........................................................................................................1
The Parties..............................................................................................1
AMBANC .......................................................................................1
UPC .......................................................................................1
UPC Merger Subsidiary...........................................................................2
Meeting Of Shareholders..................................................................................2
The Merger...............................................................................................3
General. .......................................................................................3
Effect Of The Merger On Employee Options........................................................4
Reasons For The Merger, Recommendations Of The Board Of Directors Of AMBANC.....................4
Opinion Of Financial Advisor....................................................................4
Effective Time..................................................................................4
Exchange Of Stock Certificates..................................................................5
Regulatory Approval And Other Conditions........................................................5
Waiver, Amendment, And Termination..............................................................5
Dissenters' Rights..............................................................................5
Interests Of Certain Persons In The Merger......................................................5
Certain Federal Income Tax Consequences Of The Merger...........................................6
Accounting Treatment............................................................................6
Certain Differences In Shareholders' Rights.....................................................6
Option Agreement................................................................................6
Conduct Of Business Pending The Merger..........................................................6
Comparative Market Prices Of Common Stock................................................................7
Historical And Pro Forma Comparative Per Share Data......................................................8
Selected Financial Data.................................................................................10
SPECIAL MEETING OF AMBANC SHAREHOLDERS...........................................................................18
Date, Place, Time, And Purpose..........................................................................18
Record Date, Voting Rights, Required Vote, And Revocability Of Proxies..................................18
Solicitation Of Proxies.................................................................................19
Recommendation..........................................................................................19
DESCRIPTION OF TRANSACTION.......................................................................................20
General ...............................................................................................20
Possible Adjustment Of Exchange Ratio...................................................................20
Effect Of The Merger On Options.........................................................................22
Right to Restructure Transaction........................................................................23
Background Of And Reasons For The Merger................................................................23
Background of the Merger.......................................................................23
AMBANC's Reasons for the Merger and Recommendation of the AMBANC Board.........................24
UPC's Reasons For The Merger...................................................................25
Opinion Of AMBANC's Financial Advisors...........................................................................25
Effective Time Of The Merger............................................................................30
Dissenters' Rights......................................................................................31
Distribution Of UPC Stock Certificates..................................................................31
Conditions To Consummation Of The Merger................................................................31
Regulatory Approval.....................................................................................32
Waiver, Amendment, And Termination......................................................................33
Conduct Of Business Pending The Merger..................................................................33
Management And Operations After The Merger..............................................................34
</TABLE>
-v-
<PAGE> 10
<TABLE>
<S> <C>
Interests Of Certain Persons In The Merger..............................................................34
General........................................................................................34
Employment Agreement...........................................................................35
Stock Options..................................................................................35
Indemnification; Directors And Officers Insurance..............................................35
Certain Federal Income Tax Consequences Of The Merger...................................................36
Accounting Treatment....................................................................................38
Expenses And Fees.......................................................................................38
Resales Of UPC Common Stock.............................................................................38
Option Agreement........................................................................................39
EFFECT OF THE MERGER ON RIGHTS OF SHAREHOLDERS...................................................................41
Anti-Takeover Provisions Generally......................................................................41
Authorized Capital Stock................................................................................42
UPC............................................................................................42
AMBANC.........................................................................................43
Amendment Of Charter And Bylaws.........................................................................43
UPC............................................................................................43
AMBANC.........................................................................................44
Director Removal........................................................................................44
UPC............................................................................................44
AMBANC.........................................................................................44
Limitations On Director Liability.......................................................................44
UPC............................................................................................44
AMBANC.........................................................................................45
Indemnification.........................................................................................45
UPC............................................................................................45
AMBANC.........................................................................................46
Special Meeting Of Shareholders.........................................................................46
UPC............................................................................................46
AMBANC.........................................................................................46
Shareholder Nominations And Proposals...................................................................46
UPC............................................................................................46
AMBANC.........................................................................................47
Business Combinations...................................................................................47
UPC............................................................................................47
AMBANC.........................................................................................48
Dissenters' Rights Of Appraisal.........................................................................49
UPC............................................................................................49
AMBANC.........................................................................................49
Dividends...............................................................................................50
UPC............................................................................................50
AMBANC.........................................................................................50
COMPARATIVE MARKET PRICES AND DIVIDENDS..........................................................................50
BUSINESS OF AMBANC...............................................................................................52
General ...............................................................................................52
Beneficial Ownership Of AMBANC Common Stock.............................................................52
BUSINESS OF UPC..................................................................................................52
General ...............................................................................................52
Recent Developments.....................................................................................53
Recently Completed Acquisitions................................................................53
Other Pending Acquisitions.....................................................................54
Earnings Considerations Related To The Merger And The Other Acquisitions.......................55
</TABLE>
-vi-
<PAGE> 11
<TABLE>
<S> <C>
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION...........................................................56
CERTAIN REGULATORY CONSIDERATIONS................................................................................63
General ...............................................................................................63
Payment Of Dividends....................................................................................64
Capital Adequacy........................................................................................65
Support Of Subsidiary Institutions......................................................................66
Prompt Corrective Action................................................................................66
DESCRIPTION OF UPC CAPITAL STOCK.................................................................................67
UPC Common Stock........................................................................................68
General ......................................................................................68
Dividends......................................................................................68
Liquidation Rights.............................................................................68
UPC Preferred Stock.....................................................................................68
Series A Preferred Stock.......................................................................68
Series E Preferred Stock.......................................................................69
OTHER MATTERS....................................................................................................69
SHAREHOLDER PROPOSALS............................................................................................69
EXPERTS ........................................................................................................69
OPINIONS ........................................................................................................69
</TABLE>
Appendices
Appendix A Agreement and Plan of Reorganization, dated March 31, 1998,
between AMBANC Corp. and Union Planters Corporation (without
exhibits)
Appendix B Plan of Merger, dated March 31, 1998, between Ambanc Corp. and
Union Planters Holding
Corporation
Appendix C Opinion of McDonald & Company Securities, Inc.
-vii-
<PAGE> 12
SUMMARY
THE FOLLOWING IS A SUMMARY OF CERTAIN INFORMATION CONTAINED IN
THIS PROXY STATEMENT AND THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE. THIS
SUMMARY IS NOT INTENDED TO BE A COMPLETE DESCRIPTION OF THE MATTERS COVERED IN
THIS PROXY STATEMENT AND IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION APPEARING ELSEWHERE OR INCORPORATED BY REFERENCE IN THIS PROXY
STATEMENT. SHAREHOLDERS ARE URGED TO READ CAREFULLY THE ENTIRE PROXY STATEMENT,
INCLUDING THE APPENDICES. AS USED IN THIS PROXY STATEMENT, THE TERMS "UPC" AND
"AMBANC" REFER TO UNION PLANTERS CORPORATION AND AMBANC CORP., RESPECTIVELY,
AND, WHERE THE CONTEXT REQUIRES, TO THOSE ENTITIES AND THEIR RESPECTIVE
SUBSIDIARIES.
THE PARTIES
AMBANC. AMBANC, an Indiana corporation, is a bank holding
company registered with the Board of Governors of the Federal Reserve System
(the "Federal Reserve") under the Bank Holding Company Act of 1956, as amended
(the "BHC Act"). As of March 31, 1998, AMBANC had total consolidated assets of
approximately $733.5 million, total consolidated loans of approximately $549.6
million, total consolidated deposits of approximately $629.0 million, and total
consolidated shareholders' equity of approximately $79.5 million.
AMBANC conducts a complete range of commercial and personal
banking activities in Indiana and Illinois through its wholly owned bank
subsidiaries, AmBank Indiana, N.A., and AmBank Illinois, N.A. (the "AmBank
Banks"). The AmBank Banks operate 26 branches in five Indiana counties and in
three counties in Illinois.
The principal executive offices of AMBANC are located at 302
Main Street, Vincennes, Indiana 47591-0556, and its telephone number at such
address is (812)882-3050. Additional information with respect to AMBANC and its
subsidiaries is included elsewhere herein and in documents incorporated by
reference in this Proxy Statement. See "AVAILABLE INFORMATION," "DOCUMENTS
INCORPORATED BY REFERENCE," and "BUSINESS OF AMBANC."
UPC. UPC, a Tennessee corporation, is a bank holding company
registered with the Federal Reserve under the BHC Act. As of March 31, 1998, UPC
had total consolidated assets of approximately $18.4 billion, total consolidated
loans of approximately $12.7 billion, total consolidated deposits of
approximately $13.6 billion, and total consolidated shareholders' equity of
approximately $1.8 billion.
UPC conducts its business activities through its principal
bank subsidiary, the $15.7 billion asset Union Planters Bank, National
Association ("UPB"), a multi-state national banking association, founded in 1869
and headquartered in Memphis, Tennessee with branches in Tennessee, Arkansas,
Missouri, Kentucky, Alabama, Mississippi and Louisiana, one savings association
headquartered in Tennessee, two other Tennessee chartered banks headquartered in
Tennessee, two recently acquired Arkansas state-chartered banks and one Florida
chartered bank headquartered in Miami, Florida (collectively, with UPB, the "UPC
Banking Subsidiaries"). Through the UPC Banking Subsidiaries, UPC provides a
diversified range of financial services in the communities in which it operates
and maintains approximately 518 banking offices and 676 automated teller
machines ("ATMs"). UPC's total deposits at March 31, 1998 are allocable by state
(before consolidating adjustments) approximately as follows: $6.7 billion in
Tennessee; $2.9 billion in Mississippi; $1.3 billion in Florida; $1.2 billion in
Missouri; $596 million in Arkansas; $598 million in Louisiana; $412 million in
Alabama; and $103 million in Kentucky.
Acquisitions have been, and are expected to continue to be, an
important part of the expansion of UPC's business. UPC completed 13 acquisitions
in 1994, three in 1995, seven in 1996, six in 1997, adding approximately $3.8
billion in total assets in 1994, $1.3 billion in 1995, $4.2 billion in 1996 and
$3.6 billion in 1997. Through June 1, 1998, UPC has completed the acquisition of
two institutions with approximately $520 million in total assets (the "Recently
Completed Acquisitions"). In addition, UPC was, as of that date, a party to
definitive agreements to acquire ten financial institutions, not including
AMBANC, and to purchase certain branch locations and assume deposit liabilities
of California Federal Bank in Florida ("CalFed Branch Purchase")(collectively
referred to as the "Other Pending Acquisitions"). The Other Pending Acquisitions
had aggregate total assets of approximately $12.4 billion at March 31, 1998. For
purposes of this Proxy Statement, the "Recently Completed Acquisitions" and
"Other Pending Acquisitions" are collectively referred to as the "Other
Acquisitions". The largest of the Other Acquisitions is UPC's proposed
acquisition of Magna Group, Inc. ("MGR"), St. Louis, Missouri, which had total
consolidated assets
<PAGE> 13
of approximately $7.3 billion at March 31, 1998. On May 1, 1998, MGR acquired
Charter Financial, Inc. and its subsidiary, Charter Bank, S.B. (the "Charter
Acquisition"), in a transaction accounted for as a purchase. Located in Sparta,
Illinois, Charter Financial, Inc. had at the time of consummation, total assets
of approximately $406 million, total deposits of approximately $309 million, and
total shareholders' equity of approximately $67 million. For purposes of this
Proxy Statement, including the historical and equivalent pro forma data, the
terms "Other Acquisitions" and "Other Pending Acquisitions" include the Charter
Acquisition. For additional information, see "BUSINESS OF UPC -- Recent
Developments" and "PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION." For
a discussion of UPC's acquisition program, including a discussion of the
significant charges UPC has incurred incidental to acquisitions in the past
three fiscal years, see the caption "Acquisitions" (pages 10, 11 and 12) in
UPC's 1997 Annual Report to Shareholders and Note 2 to UPC's audited
consolidated financial statements for the years ended December 31, 1997, 1996,
and 1995 contained (pages 49 and 50) in such Annual Report to Shareholders.
UPC's 1997 Annual Report to Shareholders is included as Exhibit 13 to UPC's 1997
Form 10-K and Exhibit 13 is incorporated by reference herein to the extent
indicated herein.
UPC expects to continue to take advantage of the consolidation
of the financial services industry by further developing its franchise through
the acquisition of financial institutions and other entities engaged in lines of
business permissible for banks and bank holding companies. Future acquisitions
may entail the payment by UPC of consideration in excess of the book value of
the underlying net assets acquired, may result in the issuance of additional
shares of UPC capital stock or the incurring of additional indebtedness by UPC,
and could have a dilutive effect on the earnings or book value per share of UPC
Common Stock. Moreover, significant charges against earnings are sometimes
required in connection with acquisitions. For a description of the acquisitions
in addition to the Merger which are currently pending, see "BUSINESS OF UPC --
Recent Developments."
The principal executive offices of UPC 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 UPC and
its subsidiaries is included elsewhere herein and in documents incorporated by
reference in this Proxy Statement. See "AVAILABLE INFORMATION," "DOCUMENTS
INCORPORATED BY REFERENCE," and "BUSINESS OF UPC."
UPC MERGER SUBSIDIARY. UPC Merger Subsidiary, a Tennessee
corporation, is a wholly owned subsidiary of UPC. UPC Merger Subsidiary is a
bank holding company which owns all of the common stock of UPB, all the
outstanding stock of Union Planters Bank of Florida and other permissible
investments. The directors and officers of UPC Merger Subsidiary are executive
officers of UPC.
MEETING OF SHAREHOLDERS
This Proxy Statement is being furnished to the shareholders of
AMBANC in connection with the solicitation by the Board of Directors of AMBANC
(the "AMBANC Board") of proxies for use at the Special Meeting. At the Special
Meeting, AMBANC shareholders will be asked to vote upon (i) a proposal to
approve the Agreement and the Plan of Merger and (ii) such other business as may
properly come before the meeting but which is not now anticipated. The Special
Meeting will be held at Green Auditorium, Vincennes University, located at 1st
and Harrison Streets, Vincennes, Indiana, at 10:30 a.m., local time, on
__________, 1998. See "SPECIAL MEETING OF AMBANC SHAREHOLDERS -- Date, Place,
Time, and Purpose."
The AMBANC Board has fixed the close of business on
____________, 1998, as the record date (the "Record Date") for determination of
the shareholders entitled to notice of and to vote at the Special Meeting. Only
holders of record of shares of AMBANC Common Stock on the Record Date will be
entitled to notice of and to vote at the Special Meeting. Each share of AMBANC
Common Stock is entitled to one vote. Shareholders who execute proxies solicited
by the AMBANC Board retain the right to revoke them at any time prior to the
proxies being voted at the Special Meeting. On the Record Date, there were
6,999,281 shares of AMBANC Common Stock outstanding. See "SPECIAL MEETING OF
AMBANC SHAREHOLDERS -- Record Date, Voting Rights, Required Vote, and
Revocability of Proxies."
2
<PAGE> 14
Pursuant to AMBANC's Articles of Incorporation, approval of
the Agreement and the Plan of Merger and the transactions contemplated thereby
requires the affirmative vote of the holders of a majority of the votes entitled
to be cast at the Special Meeting.
The directors and executive officers of AMBANC (including
immediate family members and affiliated entities) owned, as of the Record Date,
652,515 shares (excluding shares underlying stock options), or approximately
9.3% of the outstanding shares of AMBANC Common Stock.
The directors and executive officers of UPC owned, as of the
Record Date, no shares of AMBANC Common Stock. As of the Record Date, UPC held
no shares of AMBANC Common Stock in a fiduciary capacity for others, or as a
result of debts previously contracted, and the Ambank Banks held 299,674 shares
of AMBANC Common Stock in a fiduciary capacity for others with respect to which
the AmBank Banks have sole or shared voting power. See "SPECIAL MEETING OF
AMBANC SHAREHOLDERS -- Record Date, Voting Rights, Required Vote, and
Revocability of Proxies."
For information with respect to beneficial owners of 5.0% or
more of the outstanding shares of AMBANC Common Stock, see "BUSINESS OF AMBANC
- -- Beneficial Ownership of AMBANC Common Stock."
THE MERGER
GENERAL. The Agreement provides for the acquisition of AMBANC
by UPC pursuant to the merger of AMBANC with and into UPC Merger Subsidiary, a
wholly owned subsidiary of UPC organized under the laws of Tennessee, with the
effect that UPC Merger Subsidiary will be the surviving corporation of the
Merger. At the Effective Time, each share of AMBANC Common Stock then issued and
outstanding, (excluding shares held by AMBANC, UPC, or their respective
subsidiaries, in each case 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 0.4841 of a share of UPC Common Stock, subject to
possible adjustment as described below (the "Exchange Ratio").
If (i) the Average Closing Price (as described below) of UPC
Common Stock is less than $49.95 (or $24.18 on an AMBANC per share equivalent
basis) and (ii) the relative performance of UPC Common Stock (as measured by
comparing the Average Closing Price to $62.438, which was the closing price of
UPC Common Stock on the fourth trading day after the public announcement of the
Merger) is more than 15% lower than the relative performance of the common
stocks of a specified group (the "Index Group") of bank holding companies (as
measured by comparing the Index Price on the later of the date of Federal
Reserve approval of the Merger and the date of the Special Meeting to the Index
Price on the fourth trading day after the public announcement of the Merger),
then AMBANC may elect to terminate the Agreement (the "Stock Price Termination
Right") unless UPC increases the Exchange Ratio to equal the lesser of (i) the
number obtained by dividing the product of $62.438 and the Exchange Ratio by the
Average Closing Price or (ii) the number obtained by dividing the product of the
Index Ratio and the Exchange Ratio by the UPC Ratio. If the Merger is approved
by the AMBANC shareholders, the AMBANC Board could elect not to terminate the
Agreement and to consummate the Merger without resoliciting shareholders even if
the Stock Price Termination Right is triggered. The AMBANC Board would determine
whether to exercise its right to terminate the Agreement only after evaluating,
in consultation with its financial and legal advisors, the financial condition
of UPC and AMBANC and all relevant facts and circumstances that exist at the
time. If the AMBANC Board were to elect not to exercise its termination right,
the value of the shares of UPC Common Stock that AMBANC shareholders would
receive, based on the Exchange Ratio and the Average Closing Price, would be
less than $49.95 and less than the price that would reflect a decline in the
market price of UPC Common Stock since April 6, 1998, which is 15% more than the
relative decline of the Index Group stocks during the same period.
Under no circumstances would the Exchange Ratio be less than
0.4841 of a share of UPC Common Stock for each share of AMBANC Common Stock. See
"DESCRIPTION OF TRANSACTION -- Possible Adjustment of Exchange Ratio."
3
<PAGE> 15
The Average Closing Price will be 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 20 consecutive full trading days in which such
shares are traded on the NYSE ending at the close of trading on the later of the
date the Federal Reserve approves the Merger and the date of the Special
Meeting.
No fractional shares of UPC Common Stock will be issued.
Rather, cash (without interest) will be paid in lieu of any fractional share
interest to which any AMBANC shareholder would otherwise be entitled upon
consummation of the Merger, in an amount equal to such fraction multiplied by
the closing price of one share of UPC Common Stock on the NYSE (as reported by
The Wall Street Journal or, if not reported thereby, another authoritative
source as selected by UPC) on the last trading day preceding the Effective Time.
See "DESCRIPTION OF TRANSACTION -- General."
EFFECT OF THE MERGER ON EMPLOYEE OPTIONS. At the Effective
Time, each option to purchase shares of AMBANC Common Stock, pursuant to stock
options ("Employee Options") granted by AMBANC under the AMBANC Stock Plans, as
defined in the Agreement, which is outstanding at the Effective Time, whether or
not exercisable, shall be assumed by UPC and will be converted into and become
an option with respect to UPC Common Stock on a basis adjusted to reflect the
Exchange Ratio. See "DESCRIPTION OF TRANSACTION -- Effect of the Merger on
Employee Options."
As of the Record Date, AMBANC had 6,999,281 shares of AMBANC
Common Stock issued and outstanding and 19,685 additional shares of AMBANC
Common Stock subject to Employee Options. Based upon an Exchange Ratio of
0.4841, upon consummation of the Merger, UPC would issue up to approximately
3,388,352 shares of UPC Common Stock, excluding shares subject to assumed
Employee Options. Accordingly, UPC would then have outstanding up to
approximately 88,359,251 shares of UPC Common Stock based on the number of
shares of UPC Common Stock outstanding on May 31, 1998 (and excluding shares to
be issued pursuant to Other Acquisitions and shares to be issued pursuant to the
exercise of stock options and for other purposes).
REASONS FOR THE MERGER, RECOMMENDATIONS OF THE BOARD OF
DIRECTORS OF AMBANC. The AMBANC Board believes that the Agreement and the Merger
are in the best interests of AMBANC and its shareholders. THE AMBANC BOARD
UNANIMOUSLY RECOMMENDS THAT AMBANC SHAREHOLD ERS VOTE FOR APPROVAL OF THE
AGREEMENT AND THE PLAN OF MERGER. The AMBANC Board believes that the Merger will
result in a company with expanded opportunities for profitable growth and that
the combined resources and capital of AMBANC and UPC will provide an enhanced
ability to compete in the changing and competitive financial services industry.
See "DESCRIPTION OF TRANSACTION -- Background of and Reasons for the Merger."
In unanimously approving the Agreement and the Plan of Merger,
AMBANC's directors considered, among other things, UPC's business and financial
condition, the financial terms and income tax consequences of the Merger, the
effect on shareholder value of AMBANC continuing as an independent entity
compared to the effect of the Merger with UPC, and the opinion of McDonald &
Company Securities, Inc. ("McDonald") as to the fairness of the Exchange Ratio,
from a financial point of view, to the shareholders of AMBANC. See "DESCRIPTION
OF TRANSACTION -- Background of and Reasons for the Merger."
OPINION OF FINANCIAL ADVISOR. McDonald has rendered its
opinion to the AMBANC Board that, based on and subject to the procedures,
matters, and limitations described in its opinion and such other matters as it
considered relevant, as of the date of its opinion, the Exchange Ratio is fair,
from a financial point of view, to the shareholders of AMBANC. The opinion of
McDonald's dated as of the date of this Proxy Statement is attached as Appendix
C to this Proxy Statement. AMBANC shareholders are urged to read the opinions in
their entirety for a description of the procedures followed, matters considered,
and limitations on the reviews undertaken in connection therewith. See
"DESCRIPTION OF TRANSACTION -- Opinions of AMBANC's Financial Advisor."
EFFECTIVE TIME. Subject to the conditions to the obligations
of the parties to effect the Merger, the Effective Time will occur on the date
and at the time that Articles of Merger become effective with the Secretary of
State of the State of Indiana and the Secretary of State of the State of
Tennessee.
4
<PAGE> 16
Subject to the terms and conditions of the Agreement, unless otherwise agreed
upon by AMBANC and UPC, the parties will use their reasonable efforts to cause
the Effective Time to occur on such date as may be designated by UPC within 15
days following the last to occur of (i) the effective date of the last consent
of any regulatory authority having authority over and approving or exempting the
Merger (taking into account any requisite waiting period in respect thereof),
and (ii) the date on which the shareholders of AMBANC approve the Agreement. It
is anticipated that the Effective Time will occur on or about __________, 1998.
See "DESCRIPTION OF TRANSACTION -- Effective Time of the Merger," "-- Conditions
to Consummation of the Merger," and "-- Waiver, Amendment, and Termination."
No assurance can be provided that the necessary shareholder
and regulatory approvals can be obtained or that the other conditions precedent
to the Merger can or will be satisfied. AMBANC and UPC anticipate that all
conditions to the consummation of the Merger will be satisfied so that the
Merger can be consummated on or before __________, 1998. However, delays in the
consummation of the Merger could occur.
EXCHANGE OF STOCK CERTIFICATES. Promptly after the Effective
Time, UPC will cause UPB, acting in its capacity as exchange agent for UPC (the
"Exchange Agent"), to mail to each holder of record of a certificate or
certificates (collectively, the "Certificates") which, immediately prior to the
Effective Time, represented outstanding shares of AMBANC Common Stock, a letter
of transmittal and instructions for use in effecting the surrender and
cancellation of the Certificates in exchange for certificates representing
shares of UPC Common Stock. Cash will be paid to the holders of AMBANC Common
Stock in lieu of issuing any fractional shares of UPC Common Stock. In no event
will the holder of any surrendered Certificate(s) be entitled to receive
interest on any cash to be issued to such holder, and in no event will AMBANC,
UPC, or the Exchange Agent be liable to any holder of AMBANC Common Stock for
any UPC Common Stock or dividends thereon or cash delivered in good faith to a
public official pursuant to any applicable abandoned property, escheat, or
similar law.
REGULATORY APPROVAL AND OTHER CONDITIONS. The Merger is
subject to the prior approval of the Federal Reserve. An application has been
filed with the Federal Reserve for the requisite approval. [By letter dated
________, 1998, the Federal Reserve advised UPC that the Merger had been
approved.]
Consummation of the Merger is subject to various other
conditions, including receipt of the required approval of AMBANC shareholders,
receipt of an opinion of counsel as to the tax-free nature of certain aspects of
the Merger, and certain other conditions. See "DESCRIPTION OF TRANSACTION --
Regulatory Approval" and "-- Conditions to Consummation of the Merger."
WAIVER, AMENDMENT, AND TERMINATION. The Agreement may be
terminated and the Merger abandoned at any time prior to the Effective Time by
mutual consent of the AMBANC Board and the Board of Directors of UPC (the "UPC
Board"), or by the action of the Board of Directors of either company under
certain circumstances, including, but not limited to, (i) if the Merger is not
consummated by December 31, 1998, unless the failure to consummate by such date
is due to a willful breach of the Agreement by the party seeking to terminate,
and (ii) by the AMBANC Board, in certain circumstances, if an adjustment is not
made to the Exchange Ratio. To the extent permitted by law, the Agreement may be
amended upon the written agreement of UPC and AMBANC without the approval of
shareholders, whether before or after approval of the Agreement and the Plan of
Merger by AMBANC shareholders. See "DESCRIPTION OF TRANSACTION -- Possible
Adjustment of Exchange Ratio" and "-- Waiver, Amendment, and Termination."
DISSENTERS' RIGHTS. Under Indiana law, AMBANC shareholders
will NOT have the statutory right to dissent from the Merger and to receive the
fair value of their shares of AMBANC Common Stock if the Merger is approved by
shareholders and consummated.
INTERESTS OF CERTAIN PERSONS IN THE MERGER. Certain members of
AMBANC's management and the AMBANC Board have interests in the Merger in
addition to their interests as shareholders of AMBANC generally. These interests
relate to: (i) the receipt by AMBANC's President and Chief Executive Officer of
certain economic benefits pursuant to the terms of his employment agreement;
(ii) the assumption by UPC of the Employee Options on a basis that reflects the
Exchange Ratio entitling AMBANC's President and Chief Executive Officer, as of
the Record Date, to purchase in the aggregate
5
<PAGE> 17
14,766 shares of AMBANC Common Stock having an aggregate value of approximately
$34,995 (based upon the $26.75 closing price of AMBANC Common Stock on the
Nasdaq National Market on June 3, 1998); and (iii) the continued indemnification
by UPC of the former directors, officers, employees, and agents of AMBANC and
its subsidiaries following consummation of the Merger. In connection with the
Merger, pursuant to the terms of the aforementioned employment agreement, cash
payments equal to $990,000 will be paid to AMBANC's President and Chief
Executive Officer. See "DESCRIPTION OF TRANSACTION -- Interests of Certain
Persons in the Merger."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER. It is
intended that the Merger will be treated as a reorganization within the meaning
of Section 368 of the Internal Revenue Code of 1986, as amended (the "Code").
Accordingly, for federal income tax purposes, no gain or loss will be recognized
by a AMBANC shareholder upon the exchange of all of such shareholder's shares of
AMBANC Common Stock solely for shares of UPC Common Stock (except with respect
to cash received in lieu of a fractional share of UPC Common Stock).
Consummation of the Merger is conditioned upon receipt by UPC of an opinion of
Wyatt, Tarrant & Combs and upon receipt by AMBANC of an opinion of Leagre
Chandler & Millard, in each case dated the Effective Time, substantially to this
effect. The conditions relating to the receipt of the tax opinions may be waived
by both UPC and AMBANC. Neither UPC nor AMBANC currently intends to waive the
conditions relating to the receipt of the tax opinions. If the conditions
relating to the receipt of the tax opinions were waived and the material federal
income tax consequences of the Merger were substantially different from those
described in this Proxy Statement, AMBANC would resolicit the approval of its
shareholders prior to consummating the Merger. Tax consequences of the Merger
for individual taxpayers can vary, however, and all AMBANC shareholders are
urged to consult their own tax advisors to determine the effect of the Merger on
them under federal, state, local, and foreign tax laws. For a further discussion
of the federal income tax consequences of the Merger, including a description of
the tax opinions issued in connection with this Proxy Statement, see
"DESCRIPTION OF TRANSACTION -- Certain Federal Income Tax Consequences of the
Merger."
ACCOUNTING TREATMENT. It is intended that the Merger will be
accounted for as a pooling of interests transaction for accounting and financial
reporting purposes and UPC will not consummate the Merger if such accounting
treatment is not available. See "DESCRIPTION OF TRANSACTION -- Accounting Treat
ment."
CERTAIN DIFFERENCES IN SHAREHOLDERS' RIGHTS. At the Effective
Time, AMBANC shareholders, whose rights are governed by AMBANC's Articles of
Incorporation, as amended (the "Articles"), and Bylaws (the "Bylaws") and by the
Indiana Business Corporation Law ("IBCL"), will automatically become UPC
shareholders, and their rights as UPC shareholders will be governed by UPC's
Restated Charter (the "Charter") and Bylaws and the Tennessee Business
Corporation Act (the "TBCA"). The rights of UPC shareholders differ from the
rights of AMBANC shareholders in certain important respects, including but not
limited to (i) anti-takeover provisions generally, (ii) authorized capital
stock, (iii) amendments of charter and bylaws, (iv) director removal, (v)
indemnification, (vi) shareholder meetings, (vii) shareholder nominations and
proposals, (viii) dissenters' rights, and (ix) dividends. See "EFFECT OF THE
MERGER ON RIGHTS OF SHAREHOLDERS."
OPTION AGREEMENT. AMBANC, as issuer, and UPC, as grantee,
entered into a stock option agreement (the "Option Agreement"), dated as of
March 31, 1998, pursuant to which AMBANC granted UPC an option to purchase,
under certain circumstances and subject to certain possible adjustments and
limitations, up to 1,392,749 shares of AMBANC Common Stock at a price of $29.75
per share. The Option Agreement is exercisable upon the occurrence of certain
events that create the potential for another party to acquire control of AMBANC.
To the knowledge of AMBANC, no event that would permit exercise of the Option
Agreement has occurred as of the date of this Proxy Statement. The Option
Agreement was granted by AMBANC as a condition of and in consideration for UPC's
entering into the Agreement and is intended to increase the likelihood that the
Merger will be completed by making it more difficult and more expensive for a
third party to acquire control of AMBANC. See "DESCRIPTION OF TRANSACTION --
Option Agreement."
CONDUCT OF BUSINESS PENDING THE MERGER. Each party has agreed
in the Agreement to, among other things, take no action that would materially
adversely affect the ability of any party to perform
6
<PAGE> 18
its covenants and agreements under the Agreement. In addition, AMBANC has agreed
not to take certain actions relating to the operation of AMBANC pending
consummation of the Merger without the prior written consent of UPC, except as
otherwise permitted by the Agreement, including, among other things: (i)
becoming responsible for any obligation for borrowed money in excess of an
aggregate of $50,000, except in the ordinary course of business consistent with
past practices; (ii) paying any dividends, except a quarterly dividend of no
more than $0.12 per share of AMBANC Common Stock in accordance with past
practices, or, subject to certain exceptions, exchanging any shares of its
capital stock, issuing any additional shares of its capital stock, or giving any
person the right to acquire any such shares; (iii) acquiring control over any
other entity; (iv) subject to certain exceptions, granting any increase in
compensation or benefits, or paying any bonus, to any of its directors,
officers, or employees; or (v) except as previously disclosed to UPC, modifying
or adopting any employee benefit plans, including any employment contract. See
"DESCRIPTION OF TRANSACTION -- Conduct of Business Pending the Merger."
COMPARATIVE MARKET PRICES OF COMMON STOCK
Shares of UPC Common Stock are traded on the NYSE under the
symbol "UPC." Shares of AMBANC Common Stock are quoted on the Nasdaq National
Market under the symbol "AMBK." The following table sets forth the reported
closing sale prices per share for AMBANC Common Stock and UPC Common Stock and
the equivalent per share prices giving effect to the Merger (as explained below)
for AMBANC Common Stock on (i) March 31, 1998, the last trading day preceding
the public announcement of the execution of the Agreement, and (ii) June 3,
1998, the latest practicable date prior to the mailing of this Proxy Statement.
<TABLE>
<CAPTION>
Equivalent Price
AMBANC Common Stock UPC Common Stock Per AMBANC Share(1)
------------------- ---------------- -------------------
<S> <C> <C> <C>
March 31, 1998 $29.75 $60.00 $29.05
June 3, 1998 $26.75 $56.44 $27.32
</TABLE>
- --------------
(1) The equivalent price per share of AMBANC Common Stock at each specified
date represents the closing sale price of a share of UPC Common Stock
on such date multiplied by an Exchange Ratio of 0.4841. See
"COMPARATIVE MARKET PRICES AND DIVIDENDS."
There can be no assurance as to what the market price of the
UPC Common Stock will be if and when the Merger is consummated.
7
<PAGE> 19
HISTORICAL AND PRO FORMA COMPARATIVE PER SHARE DATA
The following table sets forth certain comparative per share
data relating to earnings before extraordinary items and accounting changes,
cash dividends, and book value on: (i) a historical basis for UPC and AMBANC;
(ii) a pro forma combined basis per share of UPC Common Stock, giving effect to
the Merger only; (iii) a pro forma combined basis per share of UPC Common Stock,
giving effect to the Merger and the Other Acquisitions; (iv) an equivalent pro
forma basis per share of AMBANC Common Stock, giving effect to the Merger only;
and (v) an equivalent pro forma basis per share of AMBANC Common Stock, giving
effect to the Merger and the Other Acquisitions. The UPC pro forma combined
information and the AMBANC equivalent pro forma information give effect to the
Merger and the Other Acquisitions and reflect an Exchange Ratio of 0.4841. The
Merger and each of the Other Pending Acquisitions (with the exception of the
acquisitions of Duck Hill Bank, the Charter Acquisition and the CalFed Branch
Purchase) are expected to be, and the Recently Completed Acquisition of Security
Bancshares, Inc. was, accounted for using the pooling of interests method of
accounting. The Recently Completed Acquisitions of Sho-Me Financial Corp. and
the Charter Acquisition were, and the Other Pending Acquisitions of Duck Hill
Bank and the CalFed Branch Purchase are expected to be accounted for using the
purchase method of accounting. The pro forma information for 1997 reflects the
acquisition of AMBANC and the Other Acquisitions as of January 1, 1997. The pro
forma information for 1996 and 1995 reflects only the acquisition of MGR,
AMBANC, Peoples First Corporation ("Peoples") and Merchants Bancshares, Inc.
("Merchants") because the Other Acquisitions (other than MGR, Peoples and
Merchants) are not considered material to UPC from a financial statement
presentation standpoint. Furthermore, the pro forma impact of the CalFed Branch
Purchase on the pro forma statement of earnings for the periods presented has
been excluded due to the lack of information available for operation of the
branches on a historical basis. The pro forma data are presented for information
purposes only and are not necessarily indicative of the results of operations or
combined financial position that would have resulted had the Merger or the Other
Acquisitions been consummated at the dates or during the periods indicated, nor
are they necessarily indicative of future results of operations or combined
financial position. The pro forma book value per share reflects preliminary
estimates by UPC of acquisition-related charges to be incurred in connection
with consummation of the Merger and the Other Acquisitions; however, the
earnings per share amounts do not reflect the estimated acquisition related
charges. For additional information with respect to the estimated charges UPC
anticipates it would incur in connection with the Merger and the Other
Acquisitions, see "BUSINESS OF UPC -- Recent Developments." For a discussion of
UPC's acquisition program, including a discussion of the significant charges UPC
has incurred incidental to its acquisition program over the past three fiscal
years, see the caption "Acquisitions" (on pages 10, 11 and 12) in UPC's 1997
Annual Report to Shareholders and Note 2 to UPC's audited consolidated financial
statements for the years ended December 31, 1997, 1996 and 1995 (on pages 49 and
50) contained in such UPC 1997 Annual Report to Shareholders. UPC's 1997 Annual
Report to Shareholders is included as Exhibit 13 to UPC's 1997 Form 10-K, and
Exhibit 13 is incorporated by reference herein to the extent indicated herein.
See "DOCUMENTS INCORPORATED BY REFERENCE."
The information shown below should be read in conjunction
with, and is qualified in its entirety by, the historical consolidated financial
statements of UPC and AMBANC, including the respective notes thereto. See
"DOCUMENTS INCORPORATED BY REFERENCE," "-- Selected Financial Data," and
"BUSINESS OF UPC -- Recent Developments."
8
<PAGE> 20
UNION PLANTERS CORPORATION
AND AMBANC CORP.
HISTORICAL AND PRO FORMA COMPARATIVE PER SHARE DATA
<TABLE>
<CAPTION>
Three Months
Ended Years Ended December 31 (1)
March 31, 1998 1997 1996 1995
-------------- --------- -------- --------
<S> <C> <C> <C> <C>
EARNINGS BEFORE EXTRAORDINARY ITEMS
AND ACCOUNTING CHANGES
UPC
Basic $ .89 $ 2.54 $ 2.13 $ 2.79
Diluted .86 2.45 2.05 2.66
AMBANC
Basic .29 1.19 1.14 1.01
Diluted .29 1.19 1.14 1.01
UPC pro forma (AMBANC Only)
Basic .88 2.53 2.14 2.76
Diluted .85 2.45 2.06 2.64
UPC pro forma (all Other Acquisitions
and AMBANC)(2)
Basic .80 2.52 2.24 2.56
Diluted .78 2.45 2.17 2.46
AMBANC equivalent pro forma
(AMBANC only)(1)
Basic .43 1.22 1.04 1.34
Diluted .41 1.19 1.00 1.28
AMBANC equivalent pro forma (all
Other Acquisitions
and AMBANC)(1)(2)
Basic .39 1.22 1.08 1.24
Diluted .38 1.19 1.05 1.19
CASH DIVIDENDS PER SHARE
UPC .50 $ 1.495 $ 1.08 $ .98
AMBANC .12 .41 .38 .31
AMBANC equivalent pro forma (1) .24 .72 .52 .47
</TABLE>
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
---- ----
<S> <C> <C>
BOOK VALUE PER COMMON SHARE
UPC $ 21.13 $ 20.72
AMBANC 11.36 11.22
UPC pro forma (AMBANC only) 21.18 20.75
UPC pro forma (all Other Acquisitions 20.82 21.73
and AMBANC)
AMBANC equivalent pro forma (AMBANC only)(1) 10.25 10.05
AMBANC equivalent pro forma (all Other 10.08 10.52
Acquisitions and AMBANC)(1)
</TABLE>
- ---------------
(1) The equivalent pro forma per share data for AMBANC is computed by
multiplying UPC's pro forma information by an Exchange Ratio of 0.4841.
(2) Pro forma information for 1996 and 1995 reflects only the acquisitions
of MGR, AMBANC, Merchants and Peoples; the remaining Other Acquisitions
are not considered significant to UPC from a financial statement
presentation standpoint.
9
<PAGE> 21
SELECTED FINANCIAL DATA
The following tables present selected consolidated financial
data for UPC and AMBANC for the three months ended March 31, 1998 and 1997 and
for the five-year period ended December 31, 1997. The information for UPC has
been derived from the consolidated financial statements of UPC, including the
audited consolidated financial statements of UPC incorporated in this Proxy
Statement by reference to UPC's unaudited March 31, 1998 Form 10-Q and the
audited consolidated financial statements of UPC incorporated by reference to
UPC's 1997 Form 10-K and should be read in conjunction therewith and with the
notes thereto. See "DOCUMENTS INCORPORATED BY REFERENCE." The information for
AMBANC has been derived from the consolidated financial statements of AMBANC
incorporated in this Proxy Statement by reference to AMBANC's March 31, 1998
Form 10-Q and 1997 Form 10-K and should be read in conjunction therewith and
with the notes thereto. See "DOCUMENTS INCORPORATED BY REFERENCE." Historical
results are not necessarily indicative of results to be expected for any future
period. In the opinion of the respective managements of UPC and AMBANC, all
adjustments (which include only normal recurring adjustments necessary to arrive
at a fair statement of interim results of operations of UPC and AMBANC,
respectively, have been included. With respect to UPC and AMBANC, results for
the three months ended March 31, 1998 are not necessarily indicative of results
which may be expected for any other interim period or for the year as a whole.
See "BUSINESS OF UPC -- Recent Developments" for information concerning UPC's
Other Acquisitions as defined therein.
10
<PAGE> 22
UPC SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Three Months Ended
March 31,(1) Years Ended December 31,(2)
------------------- ------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
-------- -------- -------- -------- -------- --------- --------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Net interest income $190,707 $190,590 $770,385 $744,852 $669,451 $ 627,439 $558,036
Provision for losses on loans 17,909 22,004 113,633 68,948 33,917 15,989 35,235
Investment securities gains
(losses) 5,215 173 2,104 4,099 1,433 (21,302) 6,686
Other noninterest income 90,503 82,811 359,506 316,403 292,277 237,129 228,996
Noninterest expense 153,624 148,646 697,704 731,817 607,189 634,965 550,045
-------- -------- -------- -------- -------- --------- --------
Earnings before income
taxes, extraordinary item,
and accounting changes 114,892 102,924 320,658 264,589 322,055 192,312 208,438
Applicable income taxes 40,320 36,479 111,897 93,115 110,799 63,058 66,570
-------- -------- -------- -------- -------- --------- --------
Earnings before extra-
ordinary item and
accounting changes 74,572 66,445 208,761 171,474 211,256 129,254 141,868
Extraordinary item and
accounting changes,
net of taxes -- -- -- -- -- -- 4,505
-------- -------- -------- -------- -------- --------- --------
Net earnings $ 74,572 $ 66,445 $208,761 $171,474 $211,256 $ 129,254 $146,373
======== ======== ======== ======== ======== ========= ========
PER COMMON SHARE DATA(3)
Basic
Earnings before extra-
ordinary item and
accounting changes $ .89 $ .82 $ 2.54 $ 2.13 $ 2.79 $ 1.67 $ 2.19
Net earnings .89 .82 2.54 2.13 2.79 1.67 2.27
Diluted
Earnings before extra-
ordinary item and
accounting changes .86 .79 2.45 2.05 2.66 1.63 2.13
Net earnings .86 .79 2.45 2.05 2.66 1.63 2.21
Cash dividends .50 .32 1.495 1.08 .98 .88 .72
Book value 21.13 20.00 20.72 19.57 18.34 15.28 14.50
</TABLE>
11
<PAGE> 23
UPC SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Three Months Ended Years Ended
March 31,(1) December 31,(2)
--------------------------------------------
1998 1997 1997
--------------------------------------------
BALANCE SHEET DATA
(AT PERIOD END)
<S> <C> <C> <C>
Total assets $18,413,614 $18,054,916 $18,105,079
Loans, net of unearned
income 12,727,659 12,560,838 12,658,564
Allowance for losses on
loans 223,837 192,943 225,389
Investment securities 3,287,664 3,449,824 3,247,680
Total deposits 13,581,227 13,386,397 13,440,269
Short-term borrowings 442,051 611,757 831,627
Long-term debt(4)
Parent company 373,242 373,468 373,746
Subsidiary banks 1,630,693 1,473,599 1,176,158
Total shareholders' equity 1,809,442 1,663,363 1,746,866
Average assets 18,005,794 18,031,648 17,991,160
Average shareholders' equity 1,760,458 1,615,979 1,690,992
Average shares outstanding
(in thousands)(3)
Basic 83,379 78,904 80,336
Diluted 86,974 84,465 85,195
</TABLE>
<TABLE>
<CAPTION>
Years Ended December 31,(2)
--------------------------------------------------------
1996 1995 1994 1993
--------------------------------------------------------
(Dollars in thousands, except per share data)
BALANCE SHEET DATA
(AT PERIOD END)
<S> <C> <C> <C> <C>
Total assets $18,330,588 $17,182,861 $15,893,162 $14,180,524
Loans, net of unearned
income 12,578,571 10,917,307 10,074,458 8,077,152
Allowance for losses on
loans 189,118 179,968 174,604 172,330
Investment securities 3,387,217 3,970,036 4,016,506 4,124,679
Total deposits 13,514,144 13,047,488 12,506,212 11,732,707
Short-term borrowings 961,051 974,416 887,074 392,980
Long-term debt(4)
Parent company 373,459 214,758 114,790 114,729
Subsidiary banks 1,332,534 1,087,273 819,982 481,193
Total shareholders' equity 1,618,883 1,450,546 1,202,686 1,111,158
Average assets 18,202,355 16,263,164 15,472,568 13,823,185
Average shareholders' equity 1,533,348 1,334,995 1,226,852 973,087
Average shares outstanding
(in thousands)(3)
Basic 77,240 72,512 71,678 56,169
Diluted 83,542 78,798 77,579 60,832
</TABLE>
- -----------------
(continued on the following page)
12
<PAGE> 24
UPC SELECTED FINANCIAL DATA (CONTINUED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,(1) Years Ended December 31,(1)
------------------- -------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
------- ------- ------- ------- ------- ------- -------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
PROFITABILITY AND CAPITAL RATIOS
Return on average assets 1.68% 1.49% 1.16% .94% 1.30% .84% 1.06%
Return on average common
equity 17.50 17.16 12.54 11.38 16.56 10.74 15.88
Net interest income (taxable-
equivalent)/average earning
assets(5) 4.80 4.80 4.79 4.56 4.60 4.56 4.58
Loans/deposits 93.72 93.83 94.18 93.08 83.67 80.56 68.84
Common and preferred
dividend payout ratio 57.03 37.71 54.96 44.57 29.25 35.03 24.42
Equity/assets (period end) 9.83 9.21 9.65 8.83 8.44 7.57 7.84
Average shareholders'
equity/average total assets 9.78 8.96 9.40 8.42 8.21 7.93 7.04
Leverage ratio 10.72 10.05 10.48 9.50 8.11 7.56 7.73
Tier 1 capital/risk-weighted
assets 15.66 14.88 15.51 14.92 13.28 12.58 13.65
Total capital/risk-weighted
assets 20.71 17.55 18.12 17.60 16.21 14.67 15.92
CREDIT QUALITY RATIOS(6)
Allowance/period end loans 1.95 1.76 1.99 1.72 1.82 1.87 2.27
Nonperforming loans/total
loans .81 .85 .92 .91 .85 .74 1.18
Allowance/nonperforming
loans 240 207 215 188 213 252 193
Nonperforming assets/loans
and foreclosed properties 1.01 1.14 1.13 1.21 1.09 1.08 1.76
Provision/average loans .62 .81 1.01 .65 .35 .19 .47
Net charge-offs/average
loans .79 .67 .72 .61 .32 .27 .34
</TABLE>
13
<PAGE> 25
NOTES TO SELECTED FINANCIAL DATA
- ------------------------------
(1) Interim period ratios have been annualized where applicable.
(2) Reference is made to "Basis of Presentation" in Note 1 to UPC's
consolidated financial statements contained in the 1997 Annual Report
to Shareholders.
(3) Share and per share amounts have been retroactively restated for
significant acquisitions accounted for as poolings of interests and to
reflect the change in presentation of EPS as discussed in Notes 2 and
16 to the consolidated financial statements contained in UPC's 1997
Annual Report to Shareholders.
(4) Long-term debt includes Medium-Term Bank Notes, Federal Home Loan Bank
(FHLB) 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.
(5) Average balances and calculations do not include the impact of the net
unrealized gain or loss on available for sale securities.
(6) FHA/VA government-insured/guaranteed loans have been excluded, since
they represent minimal credit risk to UPC.
