<PAGE> 1
As filed with the Securities and Exchange Commission on November 22, 2000
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)
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<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) 580-6584
(Name,address, including zip code, and telephone number, including area code, of
agent for service)
WITH COPIES TO:
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<S> <C> <C>
FRANK M. CONNER III DAVID V. MCCAY JOHN K. PRUELLAGE
ALSTON & BIRD LLP CHAIRMAN AND CHIEF EXECUTIVE OFFICER LEWIS, RICE & FINGERSH, L.C.
601 PENNSYLVANIA AVENUE, N.W. JEFFERSON SAVINGS BANCORP, INC. SUITE 2000
NORTH BUILDING, 11TH FLOOR 15435 CLAYTON ROAD 500 NORTH BROADWAY
WASHINGTON, D.C. 20004 BALLWIN, MISSOURI 63011 ST. LOUIS, MISSOURI 63102-2147
(202) 756-3303 (636) 227-3000 (314) 444-7600
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF SECURITIES TO THE PUBLIC:
As soon as practicable after the merger described in this Registration
Statement becomes effective.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(d) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM
OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED (1) PER UNIT (2) OFFERING PRICE (2) REGISTRATION FEE
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<S> <C> <C> <C> <C> <C>
Common Stock, $5.00 par value 4,526,195 $30.89 $139,810,320 $36,910
(including associated preferred stock purchase rights)
====================================================================================================================================
</TABLE>
(1) This Registration Statement covers the maximum number of shares of the
common stock of the Registrant which is expected to be issued in
connection with the merger.
(2) Estimated solely for purposes of calculating the registration fee and
based, pursuant to Rule 457(f) under the Securities Act of 1933, as
amended, on the average of the high low sales prices of the shares of
common stock of Jefferson Savings Bancorp, Inc. as listed on the Nasdaq
National Market on November 16, 2000.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE TIME 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
PROXY STATEMENT
FOR THE SPECIAL MEETING PROSPECTUS
OF STOCKHOLDERS OF UNION PLANTERS CORPORATION
JEFFERSON SAVINGS BANCORP, INC.
MERGER PROPOSED -- YOUR VOTE IS VERY IMPORTANT
The boards of directors of Jefferson Savings Bancorp, Inc., a unitary
savings and loan holding company headquartered in Ballwin, Missouri, and Union
Planters Corporation, a bank holding company headquartered in Memphis,
Tennessee, have agreed to a transaction which will result in the merger of
Jefferson Savings with and into Union Planters Holding Corporation, a
wholly-owned subsidiary of Union Planters.
If the merger is completed, you will receive .433 of a share of Union
Planters common stock and the related preferred stock purchase rights for each
share of Jefferson Savings common stock you own, subject to possible adjustment.
The .433 multiple, as it may be adjusted, is referred to as the "exchange
ratio." The approximate number of shares to be issued by Union Planters pursuant
to the agreement and plan of reorganization is 4,526,195.
Union Planters common stock is traded on the New York Stock Exchange
under the symbol "UPC." Based on the closing price of Union Planters common
stock on December ___, 2000 of $_____ and the .433 exchange ratio, you will
receive approximately $____ worth of Union Planters common stock for each share
of Jefferson Savings common stock you own. The .433 exchange ratio is subject to
possible adjustment in limited circumstances as described in this proxy
statement-prospectus. The actual value of the Union Planters common stock
received by Jefferson Savings stockholders in the merger will depend on the
market value of Union Planters common stock at the time of closing.
A special meeting of Jefferson Savings stockholders will be held on
January ___, 2001 at __:__ _.m., local time, at _______________, located at
____________________________, ________________________. At the special meeting,
you will be asked to approve the agreement and plan of reorganization, the
related plan of merger and the transactions contemplated thereby, including the
merger. The merger cannot be completed unless the holders of a majority of the
shares of Jefferson Savings common stock outstanding and entitled to vote,
approve it.
YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE __ OF
THIS PROXY STATEMENT-PROSPECTUS.
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NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR
DISAPPROVED OF THE SHARES OF UNION PLANTERS COMMON STOCK TO BE ISSUED IN THE
MERGER OR DETERMINED IF THIS PROXY STATEMENT-PROSPECTUS IS ACCURATE OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------------------------------------------------------------------------
The date of this proxy statement-prospectus is December ___, 2000.
It is first being mailed on December ___, 2000.
<PAGE> 3
PLEASE NOTE
No one has been authorized to give any information or make any
representation about the merger or Jefferson Savings or Union Planters that
differs from, or adds to, the information in this proxy statement-prospectus,
the documents that are referred to herein or in Union Planters' or Jefferson
Savings' documents filed with the Securities and Exchange Commission. Therefore,
if anyone does give you different or additional information, you should not rely
on it.