14
<PAGE> 26
AMBANC SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Three Months Ended
March 31, Years Ended December 31
1998 1997 1997 1996 1995 1994 1993
---------------- ---------------------------------------------------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Net Interest Income $7,126 $6,713 $27,813 $26,719 $25,201 $23,899 $22,751
Provisions for losses on loans 190 315 1,245 1,366 1,182 338 1,492
Investment securities gains
(losses) 9 55 78 28 41 29 93
Other noninterest income 1,087 1,016 4,271 3,666 3,112 2,855 3,006
Noninterest expense 5,095 4,459 19,045 17,799 17,502 17,319 16,374
------ ------ ------- ------- ------- ------- -------
Earnings before income taxes,
extraordinary item, and
accounting changes 2,937 3,010 11,872 11,248 9,670 9,126 7,984
Applicable income taxes 880 895 3,586 3,282 2,625 2,624 2,074
------ ------ ------- ------- ------- ------- -------
Earnings before extraordinary
item and accounting changes 2,057 2,115 8,286 7,966 7,045 6,502 5,910
Extraordinary item and
accounting changes, net of
taxes 0 0 0 0 0 0 252
------ ------ ------- ------- ------- ------- -------
Net Earnings $2,057 $2,115 $ 8,286 $ 7,966 $ 7,045 $ 6,502 $ 6,162
====== ====== ======= ======= ======= ======= =======
PER COMMON SHARE DATA
Basic
Earnings before extraordinary
item and accounting changes $ 0.29 $ 0.30 $ 1.19 $ 1.14 $ 1.01 $ 0.93 $ 0.85
Net earnings 0.29 0.30 1.19 1.14 1.01 0.93 0.89
Diluted
Earnings before extraordinary
item and accounting changes 0.29 0.30 1.19 1.14 1.01 0.93 0.85
Net earnings 0.29 0.30 1.19 1.14 1.01 0.93 0.88
Cash dividends 0.12 0.10 0.41 0.38 0.31 0.28 0.24
Book value 11.36 10.41 11.22 10.36 9.72 8.36 8.29
</TABLE>
- ------------------------
(continued on following page)
15
<PAGE> 27
AMBANC SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Three Months Ended
March 31, Years Ended December 31
1998 1997 1997 1996 1995 1994 1993
-------------------- -------------------------------------------------------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA (AT PERIOD END)
Total assets $733,533 $726,579 $759,395 $719,785 $682,347 $625,240 $622,568
Loans, net of unearned income 549,575 506,782 540,433 494,467 442,657 388,657 342,950
Allowance for losses on loans 5,692 5,422 5,428 5,630 5,022 4,531 4,238
Investment securities 137,351 163,552 150,219 170,724 173,469 186,875 210,774
Deposits 629,018 639,580 665,685 633,556 600,069 550,387 550,350
Short-term borrowings 11,595 6,434 6,747 5,285 6,788 9,294 6,979
Long-term debt
Parent company 0 0 0 0 0 0 0
Subsidiary banks 6,811 2,063 2,031 2,309 2,677 3,189 1,000
Total shareholders' equity 79,475 72,479 78,355 72,183 67,712 58,210 57,722
Average assets 741,007 714,508 728,281 702,083 644,456 619,540 601,232
Average shareholders' equity 78,870 72,510 74,397 68,772 62,344 58,113 54,967
Average shares outstanding (in
thousands)
Basic 6,987 6,963 6,970 6,965 6,965 6,959 6,959
Diluted 6,987 6,986 6,982 6,986 6,986 6,981 6,983
</TABLE>
16
<PAGE> 28
AMBANC SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Three Months Ended
March 31, Years Ended December 31
1998 1997 1997 1996 1995 1994 1993
-------------------- --------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
PROFITABILITY AND CAPITAL RATIOS
Return on average assets 1.13% 1.20% 1.14% 1.13% 1.09% 1.05% 1.02%
Return on average common equity 10.72% 11.87% 11.14% 11.58% 11.30% 11.19% 11.21%
Net interest income (taxable-
equivalent/average earning
assets 4.40% 4.27% 4.29% 4.25% 4.37% 4.33% 4.29%
Loans/deposits 87.37% 79.24% 81.18% 78.05% 73.77% 70.62% 62.31%
Common and preferred dividend
payout ratio 35.10% 33.66% 34.84% 33.30% 30.43% 29.95% 27.61%
Equity/assets (period end) 10.83% 9.98% 10.32% 10.03% 9.92% 9.31% 9.27%
Average shareholders'
equity/average total assets 10.64% 10.15% 10.22% 9.80% 9.67% 9.38% 9.14%
Leverage ratio 10.41% 10.00% 10.40% 10.00% 10.01% 9.87% 9.45%
Tier 1 capital/risk-weighted assets 13.59% 13.34% 13.37% 13.26% 13.61% 14.25% 14.29%
Total capital/risk-weighted assets 14.60% 14.35% 14.33% 14.33% 14.67% 15.30% 15.34%
CREDIT QUALITY RATIOS
Allowance/period end loans 1.04% 1.07% 1.00% 1.14% 1.13% 1.17% 1.24%
Nonperforming loans/total loans 0.79% 1.04% 0.57% 0.91% 0.23% 0.29% 0.48%
Allowance/nonperforming loans 131% 103% 177% 125% 489% 397% 258%
Nonperforming assets(1)/loans and
foreclosed properties(2) 0.96% 1.13% 0.70% 0.98% 0.30% 0.31% 0.52%
Provisions/average loans(3) 0.03% 0.06% 0.24% 0.29% 0.28% 0.09% 0.46%
Net charge-offs/average loans(3) (0.01)% 0.10% 0.28% 0.16% 0.17% 0.01% 0.44%
</TABLE>
- --------
(1) nonaccrual loans + restructured loans
(2) nonaccrual loans + restructured loans + OREO
(3) interim period ratios have been annualized where applicable
17
<PAGE> 29
SPECIAL MEETING OF AMBANC SHAREHOLDERS
DATE, PLACE, TIME, AND PURPOSE
This Proxy Statement is being furnished to the holders of
AMBANC Common Stock in connection with the solicitation by the AMBANC Board of
proxies for use at the Special Meeting and at any adjournments or postponements
thereof at which AMBANC shareholders will be asked to vote upon a proposal to
approve the Agreement and the Plan of Merger. The Special Meeting will be held
at Green Auditorium, Vincennes University, 1st and Harrison Streets, Vincennes,
Indiana, at 10:30 a.m., local time, on ____________, 1998. See "DESCRIPTION OF
TRANSACTION."
RECORD DATE, VOTING RIGHTS, REQUIRED VOTE, AND REVOCABILITY OF PROXIES
The close of business on ___________, 1998, has been fixed as
the Record Date for determining holders of outstanding shares of AMBANC Common
Stock entitled to notice of and to vote at the Special Meeting. Only holders of
AMBANC Common Stock of record on the books of AMBANC at the close of business on
the Record Date are entitled to notice of and to vote at the Special Meeting. As
of the Record Date, there were 6,999,281 shares of AMBANC Common Stock issued
and outstanding held by approximately _______ holders of record.
Each holder of record of shares of AMBANC Common Stock on the
Record Date is entitled to cast one vote per share on the proposal to approve
the Agreement and the Plan of Merger, and on any other matter properly submitted
for the vote of the AMBANC shareholders at the Special Meeting. The presence,
either in person or by properly executed proxy, of the holders of a majority of
the outstanding shares of AMBANC Common Stock entitled to vote at the Special
Meeting is necessary to constitute a quorum at the Special Meeting.
AMBANC intends to count shares of AMBANC Common Stock present
in person at the Special Meeting but not voting, and shares of AMBANC Common
Stock for which it has received proxies but with respect to which holders of
shares have abstained on any matter, as present at the Special Meeting for
purposes of determining the presence or absence of a quorum for the transaction
of business. Approval of the Agreement and Plan of Merger requires the
affirmative vote of a majority of the votes entitled to be cast at the Special
Meeting. Brokers who hold shares in street name for customers who are the
beneficial owners of such shares are prohibited from giving a proxy to vote
shares held for such customers on the approval of the Agreement and the Plan of
Merger without specific instructions from such customers. Any abstention,
non-voting share or "broker non-vote" with respect to such shares of AMBANC
Common Stock will have the same effect as a vote AGAINST the approval of the
Agreement and the Plan of Merger.
Shares of AMBANC Common Stock represented by properly executed
proxies that are received before voting at the Special Meeting and not revoked
will be voted in accordance with the instructions indicated on the proxies. IF
NO INSTRUCTIONS ARE INDICATED, SUCH PROXIES WILL BE VOTED FOR THE PROPOSAL TO
APPROVE THE AGREEMENT AND THE PLAN OF MERGER AND IN THE DISCRETION OF THE
PROXYHOLDER AS TO ANY OTHER MATTER WHICH MAY COME PROPERLY BEFORE THE SPECIAL
MEETING. IF NECESSARY, THE PROXYHOLDERS MAY VOTE IN FAVOR OF A PROPOSAL TO
ADJOURN THE SPECIAL MEETING IN ORDER TO PERMIT FURTHER SOLICITATION OF PROXIES
IN THE EVENT THERE ARE NOT SUFFICIENT VOTES TO APPROVE THE FOREGOING PROPOSAL AT
THE TIME OF THE SPECIAL MEETING. HOWEVER, NO PROXYHOLDER WILL VOTE ANY PROXIES
VOTED AGAINST APPROVAL OF THE AGREEMENT AND THE PLAN OF MERGER IN FAVOR OF A
PROPOSAL TO ADJOURN THE SPECIAL MEETING.
An AMBANC shareholder who has given a proxy solicited by the
AMBANC Board may revoke it at any time prior to its exercise at the Special
Meeting by (i) giving written notice of revocation to the Secretary of AMBANC,
(ii) properly submitting to AMBANC a duly executed proxy bearing a later date,
or (iii) attending the Special Meeting and voting in person. All written notices
of revocation and other
18
<PAGE> 30
communications with respect to revocation of proxies should be addressed as
follows: AMBANC Corp., 302 Main Street, Vincennes, Indiana 47591-0556;
Attention: Troy D. Stoll, Secretary.
The directors and executive officers of AMBANC (including
immediate family members and affiliated entities) owned, as of the Record Date,
652,515 shares (excluding shares underlying Employee Options), or approximately
9.3% of the outstanding shares of AMBANC Common Stock.
The directors and executive officers of UPC owned, as of the
Record Date, no shares of AMBANC Common Stock. As of the Record Date, UPC held
no shares of AMBANC Common Stock in a fiduciary capacity for others, or as a
result of debts previously contracted, and AMBANC Bank held 299,674 shares of
AMBANC Common Stock in a fiduciary capacity for others with respect to which
AMBANC Bank has sole or shared voting power.
To the knowledge of AMBANC, no person beneficially owns 5.0%
or more of the outstanding shares of AMBANC Common Stock.
SOLICITATION OF PROXIES
Proxies may be solicited by the directors, officers, and
employees of AMBANC by mail, in person, or by telephone or telegraph. Such
persons will receive no additional compensation for such services. AMBANC may
make arrangements with brokerage firms and other custodians, nominees, and
fiduciaries, if any, for the forwarding of solicitation materials to the
beneficial owners of AMBANC Common Stock held of record by such persons. Any
such brokers, custodians, nominees, and fiduciaries will be reimbursed for the
reasonable out-of-pocket expenses incurred by them for such services. All
expenses associated with the solicitation of proxies, other expenses associated
with the Special Meeting, and expenses related to the printing and mailing of
this Proxy Statement, will be shared by UPC and AMBANC as provided in the
Agreement. See "DESCRIPTION OF TRANSACTION -- Expenses and Fees."
RECOMMENDATION
THE AMBANC BOARD HAS UNANIMOUSLY APPROVED THE AGREEMENT, THE
PLAN OF MERGER, AND THE MERGER CONTEMPLATED THEREBY, BELIEVES THAT THE PROPOSAL
TO APPROVE THE AGREEMENT AND THE PLAN OF MERGER IS IN THE BEST INTERESTS OF
AMBANC AND ITS SHAREHOLDERS, AND RECOMMENDS THAT THE AMBANC SHAREHOLDERS VOTE
FOR APPROVAL OF THE AGREEMENT AND THE PLAN OF MERGER.
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DESCRIPTION OF TRANSACTION
The following information describes material aspects of the
Merger. This description does not purport to be complete and is qualified in its
entirety by reference to 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. The Agreement and Plan of Merger are
incorporated herein by reference. All shareholders are urged to read the
Appendices in their entirety.
GENERAL
The Agreement provides for the acquisition of AMBANC by UPC
pursuant to the merger of AMBANC with and into UPC Merger Subsidiary, a
corporation organized under the laws of the State of Tennessee, and a wholly
owned subsidiary of UPC, with the effect that UPC Merger Subsidiary will be the
surviving corporation resulting from the Merger. At the Effective Time, each
share of AMBANC Common Stock then issued and outstanding, including any
associated AMBANC Rights (excluding shares held by AMBANC, UPC, or their
respective subsidiaries, in each case 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 0.4841 of a share of UPC Common Stock and
the associated Preferred Share Rights, subject to possible adjustment as
described below (the "Exchange Ratio").
No fractional shares of UPC Common Stock will be issued.
Rather, cash (without interest) will be paid in lieu of any fractional share to
which any AMBANC shareholder would be entitled upon consummation of the Merger,
in an amount equal to such fractional part of a share of UPC Common Stock
multiplied by the closing price of such common stock on the NYSE (as reported by
The Wall Street Journal or, if not reported thereby, another authoritative
source as selected by UPC) on the last trading day preceding the Effective Time.
As of the Record Date, AMBANC had 6,999,281 shares of AMBANC
Common Stock issued and outstanding and 19,685 additional shares of AMBANC
Common Stock subject to Employee Options. Based upon an Exchange Ratio of
0.4841, upon consummation of the Merger, UPC would issue approximately 3,388,352
shares of UPC Common Stock, excluding shares subject to assumed Employee
Options. Accordingly, UPC would then have outstanding approximately 88,359,251
shares of UPC Common Stock based on the number of shares of UPC Common Stock
outstanding on May 31, 1998 (and excluding shares to be issued pursuant to Other
Acquisitions and shares to be issued pursuant to the exercise of stock options
and for other purposes).
UPC's Charter currently authorizes the issuance of 300,000,000
shares of UPC Common Stock and 10,000,000 shares of UPC Preferred Stock. As of
May 31, 1998, UPC had 84,970,899 shares of UPC Common Stock outstanding and
approximately 7,792,332 shares of UPC Common Stock were earmarked for issuance
in connection with currently outstanding UPC stock options, UPC's dividend
reinvestment plan, and with respect to conversion rights of currently
outstanding UPC Series E Preferred Stock (defined below). At its 1998 Annual
Shareholders Meeting held on April 16, 1998 (the "UPC Annual Meeting"), UPC's
shareholders approved an amendment to the UPC Charter to increase the number of
authorized shares of UPC Common Stock by 200,000,000 shares for a total of
300,000,000 shares of authorized UPC Common Stock. In addition, as of May 31,
1998, 1,156,231 shares of Series E Preferred Stock were outstanding. As of May
31, 1998, none of UPC's 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.
POSSIBLE ADJUSTMENT OF EXCHANGE RATIO
Under certain circumstances described below, the Exchange
Ratio could be adjusted pursuant to certain provisions of the Agreement. UNDER
NO CIRCUMSTANCES WOULD THE EXCHANGE RATIO BE LESS THAN 0.4841 OF A SHARE OF UPC
COMMON STOCK FOR EACH SHARE OF AMBANC COMMON STOCK. An adjustment could occur
only if the AMBANC Board elects by a majority vote to terminate the Agreement
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pursuant to the provisions of the Agreement described below, and if UPC then
elects to avoid termination of the Agreement by increasing the Exchange Ratio.
AMBANC may elect to terminate the Agreement (the "Stock Price
Termination Right") if both:
(i) the Average Closing Price (as defined below) is less than
$49.95; and
(ii) (a) the number obtained by dividing the Average Closing Price
by $62.438 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 later of the
date of Federal Reserve approval of the Merger and the date of the Special
Meeting, by the Index Price on April 6, 1998, less 15% (the "Index Ratio").
In either case, UPC has the option to avoid termination of the
Agreement by AMBANC by increasing the Exchange Ratio to equal the lesser of (i)
the number obtained by dividing the product of $49.95 and the Exchange Ratio by
the Average Closing Price and (ii) the number obtained by dividing the product
of the Index Ratio and the Exchange Ratio by the UPC Ratio. If the Merger is
approved by the AMBANC shareholders, the AMBANC Board could elect not to
terminate the Agreement and to consummate the Merger without resoliciting the
AMBANC shareholders even if AMBANC's Stock Price Termination Right is triggered.
The Average Closing Price is 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 authori tative source
as chosen by UPC) for 20 consecutive full trading days in which such shares are
traded on the NYSE ending at the close of trading on the later of the date the
Federal Reserve approves the Merger and the date of the Special Meeting (the
Determination Date). The UPC Ratio is the number obtained by dividing the
Average Closing Price by $62.438.
These conditions reflect the parties' agreement that AMBANC's
shareholders will assume the risk of declines in the value of UPC Common Stock
to $49.95. Any adjustment of the Exchange Ratio below a decline in the price of
UPC Common Stock to $49.95 would be dependent on whether the Average Closing
Price of UPC Common Stock lags behind the trading 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, the AMBANC Board will take into account, consistent with its
fiduciary duties, all relevant facts and circumstances that exist at such time,
including, without limitation, information concerning the business, financial
condition, results of operations, and prospects of UPC (including the recent
performance of UPC Common Stock, the historical financial data of UPC, customary
statistical measurements of UPC's financial performance, and the future
prospects for UPC Common Stock following the Merger), and the advice of its
financial advisors and legal counsel. If the AMBANC Board elects to terminate
the Agreement, UPC would then determine whether to proceed with the Merger at
the higher Exchange Ratio. In making this determination, the principal factors
UPC will consider include the projected effect of the Merger on UPC's pro forma
earnings per share and whether UPC's assessment of AMBANC's earning potential as
part of UPC justifies the issuance of an increased number of UPC's shares. If
UPC declines to adjust the Exchange Ratio, AMBANC may elect to proceed without
the adjustment, provided it does so within 12 days of the Determination Date.
UPC 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 0.4841, the Starting Price of UPC Common Stock is
$62.438, and the Index Price, as of the Starting Date, is $100.)
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(1) The first scenario occurs if the Average Closing Price is equal to
$49.95 or more. Under this scenario, regardless of any comparison
between the UPC Ratio and the Index Ratio, there would be no possible
adjustment to the Exchange Ratio, even though the value of the
consideration to be received by AMBANC shareholders could have fallen
from a pro forma $30.105 per share, as of the Starting Date, to $24.18
per share, as of the Determination Date.
(2) The second scenario occurs if the Average Closing Price is less than
$49.95, but does not represent a decline from the Starting Price of
more than 15% 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 AMBANC shareholders would have fallen from a pro forma
$30.105 per share, as of the Starting Date, to an amount based on the
then lower Average Closing Price of UPC Common Stock, as of the
Determination Date.
(3) The third scenario occurs if the Average Closing Price declines below
$49.95, and the UPC Ratio is below the Index Ratio. Under this
scenario, the adjustment in the Exchange Ratio is designed to ensure
that the AMBANC shareholders receive shares of UPC Common Stock having
a value (based upon the Average Closing Price) that corresponds to at
least $49.95 or a price reflecting a 15% decline from the stock price
performance reflected by the Index Group, whichever is less.
For example, if the Average Closing Price were $49, and the ending
Index Price, as of the Determination Date, were $95, the UPC Ratio
(.7848) would be below the Index Ratio (.80, or .95 minus .15), AMBANC
could terminate the Agreement unless UPC elected within five days to
increase the Exchange Ratio to equal .4935, which represents the lesser
of (a) .6169 [the result of dividing $30.23 (the product of $62.438 and
the 0.4841 Exchange Ratio) by the Average Closing Price ($49), rounded
to the nearest thousandth] and (b) .4935 [the result of dividing the
Index Ratio (.80) times 0.4841 by the UPC Ratio (.7848), rounded to the
nearest thousandth]. Based upon the assumed $49 Average Closing Price,
the new Exchange Ratio would represent a value to the AMBANC
shareholders of $22.21 per share.
If the Average Closing Price were $45, and the ending Index Price, as
of the Determination Date, were $100, the UPC Ratio (.7848) would be
below the Index Ratio (.85, or 1.00 minus .15), AMBANC could terminate
the Agreement unless UPC elected within five days to increase the
Exchange Ratio to equal .5243, which represents the lesser of (a) .6169
[the result of dividing $30.23 (the product of $62.438 and the 0.4841
Exchange Ratio) by the Average Closing Price ($50), rounded to the
nearest thousandth] and (b) .5243 [the result of dividing the Index
Ratio (.85) times 0.4841 by the UPC Ratio (.7848), rounded to the
nearest thousandth]. Based upon the assumed $45 Average Closing Price,
the new Exchange Ratio would represent a value to the AMBANC
shareholders of $23.59 per share.
Based on the $56.44 closing price of UPC Common Stock on June
3, 1998, the Exchange Ratio would represent a value of $27.32 per share of
AMBANC Common Stock.
The actual market value of a share of UPC Common Stock at the
Effective Time and at the time certificates for those shares are delivered
following surrender and exchange of Certificates for shares of AMBANC Common
Stock may be more or less than the Average Closing Price. AMBANC shareholders
are urged to obtain current market quotations for UPC Common Stock. See
"COMPARATIVE MARKET PRICES AND DIVIDENDS."
EFFECT OF THE MERGER ON OPTIONS
At the Effective Time, each Employee Option granted under the
AMBANC Stock Plans, as defined in the Agreement, that is outstanding at the
Effective Time, whether or not exercisable, will be converted into and become an
option with respect to UPC Common Stock, and UPC will assume each
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Employee Option, in accordance with the terms of the AMBANC Stock Plan and stock
option or other agreement by which it is evidenced, except that from and after
the Effective Time, (i) UPC and its Salary and Benefits Committee will be
substituted for AMBANC and the Committee of the AMBANC Board (including, if
applicable, the entire AMBANC Board) administering such AMBANC Stock Plan, (ii)
each Employee Option assumed by UPC may be exercised solely for shares of UPC
Common Stock (or cash in the case of stock appreciation rights), (iii) the
number of shares of UPC Common Stock subject to such Employee Option will be
equal to the number of shares of AMBANC Common Stock subject to such Employee
Option immediately prior to the Effective Time multiplied by the Exchange Ratio
and rounding down to the nearest whole share, and (iv) the per share exercise
price under each such Employee Option will be adjusted by dividing the per share
exercise price under each such Employee Option by the Exchange Ratio and
rounding up to the nearest cent.
For information with respect to Employee Options held by
AMBANC management, see "-- Interests of Certain Persons in the Merger."
RIGHT TO RESTRUCTURE TRANSACTION
UPC has reserved the right to revise the structure of the Merger in
order to achieve tax benefits or for any other reason it deems advisable.
However, without the approval of the AMBANC Board and, if required by the IBCL,
the AMBANC shareholders, UPC may not make any revision to the structure of the
Merger which would: (i) change the amount of the consideration AMBANC
shareholders are entitled to receive; (ii) change the intended tax-free effects
of the Merger to UPC, AMBANC or AMBANC shareholders or change the intended
pooling of interests accounting treatment; (iii) permit UPC to pay the
consideration for the Merger other than by delivery of UPC Common Stock
registered with the SEC; (iv) be materially adverse to the interests of AMBANC
or adverse to the shareholders of AMBANC; (v) materially impede or delay
consummation of the Merger; or (vi) require a vote of UPC shareholders under
relevant state law.
BACKGROUND OF AND REASONS FOR THE MERGER
BACKGROUND OF THE MERGER. Because of various changes to the banking
laws, acquisition activity among financial institutions located in Indiana and
in other states during the last several years has increased. This acquisition
activity has resulted in regional and large financial institutions entering
Indiana and other markets in the midwestern United States. In addition,
developments and deregulation in the financial services industry generally have
led to increases in competition for bank services. Further, recent increases in
bank regulatory burdens have resulted in increased costs to most financial
institutions. These increased costs and competitive factors have created an
environment in which it is increasingly difficult for even relatively large
community bank holding companies such as AMBANC to compete effectively with
other larger financial institutions and financial services providers.
In light of the competitive and regulatory factors described above and
other financial, legal and market considerations, the Executive Committee of the
Board of Directors, at its meeting in September 1997, began the process of
evaluating the options available to AMBANC, including the possibility of an
acquisition of AMBANC by another acquiror. At that meeting, representatives of
McDonald & Company Securities, Inc. ("McDonald") presented information regarding
the acquisition climate throughout the Midwest and an analysis of alternatives
available to AMBANC.
At its October meeting, the Executive Committee of the Board again
discussed the status of merger activity in Indiana and throughout the Midwest
and the various strategic alternatives to AMBANC.
At its meeting on January 23, 1998, the Board of Directors of AMBANC
made its initial determination to evaluate the possibility of affiliating with a
larger bank holding company. The Board appointed the Executive Committee as an
Acquisition Evaluation Committee to evaluate a possible affiliation with
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AMBANC with another banking institution and to consider all the factors and
issues related to such an affiliation.
In its February 6, 1998, meeting, the Executive Committee interviewed
four investment banking firms and thereafter selected McDonald to represent
AMBANC in a possible merger transaction. On February 9, 1998, AMBANC and
McDonald executed an engagement letter.
Thereafter, McDonald solicited indications of interest from a number of
bank holding companies throughout the Midwest. The result of this solicitation
were presented to the Executive Committee at its meeting on March 25, 1998.
Indications of interest were received from three bank holding companies,
including UPC. At that meeting, representatives from McDonald represented a
detailed financial analysis of the various indications of interest and, based on
that analysis, the Executive Committee unanimously determined that it would
recommend to the full Board of Directors that an affiliation with UPC would be
in the best interest of AMBANC's shareholders. The Executive Committee
authorized management, with the assistance of McDonald and legal counsel, to
attempt to negotiate a definitive acquisition agreement for presentation to the
full Board of Directors of AMBANC as soon as possible.
Following the March 25 meeting, representatives of UPC conducted due
diligence of AMBANC in Vincennes, Indiana, and representatives of AMBANC,
McDonald, and AMBANC's legal counsel conducted due diligence of UPC at the
corporate headquarters of UPC in Memphis, Tennessee. These due diligence
sessions were held from March 27 through March 29.
Concurrently with the due diligence meetings, the parties were
negotiating the terms of the Agreement and the Plan of Merger between AMBANC and
UPC.
On March 31, 1998, the Board of Directors of AMBANC met at the
corporate offices of AMBANC to review the proposed Agreement and Plan of Merger.
At that meeting, representatives with McDonald presented the outline of their
fairness opinion and again presented a detailed financial analysis of the terms
of the proposed merger. The Board of Directors then unanimously approved the
Agreement and Plan of Merger.
AMBANC'S REASONS FOR THE MERGER AND RECOMMENDATION OF THE AMBANC BOARD.
The Board of Directors of AMBANC considered several factors in determining to
approve the Agreement and Plan of Merger instead of the proposals from other
potential acquirors. Those factors are discussed below.
Among other items considered by the Board of Directors of AMBANC in
making its decision to approve the Agreement and Plan of Merger were the price
and form of consideration proposed to be paid by UPC; the financial condition,
results of operation, dividend payment records and prospects of AMBANC as an
independent bank; the financial condition, results of operation, dividend
payment records and prospects of UPC; the compatibility of the markets of UPC's
existing subsidiary banks to the market of AMBANC; the anticipated tax-free
nature of the Merger to shareholders of AMBANC receiving solely UPC Common Stock
in exchange for their shares of AMBANC Common Stock; the possibility of
increased liquidity by AMBANC shareholders through ownership of UPC Common Stock
as compared to AMBANC Common Stock; price information from McDonald regarding
other comparable bank acquisitions; and the opinion of McDonald that the
consideration to be received by AMBANC shareholders under the AMBANC Agreement
was fair from a financial perspective.
The Board of Directors of AMBANC also considered, among other things,
the impact of the AMBANC Merger on AMBANC's customers and employees and the
community served by AMBANC. UPC's historical practice of retaining employees of
the banks that it had previously acquired with competitive salary and benefit
programs and with career advancement opportunities was also considered. The
Board also examined UPC's continuing commitment to the communities served by
banks previously acquired by UPC.
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Based upon the foregoing factors, the Board of Directors of AMBANC
concluded that it was in the best interests of AMBANC and its shareholders to
affiliate with UPC and to enter into the Merger and the Agreement and Plan of
Merger. The importance of the various factors discussed above relative to one
another cannot be precisely determined or stated.
THE BOARD OF DIRECTORS OF AMBANC HAS UNANIMOUSLY APPROVED THE AGREEMENT
AND PLAN OF MERGER AND UNANIMOUSLY RECOMMENDS TO THE SHAREHOLDERS OF AMBANC THAT
THEY APPROVE AND ADOPT THE AGREEMENT AND PLAN OF MERGER AND THE TRANSACTIONS
CONTEMPLATED THEREBY.
UPC'S REASONS FOR THE MERGER. In adopting the Agreement, the Plan of
Merger, and the Merger, the UPC Board considered a number of additional factors
concerning the benefits of the Merger. Without assigning any relative or
specific weights to the factors, the UPC Board considered the following
additional material factors:
(a) a review, based in part on a presentation by UPC's
management, of (i) the business, operations, earnings, and financial
condition, including the capital levels and asset quality, of AMBANC on
an historical, prospective, and pro forma basis and in comparison to
other financial institutions in the area, (ii) the demographic,
economic, and financial characteristics of the markets in which AMBANC
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 (iii) the results of UPC's due
diligence review of AMBANC; and
(b) a variety of factors affecting and relating to the overall
strategic focus of UPC, including UPC's desire to expand into markets
in Indiana and Illinois and the business lines pursued by AMBANC.
The UPC Board determined that the Merger was in the best
interests of UPC and its shareholders and unanimously approved the proposed
Merger on April 16, 1998.
OPINION OF AMBANC'S FINANCIAL ADVISORS
Merger - General. Pursuant to an engagement letter dated February 9,
1998 between AMBANC and McDonald, AMBANC retained McDonald to act as its sole
financial advisor in connection with the Merger and related matters. As part of
its engagement, McDonald agreed, if requested by AMBANC, to render an opinion
with respect to the fairness, from a financial point of view, to AMBANC
shareholders of the consideration to be received by AMBANC in the Merger.
McDonald is a nationally recognized specialist in the financial services
industry, in general, and in Midwestern banks and thrifts in particular.
McDonald is regularly engaged in evaluations of similar businesses and in
advising institutions with regard to mergers and acquisitions, as well as
raising debt and equity capital for such institutions. AMBANC selected McDonald
as its financial advisor based upon its qualifications, expertise and reputation
in such capacity.
At the March 31, 1998 meeting of the AMBANC Board, McDonald delivered
its opinion that the consideration to be received by AMBANC in the Merger (the
amount of which was determined by AMBANC and UPC on the basis of arm's-length
negotiation between AMBANC and UPC), was fair to AMBANC shareholders, from a
financial point of view, as of March 31, 1998. McDonald also delivered to the
AMBANC Board a written opinion dated as of March 31, 1998 and has included as
part of this Joint Proxy Statement/Prospectus a letter confirming its opinion as
of the date of this Joint Proxy Statement/Prospectus. No limitations were
imposed by AMBANC on McDonald with respect to the investigations made or the
procedures followed in rendering its opinion.
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THE FULL TEXT OF MCDONALD'S WRITTEN OPINION TO THE AMBANC BOARD, DATED
AS OF MARCH 31, 1998, WHICH SETS FORTH THE ASSUMPTIONS MADE, MATTERS CONSIDERED
AND EXTENT OF REVIEW BY MCDONALD IS ATTACHED HERETO AS APPENDIX C AND IS
INCORPORATED HEREIN BY REFERENCE AND SHOULD BE READ CAREFULLY AND IN ITS
ENTIRETY IN CONJUNCTION WITH THIS JOINT PROXY STATEMENT/PROSPECTUS. THE
FOLLOWING SUMMARY OF MCDONALD'S OPINION IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO THE FULL TEXT OF THE OPINION. MCDONALD'S OPINION IS ADDRESSED TO
THE AMBANC BOARD AND DOES NOT CONSTITUTE A RECOMMENDATION TO ANY SHAREHOLDER OF
AMBANC AS TO HOW SUCH SHAREHOLDER SHOULD VOTE AT THE AMBANC SPECIAL MEETING.
In connection with its opinion, McDonald has, among other things: (i)
reviewed the Agreement and the other related documents and this Joint Proxy
Statement/Prospectus; (ii) reviewed certain historical business and financial
information relating to AMBANC and UPC; (iii) reviewed other pertinent
internally generated reports with regard to the separate businesses and
prospects of AMBANC and UPC including, among other things, the strategic
objectives of each corporation and the potential benefits which might be
realized through consummation of the Merger; (iv) participated in senior
management discussions between AMBANC and UPC with regard to said strategic
objectives which might be realized through consummation of the Merger; (v)
reviewed public information regarding other selected comparable publicly traded
companies deemed relevant to the proposed business combination; (vi) reviewed
the financial terms and data of selected comparable combinations between banks
and bank or thrift holding companies deemed relevant to the proposed business
combination; (vii) reviewed the historical market performance and trading volume
of AMBANC Common Stock and UPC Common Stock; (viii) reviewed and evaluated the
current stock distribution and ownership of AMBANC Common Stock and UPC Common
Stock, as well as the pro forma distribution and ownership following
consummation of the Merger, based upon the contribution of, among other things,
AMBANC's assets, liabilities, shareholders' equity and earnings to the combined
entity; and (ix) conducted such other financial studies, analyses and
investigations as McDonald deemed appropriate. The oral and written opinions
provided by McDonald to AMBANC were necessarily based upon economic, monetary,
financial market and other relevant conditions as of the dates thereof.
In connection with its review and arriving at its opinion, McDonald
relied upon the accuracy and completeness of the financial information and other
pertinent information provided by AMBANC to McDonald for purposes of rendering
its opinion. McDonald did not assume any obligation to independently verify any
of the provided information as being complete and accurate in all material
respects. With regard to the financial forecasts established and developed for
AMBANC and UPC with the input of the respective managements, as well as
projections of cost savings, revenue enhancements and operating synergies,
McDonald assumed that these materials had been reasonably prepared on bases
reflecting the best available estimates and judgments of AMBANC and UPC as to
the future performance of the separate and combined entities and that the
projections provided a reasonable basis upon which McDonald could formulate its
opinion. Neither AMBANC nor UPC publicly discloses such internal management
projections of the type utilized by McDonald in connection with McDonald's role
as financial advisor to AMBANC with respect to review of the Merger. Therefore,
such projections cannot be assumed to have been prepared with a view towards
public disclosure. The projections were based upon numerous variables and
assumptions that are inherently uncertain, including, but notwithstanding,
factors relative to the general economic and competitive conditions facing
AMBANC and UPC. Accordingly, actual results could vary significantly from those
set forth in the respective projections.
McDonald does not claim to be an expert in the evaluation of loan
portfolios or the allowance for loan losses with respect thereto and therefore
assumes that such allowances for AMBANC and UPC are adequate to cover such
losses. In addition, McDonald does not assume responsibility for the review of
individual credit files, did not make an independent evaluation, appraisal or
physical inspection of the assets or individual properties of AMBANC or UPC, nor
was McDonald provided with such appraisals. Furthermore, McDonald assumes that
the Merger will be consummated in accordance with the terms set forth in the
Merger Agreement, without any waiver of any material terms or conditions by
AMBANC and that obtaining the necessary regulatory approvals for the Merger will
not have an adverse effect on either separate institution
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or combined entity. Moreover, in each analysis that involves per share data for
AMBANC, McDonald adjusted the data to reflect full dilution, i.e., the exercise
of all outstanding options and/or warrants (utilizing the treasury stock
method). In particular, McDonald assumes that the Merger will be recorded as a
"pooling-of-interests" in accordance with generally accepted accounting
principles.
In connection with rendering its opinion to the AMBANC Board, McDonald
performed a variety of financial and comparative analyses which are briefly
summarized below. Such summary of analyses does not purport to be a complete
description of the analyses performed by McDonald. Moreover, McDonald believes
that these analyses must be considered as a whole and that selecting portions of
such analyses and the factors considered by it, without considering all such
analyses and factors, could create an incomplete understanding of the scope of
the process underlying the analyses and, more importantly, the opinion derived
form them. The preparation of a financial advisor's opinion is a complex process
involving subjective judgments and is not necessarily susceptible to partial
analyses or a summary description of such analyses. In its full analysis,
McDonald also accounted for the assessment of general economic, financial market
and other financial conditions. Furthermore, McDonald drew from its past
experience in similar transactions, as well as its experience in the valuation
of securities and its general knowledge of the banking industry as a whole. Any
estimates in McDonald's analyses were not necessarily indicative of future
results or values which may significantly diverge more or less favorably from
such estimates. Estimates of company valuations do not purport to be appraisals
or necessarily reflect the prices at which companies or their respective
securities actually may be sold. Most notably, none of the analyses performed by
McDonald were assigned a greater significance by McDonald than any other in
deriving its opinion.
Comparable Company Analysis: McDonald reviewed and compared actual
stock market data and actual and estimated selected financial information for
AMBANC with corresponding information for 21 publicly traded Midwestern banks
with assets between $500 million and $1 billion (the "AMBANC Peer Group"). The
AMBANC Peer Group included: Independent Bank Corporation, Ionia, MI; Old Second
Bancorp Inc., Aurora, IL; National City Bancorporation, Minneapolis, MN; Second
Bancorp Inc, Warren, OH; Midwest Banc Holdings Inc., Melrose Park, IL; Shoreline
Financial Corporation, Benton Harbor, MI; Merchants Bancorp, Inc., Aurora, IL;
First Oak Brook Bancshares, Inc., Oak Brook, IL; Michigan Financial Corporation,
Marquette, MI; Mahoning National Bancorp Inc., Youngstown, OH; Peoples Bancorp
Inc., Marietta, OH; Lakeland Financial Corporation, Warsaw, IN; Capitol Bancorp
Ltd., Lansing, MI; UnionBancorp, Inc., Ottawa, IL; Peoples Bank of Indianapolis,
Indianapolis, IN; CoVest Bancshares, Inc., Des Plaines, IL; Allegiant Bancorp,
Inc., Clayton, MO; Southside Bancshares Corp., St. Louis, MO; ANB Corporation,
Muncie, IN; Gold Banc Corp., Leawood, KS; and Franklin Bank, N.A., Southfield,
MI.
The analysis of the AMBANC Peer Group indicated, among other things,
that, based on market prices as of March 30, 1998 and the latest publicly
available financial data based on December 31, 1997 or September 30, 1997: (i)
the mean and median multiples of price to respective last twelve months'
earnings were 19.66x and 18.97x, respectively, as compared to 24.37x for AMBANC;
(ii) the mean and median multiples of price to estimated 1998 earnings were
19.0x and 19.4x, respectively, as compared to 21.5x for AMBANC; (iii) the mean
and median multiples of price to estimated 1999 earnings were 17.8x and 18.0x,
respectively, as compared to 21.0x for AMBANC, based on consensus estimates;
(iv) the mean and median multiples of price to book value were 248% and 243%,
respectively, as compared to 259% for AMBANC; (v) the mean and median multiples
of price to tangible book value were 276% and 266%, respectively, as compared to
264% for AMBANC; (vi) the mean and median dividend yields were 1.4% for both,
respectively, as compared to 1.7% for AMBANC; (vii) the mean and median return
on average assets ("ROAA") for the last twelve months were 0.98% and 1.01%,
respectively, as compared to 1.10% for AMBANC; (viii) the mean and median return
on average equity ("ROAE") for the last twelve months were 11.48% and 12.07%,
respectively, as compared to 10.68% for AMBANC; (ix) the mean and median ratios
of tangible equity to tangible assets were 8.10% and 7.95%, respectively, as
compared to 10.13% for AMBANC; (x) the mean and median ratios of non-performing
assets to assets were 0.38% and 0.31%, as compared to 0.48% for AMBANC; (xi) the
mean and median ratios of loan loss reserves to non-performing loans were 343%
and 310%, respectively, as compared to 185% for AMBANC; and (xii) the mean and
median efficiency ratios for the last twelve months were 60.0% for both,
respectively, as compared to 55.9% for AMBANC.
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McDonald also reviewed and compared actual stock market data and actual
and estimated selected financial information for UPC with corresponding
information for 25 publicly traded Midwestern banks with assets between $10
billion and $50 billion (the "UPC Peer Group"). The UPC Peer Group included:
Mellon Bank Corp., Pittsburgh, PA; Comerica Inc., Detroit, MI; SouthTrust Corp.,
Birmingham, AL; Summit Bancorp, Princeton, NJ; Mercantile Bancorp., St. Louis,
MO; BB&T Corp., Winston-Salem, NC; Huntington Bancshares Inc., Columbus, OH;
Northern Trust Corp., Chicago, IL; Crestar Financial Corp., Richmond, VA;
Regions Financial Corp., Birmingham, AL; Fifth Third Bancorp, Cincinnati, OH;
Firstar Corp., Milwaukee, WI; Marshall & Ilsley Corp., Milwaukee, WI; Popular
Inc., San Juan, PR; AmSouth Bancorp., Birmingham, AL; First Security Corp., Salt
Lake City, UT; First Tennessee National Corp., Memphis, TN; First Empire State
Corp., Buffalo, NY; Old Kent Financial Corp., Grand Rapids, MI; Compass
Bancshares Inc., Birmingham, AL; Hibernia Corp., New Orleans, LA; Star Banc
Corp., Cincinnati, OH; First American Corp., Nashville, TN; Associated Banc-
Corp, Green Bay, WI; and Commerce Bancshares Inc., Kansas City, MO.
The analysis of the UPC Peer Group indicated, among other things, that,
based on market prices as of March 30, 1998 and the latest publicly available
financial data based on December 31, 1997 or September 30, 1997: (i) the mean
and median multiples of price to respective last twelve months' earnings were
21.8x and 21.3x, respectively, as UPC was 23.0x; (ii) the mean and median
multiples of price to estimated 1998 earnings were 19.4x and 18.7x,
respectively, as compared to 17.0x for UPC; (iii) the mean and median multiples
of price to estimated 1999 earnings were 17.3x and 16.9x, respectively, as
compared to 14.9x for UPC; (iv) the mean and median multiples of price to book
value were 360% and 335%, respectively, as compared to 299% for UPC; (v) the
mean and median multiples of price to tangible book value were 423% and 388%,
respectively, as compared to 308% for UPC; (vi) the mean and median dividend
yields were 1.8% and 1.9%, respectively, as compared to 3.23% for UPC; (vii) the
mean and median ROAA for the last twelve months were 1.31% and 1.34%,
respectively, as compared to 0.85% for UPC; (viii) the mean and median ROAE for
the last twelve months were 16.01% and 16.54%, respectively, as compared to
8.68% for UPC; (ix) the mean and median ratios of tangible equity to tangible
assets were 7.07% and 6.95%, respectively, as compared to 9.38% for UPC; (x) the
mean and median ratios of non-performing assets to assets were 0.36% and 0.35%,
respectively, as compared to 0.79% for UPC; (xi) the mean and median ratios of
loan loss reserves to non-performing loans were 394% and 356%, respectively, as
compared to 189% for UPC; and (xii) the mean and median efficiency ratios for
the last twelve months were 55.7% and 55.8%, respectively, as compared to 62.1%
for UPC.
Comparable Transactions Analysis: McDonald reviewed and compared actual
information for comparable pending or closed transactions it deemed pertinent to
the Merger, including: (i) 17 bank merger and/or acquisition transactions with
seller's assets between $500 million and $2.5 billion (the "Nationwide
Transactions"); and (ii) 13 Midwestern bank merger and/or acquisition
transactions with seller's assets between $500 million and $2.5 billion (the
"Midwestern Transactions").
The Nationwide Transactions were (seller in italics): St. Paul Bancorp,
Chicago, IL/Beverly Bancorp., Tinley Park, IL; First Security Corp, Salt Lake
City, UT/ California State Bank, West Covina, CA; SouthTrust Corp, Birmingham,
AL/American Banks of FL, Jacksonville, FL; Cullen/Frost Bankers, San Antonio,
TX/Overton Bancshares, Fort Worth, TX; Banco Bilbao, Mayaguez, PR/PonceBank,
Ponce, PR; Mercantile Bancorp, St Louis, MO/Firstbank of IL, Springfield, IL;
Union Planters Corp, Memphis, TN/Merchants Bancshares, Houston, TX; First
Midwest Bncp, Naperville, IL/Heritage Finl Srvcs, Tinley Park, IL; Mercantile
Bancorp, St Louis, MO/CBT Corp, Paducah, KY; BB&T Corp, Winston-Salem,
NC/Franklin Bancorp, Washington, DC; Regions Financial, Birmingham, AL/First
State Corp, Albany, GA; F&M Bancorporation, Kaukauna, WI/BancSecurity Corp.,
Marshalltown, IA; Union Planters Corp, Memphis, TN/Peoples First Corp, Paducah,
KY; FirstMerit Corp, Akron, OH/CoBancorp, Inc., Elyria, OH; CNB Bancshares Inc.,
Evansville, IN/Pinnacle Financial, St Joseph, MI; United Bankshares, Charleston,
WV/George Mason Bankshares, Fairfax, VA; and Fulton Financial Corp, Lancaster,
PA/Keystone Heritage Group, Lebanon, PA.
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The analysis of the Nationwide Transactions indicated, among other
things, that, based on the announced transaction value: (i) the mean and median
multiples of transaction value to respective last twelve months' earnings were
22.6x and 22.1x, respectively, as compared to an implied valuation of 25.2x for
AMBANC earnings in this transaction; (ii) the mean and median ratios of
transaction value to book value were 299% and 291%, respectively, as compared to
an implied valuation of 268% of AMBANC stated book value; (iii) the mean and
median ratios of transaction value to tangible book value were 322% and 321%,
respectively, as compared to an implied valuation of 274% of AMBANC stated
tangible book; and (iv) the mean and median ratios of transaction value to total
assets were 27.6% and 27.3%, respectively, as compared to an implied valuation
of 27.7% of AMBANC total assets.
The Midwestern Transactions were (seller in italics): St. Paul Bancorp,
Chicago, IL/Beverly Bancorp., Tinley Park, IL; Mercantile Bancorp, St Louis,
MO/Firstbank of IL, Springfield, IL; First Midwest Bncp, Naperville, IL/Heritage
Finl Srvcs, Tinley Park, IL; Mercantile Bancorp, St Louis, MO/CBT Corp, Paducah,
KY; F&M Bancorporation, Kaukauna, WI/ BancSecurity Corp., Marshalltown, IA;
Union Planters Corp, Memphis, TN/Peoples First Corp, Paducah, KY; FirstMerit
Corp, Akron, OH/CoBancorp, Inc., Elyria, OH; CNB Bancshares Inc., Evansville,
IN/Pinnacle Financial, St Joseph, MI; Commercial Federal, Omaha, NE/Liberty
Financial, West Des Moines, IA; Area Bancshares Corp, Owensboro, KY/Cardinal
Bancshares, Lexington, KY; Citizens Bankng Corp, Flint, MI/CB Financial Corp,
Jackson, MI; Park National Corp, Newark, OH/First- Knox Banc Corp, Mount Vernon,
OH; and Magna Group, St. Louis, MO/Homeland Bankshares, Waterloo, IA.
The analysis of Midwestern Transactions indicated, among other things,
that, based on the announced transaction value: (i) the mean and median
multiples of transaction value to respective last twelve months' earnings were
21.3x and 21.4x, respectively, as compared to an implied valuation of 25.2x
AMBANC earnings in this transaction; (ii) the mean and median ratios of
transaction value to book value were 250% and 237%, respectively, as compared to
an implied valuation of 268% of AMBANC stated book value; (iii) the mean and
median ratios of transaction value to tangible book value were 274% and 256%,
respectively, as compared to an implied valuation of 274% of AMBANC stated
tangible book; and (iv) the mean and median ratios of transaction value to total
assets were 24.9% and 25.3%, respectively, as compared to an implied valuation
of 27.7% of AMBANC total assets.
Contribution Analysis: McDonald analyzed the contribution of each of
AMBANC and UPC to the pro forma assets, total loans, deposits, equity, tangible
equity, earnings for the last twelve months, earnings excluding nonrecurring
charges for the last twelve months, 1998 estimated earnings and 1999 estimated
earnings. This analysis demonstrated that AMBANC contributed approximately 2.47%
of assets, 2.67% of total loans, 2.81% of deposits, 2.83% of total equity, 2.95%
of tangible equity, 2.50% of earnings for the last twelve months, 1.93% of
earnings excluding nonrecurring charges for the last twelve months, 1.84% of
1998 estimated earnings and 1.75% of 1999 estimated earnings. The Exchange Ratio
implies that AMBANC shareholders will own approximately 2.49% of pro forma
shares outstanding upon completion of the Merger.
Accretion/Dilution Analysis: On the basis of financial projections
prepared by McDonald, with the assistance of both of the management teams, and
estimates of on-going cost savings accruing to the pro forma company provided to
McDonald by management, as well as estimated one-time costs related to the
transaction, McDonald compared pro forma equivalent earnings, cash dividends,
book value and tangible book value to the stand-alone projections of AMBANC.
The accretion/dilution analysis demonstrated, among other things, that
the Merger would result in (i) accretion to earnings for AMBANC shareholders
ranging from 36% to 48% from 1998 through 2000; (ii) accretion to estimated cash
dividends for AMBANC shareholders ranging from 102% to 112% from 1998 through
2000; (iii) dilution to book value for AMBANC shareholders ranging from 9% to 6%
from 1998 through 2000; and (iv) dilution to tangible book value to AMBANC
shareholders ranging from 40% to 33% from 1998 through 2000.
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<PAGE> 41
Discounted Cash Flow Analysis: McDonald performed a discounted cash
flow analysis with regard to AMBANC on a stand-alone basis, as based on the
above-mentioned projections. This analysis utilized a discount rate of 14% and a
range of earnings terminal multiples of 14.0x to 22.0x. The analysis resulted in
a range of present values of $15.69 to $23.76 per share for AMBANC on a
stand-alone basis.
Other Analyses: McDonald also reviewed certain other information
including selected pro forma industry rankings, pro forma estimated balance
sheet composition and pro forma financial performance.
No other company used as a comparison in the above analyses is
identical to AMBANC, UPC or the combined entity and no other transaction is
identical to the Merger. Accordingly, an analysis of the results of the
foregoing is not purely mathematical; rather, it involves complex considerations
and judgments concerning differences in financial market and operating
characteristics of the companies and other factors that could affect the public
trading volume of the companies to which AMBANC, UPC and the combined entity are
being compared.
For its financial advisory services provided to AMBANC, McDonald will
be paid a fee based on 0.6% of the transaction value upon closing of the Merger.
In addition, AMBANC has agreed to reimburse McDonald for all reasonable
out-of-pocket expenses, incurred by it on AMBANC's behalf, as well as indemnify
McDonald against certain liabilities, including any which may arise under the
federal securities laws.
McDonald is a member of all principal securities exchanges in the
United States; and its conduct of its broker-dealer activities has from time to
time purchased securities from, and sold securities to, AMBANC and/or UPC. As a
market maker, McDonald may also have purchased and sold the securities of AMBANC
for McDonald's own account and for the accounts of its customers.
EFFECTIVE TIME OF THE MERGER
Subject to the conditions to the obligations of the parties to
effect the Merger, the Effective Time will occur on the date and at the time
that Articles of Merger reflecting the Merger become effective with the
Secretary of State of the State of Indiana and the Secretary of State of the
State of Tennessee. Subject to the terms and conditions of the Agreement, unless
otherwise agreed upon in writing by UPC and AMBANC, the parties will use their
reasonable efforts to cause the Effective Time to occur on such date as may be
designated by UPC within 15 days following the last to occur of (i) the
effective date of the last consent of any regulatory authority having authority
over and approving or exempting the Merger (taking into account any requisite
waiting period in respect thereof), and (ii) the date on which the shareholders
of AMBANC approve the Agreement. It is anticipated that the Effective Time of
the Merger will occur on or about _________, 1998.
No assurance can be provided that the necessary shareholder and
regulatory approvals can be obtained or that other conditions precedent to the
Merger can or will be satisfied. AMBANC and UPC anticipate that all conditions
to consummation of the Merger will be satisfied so that the Merger can be
consummated on or about ___________, 1998. However, delays in the consummation
of the Merger could occur.
The Board of Directors of either AMBANC or UPC generally may terminate
the Agreement and the Plan of Merger if the Merger is not consummated by
December 31, 1998, unless the failure to consummate the transactions
contemplated by the Agreement on or before such date is caused by any willful
breach of the Agreement by the party seeking termination. See "-- Conditions to
Consummation of the Merger" and "-- Waiver, Amendment, and Termination."
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DISSENTERS' RIGHTS
Because AMBANC Common Stock is traded on the Nasdaq National
Market System, shareholders of AMBANC will not have dissenters' rights under
Indiana law.
DISTRIBUTION OF UPC STOCK CERTIFICATES
Promptly after the Effective Time, UPC and AMBANC will cause
UPB, Memphis, Tennessee, acting in its capacity as Exchange Agent, to mail to
the former shareholders of AMBANC a letter of transmittal, together with
instructions for the exchange of the Certificates representing shares of AMBANC
Common Stock for certificates representing shares of UPC Common Stock.
AMBANC SHAREHOLDERS SHOULD NOT SEND IN THEIR CERTIFICATES UNTIL
THEY RECEIVE THE LETTER OF TRANSMITTAL AND INSTRUCTIONS.
Upon surrender to the Exchange Agent of Certificates for AMBANC
Common Stock, together with a properly completed letter of transmittal, there
will be issued and mailed to each holder of AMBANC Common Stock surrendering
such items a certificate or certificates representing the number of shares of
UPC Common Stock to which such holder is 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 such shares
(without interest thereon), if any. UPC will not be obligated to deliver the
consideration to which any former holder of AMBANC Common Stock is entitled as a
result of the Merger until the holder surrenders such holder's Certificates
representing the shares of AMBANC Common Stock. Whenever a dividend or other
distribution is declared by UPC on UPC Common Stock, the record date for which
is at or after the Effective Time, the declaration will include dividends or
other distributions on all shares issuable pursuant to the Agreement, but no
dividend or other distribution payable after the Effective Time with respect to
UPC Common Stock will be paid to the holder of any unsurrendered AMBANC Common
Stock Certificate until the holder duly surrenders such Certificate. Upon
surrender, both the UPC Common Stock certificate, together with all undelivered
dividends or other distributions (without interest) and any undelivered cash
payment to be paid in lieu of a fractional share (without interest), will be
delivered and paid with respect to the shares represented by such Certificate.
If any AMBANC Common Stock Certificate has been lost, stolen, or destroyed, upon
the submission of an affidavit claiming the Certificate to be lost, stolen, or
destroyed by the shareholder of record and, if required by UPC, the posting by
such person of a bond in such amount as UPC may reasonably direct as indemnity
against any claim that may be made against UPC with respect to such Certificate,
the Exchange Agent will issue in exchange for such lost, stolen, or destroyed
Certificate the shares of UPC Common Stock and cash in lieu of fractional shares
deliverable in respect thereof pursuant to the Agreement.
At the Effective Time, the stock transfer books of AMBANC will be
closed to holders of AMBANC Common Stock and no transfer of shares of AMBANC
Common Stock by any such holder will thereafter be made or recognized. If
Certificates representing shares of AMBANC Common Stock are presented for
transfer after the Effective Time, they will be canceled and exchanged for
shares of UPC Common Stock and a check for the amount due in lieu of fractional
shares and undelivered dividends, if any, deliverable in respect thereof.
CONDITIONS TO CONSUMMATION OF THE MERGER
Consummation of the Merger is subject to various conditions,
including (i) receipt of the approval of the Agreement and the Plan of Merger by
holders of a majority of the outstanding AMBANC Common Stock, (ii) receipt of
certain regulatory approvals required for consummation of the Merger, (iii)
receipt by UPC of a written opinion of counsel from Wyatt, Tarrant & Combs and
by AMBANC of a written opinion of counsel from Leagre Chandler & Millard as to
the tax-free nature of the Merger (except to the extent of cash
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received), (iv) receipt of approval of the shares of UPC Common Stock issuable
pursuant to the Merger for listing on the NYSE, subject to official notice of
issuance, (v) the Registration Statement being declared effective under the
Securities Act, (vi) the accuracy, as of the date of the Agreement and as of the
Effective Time, of the representations and warranties of AMBANC and UPC as set
forth in the Agreement, (vii) the performance of all agreements and the
compliance with all covenants of AMBANC and UPC as set forth in the Agreement,
(viii) receipt of all consents required for consummation of the Merger or for
the preventing of any default under any contract or permit which, if not
obtained or made, is reasonably likely to have, individually or in the
aggregate, a material adverse effect on AMBANC or UPC, (ix) receipt by UPC as of
the Effective Time, with a copy to AMBANC, of a letter from Price Waterhouse LLP
to the effect that the Merger will qualify for pooling-of-interests accounting
treatment, (x) the absence of any law or order or any action taken by any court,
governmental, or regulatory authority of competent jurisdiction prohibiting,
restricting, or making illegal the consummation of the transactions contemplated
by the Agreement, (xi) receipt by AMBANC of an opinion from McDonald to the
effect that the Merger is fair to AMBANC shareholders from a financial point of
view; and (xii) satisfaction of certain other conditions, including the receipt
of certain legal opinions and various certificates from the officers of AMBANC
and UPC. See "-- Regulatory Approval" and "-- Waiver, Amendment, and
Termination."
No assurance can be provided as to when or if all of the
conditions precedent to the Merger can or will be satisfied or waived by the
party permitted to do so. In the event the Merger is not effected on or before
December 31, 1998, the Agreement may be terminated and the Merger abandoned by a
vote of a majority of the Board of Directors of either AMBANC or UPC. See "--
Waiver, Amendment, and Termination."
REGULATORY APPROVAL
THE MERGER MAY NOT PROCEED IN THE ABSENCE OF RECEIPT OF THE
REQUISITE REGULATORY APPROVAL. THERE CAN BE NO ASSURANCE THAT SUCH REGULATORY
APPROVAL WILL BE OBTAINED OR AS TO THE TIMING OF SUCH APPROVAL. APPLICATIONS FOR
THE APPROVAL DESCRIBED BELOW HAVE BEEN SUBMITTED TO THE APPROPRIATE REGULATORY
AUTHORITIES.
It is a condition to the consummation of the Merger that UPC and
AMBANC shall have received all applicable regulatory approvals to consummate the
transactions contemplated by the Agreement, without the imposition of any
condition which in the reasonable judgment of the UPC Board would so materially
adversely impact the financial or economic benefits of the transactions
contemplated by the Agreement and the Plan of Merger that, had such condition or
requirement been known, UPC would not, in its reasonable judgment, have entered
into the Agreement. There can be no assurance that such approvals will not
contain terms, conditions or requirements which cause such approvals to fail to
satisfy such condition to the consummation of the Merger.
AMBANC and UPC are not aware of any material governmental
approvals or actions that are required for consummation of the Merger, except as
described below. Should any other approval or action be required, it presently
is contemplated that such approval or action would be sought.
The Merger is subject to the prior approval of the Federal
Reserve, pursuant to Section 3 of the BHC Act. In evaluating the Merger, the
Federal Reserve must consider, among other factors, the financial and managerial
resources and future prospects of the institutions and the convenience and needs
of the communities to be served. The relevant statutes prohibit the Federal
Reserve from approving the Merger if (i) it would result in a monopoly or be in
furtherance of any combination or conspiracy to monopolize or attempt to
monopolize the business of banking in any part of the United States or (ii) its
effect in any section of the country could be to substantially lessen
competition or to tend to create a monopoly, or if it would result in a
restraint of trade in any other manner, unless the Federal Reserve should find
that any anticompetitive effects are outweighed clearly by the public interest
and the probable effect of the transaction in meeting the convenience and needs
of the communities to be served. The Merger may not be
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consummated until the 30th day (which the Federal Reserve may reduce to 15 days)
following the date of the Federal Reserve approval, during which time the United
States Department of Justice would be afforded 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 should specifically order otherwise. By letter dated
______ __, 1998, the Federal Reserve advised UPC that the Merger had been
approved.
WAIVER, AMENDMENT, AND TERMINATION
To the extent permitted by law, the 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 orafter shareholder
approval of the Agreement and the Plan of Merger has been obtained. In addition,
prior to or at the Effective Time, either AMBANC or UPC, or both, acting through
their respective Boards of Directors, chief executive officers, or other
authorized officers, may waive any default in the performance of any term of the
Agreement by the other party, 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, and may waive any of the conditions precedent to the obligations of
such party under the Agreement, except any condition that, if not satisfied,
would result in the violation of any applicable law or governmental regulation.
No such waiver will be effective unless written and unless executed by a duly
authorized officer of AMBANC or UPC, as the case may be.
The Agreement and the Plan of Merger may be terminated and the
Merger abandoned at any time prior to the Effective Time (i) by the mutual
consent of the Boards of Directors of AMBANC and UPC; (ii) by the AMBANC Board
or the UPC Board (a) if any inaccuracy of any representation or warranty of the
other party contained in the Agreement cannot be or has not been cured within 30
days after giving 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 standards set forth in the Agreement
(provided that the terminating party is not then in breach of any representation
or warranty contained in the Agreement under the applicable standards set forth
in the Agreement or in material breach of any covenant or other agreement
contained in the Agreement), (b) 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 then in breach of any
representation or warranty contained in the Agreement under the applicable
standards set forth in the Agreement or in material breach of any covenant or
other agreement contained in the Agreement), (c) if (1) any consent of any
regulatory authority required for consummation of the Merger and the other
transactions contemplated by the Agreement has been denied by final
nonappealable action, or if any action taken by such authority is not appealed
within the time limit for appeal or (2) the shareholders of AMBANC fail to vote
their approval of the Agreement and the transactions contemplated thereby as
required by the IBCL and the Agreement at the Special Meeting, or (d) if the
Merger is not consummated by December 31, 1998, provided that the failure to
consummate is not caused by any willful breach of the Agreement by the party
electing to terminate; or (iii) by the AMBANC Board pursuant to the relevant
provisions of the Agreement described in " -- Possible Adjustment of Exchange
Ratio."
If the Merger is terminated as described above, 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. In addition, termination of the Agreement will not
relieve any breaching party from liability for any uncured willful breach of a
representation, warranty, covenant, or agreement. The Option Agreement will be
governed by its own terms as to its termination. See "-- Expenses and Fees" and
"-- Option Agreement."
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CONDUCT OF BUSINESS PENDING THE MERGER
The Agreement obligates AMBANC to conduct its business only in
the usual, regular, and ordinary course, before the Effective Time, and imposes
certain limitations on the operations of AMBANC and its banking subsidiaries
before the Effective Time. Among other things, AMBANC has agreed that, absent
the prior written consent of UPC and except as otherwise permitted by the
Agreement, it will not: (i) become responsible for any obligation for borrowed
money in excess of an aggregate of $50,000, except in the ordinary course of
business consistent with past practices; (ii) pay any dividends, except in
accordance with past practices, or, subject to certain exceptions, exchanging
any shares of its capital stock, issuing any additional shares of its capital
stock, or giving any person the right to acquire any such shares; (iii) acquire
control over any other entity; (iv) subject to certain exceptions, grant any
increase in compensation or benefits, or pay any bonus, to any of its directors,
officers, or employees; or (v) except as previously disclosed to UPC, modify or
adopt any employee benefit plans, including any employment contract. See Article
7 of the Agreement, which is attached as Appendix A to this Proxy Statement. The
Agreement authorizes AMBANC to declare and pay regular quarterly dividends on
the AMBANC Common Stock in accordance with its past practice in an amount not to
exceed $0.12 per share per quarter. The Agreement contemplates that the Merger
will be timed to occur at such a time that the AMBANC shareholders will not fail
to receive a dividend during a quarterly period, nor will they receive a
dividend on both their AMBANC Common Stock and the UPC Common Stock they receive
in the Merger during the same quarterly period.
AMBANC has also agreed that, except with respect to the Agreement,
the Plan of Merger, and the transactions contemplated thereby, no AMBANC company
or any representative thereof shall directly or indirectly solicit any
acquisition proposal or, except to the extent necessary to comply with the
fiduciary duties of the AMBANC Board as advised by counsel, 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.
In the Agreement, UPC and AMBANC each also agree not to take any
action which would (a) materially adversely affect its ability to obtain any
consents required for the transactions contemplated by the Agreement or prevent
the transactions contemplated by the Agreement, including the Merger, from
qualifying for pooling-of-interests accounting treatment or as a reorganization
within the meaning of Section 368(a) of the Code (see "-- Certain Federal Income
Tax Consequences of the Merger"), or (b) materially adversely affect the ability
of any party to perform its covenants and agreements under the Agreement.
MANAGEMENT AND OPERATIONS AFTER THE MERGER
Consummation of the Merger will not alter the present management
team or Board of Directors of UPC or UPC Merger Subsidiary. Information
concerning the management of UPC is included in the documents incorporated
herein by reference. See "DOCUMENTS INCORPORATED BY REFERENCE." The current
officers and directors of the AMBANC Banks will continue to serve in their
respective capacities on behalf of the AMBANC Banks. UPC Merger Subsidiary, as
the sole shareholder of the AMBANC Banks at that time, may alter the composition
of the Board of Directors of the AMBANC Banks. It is currently expected that the
AMBANC Banks would be merged with and into UPB as soon as practicable following
the Effective Time. At such time, executive officers of the AMBANC Banks could
be offered positions as regional officers of UPB and directors of the AMBANC
Banks could be offered positions as advisory directors of UPB. For additional
information regarding the interests of certain persons in the Merger, see "--
Interests of Certain Persons in the Merger."
UPC Merger Subsidiary will be the surviving corporation resulting
from the Merger and shall continue to be governed by the laws of the State of
Tennessee and operate in accordance with its Charter and Bylaws.
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<PAGE> 46
INTERESTS OF CERTAIN PERSONS IN THE MERGER
GENERAL. Certain members of AMBANC's management and the AMBANC
Board may be deemed to have certain interests in the Merger that are in addition
to their interests as shareholders of AMBANC generally. The AMBANC Board was
aware of these interests and considered them, among other matters, in approving
the Agreement and the transactions contemplated thereby.
EMPLOYMENT AGREEMENT. AMBANC is a party to an employment agreement
with Robert G. Watson entered into in 1985, and amended as of December 31, 1997.
The agreement becomes operative only upon a "Change in Control" of AMBANC, which
is deemed to occur for purposes of the agreement if, following a tender offer,
merger, consolidation, sale of assets, or contested election of directors, the
persons who were previously directors of AMBANC no longer constitute a majority.
Under the agreement, AMBANC agreed to employ Mr. Watson in his current position
for a position of three years commencing on the date the agreement becomes
operative. Following a change in control, if Mr. Watson's employment is
terminated for reasons other than cause, death or disability or should Mr.
Watson resign as a result of a diminishment of his status, functions, duties, or
responsibilities, the agreement provides for the payment of severance benefits
to Mr. Watson monthly for a period of three years equal to one-twelfth of his
annual base salary at a rate of no less than the highest annualized rate in
effect during the 12 months prior to his termination, monthly payments equal to
one twelfth of the cash bonus he received for the most recent year preceding the
termination of the year prior to the year in which the agreement became
operable, whichever was greater, the continuation of his participation under all
incentive and employee welfare benefit plans, and a pension supplement
compensating him for any reduction in pension benefits caused by the premature
termination.
AMBANC and UPC have entered into a letter agreement which provides
that Mr. Watson's employment agreement with AMBANC will be terminated as of the
Effective Time and Mr. Watson will be paid the severance benefits to which he is
entitled ($990,000). Upon termination of the employment agreement, Mr. Watson
will remain an employee at will at a mutually agreed upon compensation level.
The letter agreement also provides that 10 key employees of AMBANC and/or the
AMBANC Banks to be designated prior to the Effective Time will be paid stay
bonuses at or after the Closing, for remaining employed by Ambanc pending the
consummation of the Merger, provided that the aggregate amount of such stay
bonuses will not exceed $346,000 (before applicable withholdings).
STOCK OPTIONS. AMBANC has granted Employee Options and stock
appreciation rights to Mr. Watson and Raymond E. Mott under the AMBANC Stock
Plan. All of Mr. Watson's and Mr. Mott's stock options and stock appeciation
rights are fully exercisable. The Agreement provides that UPC will assume the
Employee Options outstanding at the Effective Time on a basis adjusted to
reflect the Exchange Ratio. The letter agreement entered into between AMBANC and
UPC provides that the stock appreciation rights will be exercised and retired by
AMBANC prior to the Effective Time. See "DESCRIPTION OF TRANSACTION -- Effect of
the Merger on Employee Options."
The following table sets forth, with respect to the number of
shares of AMBANC Common Stock covered by outstanding stock options held by Mr.
Watson and Mr. Mott as of the Record Date:
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<PAGE> 47
<TABLE>
<CAPTION>
Weighted
Options Average Aggregate
Currently Exercise Price Value of
Options Held Exercisable Per Option Options(1)
------------ ----------- ---------- ----------
<S> <C> <C> <C> <C>
Robert G. Watson 14,766 14,766 $24.38 $34,995
Raymond E. Mott 4,919 4,919 $24.40 $11,560
</TABLE>
(1) Based on the closing price of AMBANC Common Stock of $26.75 as quoted on the
Nasdaq National Market on June 3, 1998.
INDEMNIFICATION; DIRECTORS AND OFFICERS INSURANCE. The
Agreement provides that UPC will, subject to the conditions set forth therein,
indemnify the present and former directors, officers, employees, and agents of
AMBANC and its subsidiaries against all Liabilities (as defined in the
Agreement) arising out of actions or omissions occurring at or prior to the
Effective Time (including the transactions contemplated by the Agreement) to the
full extent permitted under Indiana law, AMBANC's Articles and Bylaws, and any
indemnity agreements previously entered into by AMBANC or any of its
subsidiaries and any director, officer, employee, or agent of AMBANC or any of
its subsidiaries. This provision of the Agreement is consistently included in
UPC's standard form merger agreement and is not intended to broaden in any
manner the scope of indemnification to which the present and former directors,
officers, employees, and agents of AMBANC and its subsidiaries are entitled, but
serves to ratify the legal obligations of AMBANC and its subsidiaries (to be
assumed by UPC Merger Subsidiary upon consummation of the Merger) to provide
indemnification in accordance with Indiana law, AMBANC's Articles and Bylaws,
and any indemnification agreements to which AMBANC or its subsidiaries is a
party with an indemnified person. The indemnification provided under the
provisions of such instruments will be subject to the same standards that are
currently applicable for determining whether indemnified parties are entitled to
indemnification under such instruments.
The Agreement further provides that UPC will, subject to the
conditions set forth in the Agreement, use its reasonable efforts to cause the
persons serving as officers and directors of AMBANC immediately prior to the
Merger to be covered for a period of three years following the Effective Time by
AMBANC's directors and officers liability insurance policy (or any equivalent
substitute therefor), provided that UPC will not be required to expend on an
annual basis more than 150% of the current annual amount expended by AMBANC to
procure such insurance.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
The parties to the Merger have not and do not intend to seek a
ruling from the Internal Revenue Service ("IRS") as to the federal income tax
consequences of the Merger. Instead, UPC has obtained the opinion of Wyatt,
Tarrant & Combs (counsel to UPC) and AMBANC has obtained the opinion of Leagre
Chandler & Millard (counsel to AMBANC) (collectively, the "Tax Opinions") as to
certain of the expected federal income tax consequences of the Merger, copies of
which are attached as exhibits to the Registration Statement.
The Tax Opinions do not address, among other matters: (i) state,
local, foreign or other federal tax consequences of the Merger not specifically
addressed therein; (ii) federal income tax consequences to shareholders of
AMBANC subject to special rules under the Code, such as foreign persons,
tax-exempt organizations, insurance companies, financial institutions, dealers
in stocks and securities, and persons who do not own such stock as a capital
asset; (iii) federal income tax consequences affecting shares of AMBANC stock
acquired upon exercise of stock options, stock purchase plan rights or otherwise
as compensation; (iv) the tax consequences to holders of warrants, options or
other rights to acquire shares of such stock; (v) the tax consequences of the
parties to the Agreement of the inclusion in income of the amount of the
bad-debt reserve maintained by AMBANC and/or its subsidiaries and any other
amounts resulting from any required
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<PAGE> 48
change in accounting methods; and (vi) the tax consequences of the parties to
the Agreement of any income and deferred gain recognized pursuant to Treasury
Regulations issued under Section 1502 of the Code.
Subject to the conditions, qualifications, representations and
assumptions contained herein, and in the Tax Opinions, such counsel have opined
that:
[1] The acquisition by UPC Merger Subsidiary of substantially all of the
assets of AMBANC in exchange for shares of UPC Common Stock and the assumption
of liabilities of AMBANC pursuant to the Merger will constitute a reorganization
within the meaning of Section 368(a) of the Code.
[2] AMBANC, UPC and UPC Merger Subsidiary will each be "a party to a
reorganization" within the meaning of Section 368(b) of the Code.
[3] No gain or loss will be recognized by AMBANC as a result of the Merger.
[4] No gain or loss will be recognized by UPC Merger Subsidiary or UPC as a
result of the Merger.
[5] No gain or loss will be recognized by the shareholders of AMBANC as a
result of the exchange of AMBANC Common Stock for UPC 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 AMBANC Common Stock is a
capital asset in the hands of the respective AMBANC 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 AMBANC Common Stock allocable
to the fractional share.
[6] The tax basis of UPC Common Stock to be received by the shareholders of
AMBANC will be the same as the tax basis of the AMBANC 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 UPC Common Stock to be received by
shareholders of AMBANC will include the holding period of the AMBANC Common
Stock surrendered in exchange therefor, provided the AMBANC shares were held as
a capital asset by the shareholders of AMBANC on the date of the exchange.
[8] A shareholder of AMBANC who perfects his dissenter's rights and who
receives payment of the fair market value of his shares of AMBANC 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 Code.
The Tax Opinions are based on the Code, the Treasury Regulations
promulgated thereunder, judicial decisions and administrative pronouncements of
the IRS, all existing and in effect on the date of this Proxy Statement and all
of which are subject to change at any time, possibly retroactively. Any such
change could have a material impact on the conclusions reached in the Tax
Opinions. The Tax Opinions 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 therein and
shareholders of AMBANC 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 AMBANC and UPC.
In rendering the Tax Opinions, such counsel have relied, as to
factual matters, solely on the continuing accuracy of (i) the description of the
facts relating to the Merger contained in the Agreement and Proxy Statement,
(ii) the factual representations and warranties contained in the Agreement and
Proxy Statement and related documents and agreements, and (iii) certain factual
matters addressed by representations made by certain executive officers of
AMBANC, UPC and UPC Merger Subsidiary, as further described in the Tax Opinions
and exhibits thereunder. Events occurring after the date of the Tax Opinions
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<PAGE> 49
could alter the facts upon which the Tax Opinions are based, in which event the
conclusions reached therein and in this summary could be materially impacted.
ACCORDINGLY, FOR ALL OF THE ABOVE REASONS, SHAREHOLDERS OF AMBANC
AND UPC 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.
The obligation of each party to consummate the Merger is
conditioned on, among other things, receipt by UPC of an opinion of Wyatt,
Tarrant & Combs and the receipt by AMBANC of an opinion of Leagre Chandler &
Millard, substantially to the foregoing effect. The conditions relating to the
receipt of the tax opinions may be waived by both UPC and AMBANC. Neither UPC
nor AMBANC 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, AMBANC
would resolicit the approval of its shareholders prior to consummating 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 AMBANC will be carried forward
at their previously recorded amounts, and current and prior period financial
statements will be restated for all periods as though AMBANC and UPC had been
combined at the beginning of the earliest period presented.
In order for the Merger to qualify for pooling-of-interests
accounting treatment, substantially all (90% or more) of the outstanding AMBANC
Common Stock must be exchanged for UPC 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 which criteria cannot be
satisfied until after the Effective Time. In addition, it is a condition to
closing that Price Waterhouse LLP deliver a letter to UPC, as of the Effective
Time, with a copy to AMBANC, to the effect the Merger will qualify for
pooling-of-interests accounting treatment. UPC will not consummate the Merger if
pooling-of-interests accounting treatment is not available.
For information concerning certain conditions to be imposed on the
exchange of AMBANC Common Stock for UPC Common Stock in the Merger by affiliates
of AMBANC and certain restrictions to be imposed on the transferability of the
UPC Common Stock received by those affiliates in the Merger in order, among
other things, to ensure the availability of pooling-of-interests accounting
treatment, see "--Resales of UPC Common Stock."
EXPENSES AND FEES
The Agreement provides that each of the parties will bear and pay
its own expenses in connection with the transactions contemplated by the
Agreement, 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 UPC and AMBANC will bear
and pay one-half of the printing costs in connection with the Registration
Statement and this Proxy Statement.
RESALES OF UPC COMMON STOCK
UPC Common Stock to be issued to shareholders of AMBANC in
connection with the Merger will be registered under the Securities Act. All
shares of UPC Common Stock received by holders of AMBANC Common Stock and all
shares of UPC Common Stock issued and outstanding immediately prior
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<PAGE> 50
to the Effective Time, will be freely transferable upon consummation of the
Merger by those shareholders of AMBANC not deemed to be "Affiliates" of AMBANC
or UPC. "Affiliates" generally are defined as persons or entities who control,
are controlled by, or are under common control with AMBANC or UPC at the time of
the Special Meeting (generally, executive officers, directors, and 10% or
greater shareholders).
Rule 145 promulgated under the Securities Act restricts the sale
of UPC Common Stock received in the Merger by Affiliates and certain of their
family members and related interests. Under the rule, during the one year
following the Effective Time, Affiliates of AMBANC or UPC may resell publicly
the UPC Common Stock received by them in the Merger within certain limitations
as to the amount of UPC Common Stock sold in any three-month period and as to
the manner of sale. After the one-year period, such Affiliates of AMBANC who are
not Affiliates of UPC may resell their shares without restriction. The ability
of Affiliates to resell shares of UPC Common Stock received in the Merger under
Rule 145 will be subject to UPC having satisfied its Exchange Act reporting
requirements for specified periods prior to the time of sale. Affiliates will
receive additional information regarding the effect of Rule 145 on their ability
to resell UPC Common Stock received in the Merger. Affiliates also would be
permitted to resell UPC Common Stock received in the Merger pursuant to an
effective registration statement under the Securities Act or an available
exemption from the Securities Act registration requirements. This Proxy
Statement does not cover any resales of UPC Common Stock received by persons who
may be deemed to be Affiliates of AMBANC or UPC.
AMBANC has agreed to use its reasonable efforts to cause each
person who may be deemed to be an Affiliate of AMBANC to execute and deliver to
UPC not later than 30 days prior to the Effective Time, an agreement (each, an
"Affiliate Agreement") providing that such Affiliate will not sell, pledge,
transfer, or otherwise dispose of any AMBANC Common Stock held by such Affiliate
except as contemplated by the Agreement or the Affiliate Agreement, and will not
sell, pledge, transfer or otherwise dispose of any UPC Common Stock received by
such Affiliate upon consummation of the Merger (i) except in compliance with the
Securities Act and the rules and regulations thereunder and (ii) until such time
as financial results covering 30 days of combined operations of UPC and AMBANC
have been published. If the Merger qualifies for pooling-of-interests accounting
treatment, shares of UPC Common Stock issued to such Affiliates of AMBANC in
exchange for shares of AMBANC Common Stock will not be transferable until such
time as financial results covering at least 30 days of combined operations of
UPC and AMBANC have been published, regardless of whether each such Affiliate
has provided an Affiliate Agreement (and UPC shall be entitled to place
restrictive legends upon certificates for shares of UPC Common Stock issued to
Affiliates of AMBANC). Prior to publication of such results, UPC will not
transfer on its books any shares of UPC Common Stock received by an Affiliate
pursuant to the Merger. The stock certificates representing UPC Common Stock
issued to Affiliates in the Merger may bear a legend summarizing the foregoing
restrictions. See "-- Conditions to Consummation of the Merger."
OPTION AGREEMENT
As an inducement and a condition to UPC entering into the
Agreement, AMBANC and UPC entered into the Option Agreement, dated March 31,
1998, pursuant to which AMBANC granted UPC an option (the "Option") entitling it
to purchase up to 1,392,749 shares (representing approximately 19.9% of the
shares issued and outstanding before giving effect to the issuance of additional
shares of AMBANC Common Stock pursuant to the exercise of the Option) of AMBANC
Common Stock under the circumstances described below, at a cash price per share
equal to $29.75, subject to possible adjustment in certain circumstances (the
"Purchase Price"). This description of the Option Agreement and the Option does
not purport to be complete and is qualified in its entirety by reference to the
Option Agreement, which is filed as an exhibit to the Registration Statement and
incorporated herein by reference.
If no preliminary or permanent injunction or other order against
the delivery of the shares of AMBANC Common Stock covered by the Option issued
by any court of competent jurisdiction is in effect, UPC may exercise the
Option, in whole or in part, at any time, from time to time, if, but only if, a
Purchase Event (as defined below) occurs prior to the Option's termination;
provided that UPC, at the time, is not in
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<PAGE> 51
material breach of the Option Agreement or the Agreement. As defined in the
Option Agreement, "Purchase Event" means either of the following events:
(a) without UPC's prior written consent, AMBANC authorizing,
recommending, publicly proposing, or publicly announcing an intention to
authorize, recommend, or propose or entering into an agreement with any
third party to effect (i) a merger, consolidation, or similar transaction
involving AMBANC or any of its subsidiaries (other than transactions solely
between AMBANC's subsidiaries other than transactions involving AMBANC or
any of its subsidiaries in which the voting securities outstanding
immediately prior thereto continue to represent (by either remaining
outstanding or being converted into securities of the surviving entity) at
least 75% of the combined voting power of the voting securities of AMBANC
or the surviving entity outstanding immediately after the consummation of
the transaction))), (ii) the disposition, by sale, lease, exchange, or
otherwise, of 20% or more of the consolidated assets of AMBANC and its
subsidiaries or (iii) the issuance, sale, or other disposition (including
by way of merger, consolidation, share exchange, or any similar
transaction) of securities representing 20% or more of the voting power of
AMBANC or any of its subsidiaries; or
(b) any person (other than UPC or any UPC subsidiary) acquiring
beneficial ownership (as such term is defined in Rule 13d-3 promulgated
under the Exchange Act), or the right to acquire beneficial ownership of,
or the formation of any "group" (as defined under the Exchange Act), other
than a group of which UPC or any UPC subsidiary is a member, that
beneficially owns or has the right to acquire beneficial ownership of, 20%
or more of the outstanding shares of AMBANC Common Stock.
The Option will terminate upon the earliest of the following:
(a) the Effective Time;
(b) termination of the Agreement in accordance with its terms
before the occurrence of a Purchase Event or a Preliminary Purchase Event (as
defined below) (other than a termination of the Agreement under certain
circumstances involving generally a willful breach by AMBANC of a representa
tion or warranty contained in the Agreement or a breach by AMBANC of a covenant
contained in the Agreement) (a "Default Termination");
(c) 18 months after termination of the Agreement by UPC pursuant
to a Default Termination; or
(d) 18 months after termination of the Agreement following the
occurrence of a Purchase Event or a Preliminary Purchase Event.
As defined in the Option Agreement, "Preliminary Purchase Event"
includes the following events:
(a) commencement or filing of a registration statement under the
Securities Act by any third party of a tender offer or exchange offer to
purchase any shares of AMBANC Common Stock such that, upon consummation of
such offer, such person would own or control 15% or more of the
then-outstanding shares of AMBANC Common Stock (a "Tender Offer" or an
"Exchange Offer," respectively); or
(b) failure of the shareholders of AMBANC Common Stock to approve
the Agreement and the Plan of Merger at the Special Meeting, the failure to
have the Special Meeting or another such meeting held for the purpose of
voting on the Agreement or the cancellation of such meeting prior to
termination of the Agreement, or the withdrawal or modification by the
AMBANC Board in a manner adverse to UPC of the recommendation of the AMBANC
Board with respect to the Agreement, in each case, after public
announcement that a third party (i) made a proposal to engage in an
acquisition transaction, (ii) commenced a Tender Offer or filed a
registration statement under the Securities Act with respect to an
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<PAGE> 52
Exchange Offer or (iii) filed an application or gave a notice under any
federal or state statutes or regula tions for approval or consent to
engage in an acquisition transaction.
In the event of any change in AMBANC Common Stock by reason of a
stock dividend, stock split, split-up, recapitalization, combination, exchange
of shares, or similar transaction, the type and number of securities subject to
the Option, and the purchase price therefor, shall be adjusted appropriately. In
the event that any additional shares of AMBANC Common Stock are issued after
March 31, 1998 (other than pursuant to an event described in the preceding
sentence), the number of shares of AMBANC Common Stock subject to the Option
will be adjusted so that, after such issuance, it, together with any shares of
AMBANC Common Stock previously issued pursuant to the Option Agreement, shall
not exceed the lesser of (i) 19.9% of the number of shares then issued and
outstanding, without giving effect to any shares subject to or issued pursuant
to the Option and (ii) that minimum number of shares of AMBANC Common Stock
which when aggregated with any other AMBANC Common Stock by UPC would cause the
provisions of any Indiana takeover laws to be applicable to the Merger or the
Option.
Upon the occurrence of a Repurchase Event (as defined below) that
occurs prior to the exercise or termination of the Option, at the request of
UPC, delivered within 18 months of the Repurchase Event, AMBANC will, subject to
regulatory restrictions, be obligated to repurchase the Option and any shares of
AMBANC Common Stock purchased pursuant to the Option Agreement at a specified
price.
As defined in the Option Agreement, a "Repurchase Event"
occurs if (i) any person (other than UPC or any UPC subsidiary) acquires
beneficial ownership, or the right to acquire beneficial ownership, or any
"group" (as such term is defined under the Exchange Act) shall have been formed
which beneficially owns or has the right to acquire beneficial ownership of 50%
or more of the then-outstanding shares of AMBANC Common Stock, or (ii) any of
the following transactions is consummated: (a) AMBANC consolidates with or
merges into any person, other than UPC or one of UPC's subsidiaries, and is not
the continuing or surviving corporation of such consolidation or merger; (b)
AMBANC permits any person, other than UPC or one of UPC's subsidiaries, to merge
into AMBANC and AMBANC shall be the continuing or surviving corporation, but, in
connection with such merger, the then-outstanding shares of AMBANC Common Stock
shall be changed into or exchanged for stock or other securities of AMBANC or
any other person or cash or any other property or the outstanding shares of
AMBANC Common Stock immediately prior to such merger shall after such merger
represent less than 50% of the outstanding shares and share equivalents of the
merged company; or (c) AMBANC sells or otherwise transfers all or substantially
all of its assets to any person, other than UPC or one of UPC's subsidiaries.
After the occurrence of a Purchase Event, UPC may assign the
Option Agreement and its rights thereunder in whole or in part.
Upon the occurrence of certain events, AMBANC has agreed to file
with the SEC and to cause to become effective certain registration statements
under the Securities Act with respect to dispositions by UPC and its assigns of
all or part of the Option and/or any shares of AMBANC Common Stock into which
the Option is exercisable.
EFFECT OF THE MERGER ON RIGHTS OF SHAREHOLDERS
As a result of the Merger, holders of AMBANC Common Stock will be
exchanging their shares of an Indiana corporation governed by the IBCL and
AMBANC's Articles and Bylaws, for shares of UPC, a Tennessee corporation
governed by the TBCA and UPC's Charter and Bylaws. Certain significant
differences exist between the rights of AMBANC shareholders and those of UPC
shareholders. The following discussion is necessarily general; it is not
intended to be a complete statement of all differences affecting the rights of
shareholders and their respective entities, and it is qualified in its entirety
by reference to the IBCL and the TBCA as well as to UPC's Charter and Bylaws and
AMBANC's Articles and Bylaws.
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ANTI-TAKEOVER PROVISIONS GENERALLY
The provisions of UPC's Charter and Bylaws described below under
the headings, "-- Authorized AMBANC Stock," "-- Amendment of Charter and
Bylaws," "-- Classified Board of Directors and Absence of Cumulative Voting,"
"-- Director Removal and Vacancies," "-- Limitations on Director Liability," "--
Indemnifi cation," "-- Special Meeting of Shareholders," "-- Actions by
Shareholders Without a Meeting," "-- Shareholder Nominations and Proposals" and
"-- Business Combinations" are referred to herein as the "Protective
Provisions." In general, one purpose of the Protective Provisions is to assist
the UPC Board in playing a role if any group or person attempts to acquire
control of UPC, so that the UPC Board can further protect the interests of UPC
and its shareholders as appropriate under the circumstances, including, if the
UPC Board determines that a sale of control is in the best interests of UPC's
shareholders, by enhancing the UPC Board's ability to maximize the value to be
received by the shareholders upon such a sale.
Although UPC's management believes the Protective Provisions are,
therefore, beneficial to UPC's shareholders, the Protective Provisions also may
tend to discourage some takeover bids. As a result, UPC's shareholders may be
deprived of opportunities to sell some or all of their shares at prices that
represent a premium over prevailing market prices. On the other hand, defeating
undesirable acquisition offers can be a very expensive and time-consuming
process. To the extent that the Protective Provisions discourage undesirable
proposals, UPC may be able to avoid those expenditures of time and money.
The Protective Provisions also may discourage open market
purchases by a potential acquiror. Such purchases may increase the market price
of UPC Common Stock temporarily, enabling shareholders to sell their shares at a
price higher than that which otherwise would prevail. In addition, the
Protective Provisions may decrease the market price of UPC Common Stock by
making the stock less attractive to persons who invest in securities in
anticipation of price increases from potential acquisition attempts. The
Protective Provisions also may make it more difficult and time consuming for a
potential acquiror to obtain control of UPC through replacing the Board of
Directors and management. Furthermore, the Protective Provisions may make it
more difficult for UPC's shareholders to replace the Board of Directors or
management, even if a majority of the shareholders believe such replacement is
in the best interests of UPC. As a result, the Protective Provisions may tend to
perpetuate the incumbent Board of Directors and management.
AMBANC's Articles of Incorporation and Bylaws also contain certain
anti-takeover provisions which are described below. These provisions may
discourage or prevent tender or exchange offers by a corporation or group that
intends to use the acquisition of a substantial number of shares of AMBANC to
initiate a takeover culminating in a merger or other business combination. These
provisions may also have the effect of making the removal of current management
more difficult.
AUTHORIZED CAPITAL STOCK
UPC. With the amendment approved by shareholders of UPC at its
1998 Annual Meeting of Shareholders, UPC's Charter authorizes the issuance of up
to (i) 300,000,000 shares of UPC Common Stock, of which 84,970,899 shares were
issued and outstanding as of May 31, 1998, and (ii) 10,000,000 shares of no par
value preferred stock ("UPC Preferred Stock"), of which no shares of UPC Series
A Preferred Stock, and 1,156,231 shares of UPC Series E Preferred Stock were
issued and outstanding as of May 31, 1998. The UPC Board may authorize the
issuance of additional shares of UPC Common Stock without further action by
UPC's shareholders, unless such action is required in a particular case by
applicable laws or regulations or by any stock exchange upon which UPC's capital
stock may be listed.
With certain exceptions, the UPC Board may issue, without any
further action by the shareholders, shares of UPC Preferred Stock, in one or
more classes or series, with such voting, conversion, dividend, and liquidation
rights as specified in UPC's Charter. In providing for the issuance of such
shares, the UPC Board 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
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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 UPC 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 UPC, the holders of any
series of UPC Preferred Stock will have priority over holders of UPC Common
Stock.
The authority to issue additional shares of UPC Common Stock or
UPC Preferred Stock provides UPC with the flexibility necessary to meet its
future needs without the delay resulting from seeking shareholder approval. The
authorized but unissued shares of UPC Common Stock (including such increased
number as may be approved by the UPC shareholders pursuant to the amendment
discussed above) and UPC Preferred Stock will be issuable from time to time for
any corporate purpose, including, without limitation, stock splits, stock
dividends, employee benefit and compensation plans, acquisitions, and public or
private sales for cash as a means of raising capital. Such shares could be used
to dilute the stock ownership of persons seeking to obtain control of UPC. In
addition, the sale of a substantial number of shares of UPC voting stock to
persons who have an understanding with UPC concerning the voting of such shares,
or the distribution or declaration of a dividend of shares of UPC voting stock
(or the right to receive UPC voting stock) to UPC shareholders, may have the
effect of discouraging or increasing the cost of unsolicited attempts to acquire
control of UPC.
In 1989, the UPC Board adopted a Share Purchase Rights Plan
("Preferred Share Rights Plan") and distributed a dividend of one Preferred
Share Unit Purchase Right ("Preferred Share Right") for each outstanding share
of UPC Common Stock. In addition, under the Preferred Share Rights Plan, one
Preferred Share Right is to be automatically, and without further action by UPC,
distributed in respect to each share of UPC Common Stock issued after adoption
of the Preferred Share Rights Plan. The Preferred Share Rights are generally
designed to deter coercive takeover tactics and to encourage all persons
interested in potentially acquiring control of UPC to treat each shareholder on
a fair and equal basis. Each Preferred Share Right trades in tandem with the
share of UPC Common Stock to which it relates until the occurrence of certain
events indicating a potential change in control of UPC. Upon the occurrence of
such an event, the Preferred Share Rights would separate from UPC Common Stock
and each holder of a Preferred Share Right (other than the potential acquiror)
would be entitled to purchase certain equity securities of UPC at prices below
their market value. UPC has authorized 750,000 shares of Series A Preferred
Stock for issuance under the Preferred Share Rights Plan and no shares have been
issued as of the date of this Proxy Statement. Until a Preferred Share Right is
exercised, the holder thereof, as such, has no rights of a shareholder of UPC,
including the right to vote or receive dividends.
AMBANC. AMBANC's Articles authorize the issuance of up to
10,000,000 shares of AMBANC Common Stock, of which 6,999,281 shares were issued
and outstanding as of the Record Date, and 200,000 shares of preferred stock,
none of which are issued or outstanding. The AMBANC Board generally may
authorize the issuance of additional authorized shares of AMBANC Common Stock
without further action by AMBANC's shareholders upon receipt of valid
consideration in exchange for such shares.
AMBANC's Articles of Incorporation authorize the Board of
Directors, without further shareholder approval, to establish the relative
rights, designations, preferences, and limitations or restrictions of the shares
of Preferred Stock prior to the issuance thereof, including without limitation,
dividend rights, conversion rights, voting rights, liquidation preferences,
redemption rights, division into series, sinking fund provisions, and similar
matters. Thus, the Board of Directors may authorize up to 200,000 shares of
Preferred Stock in one or more series with rights and preferences that are
superior to those of AMBANC Common Stock, the issuance of which could adversely
affect the voting power of the holders of AMBANC Common Stock.
The availability of Preferred Stock with unspecified voting rights
and possibly other rights, such as required approval of mergers or other
extraordinary corporate transactions, could be used by
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management to create voting impediments or to deter persons seeking to effect a
merger or otherwise to gain control of AMBANC. Preferred Stock may also be
issued at some future time in connection with an acquisition by AMBANC of an
additional company or companies or some other business permitted to be acquired
by AMBANC. However, no such future issuances are presently planned or
contemplated.
AMENDMENT OF CHARTER AND BYLAWS
UPC. The Charter of UPC provides that amendments thereto may be
adopted in any manner permitted by the TBCA. The TBCA provides that a
corporation's charter may be amended by a majority of votes entitled to be cast
on the amendment, subject to any condition the Board of Directors may place on
its submission of the amendment to the shareholders. The 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 UPC Board may adopt, amend, or repeal the Bylaws by a majority
vote of the entire Board of Directors. The Bylaws may also be amended or
repealed by action of UPC's shareholders.
UPC's Charter provides that all corporate powers of UPC shall be
exercised by the Board of Directors except as otherwise provided by law. The
Board of Directors may designate an executive committee consisting of five or
more directors and may authorize such committee to exercise all of the authority
of the Board of Directors, including the authority to adopt, amend and repeal
the Bylaws, to submit any action to the shareholders, to fill vacancies on the
Board of Directors or any committee, to declare dividends or other corporate
distributions, and to issue or reissue any capital stock or any warrant, right
or option to acquire capital stock of the corporation.
AMBANC. The IBCL provides that, unless a greater vote is required
under a specific provision of the IBCL or by a corporation's articles of
incorporation or its board of directors, a corporation may amend its articles of
incorporation upon the affirmative vote of the holders of a greater number of
shares cast in favor of the amendment than the holders of shares cast against
the amendment, unless the amendment creates dissenters' rights in which case a
favorable vote of the holders of a majority of the shares entitled to vote on
the matter is required. Under the IBCL, a corporation's board of directors may
condition its submission of a proposed amendment to the shareholders of the
corporation on any basis, including the requirement of the affirmative vote of
holders of a greater percentage of the voting shares of the corporation than
otherwise would be required under the IBCL.
The Articles of AMBANC require that any amendment, change, or
repeal of certain of the Articles of Incorporation which pertain to removal of
directors, amending the Articles, or the approval of Business Combinations (as
defined) would require the approval of (a) at least 80 percent of the
outstanding voting power, and (b) in the case of an amendment, change, or repeal
of any of the above-stated provisions proposed by or on behalf of a Related
Person (as defined), the approval by a majority of the shares not controlled by
the Related Person. However, in the event that an amendment, change, or repeal
of those provisions is approved by two-thirds of the Board of Directors, and, if
the amendment is proposed by or on behalf of a Related Person, by the favorable
vote of two-thirds of certain Directors who are not associated with the Related
Person, the affirmative vote of a majority of the outstanding voting power would
be sufficient to approve any such amendment, change, or repeal.
DIRECTOR REMOVAL
UPC. UPC's Charter provides that a director may be removed by the
shareholders only upon the affirmative vote of the holders of at least
two-thirds of the voting power of all shares of capital stock entitled to vote
generally in the election of directors. The purpose of this provision is to
prevent a majority
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shareholder from circumventing the classified board system by removing directors
and filling the vacancies with new individuals selected by that shareholder.