This proxy statement-prospectus has been prepared as of December ___,
2000. There may be changes in the affairs of Union Planters or Jefferson Savings
since that date which are not reflected in this document.
Information in this proxy statement-prospectus about Union Planters
Corporation has been supplied by Union Planters and information about Jefferson
Savings Bancorp, Inc. has been supplied by Jefferson Savings.
As used in this proxy statement-prospectus, the terms "Jefferson
Savings" and "Union Planters" refer to Jefferson Savings Bancorp, Inc. and Union
Planters Corporation, respectively, and, where the context requires, to
Jefferson Savings and Union Planters and their respective subsidiaries.
HOW TO OBTAIN ADDITIONAL INFORMATION
THIS PROXY STATEMENT-PROSPECTUS INCORPORATES IMPORTANT BUSINESS AND
FINANCIAL INFORMATION ABOUT UNION PLANTERS AND JEFFERSON SAVINGS THAT IS NOT
INCLUDED IN OR DELIVERED WITH THIS DOCUMENT. THIS INFORMATION IS DESCRIBED ON
PAGE __ UNDER "WHERE YOU CAN FIND MORE INFORMATION." YOU CAN OBTAIN FREE COPIES
OF THIS INFORMATION BY WRITING OR CALLING:
E. James House, Jr.
Secretary and Manager of the Legal Department
UNION PLANTERS CORPORATION
7130 Goodlett Farms Parkway
Memphis, Tennessee 38018
(Telephone: (901) 580-6584)
Paul J. Milano
Chief Financial Officer, Treasurer and Secretary
JEFFERSON SAVINGS BANCORP, INC.
15435 Clayton Road
Ballwin, Missouri 63011
(Telephone: (636) 227-3000)
IN ORDER TO OBTAIN TIMELY DELIVERY OF THE DOCUMENTS, YOU MUST REQUEST
THE INFORMATION BY JANUARY ___, 2001.
<PAGE> 4
JEFFERSON SAVINGS BANCORP, INC.
15435 CLAYTON ROAD
BALLWIN, MISSOURI 63011
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY ___, 2001.
Jefferson Savings Bancorp, Inc. will hold a special meeting of
stockholders at _________________, in ________________________, at ____ _.m.
local time on January ___, 2001, to vote on:
(1) Merger. The agreement and plan of reorganization, dated as of
September 20, 2000, between Jefferson Savings Bancorp, Inc. and
Union Planters Corporation, the related plan of merger and the
transactions contemplated thereby, including the merger. These
transactions include the merger of Jefferson Savings Bancorp,
Inc. with and into Union Planters Holding Corporation, a
wholly-owned subsidiary of Union Planters Corporation.
(2) Other Business. Any other matters that properly come before the
special meeting, or any adjournments or postponements of the
special meeting.
Record holders of Jefferson Savings Bancorp, Inc. common stock at the
close of business on December ___, 2000, will receive notice of and may vote at
the special meeting, including any adjournments or postponements. The agreement
and plan of reorganization and the related plan of merger require approval by
the holders of a majority of the shares of Jefferson Savings Bancorp, Inc.
common stock outstanding and entitled to vote.
YOUR VOTE IS VERY IMPORTANT. Whether or not you plan to attend the
special meeting, please take the time to vote by completing and mailing the
enclosed proxy card. If you sign, date and mail your proxy card without
indicating how you want to vote, your proxy will be voted in favor of the
merger. If you do not return your card, or if you do not attend and vote in
favor of the merger at the special meeting, the effect will be a vote against
the merger. You may revoke your proxy by filing with the Secretary of Jefferson
Savings Bancorp, Inc. a notice of revocation prior to the special meeting, or a
duly executed proxy bearing a later date, or by revoking your proxy in person at
the special meeting.
This proxy statement-prospectus provides you with detailed information
about the proposed merger. You can also get information about Union Planters
Corporation and Jefferson Savings Bancorp, Inc. from documents filed with the
Securities and Exchange Commission. We encourage you to read this entire
document carefully. Your board of directors supports this merger of Jefferson
Savings Bancorp, Inc. with and into Union Planters Corporation and unanimously
recommends that you vote in favor of the merger.
BY ORDER OF THE BOARD OF DIRECTORS
--------------------
Paul J. Milano
Secretary
December ___, 2000
<PAGE> 5
A WARNING ABOUT FORWARD-LOOKING STATEMENTS
This proxy statement-prospectus contains forward-looking statements
about Union Planters and Jefferson Savings following the merger. These
statements can be identified by our use of words like "expect," "may," "could,"
"intend," "project," "estimate" or "anticipate." These forward-looking
statements reflect our current views, but they are based on assumptions and are
subject to risks, uncertainties and other factors. These factors include the
following:
(1) we may not fully realize the expected cost savings from the
merger;
(2) deposit attrition, customer loss, or revenue loss following the
merger may be greater than we expect;
(3) competitive pressure in the banking industry may increase
significantly;
(4) costs or difficulties related to the integration of the
businesses of Union Planters and Jefferson Savings may be
greater than we expect;
(5) changes in the interest rate environment may reduce profit
margins;
(6) general economic conditions, either nationally or regionally,
may be less favorable than we expect, resulting in, among other
things, credit quality deterioration;
(7) changes may occur in the regulatory environment;
(8) changes may occur in business conditions and inflation; and
(9) changes may occur in the securities markets.