Accordingly, the provision may have the effect of impeding efforts to gain
control of the Board of Directors by anyone who obtains a controlling interest
in UPC Common Stock.
AMBANC. The Articles of AMBANC provide that any Director may be
removed only by an 80 percent affirmative vote of the outstanding voting power
at a shareholders' meeting called for that purpose, with or without good cause.
Directors may not be removed by the Board of Directors.
LIMITATIONS ON DIRECTOR LIABILITY
UPC. UPC's Charter does not address the issue of director
liability to the corporation.
AMBANC. The Articles of AMBANC are consistent with the IBCL, which
provides that no director of a corporation will be subject to liability for any
action taken as a director, or any failure to take any action as a director,
unless the director has both breached or failed to perform the duties of the
director's office in compliance with the IBCL and the breach or failure to
perform constitutes willful misconduct or recklessness. This provision
eliminates the potential liability of a corporation's directors for failure,
except through willful misconduct or recklessness, to satisfy their duty of
care, which requires each director to carry out his or her duties in good faith,
with the care an ordinarily prudent person in a like position would exercise
under similar circumstances, and in a manner the director reasonably believes to
be in the best interests of the corporation. This provision may thus reduce the
likelihood of derivative litigation against directors and discourage or deter
shareholders or management from bringing a lawsuit against directors for breach
of their duty of care, even though such an action, if successful, might
otherwise have been beneficial to the corporation and its share holders.
Shareholders therefore would not have a cause of action against the director
based upon negligent business decisions, including those relating to attempts to
acquire control of the corporation. This provision does not, however, preclude
all equitable remedies for breach of the duty of care, although such remedies
might not be available as a practical matter. AMBANC's Articles provide for
director immunity from personal liability to the fullest extent permitted by the
IBCL and general provisions of corporate law.
INDEMNIFICATION
UPC. Under the TBCA, subject to certain exceptions, a corporation
may indemnify an individual made a party to a proceeding, because he or she is
or was a director, against liability incurred in the proceeding if (i) he or she
conducted himself or herself in good faith; (ii) he or she reasonably believed
(a) 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, and (b) in
all other cases, that his or her conduct was at least not opposed to the
corporation's best interests; and (iii) in the case of any criminal proceeding,
he or she had no reasonable cause to believe his or her conduct was unlawful
(the "Standard of Conduct"). Moreover, unless limited by its articles of
incorporation, a corporation must indemnify a director who was wholly
successful, on the merits or otherwise, in the defense of any proceeding to
which he or she was a party because he or she is or was a director of the
corporation against reasonable expenses incurred by him or her in connection
with the proceeding. Expenses incurred by a director in defending a proceeding
may be paid by the corporation in advance of the final disposition of such
proceeding upon receipt of a written affirmation by the director of his or her
good faith belief that he or she has met the Standard of Conduct, a written
undertaking by or on behalf of a director to repay such amount if it shall
ultimately be determined that he or she is entitled to be indemnified by the
corporation against such expenses and a determination is made that the facts
known to those making the determination would preclude indemnification. Before
any such indemnification is made, it must be determined that such
indemnification would not be precluded by the TBCA.
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A director may also apply for court-ordered indemnification under
certain circumstances. Unless a corporation's articles of incorporation provide
otherwise, (i) 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; (ii) 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 (iii) 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 articles of
incorporation, bylaws, general or specific action of its board of directors, or
contract.
UPC's Charter and Bylaws provide for the indemnification of its
directors and officers, to the fullest extent permitted by Tennessee law.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, or persons controlling
UPC pursuant to the foregoing provisions, UPC has been informed that, in the
opinion of the SEC, such indemnification is against public policy as expressed
in the Securities Act and is therefore unenforceable.
AMBANC. Pursuant to the IBCL and the Articles of Incorporation and
Bylaws of AMBANC, AMBANC is obligated to indemnify certain officers and
directors in connection with liabilities arising from legal proceedings
resulting from such person's service to AMBANC in certain circumstances. AMBANC
may also voluntarily undertake to indemnify certain persons acting on AMBANC's
behalf in certain circumstances.
The IBCL requires corporations, unless limited by their articles
of incorporation, to indemnify any director or officer against reasonable
expenses incurred in connection with any proceeding to which such person was a
party if the individual is wholly successful on the merits. The IBCL authorizes
corporations to indemnify any director, officer, employee or agent against
liability incurred in such a proceeding generally if the individual's conduct
was in good faith and the individual reasonably believed, in the case of conduct
in the individual's official capacity, that his or her conduct was in the
corporation's best interests and in all other cases that his or her conduct was
not opposed to the best interests of such corporation. The IBCL also applies to
individuals who are serving at such corporation's request as directors,
officers, employees and agents of such corporation's subsidiaries.
The IBCL further authorizes any court of competent jurisdiction,
unless the articles of incorporation provide otherwise, to order indemnification
generally if the court determines a director or officer of a corporation is
entitled to mandatory indemnification or is otherwise fairly and reasonably
entitled to indemnification in view of all the relevant circumstances. The IBCL
also authorizes corporations to advance reasonable expenses in advance of final
disposition of a proceeding generally if the individual affirms in writing a
good faith belief that he satisfies the standard of conduct for permissive
indemnification, the individual undertakes in a signed writing to repay the
advance if it is determined he does not satisfy the standard of conduct for
permissive indemnification and the corporation determines that the facts then
known do not preclude indemnification. Finally, the IBCL authorizes further
indemnification to the extent that the corporation may provide in its articles
of incorporation, by-laws, a resolution of the board of directors or the
shareholders or any other authorization, whenever adopted, after notice, by a
majority vote of holders of all the voting shares then issued and outstanding.
Except with respect to the advancement of expenses, AMBANC's Bylaws generally
provide for the indemnification of AMBANC's directors, officers, employees and
agents to the fullest extent permitted by the IBCL.
SPECIAL MEETING OF SHAREHOLDERS
UPC. UPC's Bylaws provide that special meetings of shareholders
may be called, unless otherwise prescribed by law, for any purpose or purposes
whatever 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.
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AMBANC. AMBANC's Bylaws provide that special meetings may be
called by the Board of Directors or the President if demanded in writing by the
holders of shares representing at least 25% of all votes entitled to be cast on
any issue to be considered at the special meeting.
SHAREHOLDER NOMINATIONS AND PROPOSALS
UPC. UPC's Charter and Bylaws do not address whether a shareholder
may nominate members of the Board of Directors.
Holders of UPC Common Stock are entitled to submit proposals to be
presented at an annual meeting of UPC shareholders. The UPC Bylaws provide that
any proposal of a shareholder which is to be presented at any annual meeting of
shareholders shall be sent so as to be received by UPC not less than 120 days in
advance of the date of the proxy statement issued in connection with the
previous year's annual meeting.
AMBANC. AMBANC's Articles and Bylaws do not address the areas of
shareholder nominations and proposals.
BUSINESS COMBINATIONS
UPC. UPC's Charter requires the affirmative vote of the holders of
two-thirds or more of the outstanding UPC Common Stock for approval of a merger,
consolidation, or a sale or lease of all or substantially all of the assets of
UPC if the other party to the transaction is a beneficial owner of 10% or more
of the outstanding shares of UPC. A two-thirds vote is not required for any
merger or consolidation of UPC with or into any corporation or entity of which a
majority of the outstanding shares of all classes of capital stock entitled to
vote in the election of directors is owned by UPC or any UPC company.
The requirement of a supermajority vote of shareholders to approve
certain business transactions, as described above, may discourage a change in
control of UPC by allowing a minority of UPC's 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 thereby enabling management to retain control
over the affairs of UPC and their positions with UPC. The primary purpose of the
supermajority vote requirement, however, is to encourage negotiations with UPC's
management by groups or corporations interested in acquiring control of UPC and
to reduce the danger of a forced merger or sale of assets.
As a Tennessee corporation, UPC is or could be subject to various
legislative acts set forth in Chapter 103 of Title 48 of the Tennessee Code,
which impose certain restrictions on business combinations, including, but not
limited to, combinations with interested shareholders similar to those described
above.
The TBCA generally prohibits a "business combination" (generally
defined to include mergers, share exchanges, sales and leases of assets,
issuances of securities, and similar transactions) by UPC or a subsidiary with
an "interested shareholder" (generally defined as any person or entity which
beneficially owns 10% or more of the voting power of any class or series of
UPC's stock then outstanding) within five years after the person or entity
becomes an interested shareholder, unless the business combination or the
transaction pursuant to which the interested shareholder became such was
approved by the UPC Board before the interested shareholder became such, and the
business combination satisfies any other applicable requirements imposed by law
or by UPC's Charter or Bylaws. The TBCA also severely limits the extent to which
UPC or any of its officers or directors could be held liable for resisting any
business combination.
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The Tennessee Control Share Acquisition Act (the "Tennessee CSAA")
generally provides that any person or group of persons that acquires the power
to vote more than specified levels (one-fifth, one-third, or a majority) of the
shares of certain Tennessee corporations will not have the right to vote such
shares unless granted voting rights by the holders of a majority of the votes
entitled to be cast, excluding "interested shares." Interested shares are those
shares held by the acquiring person, officers of the corporation, and employees
of the corporation who are also directors of the corporation. If approval of
voting power for the shares is obtained at one of the specified levels,
additional shareholder approval is required when a shareholder seeks to acquire
the power to vote shares at the next level. In the absence of such approval, the
additional shares acquired by the shareholder may not be voted until they are
transferred to another person in a transaction other than a control share
acquisition. The Tennessee CSAA applies only to those Tennessee corporations
whose charters or bylaws contain an express declaration that control share
acquisitions in respect of the shares of such corporations are governed by and
subject to the provisions of such act. UPC's Charter and Bylaws do not currently
contain such an express declaration.
The Tennessee Greenmail Act ("Tennessee GA") prohibits a Tennessee
corporation having 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 from purchasing, directly or indirectly, any of its shares at a
price above the market value of such shares (defined as the average of the
highest and lowest closing market price of such shares during the 30 trading
days preceding the purchase or preceding the commencement or announcement of a
tender offer if the seller of such shares has commenced a tender offer or
announced an intention to seek control of the corporation) 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
voting stock issued by such corporation or the corporation makes an offer, of at
least equal value per share, to all holders of shares of such class.
The TBCA provides that no Tennessee corporation having any 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 or any of
its officers or directors may be held liable at law or in equity for either
having failed to approve the acquisition of shares by an interested shareholder
on or before the date such interested shareholder's share acquisition date, or
for seeking to enforce or implement the provisions of the TBCA or the Tennessee
CSAA, or for failing to adopt or recommend any charter or bylaw amendment or
provision in respect of any one or more of these acts or the Tennessee GA, or
for opposing any merger, exchange, tender offer, or significant disposition of
the assets of the resident domestic corporation or any subsidiary of such
corporation because of a good faith belief that such merger, exchange, tender
offer, or significant disposition of assets would adversely affect the
corporation's employees, customers, suppliers, the communities in which the
corporation or its subsidiaries operate or are located or any other relevant
factor if such factors are permitted to be considered by the board of directors
under the corporation's charter in connection with the merger, exchange, tender
offer or significant disposition of assets.
The acts described above along with the provisions of UPC's
Charter regarding business combinations might be deemed to make UPC less
attractive as a candidate for acquisition by another company than would
otherwise be the case in the absence of such provisions. For example, if another
company should seek to acquire a controlling interest of less than 66-2/3% of
the outstanding shares of UPC Common Stock, the acquiror would not thereby
obtain the ability to replace a majority of the UPC Board until at least the
second annual meeting of shareholders following the acquisition, and furthermore
the acquiror would not obtain the ability immediately to effect a merger,
consolidation, or other similar business combination unless the described
conditions were met.
As a result, UPC's shareholders may be deprived of opportunities
to sell some or all of their shares at prices that represent a premium over
prevailing market prices in a takeover context. The provisions described above
also may make it more difficult for UPC's shareholders to replace the UPC Board
or management, even if the holders of a majority of the UPC Common Stock should
believe that such
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replacement is in the interests of UPC. As a result, such provisions may tend to
perpetuate the incumbent UPC Board and management.
AMBANC. The Articles of Incorporation of AMBANC include a
provision imposing certain supermajority vote and minimum price requirements on
any "Business Combination" with a "Related Person" unless the combination has
been approved by the vote of two-thirds of certain members of the Board of
Directors of AMBANC who are not associated with the Related Person. This
provision defines "Business Combination" very broadly to include, subject to
certain conditions, (i) any merger or consolidation of AMBANC or any of its
subsidiaries into or with a Related Person, its affiliates or associates; (ii)
any sale, exchange, lease, transfer or other disposition by AMBANC or any of its
subsidiaries of all or any substantial part of its or their assets or businesses
to or with a Related Person, its affiliates or associates; (iii) the purchase,
exchange, exchange, lease or acquisition by AMBANC or any of its subsidiaries of
all or any substantial part of the assets or business of a Related Person, its
affiliates or associates; (iv) any reclassification of securities,
recapitalization or other transaction that has the effect of increasing the
proportionate amount of AMBANC's Common Stock (or other voting capital security)
beneficially owned by a Related Person; (v) any partial or complete liquidation,
spinoff or split up of AMBANC or any of its subsidiaries; and (vi) the
acquisition by a Related Person of beneficial ownership upon issuance of Common
Stock (or other voting capital shares) of AMBANC or any of its subsidiaries or
any securities convertible into, or any rights, warrants or options to acquire,
any such shares. "Related Person" also is defined broadly to mean any person
(which includes any individual, corporation or entity other than AMBANC or its
subsidiaries ) who (i) beneficially owns ten percent or more of AMBANC Common
Stock (or other voting capital security) (a "Ten Percent Shareholder"); (ii) any
person who within the preceding two-year period has been a Ten Percent
Shareholder and who directly or indirectly controls, is controlled by, or is
under common control with AMBANC; or (iii) any person who has received, other
than pursuant to or in a series of transactions involving a public offering
within the meaning of the Securities Act of 1933, AMBANC Common Stock (or other
voting capital security) that has been owned by a Related Person within the
preceding two-year period. In the absence of approval by the AMBANC Directors
who are not associated with the Related Person or, in the alternative, the
agreement by the Related Person to pay all other shareholders a certain minimum
price for their shares, a Business Combination with a Related Person would
require the approval of 80 percent of the outstanding voting stock plus the
approval of a majority of the outstanding shares that are not controlled by the
Related Person. In general terms, the restrictions apply to mergers or
consolidations of AMBANC or any subsidiary with any Related Person, transfers or
encumbrances of all or substantially all of the assets of AMBANC to a Related
Person, the adoption of any plan of liquidation proposed by a Related Person or
any transaction which would have the effect, directly or indirectly, of
increasing the proportionate share of any class of equity securities of AMBANC
or any shareholder (including affiliates and associates) who is the beneficial
owner of more than 10 percent of the voting power of the then outstanding shares
entitled to vote generally in the election of Directors of AMBANC. Absent the
provision regulating Business Combinations, mergers, consolidations, and sales
of all or substantially all assets would require only the approval of a majority
of the Board of Directors and (subject to the rights of any Preferred Stock
issued in the future) the affirmative vote of a majority of the total number of
outstanding shares of AMBANC entitled to vote on the matter.
DISSENTERS' RIGHTS OF APPRAISAL
UPC. Under the TBCA, a shareholder is generally entitled to
dissent from a corporate action, and obtain payment of the fair value of his
shares in the event of: (i) consummation of a plan of merger to which the
corporation is a party, unless shareholder approval is not required by the TBCA;
(ii) consummation of a plan of share exchange to which the corporation is a
party as the corporation whose shares will be acquired if the shareholder is
entitled to vote on the plan; (iii) consummation of a sale or exchange of
substantially all of the corporation's property other than in the usual and
regular course of business, if the shareholder is entitled to vote on the sale
or exchange, including a sale in dissolution, but not including a sale pursuant
to court order or to a plan by which substantially all of the net proceeds of
the sale will be distributed in cash to the shareholders within one year after
the date of sale; (iv) an amendment of the charter that materially and adversely
affects rights in respect of a dissenter's shares because it (a) alters or
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abolishes a preferential right of the shares, (b) creates, alters, or abolishes
a right in respect of redemption of the shares, including a provision respecting
a sinking fund for the redemption or repurchase of the shares, (c) alters or
abolishes a preemptive right of the holder of the shares to acquire shares or
other securities, (d) excludes or limits the right of the shares to vote on any
matter, or to cumulate votes, other than a limitation by dilution through
issuance of shares or other securities with similar voting rights, or (e)
reduces the number of shares owned by the shareholder to a fraction of a share
if the fractional share so created is to be acquired for cash under the TBCA; or
(v) any corporate action taken pursuant to a shareholder vote, to the extent the
charter, bylaws, or a resolution of the board of directors provide that voting
or nonvoting shareholders are entitled to dissent and obtain payment for their
shares. UPC's Charter and Bylaws do not provide for any such additional
dissenters' rights.
AMBANC. The rights of appraisal of dissenting shareholders of
AMBANC are governed by the IBCL, which generally provides that the holders of
shares which are traded on the Nasdaq National Market System do not have
dissenters' rights. The shareholders of AMBANC accordingly will not have
dissenters' rights in the Merger because the AMBANC Common Stock is traded on
the Nasdaq National Market.
DIVIDENDS
UPC. UPC's ability to pay dividends on UPC Common Stock is
governed by Tennessee corporate law. Under Tennessee corporate law, dividends
may be paid so long as the corporation would be able to pay its debts as they
become due in the ordinary course of business and the corporation's total assets
would not be less than the sum of its total liabilities plus the amount that
would be needed, if the corporation were to be dissolved at the time of the
distribution, to satisfy the preferential rights upon dissolution to
shareholders whose preferential rights are superior to those receiving the
distribution.
There are various statutory limitations on the ability of the UPC
Banking Subsidiaries to pay dividends to UPC. See "CERTAIN REGULATORY
CONSIDERATIONS -- Payment of Dividends."
AMBANC. Subject to any preferential dividend rights of a series of
shares of Preferred Stock, the holders of AMBANC Common Stock are entitled to
receive dividends as and when declared by the Board of Directors from funds
legally available for their payment. A dividend may be paid by AMBANC only if,
after paying such dividend, (1) AMBANC would be able to pay its debts as they
become due in the usual course of business, and (2) AMBANC total assets would
not be less than the sum of its total liabilities (and without regard to any
amounts that would be needed, if AMBANC were to be dissolved at the time of the
dividend, to satisfy the preferential rights upon dissolution of any
shareholders whose preferential rights are superior to those receiving the
dividend, unless the Board provides otherwise by means of an amendment to the
Articles of Incorporation that designates the terms of the shares having such
preferential rights). Furthermore, because funds for the payment of dividends by
AMBANC must come primarily from the earnings of its subsidiary banks,
restrictions on the amount of dividends that the subsidiary banks may pay also
restrict the amount of funds available for payment of dividends by AMBANC.
COMPARATIVE MARKET PRICES AND DIVIDENDS
UPC Common Stock is traded on the NYSE under the symbol "UPC."
AMBANC Common Stock is quoted on the Nasdaq National Market under the symbol
"AMBK." The following table sets forth, for the indicated periods, the high and
low closing sale prices for the UPC Common Stock and AMBANC Common Stock as
reported by the NYSE and Nasdaq National Market, respectively, and the cash
dividends declared per share of UPC Common Stock and AMBANC Common Stock for the
indicated periods. 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.
50
<PAGE> 62
<TABLE>
<CAPTION>
UPC AMBANC
--- ------
Cash Cash
Price Range Dividends Price Range Dividends
----------- Declared ----------- Declared
Per Per
High Low Share High Low Share
-------- -------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
1998
First Quarter $ 67.31 $ 58.38 $ .50 $ 31.00 $ 23.875 $ .12
Second Quarter
(through June 3,
1998) 62.56 56.44 .50 530.00 $ 26.75 $ .12
--------- --------
Total $ 1.00 $ .24
========= ========
1997
First Quarter $ 47.75 $ 38.38 $ .320 $ 17.86 $ 13.81 .10
Second Quarter 52.13 41.25 .375 718.33 16.42 .1048
Third Quarter 56.50 49.25 .400 24.88 17.73 .1048
Fourth Quarter 67.88 57.00 .400 25.50 21.67 .1048
---------
Total $ 1.495 $ 41.44
========= ========
1996
First Quarter $ 31.75 $ 29.00 $ .27 $ 14.73 $ 13.38 .0952
Second Quarter 31.25 29.63 .27 14.28 13.03 .0952
Third Quarter 36.25 28.63 .27 14.63 12.92 .0952
Fourth Quarter 41.38 34.63 .27 14.73 13.27 .0952
---------
Total $ 1.08 $ 38.08
========= ========
</TABLE>
- ---------------
On June 3, 1998, the last sale prices of UPC Common Stock and
AMBANC Common Stock as reported on the NYSE and Nasdaq National Market,
respectively, were $56.44 and $26.75 per share, respectively. On March 31, 1998,
the last business day prior to public announcement of the proposed Merger, the
last sale prices of the UPC Common Stock and AMBANC Common Stock as reported by
the NYSE and Nasdaq National Market, respectively, were $62.188 and $29.75,
respectively.
The holders of UPC Common Stock are entitled to receive dividends
when and if declared by the Board of Directors out of funds legally available
therefor. Although UPC currently intends to continue to pay quarterly cash
dividends on the UPC Common Stock, there can be no assurance that UPC's 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 AMBANC may
not declare and pay cash dividends, other than regular quarterly cash dividends,
on the shares of AMBANC Common Stock.
UPC and AMBANC 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. UPC's and AMBANC'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."
51
<PAGE> 63
BUSINESS OF AMBANC
GENERAL
AMBANC, headquartered in Vincennes, Indiana, is a bank holding
company registered with the Federal Reserve under the BHC Act. AMBANC conducts a
complete range of commercial and personal banking activities through its banking
subsidiaries, AMBANC Indiana, N.A. and AMBANC Illinois, N.A. The AMBANC Banks
operates 26 branches in five Indiana counties and three Illinois counties.
AMBANC is an Indiana corporation incorporated on January 7, 1982
to become the bank holding company for its banking subsidiaries. As of March 31,
1998, AMBANC had total consolidated assets of approximately $733.5 million,
total consolidated loans of approximately $549.6 million, total consolidated
deposits of approximately $629.0 million, and total consolidated shareholders'
equity of approximately $79.5 million.
The principal executive offices of AMBANC are located at 302 Main
Street, Vincennes, Indiana and its telephone number at such address is (812)
882-3050. Additional information with respect to AMBANC and its subsidiaries is
included elsewhere herein and in documents incorporated by reference in this
Proxy Statement. See "AVAILABLE INFORMATION" and "DOCUMENTS INCORPORATED BY
REFERENCE."
BENEFICIAL OWNERSHIP OF AMBANC COMMON STOCK
To the knowledge of AMBANC, no person beneficially owns 5.0% or
more of the outstanding shares of AMBANC common stock.
BUSINESS OF UPC
GENERAL
UPC, a Tennessee corporation, is a bank holding company registered
with the Federal Reserve under the BHC Act. As of March 31, 1998, UPC had total
consolidated assets of approximately $18.4 billion, total consolidated loans of
approximately $12.7 billion, total consolidated deposits of approximately $13.6
billion, and total consolidated shareholders' equity of approximately $1.8
billion.
UPC conducts its business activities through its principal bank
subsidiary, the $15.7 billion asset UPB founded in 1869 and headquartered in
Memphis, Tennessee, with branches in Alabama, Kentucky, Louisiana, Mississippi,
Missouri and Tennessee. UPC also had, as of March 31, 1998, four other financial
institution subsidiaries, the largest of which being Union Planters Bank of
Florida, Miami, Florida, which had total consolidated assets as of March 31,
1998 of approximately $2.2 billion. Effective January 1, 1998, UPC consolidated
substantially all of its bank subsidiaries into UPB. It is likely that UPC will
continue to consolidate its various bank subsidiaries into UPB in the future, to
the extent allowed by law. Through the UPC Banking Subsidiaries, UPC provides a
diversified range of financial services in the communities in which it operates
and maintains approximately 518 banking offices and 676 ATMs. UPC's total
deposits at March 31, 1998 are allocable by state to its banking offices (before
consolidating adjustments) approximately as follows: $6.7 billion in Tennessee;
$2.9 billion in Mississippi; $1.3 billion in Florida; $1.2 billion in Missouri;
$596 million in Arkansas; $598 million in Louisiana; $412 million in Alabama;
and $103 million in Kentucky.
Acquisitions have been, and are expected to continue to be, an
important part of the expansion of UPC's business. UPC completed 13 acquisitions
in 1994, three in 1995, seven in 1996, and six in 1997,
52
<PAGE> 64
adding approximately $3.8 billion in total assets in 1994, $1.3 billion in 1995,
$4.2 billion in 1996, and $3.6 billion in 1997. Through June 1, 1998, UPC has
completed the acquisition of two institutions with approximately $520 million in
total assets (the "Recently Completed Acquisitions"). In addition, UPC was, as
of that date, a party to definitive agreements to acquire ten financial
institutions, in addition to AMBANC, and to purchase certain branch locations
and assume deposit liabilities of California Federal Bank in Florida ("CalFed
Branch Purchase") (collectively, the "Other Pending Acquisitions"). The Other
Pending Acquisitions had aggregate total assets of approximately $12.4 billion
at March 31, 1998. Collectively, the Recently Completed Acquisitions and the
Other Pending Acquisitions are referred to herein as the "Other Acquisitions."
The largest of the Other Pending Acquisitions is UPC's proposed acquisition of
Magna Group, Inc. ("MGR"), St. Louis, Missouri, which had total consolidated
assets of approximately $7.3 billion at March 31, 1998. On May 1, 1998, MGR
acquired Charter Financial, Inc. and its subsidiary, Charter Bank, S.B. (the
"Charter Acquisition") in a transaction accounted for as a purchase. Located in
Sparta, Illinois, Charter Financial, Inc. had at March 31, 1998, total assets of
approximately $406 million, total deposits of approximately $309 million, and
total shareholders' equity of approximately $67 million. For purposes of this
Proxy Statement, including the historical and equivalent pro forma data, the
term "Other Acquisitions" and "Other Pending Acquisitions" includes the Charter
Acquisition. For information with respect to these acquisitions see "-- Recent
Develop ments." For a discussion of UPC's acquisition program, see the caption
"Acquisitions" (pages 10, 11 and 12) in UPC's Annual Report to Shareholders and
Note 2 to UPC's audited consolidated financial statements for the years ended
December 31, 1997, 1996, and 1995 (pages 49 and 50) contained in such Annual
Report to Shareholders. UPC's Annual Report to Shareholders is included as
Exhibit 13 to UPC's 1997 Form 10-K and Exhibit 13 is incorporated by reference
herein to the extent indicated herein.
UPC expects to continue to take advantage of the consolidation of
the financial services industry by further developing its franchise through the
acquisition of financial institutions. Future acquisitions may entail the
payment by UPC of consideration in excess of the book value of the underlying
net assets acquired, may result in the issuance of additional shares of UPC
capital stock or the incurring of additional indebtedness by UPC, and could have
a dilutive effect on the earnings or book value per share of UPC 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 UPC 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 UPC and
its subsidiaries is included in documents incorporated by reference in this
Proxy Statement. See "AVAILABLE INFORMATION" and "DOCUMENTS INCORPORATED BY
REFERENCE."
RECENT DEVELOPMENTS
RECENTLY COMPLETED ACQUISITIONS. Since December 31, 1997, UPC has
completed the acquisition of two institutions (the "Recently Completed
Acquisitions").
53
<PAGE> 65
<TABLE>
<CAPTION>
Asset Size
Institution (In Millions) Type of Consideration
----------- ------------- ---------------------
<S> <C> <C>
Sho-Me Financial Corp. $374 Approximately 1,153,459
Mt. Vernon, Missouri and Shares of UPC Common Stock
its subsidiary, 1st Savings
Bank, f.s.b.
Security Bancshares, Inc., Des 146 Approximately 490,888 shares
Arc, Arkansas, and its subsid of UPC Common Stock
iaries, Farmers & Merchants
----
TOTAL $520
====
</TABLE>
OTHER PENDING ACQUISITIONS. UPC has entered into definitive
agreements to acquire the following financial institutions in addition to AMBANC
(collectively, the Other Pending Acquisitions and, together with the Recently
Completed Acquisitions, the "Other Acquisitions") which UPC's management
considers probable of consummation and which are expected to close in 1998. The
largest of the Other Pending Acquisitions is UPC's proposed acquisition of MGR.
MGR acquired Charter Financial, Inc. and its subsidiary Charter Bank, S.B. on
May 1, 1998 (the "Charter Acquisition"). Charter is located in Sparta, Illinois
and at the time of the Charter Acquisition had total assets of approximately
$406 million. For the purpose of this Proxy Statement, including the pro forma
financial information included herein, the term "Other Pending Acquisitions"
includes the Charter Acquisition.
<TABLE>
<CAPTION>
Asset Size Projected
Institution (in Millions)(1) Type of Consideration(2) Closing Date
----------- ---------------- ------------------------ ------------
<S> <C> <C> <C>
Magna Group, Inc., St. Louis, $7,657 Approximately 35,446,000 shares 3rd Quarter
Missouri, and its subsidiaries, of UPC Common Stock 1998
including Magna Bank, NA., St.
Louis, Missouri
Peoples First Corporation, 1,493 Approximately 6,015,000 shares 3rd Quarter
Paducah, Kentucky, and its of UPC Common Stock 1998
subsidiary, The Peoples First
National Bank & Trust Company
of Paducah, Kentucky
Purchase of 24 branches and 1,465 $110 million deposit premium in 3rd Quarter
assumption of $1.5 billion of cash 1998
deposits of California Federal
Bank in Florida ("CalFed Branch
Purchase")
Merchants Bancshares, Inc., 552 Approximately 2,000,000 shares 3rd Quarter
Houston, Texas, and its of UPC Common Stock 1998
subsidiaries, including Mercha
nts Bank, Houston, Texas
</TABLE>
54
<PAGE> 66
<TABLE>
<CAPTION>
Asset Size Projected
Institution (in Millions)(1) Type of Consideration(2) Closing Date
----------- ---------------- ------------------------ ------------
<S> <C> <C> <C>
Transflorida Bank, Boca Raton, 318 Approximately 1,655,000 shares 3rd Quarter
Florida of UPC Common Stock 1998
CB&T, Inc., McMinnville, Ten 271 Approximately 1,450,000 shares 3rd Quarter
nessee, and its subsidiary, City of UPC Common Stock 1998
Bank & Trust Company, McMi
nnville, Tennessee
Capital Savings Bancorp, Inc., 232 Approximately 801,000 shares of 3rd Quarter
Jefferson City, Missouri, and its UPC Common Stock 1998
subsidiary, Capital Savings
Bank, FSB, Jefferson City, Mis
souri
First National Bancshares of 217 Approximately 836,000 shares of 3rdQuarter
Wetumpka, Inc., Wetumpka, UPC Common Stock 1998
Alabama, and its subsidiary,
First National Bank, Wetumpka,
Alabama
Alvin Bancshares, Inc., Alvin, 121 Approximately 425,000 shares of 3rd Quarter
Texas, and its subsidiary, Alvin UPC Common Stock 1998
State Bank, Alvin, Texas
First Community Bancshares, 41 Approximately 129,000 shares of 3rd Quarter
Inc., Middleton, TN, and its UPC Common Stock 1998
subsidiary, Bank of Middleton,
Middleton, Tennessee
Duck Hill Bank, Duck Hill, Mis 20 Approximately 42,000 shares of 3rd Quarter
sissippi ------- UPC Common Stock 1998
TOTAL $12,387
=======
</TABLE>
- ---------------
(1) Approximate total assets at March 31, 1998.
(2) Assumes no adjustment to shares pursuant to exchange rates adjustment
mechanisms.
(3) Includes the pro forma impact of the Charter Acquisition.
EARNINGS CONSIDERATIONS RELATED TO THE MERGER AND THE OTHER
ACQUISITIONS. It is expected that either UPC or the institutions to be acquired
in connection with the Merger and the Other Acquisitions will incur charges
arising from such acquisitions and from the assimilation of those institutions
into the UPC organization. Most of the charges are expected to relate to MGR and
Peoples. Anticipated charges would normally arise from matters such as, but not
limited to: (i) legal, accounting, financial advisory and consulting fees; (ii)
payment of contractual benefits triggered by a change of control, early
retirement and involuntary separation and related benefits; (iii) costs
associated with elimination of duplicate facilities and branch consolidations;
(iv) data processing charges; (v) cancellation of vendor contracts; and (vi)
other contingencies and similar costs which normally arise from the
consolidation of operational activities.
55
<PAGE> 67
For a discussion of the significant charges UPC has incurred over
the past three years incidental to its acquisition program, see the caption
"Acquisitions" in UPC's Annual Report to Shareholders and Note 2 to UPC's
audited consolidated financial statements for the years ended December 31, 1997,
1996, and 1995 contained in such Annual Report to Shareholders. UPC's Annual
Report to Shareholders is included as Exhibit 13 to UPC's 1997 Form 10-K and
Exhibit 13 is incorporated by reference herein to the extent indicated herein.
The Merger and the Other Acquisitions (with the exception of the
Charter Acquisition which was, and Duck Hill Bank, the Charter Acquisition and
the CalFed Purchase which are expected to be accounted for as purchases) are
expected to be accounted for as pooling of interests. UPC currently estimates
incurring aggregate pre-tax charges in the range of $100 million to $115 million
(approximately $91 million related to MGR) in connection with the consummation
of the Merger and the Other Acquisitions. On an after-tax basis these charges
are estimated in the range of $75 million to $80 million (approximately $61
million related to MGR). To the extent that UPC's 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. The pro forma impact of these charges is reflected in the
pro forma balance sheet information included in this Proxy Statement. See
"SUMMARY - Historical and Pro Forma Per Share Data" and "PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL INFORMATION".
The range of anticipated charges to be incurred in connection with
consummating the Merger and the Other Acquisitions is a preliminary estimate of
the significant charges which may, in the aggregate, be required and should be
viewed accordingly. These charges are not reflected in the pro forma
consolidated balance sheet included in this Proxy Statement. Moreover, this
range has been based on the due diligence that has been performed to date in
connection with Merger and the Other Acquisitions and 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 entries are required. UPC regularly evaluates the potential
acquisition of, and holds discussions with, various potential acquisition
candidates. As a general rule, UPC will publicly announce such acquisitions only
after a definitive agreement has been reached, and only then if UPC 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 UPC regularly engages in acquisition, such
range could change, and AMBANC's shareholders should view such information
accordingly.
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following tables contain unaudited pro forma condensed consolidated
financial statements including a balance sheet as of March 31, 1998 and
statements of earnings for the three months ended March 31, 1998 and for the
years ended December 31, 1997, 1996, and 1995. These statements present on a pro
forma basis historical results for (i) UPC for all periods, (ii) UPC and MGR for
all periods, (iii) UPC, AMBANC and the Other Acquisitions (including MGR) for
the three months ended March 31, 1998 and for the year ended December 31, 1997,
and (iv) UPC, AMBANC, MGR, Peoples and Merchants for the years ended December
31, 1996 and 1995 (see "BUSINESS OF UPC--Recent Developments").
The Merger and all but four of the Other Acquisitions, are expected to be
accounted for using the pooling-of-interests method of accounting. The pro forma
information as of March 31, 1998 and for the three months ended March 31, 1998
and for the year ended December 31, 1997, reflect the acquisition of AMBANC and
the Other Acquisitions as of January 1, 1997. The pro forma information for the
years ended December 31, 1996 and 1995, reflect only the acquisition of AMBANC,
MGR, Peoples and Merchants because the Other
56
<PAGE> 68
Acquisitions (other than MGR, Peoples and Merchants) are not individually or in
the aggregate, considered material to UPC from a financial statement
presentation standpoint. Pro forma financial information are presented for
information purposes only and are not necessarily indicative of the results of
operations or combined financial position that would have resulted had the
Merger or the Other Acquisitions been consummated at the dates or during the
periods indicated, nor are they necessarily indicative of future results
of operations or combined financial position. The pro forma balance sheet
reflects preliminary estimates by UPC of acquisition-related charges to be
incurred in connection with consummation of the Merger and the Other
Acquisitions; however, the statements of earnings do not reflect these charges.
For additional information with respect to the estimated charges UPC anticipates
it would incur in connection with the Merger and the Other Acquisitions, see
"BUSINESS OF UPC--Recent Developments." For a discussion of UPC's acquisition
program, including a discussion of the significant charges UPC has incurred
incidental to acquisitions over the past three fiscal years, see the caption
"Acquisitions" (on pages 10, 11 and 12) in UPC's 1997 Annual Report to
Shareholders and Note 2 to UPC's audited consolidated financial statements for
the years ended December 31, 1997, 1996, and 1995 (on pages 49 and 50) contained
in such UPC 1997 Annual Report to Shareholders. UPC's 1997 Annual Report to
Shareholders is included as Exhibit 13 to UPC's 1997 Form 10-K, and Exhibit 13
is incorporated by reference herein to the extent indicated herein. See
"DOCUMENTS INCORPORATED BY REFERENCE."
The unaudited pro forma condensed consolidated financial statements should
be read in conjunction with the consolidated historical financial statements of
UPC which are incorporated by reference herein. Pro forma results are not
necessarily indicative of future operating results.
57
<PAGE> 69
UNION PLANTERS CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 1998
<TABLE>
<CAPTION>
UPC, MGR,
Pro Forma UPC and MGR AMBANC and
UPC MGR Adjustments Other
Acquisitions
-------------------------------------------------------------------------------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and due from banks ........................ $ 660,528 $ 220,317 $ 880,845 $ 1,008,839
Interest-bearing deposits at financial
institutions................................... 20,425 -- 20,425 49,640
Federal funds sold and securities purchased
under agreements to resell..................... 309,415 95,126 404,541 545,801
Trading account assets ......................... 163,698 -- 163,698 163,698
Loans held for resale .......................... 253,021 -- 253,021 259,017
Investment securities .......................... 3,287,664 2,239,113 5,526,777 7,812,071
Loans .......................................... 12,754,653 4,379,021 17,133,674 20,272,013
Less: Unearned income ....................... (26,994) (93) (27,087) (34,152)
Allowance for losses on loans ......... (223,837) (59,928) (283,765) (320,107)
------------ ----------- ------------ ------------
Net loans .................................... 12,503,822 4,319,000 16,822,822 19,917,754
Premises and equipment ......................... 338,799 117,253 456,052 534,387
Accrued interest receivable .................... 196,595 46,523 243,118 279,665
FHA/VA claims receivable ....................... 138,626 -- 138,626 138,626
Mortgage servicing rights ...................... 98,089 1,237 99,326 99,832
Goodwill and other intangibles ................. 78,927 120,951 199,878 375,339
Other assets ................................... 364,005 91,098 29,060 (b) 484,163 519,252
------------ ----------- ------------ ------------ ------------
Total assets .............................. $ 18,413,614 $ 7,250,618 $ 29,060 $ 25,693,292 $ 31,703,921
============ =========== ============ ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest-bearing .......................... $ 2,290,776 $ 641,300 $ 2,932,076 $ 3,781,318
Certificates of deposit of $100,000
and over .................................... 1,417,728 932,141 2,349,869 2,854,920
Other interest-bearing ....................... 9,872,723 3,973,247 13,845,970 17,696,215
------------ ----------- ------------ ------------
Total deposits ............................ 13,581,227 5,546,688 -- 19,127,915 24,332,453
Short-term borrowings .......................... 442,051 891,706 1,333,757 1,365,605
Short and medium-term bank notes ............... 135,000 -- 135,000 139,743
Federal Home Loan Bank advances ................ 846,291 106,370 952,661 1,215,073
Other long-term debt ........................... 1,022,644 9,513 1,032,157 1,037,766
Accrued interest, expenses and taxes ........... 182,422 76,604 $ 90,511 (b) 349,537 406,185
Other liabilities .............................. 394,537 8,759 403,296 410,918
------------ ----------- ------------ ------------ ------------
Total liabilities ......................... 16,604,172 6,639,640 90,511 23,334,323 28,907,743
------------ ----------- ------------ ------------ ------------
Shareholders' equity
Convertible preferred stock .................. 36,972 40 37,012 37,012
Common stock ................................. 419,326 68,075 89,631 (a) 577,032 662,544
Additional paid-in capital ................... 272,157 343,601 (150,257)(a) 457,905 580,938
(7,596)(b)
Retained earnings ............................ 1,060,029 267,982 (61,451)(b) 1,266,560 1,489,763
Treasury stock ............................... -- (60,626) 60,626 (a) -- --
Unearned compensation ........................ (9,550) (7,596) 7,596 (b) (9,550) (10,021)
Net unrealized gain on available
for sale securities.......................... 30,508 (498) -- 30,010 35,942
------------ ----------- ------------ ------------ ------------
Total shareholders' equity ................ 1,809,442 610,978 (61,451) 2,358,969 2,796,178
------------ ----------- ------------ ------------ ------------
Total liabilities and shareholders' equity $ 18,413,614 $ 7,250,618 $ 29,060 $ 25,693,292 $ 31,703,926
============ =========== ============ ============ ============
</TABLE>
(a) Issuance of shares to acquire MGR (32,563,752 MGR shares outstanding times
the exchange ratio of .9686 equals 31,541,250 sharess of UPC Common Stock to be
issued).
(b) Acquisition related charges -- see "Business of UPC -- Recent Developments
- -- Earnings Considerations Related to the Merger and the Other Pending
Acquisitions".
58
<PAGE> 70
UNION PLANTERS CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
FOR THE THREE MONTHS ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
UPC, MGR,
UPC and AMBANC
UPC MGR and Other
Acquisitions
-----------------------------------------------
(Dollars in thousands, except per share data)
<S> <C> <C> <C>
Interest income .............................................. $292,160 $388,325 $465,341
Interest and fees on loans
Interest on investment securities
Taxable .................................................. 41,475 69,870 83,000
Tax-exempt ............................................... 7,066 10,836 13,777
Interest on deposits at financial institutions ............. 424 470 735
Interest on federal funds sold and securities purchased
under agreements to resell ............................... 2,710 4,837 6,387
Interest on trading account assets ......................... 3,020 3,020 3,020
Interest on loans held for resale .......................... 2,280 2,280 2,383
-------- -------- --------
Total interest income .................................... 349,135 479,638 574,643
-------- -------- --------
Interest expense
Interest on deposits ....................................... 124,085 179,549 221,207
Interest on short-term borrowings .......................... 6,016 17,237 21,987
Interest on long-term debt ................................. 28,327 29,936 30,779
-------- -------- --------
Total interest expense ................................... 158,428 226,722 273,973
-------- --------
Net interest income ...................................... 190,707 252,916 300,670
Provision for losses on loans ................................ 17,909 21,459 24,775
-------- -------- --------
Net interest income after provision for losses on loans .. 172,798 231,457 275,895
-------- -------- --------
Noninterest income
Service charges on deposit accounts ........................ 25,746 32,074 36,435
Mortgage servicing income .................................. 16,191 16,453 16,890
Bank card income ........................................... 7,498 9,426 9,641
Factoring commissions ...................................... 7,304 7,304 7,304
Trust service income ....................................... 2,407 5,723 6,381
Profits and commissions from trading activities ............ 1,847 1,848 1,848
Investment securities gains ................................ 5,215 5,811 6,552
Other income ............................................... 29,510 41,058 43,559
-------- -------- --------
Total noninterest income ................................. 95,718 119,697 128,610
-------- -------- --------
Noninterest expense
Salaries and employee benefits ............................. 73,230 96,595 113,940
Net occupancy expense ...................................... 10,644 15,473 18,137
Equipment expense .......................................... 10,997 13,694 16,052
Other expense .............................................. 58,753 77,892 90,669
-------- -------- --------
Total noninterest expense ................................ 153,624 203,654 238,798
-------- -------- --------
Earnings before income taxes ............................. 114,892 147,500 165,707
Applicable income taxes .................................... 40,320 52,417 59,139
-------- -------- --------
$ 74,572 $ 95,083 $106,568
======== ======== ========
Net earnings
Earnings per common share
Basic ...................................................... $ .89 $ .82 $ .80
Diluted .................................................... .86 .79 .78
Weighted average shares outstanding (in thousands)
Basic ...................................................... 83,379 114,868 131,931
Diluted .................................................... 86,974 120,157 137,409
</TABLE>
59
<PAGE> 71
UNION PLANTERS CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
UPC, MGR,
AMBANC and
UPC UPC and MGR Other
Acquisitions
------------------------------------------------------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
Interest income .............................................. $1,165,925 $1,536,829 $1,839,742
Interest and fees on loans
Interest on investment securities
Taxable .................................................. 187,221 290,351 343,598
Tax-exempt ............................................... 29,032 40,516 52,133
Interest on deposits at financial institutions ............. 2,627 2,627 3,179
Interest on federal funds sold and securities purchased
under agreements to resell ............................... 9,114 13,760 18,554
Interest on trading account assets ......................... 14,956 14,956 14,956
Interest on loans held for resale .......................... 7,819 7,819 7,982
---------- ---------- ----------
Total interest income .................................... 1,416,694 1,906,858 2,280,144
---------- ---------- ----------
Interest expense
Interest on deposits ....................................... 494,517 698,778 860,526
Interest on short-term borrowings .......................... 41,280 81,980 104,620
Interest on long-term debt ................................. 110,512 116,687 120,184
---------- ---------- ----------
Total interest expense ................................... 646,309 897,445 1,085,330
---------- ---------- ----------
Net interest income ...................................... 770,385 1,009,413 1,194,814
Provision for losses on loans ................................ 113,633 142,580 154,163
---------- ---------- ----------
Net interest income after provision for losses on loans .. 656,752 866,833 1,040,651
Noninterest income
Service charges on deposit accounts ........................ 107,248 133,352 151,454
Mortgage servicing income .................................. 57,265 57,265 58,051
Bank card income ........................................... 31,317 38,544 39,239
Factoring commissions ...................................... 30,140 30,140 30,140
Trust service income ....................................... 9,020 21,663 24,355
Profits and commissions from trading activities ............ 7,295 7,295 7,295
Investment securities gains ................................ 2,104 4,688 5,481
Other income ............................................... 117,221 139,945 153,075
---------- ---------- ----------
Total noninterest income ................................. 361,610 432,892 469,090
---------- ---------- ----------
Noninterest expense
Salaries and employee benefits ............................. 284,648 372,959 440,212
Net occupancy expense ...................................... 44,813 64,140 73,676
Equipment expense .......................................... 43,812 53,579 62,466
Other expense .............................................. 324,431 379,663 430,225
---------- ---------- ----------
Total noninterest expense ................................ 697,704 870,341 1,006,579
---------- ---------- ----------
Earnings before income taxes ............................. 320,658 429,384 503,162
Applicable income taxes .................................... 111,897 147,948 173,787
---------- ---------- ----------
$ 208,761 $281,436 $329,375
========== ========== ==========
Net earnings
Earnings per common share
Basic ...................................................... $ 2.54 $ 2.48 $ 2.52
Diluted .................................................... 2.45 2.40 2.45
Weighted average shares outstanding (in thousands)
Basic ...................................................... 80,336 111,418 128,555
Diluted........................................................ 85,195 117,884 135,180
</TABLE>
60
<PAGE> 72
UNION PLANTERS CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
UPC, MGR,
AMBANC,
UPC UPC and MGR and Other
Acquisitions
--------------------------------------------------------
(Dollars in thousands, except per share data)
<S> <C> <C> <C>
Interest income .............................................. $1,095,148 $1,380,299 $1,535,342
Interest and fees on loans
Interest on investment securities
Taxable .................................................. 247,716 340,745 372,233
Tax-exempt ............................................... 30,839 37,980 45,560
Interest on deposits at financial institutions ............. 1,593 1,593 1,910
Interest on federal funds sold and securities
purchased under agreements to resell ..................... 16,948 19,462 21,664
Interest on trading account assets ......................... 13,895 13,895 13,895
Interest on loans held for resale .......................... 6,852 6,852 7,241
---------- ---------- ----------
Total interest income .................................... 1,412,991 1,800,826 1,997,845
---------- ---------- ----------
Interest expense
Interest on deposits ....................................... 512,668 670,856 755,680
Interest on short-term borrowings .......................... 64,689 93,501 100,543
Interest on long-term debt ................................. 90,782 97,530 97,680
---------- ---------- ----------
Total interest expense ................................... 668,139 861,887 953,903
---------- ---------- ----------
Net interest income ...................................... 744,852 938,939 1,043,942
Provision for losses on loans ................................ 68,948 79,228 84,198
---------- ---------- ----------
Net interest income after provision for losses on
loans ....................................................... 675,904 859,711 959,744
---------- ---------- ----------
Noninterest income
Service charges on deposit accounts ........................ 107,535 130,978 141,119
Mortgage servicing income .................................. 63,003 63,003 63,003
Bank card income ........................................... 24,975 30,988 31,636
Factoring commissions ...................................... 26,066 26,066 26,066
Trust service income ....................................... 10,130 19,512 21,496
Profits and commissions from trading activities ............ 5,765 5,765 5,765
Investment securities gains ................................ 4,099 4,916 4,942
Other income ............................................... 78,929 89,632 94,739
---------- ---------- ----------
Total noninterest income ................................. 320,502 370,860 388,766
---------- ---------- ----------
Noninterest expense
Salaries and employee benefits ............................. 282,726 351,868 388,972
Net occupancy expense ...................................... 47,215 65,195 70,142
Equipment expense .......................................... 44,418 53,149 60,704
Other expense .............................................. 357,458 399,991 422,915
---------- ---------- ----------
Total noninterest expense ................................ 731,817 870,203 942,733
---------- ---------- ----------
Earnings before income taxes ............................. 264,589 360,368 405,777
Applicable income taxes .................................... 93,115 125,755 139,649
---------- ---------- ----------
Net earnings.............................................. $ 171,474 $ 234,613 $ 266,128
========== ========== ==========
Earnings per common share
Basic ...................................................... $ 2.13 $ 2.18 $ 2.24
Diluted .................................................... 2.05 2.11 2.17
Weighted average shares outstanding (in thousands)
Basic ...................................................... 77,240 104,539 115,726
Diluted .................................................... 83,542 112,425 123,714
</TABLE>
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<PAGE> 73
UNION PLANTERS CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
UPC, MGR,
UPC PEOPLES,
AND AMBANC AND
UPC MGR MERCHANTS
---------------------------------------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
Interest income
Interest and fees on loans ................................ $ 986,230 $1,252,376 $ 1,388,252
Interest on investment securities
Taxable ................................................ 202,890 274,743 304,771
Tax-exempt ............................................. 32,400 39,666 47,200
Interest on deposits at financial institutions ............ 5,284 5,284 6,153
Interest on federal funds sold and securities
purchased under agreements to resell ..................... 19,965 21,868 24,547
Interest on trading account assets ........................ 14,191 14,191 14,191
Interest on loans held for resale ......................... 4,858 4,858 5,184
--------- ---------- -----------
Total interest income .................................. 1,265,818 1,612,986 1,790,298
--------- ---------- -----------
Interest expense
Interest on deposits ...................................... 478,641 616,666 695,224
Interest on short-term borrowings ......................... 44,492 64,725 70,706
Interest on long-term debt ................................ 73,234 79,293 79,674
--------- ---------- -----------
Total interest expense ................................. 596,367 760,684 845,604
--------- ---------- -----------
Net interest income .................................... 669,451 852,302 944,694
Provision for losses on loans ................................ 33,917 43,909 47,393
--------- ---------- -----------
Net interest income after provision for
losses on loans ....................................... 635,534 808,393 897,301
Noninterest income
Service charges on deposit accounts ....................... 102,932 125,419 134,243
Mortgage servicing income ................................. 55,903 55,903 55,903
Bank card income .......................................... 20,758 26,559 27,124
Factoring commissions ..................................... 19,519 19,519 19,519
Trust service income ...................................... 8,326 16,964 18,786
Profits and commissions from trading activities ........... 12,362 12,362 12,362
Investments securities gains .............................. 1,433 1,789 2,008
Other income .............................................. 72,477 83,058 87,381
--------- ---------- -----------
Total noninterest income ............................... 293,710 341,573 357,326
--------- ---------- -----------
Noninterest expense
Salaries and employee benefits ............................ 264,663 337,656 371,136
Net occupancy expense ..................................... 44,061 61,738 66,224
Equipment expense ......................................... 42,251 51,218 57,289
Other expenses ............................................ 256,214 302,794 324,295
--------- ---------- -----------
Total noninterest expense .............................. 607,189 753,406 818,944
--------- ---------- -----------
Earnings before income taxes ........................... 322,055 396,560 435,683
Applicable income taxes ...................................... 110,799 134,082 145,486
--------- ---------- -----------
Net earnings ........................................... $ 211,256 $ 262,478 $ 290,197
========= ========== ===========
Earnings per common share
Basic ..................................................... $ 2.79 $ 2.56 $ 2.56
Diluted ................................................... 2.66 2.46 2.46
Weighted average shares outstanding (in thousands)
Basic ..................................................... 72,512 99,346 110,196
Diluted ................................................... 78,798 106,632 117,604
</TABLE>
62
<PAGE> 74
CERTAIN REGULATORY CONSIDERATIONS
The following discussion sets forth certain of the material
elements of the regulatory framework applicable to banks and bank holding
companies and provides certain specific information related to UPC. A more
complete discussion is included in UPC's 1997 Form 10-K. Information relating to
AMBANC is included in the AMBANC 1997 Form 10-K. See "AVAILABLE INFORMATION" and
"DOCUMENTS INCORPORATED BY REFERENCE."