Information on other factors that could affect the financial results of
Union Planters after the merger is included in the SEC filings incorporated by
reference in this proxy statement-prospectus.
<PAGE> 6
QUESTIONS AND ANSWERS ABOUT THE MERGER
Q: WHAT AM I BEING ASKED TO VOTE ON?
A: You are being asked to approve the agreement and plan of reorganization,
the related plan of merger and the transactions contemplated thereby, including
the merger of Jefferson Savings with and into Union Planters Holding
Corporation, a wholly-owned subsidiary of Union Planters. As a result of the
merger you will become a stockholder of Union Planters and Union Planters will
continue Jefferson Savings' business.
Q: WHAT SHOULD I DO NOW?
A: After reviewing this document, indicate on your proxy card how you want
to vote, and sign, date, and mail it in the enclosed envelope as soon as
possible, to ensure that your shares will be represented at the special meeting.
If you sign, date, and send in your proxy and do not indicate how you
want to vote, your proxy will be voted in favor of the proposal to approve and
adopt the agreement and plan of reorganization and the related plan of merger.
If you do not sign and send in your proxy, or if you do not attend and cast your
vote at the special meeting, it will have the effect of a vote against the
merger.
Q: IF MY SHARES ARE HELD IN "STREET NAME" BY MY BROKER, WILL MY BROKER VOTE
MY SHARES FOR ME?
A: Your broker will vote your shares of Jefferson Savings common stock only
if you provide instructions on how to vote. You should instruct your broker how
to vote your shares, following the directions your broker provides. If you do
not provide instructions to your broker, your shares will not be voted and this
will have the effect of voting against the merger.
Q: SHOULD I SEND IN MY STOCK CERTIFICATES NOW?
A: No. After the merger is completed, we will send you written instructions
for exchanging Jefferson Savings common stock certificates for Union Planters
common stock certificates.
Q: CAN I REVOKE MY PROXY AND CHANGE MY MIND?
A: You may take back your proxy up to the time it is voted at the special
meeting by following the directions on page __. Then you can either sign and
deliver a new proxy or attend the special meeting and vote in person.
Q: CAN I VOTE MY SHARES IN PERSON?
A: You may attend the special meeting and vote your shares in person rather
than signing and mailing your proxy card.
Q: WHEN AND WHERE WILL THE SPECIAL MEETING TAKE PLACE?
A: The special meeting will be held at _______, located at _____________,
________________, at ____:__ _.m., local time, on January __, 2001.
Q: WHAT WILL I RECEIVE FOR MY JEFFERSON SAVINGS SHARES?
A: You will receive .433 of a share of Union Planters common stock for each
share of Jefferson Savings common stock that you own (subject to possible
adjustment) as soon as practicable following the date the merger is completed.
Based on the closing price of Union Planters common stock on December __, 2000
of $_____, the value of .433 of a share of Union Planters common stock was
$_____. The exchange ratio is subject to change in limited circumstances as
described in this proxy statement-prospectus. Also, the market price of Union
Planters common stock may fluctuate between the date of this proxy
statement-prospectus and the date that the merger is completed, which would
alter the value of the shares of Union Planters common stock that you would
receive in exchange for your shares of Jefferson Savings common stock.
<PAGE> 7
Q: WILL FRACTIONAL SHARES BE ISSUED?
A: Union Planters will not issue any fractional shares of common stock in
the merger. Instead, Union Planters will pay cash (without interest) for any
fractional share interest in Union Planters common stock you would otherwise
receive in the merger. The cash payment will be in an amount equal to the
fraction multiplied by the closing price of one share of Union Planters common
stock on the New York Stock Exchange on the last trading day before the merger
is completed.
WHO CAN HELP ANSWER YOUR QUESTIONS
If you want additional copies of this document, or if you want to ask
any questions about the merger, you should contact:
Paul J. Milano
Chief Financial Officer, Treasurer
and Secretary
JEFFERSON SAVINGS BANCORP, INC.
15435 Clayton Road
Ballwin, Missouri 63011
(636) 227-3000
<PAGE> 8
TABLE OF CONTENTS
<TABLE>
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Page
<S> <C>
SUMMARY .....................................................................................................................1
The Companies....................................................................................................1
The Merger.......................................................................................................1
What You Will Receive in the Merger..............................................................................2
Effect of the Merger on Jefferson Savings Options................................................................2
No Dissenters' Rights in the Merger..............................................................................2
Your Expected Tax Treatment as a Result of the Merger............................................................2
Comparative Market Prices of Common Stock........................................................................4
Our Reasons for the Merger.......................................................................................5
Fairness Opinion of Jefferson Savings' Financial Advisor.........................................................5
Special Meeting of Stockholders..................................................................................5
Stockholder Vote Required........................................................................................5
Voting Rights at the Special Meeting.............................................................................5
Voting Procedures for the Special Meeting........................................................................5
Recommendation to Stockholders...................................................................................6
Share Ownership of Management and Certain Stockholders...........................................................6
Interests of Certain Persons in the Merger That May Be Different from Yours......................................6
Effective Time...................................................................................................6
Exchange of Stock Certificates...................................................................................7
Regulatory Approval and Other Conditions.........................................................................7
Waiver, Amendment, and Termination...............................................................................7
Accounting Treatment.............................................................................................8
Certain Differences in Stockholders' Rights......................................................................8
Stock Option Agreement...........................................................................................8
Historical and Pro Forma Comparative Per Share Data..............................................................9
Selected Consolidated Financial Data............................................................................11
RISK FACTORS................................................................................................................16
General ........................................................................................................16
Risks Relating to the Merger....................................................................................16
SPECIAL MEETING OF JEFFERSON SAVINGS STOCKHOLDERS...........................................................................17
Purpose ........................................................................................................17
Record Date, Voting Rights, Required Vote, and Revocability of Proxies..........................................18
Solicitation of Proxies.........................................................................................20
No Dissenters' Rights...........................................................................................20
Recommendation..................................................................................................20
DESCRIPTION OF TRANSACTION..................................................................................................21
General ........................................................................................................21
What You Will Receive in the Merger.............................................................................21
</TABLE>
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<PAGE> 9
<TABLE>
<S> <C>
Effect of the Merger on Jefferson Savings Options...............................................................24
Certain Federal Income Tax Consequences.........................................................................25
Background of and Reasons for the Merger........................................................................27
Opinion of Jefferson Savings' Financial Advisor.................................................................33
Effective Time of the Merger....................................................................................42
Distribution of Union Planters Stock Certificates...............................................................43
Conditions to Consummation of the Merger........................................................................44
Regulatory Approval.............................................................................................45
Waiver, Amendment, and Termination..............................................................................47
Conduct of Business Pending the Merger..........................................................................49
Management and Operations After the Merger......................................................................49
Interests of Certain Persons in the Merger......................................................................50
Accounting Treatment............................................................................................54
Expenses and Fees...............................................................................................54
Resales of Union Planters Common Stock..........................................................................54
Stock Option Agreement..........................................................................................55
Repurchase of Shares............................................................................................55
EFFECT OF THE MERGER ON RIGHTS OF STOCKHOLDERS..............................................................................56
Anti-Takeover Provisions Generally..............................................................................56
Authorized Capital Stock........................................................................................57
Preemptive Rights...............................................................................................59
Amendment of Charter and Bylaws.................................................................................59
Classified Board of Directors and Absence of Cumulative Voting..................................................60
Director Removal and Vacancies..................................................................................61
Limitations on Director Liability...............................................................................61
Indemnification.................................................................................................62
Special Meetings of Stockholders................................................................................64
Stockholder Nominations and Proposals...........................................................................64
Business Combinations...........................................................................................64
Dissenters' Rights of Appraisal.................................................................................68
Stockholders' Rights to Examine Books and Records...............................................................69
Dividends.......................................................................................................69
COMPARATIVE MARKET PRICES AND DIVIDENDS.....................................................................................70
BUSINESS OF JEFFERSON SAVINGS...............................................................................................72
BUSINESS OF UNION PLANTERS..................................................................................................72
CERTAIN REGULATORY CONSIDERATIONS...........................................................................................74
Payment of Dividends............................................................................................76
Capital Adequacy................................................................................................77
Support of Subsidiary Institutions..............................................................................78
Prompt Corrective Action........................................................................................79
</TABLE>
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<PAGE> 10
<TABLE>
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DESCRIPTION OF UNION PLANTERS CAPITAL STOCK.................................................................................81
Union Planters Common Stock.....................................................................................82
Union Planters Preferred Stock..................................................................................83
OTHER MATTERS84
STOCKHOLDER PROPOSALS.......................................................................................................84
EXPERTS ....................................................................................................................85
OPINIONS ...................................................................................................................85
WHERE YOU CAN FIND MORE INFORMATION.........................................................................................85
</TABLE>
APPENDICES:
Appendix A -- Agreement and Plan of Reorganization, dated as of September 20,
2000, by and between Jefferson Savings Bancorp, Inc. and Union
Planters Corporation
Appendix B -- Form of Plan of Merger, dated as of __________, 200__, by and
between Jefferson Savings Bancorp, Inc. and Union Planters
Holding Corporation
Appendix C -- Form of Opinion of Sandler O'Neill & Partners, L.P.