GENERAL
UPC is a bank holding company registered with the Federal Reserve
under the BHC Act. As such, UPC and its non-bank subsidiaries are subject to the
supervision, examination, and reporting requirements of the BHC Act and the
regulations of the Federal Reserve.
The BHC Act requires every bank holding company to obtain the
prior approval of the Federal Reserve before: (i) it may acquire direct or
indirect ownership or control of any voting shares of any bank if, after such
acquisition, the bank holding company will directly or indirectly own or control
more than 5.0% of the voting shares of the bank; (ii) it or any of its
subsidiaries, other than a bank, may acquire all or substantially all of the
assets of any bank; or (iii) it may merge or consolidate with any other bank
holding company.
The BHC Act further provides that the Federal Reserve may not
approve any transaction that would result in a monopoly or would be in
furtherance of any combination or conspiracy to monopolize or attempt to
monopolize the business of banking in any section of the United States, or the
effect of which may be substantially to lessen competition or to tend to create
a monopoly in any section of the country, or that in any other manner would be
in restraint of trade, unless the anticompetitive effects of the proposed
transaction are clearly outweighed by the public interest in meeting the
convenience and needs of the community to be served. The Federal Reserve is also
required to consider the financial and managerial resources and future prospects
of the bank holding companies and banks concerned and 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.
The BHC Act, as amended by the interstate banking provisions of
the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
("Interstate Banking Act"), which became effective in September 1995, repealed
the prior statutory restrictions on interstate acquisitions of banks by bank
holding companies, such that UPC and any other bank holding company located in
Tennessee may now acquire a bank located in any other state, and any bank
holding company located outside Tennessee may lawfully acquire any
Tennessee-based bank, regardless of state law to the contrary, in either case
subject to certain deposit-percentage limitations, aging requirements, and other
restrictions. The Interstate Banking Act also generally provides that, after
June 1, 1997, national and state-chartered banks may branch interstate through
acquisitions of banks in other states. By adopting legislation prior to that
date, a state has the ability either to "opt in" and accelerate the date after
which interstate branching is permissible or "opt out" and prohibit interstate
branching altogether. None of the states in which the banking subsidiaries of
UPC or AMBANC are located has either moved up the date after which interstate
branching will be permissible or "opted out." Texas, where one of the Other
Acquisitions will occur, however, elected to "opt out," in legislation that
expires September 2, 1999. UPC utilized the provisions of the Interstate Banking
Act at the end of 1997 to merge substantially all of UPC's Banking Subsidiaries
with and into UPB. As a result of such consolidation, UPB is now a multi-state
national bank with branches in Tennessee, Alabama, Mississippi, Louisiana,
Arkansas, Missouri and Kentucky.
The BHC Act generally prohibits UPC from engaging in activities
other than banking or managing or controlling banks or other permissible
subsidiaries and from 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
63
<PAGE> 75
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, such as greater
convenience, increased competition, or gains in efficiency, that outweigh
possible adverse effects, such as undue concentration of resources, decreased or
unfair competition, conflicts of interest, or unsound banking practices. For
example, factoring accounts receivable, acquiring or servicing loans, leasing
personal property, conducting discount securities brokerage activities,
performing certain data processing services, acting as agent or broker in
selling credit life insurance and certain other types of insurance in connection
with credit transactions, and performing certain insurance underwriting
activities all have been determined by the Federal Reserve to be permissible
activities of bank holding companies. The BHC Act does not place territorial
limitations on permissible nonbanking 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 continuation of such activity or such ownership or control constitutes a
serious risk to the financial safety, soundness, or stability of any bank
subsidiary of that bank holding company.
Each of the UPC Banking Subsidiaries is a member of the FDIC, and
as such, its deposits are insured by the FDIC to the extent provided by law.
Each such subsidiary 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 regulatory agencies having supervisory jurisdiction over the
respective subsidiary institutions of UPC and AMBANC (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) regularly examine the operations of such institutions and 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
UPC is a legal entity separate and distinct from its banking,
thrift, and other subsidiaries. The principal sources of cash flow of UPC,
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 UPC, as well as by UPC and AMBANC to their shareholders.
As to the payment of dividends, each of UPC's state-chartered
banking subsidiaries is subject to the respective laws and regulations of the
state in which such bank is located, and to the regulations of the bank's
primary federal regulator. UPC's 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, in the opinion of the federal banking regulator, a depository
institution under its jurisdiction is engaged in or is about to engage in an
unsafe or unsound practice (which, depending on the financial condition of the
depository institution, could include the payment of dividends), such agency may
require, after notice and hearing, that such institution cease and desist from
such practice. 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 payment would cause it to become
undercapitalized or if it already is undercapitalized. See "-- Prompt Corrective
Action." Moreover, the federal agencies have issued policy statements that
provide that bank holding companies and insured banks should generally only pay
dividends out of current operating earnings.
64
<PAGE> 76
At March 31, 1998, under dividend restrictions imposed under
federal and state laws, the UPC Banking Subsidiaries, without obtaining
governmental approvals, could declare aggregate dividends to UPC of
approximately $172.4 million.
The payment of dividends by UPC and the UPC Banking Subsidiaries
may also be affected or limited by other factors, such as the requirement to
maintain adequate capital above regulatory guidelines.
CAPITAL ADEQUACY
UPC and the UPC Banking Subsidiaries are required to comply with
the capital adequacy standards established by the Federal Reserve in the case of
UPC, and the appropriate federal banking regulator in the case of each UPC
Banking Subsidiary. There are two basic measures of capital adequacy for bank
holding companies and their subsidiary depository institutions that have been
promulgated by the Federal Reserve and each of the federal bank regulatory
agencies: 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 March 31, 1998, UPC's consolidated Total Capital Ratio and its Tier 1 Capital
Ratio (i.e., the ratio of Tier 1 Capital to risk-weighted assets) were 20.17%
and 15.66%, 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. UPC's Leverage Ratio at March 31, 1998, was 10.72%. The guidelines also
provide that bank holding companies experiencing internal growth or making
acquisitions will be expected to maintain strong capital positions substantially
above the minimum supervisory levels without significant reliance on intangible
assets. Furthermore, the Federal Reserve has indicated that it will consider a
"tangible Tier 1 Capital Leverage Ratio" (deducting all intangibles) and other
indicia of capital strength in evaluating proposals for expansion or new
activities.
Each of the UPC Banking Subsidiaries is subject to risk-based and
leverage capital requirements adopted by its federal banking regulator, which
are substantially similar to those adopted by the Federal Reserve for bank
holding companies. Each of the UPC Banking Subsidiaries was in compliance with
applicable minimum capital requirements as of March 31, 1998. Neither UPC nor
any of the UPC Banking Subsidiaries has been advised by any federal banking
agency of any specific minimum capital ratio requirement applicable to it.
Failure to meet capital guidelines could subject a bank or thrift
to a variety of enforcement remedies, including issuance of a capital directive,
the termination of deposit insurance by the FDIC, a prohibition on the taking of
brokered deposits, and certain other restrictions on its business. As described
65
<PAGE> 77
below, substantial additional restrictions can be imposed upon FDIC-insured
depository institutions that fail to meet applicable capital requirements. See
"-- Prompt Corrective Action."
The federal bank regulators continue to indicate their desire to
raise capital requirements applicable to banking organizations beyond their
current levels. In this regard, the Federal Reserve, the FDIC, and the OCC have,
pursuant to FDICIA, proposed an amendment to the risk-based capital standards
that would calculate the change in an institution'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, UPC is expected to act as a source
of financial strength for, and to commit resources to support, each of the UPC
Banking Subsidiaries. This support may be required at times when, absent such
Federal Reserve policy, UPC may not be inclined to provide it. In addition, any
capital loans by a bank holding company to any of its banking subsidiaries are
subordinate in right of payment to deposits and to certain other indebtedness of
such banks. 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 banking subsidiary will be assumed by the bankruptcy trustee and
entitled to a priority of payment.
Under the Federal Deposit Insurance Act (the "FDIA"), 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 after August 9, 1989, in
connection with (i) the default of a commonly controlled FDIC-insured depository
institution or (ii) any assistance provided by the FDIC to any commonly
controlled FDIC-insured depository institution "in danger of default." "Default"
is defined generally as the appointment of a conservator or receiver, and "in
danger of default" is defined generally as the existence of certain conditions
indicating that a default is likely to occur in the absence of regulatory
assistance. 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. The UPC Banking Subsidiaries are subject to these cross-guarantee
provisions. As a result, any loss suffered by the FDIC in respect of any of
these subsidiaries would likely result in assertion of the cross-guarantee
provisions, the assessment of such estimated losses against the depository
institution's banking or thrift affiliates, and a potential loss of UPC's
respective investments in such other subsidiary depository institutions.
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) and to take certain mandatory supervisory actions, and are
authorized to take other discretionary actions, with respect to institutions in
the three undercapitalized categories, the severity of which 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 by regulation the relevant capital level for
each category.
Under the final agency rules implementing the prompt corrective
action provisions, an institution that (i) has a Total Capital Ratio of 10% or
greater, a Tier 1 Capital Ratio of 6.0% or greater, and a Leverage Ratio of 5.0%
or greater and (ii) is not subject to any written agreement, order, capital
directive, or prompt corrective action directive issued by the appropriate
federal banking agency is deemed to be well capitalized. An institution with 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 is considered to be adequately
capitalized. A depository institution that
66
<PAGE> 78
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% is considered to be
undercapitalized. A depository institution that has a Total Capital Ratio of
less than 6.0%, a Tier 1 Capital Ratio of less than 3.0%, or a Leverage Ratio of
less than 3.0% is considered to be significantly undercapitalized, and an
institution that has a tangible equity capital to assets ratio equal to or less
than 2.0% is deemed to be critically undercapitalized. For purposes of the
regulation, the term "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. Under FDICIA, a bank holding company must guarantee that a subsidiary
depository institution meet its capital restoration plan, subject to certain
limitations. The obligation of a controlling bank holding company under FDICIA
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. 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, except in
accordance with an accepted capital restoration plan or with the approval of the
FDIC. In addition, the appropriate federal banking agency is given authority
with respect to any undercapitalized depository institution to take any of the
actions it is required to or may take with respect to a significantly
undercapitalized institution as described below 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, the appropriate
federal banking agency must require the institution to take one or more of the
following actions: (i) sell enough shares, including voting shares, to become
adequately capitalized; (ii) merge with (or be sold to) another institution (or
holding company), but only if grounds exist for appointing a conservator or
receiver; (iii) restrict certain transactions with banking affiliates as if the
"sister bank" exception to the requirements of Section 23A of the Federal
Reserve Act did not exist; (iv) otherwise restrict transactions with bank or
non-bank affiliates; (v) restrict interest rates that the institution pays on
deposits to "prevailing rates" in the institution's "region;" (vi) restrict
asset growth or reduce total assets; (vii) alter, reduce, or terminate
activities; (viii) hold a new election of directors; (ix) 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 the
director or officer will have the burden of proving his or her value to the
institution; (x) employ "qualified" senior executive officers; (xi) cease
accepting deposits from correspondent depository institutions; (xii) divest
certain nondepository affiliates which pose a danger to the institution; or
(xiii) be divested by a parent holding company. In addition, without the prior
approval of the appropriate 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.
At March 31, 1998, all of the UPC Banking Subsidiaries had the
requisite capital levels to qualify as well capitalized.
DESCRIPTION OF UPC CAPITAL STOCK
UPC's Charter currently authorizes the issuance of 300,000,000
shares of UPC Common Stock and 10,000,000 shares of UPC Preferred Stock. As of
May 31, 1998, 84,970,899 shares of UPC Common Stock were outstanding and
approximately 7,792,332 shares were earmarked for issuance in connection with
currently outstanding UPC options, UPC's dividend reinvestment plan, and with
respect to conversion rights of currently outstanding UPC Series E Preferred
Stock (defined next). In addition, as of May 31, 1998, 1,156,231 shares of UPC's
8% Cumulative, Convertible Preferred Stock, Series E (the Series E Preferred
Stock) were outstanding. As of May 31, 1998, none of UPC's 750,000 authorized
shares of Series A Preferred Stock were issued and outstanding nor is management
aware of the existence of circumstances
67
<PAGE> 79
from which it may be inferred that such issuance is imminent. THE CAPITAL STOCK
OF UPC DOES NOT REPRESENT OR CONSTITUTE A DEPOSIT ACCOUNT AND IS NOT INSURED BY
THE FDIC, THE BANK INSURANCE FUND, THE SAVINGS ASSOCIATION INSURANCE FUND, OR
ANY GOVERNMENTAL AGENCY.
UPC COMMON STOCK
GENERAL. Shares of UPC Common Stock may be issued at such time or
times and for such consideration (not less than the par value thereof) as the
UPC Board may deem advisable, subject to such limitations as may be set forth in
the laws of the State of Tennessee, UPC's Charter or Bylaws or the rules of the
NYSE. UPB, a wholly-owned, first-tier subsidiary of UPC, is the Registrar,
Transfer Agent and Dividend Disbursing Agent for shares of UPC Common Stock. Its
address is Union Planters Bank, National Association, Corporate Trust
Department, 6200 Poplar Avenue, Third Floor, Memphis, Tennessee 38119. Its
mailing address is P.O. Box 387, Memphis, Tennessee 38147.
DIVIDENDS. Subject to the preferential dividend rights applicable
to outstanding shares of the UPC Preferred Stock and subject to applicable
requirements, if any, with respect to the setting aside of sums for purchase,
retirement, or sinking funds, if any, for all outstanding UPC Preferred Stock,
the holders of the UPC Common Stock are entitled to receive, to the extent
permitted by law, only such dividends as may be declared from time to time by
the UPC Board.
UPC has the right to, and may from time to time, enter into
borrowing arrangements or issue other debt instruments, the provisions of which
may contain restrictions on payment of dividends and other distributions on UPC
Common Stock and UPC Preferred Stock. UPC has no such arrangements in effect at
the date hereof. In December 1996, UPC caused to be issued $200,000,000 in
aggregate liquidation amount of 8.20% Capital Trust Pass - through Securities
("UPC Capital Securities") through a Delaware trust subsidiary. Pursuant to the
terms of the governing instruments, UPC would be prohibited from paying
dividends on any UPC Common Stock or UPC Preferred Stock if all quarterly
payments on the UPC Capital Securities had not been paid in full. The UPC
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 UPC, after
distribution in full of the preferential amounts required to be distributed to
the holders of UPC Preferred Stock, holders of UPC Common Stock will be entitled
to receive all of the remaining assets of UPC, of whatever kind, available for
distribution to shareholders ratably in proportion to the number of shares of
UPC Common Stock held. The UPC Board may distribute in kind to the holders of
UPC Common Stock such remaining assets of UPC or may sell, transfer, or
otherwise dispose of all or any part of such remaining assets to any other
person or entity and receive payment therefor in cash, stock, or obligations of
such other person or entity, and may sell all or any part of the consideration
so received and distribute any balance thereof in kind to holders of UPC Common
Stock. Neither the merger or consolidation of UPC into or with any other
corporation, nor the merger of any other corporation into UPC, nor any purchase
or redemption of shares of stock of UPC of any class, shall be deemed to be a
dissolution, liquidation, or winding-up of UPC for purposes of this paragraph.
Because UPC is a holding company, its right and the rights of its
creditors and shareholders, including the holders of UPC Preferred Stock and UPC
Common Stock, to participate in the distribution of assets of a subsidiary on
its liquidation or recapitalization may be subject to prior claims of such
subsidiary's creditors except to the extent that UPC itself may be a creditor
having recognized claims against such subsidiary.
For a further description of UPC Common Stock, see "EFFECT OF THE
MERGER ON RIGHTS OF SHAREHOLDERS."
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UPC PREFERRED STOCK
SERIES A PREFERRED STOCK. UPC's Charter provides for the issuance
of up to 750,000 shares (subject to adjustment by action of the UPC Board) of
Series A Preferred Stock under certain circumstances involving a potential
change in control of UPC. None of such shares are outstanding and management is
aware of no facts suggesting that issuance of such shares may be imminent. The
Series A Preferred Stock is described in more detail in UPC's 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 May 31, 1998, 1,156,231 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 UPC Common Stock for each share of
Series E Preferred Stock. The Series E Preferred Stock is not subject to any
sinking fund provisions and has no preemptive rights. Such shares have a
liquidation preference of $25.00 per share plus unpaid dividends accrued thereon
and, at UPC's option and with the prior approval of the Federal Reserve, are
subject to redemption by UPC at any time 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, the AMBANC Board knows of
no matters that will be presented for consideration at the Special Meeting other
than as described in this Proxy Statement. However, if any other matters shall
properly come before the Special Meeting or any adjournment or postponement
thereof and be voted upon, the enclosed proxy shall be deemed to confer
discretionary authority to the individuals named as proxies therein to vote the
shares represented by such proxy as to any such matters.
SHAREHOLDER PROPOSALS
UPC expects to hold its next annual meeting of shareholders after
the Merger in April 1999. Under SEC rules, proposals of UPC shareholders
intended to be presented at that meeting must be received by UPC at its
principal executive offices no later than the date specified in UPC's 1998
annual meeting proxy statement. It is not currently anticipated that AMBANC will
hold its annual meeting unless the Merger should not be consummated. In the
event the Merger is not consummated, proposals of AMBANC shareholders intended
to be presented at that meeting must have been received by AMBANC at its
principal executive offices no later than ______________, 1998.
EXPERTS
The consolidated financial statements of UPC and subsidiaries
incorporated in this Proxy Statement/Prospectus by reference to UPC's Annual
Report on Form 10-K for the year ended December 31, 1997, have been so
incorporated in reliance on the report of Price Waterhouse LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
The consolidated financial statements incorporated in this Proxy
Statement/Prospectus by reference from AMBANC's annual report on Form 10-K for
the year ended December 31, 1997 have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report, which is incorporated herein by
reference (which report expresses an unqualified opinion and includes an
explanatory paragraph relating to the adoption of Statement of Financial
Accounting Standards No. 122 described in Note 1 to the consolidated financial
statements), and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
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OPINIONS
The legality of the shares of UPC 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 UPC. E. James House, Jr. is an officer of, and receives
compensation from, UPC.
Certain tax consequences of the transaction have been passed upon
by Wyatt, Tarrant & Combs for UPC and by Leagre Chandler & Millard for AMBANC.
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APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
BY AND BETWEEN
AMBANC CORP.
AND
UNION PLANTERS CORPORATION
DATED AS OF MARCH 31, 1998
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE 1 -- TRANSACTIONS AND TERMS OF MERGER................................................................... 1
1.1 MERGER............................................................................................ 1
1.2 TIME AND PLACE OF CLOSING......................................................................... 2
1.3 EFFECTIVE TIME.................................................................................... 2
1.4 EXECUTION OF STOCK OPTION AGREEMENT............................................................... 2
ARTICLE 2 -- TERMS OF MERGER.................................................................................... 2
2.1 CHARTER........................................................................................... 2
2.2 BYLAWS............................................................................................ 2
2.3 DIRECTORS AND OFFICERS............................................................................ 2
ARTICLE 3 -- MANNER OF CONVERTING SHARES........................................................................ 3
3.1 CONVERSION OF SHARES.............................................................................. 3
3.2 ANTI-DILUTION PROVISIONS.......................................................................... 3
3.3 SHARES HELD BY AMBANC OR UPC...................................................................... 3
3.4 FRACTIONAL SHARES................................................................................. 3
3.5 CONVERSION OF STOCK RIGHTS........................................................................ 4
ARTICLE 4 -- EXCHANGE OF SHARES................................................................................. 5
4.1 EXCHANGE PROCEDURES............................................................................... 5
4.2 RIGHTS OF FORMER AMBANC STOCKHOLDERS.............................................................. 5
ARTICLE 5 -- RESENTATIONS AND WARRANTIES OF AMBANC.............................................................. 6
5.1 ORGANIZATION, STANDING, AND POWER................................................................. 6
5.2 AUTHORITY; NO BREACH BY AGREEMENT................................................................. 6
5.3 CAPITAL STOCK..................................................................................... 7
5.4 AMBANC SUBSIDIARIES............................................................................... 8
5.5 SEC FILINGS; FINANCIAL STATEMENTS................................................................. 8
5.6 ABSENCE OF UNDISCLOSED LIABILITIES................................................................ 9
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS.............................................................. 9
5.8 TAX MATTERS....................................................................................... 9
5.9 ASSETS............................................................................................ 10
5.10 ENVIRONMENTAL MATTERS............................................................................ 11
5.11 COMPLIANCE WITH LAWS............................................................................. 11
5.12 LABOR RELATIONS.................................................................................. 12
5.13 EMPLOYEE BENEFIT PLANS........................................................................... 12
5.14 MATERIAL CONTRACTS............................................................................... 15
5.15 LEGAL PROCEEDINGS................................................................................ 15
5.16 REPORTS.......................................................................................... 15
5.17 STATEMENTS TRUE AND CORRECT...................................................................... 16
5.18 ACCOUNTING, TAX, AND REGULATORY MATTERS.......................................................... 16
</TABLE>
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<TABLE>
<S> <C> <C>
5.19 STATE TAKEOVER LAWS.............................................................................. 16
5.20 CHARTER PROVISIONS............................................................................... 16
5.21 RIGHTS AGREEMENT................................................................................. 17
5.22 DERIVATIVES...................................................................................... 17
5.23 YEAR 2000........................................................................................ 17
ARTICLE 6 -- REPRESENTATIONS AND WARRANTIES OF UPC.............................................................. 17
6.1 ORGANIZATION, STANDING, AND POWER................................................................. 17
6.2 AUTHORITY; NO BREACH BY AGREEMENT................................................................. 17
6.3 CAPITAL STOCK..................................................................................... 18
6.4 UPC SUBSIDIARIES.................................................................................. 18
6.5 SEC FILINGS; FINANCIAL STATEMENTS................................................................. 19
6.6 ABSENCE OF UNDISCLOSED LIABILITIES................................................................ 20
6.7 ABSENCE OF CERTAIN CHANGES OR EVENTS.............................................................. 20
6.8 TAX MATTERS....................................................................................... 20
6.9 ASSETS............................................................................................ 21
6.10 ENVIRONMENTAL MATTERS............................................................................ 21
6.11 COMPLIANCE WITH LAWS............................................................................. 22
6.12 LABOR RELATIONS.................................................................................. 23
6.13 LEGAL PROCEEDINGS................................................................................ 23
6.14 REPORTS.......................................................................................... 23
6.15 STATEMENTS TRUE AND CORRECT...................................................................... 23
6.16 ACCOUNTING, TAX, AND REGULATORY MATTERS.......................................................... 24
6.17 EMPLOYEE BENEFIT PLANS........................................................................... 24
6.18 DERIVATIVES...................................................................................... 24
6.19 YEAR 2000........................................................................................ 24
ARTICLE 7 -- CONDUCT OF BUSINESS PENDING CONSUMMATION........................................................... 25
7.1 AFFIRMATIVE COVENANTS OF BOTH PARTIES............................................................. 25
7.2 NEGATIVE COVENANTS OF AMBANC...................................................................... 25
7.3 ADVERSE CHANGES IN CONDITION...................................................................... 27
7.4 REPORTS........................................................................................... 27
ARTICLE 8 -- ADDITIONAL AGREEMENTS.............................................................................. 28
8.1 REGISTRATION STATEMENT; PROXY STATEMENT; STOCKHOLDER
APPROVALS..................................................................................... 28
8.2 EXCHANGE LISTING.................................................................................. 28
8.3 APPLICATIONS...................................................................................... 28
8.4 FILINGS WITH STATE OFFICES........................................................................ 28
8.5 AGREEMENT AS TO EFFORTS TO CONSUMMATE............................................................. 28
8.6 INVESTIGATION AND CONFIDENTIALITY................................................................. 29
8.7 PRESS RELEASES.................................................................................... 29
8.8 CERTAIN ACTIONS................................................................................... 30
8.9 ACCOUNTING AND TAX TREATMENT...................................................................... 30
8.10 STATE TAKEOVER LAWS.............................................................................. 30
8.11 CHARTER PROVISIONS............................................................................... 30
8.12 AGREEMENT OF AFFILIATES.......................................................................... 30
</TABLE>
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<TABLE>
<S> <C> <C> <C>
8.13 EMPLOYEE BENEFITS AND CONTRACTS.................................................................. 31
8.14 INDEMNIFICATION.................................................................................. 32
8.15 CERTAIN MODIFICATIONS............................................................................ 33
ARTICLE 9 -- CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE.................................................. 33
9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY........................................................... 33
9.2 CONDITIONS TO OBLIGATIONS OF UPC.................................................................. 35
9.3 CONDITIONS TO OBLIGATIONS OF AMBANC............................................................... 36
ARTICLE 10 -- TERMINATION....................................................................................... 37
10.1 TERMINATION...................................................................................... 37
10.2 EFFECT OF TERMINATION............................................................................ 40
10.3 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS.................................................... 40
ARTICLE 11 -- MISCELLANEOUS..................................................................................... 40
11.1 DEFINITIONS...................................................................................... 40
11.2 EXPENSES......................................................................................... 48
11.3 BROKERS AND FINDERS.............................................................................. 48
11.4 ENTIRE AGREEMENT................................................................................. 48
11.5 AMENDMENTS....................................................................................... 48
11.6 WAIVERS.......................................................................................... 49
11.7 ASSIGNMENT....................................................................................... 49
11.8 NOTICES.......................................................................................... 49
11.9 GOVERNING LAW.................................................................................... 50
11.10 COUNTERPARTS.................................................................................... 50
11.11 CAPTIONS........................................................................................ 50
11.12 INTERPRETATIONS................................................................................. 51
11.13 ENFORCEMENT OF AGREEMENT........................................................................ 51
11.14 SEVERABILITY.................................................................................... 51
</TABLE>
LIST OF EXHIBITS
Exhibit 1 Stock Option Agreement
Exhibit 2 Plan of Merger
Exhibit 3 Affiliate Agreement
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement")
is made and entered into as of March 31, 1998, by and between AMBANC CORP.
("Ambanc"), a corporation organized and existing under the Laws of the State of
Indiana, with its principal office located in Vincennes, Indiana; and UNION
PLANTERS CORPORATION ("UPC"), a corporation organized and existing under the
Laws of the State of Tennessee, with its principal office located in Memphis,
Tennessee.
PREAMBLE
The Boards of Directors of Ambanc and UPC are of the opinion
that the transactions described herein are in the best interests of the parties
to this Agreement and their respective stockholders. This Agreement provides for
the acquisition of Ambanc by UPC pursuant to the merger (the "Merger") of Ambanc
with and into Union Planters Holding Corporation ("UPHC"), a wholly-owned
subsidiary of UPC organized under the Laws of the State of Tennessee. At the
effective time of the Merger, the outstanding shares of the common stock of
Ambanc shall be converted into shares of the common stock of UPC (except as
provided herein). As a result, stockholders of Ambanc shall become stockholders
of UPC, and UPHC shall continue to conduct the business and operations of Ambanc
as a wholly-owned subsidiary of UPC. The transactions described in this
Agreement are subject to the approvals of the stockholders of Ambanc, the Board
of Governors of the Federal Reserve System, and certain state regulatory
authorities, and the satisfaction of certain other conditions described in this
Agreement. It is the intention of the parties to this Agreement that the Merger
(i) for federal income tax purposes shall qualify as a "reorganization" within
the meaning of Section 368(a) of the Internal Revenue Code and (ii) for
accounting purposes shall qualify for treatment as a pooling of interests.
Immediately after the execution and delivery of this
Agreement, as a condition and inducement to UPC's willingness to enter into this
Agreement, Ambanc and UPC are entering into a stock option agreement (the "Stock
Option Agreement"), in substantially the form of Exhibit 1, pursuant to which
Ambanc is granting to UPC an option to purchase shares of Ambanc Common Stock.
Certain terms used in this Agreement are defined in Section
11.1 of this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, the
Parties agree as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 MERGER. Subject to the terms and conditions of this Agreement, at
the Effective Time, Ambanc shall be merged with and into UPHC in accordance with
the provisions of IC 23-
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1-40-7 of the IBCL and with the effect provided in IC 23-1-40-7 of the IBCL and
in accordance with the provisions of Section 48-21-109 of the TBCA and with the
effect provided in Section 48-21-108 of the TBCA (the "Merger"). UPHC shall be
the Surviving Corporation resulting from the Merger and shall continue to be
governed by the Laws of the State of Tennessee. The Merger shall be consummated
pursuant to the terms of this Agreement, which has been approved and adopted by
the Board of Directors of Ambanc and has been or will be adopted by the Board of
Directors of UPC, and the Plan of Merger, in substantially the form of Exhibit
2, which has been approved and adopted by the Board of Directors of Ambanc and
will be approved and adopted by the Board of Directors of UPHC prior to the
Effective Time.
1.2 TIME AND PLACE OF CLOSING. The consummation of the Merger (the
"Closing") shall take place at 9:00 A.M. on the date that the Effective Time
occurs (or the immediately preceding day if the Effective Time is earlier than
9:00 A.M.), or at such other time as the Parties, acting through their duly
authorized officers, may mutually agree. The place of Closing shall be at such
location as may be mutually agreed upon by the Parties.
1.3 EFFECTIVE TIME. The Merger and the other transactions contemplated
by this Agreement shall become effective on the date and at the time the
Articles of Merger shall become effective with the Secretary of State of the
State of Indiana and the Secretary of State of the State of Tennessee (the
"Effective Time"). Subject to the terms and conditions hereof, unless otherwise
mutually agreed upon in writing by the duly authorized officers of each Party,
the Parties shall use their reasonable efforts to cause the Effective Time to
occur on or before the 15th business day (as designated by UPC) following the
last to occur of (i) the effective date (including expiration of any applicable
waiting period) of the last required Consent of any Regulatory Authority having
authority over and approving or exempting the Merger and (ii) the date on which
the stockholders of Ambanc approve the matters relating to this Agreement
required to be approved by such stockholders by applicable Law.
1.4 EXECUTION OF STOCK OPTION AGREEMENT. Immediately after the
execution of this Agreement and as a condition hereto, Ambanc is executing and
delivering to UPC the Stock Option Agreement.
ARTICLE 2
TERMS OF MERGER
2.1 CHARTER. The Charter of UPHC in effect immediately prior to the
Effective Time shall be the Charter of the Surviving Corporation after the
Effective Time until otherwise amended or repealed.
2.2 BYLAWS. The Bylaws of UPHC in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation after the
Effective Time until otherwise amended or repealed.
2.3 DIRECTORS AND OFFICERS. The directors of UPHC in office immediately
prior to the Effective Time, together with such additional individuals
thereafter 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 UPHC in office immediately prior to the Effective
Time, together with such additional individuals thereafter elected, shall serve
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as the officers of the Surviving Corporation from and after 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,
at the Effective Time, by virtue of the Merger and without any action on the
part of UPC or Ambanc, or the stockholders of either of the foregoing, the
shares of the constituent corporations shall be converted as follows:
(a) Each share of UPC Common Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding from
and after the Effective Time.
(b) Each share of UPHC Common Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding from
and after the Effective Time.
(c) Each share of Ambanc Common Stock excluding shares held by
any Ambanc Company or any UPC Company (in each case other than in a fiduciary
capacity or as a result of debts previously contracted) issued and outstanding
at the Effective Time shall be converted into 0.4841 of a share of UPC Common
Stock (subject to possible adjustment as set forth in Section 10.1(g) of this
Agreement, the "Exchange Ratio"). Pursuant to the UPC Rights Agreement, each
share of UPC Common Stock issued in connection with the Merger upon conversion
of Ambanc Common Stock shall be accompanied by a UPC Right.
3.2 ANTI-DILUTION PROVISIONS. In the event Ambanc changes the number of
shares of Ambanc Common Stock issued and outstanding prior to the Effective Time
as a result of a stock split, stock dividend, recapitalization, or similar
transaction with respect to such stock, the Exchange Ratio shall be
proportionately adjusted. In the event UPC changes the number of shares of UPC
Common Stock issued and outstanding prior to the Effective Time as a result of a
stock split, stock dividend, recapitalization, or similar transaction with
respect to such stock and the record date therefor (in the case of a stock
dividend) or the effective date thereof (in the case of a stock split or similar
recapitalization for which a record date is not established) shall be prior to
the Effective Time, the Exchange Ratio shall be proportionately adjusted.
3.3 SHARES HELD BY AMBANC OR UPC. Each of the shares of Ambanc Common
Stock issued but not outstanding or held by any Ambanc Company or by any UPC
Company, in each case other than in a fiduciary capacity or as a result of debts
previously contracted, shall be canceled and retired at the Effective Time and
no consideration shall be issued in exchange therefor.
3.4 FRACTIONAL SHARES. Notwithstanding any other provision of this
Agreement, each holder of shares of Ambanc Common Stock exchanged pursuant to
the Merger who would otherwise have been entitled to receive a fraction of a
share of UPC Common Stock (after taking into account all certificates delivered
by such holder) shall receive, in lieu thereof, cash (without interest) in an
amount equal to such fractional part of a share of UPC Common
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Stock multiplied by the market value of one share of UPC Common Stock at the
Effective Time. The market value of one share of UPC Common Stock at the
Effective Time shall be the last sale price of UPC Common Stock on the
NYSE-Composite Transactions List (as reported by The Wall Street Journal or, if
not reported thereby, any other authoritative source selected by UPC) on the
last trading day preceding the Effective Time. No such holder will be entitled
to dividends, voting rights, or any other rights as a stockholder in respect of
any fractional shares.
3.5 CONVERSION OF STOCK RIGHTS.
(a) At the Effective Time, each award, option, or other right
to purchase or acquire shares of Ambanc Common Stock pursuant to stock options,
stock appreciation rights, or stock awards ("Ambanc Rights") granted by Ambanc
under the Ambanc Stock Plans, which are outstanding at the Effective Time,
whether or not exercisable, shall be converted into and become rights with
respect to UPC Common Stock, and UPC shall assume each Ambanc Right, in
accordance with the terms of the Ambanc Stock Plan and stock option agreement by
which it is evidenced, except that from and after the Effective Time, (i) UPC
and its Salary and Benefits Committee shall be substituted for Ambanc and the
Committee of Ambanc's Board of Directors (including, if applicable, the entire
Board of Directors of Ambanc) administering such Ambanc Stock Plan, (ii) each
Ambanc Right assumed by UPC may be exercised solely for shares of UPC Common
Stock (or cash in the case of stock appreciation rights), (iii) the number of
shares of UPC Common Stock subject to such Ambanc Right shall be equal to the
number of shares of Ambanc Common Stock subject to such Ambanc Right immediately
prior to the Effective Time multiplied by the Exchange Ratio and rounding down
to the nearest whole share, and (iv) the per share exercise price (or similar
threshold price, in the case of stock awards) under each such Ambanc Right shall
be adjusted by dividing the per share exercise (or threshold) price under each
such Ambanc Right by the Exchange Ratio and rounding up to the nearest cent.
Notwithstanding the provisions of clauses (iii) and (iv) of the first sentence
of this Section 3.5, each Ambanc Right which is an "incentive stock option"
shall be adjusted as required by Section 424 of the Internal Revenue Code, so as
not to constitute a modification, extension, or renewal of the option, within
the meaning of Section 424(h) of the Internal Revenue Code. UPC agrees to take
all necessary steps to effectuate the foregoing provisions of this Section 3.5.
(b) As soon as reasonably practicable after the Effective
Time, UPC shall deliver to the participants in each Ambanc Stock Plan an
appropriate notice setting forth such participant's rights pursuant thereto and
the grants pursuant to such Ambanc Stock Plan shall continue in effect on the
same terms and conditions (subject to the adjustments required by Section 3.5(a)
after giving effect to the Merger), and UPC shall comply with the terms of each
Ambanc Stock Plan to ensure, to the extent required by, and subject to the
provisions of, such Ambanc Stock Plan, that Ambanc Rights which qualified as
incentive stock options prior to the Effective Time continue to qualify as
incentive stock options after the Effective Time. At or prior to the Effective
Time, UPC shall take all corporate action necessary to reserve for issuance
sufficient shares of UPC Common Stock for delivery upon exercise of Ambanc
Rights assumed by it in accordance with this Section 3.5. As soon as reasonably
practicable after the Effective Time, UPC shall file a registration statement on
Form S-3 or Form S-8, as the case may be (or any successor or other appropriate
forms), with respect to the shares of UPC Common Stock subject to such options
and shall use its reasonable efforts to maintain the effectiveness of such
registration statements (and maintain the current status of the prospectus or
prospectuses contained therein) for so long as such options remain outstanding.
With respect to those individuals who subsequent to the Merger will be subject
to the reporting requirements under
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Section 16(a) of the 1934 Act, where applicable, UPC shall administer the Ambanc
Stock Plan assumed pursuant to this Section 3.5 in a manner that complies with
Rule 16b-3 promulgated under the 1934 Act.
(c) All restrictions or limitations on transfer with respect
to Ambanc Common Stock awarded under the Ambanc Stock Plans or any other plan,
program, or arrangement of any Ambanc Company, to the extent that such
restrictions or limitations shall not have already lapsed, and except as
otherwise expressly provided in such plan, program, or arrangement, shall remain
in full force and effect with respect to shares of UPC Common Stock into which
such restricted stock is converted pursuant to Section 3.1 of this Agreement.
ARTICLE 4
EXCHANGE OF SHARES
4.1 EXCHANGE PROCEDURES. Promptly after the Effective Time, UPC and
Ambanc shall cause the exchange agent selected by UPC (the "Exchange Agent") to
mail to the former stockholders of Ambanc appropriate transmittal materials
(which shall specify that delivery shall be effected, and risk of loss and title
to the certificates theretofore representing shares of Ambanc Common Stock shall
pass, only upon proper delivery of such certificates to the Exchange Agent).
After the Effective Time, each holder of shares of Ambanc Common Stock (other
than shares to be canceled pursuant to Section 3.3 of this Agreement) issued and
outstanding at the Effective Time shall surrender the certificate or
certificates representing such shares to the Exchange Agent and shall promptly
upon surrender thereof receive in exchange therefor the consideration provided
in Section 3.1 of this Agreement, together with all undelivered dividends or
distributions in respect of such shares (without interest thereon) pursuant to
Section 4.2 of this Agreement. To the extent required by Section 3.4 of this
Agree ment, each holder of shares of Ambanc Common Stock issued and outstanding
at the Effective Time also shall receive, upon surrender of the certificate or
certificates representing such shares, cash in lieu of any fractional share of
UPC Common Stock to which such holder may be otherwise entitled (without
interest). UPC shall not be obligated to deliver the consideration to which any
former holder of Ambanc Common Stock is entitled as a result of the Merger until
such holder surrenders such holder's certificate or certificates representing
the shares of Ambanc Common Stock for exchange as provided in this Section 4.1.
The certificate or certificates of Ambanc Common Stock so surrendered shall be
duly endorsed as the Exchange Agent may require. Any other provision of this
Agreement notwithstanding, neither the Surviving Corporation nor the Exchange
Agent shall be liable to a holder of Ambanc 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 AMBANC STOCKHOLDERS. At the Effective Time, the
stock transfer books of Ambanc shall be closed as to holders of Ambanc Capital
Stock immediately prior to the Effective Time and no transfer of Ambanc Capital
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 Ambanc
Common Stock (other than shares to be canceled pursuant to Section 3.3 of this
Agreement) shall from and after the Effective Time represent for all purposes
only the right to receive the consideration provided in Sections 3.1 and 3.4 of
this Agreement in exchange therefor, subject, however, to the Surviving
Corporation's obligation to pay any dividends or
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make any other distributions with a record date prior to the Effective Time
which have been declared or made by Ambanc in respect of such shares of Ambanc
Common Stock in accordance with the terms of this Agreement and which remain
unpaid at the Effective Time. To the extent permitted by Law, former
stockholders of record of Ambanc shall be entitled to vote after the Effective
Time at any meeting of UPC stockholders the number of whole shares of UPC Common
Stock into which their respective shares of Ambanc Common Stock are converted,
regardless of whether such holders have exchanged their certificates
representing Ambanc Common Stock for certificates representing UPC Common Stock
in accordance with the provisions of this Agreement. Whenever a dividend or
other distribution is declared by UPC on the UPC Common Stock, the record date
for which is at or after the Effective Time, the declaration shall include
dividends or other distributions on all shares issuable pursuant to this
Agreement, but beginning 30 days after the Effective Time no dividend or other
distribution payable to the holders of record of UPC Common Stock as of any time
subsequent to the Effective Time shall be delivered to the holder of any
certificate representing shares of Ambanc 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
Ambanc Common Stock certificate, both the UPC Common Stock certificate (together
with all such undelivered dividends or other distributions without interest) and
any undelivered dividends and cash payments to be paid for fractional share
interests (without interest) shall be delivered and paid with respect to each
share represented by such certificate.
ARTICLE 5
RESENTATIONS AND WARRANTIES OF AMBANC
Except as set forth in the Ambanc Disclosure Memorandum
referencing a specific section of this Agreement, Ambanc hereby represents and
warrants to UPC as follows:
5.1 ORGANIZATION, STANDING, AND POWER. Ambanc is a corporation duly
organized and validly existing under the Laws of the State of Indiana, and has
the corporate power and authority to carry on its business as now conducted and
to own, lease, and operate its Material Assets. Ambanc is duly qualified or
licensed to transact business as a foreign corporation in the States of the
United States and foreign jurisdictions where the character of its Assets or the
nature or conduct of its business requires it to be so qualified or licensed,
except for such jurisdictions in which the failure to be so qualified or
licensed is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Ambanc.
5.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) Ambanc 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 Ambanc, subject to
the approval of this Agreement and the Plan of Merger by holders of a majority
of the issued and outstanding shares of Ambanc Common Stock, voting together as
one class, as required by Law, which is the only stockholder vote required for
approval of this Agreement and the Plan of Merger and consummation of the Merger
by Ambanc. Subject to such requisite stockholder
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approval, this Agreement and the Plan of Merger represent legal, valid, and
binding obligations of Ambanc, enforceable against Ambanc in accordance with
their respective terms (except in all cases as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, receivership,
conservatorship, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement and
the Plan of Merger by Ambanc, nor the consummation by Ambanc of the transactions
contemplated hereby or thereby, nor compliance by Ambanc with any of the
provisions hereof or thereof, will (i) conflict with or result in a breach of
any provision of Ambanc's Articles of Incorporation or Bylaws or (ii) constitute
or result in a Default under, or require any Consent pursuant to, or result in
the creation of any Lien on any Asset of any Ambanc Company under, any Contract
or Permit of any Ambanc Company, where such Default or Lien, or any failure to
obtain such Consent, is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Ambanc, or (iii) subject to receipt of
the requisite Consents referred to in Section 9.1(b) of this Agreement, violate
any Law or Order applicable to any Ambanc Company or any of their respective
Material Assets.
(c) Other than in connection or compliance with the provisions
of the Securities Laws and applicable state corporate and securities Laws, and
other than Consents required from Regulatory Authorities, and other than notices
to or filings with the Internal Revenue Service or the Pension Benefit Guaranty
Corporation with respect to any employee benefit plans, or under the HSR Act,
and other than Consents, filings, or notifications which, if not obtained or
made, are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Ambanc, no notice to, filing with, or Consent of, any
public body or authority is necessary for the consummation by Ambanc of the
Merger and the other transactions contemplated in this Agreement and the Plan of
Merger.
(d) Holders of shares of Ambanc Common Stock do not have the
right to dissent from the Merger under Chapter 44 of the IBCL.
5.3 CAPITAL STOCK.
(a) The authorized capital stock of Ambanc consists, as of the
date of this Agreement, of (i) 10,000,000 shares of Ambanc Common Stock, of
which 6,998,741 shares were issued and outstanding, and 684 shares were held by
Ambanc in treasury, as of March 31, 1998 and not more than 7,018,426 shares will
be issued and outstanding, and not more than 684 shares will be held by Ambanc
in treasury, at the Effective Time, and (ii) 200,000 shares of Ambanc Preferred
Stock, of which no shares are issued and outstanding as of the date of this
Agreement and no shares will be issued and outstanding as of the Effective Time.