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<PAGE> 11
SUMMARY
This summary highlights selected information from this proxy
statement-prospectus and may not contain all of the information that is
important to you. You should carefully read this entire document and the other
documents we refer to in this document in order to understand fully the merger
and to obtain a more complete description of the legal terms of the merger. This
will give you a more complete description of the transaction we are proposing.
For more information about Union Planters and Jefferson Savings, see "WHERE YOU
CAN FIND MORE INFORMATION" on page __. We have included page references in this
summary to direct you to other places in this proxy statement-prospectus where
you can find a more complete description of the topics we have summarized.
THE COMPANIES
(SEE PAGE __ FOR JEFFERSON SAVINGS, PAGE __ FOR UNION PLANTERS)
JEFFERSON SAVINGS BANCORP, INC.
15435 CLAYTON ROAD
BALLWIN, MISSOURI 63011
(636) 227-3000
Jefferson Savings is a unitary savings and loan holding company
headquartered in Ballwin, Missouri. Jefferson Savings operates primarily through
its subsidiary bank, Jefferson Heritage Bank. Jefferson Heritage Bank has nine
branches in Missouri and 17 branches in Texas. Jefferson Heritage Bank also
operates through four subsidiaries, Jefferson Heritage Mortgage Company,
Jefferson Financial, Inc., Jefferson Financial Corporation and First Service
Corporation, Inc.
On September 30, 2000, Jefferson Savings had, on a consolidated basis,
assets of approximately $1.7 billion, loans of approximately $1.4 billion,
deposits of approximately $917.5 million, and stockholders' equity of
approximately $135.2 million.
UNION PLANTERS CORPORATION
7130 GOODLETT FARMS PARKWAY
MEMPHIS, TENNESSEE 38018
(901) 580-6000
Union Planters is a registered bank holding company headquartered in
Memphis, Tennessee. Through Union Planters Bank, National Association and
various other banking-related subsidiaries, Union Planters provides a
diversified range of financial services in the communities in which it operates
throughout Alabama, Arkansas, Florida, Illinois, Indiana, Iowa, Kentucky,
Louisiana, Mississippi, Missouri, Tennessee and Texas. It operates 863 banking
offices and more than 1,056 automated teller machines.
On September 30, 2000, Union Planters had, on a consolidated basis,
total assets of approximately $34.3 billion, loans of approximately $23.4
billion, deposits of approximately $23.1 billion, and stockholders' equity of
approximately $2.8 billion.
THE MERGER (SEE PAGE __)
Pursuant to the agreement and plan of reorganization between Union
Planters and Jefferson Savings, Union Planters will acquire Jefferson Savings by
means of the merger of Jefferson Savings with and into Union Planters Holding
Corporation, a wholly-owned subsidiary of Union Planters.
<PAGE> 12
WHAT YOU WILL RECEIVE IN THE MERGER (SEE PAGE __)
If we complete the merger, you will have the right to receive .433 of a
share of Union Planters common stock for each share of Jefferson Savings common
stock that you own on the date the merger is completed. The .433 exchange ratio
is subject to change in limited circumstances as described in this proxy
statement-prospectus.
Based on the closing price of Union Planters common stock on December
___, 2000 of $_____ and the .433 exchange ratio, you would have received
approximately $____ of Union Planters common stock for each share of Jefferson
Savings common stock you own had the merger closed on December __, 2000. The
market price of Union Planters common stock is certain to fluctuate between the
date of this proxy statement-prospectus and the date that the merger is
completed, which would alter the value of the shares of Union Planters common
stock that you receive in the merger. For more information about what the
Jefferson Savings stockholders will receive if the merger is completed, see
"DESCRIPTION OF TRANSACTION - What You Will Receive in the Merger" on page _ of
this proxy statement-prospectus.
Union Planters will not issue any fractions of shares of common stock.
Rather, Union Planters will pay cash (without interest) for any fractional share
interest any Jefferson Savings stockholder would otherwise receive in the
merger. The cash payment will be in an amount equal to the fraction multiplied
by the closing price of one share of Union Planters common stock on the New York
Stock Exchange on the last trading day before the merger is completed.
EFFECT OF THE MERGER ON JEFFERSON SAVINGS OPTIONS (SEE PAGE __)
Jefferson Savings has granted certain options to acquire Jefferson
Savings common stock under existing Jefferson Savings stock plans. If the merger
is completed, each option granted under Jefferson Savings' stock plans that is
outstanding, whether or not exercisable, will either, at the election of the
option holder, be canceled in exchange for a cash payment, or be assumed by
Union Planters. Each option that is assumed by Union Planters will become an
option to purchase Union Planters common stock, and Union Planters will agree to
deliver Union Planters common stock or cash, as applicable, upon the exercise of
each option. The number of Union Planters shares that may be purchased, under
the exercise price of each option, will be adjusted based on the exchange ratio
which determines the number of shares of Union Planters common stock that
Jefferson Savings stockholders receive in the merger in exchange for each share
of Jefferson Savings common stock.
NO DISSENTERS' RIGHTS IN THE MERGER (SEE PAGE __)
As a Jefferson Savings stockholder, you will not have any statutory
dissenters' rights in connection with the merger.
YOUR EXPECTED TAX TREATMENT AS A RESULT OF THE MERGER (SEE PAGE __)
We expect that, for federal income tax purposes, you will not recognize
any gain or loss upon the exchange of all of your shares of Jefferson Savings
common stock for shares of Union Planters common stock. You may, however,
recognize taxable gain or loss related to any cash you receive in lieu of a
fractional share of Union Planters common stock. See the discussion above under
"-- What You Will Receive in the Merger" on page __ of this proxy
statement-prospectus. Before the merger can be completed, Union Planters and
Jefferson Savings must receive opinions of Alston & Bird LLP and Lewis, Rice &
Fingersh, L.C., respectively, with respect to material federal income tax
consequences of the merger. If these opinions are not received and the material
federal income tax consequences of the merger were substantially different from
those described in this proxy statement-prospectus,
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<PAGE> 13
Jefferson Savings would resolicit the approval of its stockholders prior to
completing the merger.
Tax matters are very complicated and the tax consequences of the merger
to you will depend on the facts of your specific situation. You should consult
your own tax advisor to determine the effect of the merger under federal, state,
local, and foreign tax laws.
-3-
<PAGE> 14
COMPARATIVE MARKET PRICES OF COMMON STOCK (SEE PAGE __)
Shares of Jefferson Savings common stock are traded on the Nasdaq
National Market under the symbol "JSBA." Shares of Union Planters common stock
are traded on the New York Stock Exchange under the symbol "UPC." The table
shows you the closing sales prices for Jefferson Savings and Union Planters
common stock on September 19, 2000, the last trading day before we announced the
execution of the agreement and plan of reorganization, and on December ___,
2000, the latest practicable date before the mailing of this proxy
statement-prospectus. The table also shows you the "equivalent price per
Jefferson Savings share" or the value Jefferson Savings stockholders will
receive in the merger for each share of Jefferson Savings common stock such
stockholder owns based on the .433 exchange ratio.
<TABLE>
<CAPTION>
Jefferson Savings Union Planters Equivalent Price
Common Stock Common Stock Per Jefferson Savings Share(1)
----------------- -------------- ------------------------------
<S> <C> <C> <C>
September 19, 2000 $11.3125 $33.0625 $14.3160
December ___, 2000
</TABLE>
------------------------------
(1) The equivalent price per share of Jefferson Savings common stock
at each specified date represents the closing sale price of a
share of Union Planters common stock on such date multiplied by
an exchange ratio of .433. See "COMPARATIVE MARKET PRICES AND
DIVIDENDS" on page __.
Jefferson Savings stockholders should obtain current stock price
quotations for Union Planters common stock and Jefferson Savings common stock.
As described elsewhere in this proxy statement-prospectus, the number of shares
of Union Planters common stock to be issued in connection with the merger is
subject to adjustment under limited circumstances.
-4-
<PAGE> 15
OUR REASONS FOR THE MERGER (SEE PAGE __)
Jefferson Savings and Union Planters believe that the merger will result
in a company with expanded opportunities for profitable growth. In addition, we
anticipate that the combined resources and capital of Jefferson Savings and
Union Planters will improve our ability to compete in the evolving and
competitive financial services industry.
FAIRNESS OPINION OF JEFFERSON SAVINGS' FINANCIAL ADVISOR (SEE PAGE __)
In deciding to approve the merger, the Jefferson Savings board of
directors considered an opinion from its financial advisor, Sandler O'Neill &
Partners, L.P., that the exchange ratio is fair to Jefferson Savings'
stockholders from a financial point of view. An updated opinion, dated as of the
date of this proxy statement-prospectus, is attached to this proxy
statement-prospectus as Appendix C. We encourage you to read this opinion.