All of the issued and outstanding shares of Ambanc Common Stock are duly and
validly issued and outstanding and are fully paid and nonassessable under the
IBCL. None of the outstand ing shares of Ambanc Common Stock has been issued in
violation of any preemptive rights of the current or past stockholders of
Ambanc.
(b) Except (i) as set forth in Section 5.3(a) of this
Agreement, (ii) with respect to 19,685 shares of Ambanc Common Stock subject to
outstanding options under the Ambanc Stock Plans, and (iii) as provided pursuant
to the Stock Option Agreement, there are no shares
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of capital stock or other equity securities of Ambanc outstanding and no
outstanding Rights relating to the capital stock of Ambanc.
5.4 AMBANC SUBSIDIARIES. Ambanc has disclosed in Section 5.4 of the
Ambanc Disclosure Memorandum all of the Ambanc Subsidiaries. Ambanc or one of
its Subsidiaries owns all of the issued and outstanding shares of capital stock
of each Ambanc Subsidiary. No equity securities of any Ambanc Subsidiary are or
may become required to be issued (other than to another Ambanc Company) by
reason of any Rights, and there are no Contracts by which any Ambanc Subsidiary
is bound to issue (other than to another Ambanc Company) additional shares of
its capital stock or Rights or by which any Ambanc Company is or may be bound to
transfer any shares of the capital stock of any Ambanc Subsidiary (other than to
another Ambanc Company). There are no Contracts relating to the rights of any
Ambanc Company to vote or to dispose of any shares of the capital stock of any
Ambanc Subsidiary. All of the shares of capital stock of each Ambanc Subsidiary
held by an Ambanc Company are duly authorized, validly issued, and fully paid
and, except as provided in statutes pursuant to which depository institution
Subsidiaries are organized, nonassessable under the applicable corporation Law
of the jurisdiction in which such Subsidiary is incorporated or organized and
are owned by the Ambanc Company free and clear of any Lien. Each Ambanc
Subsidiary is either a bank or a corporation, and is duly organized, validly
existing, and (as to national banking associations) 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 Ambanc Subsidiary is
duly qualified or licensed to transact business as a foreign corporation in the
States of the United States and foreign jurisdictions where the character of its
Assets or the nature or conduct of its business requires it to be so qualified
or licensed, except for such jurisdictions in which the failure to be so
qualified or licensed is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Ambanc. Each Ambanc Subsidiary that is a
depository institution is an "insured institution" as defined in the Federal
Deposit Insurance Act and applicable regulations thereunder, and the deposits in
which are insured by the Bank Insurance Fund or Savings Association Insurance
Fund.
5.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Ambanc has filed and made available to UPC all forms,
reports, and documents required to be filed by Ambanc with the SEC since
December 31, 1993 (collectively, the "Ambanc SEC Reports"). The Ambanc SEC
Reports (i) at the time filed, complied in all Material respects with the
applicable requirements of the 1933 Act and the 1934 Act, as the case may be and
(ii) did not at the time they were filed (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a Material fact or omit to state a Material fact
required to be stated in such Ambanc SEC Reports or necessary in order to make
the statements in such Ambanc SEC Reports, in light of the circumstances under
which they were made, not misleading. None of Ambanc's Subsidiaries is required
to file any forms, reports, or other documents with the SEC.
(b) Each of the Ambanc Financial Statements (including, in
each case, any related notes) contained in the Ambanc SEC Reports, including any
Ambanc SEC Reports filed after the date of this Agreement until the Effective
Time, complied or will comply as to form in all Material respects with the
applicable published rules and regulations of the SEC with respect thereto, 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
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statements, or, in the case of unaudited statements, as permitted by Form 10-Q
of the SEC), and fairly presented or will fairly present the consolidated
financial position of Ambanc and its Subsidiaries as at the respective dates and
the consolidated results of its operations and cash flows for the periods
indicated, except that the unaudited interim financial statements were or are
subject to normal and recurring year-end adjustments which were not or are not
expected to be Material in amount or effect.
5.6 ABSENCE OF UNDISCLOSED LIABILITIES. No Ambanc Company has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Ambanc, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of Ambanc as of
December 31, 1997, included in the Ambanc Financial Statements or reflected in
the notes thereto and except for Liabilities incurred in the ordinary course of
business subsequent to December 31, 1997. No Ambanc Company has incurred or paid
any Liability since December 31, 1997, except for such Liabilities incurred or
paid in the ordinary course of business consistent with past business practice
and which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Ambanc.
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31, 1997,
except as disclosed in the Ambanc Financial Statements, (i) there have been no
events, changes, or occurrences which have had, or are reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Ambanc and
(ii) the Ambanc Companies have conducted their respective businesses in the
ordinary and usual course (excluding the incurrence of expenses in connection
with this Agreement and the transactions contemplated hereby).
5.8 TAX MATTERS.
(a) All Tax Returns required to be filed by or on behalf of
any of the Ambanc Companies have been timely filed, or requests for extensions
have been timely filed, granted, and have not expired for periods ended on or
before December 31, 1996, and, to the Knowledge of Ambanc, all Tax Returns filed
are complete and accurate in all Material respects. All Tax Returns for periods
ending on or before the date of the most recent fiscal year end immediately
preceding the Effective Time will be timely filed or requests for extensions
will be timely filed. All Taxes shown on filed Tax Returns have been paid. There
is no audit examination, deficiency, or refund Litigation with respect to any
Taxes, that is reasonably likely to result in a determination that would have,
individually or in the aggregate, a Material Adverse Effect on Ambanc, except to
the extent reserved against in the Ambanc Financial Statements dated prior to
the date of this Agreement. All Taxes and other Liabilities due with respect to
completed and settled examinations or concluded Litigation have been paid.
(b) None of the Ambanc Companies has executed an extension or
waiver of any statute of limitations on the assessment or collection of any Tax
due (excluding such statutes that relate to years currently under examination by
the Internal Revenue Service or other applicable taxing authorities) that is
currently in effect.
(c) Adequate provision for any Taxes due or to become due for
any of the Ambanc Companies for the period or periods through and including the
date of the respective Ambanc Financial Statements has been made and is
reflected on such Ambanc Financial Statements.
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(d) Each of the Ambanc Companies is in compliance with, and
its records contain all information and documents (including properly completed
IRS Forms W-9) necessary to comply with, all applicable information reporting
and Tax withholding requirements under federal, state, and local Tax Laws, and
such records identify with specificity all accounts subject to backup
withholding under Section 3406 of the Internal Revenue Code, except for such
instances of noncompliance and such omissions as are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Ambanc.
(e) None of the Ambanc Companies has made any payments, is
obligated to make any payments, or is a party to any contract, agreement, or
other arrangement 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.
(f) There are no Material Liens with respect to Taxes upon any
of the Assets of the Ambanc Companies.
(g) No Ambanc Company has filed any consent under Section
341(f) of the Internal Revenue Code concerning collapsible corporations.
5.9 ASSETS. The Ambanc Companies have good and marketable title, free
and clear of all Liens, to all of their respective Assets, except where the
failure to have such good and marketable title is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Ambanc. All
tangible properties used in the businesses of the Ambanc Companies are in good
condition, reasonable wear and tear excepted, and are usable in the ordinary
course of business consistent with Ambanc's past practices. All Assets which are
Material to Ambanc's business on a consolidated basis, held under leases or
subleases by any of the Ambanc Companies, are held under valid Contracts
enforceable in accordance with their respective terms (except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
or other Laws affecting the enforcement of creditors' rights generally and
except that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceedings may be brought), and each such Contract is in full force and effect.
The Ambanc Companies currently maintain insurance in amounts, scope, and
coverage reasonably necessary for their operations. None of the Ambanc Companies
has received notice from any insurance carrier that (i) such insurance will be
canceled or that coverage thereunder will be reduced or eliminated or (ii)
premium costs with respect to such policies of insurance will be substantially
increased. The Assets of the Ambanc Companies include all Assets required to
operate the business of the Ambanc Companies as presently conducted.
5.10 ENVIRONMENTAL MATTERS.
(a) To the Knowledge of Ambanc, each Ambanc Company, its
Participation Facilities, and its Loan Properties are, and have been, in
compliance with all Environmental Laws, except those violations which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Ambanc.
(b) There is no Litigation pending or, to the Knowledge of
Ambanc, threatened before any court, governmental agency, or authority, or other
forum in which any Ambanc Company or any of its Participation Facilities has
been or, with respect to threatened Litigation, may reasonably be expected to be
named as a defendant (i) for alleged noncompli
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ance (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, or involving a site owned, leased, or operated by any
Ambanc Company or any of its 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 Ambanc.
(c) There is no Litigation pending, or to the Knowledge of
Ambanc, threatened before any court, governmental agency, or board, or other
forum in which any of its Loan Properties (or Ambanc in respect of such Loan
Property) has been or, with respect to threatened Litigation, may reasonably be
expected to be named as a defendant or potentially responsible party (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, or involving a Loan Property, except for
such Litigation pending or threatened that is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Ambanc.
(d) To the Knowledge of Ambanc, there is no reasonable basis
for any Litigation of a type described in subsections (b) or (c), except such as
is not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Ambanc.
(e) To the Knowledge of Ambanc, during the period of (i) any
Ambanc Company's ownership or operation of any of their respective current
properties, (ii) any Ambanc Company's participation in the management of any
Participation Facility, or (iii) any Ambanc Company's holding of a security
interest in a Loan Property, there have been no releases of Hazardous Material
in, on, under, or affecting (or potentially affecting) such properties, except
such as are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Ambanc. To the Knowledge of Ambanc, prior to the
period of (i) any Ambanc Company's ownership or operation of any of their
respective current properties, (ii) any Ambanc Company's participation in the
management of any Participation Facility, or (iii) any Ambanc Company's holding
of a security interest in a Loan Property, to the Knowledge of Ambanc, there
were no releases of Hazardous Material in, on, under, or affecting any such
property, Participation Facility, or Loan Property, except such as are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Ambanc.
5.11 COMPLIANCE WITH LAWS. Ambanc is duly registered as a bank holding
company under the BHC Act. Each Ambanc Company has in effect all Permits
necessary for it to own, lease, or operate its Material Assets and to carry on
its business as now conducted, except for those Permits the absence of which are
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Ambanc, and there has occurred no Default under any such
Permit, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Ambanc. None of
the Ambanc Companies:
(a) is in violation of any Laws, Orders, or Permits applicable
to its business or employees conducting its business, except for violations
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Ambanc; and
(b) has received any notification or communication from any
agency or department of federal, state, or local government or any Regulatory
Authority or the staff thereof (i) asserting that any Ambanc Company is not in
compliance with any of the Laws or Orders which such governmental authority or
Regulatory Authority enforces, where such
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noncompliance is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Ambanc, (ii) threatening to revoke any Permits, the
revocation of which is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Ambanc, or (iii) requiring any Ambanc
Company (x) to enter into or consent to the issuance of a cease and desist
order, formal agreement, directive, commitment, or memorandum of understanding,
or (y) to adopt any Board resolution or similar undertaking, which restricts
materially the conduct of its business, or in any manner relates to its capital
adequacy, its credit or reserve policies, its management, or the payment of
dividends.
5.12 LABOR RELATIONS. No Ambanc Company is the subject of any
Litigation asserting that it or any other Ambanc Company has committed an unfair
labor practice (within the meaning of the National Labor Relations Act or
comparable state Law) or seeking to compel it or any other Ambanc Company to
bargain with any labor organization as to wages or conditions of employment, nor
is any Ambanc Company a party to or bound by any collective bargaining
agreement, Contract, or other agreement or understanding with a labor union or
labor organization, nor is there any strike or other labor dispute involving any
Ambanc Company, pending or, to the Knowledge of Ambanc, threatened, or to the
Knowledge of Ambanc, is there any activity involving any Ambanc Company's
employees seeking to certify a collective bargaining unit or engaging in any
other organization activity.
5.13 EMPLOYEE BENEFIT PLANS.
(a) Ambanc has disclosed to UPC in writing prior to the
execution of the Agreement and in Section 5.13 of the Ambanc Disclosure
Memorandum, and has delivered or made available to UPC prior to the execution of
this Agreement correct and complete copies in each case of, all Material Ambanc
Benefits Plans. For purposes of this Agreement, "Ambanc Benefit Plans" means all
pension, retirement, profit-sharing, deferred compensation, stock option,
employee stock ownership, severance pay, vacation, bonus, or other incentive
plan, all other written employee programs or agreements, all medical, vision,
dental, or other health plans, all life insurance plans, and all other employee
benefit plans or fringe benefit plans, including, without limitation, "employee
benefit plans" as that term is defined in Section 3(3) of ERISA maintained by,
sponsored in whole or in part by, or contributed to by, any Ambanc Company for
the benefit of employees, retirees, dependents, spouses, directors, independent
contractors, or other beneficiaries and under which employees, retirees,
dependents, spouses, directors, independent contractors, or other beneficiaries
are eligible to participate. Any of the Ambanc Benefit Plans which is an
"employee welfare benefit plan," as that term is defined in Section 3(l) of
ERISA, or an "employee pension benefit plan," as that term is defined in Section
3(2) of ERISA, is referred to herein as a "Ambanc ERISA Plan." Any Ambanc ERISA
Plan which is also a "defined benefit plan" (as defined in Section 414(j) of the
Internal Revenue Code or Section 3(35) of ERISA) is referred to herein as a
"Ambanc Pension Plan." Neither Ambanc nor any Ambanc Company has an "obligation
to contribute" (as defined in ERISA Section 4212) to a "multiemployer plan" (as
defined in ERISA Sections 4001(a)(3) and 3(37)(A)). Each "employee pension
benefit plan," as defined in Section 3(2) of ERISA, maintained by any Ambanc
Company at any time during the last six years that was intended to qualify under
Section 401(a) of the Internal Revenue Code and with respect to which any Ambanc
Company has any Liability, is disclosed as such in Section 5.13 of the Ambanc
Disclosure Memorandum.
(b) Ambanc has delivered or made available to UPC prior to the
execution of this Agreement correct and complete copies of the following
documents: (i) all trust
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agreements or other funding arrangements for such Ambanc Benefit Plans
(including insurance contracts), and all amendments thereto, (ii) with respect
to any such Ambanc Benefit Plans or amendments thereto, all determination
letters, rulings, opinion letters, information letters, or advisory opinions
issued by the Internal Revenue Service, the United States Department of Labor,
or the Pension Benefit Guaranty Corporation after December 31, 1994, (iii)
annual reports or returns, audited or unaudited financial statements, actuarial
valuations and reports, and summary annual reports prepared for any Ambanc
Benefit Plan with respect to the most recent plan year, and (iv) the most recent
summary plan descriptions and any modifications thereto.
(c) All Ambanc Benefit Plans are in compliance with the
applicable terms of ERISA, the Internal Revenue Code, and any other applicable
Laws, the breach or violation of which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Ambanc. Each
Ambanc ERISA Plan which is intended to be qualified under Section 401(a) of the
Internal Revenue Code has received a favorable determination letter from the
Internal Revenue Service, and Ambanc is not aware of any circumstances which
could reasonably result in revocation of any such favorable determination
letter. Each trust created under any Ambanc ERISA Plan has been determined to be
exempt from Tax under Section 501(a) of the Internal Revenue Code and Ambanc is
not aware of any circumstance which could reasonably result in revocation of
such exemption. With respect to each Ambanc Benefit Plan to the Knowledge of
Ambanc, no event has occurred which could reasonably give rise to a loss of any
intended Tax consequences under the Internal Revenue Code or to any Tax under
Section 511 of the Internal Revenue Code that is reasonably likely, individually
or in the aggregate, to have a Material Adverse Effect on Ambanc. There is no
Material pending or, to the Knowledge of Ambanc, threatened Litigation (other
than routine claims for benefits) relating to any Ambanc ERISA Plan.
(d) No Ambanc Company has engaged in a transaction with
respect to any Ambanc Benefit Plan that, assuming the Taxable Period of such
transaction expired as of the date of this Agreement, would subject any Ambanc
Company to a Material Tax or penalty imposed by either Section 4975 of the
Internal Revenue Code or Section 502(i) of ERISA in amounts which are reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Ambanc. Neither Ambanc nor, to the Knowledge of Ambanc, any administrator or
fiduciary of any Ambanc Benefit Plan (or any agent of any of the foregoing) has
engaged in any transaction, or acted or failed to act in any manner which could
subject Ambanc to any direct or indirect Liability (by indemnity or otherwise)
for breach of any fiduciary, co-fiduciary, or other duty under ERISA, where such
Liability, individually or in the aggregate, is reasonably likely to have a
Material Adverse Effect on Ambanc. Except as disclosed under Section 5.13 of the
Ambanc Disclosure Memorandum, no oral or written representation or communication
with respect to any aspect of the Ambanc Benefit Plans has been made to
employees of any Ambanc Company which is not in accordance with the written or
otherwise preexisting terms and provisions of such plans, where any Liability
with respect to such representation or disclosure is reasonably likely to have a
Material Adverse Effect on Ambanc.
(e) No Ambanc Pension Plan has any "unfunded current
liability," as that term is defined in Section 302(d)(8)(A) of ERISA, and the
fair market value of all benefits (whether vested or not) accrued to date by all
present or former participants in such Ambanc Pension Plan exceeds the plan's
"benefit liabilities" as that term is defined in Section 4001(a)(16) of ERISA.
For this purpose, the assumptions for valuing plan Assets or Liabilities shall
be the assumptions set forth in the most recent actuarial valuations and reports
with respect to any
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such Ambanc Pension Plan. Since the date of the most recent actuarial valuation,
there has been (i) no Material change in the financial position or funded status
of any Ambanc Pension Plan, (ii) no change in the actuarial assumptions with
respect to any Ambanc Pension Plan, and (iii) no increase in benefits under any
Ambanc Pension Plan as a result of plan amendments or changes in applicable Law,
any of which is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Ambanc. Neither any Ambanc Pension Plan nor any
"single-employer plan," within the meaning of Section 4001(a)(15) of ERISA,
currently or formerly maintained by any Ambanc Company, or the single-employer
plan of any entity which is considered one employer with Ambanc under Section
4001 of ERISA or Section 414 of the Internal Revenue Code or Section 302 of
ERISA (a "Ambanc ERISA Affiliate") has an "accumulated funding deficiency"
within the meaning of Section 412 of the Internal Revenue Code or Section 302 of
ERISA (whether or not waived). All contributions with respect to a Ambanc
Pension Plan or any single-employer plan of an Ambanc ERISA Affiliate have or
will be timely made and there is no lien or expected to be a lien under Internal
Revenue Code Section 412(n) or ERISA Section 302(f) or Tax under Internal
Revenue Code Section 4971. No Ambanc Company has provided, or is required to
provide, security to an Ambanc Pension Plan or to any single-employer plan of an
Ambanc ERISA Affiliate pursuant to Section 401(a)(29) of the Internal Revenue
Code. All premiums required to be paid under ERISA Section 4006 have been timely
paid by Ambanc, except to the extent any failure would not have a Material
Adverse Effect on Ambanc.
(f) No Liability under Title IV of ERISA has been or is
expected to be incurred by any Ambanc Company with respect to any defined
benefit plan currently or formerly main tained by any of them or by any Ambanc
ERISA Affiliate that has not been satisfied in full (other than Liability for
Pension Benefit Guaranty Corporation premiums, which have been paid when due)
except to the extent any failure would not have a Material Adverse Effect on
Ambanc.
(g) Except as set forth in Section 5.13(g) of the Ambanc
Disclosure Memorandum, no Ambanc Company has any obligations for retiree health
and retiree life benefits under any of the Ambanc Benefit Plans other than with
respect to benefit coverage mandated by applicable Law.
(h) Except as set forth in Section 5.13(h) of the Ambanc
Disclosure Memorandum, neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will, by themselves,
(i) result in any payment (including, without limitation, severance, golden
parachute, or otherwise) becoming due to any director or any employee of any
Ambanc Company from any Ambanc Company under any Ambanc Benefit Plan or
otherwise, (ii) increase any benefits otherwise payable under any Ambanc Benefit
Plan, or (iii) result in any acceleration of the time of payment or vesting of
any such benefit.
5.14 MATERIAL CONTRACTS. Except as set forth in Section 5.14 of the
Ambanc Disclosure Memorandum, none of the Ambanc Companies, nor any of their
respective Assets, businesses, or operations, is a party to, or is bound or
affected by, or receives benefits under, (i) any employment, severance,
termination, consulting, or retirement Contract providing for aggregate payments
to any Person in any calendar year in excess of $100,000, (ii) any Contract
relating to the borrowing of money by any Ambanc Company or the guarantee by any
Ambanc Company of any such obligation (other than Contracts evidencing deposit
liabilities, purchases of federal funds, fully-secured repurchase agreements,
and Federal Home Loan Bank advances of depository institution Subsidiaries,
trade payables, and Contracts relating
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to borrowings or guarantees made in the ordinary course of business), and (iii)
any other Contract or amendment thereto that would be required to be filed as an
exhibit to a Form 10-K filed by Ambanc with the SEC as of the date of this
Agreement that has not been filed as an exhibit to Ambanc's Form 10-K filed for
the fiscal year ended December 31, 1997, or in another SEC Document (together
with all Contracts referred to in Sections 5.9 and 5.13(a) of this Agreement,
the "Ambanc Contracts"). With respect to each Ambanc Contract: (i) the Contract
is in full force and effect; (ii) no Ambanc Company is in Default thereunder,
other than Defaults which are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Ambanc; (iii) no Ambanc Company has
repudiated or waived any Material provision of any such Contract; and (iv) no
other party to any such Contract is, to the Knowledge of Ambanc, in Default in
any respect, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Ambanc, or has
repudiated or waived any Material provision thereunder.
5.15 LEGAL PROCEEDINGS.
(a) There is no Litigation instituted or pending, or, to the
Knowledge of Ambanc, threatened (or unasserted but considered probable of
assertion and which if asserted would have at least a reasonable probability of
an unfavorable outcome to any Ambanc Company) against any Ambanc Company, or
against any Asset, employee benefit plan, interest, or right of any of them,
that is reasonably likely to have, individually or in the aggre gate, a Material
Adverse Effect on Ambanc, nor are there any Orders of any Regulatory
Authorities, other governmental authorities, or arbitrators outstanding against
any Ambanc Company, that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Ambanc.
(b) Section 5.15(b) of the Ambanc Disclosure Memorandum
includes a summary report of all Litigation as of the date of this Agreement to
which any Ambanc Company is a party and which names an Ambanc Company as a
defendant or cross-defendant and where the maximum exposure is estimated to be
$100,000 or more.
5.16 REPORTS. Since January 1, 1994, or the date of organization if
later, each Ambanc Company has timely filed all reports and statements, together
with any amendments required to be made with respect thereto, that it was
required to file with any Regulatory Authorities, except failures to file which
are not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Ambanc. As of their respective dates, each of such reports and
documents, including the financial statements, exhibits, and schedules thereto,
complied in all Material respects with all applicable Laws.
5.17 STATEMENTS TRUE AND CORRECT. None of the information supplied or
to be supplied by any Ambanc Company regarding Ambanc for inclusion in the
Registration Statement to be filed by UPC with the SEC will, when the
Registration Statement becomes effective, be false or misleading with respect to
any Material fact, or contain any untrue statement of a Material fact, or omit
to state any Material fact required to be stated thereunder or necessary to make
the statements therein not misleading. None of the information supplied or to be
supplied by any Ambanc Company for inclusion in the Proxy Statement to be mailed
to Ambanc's stockholders in connection with the Stockholders' Meeting will, when
first mailed to the stockholders of Ambanc, be false or misleading with respect
to any Material fact, or contain any misstatement of Material fact, or omit to
state any Material fact required to be stated thereunder or necessary to make
the statements therein, in light of the circumstances under
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which they were made, not misleading, or, in the case of the Proxy Statement or
any amendment thereof or supplement thereto, at the time of the Stockholders'
Meeting, be false or misleading with respect to any Material fact, or omit to
state any Material fact required to be stated thereunder or necessary to correct
any Material statement in any earlier communication with respect to the
solicitation of any proxy for the Stockholders' Meetings. All documents that any
Ambanc Company 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.
5.18 ACCOUNTING, TAX, AND REGULATORY MATTERS. No Ambanc Company has
taken or agreed to take any action, and Ambanc has no Knowledge of any fact or
circumstance that is reasonably likely to (i) prevent the transactions
contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment or as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code or (ii) materially impede
or delay receipt of any Consents of Regulatory Authorities referred to in
Section 9.1(b) of this Agreement or result in the imposition of a condition or
restriction of the type referred to in the last sentence of such Section.
5.19 STATE TAKEOVER LAWS. Each Ambanc Company has taken all necessary
action to exempt the transactions contemplated by this Agreement and the Plan of
Merger from any applicable "moratorium," "control share," "fair price,"
"business combination," or other anti-takeover laws and regulations, including
Chapters 42 and 43 of the IBCL, of the State of Indiana (collectively, "Takeover
Laws").
5.20 CHARTER PROVISIONS. Each Ambanc Company has taken all action so
that the entering into of this Agreement and the Plan of Merger and the
consummation of the Merger and the other transactions contemplated by this
Agreement and the Plan of Merger do not and will not result in the grant of any
rights to any Person under the Articles of Incorporation, Bylaws, or other
governing instruments of any Ambanc Company or restrict or impair the ability of
UPC or any of its Subsidiaries to vote, or otherwise to exercise the rights of a
stockholder with respect to, shares of any Ambanc Company that may be directly
or indirectly acquired or controlled by it. Sections 1 and 2 of Article X of the
Restated Articles of Incorporation of Ambanc do not and will not apply to any of
the transactions contemplated by this Agreement, the Plan of Merger or the Stock
Option Agreement.
5.21 RIGHTS AGREEMENT. Ambanc is not a party to any rights agreement or
rights plan as a result of which any Person has or any acquire any Rights with
respect to Ambanc Capital Stock.
5.22 DERIVATIVES. All interest rate swaps, caps, floors, option
agreements, futures and forward contracts, and other similar risk management
arrangements, whether entered into for Ambanc's own account, or for the account
of one or more the Ambanc Subsidiaries or their customers, were entered into (i)
in accordance with prudent business practices and all applicable Laws and (ii)
with counterparties believed to be financially responsible.
5.23 YEAR 2000. Ambanc has disclosed to UPC a complete and accurate
copy of Ambanc's plan, including an estimate of the anticipated associated
costs, for implementing modifications to Ambanc's hardware, software, and
computer systems, chips, and microproces sors, to ensure proper execution and
accurate processing of all date-related data, whether from
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years in the same century or in different centuries. Between the date of this
Agreement and the Effective Time, Ambanc shall endeavor to continue its efforts
to implement such plan.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF UPC
UPC hereby represents and warrants to Ambanc as follows:
6.1 ORGANIZATION, STANDING, AND POWER. UPC is a corporation duly
organized and validly existing under the Laws of the State of Tennessee, and has
the corporate power and authority to carry on its business as now conducted and
to own, lease, and operate its Material Assets. UPC is duly qualified or
licensed to transact business as a foreign corporation in the States of the
United States and foreign jurisdictions where the character of its Assets or the
nature or conduct of its business requires it to be so qualified or licensed,
except for such jurisdictions in which the failure to be so qualified or
licensed is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on UPC.
6.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) UPC has the corporate power and authority necessary to
execute, deliver, and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery, and
performance of this Agreement and the consummation of the transactions
contemplated herein, including the Merger, have been duly and validly authorized
by all necessary corporate action in respect thereof on the part of UPC, subject
to the approval of the UPC Charter Amendment by holders of the requisite number
of shares of UPC Common Stock required by Law, which is the only stockholder
vote required for the consummation of the Merger by UPC. Subject to such
requisite stockholder approval, this Agreement represents a legal, valid, and
binding obligation of UPC, enforceable against UPC in accordance with its terms
(except in all cases as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, receivership, conservatorship,
moratorium, or similar Laws affecting the enforcement of creditors' rights
generally and except that the availability of the equitable remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by
UPC, nor the consummation by UPC of the transactions contemplated hereby, nor
compliance by UPC with any of the provisions hereof, will (i) conflict with or
result in a breach of any provision of UPC's Restated Charter or Bylaws (subject
to the amendment of the UPC Restated Charter pursuant to the UPC Charter
Amendment to increase the number of authorized shares of UPC Common Stock), (ii)
constitute or result in a Default under, or require any Consent pursuant to, or
result in the creation of any Lien on any Asset of any UPC Company under, any
Contract or Permit of any UPC Company, where such Default or Lien, or any
failure to obtain such Consent, is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on UPC, or (iii) subject to receipt of
the requisite Consents referred to in Section 9.1(b) of this Agreement, violate
any Law or Order applicable to any UPC Company or any of their respective
Material Assets.
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(c) Other than in connection or compliance with the provisions
of the Securities Laws, applicable state corporate and securities Laws, and
rules of the NYSE, and other than Consents required from Regulatory Authorities,
and other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee benefit plans,
or under the HSR Act, and other than Consents, filings, or notifications which,
if not obtained or made, are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on UPC, no notice to, filing with, or
Consent of, any public body or authority is necessary for the consummation by
UPC of the Merger and the other transactions contemplated in this Agreement.
6.3 CAPITAL STOCK. The authorized capital stock of UPC consists of (i)
100,000,000 shares of UPC Common Stock as of the date of this Agreement, of
which 81,650,946 shares are issued and outstanding as of December 31, 1997 and
(ii) 10,000,000 shares of UPC Preferred Stock, of which 2,188,358 shares of UPC
Series E Preferred Stock were issued and outstanding as of December 31, 1997.
All of the issued and outstanding shares of UPC Capital Stock are, and (subject
to the amendment of UPC's Restated Charter pursuant to the UPC Charter
Amendment) all of the shares of UPC Common Stock to be issued in exchange for
shares of Ambanc Common Stock upon consummation of the Merger when issued in
accordance with the terms of this Agreement, will be, duly and validly issued
and outstanding and fully paid and nonassessable under the TBCA. None of the
outstanding shares of UPC Capital Stock has been, and none of the shares of UPC
Common Stock to be issued in exchange for shares of Ambanc Common Stock upon
consummation of the Merger will be, issued in violation of any preemptive rights
of the current or past stockholders of UPC.
6.4 UPC SUBSIDIARIES. Except with respect to Capital Factors, Inc. or
as otherwise disclosed in the UPC SEC Reports, UPC or one of its Subsidiaries
owns all of the issued and outstanding shares of capital stock of each UPC
Subsidiary. No equity securities of any UPC Subsidiary are or may become
required to be issued (other than to another UPC Company) by reason of any
Rights, and there are no Contracts by which any UPC Subsidiary is bound to issue
(other than to another UPC Company) additional shares of its capital stock or
Rights or by which any UPC Company is or may be bound to transfer any shares of
the capital stock of any UPC Subsidiary (other than to another UPC Company).
There are no Contracts relating to the rights of any UPC Company to vote or to
dispose of any shares of the capital stock of any UPC Subsidiary. All of the
shares of capital stock of each UPC Subsidiary held by a UPC Company are duly
authorized, validly issued, fully paid and, except as provided in statutes
pursuant to which depository institution Subsidiaries are organized,
nonassessable under the applicable corporation Law of the jurisdiction in which
such Subsidiary is incorporated or organized and are owned by the UPC Company
free and clear of any Lien. Each UPC Subsidiary is either a bank or a
corporation, and is duly organized, validly existing, and (as to national
banking associations) 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 UPC Subsidiary is duly qualified or licensed to
transact business as a foreign corporation in the States of the United States
and foreign jurisdictions where the character of its Assets or the nature or
conduct of its business requires it to be so qualified or licensed, except for
such jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on UPC. Each UPC Subsidiary that is a depository institution is an
"insured institution" as defined in the Federal Deposit Insurance Act and
applicable regulations thereunder, and the deposits in which are insured by the
Bank Insurance Fund or Savings Association Insurance Fund.
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6.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) UPC has filed and made available to Ambanc all forms,
reports, and documents required to be filed by UPC with the SEC since December
31, 1993 (collectively, the "UPC SEC Reports"). The UPC SEC Reports (i) at the
time filed, complied in all Material respects with the applicable requirements
of the 1933 Act and the 1934 Act, as the case may be and (ii) did not at the
time they were filed (or if amended or superseded by a filing prior to the date
of this Agreement, then on the date of such filing) contain any untrue statement
of a Material fact or omit to state a Material fact required to be stated in
such UPC SEC Reports or necessary in order to make the statements in such UPC
SEC Reports, in light of the circumstances under which they were made, not
misleading. Except for UPC Subsidiaries that are registered as a broker, dealer,
or investment advisor or filings required due to fiduciary holdings of the UPC
Subsidiaries, none of UPC Subsidiaries is required to file any forms, reports,
or other documents with the SEC.
(b) Each of the UPC Financial Statements (including, in each
case, any related notes) contained in the UPC SEC Reports, including any UPC SEC
Reports filed after the date of this Agreement until the Effective Time,
complied or will comply as to form in all Material respects with the applicable
published rules and regulations of the SEC with respect thereto, was 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 statements, as permitted by Form 10-Q of
the SEC), and fairly presented or will fairly present the consolidated financial
position of UPC and its Subsidiaries as at the respective dates and the
consolidated results of its operations and cash flows for the periods indicated,
except that the unaudited interim financial statements were or are subject to
normal and recurring year-end adjustments which were not or are not expected to
be Material in amount or effect.
6.6 ABSENCE OF UNDISCLOSED LIABILITIES. No UPC Company has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on UPC, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of UPC as of
December 31, 1997, included in the UPC Financial Statements or reflected in the
notes thereto and except for Liabilities incurred in the ordinary course of
business subsequent to December 31, 1997. No UPC Company has incurred or paid
any Liability since December 31, 1997, except for such Liabilities incurred or
paid in the ordinary course of business consistent with past business practice
and which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on UPC.
6.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31, 1997,
except as disclosed in the UPC Financial Statements delivered prior to the date
of this Agreement, (i) there have been no events, changes or occurrences which
have had, or are reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on UPC and (ii) the UPC Companies have conducted their
respective businesses in the ordinary and usual course (excluding the incurrence
of expenses in connection with this Agreement and the transactions contemplated
hereby).
6.8 TAX MATTERS.
(a) All Tax Returns required to be filed by or on behalf of
any of the UPC Companies have been timely filed, or requests for extensions have
been timely filed, granted,
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and have not expired for periods ended on or before December 31, 1996, and, to
the Knowledge of UPC, all Tax Returns filed are complete and accurate in all
Material respects. All Tax Returns for periods ending on or before the date of
the most recent fiscal year end immediately preceding the Effective Time will be
timely filed or requests for extensions will be timely filed. All Taxes shown on
filed Tax Returns have been paid. There is no audit examination, deficiency, or
refund Litigation with respect to any Taxes, that is reasonably likely to result
in a determination that would have, individually or in the aggregate, a Material
Adverse Effect on UPC, except to the extent reserved against in the UPC
Financial Statements dated prior to the date of this Agreement. All Taxes and
other Liabilities due with respect to completed and settled examinations or
concluded Litigation have been paid.
(b) None of the UPC Companies has executed an extension or
waiver of any statute of limitations on the assessment or collection of any Tax
due (excluding such statutes that relate to years currently under examination by
the Internal Revenue Service or other applicable taxing authorities) that is
currently in effect.
(c) Adequate provision for any Taxes due or to become due for
any of the UPC Companies for the period or periods through and including the
date of the respective UPC Financial Statements has been made and is reflected
on such UPC Financial Statements.
(d) Each of the UPC Companies is in compliance with, and its
records contain all information and documents (including properly completed IRS
Forms W-9) necessary to comply with, all applicable information reporting and
Tax withholding requirements under federal, state, and local Tax Laws, and such
records identify with specificity all accounts subject to backup withholding
under Section 3406 of the Internal Revenue Code, except for such instances of
noncompliance and such omissions as are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on UPC.
(e) None of the UPC Companies has made any payments, is
obligated to make any payments, or is a party to any contract, agreement, or
other arrangement 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.
(f) There are no Material Liens with respect to Taxes upon any
of the Assets of the UPC Companies.
(g) No UPC Company has filed any consent under Section 341(f)
of the Internal Revenue Code concerning collapsible corporations.
6.9 ASSETS. The UPC Companies have good and marketable title, free and
clear of all Liens, to all of their respective Assets, except where the failure
to have such good and marketable title is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on UPC. All tangible
properties used in the businesses of the UPC Companies are in good condition,
reasonable wear and tear excepted, and are usable in the ordinary course of
business consistent with UPC's past practices. All Assets which are Material to
UPC's business on a consolidated basis, held under leases or subleases by any of
the UPC Companies, are held under valid Contracts enforceable in accordance with
their respective terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or other Laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or
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injunctive relief is subject to the discretion of the court before which any
proceedings may be brought), and each such Contract is in full force and effect.
The UPC Companies currently maintain insurance sufficient in amounts, scope, and
coverage reasonably necessary for their operations. None of the UPC Companies
has received notice from any insurance carrier that (i) such insurance will be
canceled or that coverage thereunder will be reduced or eliminated or (ii)
premium costs with respect to such policies of insurance will be substantially
increased. The Assets of the UPC Companies include all Assets required to
operate the business of the UPC Companies as presently conducted.
6.10 ENVIRONMENTAL MATTERS.
(a) To the Knowledge of UPC, each UPC Company, its
Participation Facilities, and its Loan Properties are, and have been, in
compliance with all Environmental Laws, except those violations which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on UPC.
(b) There is no Litigation pending or, to the Knowledge of
UPC, threatened before any court, governmental agency, or authority, or other
forum in which any UPC Company or any of its Participation Facilities has been
or, with respect to threatened Litigation, may reasonably be expected to 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,
or involving a site owned, leased, or operated by any UPC Company or any of its
Participation Facilities, except for such Litigation pending or threatened that
is not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on UPC.
(c) There is no Litigation pending or, to the Knowledge of
UPC, threatened before any court, governmental agency, or board, or other forum
in which any of its Loan Properties (or UPC in respect of such Loan Property)
has been or, with respect to threatened Litigation, may reasonably be expected
to be named as a defendant or potentially responsible party (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, or involving a Loan Property, except for such
Litigation pending or threatened that is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on UPC.
(d) To the Knowledge of UPC, there is no reasonable basis for
any Litigation of a type described in subsections (b) or (c), except such as is
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on UPC.
(e) To the Knowledge of UPC, during the period of (i) any UPC
Company's ownership or operation of any of their respective current properties,
(ii) any UPC Company's participation in the management of any Participation
Facility, or (iii) any UPC Company's holding of a security interest in a Loan
Property, there have been no releases of Hazardous Material in, on, under, or
affecting (or potentially affecting) such properties, except such as are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on UPC. To the Knowledge of UPC, prior to the period of (i) any UPC
Company's ownership or operation of any of their respective current properties,
(ii) any UPC Company's participation in the management of any Participation
Facility, or (iii) any UPC Company's holding of a security interest in a Loan
Property, to the Knowledge of UPC, there were no releases of Hazardous
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Material in, on, under, or affecting any such property, Participation Facility,
or Loan Property, except such as are not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on UPC.
6.11 COMPLIANCE WITH LAWS. UPC is duly registered as a bank holding
company under the BHC Act. Each UPC Company has in effect all Permits necessary
for it to own, lease, or operate its Material Assets and to carry on its
business as now conducted, except for those Permits the absence of which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on UPC, and there has occurred no Default under any such Permit, other
than Defaults which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on UPC. None of the UPC Companies:
(a) is in violation of any Laws, Orders, or Permits applicable
to its business or employees conducting its business, except for violations
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on UPC; and
(b) has received any notification or communication from any
agency or department of federal, state, or local government or any Regulatory
Authority or the staff thereof (i) asserting that any UPC Company is not in
compliance with any of the Laws or Orders which such governmental authority or
Regulatory Authority enforces, where such noncompli ance is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on UPC, (ii)
threatening to revoke any Permits, the revocation of which is reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on UPC, or
(iii) requiring any UPC Company (x) to enter into or consent to the issuance of
a cease and desist order, formal agreement, directive, commitment, or memorandum
of understanding, or (y) to adopt any Board resolution or similar undertaking,
which restricts materially the conduct of its business, or in any manner relates
to its capital adequacy, its credit or reserve policies, its management, or the
payment of dividends.
6.12 LABOR RELATIONS. No UPC Company is the subject of any Litigation
asserting that it or any other UPC Company has committed an unfair labor
practice (within the meaning of the National Labor Relations Act or comparable
state Law) or seeking to compel it or any other UPC Company to bargain with any
labor organization as to wages or conditions of employment, nor is any UPC
Company a party to or bound by any collective bargaining agreement, Contract, or
other agreement or understanding with a labor union or labor organization, nor
is there any strike or other labor dispute involving any UPC Company, pending
or, to the Knowledge of UPC, threatened, or to the Knowledge of UPC, is there
any activity involving any UPC Company's employees seeking to certify a
collective bargaining unit or engaging in any other organization activity.
6.13 LEGAL PROCEEDINGS. There is no Litigation instituted or pending,
or, to the Knowledge of UPC, threatened (or unasserted but considered probable
of assertion and which if asserted would have at least a reasonable probability
of an unfavorable outcome to any UPC Company) against any UPC Company, or
against any Asset, employee benefit plan, interest, or right of any of them,
that is reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on UPC, nor are there any Orders of any Regulatory Authorities,
other governmental authorities, or arbitrators outstanding against any UPC
Company, that are reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on UPC.
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6.14 REPORTS. Since January 1, 1994, or the date of organization if
later, each UPC Company has timely filed all reports and statements, together
with any amendments required to be made with respect thereto, that it was
required to file with any Regulatory Authorities, except failures to file which
are not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on UPC. As of their respective dates, each of such reports and
documents, including the financial statements, exhibits, and schedules thereto,
complied in all Material respects with all applicable Laws.
6.15 STATEMENTS TRUE AND CORRECT. None of the information supplied or
to be supplied by any UPC Company regarding UPC for inclusion in the
Registration Statement to be filed by UPC with the SEC will, when the
Registration Statement becomes effective, be false or misleading with respect to
any Material fact, or contain any untrue statement of a Material fact, or omit
to state any Material fact required to be stated thereunder or necessary to make
the statements therein not misleading. None of the information supplied or to be
supplied by any UPC Company for inclusion in the Proxy Statement to be mailed to
Ambanc's stockholders in connection with the Stockholders' Meeting, will, when
first mailed to the stockholders of Ambanc, be false or misleading with respect
to any Material fact, or contain any misstatement of Material fact, or omit to
state any Material fact required to be stated thereunder or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, or, in the case of the Proxy Statement or any amendment
thereof or supplement thereto, at the time of the Stockholders' Meeting, be
false or misleading with respect to any Material fact, or omit to state any
Material fact required to be stated thereunder or necessary to correct any
Material statement in any earlier communication with respect to the solicitation
of any proxy for the Stockholders' Meeting. All documents that any UPC Company
is responsible for filing with any Regulatory Authority in connection with the
transactions contem plated hereby will comply as to form in all Material
respects with the provisions of applicable Law.
6.16 ACCOUNTING, TAX, AND REGULATORY MATTERS. No UPC Company or any
Affiliate thereof has taken or agreed to take any action, and UPC has no
Knowledge of any fact or circumstance that is reasonably likely to (i) prevent
the transactions contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment or as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code or (ii) materially impede
or delay receipt of any Consents of Regulatory Authorities referred to in
Section 9.1(b) of this Agreement or result in the imposition of a condition or
restriction of the type referred to in the last sentence of such Section.
6.17 EMPLOYEE BENEFIT PLANS. All UPC Plans are in compliance with the
applicable terms of ERISA, the Internal Revenue Code, and any other applicable
Laws, the breach or violation of which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on UPC. For purposes
of this Agreement, the term "UPC Plan" means each bonus, incentive compensation,
severance pay, medical or other insurance program, retirement plan, or other
employee benefit plan program, agreement, or arrangement sponsored, maintained,
or contributed to by UPC or any trade or business, whether or not incorporated,
that together with UPC or any of its Subsidiaries would be deemed a "single
employer" under Section 4001 of ERISA or Section 414 of the Internal Revenue
Code (a "UPC ERISA Affiliate") or under which UPC or any UPC ERISA Affiliate has
any Liability or obligation. No Liability under Title IV of ERISA has been
incurred by UPC or any UPC ERISA Affiliate that has not been satisfied in full,
and no condition exists that presents a Material risk to UPC or any UPC ERISA
Affiliate of incurring any such Liability. With respect to any UPC Plan that is
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subject to Title IV of ERISA, full payment has been made, or will be made in
accordance with Section 404(a)(6) of the Internal Revenue Code, of all amounts
that UPC or any UPC ERISA Affiliate is required to pay under Section 412 of the
Internal Revenue Code or under the terms of the UPC Plans, and no accumulated
funding deficiency (within the meaning of Section 412 of the Internal Revenue
Code or Section 302 of ERISA, whether or not waived) exists with respect to any
UPC Plan. There are no Material actions, suits, or claims pending, or, to the
Knowledge of UPC, threatened or anticipated relating to any UPC Plan. There has
been no Material adverse change in the financial position or funded status of
any UPC Plan that is subject to Title IV of ERISA since the date of the
information relating to the financial position and funded status of each such
plan contained in the most recent Annual Report on Form 10-K filed by UPC with
the SEC.
6.18 DERIVATIVES. All interest rate swaps, caps, floors, option
agreements, futures and forward contracts, and other similar risk management
arrangements, whether entered into for UPC's own account, or for the account of
one or more the UPC Subsidiaries or their customers, were entered into (i) in
accordance with prudent business practices and all applicable Laws and (ii) with
counterparties believed to be financially responsible.
6.19 YEAR 2000. UPC has disclosed to Ambanc a complete and accurate
copy of UPC's plan, including an estimate of the anticipated associated costs,
for implementing modifications to UPC's hardware, software, and computer
systems, chips, and microproces sors, to ensure proper execution and accurate
processing of all date-related data, whether from years in the same century or
in different centuries. Between the date of this Agreement and the Effective
Time, UPC shall endeavor to continue its efforts to implement such plan.
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 AFFIRMATIVE COVENANTS OF BOTH PARTIES. From the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement, unless the prior written consent of the other Party shall have been
obtained, and except as otherwise expressly contemplated herein, each Party
shall and shall cause each of its Subsidiaries to (i) operate its business only
in the usual, regular, and ordinary course, (ii) preserve intact its business
organization and Assets and maintain its rights and franchises, (iii) use its
reasonable efforts to maintain its current employee relationships, and (iv) take
no action which would (a) adversely affect the ability of any Party to obtain
any Consents required for the transactions contemplated hereby without
imposition of a condition or restriction of the type referred to in the last
sentence of Section 9.1(b) of this Agreement, or (b) adversely affect the
ability of any Party to perform its covenants and agreements under this
Agreement; provided that in the case of UPC, the provisions of this Section 7.1
(other than the provisions of clause (iv) above) shall not be deemed to preclude
UPC from continuing to implement its program of acquiring unaffiliated
depository and nondepository institutions.