SPECIAL MEETING OF STOCKHOLDERS (SEE PAGE __)
The special meeting will be held at ________, located at
__________________________, ________________________, at __:__ _.m., local time,
on January ___, 2001. At the special meeting, Jefferson Savings stockholders
will be asked:
(1) to approve the agreement and plan of reorganization, the related
plan of merger and the transactions contemplated thereby,
including the merger of Jefferson Savings with and into Union
Planters Holding Corporation; and
(2) to act on any other matters that may be put to a vote at the
special meeting.
As of the date of this proxy statement-prospectus, the Jefferson
Savings' board of directors does not know of any other matters that will be
presented at the special meeting.
STOCKHOLDER VOTE REQUIRED (SEE PAGE __)
In order for the special meeting to be held, a quorum must be present. A
quorum is established when a majority of the shares of Jefferson Savings common
stock outstanding and entitled to vote on a matter are represented at the
special meeting either in person or by proxy.
The agreement and plan of reorganization, the related plan of merger and
the merger must be approved by stockholders who own a majority of the shares of
Jefferson Savings common stock outstanding and entitled to vote.
VOTING RIGHTS AT THE SPECIAL MEETING (SEE PAGE __)
If you owned shares of Jefferson Savings common stock as of the close of
business on December ___, 2000, the record date, you are entitled to vote at the
special meeting. On the record date, ________ shares of Jefferson Savings common
stock were outstanding and entitled to vote at the special meeting. You will be
entitled to one vote for each share of Jefferson Savings common stock that was
validly issued and outstanding and that you owned on the record date. You may
vote either by attending the special meeting and voting your shares or by
completing the enclosed proxy card and mailing it to us in the enclosed
envelope.
VOTING PROCEDURES FOR THE SPECIAL MEETING (SEE PAGE __)
We are seeking your proxy to use at the special meeting. We have
prepared this proxy statement-prospectus to assist you in deciding how to vote
and whether or not to grant your proxy to us. Please indicate on your proxy card
how you want to vote. Then sign, date and mail it to us as soon as possible so
that your shares will be represented at the
-5-
<PAGE> 16
special meeting. If you sign, date and mail your proxy card without indicating
how you wish to vote, your proxy will be counted as a vote for the agreement and
plan of reorganization, the related plan of merger and the transactions
contemplated thereby, including the merger. If you fail to return your proxy
card and fail to vote at the special meeting, the effect will be a vote against
the agreement and plan of reorganization, the related plan of merger and the
transactions contemplated thereby, including the merger. If you sign a proxy,
you may revoke it at any time before it is exercised at the special meeting by
(1) giving written notice of revocation to the Secretary of Jefferson Savings,
(2) properly submitting to Jefferson Savings a duly executed proxy bearing a
later date, or (3) attending the special meeting and voting in person. You
cannot vote shares of Jefferson Savings common stock held in "street name"; only
your broker can. If you do not provide your broker with instructions on how to
vote your shares, your broker will not be permitted to vote them, and your
shares will be treated as votes against the agreement and plan of
reorganization, the related plan of merger and the transactions contemplated
thereby, including the merger.
RECOMMENDATION TO STOCKHOLDERS (SEE PAGE __)
Jefferson Savings' board of directors has approved the agreement and
plan of reorganization, the related plan of merger and the transactions
contemplated thereby, including the merger. The Jefferson Savings board of
directors believes that the proposed merger is fair to Jefferson Savings
stockholders and in the best interests of Jefferson Savings stockholders. The
Jefferson Savings board of directors recommends that you vote FOR approval of
the agreement and plan of reorganization, the related plan of merger and the
transactions contemplated thereby, including the merger.
SHARE OWNERSHIP OF MANAGEMENT AND CERTAIN STOCKHOLDERS (SEE PAGES __ AND __)
On the record date, Jefferson Savings' directors and executive officers,
their immediate family members and entities they control owned ___ shares, or
approximately ____% of the outstanding shares of Jefferson Savings common stock.
This number does not include stock that the Jefferson Savings directors and
executive officers may acquire through exercising stock options.
On the record date, none of the directors or executive officers of Union
Planters, nor their immediate family members or entities they control, owned any
shares of Jefferson Savings common stock and Union Planters held no shares of
Jefferson Savings common stock other than in a fiduciary capacity for others, or
as a result of debts previously contracted.
INTERESTS OF CERTAIN PERSONS IN THE MERGER THAT MAY BE DIFFERENT FROM YOURS (SEE
PAGE __)
Jefferson Savings' directors have stock options, and certain officers
have employment, change in control or retirement agreements, rights under stock
options and other benefit plans and other arrangements that may provide them
with interests in and benefits from the merger that are different from yours.
The Jefferson Savings board of directors was aware of these interests and
considered them in approving and recommending the agreement and plan of
reorganization, the related plan of merger and the transactions contemplated
thereby, including the merger.