7.2 NEGATIVE COVENANTS OF AMBANC. From the date of this Agreement until
the earlier of the Effective Time or the termination of this Agreement, Ambanc
covenants and agrees that it will not do or agree or commit to do, or permit any
of its Subsidiaries to do or agree or commit to do, any of the following without
the prior written consent of the chief
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executive officer or chief financial officer of UPC, which consent shall not be
unreasonably withheld:
(a) amend the Articles of Incorporation, Bylaws, or other
governing instruments of any Ambanc Company, or
(b) incur, guarantee, or otherwise become responsible for, any
additional debt obligation or other obligation for borrowed money (other than
indebtedness of an Ambanc Company to another Ambanc Company) in excess of an
aggregate of $50,000 (for the Ambanc Companies on a consolidated basis), except
in the ordinary course of the business consistent with past practices (which
shall include, for Ambanc Subsidiaries that are depository institutions,
creation of deposit liabilities, purchases of federal funds, advances from the
Federal Reserve Bank or Federal Home Loan Bank, and entry into repurchase
agreements fully secured by U.S. government or agency securities), or impose, or
suffer the imposition, on any Asset of any Ambanc Company of any Lien or permit
any such Lien to exist (other than in connection with deposits, repurchase
agreements, bankers acceptances, "treasury tax and loan" accounts established in
the ordinary course of business, the satisfaction of legal requirements in the
exercise of trust powers, and Liens in effect as of the date hereof that are
disclosed in the Ambanc Disclosure Memorandum); or
(c) repurchase, redeem, or otherwise acquire or exchange
(other than exchanges in the ordinary course under employee benefit plans),
directly or indirectly, any shares, or any securities convertible into any
shares, of the capital stock of any Ambanc Company, or declare or pay any
dividend or make any other distribution in respect of Ambanc's capital stock,
provided that Ambanc may (to the extent legally and contractually permitted to
do so), but shall not be obligated to, declare and pay regular quarterly cash
dividends on the shares of Ambanc Common Stock at a rate of $0.12 per share,
with usual and regular record and payment dates in accordance with past practice
as disclosed in Section 7.2(c) of the Ambanc Disclosure Memorandum and such
dates may not be changed without the prior written consent of UPC; provided,
that, notwithstanding the provisions of Section 1.3 of this Agreement, the
Parties shall cooperate in selecting the Effective Time to ensure that, with
respect to the quarterly period in which the Effective Time occurs, the holders
of Ambanc Common Stock do not receive both a dividend in respect of their Ambanc
Common Stock and a dividend in respect of UPC Common Stock or fail to receive
any dividend; or
(d) except for this Agreement, or pursuant to the Stock Option
Agreement or pursuant to the exercise of Rights outstanding as of the date of
this Agreement and pursuant to the terms thereof in existence on the date of
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 Ambanc
Common Stock or any other capital stock of any Ambanc Company, or any stock
appreciation rights, or any option, warrant, conversion, or other right to
acquire any such stock, or any security convertible into any such stock; or
(e) adjust, split, combine, or reclassify any capital stock of
any Ambanc Company or issue or authorize the issuance of any other securities in
respect of or in substitution for shares of Ambanc Common Stock, or sell, lease,
mortgage, or otherwise dispose of or otherwise encumber (i) any shares of
capital stock of any Ambanc Subsidiary (unless any such shares of stock are sold
or otherwise transferred to another Ambanc
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Company) or (ii) 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 Ambanc Subsidiary, or otherwise
acquire direct or indirect control over any Person, other than in connection
with (i) foreclosures in the ordinary course of business, (ii) acquisitions of
control by a depository institution Subsidiary in its fiduciary capacity, or
(iii) the creation of new wholly-owned Subsidiaries organized to conduct or
continue activities otherwise permitted by this Agreement; or
(g) grant any increase in compensation or benefits to the
employees or officers of any Ambanc Company, except in accordance with 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 any Ambanc Company;
grant any Material increase in fees or other increases in compensation or other
benefits to directors of any Ambanc Company except in accordance with the
ordinary course of business consistent with past practice; or voluntarily
accelerate the vesting of any stock options or other stock-based compensation or
employee benefits; or
(h) enter into or amend any employment Contract between any
Ambanc Company and any Person (unless such amendment is required by Law or a
pre-existing contractual obligation) that the Ambanc Company does not have the
unconditional right to terminate without Liability (other than Liability for
services already rendered), at any time on or after the Effective Time; or
(i) adopt any new employee benefit plan of any Ambanc Company
or make any Material change in or to any existing employee benefit plans of any
Ambanc Company other than any such change that is required by Law or that, in
the opinion of counsel, is necessary or advisable to maintain the tax qualified
status of any such plan; or
(j) make any significant change in any Tax or accounting
methods or systems of internal accounting controls, except as may be appropriate
to conform to changes in Tax Laws or regulatory accounting requirements or GAAP;
or
(k) commence any Litigation other than as necessary for the
prudent operation of its business or settle any Litigation involving any
Liability of any Ambanc Company for Material money damages or restrictions upon
the operations of any Ambanc Company; or
(l) except in the ordinary course of business, modify, amend,
or terminate any Material Contract or waive, release, compromise, or assign any
Material rights or claims.
7.3 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
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constitute a Material breach of any of its representations, warranties, or
covenants contained herein, and to use its reasonable efforts to prevent or
promptly to remedy the same.
7.4 REPORTS. Each Party and its Subsidiaries shall file all reports
required to be filed by it with Regulatory Authorities between the date of this
Agreement and the Effective Time and shall deliver to the other Party copies of
all such reports promptly after the same are filed. If financial statements are
contained in any such reports filed with the SEC, such financial statements will
fairly present the consolidated financial position of the entity filing such
statements as of the dates indicated and the consolidated results of operations,
changes in stockholders' equity, and cash flows for the periods then ended in
accordance with GAAP (subject in the case of interim financial statements to
normal recurring year-end adjustments that are not Material). As of their
respective dates, such reports filed with the SEC will comply in all Material
respects with the Securities Laws and will not contain any untrue statement of a
Material fact or omit to state a Material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Any financial statements contained
in any other reports to another Regulatory Authority shall be prepared in
accordance with Laws applicable to such reports.
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 REGISTRATION STATEMENT; PROXY STATEMENT; STOCKHOLDER APPROV ALS. As
soon as reasonably practicable after execution of this Agreement, UPC shall file
the Registration Statement with the SEC, and shall use its reasonable efforts to
cause the Registration Statement to become effective under the 1933 Act and take
any action required to be taken under the applicable state Blue Sky or
securities Laws in connection with the issuance of the shares of UPC Common
Stock upon consummation of the Merger. Ambanc shall furnish all information
concerning it and the holders of its capital stock as UPC may reasonably request
in connection with such action. Ambanc shall call a Stockholders' Meeting, to be
held as soon as reasonably practicable after the Registration Statement is
declared effective by the SEC, for the purpose of voting upon approval of (i)
this Agreement and the Plan of Merger and (ii) such other related matters as it
deems appropriate. In connection with the Stockholders' Meeting, (i) Ambanc
shall prepare and file with the SEC a Proxy Statement and mail such Proxy
Statement to Ambanc's stockholders, (ii) the Parties shall furnish to each other
all information concerning them that they may reasonably request in connection
with such Proxy Statement, (iii) the Board of Directors of Ambanc shall
recommend to Ambanc's stockholders the approval of the matters submitted for
approval, and (iv) the Board of Directors and officers of Ambanc shall use their
reasonable efforts to obtain such stockholders' approvals, provided that Ambanc
may withdraw, modify, or change in an adverse manner to UPC its recommendations
if the Board of Directors of Ambanc, after having consulted with and based upon
the advice of outside counsel, determines in good faith that the failure to so
withdraw, modify, or change its recommendation could constitute a breach of the
fiduciary duties of Ambanc's Board of Directors under applicable Law. In
addition, nothing in this Section 8.1 or elsewhere in this Agreement shall
prohibit accurate disclosure by either Party of information that is required to
be disclosed in the Registration Statement or the Proxy Statement or in any
other document required to be filed with the SEC (including, without limitation,
a Solicitation/Recommendation Statement on Schedule 14D-9) or otherwise required
to be publicly disclosed by applicable Law or regulations or rules of the NYSE.
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8.2 EXCHANGE LISTING. UPC shall use its reasonable efforts to list,
prior to the Effective Time, on the NYSE, subject to official notice of
issuance, the shares of UPC Common Stock to be issued to the holders of Ambanc
Common Stock pursuant to the Merger.
8.3 APPLICATIONS. UPC shall promptly prepare and file, and Ambanc 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.
8.4 FILINGS WITH STATE OFFICES. Upon the terms and subject to the
conditions of this Agreement, UPC shall cause UPHC to execute and file the
Articles of Merger with the Secretary of State of the State of Indiana and the
Secretary of State of the State of Tennessee.
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
reasonably practicable after the date of this Agreement, the transactions
contemplated by this Agreement, including, without limitation, using its
reasonable efforts to lift or rescind any Order adversely affecting its ability
to consummate the transactions contem plated herein and to cause to be satisfied
the conditions referred to in Article 9 of this Agreement; provided, that
nothing herein shall preclude either Party from exercising its rights under this
Agreement. Each Party shall use, and shall cause each of its Subsidiaries to
use, its reasonable efforts to obtain all Consents necessary or desirable for
the consummation of the transactions contemplated by this Agreement.
8.6 INVESTIGATION AND CONFIDENTIALITY.
(a) Prior to the Effective Time, each Party shall keep the
other Party advised of all Material developments relevant to its business and to
consummation of the Merger and shall permit the other Party to make or cause to
be made such investigation of the business and properties of it and its
Subsidiaries and of their respective financial and legal conditions as the other
Party reasonably requests, provided that such investigation shall be reasonably
related to the transactions contemplated hereby and shall not interfere
unnecessarily with normal operations. No investigation by a Party shall affect
the representations and warranties of the other Party.
(b) Each Party shall, and shall cause its advisers and agents
to, maintain the confidentiality of all confidential information furnished to it
by the other Party concerning its and its Subsidiaries' businesses, operations,
and financial positions and shall not use such information for any purpose
except in furtherance of the transactions contemplated by this Agreement. If
this Agreement is terminated prior to the Effective Time, each Party shall
promptly return or certify the destruction of all documents and copies thereof,
and all work papers containing confidential information received from the other
Party.
(c) Each Party agrees to give the other Party notice as soon
as practicable after any determination by it of any fact or occurrence relating
to the other Party which it has discovered through the course of its
investigation and which represents, or is reasonably likely to represent, either
a Material breach of any representation, warranty, covenant, or agreement
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of the other Party or which has had or is reasonably likely to have a Material
Adverse Effect on the other Party.
(d) Neither Party nor any of their respective Subsidiaries
shall be required to provide access to or to disclose information where such
access or disclosure would violate or prejudice the rights of its customers,
jeopardize the attorney-client or similar privilege with respect to such
information or contravene any Law, rule, regulation, Order, judgment, decree,
fiduciary duty, or agreement entered into prior to the date of this Agreement.
The Parties will use their reasonable efforts to make appropriate substitute
disclosure arrangements, to the extent practicable, in circumstances in which
the restrictions of the preceding sentence apply.
8.7 PRESS RELEASES. Prior to the Effective Time, UPC and Ambanc shall
consult with each other as to the form and substance of any press release or
other public disclosure materially related to this Agreement or any other
transaction contemplated hereby; provided, that nothing in this Section 8.7
shall be deemed to prohibit any Party from making any disclosure which its
counsel deems necessary or advisable in order to satisfy such Party's disclosure
obligations imposed by Law.
8.8 CERTAIN ACTIONS. Except with respect to this Agreement and the Plan
of Merger and the transactions contemplated hereby and thereby, no Ambanc
Company nor any Affiliate thereof nor any Representatives thereof retained by
any Ambanc Company shall directly or indirectly solicit or engage in
negotiations concerning any Acquisition Proposal, or provide any confidential
information or assistance to, or have any discussions with, any Person with
respect to an Acquisition Proposal. Notwithstanding the foregoing, Ambanc may,
and may authorize and permit its Representatives to, provide Persons with
confidential information, have discussions or negotiations with, or otherwise
facilitate an effort or attempt by such Person to make or implement an
Acquisition Proposal not solicited in violation of this Agreement if Ambanc's
Board of Directors, after having consulted with, and based upon the advice of,
outside counsel, determines in good faith that the failure to take such actions
could constitute a breach of the fiduciary duties of Ambanc's Board of Directors
under applicable Law; provided, that Ambanc shall promptly advise UPC following
the receipt of any Acquisition Proposal and the Material details thereof; and,
provided further, that prior to delivery of confidential informa tion relating
to Ambanc or access to Ambanc's books, records, or properties in connection
therewith, the other Person shall have entered into a confidentiality agreement
substantially similar to the Confidentiality Agreement previously entered into
between Ambanc and UPC. Nothing contained in this Section 8.8 shall prohibit the
Board of Directors of Ambanc from complying with Rule 14e-2, promulgated under
the 1934 Act. Ambanc 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 of all its Representatives not to engage in any of
the foregoing.
8.9 ACCOUNTING AND TAX TREATMENT. Each of the Parties undertakes and
agrees to use its reasonable efforts to cause the Merger, and to take no action
which would cause the Merger not, to qualify for treatment as a
pooling-of-interests for accounting purposes or as a "reorganization" within the
meaning of Section 368(a) of the Internal Revenue Code for federal income tax
purposes.
8.10 STATE TAKEOVER LAWS. Each Ambanc Company shall take all necessary
steps to exempt the transactions contemplated by this Agreement and the Plan of
Merger from, or if necessary challenge the validity or applicability of, any
applicable Takeover Laws.
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8.11 CHARTER PROVISIONS. Each Ambanc Company shall take all necessary
action to ensure that the entering into of this Agreement and the Plan of Merger
and the consumma tion of the Merger and the other transactions contemplated
hereby and thereby do not and will not result in the grant of any rights to any
Person under the Articles of Incorporation, Bylaws, or other governing
instruments of any Ambanc Company or restrict or impair the ability of UPC or
any of its Subsidiaries to vote, or otherwise to exercise the rights of a
stockholder with respect to, shares of any Ambanc Company that may be directly
or indirectly acquired or controlled by it.
8.12 AGREEMENT OF AFFILIATES. Ambanc has disclosed in Section 8.12 of
the Ambanc Disclosure Memorandum each Person whom it reasonably believes may be
deemed an "affiliate" of Ambanc for purposes of Rule 145 under the 1933 Act.
Ambanc shall use its reasonable efforts to cause each such Person to deliver to
UPC not later than 30 days prior to the Effective Time, a written agreement, in
substantially the form of Exhibit 3, providing that such Person will not sell,
pledge, transfer, or otherwise dispose of the shares of Ambanc Common Stock held
by such Person except as contemplated by such agreement or by this Agreement and
will not sell, pledge, transfer, or otherwise dispose of the shares of UPC
Common Stock to be received by such Person upon consummation of the Merger
except in compliance with applicable provisions of the 1933 Act and the rules
and regulations thereunder and until such time as financial results covering at
least 30 days of combined operations of UPC and Ambanc have been published
within the meaning of Section 201.01 of the SEC's Codification of Financial
Reporting Policies. Shares of UPC Common Stock issued to such affiliates of
Ambanc in exchange for shares of Ambanc Common Stock shall not be transfer able
until such time as financial results covering at least 30 days of combined
operations of UPC and Ambanc have been published within the meaning of Section
201.01 of the SEC's Codification of Financial Reporting Policies, regardless of
whether each such affiliate has provided the written agreement referred to in
this Section 8.12 (and UPC shall be entitled to place restrictive legends upon
certificates for shares of UPC Common Stock issued to affiliates of Ambanc
pursuant to this Agreement to enforce the provisions of this Section 8.12). UPC
shall not be required to maintain the effectiveness of the Registration
Statement under the 1933 Act for the purposes of resale of UPC Common Stock by
such affiliates.
8.13 EMPLOYEE BENEFITS AND CONTRACTS. Following the Effective Time, but
in no event earlier than the consolidation of Ambanc's depository institution
Subsidiaries with UPC's depository institution Subsidiaries, UPC shall provide
to officers and employees of the Ambanc Companies (the "Continuing Employees"),
employee benefits under employee benefit plans on terms and conditions which
when taken as a whole are substantially similar to those currently provided by
the UPC Companies to their similarly situated officers and employees. For
purposes of participation, vesting, and benefit accruals (but not accrual of
benefits under UPC's tax-qualified retirement plans) under such employee benefit
plans, (i) service under any qualified defined benefit or contribution plans of
Ambanc shall be treated as service under UPC's qualified defined benefit or
contribution plans and (ii) service under any other employee benefit plans of
Ambanc shall be treated as service under any similar employee benefit plans
maintained by UPC. UPC shall cause the UPC welfare benefit plans that cover the
Continuing Employees after the Effective Time to (i) waive any waiting period
and restrictions and limitations for preexisting conditions or insurability and
(ii) cause any deductible, co-insurance, or maximum out-of-pocket payments made
by the Continuing Employees under Ambanc's welfare benefit plans to be credited
to such Continuing Employees under the UPC welfare benefit plans, so as to
reduce the amount of any deductible, co-insurance, or maximum out-of-pocket
payments payable by the Continuing Employees under the UPC welfare benefit
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plans. Prior to the commencement of the Continuing Employee's participation in
the UPC employee benefit plans and programs, the benefit coverage of, and
participation in benefit plans by, the Continuing Employees shall continue under
the Ambanc Benefit Plans, as in effect immediately prior to the Effective Time.
During such transition period, the coverage under and participation in the
Ambanc Benefit Plans shall be deemed to provide the Continuing Employees with
benefits that are no less favorable than those offered to other employees of UPC
and its Subsidiaries. Except as expressly provided in the Supplemental Letter,
UPC also shall cause Ambanc and its Subsidiaries to honor all employment,
severance, consulting, and other compensation Contracts disclosed in Section
8.13 of the Ambanc Disclosure Memoran dum to UPC between any Ambanc Company and
any current or former director, officer, independent contractor, or employee
thereof, and all provisions of the Ambanc Benefit Plans.
8.14 INDEMNIFICATION.
(a) After the Effective Time, UPC shall indemnify, defend and
hold harmless the present and former directors, officers, employees, and agents
of Ambanc or any of Ambanc's Subsidiaries (each, a "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 at or prior to the Effective Time (including
the transactions contemplated by this Agreement and the Stock Option Agreement)
to the full extent permitted under Indiana Law and by Ambanc's Articles of
Incorporation and Bylaws, as in effect on the date hereof and any indemnity
agreements entered into prior to the date of this Agreement by any of the Ambanc
Companies and any director, officer, employee, or agent of any of the Ambanc
Companies, including, without limitation, provisions relating to advances of
expenses incurred in the defense of any Litigation. Without limiting the
foregoing, in any case in which approval by UPC is required to effectuate any
indemnification, UPC shall direct, at the election of the Indemnified Party,
that the determination of any such approval shall be made by independent counsel
mutually agreed upon between UPC and the Indemnified Party.
(b) UPC and the Surviving Corporation shall use their
reasonable efforts (and Ambanc shall cooperate prior to the Effective Time in
these efforts) to maintain in effect for a period of three years after the
Effective Time, Ambanc's existing directors' and officers' liability insurance
policy (provided that UPC and the Surviving Corporation may substitute therefor
(i) policies of at least the same coverage and amounts containing terms and
conditions which are substantially no less advantageous or (ii) with the consent
of Ambanc given prior to the Effective Time, any other policy) with respect to
claims arising from facts or events which occurred prior to the Effective Time
and covering persons who are currently covered by such insurance; provided, that
the Surviving Corporation shall not be obligated to make aggregate annual
premium payments for such three-year period in respect of such policy (or
coverage replacing such policy) which exceed, for the portion related to
Ambanc's directors and officers, 150% of the annual premium payments on Ambanc's
current policy in effect as of the date of this Agreement (the "Maximum
Amount"). If the amount of the premiums necessary to maintain or procure such
insurance coverage exceeds the Maximum Amount, UPC shall use its reasonable
efforts to maintain the most advantageous policies of directors' and officers'
liability insurance obtainable for a premium equal to the Maximum Amount.
(c) Any Indemnified Party wishing to claim indemnification
under paragraph (a) of this Section 8.14, upon learning of any such Liability or
Litigation, shall promptly notify UPC thereof, provided that the failure so to
notify shall not affect the obligations of UPC under
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this Section 8.14 unless and to the extent such failure materially increases
UPC's Liability under this Section 8.14. In the event of any such Litigation
(whether arising before or after the Effective Time), (i) UPC or the Surviving
Corporation shall have the right to assume the defense thereof and UPC shall not
be liable to such Indemnified Parties for any legal expenses of other counsel or
any other expenses subsequently incurred by such Indemnified Parties in
connection with the defense thereof, except that if UPC or the Surviving
Corporation elects not to assume such defense or counsel for the Indemnified
Parties advises that there are substantive issues which raise conflicts of
interest between UPC or the Surviving Corporation and the Indemnified Parties,
the Indemnified Parties may retain counsel satisfactory to them, and UPC or the
Surviving Corporation shall pay all reasonable fees and expenses of such counsel
for the Indemnified Parties promptly as statements therefor are received;
provided, that UPC shall be obligated pursuant to this paragraph (c) to pay for
only one firm of counsel for all Indemnified Parties in any jurisdiction, (ii)
the Indemnified Parties will cooperate in the defense of any such Litigation,
and (iii) UPC shall not be liable for any settlement effected without its prior
written consent; and provided further that the Surviving Corporation shall not
have any obligation hereunder to any Indemnified Party when and if a court of
competent jurisdiction shall determine, and such determination shall have become
final, that the indemnification of such Indemnified Party in the manner
contemplated hereby is prohibited by applicable Law.
(d) The Surviving Corporation shall not be liable for any
settlement effected without its prior written consent which shall not be
unreasonably withheld.
(e) If either UPC 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 either UPC or the Surviving Corporation shall assume
the obligations set forth in this Section 8.14.
(f) UPC shall pay all reasonable costs, including attorneys'
fees, that may be incurred by any Indemnified Party in enforcing the indemnity
and other obligations provided for in this Section 8.14.
(g) The provisions of this Section 8.14 are intended to be for
the benefit of, and shall be enforceable by, each Indemnified Party and his or
her heirs or representatives.
8.15 CERTAIN MODIFICATIONS. UPC and Ambanc shall consult with respect
to their loan, litigation, and real estate valuation policies and practices
(including loan classifications and levels of reserves) and Ambanc shall make
such modifications or changes to its policies and practices, if any, prior to
the Effective Time, as may be mutually agreed upon. UPC and Ambanc also shall
consult with respect to the character, amount, and timing of restructuring and
Merger-related expense charges to be taken by each of the Parties in connection
with the transactions contemplated by this Agreement and shall take such charges
in accordance with GAAP as may be mutually agreed upon by the Parties. Neither
Party's representations, warranties, and covenants contained in this Agreement
shall be deemed to be inaccurate or breached in any respect as a consequence of
any modifications or charges undertaken solely on account of this Section 8.15.
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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 the Plan of Merger and to 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) STOCKHOLDER APPROVALS. The stockholders of Ambanc shall
have approved this Agreement and the Plan of Merger and the consummation of the
transactions contemplated hereby and thereby, including the Merger, as and to
the extent required by Law and by the provisions of any governing instruments.
The stockholders of UPC shall have approved the UPC Charter Amendment as and to
the extent required by Law, by the provisions of any governing instruments, and
by the rules of the NYSE.
(b) REGULATORY APPROVALS. All Consents of, filings and
registrations with, and notifications to, all Regulatory Authorities required
for consummation of the Merger shall have been obtained or made and shall be in
full force and effect and all waiting periods required by Law shall have
expired. No Consent obtained from any Regulatory Authority which is necessary to
consummate the transactions contemplated hereby shall be conditioned or
restricted in a manner (excluding requirements relating to the raising of
additional capital or the disposition of Assets or deposits) which in the
reasonable good faith judgment of the Board of Directors of UPC would so
materially adversely impact the economic or business benefits of the
transactions contemplated by this Agreement so as to render inadvisable the
consumma tion of the Merger.
(c) CONSENTS AND APPROVALS. Each Party shall have obtained any
and all Consents required for consummation of the Merger (other than those
referred to in Section 9.1(b) of this Agreement) or for the preventing of any
Default under any Contract or Permit of such Party which, if not obtained or
made, is reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on such Party.
(d) LEGAL PROCEEDINGS. No court or governmental or Regulatory
Authority of competent jurisdiction shall have enacted, issued, promulgated,
enforced, or entered any Law or Order (whether temporary, preliminary, or
permanent) or taken any other action which prohibits, restricts, or makes
illegal consummation of the transactions contem plated by this Agreement.
(e) REGISTRATION STATEMENT. The Registration Statement shall
be effective under the 1933 Act, no stop orders suspending the effectiveness of
the Registration Statement shall have been issued, no action, suit, proceeding,
or investigation by the SEC to suspend the effectiveness thereof shall have been
initiated and be continuing, and all necessary approvals under state securities
Laws or the 1933 Act or 1934 Act relating to the issuance or trading of the
shares of UPC Common Stock issuable pursuant to the Merger shall have been
received.
(f) EXCHANGE LISTING. The shares of UPC Common Stock issuable
pursuant to the Merger shall have been approved for listing on the NYSE, subject
to official notice of issuance.
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(g) TAX MATTERS. Ambanc shall have received a written opinion
from Leagre Chandler & Millard and UPC shall have received a written opinion
from Wyatt, Tarrant & Combs in each case in a form reasonably satisfactory to
such Party (the "Tax Opinions"), dated the date of the Effective Time,
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) no gain
or loss will be recognized by holders of Ambanc Common Stock who exchange all of
their Ambanc Common Stock solely for UPC Common Stock pursuant to the Merger
(except with respect to any cash received in lieu of a fractional share interest
in UPC Common Stock), (iii) the tax basis of the UPC Common Stock received by
holders of Ambanc Common Stock who exchange all of their Ambanc Common Stock
solely for UPC Common Stock in the Merger will be the same as the tax basis of
the Ambanc Common Stock surrendered in exchange for the UPC Common Stock
(reduced by an amount allocable to a fractional share interest in UPC Common
Stock for which cash is received), and (iv) the holding period of the UPC Common
Stock received by holders who exchange all of their Ambanc Common Stock solely
for UPC Common Stock in the Merger will be the same as the holding period of the
Ambanc Common Stock surrendered in exchange therefor, provided that such Ambanc
Common Stock is held as a capital asset at the Effective Time. In rendering such
Tax Opinions, such counsel shall be entitled to rely upon representations of
officers of Ambanc and UPC reasonably satisfactory in form and substance to such
counsel.
(h) POOLING LETTERS. Each Party shall have received a letter,
dated as of the Effective Time, in a form reasonably acceptable to such Party,
from Price Waterhouse LLP to the effect that the Merger will qualify for
pooling-of-interests accounting treatment. Each Party shall have received a
letter, dated as of the Effective Time, in a form reasonably acceptable to such
Party, from Deloitte & Touche LLP to the effect that such firm is not aware of
any matters relating to Ambanc and its Subsidiaries which would preclude the
Merger from qualifying for pooling-of-interests accounting treatment.
9.2 CONDITIONS TO OBLIGATIONS OF UPC. The obligations of UPC to perform
this Agreement and consummate the Merger and the other transactions contemplated
hereby are subject to the satisfaction of the following conditions, unless
waived by UPC pursuant to Section 11.6(a) of this Agreement:
(a) REPRESENTATIONS AND WARRANTIES. For purposes of this
Section 9.2(a), the accuracy of the representations and warranties of Ambanc set
forth in this Agreement shall be assessed as of the date of this Agreement and
as of the Effective Time with the same effect as though all such representations
and warranties had been made on and as of the Effective Time (provided that
representations and warranties which are confined to a specified date shall
speak only as of such date). The representations and warranties of Ambanc set
forth in Section 5.3 of this Agreement shall be true and correct (except for
inaccuracies which are de minimis in amount). The representations and warranties
of Ambanc set forth in Sections 5.18, 5.19, 5.20, and 5.21 of this Agreement
shall be true and correct in all Material respects. There shall not exist
inaccuracies in the representations and warranties of Ambanc set forth in this
Agreement (including the representations and warranties set forth in Sections
5.3, 5.18, 5.19, 5.20, and 5.21) such that the aggregate effect of such
inaccuracies has, or is reasonably likely to have, a Material Adverse Effect on
Ambanc; provided that, for purposes of this sentence only, those representations
and warranties which are qualified by references to "material, "Material,"
"Material Adverse Effect," or variations thereof, or to the "Knowledge" of
Ambanc or to a matter being "known" by Ambanc shall be deemed not to include
such qualifications.
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(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of
the agreements and covenants of Ambanc to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby prior to
the Effective Time shall have been duly performed and complied with in all
Material respects.
(c) CERTIFICATES. Ambanc shall have delivered to UPC (i) a
certificate, dated as of the Effective Time and signed on its behalf by its duly
authorized officers, to the effect that the conditions of its obligations set
forth in Section 9.2(a) and 9.2(b) of this Agreement have been satisfied and
(ii) certified copies of resolutions duly adopted by Ambanc's Board of Directors
and stockholders evidencing the taking of all corporate action necessary to
authorize the execution, delivery, and performance of this Agreement and the
Plan of Merger, and the consummation of the transactions contemplated hereby and
thereby, all in such reasonable detail as UPC and its counsel shall request.
(d) AFFILIATE AGREEMENTS. UPC shall have received from each
affiliate of Ambanc the affiliates agreement referred to in Section 8.12 of this
Agreement, to the extent necessary to assure in the reasonable judgment of UPC
that the transactions contemplated hereby will qualify for pooling-of-interests
accounting treatment.
9.3 CONDITIONS TO OBLIGATIONS OF AMBANC. The obligations of Ambanc to
perform this Agreement and the Plan of Merger and consummate the Merger and the
other transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by Ambanc pursuant to Section 11.6(b) of
this Agreement:
(a) REPRESENTATIONS AND WARRANTIES. For purposes of this
Section 9.3(a), the accuracy of the representations and warranties of UPC set
forth in this Agreement shall be assessed as of the date of this Agreement and
as of the Effective Time with the same effect as though all such representations
and warranties had been made on and as of the Effective Time (provided that
representations and warranties which are confined to a specified date shall
speak only as of such date). The representations and warranties of UPC set forth
in Section 6.3 of this Agreement shall be true and correct (except for
inaccuracies which are de minimis in amount). The representations and warranties
of UPC set forth in Section 6.16 of this Agreement shall be true and correct in
all Material respects. There shall not exist inaccuracies in the representations
and warranties of UPC set forth in this Agreement (including the representations
and warranties set forth in Sections 6.3 and 6.16) such that the aggregate
effect of such inaccuracies has, or is reasonably likely to have, a Material
Adverse Effect on UPC; provided that, for purposes of this sentence only, those
representations and warranties which are qualified by references to "material,"
"Material," "Material Adverse Effect," or variations thereof, or to the
"Knowledge" of UPC or to a matter being "known" by UPC shall be deemed not to
include such qualifications.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of
the agreements and covenants of UPC to be performed and complied with pursuant
to this Agreement and the other agreements contemplated hereby prior to the
Effective Time shall have been duly performed and complied with in all Material
respects.
(c) CERTIFICATES. UPC shall have delivered to Ambanc (i) a
certificate, dated as of the Effective Time and signed on its behalf by its duly
authorized officers, to the effect that the conditions of its obligations set
forth in Section 9.3(a) and 9.3(b) of this Agreement have been satisfied and
(ii) certified copies of resolutions duly adopted by UPC's
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Board of Directors and stockholders evidencing the taking of all corporate
action necessary to authorize the execution, delivery, and performance of this
Agreement, the UPC Charter Amendment, and the consummation of the transactions
contemplated hereby, all in such reasonable detail as Ambanc and its counsel
shall request.
(d) FAIRNESS OPINION. Ambanc shall have received an opinion
from McDonald & Company Securities, Inc., to the effect that the Merger is fair
to shareholders of Ambanc from a financial point of view dated the date of the
Proxy Statement.
ARTICLE 10
TERMINATION
10.1 TERMINATION. Notwithstanding any other provision of this Agreement
and the Plan of Merger, and notwithstanding the approval of this Agreement by
the stockholders of Ambanc or UPC, this Agreement may be terminated and the
Merger abandoned at any time prior to the Effective Time:
(a) By mutual consent of the Board of Directors of UPC and the
Board of Directors of Ambanc; or
(b) By the Board of Directors of either Party (provided that
the terminating Party is not then in breach of any representation or warranty
contained in this Agreement under the applicable standard set forth in Section
9.2(a) of this Agreement in the case of Ambanc and Section 9.3(a) of this
Agreement in the case of UPC or in Material breach of any covenant or other
agreement contained in this Agreement) in the event of an inaccuracy of any
representa tion 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 Ambanc and Section 9.3(a) of this Agreement in the case of UPC; or
(c) By the Board of Directors of either Party (provided that
the terminating Party is not then in breach of any representation or warranty
contained in this Agreement under the applicable standard set forth in Section
9.2(a) of this Agreement in the case of Ambanc and Section 9.3(a) in the case of
UPC) 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 either Party in the event (i)
any Consent of any Regulatory Authority required for consummation of the Merger
and the other transactions contemplated hereby shall have been denied by final
nonappealable action of such authority or if any action taken by such authority
is not appealed within the time limit for appeal, (ii) the stockholders of
Ambanc fail to vote their approval of the matters submitted for the approval by
such stockholders at the Stockholders' Meeting where the transactions were
presented to such stockholders for approval and voted upon, or (iii) the
stockholders of UPC fail to vote their approval of the UPC Charter Amendment at
the 1998 annual meeting of stockholders of UPC; or
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(e) By the Board of Directors of either Party in the event
that the Merger shall not have been consummated by December 31, 1998, if the
failure to consummate the transactions contemplated hereby on or before such
date is not caused by any breach of this Agreement by the Party electing to
terminate pursuant to this Section 10.1(e); or
(f) By the Board of Directors of either Party (provided that
the terminating Party is not then in breach of any representation or warranty
contained in this Agreement under the applicable standard set forth in Section
9.2(a) of this Agreement in the case of Ambanc and Section 9.3(a) of this
Agreement in the case of UPC or in Material breach of any covenant or other
agreement contained in this Agreement) in the event that any of the conditions
precedent to the obligations of such Party to consummate the Merger cannot be
satisfied or fulfilled by the date specified in Section 10.1(e) of this
Agreement; or
(g) By the Board of Directors of Ambanc upon written notice to
UPC at any time during the ten-day period commencing two days after the
Determination Date, if both of the following conditions are satisfied:
(1) the Average Closing Price shall be less than the
product of (i) 0.80 and (ii) the Starting Price; and
(2) (i) the quotient obtained by dividing the Average
Closing Price by the Starting Price (such number being
referred to herein as the "UPC Ratio") shall be less than (ii)
the quotient obtained by dividing the Index Price on the
Determination Date by the Index Price on the Starting Date and
subtracting 0.15 from the quotient in this clause (2)(ii)
(such number being referred to herein as the "Index Ratio");
subject, however, to the following three sentences. If Ambanc
refuses to consummate the Merger pursuant to this Section
10.1(g), it shall give prompt written notice thereof to UPC;
provided, that such notice of election to terminate may be
withdrawn at any time within the aforementioned ten-day
period. During the five-day period commencing with its receipt
of such notice, UPC shall have the option to elect to increase
the Exchange Ratio to equal the lesser of (i) the quotient
obtained by dividing (1) the product of 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 UPC makes
an election contemplated by the preceding sentence, within
such five-day period, it shall give prompt written notice to
Ambanc 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
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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:
<TABLE>
<CAPTION>
Bank Holding Companies Weighting
- ---------------------------------------------- -------------
<S> <C>
AmSouth Bancorporation 5.50%
BB&T Corporation 9.15
Crestar Financial Corporation 7.54
First American Corporation 3.99
First Security Corporation 7.92
First Tennessee National Corporation 4.38
Firstar Corporation 9.90
Huntington Bancshares, Inc. 13.08
Marshall & Ilsley Corporation 6.93
Mercantile Bancorporation, Inc. 8.91
National Commerce Bancorp 3.34
Old Kent Financial Corporation 3.22
Regions Financial Corporation 9.31
SouthTrust Corporation 6.82
------
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 UPC or any company belonging to the Index Group declares or
effects a stock dividend, reclassification, recapitalization, split-up,
combination, exchange of shares, or similar
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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, the Plan of Merger, and the Supplemental Letter shall become void and
have no effect, except that (i) the provisions of this Section 10.2 and Article
11 and Section 8.6(b) of this Agreement shall survive any such termination and
abandonment and (ii) a termination pursuant to Sections 10.1(b), 10.1(c), or
10.1(f) of this Agreement shall not relieve the breaching Party from Liability
for an uncured willful breach of a representation, warranty, covenant, or
agreement giving rise to such termination. The Stock Option Agreement shall be
governed by its own terms.
10.3 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS. The respective
representations, warranties, obligations, covenants, and agreements of the
Parties shall not survive the Effective Time except this Section 10.3 and
Articles 2, 3, 4, and 11 and Sections 8.12 and 8.14 of this Agreement and the
Supplemental Letter.
ARTICLE 11
MISCELLANEOUS
11.1 DEFINITIONS.
(a) Except as otherwise provided herein, the capitalized terms
set forth below shall have the following meanings:
"Acquisition Proposal" with respect to a Party shall mean any
tender offer or exchange offer or any proposal for a merger, acquisition of all
of the stock or Assets of, or other business combination involving such Party or
any of its Subsidiaries or the acquisition of a substantial equity interest in,
or a substantial portion of the Assets of, such Party or any of its
Subsidiaries.
"Affiliate" of a Person shall mean 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 Plan of
Reorganization, including the Exhibits hereto (except the Stock Option
Agreement) delivered pursuant hereto and incorporated herein by reference.
"Ambanc Capital Stock" shall mean, collectively, Ambanc Common
Stock and Ambanc Preferred Stock.
"Ambanc Preferred Stock" shall mean the $10 par value
preferred stock of Ambanc.
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"Ambanc Common Stock" shall mean the $10 par value common
stock of Ambanc.
"Ambanc Companies" shall mean, collectively, Ambanc and all
Ambanc Subsidiaries.
"Ambanc Disclosure Memorandum" shall mean the written
information entitled "Ambanc Disclosure Memorandum" delivered prior to the
execution of this Agreement to UPC describing in reasonable detail the matters
contained therein and, with respect to each disclo sure made therein,
specifically referencing each Section or subsection of this Agreement under
which such disclosure is being made.
"Ambanc Financial Statements" shall mean (i) the consolidated
statements of condition (including related notes and schedules, if any) of
Ambanc as of December 31, 1997, 1996 and 1995, and the related statements of
income, changes in stockholders' equity, and cash flows (including related notes
and schedules, if any) for each of the three years ended December 31, 1997, 1996
and 1995, as filed by Ambanc in SEC Documents and (ii) the consolidated
statements of condition of Ambanc (including related notes and schedules, if
any) and related statements of income, changes in stockholders' 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.
"Ambanc Stock Plans" shall mean the existing stock option and
other stock-based compensation plans of Ambanc.
"Ambanc Subsidiaries" shall mean the Subsidiaries of Ambanc,
which shall include the Ambanc Subsidiaries described in Section 5.4 of this
Agreement and any corpora tion, bank, savings association, or other organization
acquired as a Subsidiary of Ambanc in the future and owned by Ambanc at the
Effective Time.
"Articles of Merger" shall mean the Articles of Merger to be
executed by UPHC and filed with the Secretary of State of the State of Tennessee
and the Secretary of State of the State of Indiana relating to the Merger as
contemplated by Sections 1.1 and 1.3 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 relating to or utilized in such Person's business,
directly or indirectly, in whole or in part, whether or not carried on the books
and records of such Person, and whether or not owned in the name of such Person
or any Affiliate of such Person and wherever located.
"BHC Act" shall mean the federal Bank Holding Company Act of
1956, as amended.
"Confidentiality Agreements" shall mean those certain
Confidentiality Agreements, entered into prior to the date of this Agreement,
between Ambanc and UPC.
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"Consent" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person pursuant to
any Contract, Law, Order, or Permit.
"Contract" shall mean any written or oral agreement,
arrangement, authorization, commitment, contract, indenture, instrument, lease,
obligation, plan, practice, restriction, understanding, or undertaking of any
kind or character, or other document to which any Person is a party or that is
binding on any Person or its capital stock, Assets, or business.
"Default" shall mean (i) any breach or violation of or default
under any Contract, Order, or Permit, (ii) any occurrence of any event that with
the passage of time or the giving of notice or both would constitute a breach or
violation of or default under any Contract, Order, or Permit, or (iii) any
occurrence of any event that with or without the passage of time or the giving
of notice would give rise to a right to terminate or revoke, change the current
terms of, or renegotiate, or to accelerate, increase, or impose any Liability
under, any Contract, Order, or Permit, where, in any such event, such Default is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on a Party.
"Environmental Laws" shall mean all Laws relating to pollution
or protection of human health or the environment (including ambient air, surface
water, ground water, land surface, or subsurface strata) and which are
administered, interpreted, or enforced by the United States Environmental
Protection Agency and state and local agencies with jurisdiction over, and
including common law in respect of, pollution or protection of the environment,
including the Comprehensive Environmental Response Compensation and Liability
Act, as amended, 42 U.S.C. 9601 et seq. ("CERCLA"), the Resource Conservation
and Recovery Act, as amended, 42 U.S.C. 6901 et seq. ("RCRA"), and other Laws
relating to emissions, discharges, releases, or threatened releases of any
Hazardous Material, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of any
Hazardous Material.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"Exhibits" 1 through 3, inclusive, shall mean the Exhibits so
marked, copies of which are attached to this Agreement. Such Exhibits are hereby
incorporated by reference herein and made a part hereof, and may be referred to
in this Agreement and any other related instrument or document without being
attached hereto.
"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, contami nants, 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).
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"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.
"IBCL" shall mean the Indiana Business Corporation Law.
"Internal Revenue Code" shall mean the Internal Revenue Code
of 1986, as amended.
"Proxy Statement" shall mean the proxy statement used by
Ambanc to solicit the approval of its stockholders of the transactions
contemplated by this Agreement, which shall include the prospectus of UPC
relating to the issuance of the UPC Common Stock to holders of Ambanc Common
Stock.
"Knowledge" as used with respect to a Person (including
references to such Person being aware of a particular matter) shall mean the
personal knowledge of the chairman, president, chief financial officer, chief
accounting officer, chief credit officer, general counsel, or any executive vice
president 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.
"Liability" shall mean any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost, or expense
(including costs of investigation, collection, and defense), claim, deficiency,
guaranty, or endorsement of or by any Person (other than endorsements of notes,
bills, checks, and drafts presented for collection or deposit in the ordinary
course of business) of any type, whether accrued, absolute or contingent,
liquidated or unliquidated, matured or unmatured, or otherwise.
"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 property Taxes not yet due and
payable and (ii) for depository institution Subsidiaries of a Party, pledges to
secure deposits, and other Liens incurred in the ordinary course of the banking
business.
"Litigation" shall mean any action, arbitration, cause of
action, claim, complaint, criminal prosecution, demand letter, governmental or
other examination or investigation, hearing, inquiry, administrative or other
proceeding, or notice (written or oral) by any Person alleging potential
Liability or requesting information relating to or affecting a Party, its
business, its Assets (including Contracts related to it), or the transactions
contemplated by this Agreement, but shall not include regular, periodic
examinations of depository institutions and their Affiliates by Regulatory
Authorities.
"Loan Property" shall mean any property owned, leased, or
operated by the Party in question or by any of its Subsidiaries or in which such
Party or Subsidiary holds a security or other interest (including an interest in
a fiduciary capacity), and, where required by the context, includes the owner or
operator of such property, but only with respect to such property.
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"Material" for purposes of this Agreement shall be determined
in light of the facts and circumstances of the matter in question; provided that
any specific monetary amount stated in this Agreement shall determine
materiality in that instance.
"Material Adverse Effect" on a Party shall mean an event,
change, or occurrence which, individually or together with any other event,
change, or occurrence, has a Material adverse impact on (i) the financial
condition, results of operations, or business of such Party and its
Subsidiaries, taken as a whole or (ii) the ability of such Party to perform its
obligations under this Agreement or to consummate the Merger or the other
transactions contemplated by this Agreement, provided that "Material Adverse
Effect" 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 and omissions of a Party (or any of its Subsidiaries) taken with the
prior informed consent of the other Party in contemplation of the transactions
contemplated hereby, and (d) the Merger and compliance with the provisions of
this Agreement (including the expense associated with the vesting of benefits
under the various employee benefit plans of Ambanc as a result of the Merger
constituting a change of control) on the operating performance of the Parties.
"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.
"Order" shall mean any administrative decision or award,
decree, injunction, judgment, order, quasi-judicial decision or award, ruling,
or writ of any federal, state, local, or foreign or other court, arbitrator,
mediator, tribunal, administrative agency, or Regulatory Authority.
"Participation Facility" shall mean any facility or property
in which the Party in question or any of its Subsidiaries participates in the
management (including, but not limited to, participating in a fiduciary
capacity) and, where required by the context, said term means the owner or
operator of such facility or property, but only with respect to such facility or
property.
"Party" shall mean either Ambanc or UPC, and "Parties" shall
mean both Ambanc and UPC.
"Permit" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing, franchise,
license, notice, permit, or right to which any Person is a party or that is or
may be binding upon or inure to the benefit of any Person or its securities,
Assets, or business.
"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.
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"Plan of Merger" shall mean the plan of merger providing for
the Merger, in substantially the form of Exhibit 2.
"Registration Statement" shall mean the Registration Statement
on Form S-4, or other appropriate form, including any pre-effective or
post-effective amendments or supplements thereto, filed with the SEC by UPC
under the 1933 Act with respect to the shares of UPC Common Stock to be issued
to the stockholders of Ambanc in connection with the transactions contemplated
by this Agreement.
"Regulatory Authorities" shall mean, collectively, the Federal
Trade Commission, the United States Department of Justice, the Board of the
Governors of the Federal Reserve System, the Office of the Comptroller of the
Currency, the Federal Deposit Insurance Corporation, the Office of Thrift
Supervision, all state regulatory agencies having jurisdiction over the Parties
and their respective Subsidiaries, the NASD, the NYSE and the SEC.
"Representative" shall mean any investment banker, financial
advisor, attorney, accountant, consultant, or other representative of a Person.
"Rights" shall mean all arrangements, calls, commitments,
Contracts, options, rights to subscribe to, scrip, understandings, warrants, or
other binding obligations of any character whatsoever relating to, or securities
or rights convertible into or exchangeable for, shares of the capital stock of a
Person or by which a Person is or may be bound to issue additional shares of its
capital stock or other Rights.
"SEC" shall mean the United States 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 any Regulatory
Authority pursuant to the Securities Laws.
"Securities Laws" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act of 1940,
as amended, the Trust Indenture Act of 1939, as amended, and the rules and
regulations of any Regulatory Authority promulgated thereunder.
"Stock Option Agreement" shall mean the stock option agreement
by and between Ambanc and UPC, in substantially the form of Exhibit 1.
"Stockholders' Meeting" shall mean the meeting of the
stockholders of Ambanc to be held pursuant to Section 8.1 of this Agreement,
including any adjournment or adjournments thereof.
"Subsidiaries" shall mean all those corporations, banks,
associations, or other entities of which the entity in question owns or controls
50% or more of the outstanding equity securities either directly or through an
unbroken chain of entities as to each of which 50% 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.
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"Supplemental Letter" shall mean the supplemental letter of
even date herewith between the Parties relating to certain understandings and
agreements in addition to those included in this Agreement.
"Surviving Corporation" shall mean UPHC as the surviving
corporation resulting from the Merger.
"Tax" or "Taxes" shall mean all federal, state, local, and
foreign taxes, charges, fees, levies, imposts, duties, or other assessments,
including income, gross receipts, excise, employment, sales, use, transfer,
license, payroll, franchise, severance, stamp, occupation, windfall profits,
environmental, federal highway use, commercial rent, customs duties, capital
stock, paid-up capital, profits, withholding, Social Security, single business
and unemployment, disability, real property, personal property, registration, ad
valorem, value added, alternative or add-on minimum, estimated, or other tax of
any kind whatsoever, imposed or required to be withheld by the United States or
any state, local, or foreign government or subdivision or agency thereof,
including any interest, penalties, or additions thereto.
"Taxable Period" shall mean any period prescribed by any
governmental authority, including the United States or any state, local, or
foreign government or subdivision or agency thereof for which a Tax Return is
required to be filed or Tax is required to be paid.
"Tax Return" shall mean any report, return, information
return, or other information required to be supplied to a taxing authority in
connection with Taxes, including any return of an affiliated or combined or
unitary group that includes a Party or its Subsidiaries.
"TBCA" shall mean the Tennessee Business Corporation Act.
"UPC Capital Stock" shall mean, collectively, the UPC Common
Stock, the UPC Preferred Stock and any other class or series of capital stock of
UPC.
"UPC Charter Amendment" shall mean the proposal to amend UPC's
Restated Charter to increase the number of authorized shares of UPC Common Stock
by not less than 100,000,000, which may be submitted to the stockholders of UPC
for consideration and approval at the 1998 annual meeting of stockholders of
UPC.
"UPC Common Stock" shall mean the $5.00 par value common stock
of UPC.
"UPC Companies" shall mean, collectively, UPC and all UPC
Subsidiaries.
"UPC Financial Statements" shall mean (i) the consolidated
balance sheets (including related notes and schedules, if any) of UPC as of
December 31, 1997 and 1996, and the related statements of earnings, changes in
stockholders' equity, and cash flows (including related notes and schedules, if
any) for each of the three years ended December 31, 1997, 1996 and 1995, as
filed by UPC in SEC Documents and (ii) the consolidated balance sheets of UPC
(including related notes and schedules, if any) and related statements of
earnings, changes in stockholders' 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.
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"UPC Preferred Stock" shall mean the no par value preferred
stock of UPC and shall include the (i) Series A Preferred Stock and (ii) Series
E 8% Cumulative, Convertible Preferred Stock, of UPC ("UPC Series E Preferred
Stock").
"UPC Rights" shall mean the preferred stock purchase rights
issued pursuant to the UPC Rights Agreement.
"UPC Rights Agreement" shall mean that certain Rights
Agreement, dated January 19, 1989, between UPC and Union Planters Bank, National
Association, as Rights Agent.
"UPC Subsidiaries" shall mean the Subsidiaries of UPC and any
corporation, bank, or other organization acquired as a Subsidiary of UPC in the
future and owned by UPC at the Effective Time.
"UPHC" shall mean the wholly-owned subsidiary of UPC organized
under the Laws of the State of Tennessee.
"UPHC Common Stock" shall mean the $1.00 par value common
stock of UPHC.
(b) The terms set forth below shall have the meanings ascribed
thereto in the referenced sections:
<TABLE>
<S> <C>
Ambanc Benefit Plans Section 5.13(a)
Average Closing Price Section 10.1(g)
Ambanc Contracts Section 5.14
Ambanc ERISA Affiliate Section 5.13(e)
Ambanc ERISA Plan Section 5.13(a)
Ambanc Rights Section 3.5(a)
Ambanc Pension Plan Section 5.13(a)
Ambanc SEC Reports Section 5.5(a)
Closing Section 1.2
Determination Date Section 10.1(g)
Effective Time Section 1.3
Exchange Agent Section 4.1
Exchange Ratio Section 3.1(c)
Indemnified Party Section 8.14
Index Group Section 10.1(g)
Index Price Section 10.1(g)
Index Ratio Section 10.1(g)
Merger Section 1.1
Starting Date Section 10.1(g)
Starting Price Section 10.1(g)
Takeover Laws Section 5.19
Tax Opinion Section 9.1(g)
UPC ERISA Affiliate Section 6.17
UPC Ratio Section 10.1(g)
UPC SEC Reports Section 6.5(a)
</TABLE>
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(c) Any singular term in this Agreement shall be deemed to
include the plural, and any plural term the singular. Whenever the words
"include," "includes," or "including" are used in this Agreement, they shall be
deemed followed by the words "without limitation."
11.2 EXPENSES.
(a) Except as otherwise provided in this Section 11.2, each of
the Parties shall bear and pay all direct costs and expenses incurred by it or
on its behalf in connection with the transactions contemplated hereunder,
including filing, registration, and application fees, printing fees, and fees
and expenses of its own financial or other consultants, investment bankers,
accountants, and counsel, except that each of the Parties shall bear and pay
one-half of the printing costs incurred in connection with the printing of the
Registration Statement and the Proxy Statement.
(b) Nothing contained in this Section 11.2 shall constitute or
shall be deemed to constitute liquidated damages for the willful breach by a
Party of the terms of this Agreement or otherwise limit the rights of the
nonbreaching Party.
11.3 BROKERS AND FINDERS. Except for McDonald & Company Securities,
Inc. as to Ambanc and Stifel, Nicolaus & Company, Inc. as to UPC, each of the
Parties represents and warrants that neither it nor any of its officers,
directors, employees, or Affiliates has employed any broker or finder or
incurred any Liability for any financial advisory fees, investment bankers'
fees, brokerage fees, commissions, or finders' fees in connection with this
Agreement or the transactions contemplated hereby. In the event of a claim by
any broker or finder based upon his, her, or its representing or being retained
by or allegedly representing or being retained by Ambanc or UPC, each of Ambanc
and UPC, as the case may be, agrees to indemnify and hold the other Party
harmless of and from any Liability in respect of any such claim.
11.4 ENTIRE AGREEMENT. Except as otherwise expressly provided herein,
this Agreement (including the 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 (including any provision of
the Confidentiality Agreements which would act to preclude UPC (or any Holder as
defined in the Stock Option Agreement from exercising its rights under the Stock
Option Agreement) to the extent that the Stock Option Agreement is in force and
effect, but excluding the Supplemental Letter). 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 8.12 and 8.14 of this Agreement.
11.5 AMENDMENTS. To the extent permitted by Law, this Agreement may be
amended by a subsequent writing signed by each of the Parties upon the approval
of the Boards of Directors of each of the Parties, whether before or after
stockholder approval of this Agreement has been obtained; provided, that the
provisions of this Agreement relating to the manner or basis in which shares of
Ambanc Common Stock will be exchanged for UPC Common Stock shall not be amended
after the Stockholders' Meeting without the requisite approval of the holders of
the issued and outstanding shares of UPC Common Stock and Ambanc Common Stock,
as the case may be, entitled to vote thereon.
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11.6 WAIVERS.
(a) Prior to or at the Effective Time, UPC, acting through its
Board of Directors, chief executive officer, chief financial officer, or other
authorized officer, shall have the right to waive any Default in the performance
of any term of this Agreement by Ambanc, to waive or extend the time for the
compliance or fulfillment by Ambanc of any and all of its obliga tions under
this Agreement, and to waive any or all of the conditions precedent to the
obligations of UPC under this Agreement, except any condition which, if not
satisfied, would result in the violation of any Law. No such waiver shall be
effective unless in writing signed by a duly authorized officer of UPC.
(b) Prior to or at the Effective Time, Ambanc, acting through
its Board of Directors, chief executive officer, chief financial officer, or
other authorized officer, shall have the right to waive any Default in the
performance of any term of this Agreement by UPC, to waive or extend the time
for the compliance or fulfillment by UPC of any and all of its obligations under
this Agreement, and to waive any or all of the conditions precedent to the
obligations of Ambanc 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 Ambanc.
(c) The failure of any Party at any time or times to require
performance of any provision hereof shall in no manner affect the right of such
Party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained in
this Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.
11.7 ASSIGNMENT. Except as expressly contemplated hereby, neither this
Agreement nor any of the rights, interests, or obligations hereunder shall be
assigned by any Party hereto (whether by operation of Law or otherwise) without
the prior written consent of the other Party. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of, and be enforceable
by the Parties and their respective successors and assigns.
11.8 NOTICES. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered by hand, by
facsimile transmission, by registered or certified mail, postage pre-paid, or by
courier or overnight carrier, to the persons at the addresses set forth below
(or at such other address as may be provided hereunder), and shall be deemed to
have been delivered as of the date so delivered:
Ambanc: AMBANC CORP.
302 Main Street
Vincennes, Indiana 47591-0556
Telecopy Number: 812-885-6403
Attn: Robert G. Watson
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Copy to Counsel: Leagre Chandler & Millard
9100 Keystone Crossing, Suite 800
Indianapolis, Indiana 46240
Telecopy Number: 317-846-7900
Attn: John R. Zerkle
UPC: UNION PLANTERS CORPORATION
7130 Goodlett Farms Parkway
Memphis, Tennessee 38018
Telecopy Number: (901) 580-2939
Attn: Jackson W. Moore
President and
Chief Operating Officer
Copy to Counsel: UNION PLANTERS CORPORATION
7130 Goodlett Farms Parkway
Memphis, Tennessee 38018
Telecopy Number: (901) 580-2939
Attn: E. James House, Jr.
WYATT, TARRANT & COMBS
2800 Citizens Plaza
Louisville, KY 40202
Telecopy Number: (502) 589-0309
Attn: Stewart E. Conner
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, except to the extent that the Laws of the State of
Indiana relate to the consummation of the Merger.
11.10 COUNTERPARTS. This Agreement may be executed in two or more
counter parts, 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 the
Parties.
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11.13 ENFORCEMENT OF AGREEMENT. The Parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
11.14 SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
IN WITNESS WHEREOF, each of the Parties has caused this
Agreement to be executed on its behalf and its corporate seal to be hereunto
affixed and attested by officers thereunto as of the day and year first above
written.
ATTEST: AMBANC CORP.
By: /s/ Troy D. Stoll By: /s/ Robert G. Watson
------------------------ --------------------------------
Troy D. Stoll, Secretary Robert G. Watson
Chairman, President, and
Chief Executive Officer
[CORPORATE SEAL]
ATTEST: UNION PLANTERS CORPORATION
By: /s/ E. James House, Jr. By: /s/ Benjamin W. Rawlins, Jr.
---------------------------- ---------------------------------
E. James House, Jr. Benjamin W. Rawlins, Jr.
Secretary Chairman and Chief Executive
Officer
[CORPORATE SEAL]
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<PAGE> 136
APPENDIX B
PLAN OF MERGER
OF
AMBANC CORP.
INTO AND WITH
UNION PLANTERS HOLDING CORPORATION
Pursuant to this Plan of Merger ("Plan of Merger"), AMBANC
CORP., ("Ambanc"), a corporation organized and existing under the Laws of the
State of Indiana, shall be merged into and with UNION PLANTERS HOLDING
CORPORATION ("UPHC"), a corporation organized and existing under the laws of the
State of Tennessee and a wholly-owned subsidiary of UNION PLANTERS CORPORATION,
a corporation organized and existing under the laws of the State of Tennessee
("UPC").
ARTICLE 1.
DEFINITIONS
Except as otherwise provided herein, the capitalized terms set
forth below shall have the following meanings:
(a) "AMBANC COMMON STOCK" shall mean the $10.00 par value
common stock of Ambanc.
(b) "AMBANC COMPANIES" shall mean, collectively, Ambanc and
all Ambanc Subsidiaries.
(c) "AMBANC STOCK PLANS" shall have the meaning set forth in
the Merger Agreement.
(d) "AMBANC SUBSIDIARIES" shall have the meaning set forth in
the Merger Agreement.
(e) "ARTICLES OF MERGER" shall mean the Articles of Merger to
be executed by UPHC and filed with the Secretary of State of the State of
Tennessee and the Secretary of State of the State of Indiana relating to the
Merger as contemplated by Section 2.1 of this Plan of Merger.
(f) "CONSENT" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person pursuant to
any Contract, Law, Order, or Permit.
(g) "EFFECTIVE TIME" shall mean the date and time on which the
Merger becomes effective as defined in Section 2.2 of this Plan of Merger.
<PAGE> 137
(h) "EXCHANGE AGENT" shall mean the exchange agent selected by
UPC.
(i) "IBCL" shall mean the Indiana Business Corporation Law.
(j) "INTERNAL REVENUE CODE" shall mean the Internal Revenue
Code of 1986, as amended, and the rules and regulations promulgated thereunder.
(k) "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.
(l) "MERGER" shall mean the merger of Ambanc into and with
UPHC as provided in Section 2.1 of this Plan of Merger.
(m) "MERGER AGREEMENT" shall mean the Agreement and Plan of
Reorganiza tion, dated as of March 31, 1998, by and between UPC and Ambanc.
(n) "NYSE" shall mean the New York Stock Exchange, Inc.
(o) "REGULATORY AUTHORITIES" shall mean, collectively, the
Federal Trade Commission, the United States Department of Justice, the Board of
the Governors of the Federal Reserve System, the Office of the Comptroller of
the Currency, the Federal Deposit Insurance Corporation, the Office of Thrift
Supervision, all state regulatory agencies having jurisdiction over the Parties
and their respective Subsidiaries, the NASD, the NYSE, and the SEC.
(p) "SEC" shall mean the United States Securities and Exchange
Commission.
(q) "STOCKHOLDERS' MEETING" shall mean the meeting of the
stockholders of Ambanc to be held pursuant to Section 8.1 of the Merger
Agreement, including any adjournment or adjournments thereof.
(r) "SUBSIDIARIES" shall mean all those corporations, banks,
associations, or other entities of which the entity in question owns or controls
50% or more of the outstanding equity securities either directly or through an
unbroken chain of entities as to each of which 50% 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.
(s) "SURVIVING CORPORATION" shall refer to UPHC as the
surviving corporation resulting from the Merger.
(t) "TBCA" shall mean the Tennessee Business Corporation Act,
as in effect at the Effective Time.
(u) "UPC CAPITAL STOCK" shall mean, collectively, the UPC
Common Stock, the UPC Preferred Stock, and any other class or series of capital
stock of UPC.
(v) "UPC COMMON STOCK" shall mean the $5.00 par value common
stock of UPC.
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(w) "UPC COMPANIES" shall mean, collectively, UPC and all UPC
Subsidiaries.
(x) "UPC PREFERRED STOCK" shall mean the no par value
preferred stock of UPC and shall include the (i) Series A Preferred Stock and
(ii) Series E, 8% Cumulative, Convertible Preferred Stock, of UPC.
(y) "UPC RIGHTS" shall mean the preferred stock purchase
nights issued pursuant to the UPC Rights Agreement.
(z) "UPC RIGHTS AGREEMENT" shall mean that certain Rights
Agreement, dated January 19, 1989, between UPC and Union Planters Bank, National
Association, as Rights Agent.
(aa) "UPHC COMMON STOCK" shall mean the $1.00 par value common
stock of UPHC.
(ab) The terms set forth below shall have the meanings
ascribed to them in Section 3.6:
<TABLE>
<S> <C>
Average Closing Price Determination Date
Index Group Index Price
Index Ratio Starting Date
Starting Price UPC Ratio
</TABLE>
Any capitalized term not defined herein shall have the meaning
ascribed to it in the Merger Agreement.
ARTICLE 2.
TRANSACTIONS AND TERMS OF MERGER
(a) MERGER. Subject to the terms and conditions of this Plan
of Merger, at the Effective Time, Ambanc shall be merged with and into UPHC in
accordance with the provisions of IC 23-1-40-7 of the IBCL and with the effect
provided in IC 23-1-40-6 of the IBCL and in accordance with the provisions of
Section 48-21-109 of the TBCA and with the effect provided in Section 48-21-108
of the TBCA (the "Merger"). UPHC shall be the Surviving Corporation resulting
from the Merger and shall continue to be governed by the Laws of the State of
Tennessee.
(b) EFFECTIVE TIME. The Merger and the other transactions
contemplated by this Plan of Merger shall become effective on the date and at
the time the Articles of Merger shall become effective with the Secretary of
State of the State of Indiana and the Secretary of State of the State of
Tennessee (the "Effective Time"). Subject to the terms and conditions hereof,
unless otherwise mutually agreed upon in writing by the duly authorized officers
of each Party, the Parties shall use their reasonable efforts to cause the
Effective Time to occur on or before the 15th business day (as designated by
UPC) following the last to occur of (i) the effective date (including expiration
of any applicable waiting period) of the last required Consent of any Regulatory
Authority having authority over and approving or exempting the Merger, and (ii)
the date on which the stockholders of Ambanc approve the matters relating to
this Plan of Merger required to be approved by such stockholders by applicable
Law.
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(c) CHARTER. The Charter of UPHC in effect immediately prior
to the Effective Time shall be the Charter of the Surviving Corporation after
the Effective Time until otherwise amended or repealed.
(d) BYLAWS. The Bylaws of UPHC in effect immediately prior to
the Effective Time shall be the Bylaws of the Surviving Corporation after the
Effective Time until otherwise amended or repealed.
(e) DIRECTORS AND OFFICERS. The directors of UPHC in office
immediately prior to the Effective Time, together with such additional
individuals thereafter 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 UPHC in office immediately prior to
the Effective Time, together with such additional individuals thereafter
elected, shall serve as the officers of the Surviving Corporation from and after
the Effective Time in accordance with the Bylaws of the Surviving Corporation.
ARTICLE 3.
MANNER OF CONVERTING SHARES
(a) CONVERSION OF SHARES. Subject to the provisions of this
Article 3, at the Effective Time, by virtue of the Merger and without any action
on the part of UPC or Ambanc, or the stockholders of either of the foregoing,
the shares of the constituent corporations shall be converted as follows:
(i) Each share of UPC Capital Stock issued and
outstanding immedi ately prior to the Effective Time shall remain
issued and outstanding from and after the Effective Time.
(ii) Each share of UPHC Common Stock issued and
outstanding immediately prior to the Effective Time shall remain issued
and outstanding from and after the Effective Time.
(iii) Each share of Ambanc Common Stock, but
excluding shares held by any Ambanc Company or any UPC Company (in each
case other than in a fiduciary capacity or as a result of debts
previously contracted) issued and outstanding at the Effective Time
shall be converted into 0.4841 of a share of UPC Common Stock (subject
to possible adjustment as set forth in Section 3.6 of this Plan of
Merger, the "Exchange Ratio"). Pursuant to the UPC Rights Agreement,
each share of UPC Common Stock issued in connection with the Merger
upon conversion of Ambanc Common Stock shall be accompanied by a UPC
Right.
(b) ANTI-DILUTION PROVISIONS. In the event Ambanc changes the
number of shares of Ambanc Common Stock issued and outstanding prior to the
Effective Time as a result of a stock split, stock dividend, recapitalization.
or similar transaction with respect to such stock, the Exchange Ratio, as the
case may be, shall be proportionately adjusted. In the event UPC changes the
number of shares of UPC Common Stock issued and outstanding prior to the
Effective Time as a result of a stock split, stock dividend, recapitalization,
or similar transaction with respect to such stock and the record date therefor
(in the case of a stock dividend) or the
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effective date thereof (in the case of a stock split or similar recapitalization
for which a record date is not established) shall be prior to the Effective
Time, the Exchange Ratio shall be proportionately adjusted.
(c) SHARES HELD BY AMBANC OR UPC. Each of the shares of Ambanc
Common Stock issued but not outstanding or held by any Ambanc Company or by any
UPC Company, in each case other than in a fiduciary capacity or as a result of
debts previously contracted, shall be canceled and retired at the Effective Time
and no consideration shall be issued in exchange therefor.
(d) FRACTIONAL SHARES. Notwithstanding any other provision of
this Plan of Merger, each holder of shares of Ambanc Common Stock exchanged
pursuant to the Merger who would otherwise have been entitled to receive a
fraction of a share of UPC Common Stock (after taking into account all
certificates delivered by such holder) shall receive, in lieu thereof, cash
(without interest) in an amount equal to such fractional part of a share of UPC
Common Stock multiplied by the market value of one share of UPC Common Stock at
the Effective Time. The market value of one share of UPC Common Stock at the
Effective Time shall be the last sale price of UPC Common Stock on the
NYSE-Composite Transactions List (as reported by The Wall Street Journal or, if
not reported thereby, any other authoritative source selected by UPC) on the
last trading day preceding the Effective Time. No such holder will be entitled
to dividends, voting rights, or any other rights as a stockholder in respect of
any fractional shares.
(e) CONVERSION OF STOCK RIGHTS.
(i) At the Effective Time, each award, option, or other
right to purchase or acquire shares of Ambanc Common Stock pursuant to stock
options, stock appreciation rights, or stock awards ("Ambanc Rights") granted by
Ambanc under the Ambanc Stock Plans, which are outstanding at the Effective
Time, whether or not exercisable, shall be converted into and become rights with
respect to UPC Common Stock, and UPC shall assume each Ambanc Right, in
accordance with the terms of the Ambanc Stock Plan and stock option agreement by
which it is evidenced, except that from and after the Effective Time, (i) UPC
and its Salary and Benefits Committee shall be substituted for Ambanc and the
Committee of Ambanc's Board of Directors (including, if applicable, the entire
Board of Directors of Ambanc) administering such Ambanc Stock Plan, (ii) each
Ambanc Right assumed by UPC may be exercised solely for shares of UPC Common
Stock (or cash in the case of stock appreciation rights), (iii) the number of
shares of UPC Common Stock subject to such Ambanc Right shall be equal to the
number of shares of Ambanc Common Stock subject to such Ambanc Right immediately
prior to the Effective Time multiplied by the Exchange Ratio and rounded down to
the nearest whole share, and (iv) the per share exercise price (or similar
threshold price, in the case of stock awards) under each such Ambanc Right shall
be adjusted by dividing the per share exercise (or threshold) price under each
such Ambanc Right by the Exchange Ratio and rounding up to the nearest cent.
Notwithstanding the provisions of clauses (iii) and (iv) of the first sentence
of this Section 3.5, each Ambanc Right which is an "incentive stock option"
stall be adjusted as required by Section 424 of the Internal Revenue Code, so as
not to constitute a modification, extension, or renewal of the option, within
the meaning of Section 424(h) of the Internal Revenue Code. UPC agrees to take
all necessary steps to effectuate the foregoing provisions of this Section 3.5.
(ii) As soon as reasonably practicable after the
Effective Time, UPC shall deliver to the participants in each Ambanc Stock Plan
an appropriate notice setting forth such participant's rights pursuant thereto
and the grants pursuant to such Ambanc Stock Plan shall
B-5
<PAGE> 141
continue in effect on the same terms and conditions (subject to the adjustments
required by Section 3.5(a) after giving effect to the Merger), and UPC shall
comply with the terms of each Ambanc Stock Plan to ensure, to the extent
required by, and subject to the provisions of, such Ambanc Stock Plan, that
Ambanc Rights which qualified as incentive stock options prior to the Effective
Time continue to qualify as incentive stock options after the Effective Time. At
or prior to the Effective Time, UPC shall take all corporate action necessary to
reserve for issuance sufficient shares of UPC Common Stock for delivery upon
exercise of Ambanc Rights assumed by it in accordance with this Section 3.5. As
soon as reasonably practicable after the Effective Time, UPC shall file a
registration statement on Form S-3 or Form S-8, as the case may be (or any
successor or other appropriate forms), with respect to the shares of UPC Common
Stock subject to such options and shall use its reasonable efforts to maintain
the effectiveness of such registration statements (and maintain the current
status of the prospectus or prospectuses contained therein) for so long as such
options remain outstanding. With respect to those individuals who subsequent to
the Merger shall be subject to the reporting requirements under Section 16(a) of
the 1934 Act, where applicable, UPC shall administer the Ambanc Stock Plan
assumed pursuant to this Section 3.5 in a manner that complies with Rule 16b-3
promulgated under the 1934 Act.
(iii) All restrictions or limitations on transfer
with respect to Ambanc Common Stock awarded under the Ambanc Stock Plans or any
other plan, program, or arrangement of any Ambanc Company, to the extent that
such restrictions or limitations shall not have already lapsed, and except as
otherwise expressly provided in such plan, program, or arrangement, shall remain
in full force and effect with respect to shares of UPC Common Stock into which
such restricted stock is converted pursuant to Section 3.1 of this Plan of
Merger.
(f) ADJUSTMENT OF EXCHANGE RATIO. If the Board of Directors of
Ambanc provides written notice to UPC in accordance with the Merger Agreement
that Ambanc refuses to consummate the Merger because, at any time during the
ten-day period commencing two days after the Determination Date, both:
(i) the Average Closing Price shall be less than the
product of (i) 0.80 and (ii) the Starting Price; and
(ii) (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 (b)(ii)
(such number being referred to herein as the "Index Ratio");
then, during the five-day period commencing with its receipt of such notice, UPC
shall have the option to elect to increase the Exchange Ratio to equal the
lesser of (i) the quotient obtained by dividing (1) the product of 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
UPC makes an election contemplated by the preceding sentence, within such
five-day period, it shall give prompt written notice to Ambanc of such election
and the revised Exchange Ratio, whereupon no termination shall have occurred
pursuant to the Merger Agreement and this Plan of Merger shall remain in effect
in accordance with its terms (except as the Exchange Ratio shall have been so
modified),
B-6
<PAGE> 142
and any references in this Plan of Merger to "Exchange Ratio" shall thereafter
be deemed to refer to the Exchange Ratio as adjusted pursuant to this Section
3.6.
For purposes of this Section 3.6, 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:
<TABLE>
<CAPTION>
Bank Holding Companies Weighting
- -------------------------------------------------- -----------------
<S> <C>
AmSouth Bancorporation 5.50%
BB&T Corporation 9.15
Crestar Financial Corporation 7.54
First American Corporation 3.99
First Security Corporation 7.92
First Tennessee National Corporation 4.38
Firstar Corporation 9.90
Huntington Bancshares, Inc. 13.08
Marshall & Ilsley Corporation 6.93
Mercantile Bancorporation, Inc. 8.91
National Commerce Bancorp 3.34
Old Kent Financial Corporation 3.22
Regions Financial Corporation 9.31
SouthTrust Corporation 6.82
------
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.
B-7
<PAGE> 143
"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 UPC 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 3.6.
ARTICLE 4.
EXCHANGE OF SHARES
(a) EXCHANGE PROCEDURES. Promptly after the Effective Time,
UPC and Ambanc shall cause the exchange agent selected by UPC (the "Exchange
Agent") to mail to the former stockholders of Ambanc appropriate transmittal
materials (which shall specify that delivery shall be effected, and risk of loss
and title to the certificates theretofore representing shares of Ambanc Common
Stock shall pass, only upon proper delivery of such certificates to the Exchange
Agent). After the Effective Time, each holder of shares of Ambanc Common Stock
(other than 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 of this Plan of Merger, together with all
undelivered dividends or distributions 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 Ambanc
Common Stock issued and outstanding at the Effective Time also shall receive,
upon surrender of the certificate or certificates representing such shares, cash
in lieu of any fractional share of UPC Common Stock to which such holder may be
otherwise entitled (without interest). UPC shall not be obligated to deliver the
consideration to which any former holder of Ambanc Common Stock is entitled as a
result of the Merger until such holder surrenders such holder's certificate or
certificates representing the shares of Ambanc Common Stock for exchange as
provided in this Section 4.1. The certificate or certificates of Ambanc Common
Stock so surrendered shall be duly endorsed as the Exchange Agent may require.
Any other provision of this Plan of Merger notwithstanding, neither the
Surviving Corporation nor the Exchange Agent shall be liable to a holder of
Ambanc Common Stock for any amounts paid or property delivered in good faith to
a public official pursuant to any applicable abandoned property Law.
(b) RIGHTS OF FORMER AMBANC STOCKHOLDERS. At the Effective
Time, the stock transfer books of Ambanc shall be closed as to holders of Ambanc
Common Stock immediately prior to the Effective Time and no transfer of Ambanc
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 Ambanc
Common Stock (other than 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
and 3.5 of this Plan of Merger in exchange
B-8
<PAGE> 144
therefor, subject, however, to the Surviving Corporation's obligation to pay any
dividends or make any other distributions with a record date prior to the
Effective Time which have been declared or made by Ambanc in respect of such
shares of Ambanc Common Stock in accordance with the terms of this Plan of
Merger and which remain unpaid at the Effective Time. To the extent permitted by
Law, former stockholders of record of Ambanc shall be entitled to vote after the
Effective Time at any meeting of UPC stockholders the number of whole shares of
UPC Common Stock into which their respective shares of Ambanc Common Stock are
converted, regardless of whether such holders have exchanged their certificates
representing Ambanc Common Stock for certificates representing UPC Common Stock
in accordance with the provisions of this Plan of Merger. Whenever a dividend or
other distribution is declared by UPC on the UPC Common Stock, the record date
for which is at or after the Effective Time, the declaration shall include
dividends or other distributions on ali shares issuable pursuant to this Plan of
Merger, but beginning 30 days after the Effective Time no dividend or other
distribution payable to the holders of record of UPC Common Stock as of any time
subsequent to the Effective Time shall be delivered to the holder of any
certificate representing shares of Ambanc 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 Plan of Merger. However, upon surrender of such
Ambanc Common Stock certificate, both the UPC Common Stock certificate (together
with all such undelivered dividends or other distributions without interest) and
any undelivered dividends and cash payments to be paid for fractional share
interests (without interest) shall be delivered and paid with respect to each
share represented by such certificate.
ARTICLE 5.
MISCELLANEOUS
(a) CONDITIONS PRECEDENT. Consummation of the Merger by UPHC
shall be conditioned on the satisfaction of, or waiver by UPC of, the conditions
precedent to the Merger set forth in Sections 9.1 and 9.2 of the Merger
Agreement. Consummation of the Merger by Ambanc shall be conditioned on the
satisfaction of, or waiver by Ambanc of, of the conditions precedent to the
Merger set forth in Sections 9.1 and 9.3 of the Merger Agreement.
(b) 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 Merger Agreement.
(c) COUNTERPARTS. This Plan of Merger may be executed in
counterparts, each of which shall be an original; but all of such counterparts
together shall constitute one and the same instrument
B-9
<PAGE> 145
IN WITNESS WHEREOF, the parties have caused their duly
authorized officers to execute this Plan of Merger as of the date first above
written.
AMBANC CORP.
ATTEST: /s/ Troy D. Stoll By: /s/ Robert G. Watson
----------------------------- --------------------------------
Troy D. Stoll, Secretary Robert G. Watson,
Chairman, President, and
Chief Executive Officer
UNION PLANTERS HOLDING
CORPORATION
ATTEST: /s/ E. James House, Jr. By: /s/ Jackson W. Moore
-------------------------- -------------------------------
E. James House, Jr. Jackson W. Moore
Secretary President
B-10
<PAGE> 146
APPENDIX C
[Letterhead of McDonald & Company Securities, Inc.]
March 31, 1998
Board of Directors
AMBANC Corp.
302 Main Street
Vincennes, IN 47591
Attention: Mr. Robert G. Watson
Chairman of the Board
Ladies and Gentlemen:
You have requested our opinion with respect to the fairness, from a
financial point of view, as of the date hereof, to the holders of the common
stock, par value $10.00 per share ("AMBANC Common"), of AMBANC Corp. ("AMBANC"),
of the Exchange Ratio, as set forth in the Agreement and Plan of Merger (the
"Agreement"), between AMBANC and Union Planters Corp. ("Union Planters").
The Agreement provides for the merger (the "Merger") of AMBANC with and
into Union Planters, pursuant to which, among other things, at the Effective
Time (as defined in the Agreement), each outstanding share of AMBANC Common,
other than shares held in the treasury of AMBANC, will be converted in the right
to receive .4841 shares of the common stock, $5.00 par value ("Union Planters
Common") of Union Planters, as set forth in the Agreement. The terms and
conditions of the Merger are more fully set forth in the Agreement.
McDonald & Company Securities, Inc., as part of its investment banking
business, is customarily engaged in the valuation of businesses and their
securities in connection with mergers and acquisitions, negotiated
underwritings, secondary distributions of listed and unlisted securities,
private placements and valuations for estate, corporate and other purposes.
We have acted as AMBANC's financial advisor in connection with, and
have participated in certain negotiations leading to, the Agreement. In
connection with rendering our opinion set forth herein, we have among
other things:
<PAGE> 147
(i) Reviewed AMBANC's Annual Reports to Shareholders and Annual
Reports on Form 10-K for each of the years ended December 31,
1996, December 31, 1995 and December 31, 1994, including the
audited financial statements contained therein, and AMBANC's
Quarterly Reports on Form 10-Q for each of the first three
quarters of 1997 and AMBANC's draft financial reports for the
year ended December 31, 1997, including the unaudited
financial statements contained therein;
(ii) Reviewed Union Planters' Annual Reports to Shareholders and
Annual Reports on Form 10-K for each of the years ended
December 31, 1997, December 31, 1996 and December 31, 1995,
including the audited financial statements contained therein,
and Union Planters' Quarterly Reports on Form 10-Q for each of
the first three quarters of 1997;
(iii) Reviewed certain other public and non-public information,
primarily financial in nature, relating to the respective
businesses, earnings, assets and prospects of AMBANC and Union
Planters provided to us or publicly available;
(iv) Participated in meetings and telephone conferences with
members of senior management of AMBANC and Union Planters
concerning the financial condition, business, assets,
financial forecasts and prospects of the respective companies,
as well as other matters we believed relevant to our inquiry;
(v) Reviewed certain stock market information for AMBANC Common
and Union Planters Common, and compared it with similar
information for certain companies, the securities of which are
publicly traded;
(vi) Compared the results of operations and financial condition of
AMBANC and Union Planters with that of certain companies which
we deemed to be relevant for purposes of this opinion;
(vii) Reviewed the financial terms, to the extent publicly
available, of certain acquisition transactions which we deemed
to be relevant for purposes of this opinion;
(viii) Reviewed the Agreement dated March 31, 1998 and its schedules
and exhibits and certain related documents; and (ix) Performed
such other reviews and analyses as we have deemed appropriate.
In our review and analysis and in arriving at our opinion, we have
assumed and relied upon the accuracy and completeness of all of the financial
and other information reviewed by us and have relied upon the accuracy and
completeness of the representations, warranties and covenants of AMBANC and
Union Planters contained in the Agreement. We have not been engaged to
undertake, and have not assumed any responsibility for, nor have we conducted,
an independent investigation or verification of such matters. We have not been
engaged to and we have not conducted a physical inspection of any of the assets,
properties or facilities of either AMBANC or Union Planters, nor have we made or
obtained or been furnished with any independent valuation or appraisal of any of
such assets, properties or facilities or any of the liabilities of either AMBANC
or Union Planters. With respect to financial forecasts used in our analysis, we
have assumed that such forecasts have been reasonably prepared or reviewed by
management of AMBANC and Union Planters, as the case may be, on a basis
reflecting the best currently available estimates and judgments of the
management of AMBANC and Union Planters, as to the future performance of AMBANC,
Union Planters, and AMBANC and Union Planters combined, as the case may be. We
have not been engaged to and we have not assumed any responsibility for, nor
have we conducted any independent investigation or verification of such matters,
and we express no view as to such financial forecasts or the assumptions on
which they are based.
C-2
<PAGE> 148
We have also assumed that all of the conditions to the consummation of the
Merger, as set forth in the Agreement, including the tax-free treatment of the
Merger to the holders of AMBANC Common, would be satisfied and that the Merger
would be consummated on a timely basis in the manner contemplated by the
Agreement.
We will receive a fee for our services as financial advisor to AMBANC,
a substantial portion of which is contingent upon closing of the Merger. We will
also receive a fee for our services in rendering this opinion.
In the ordinary course of business, we may actively trade securities of
Union Planters and AMBANC for our own account and for the accounts of customers
and accordingly, we may at any time hold a long or short position in such
securities.
This opinion is based on economic and market conditions and other
circumstances existing on, and information made available as of, the date
hereof. In addition, our opinion is, in any event, limited to the fairness, as
of the date hereof, from a financial point of view, of the Exchange Ratio, to
the holders of AMBANC Common, and does not address the underlying business
decision by AMBANC's Board of Directors to effect the Merger, does not compare
or discuss the relative merits of any competing proposal or any other terms of
the Merger, and does not constitute a recommendation to any AMBANC shareholder
as to how such shareholder should vote with respect to the Merger. This opinion
does not represent an opinion as to what the value of AMBANC Common or Union
Planters Common may be at the Effective Time of the Merger or as to the
prospects of AMBANC's business or Union Planters' business.
This opinion is directed to the Board of Directors of AMBANC and may
not be reproduced, summarized, described or referred to or given to any other
person without our prior written consent. Notwithstanding the foregoing, this
opinion may be included in the proxy statement to be mailed to the holders of
AMBANC Common in connection with the Merger, provided that this opinion will be
reproduced in such proxy statement in full, and any description of or reference
to us or our actions, or any summary of the opinion in such proxy statement,
will be in a form reasonably acceptable to us and our counsel.
Based upon and subject to the foregoing, it is our opinion that, as of
the date hereof, the Exchange Ratio is fair to the holders of AMBANC Common from
a financial point of view.
Very truly yours,
MCDONALD & COMPANY SECURITIES, INC.
C-3
<PAGE> 149
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 ordinary 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 Board of Directors, (ii) the Board of Directors based upon the
written opinion of independent legal counsel to such effect, or (iii) a vote to
the shareholders.
<PAGE> 150
ITEM 21. EXHIBITS.
The following exhibits are filed herein or have been, as noted,
will be filed by amendment.
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
2.1 Agreement and Plan of Merger, dated as of March 31, 1998, between
Union Planters Corporation and AMBANC Corp. (Incorporated by
reference to Exhibit 1 to the Schedule 13D, dated March 31, 1998,
filed by UPC (File No. 0-6919) with respect to the common stock of
AMBANC Corp. (File No. 0-10710) (Included as Appendix A to the
Proxy Statement included as part of this Registration Statement).
2.2 Plan of Merger of AMBANC Corp. into and with Union Planters
Holding Corporation. (Included as Appendix B to the Proxy
Statement included as part of this Registration Statement.)
2.3 Stock Option Agreement, dated as of March 31, 1998, between AMBANC
Corp. and Union Planters Corporation. (Incorporated by reference
to Exhibit 1 to the Schedule 13D, dated March 31, 1998, filed by
UPC (File No. 0-6919) with respect to the common stock of AMBANC
Corp. (File No. 0-10710).)
4.1 Restated Charter of Union Planters Corporation, as amended
(Incorporated by reference to Exhibit 3(a) to the Quarterly Report
on Form 10-Q for the quarter ended March 31, 1998 (File No.
0-6919).
4.2 Amended and Restated Bylaws of Union Planters Corporation.
(Incorporated by reference to Exhibit 3(d) to the Annual Report on
Form 10-K of UPC for the fiscal year ended December 31, 1996 (File
No. 0-6919).)
5.1 Opinion of E. James House, Jr., Secretary and Manager of the Legal
Department of Union Plant ers 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 (to be filed by amendment).
8.2 Opinion of Leagre Chandler & Millard as to federal income tax
consequences (to be filed by amendment).
23.1 Consent of Price Waterhouse LLP, independent accountants for Union
Planters Corporation.
23.2 Consent of Deloitte & Touche LLP, independent auditors for AMBANC
Corp.
23.3 Consent of E. James House, Jr., Secretary and Manager of the Legal
Department of Union Plant ers Corporation (included in Exhibit
5.1).
23.4 Consent of Wyatt, Tarrant & Combs (included in Exhibit 8.1) (to be
filed by amendment).
23.5 Consent of Leagre Chandler & Millard (included in Exhibit 8.2)
(to be filed by amendment).
23.6 Consent of McDonald & Company Securities, Inc.
24.1 Power of Attorney (contained on the signature page hereof).
99.1 Form of proxy of AMBANC Corp.
</TABLE>
<PAGE> 151
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 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> 152
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Company certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-4 and 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 April 16, 1998.
UNION PLANTERS CORPORATION
By: /s/ BENJAMIN W. RAWLINS, JR.
--------------------------------------
Benjamin W. Rawlins, Jr.
Chairman of the Board and Chief
Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints E. James House, Jr. and M. Kirk Walters,
and each of them, with the power to act without the other, his or her true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him or her, and in his or her name, place and stead, in any
and all capacities, to sign any and all amendments (including post-effective
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, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully and to all intents and purposes as he or she might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or his or her 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 on Form S-4 has been signed below by the
following persons as of the 16th day of April, 1998 in the capacities indicated:
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ---------- ----- ----
<S> <C> <C>
/s/ BENJAMIN W. RAWLINS, JR. Chairman of the Board, April 16, 1998
- -------------------------------- Chief Executive Officer
Benjamin W. Rawlins, Jr. Director (Principal Executive Officer)
/s/ JOHN W. PARKER Executive Vice President and l April 16, 1998
- -------------------------------- Chief Officer (Principal Financial Officer)
John W. Parker
</TABLE>
<PAGE> 153
<TABLE>
SIGNATURES TITLE DATE
- ---------- ----- ----
<S> <C> <C>
/s/ M. KIRK WALTERS Senior Vice President, Treasurer, April 16, 1998
- -------------------------------- and Chief Accounting Officer
M. Kirk Walters
/s/ ALBERT M. AUSTIN Director April 16, 1998
- --------------------------------
Albert M. Austin
/s/ MARVIN E. BRUCE Director April 16, 1998
- --------------------------------
Marvin E. Bruce
/s/ GEORGE W. BRYAN Director April 16, 1998
- --------------------------------
George W. Bryan
/s/ JAMES E. HARWOOD Director April 16, 1998
- --------------------------------
James E. Harwood
/s/ PARNELL S. LEWIS, JR. Director April 16, 1998
- --------------------------------
Parnell S. Lewis, Jr.
/s/ C.J. LOWRANCE, III Director April 16, 1998
- --------------------------------
C.J. Lowrance, III
/s/ JACKSON W. MOORE President, Chief Operating Officer, April 16, 1998
- -------------------------------- Director
Jackson W. Moore
/s/ STANLEY D. OVERTON Director April 16, 1998
- --------------------------------
Stanley D. Overton
/s/ V. LANE RAWLINS Director April 16, 1998
- ----------------------------
V. Lane Rawlins
</TABLE>
<PAGE> 154
<TABLE>
SIGNATURES TITLE DATE
- ---------- ----- ----
<S> <C> <C>
/s/ DONALD F. SCHUPPE Director April 16, 1998
- --------------------------------
Donald F. Schuppe
/s/ DAVID M. THOMAS Director April 16, 1998
- --------------------------------
David M. Thomas
/s/ RICHARD A. TRIPPEER, JR. Director April 16, 1998
- -----------------------------
Richard A. Trippeer, Jr.
/s/ SPENCE L. WILSON Director April 16, 1998
- -------------------------------
Spence L. Wilson
</TABLE>
<PAGE> 155
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
2.1 Agreement and Plan of Merger, dated as of March 31, 1998,
between Union Planters Corporation and AMBANC Corp.
(Incorporated by reference to Exhibit 1 to the Schedule 13D,
dated March 31, 1998, filed by UPC (File No. 0-6919) with
respect to the common stock of AMBANC Corp. (File No.
0-10710).)
2.2 Plan of Merger of AMBANC Corp. into and with Union Planters
Holding Corporation. (Included as Appendix B to the Proxy
Statement included as part of this Registration Statement.)
2.3 Stock Option Agreement, dated as of March 31, 1998, between
AMBANC Corp. and Union Planters Corporation. (Incorporated by
reference to Exhibit 1 to the Schedule 13D, dated March 31,
1998, filed by UPC (File No. 0-6919) with respect to the
common stock of AMBANC Corp. (File No. 0-10710).)
4.1 Restated Charter of Union Planters Corporation, as amended.
(Incorporated by reference to Exhibit 3(a) to the Annual
Report on Form 10-K of UPC for the fiscal year ended December
31, 1996 and to Exhibit 3(a) to the Quarterly Report on Form
10-Q for the quarter ended March 31, 1998 (File No. 0-6919).)
4.2 Amended and Restated Bylaws of Union Planters Corporation.
(Incorporated by reference to Exhibit 3(d) to the Annual
Report on Form 10-K of UPC for the fiscal year ended December
31, 1996 (File No. 0-6919).)
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 (to be filed by amendment).
8.2 Opinion of Leagre Chandler & Millard as to federal income tax
consequences (to be filed by amendment).
23.1 Consent of Price Waterhouse LLP, independent accountants for
Union Planters Corporation.
23.2 Consent of Deloitte & Touche LLP, independent auditors for
AMBANC Corp.
23.3 Consent of E. James House, Jr., Secretary and Manager of the
Legal Department of Union Planters Corporation (included in
Exhibit 5.1).
</TABLE>
<PAGE> 156
<TABLE>
<S> <C>
23.4 Consent of Wyatt, Tarrant & Combs (included in Exhibit 8.1)
(to be filed by amendment).
23.5 Consent of Leagre Chandler & Millard (included in Exhibit 8.2)
(to be filed by amendment).
23.6 Consent of McDonald & Company Securities, Inc.
24.1 Power of Attorney (contained on the signature page hereof).
99.1 Form of proxy of AMBANC Corp.
</TABLE>
<PAGE> 1
EXHIBIT 5.1
[Letterhead of Union Planters Corporation]
May 29, 1998
Union Planters Corporation
7130 Goodlett Farms Parkway
Memphis, Tennessee 38018
Re: 3,398,000 Shares of the Common Stock, $5.00 Par Value Per
Share of Union Planters Corporation, a Tennessee
Corporation ("UPC")
Gentlemen:
The undersigned has participated in the preparation of a
registration statement on Form S-4 (the "Registration Statement") for filing
with the Securities and Exchange Commission in respect to not more than
3,398,000 shares of UPC's Common Stock, $5.00 par value per share, ("UPC Common
Stock") which may be issued by UPC pursuant to an Agreement and Plan of Merger
dated as of March 31, 1998, by and between UPC and AMBANC Corp. ("AMBANC") (the
"Agreement").
For purposes of rendering the opinion expressed herein, the
undersigned has examined UPC's corporate charter and all amendments thereto;
UPC's by-laws and amendments thereto; the Reorganization Agreement and such of
UPC's corporate records as the undersigned has deemed necessary and material to
rendering the undersigned's opinion. The undersigned has relied upon
certificates of public officials and representations of UPC officials, and has
assumed that all documents examined by the undersigned as originals are
authentic, that all documents submitted to the undersigned as photocopies are
exact duplicates of original documents, and that all signatures on all documents
are genuine.
Further, the undersigned is familiar with and has supervised
all corporate action taken in connection with the authorization of the issuance
and offering of the subject securities.
Based upon and subject to the foregoing and subsequent
assumptions, qualifications and exceptions, it is the undersigned's opinion
that:
1. UPC is a duly organized and validly existing corporation in
good standing under the laws of the State of Tennessee and has all requisite
power and authority to issue, sell and deliver the subject securities, and to
carry on its business and own its property; and
<PAGE> 2
2. The shares of UPC Common Stock to be issued by UPC pursuant
to the Merger will be duly authorized and when issued by UPC in accordance
therewith, such shares of UPC Common Stock will be fully paid and nonassessable.
The opinion expressed above is limited by the following
assumptions qualifications and exceptions:
(a) The undersigned is licensed to practice law only in the
State of Tennessee and expressed no opinion with respect to the effect of any
laws other than those of the State of Tennessee and of the United States of
America.
(b) The opinion stated herein is based upon statutes,
regulations, rules, court decisions and other authorities existing and effective
as of the date of this opinion, and the undersigned undertakes no responsibility
to update or supplement said opinion in the event of or in response to any
subsequent changes in the law or said authorities, or upon the occurrence after
the date hereof of events or circumstances that, if occurring prior to the date
hereof, might have resulted in a different opinion.
(c) This opinion is limited to the legal matters expressly set
forth herein, and no opinion is to be implied or inferred beyond the legal
matters expressly so addressed.
The undersigned hereby consents to the undersigned being named
as a party rendering a legal opinion under the caption "Legal Opinions" in the
Prospectus constituting part of the Registration Statement and to the filing of
this opinion with the Securities and Exchange Commission as well as all state
regulatory bodies and jurisdictions where qualification is sought for the sale
of the subject securities.
The undersigned is an officer of, and receives compensation
from UPC and therefore, is not independent from UPC.
Yours very truly,
UNION PLANTERS CORPORATION
By: /s/ E. JAMES HOUSE, JR.
--------------------------
E. James House, Jr.
Manager, Legal Division
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Proxy
Statement/Prospectus constituting part of this Registration Statement on Form
S-4 of Union Planters Corporation of our report dated January 15, 1998, except
as to Note 2 which is as of March 3, 1998, which appears on page 41 of Union
Planters Corporation's 1997 Annual Report to Shareholders, which is incorporated
by reference in its Annual Report on Form 10-K for the year ended December 31,
1997. We also consent to the reference to us under the heading "Experts" in such
Proxy Statement/Prospectus.
/s/ PRICE WATERHOUSE LLP
Memphis, Tennessee
June 5, 1998
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Union Planters Corporation on Form S-4 of our report dated January 23, 1998
(which expresses an unqualified opinion and includes an explanatory paragraph
relating to the adoption of Statement of Financial Accounting Standards No. 122
described in Note 1 to the consolidated financial statements), appearing in the
Annual Report on Form 10-K of AMBANC Corp. for the year ended December 31, 1997
and to the reference to us under the heading "Experts" in the Prospectus/Proxy
Statement, which is part of this Registration Statement.
/s/ DELOITTE & TOUCHE LLP
Indianapolis, Indiana
June 5, 1998
<PAGE> 1
EXHIBIT 23.6
CONSENT OF McDONALD & COMPANY SECURITIES, INC.
We hereby consent to the use in the Joint Proxy
Statement/Prospectus constituting part of this Registration Statement on Form
S-4 of our fairness opinion dated March 31, 1998. Our consent should not be
construed as an admission that this firm is a person from whom a consent is
required under Section 7 of the Securities Act of 1933, as amended.
/s/McDONALD & COMPANY SECURITIES, INC.
Chicago, Illinois
June 5, 1998
<PAGE> 1
EXHIBIT 99.1
AMBANC CORP.
THIS PROXY CARD IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints ______________ and _______________, or
either of them in case the other is unable or unwilling to act, as Proxies, each
with the power to appoint his/her substitute, and hereby authorizes them to
represent and to vote, as designated below, all of the shares of voting stock of
AMBANC Corp. held of record by the undersigned on ______________, 1998, at the
Special Meeting of Shareholders of AMBANC Corp. to be held on _________, 1998,
or any adjournments thereof. The undersigned acknowledges receipt of the Proxy
Statement/Prospectus, dated ___________, 1998, relating to the Special Meeting
of Shareholders.
1. Approval of the Agreement and Plan of Merger, dated as of March 31, 1998,
by and between AMBANC Corp. and Union Planters Corporation and the
related Plan of Merger by and between AMBANC Corp. and Union Planters
Holding Corporation, as more fully described in the Proxy
Statement/Prospectus, dated _________, 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournments
thereof.
THIS PROXY, WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE THIS PROXY
WILL BE VOTED FOR PROPOSAL 1.
DATED: ___________________________, 1998
--------------------------------------------
Signature
--------------------------------------------
Signature, if held jointly
Please sign exactly as name appears on this
Proxy Card. When shares are held by joint
tenants, both should sign. When signing as
attorney-in-fact, executor, administrator,
personal representative, trustee or
guardian, please give full title as such. If
a corporation, please sign in full corporate
name by President or other authorized
officer. If a partnership, please sign in
partnership name by authorized person
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