EFFECTIVE TIME (SEE PAGE __)
The merger will become final at the time specified in the Certificate of
Merger reflecting the merger to be filed with the Secretary of State of the
state of Delaware and the Articles of Merger reflecting the merger to be filed
with the Secretary of State of the state of Tennessee. If Jefferson Savings
stockholders approve the merger at the special meeting, and Union Planters
obtains all
-6-
<PAGE> 17
required regulatory approvals, we currently anticipate that the merger will be
completed during the first quarter of 2001. Jefferson Savings and Union Planters
cannot assure you that we can obtain the necessary stockholder and regulatory
approvals or that the other conditions to consummation of the merger can or will
be satisfied.
EXCHANGE OF STOCK CERTIFICATES (SEE PAGE __)
Promptly after the merger is completed, you will receive a letter and
instructions on how to surrender your Jefferson Savings stock certificates in
exchange for Union Planters stock certificates. You will need to carefully
review and complete these materials and return them as instructed along with
your stock certificates for Jefferson Savings common stock. You should not send
Jefferson Savings, Union Planters, or Union Planters' transfer agent any stock
certificates until you receive these instructions. If you do not have stock
certificates but hold shares of Jefferson Savings common stock in the form of a
book entry with Jefferson Savings' transfer agent, the transfer agent will
automatically exchange your shares of Jefferson Savings common stock and your
shares of Union Planters common stock will also be held in book entry form.
YOU SHOULD NOT SEND IN YOUR STOCK CERTIFICATES UNTIL YOU RECEIVE A
LETTER AND INSTRUCTIONS ON HOW TO SURRENDER THEM.
REGULATORY APPROVAL AND OTHER CONDITIONS (SEE PAGES __ AND __)
Union Planters is required to notify and obtain approvals from certain
government regulatory agencies before the merger may be completed, including the
Federal Reserve and other federal and state banking regulators. We expect that
Union Planters will obtain all required regulatory approvals, but we cannot
assure you that these regulatory approvals will be obtained.
In addition to the required regulatory approvals, the merger will be
completed only if certain conditions, including, but not limited to the
following, are met or, if waivable, waived:
(1) Jefferson Savings stockholders approve the agreement and plan of
reorganization, the related plan of merger and the merger at the
special meeting;
(2) Jefferson Savings and Union Planters each receive an opinion of
counsel that the merger will qualify as a tax-free
reorganization; and
(3) neither Union Planters nor Jefferson Savings has breached in any
material respect any of its representations or obligations under
the agreement and plan of reorganization.
In addition to these conditions, the agreement and plan of
reorganization, attached to this proxy statement-prospectus as Appendix A,
describes other conditions that must be met before the merger may be completed.
Jefferson Savings and Union Planters cannot assure you that the
conditions to consummation of the merger can or will be satisfied.
WAIVER, AMENDMENT, AND TERMINATION (SEE PAGE __)
Union Planters and Jefferson Savings may agree to terminate the
agreement and plan of reorganization and elect not to complete the merger at any
time before the merger is completed.
Each of the parties also can terminate the agreement and plan of
reorganization in certain other circumstances, including if the merger is not
completed by June 30, 2001. However, a party may not terminate the agreement and
plan of reorganization for this reason if (a) it willfully
-7-
<PAGE> 18
breached the agreement and plan of reorganization and (b) its breach is the
reason the merger has not been completed.
In addition, the parties may also terminate the agreement and plan of
reorganization if other circumstances occur which are described in the agreement
and plan of reorganization, attached to this proxy statement-prospectus as
Appendix A.
The agreement and plan of reorganization may be amended by the written
agreement of Jefferson Savings and Union Planters. The parties may amend the
agreement and plan of reorganization without stockholder approval, even if
Jefferson Savings stockholders have already approved the merger. However,
Jefferson Savings stockholders must approve any amendments that would modify, in
a material respect, the type or amount of consideration that they will receive
in the merger.
ACCOUNTING TREATMENT (SEE PAGE __)
Union Planters intends to account for the merger as a purchase
transaction for accounting and financial reporting purposes.
The purchase method of accounting involves adding Jefferson Savings'
assets and liabilities, estimated at their fair value at the effective time of
the merger to those of Union Planters. Therefore, the financial statements of
Union Planters issued after the merger will reflect these values from Jefferson
Savings and will not be restated retroactively to reflect the historical
financial position or results of operations of Jefferson Savings.
CERTAIN DIFFERENCES IN STOCKHOLDERS' RIGHTS (SEE PAGE __)
When the merger is completed you will automatically become a Union
Planters stockholder. The rights of Union Planters stockholders differ from the
rights of Jefferson Savings stockholders in certain significant ways. Many of
these differences have to do with provisions in Union Planters' amended and
restated charter, bylaws, and Tennessee law. Certain of these provisions are
intended to make a takeover of Union Planters more difficult if the Union
Planters board of directors does not approve it.
STOCK OPTION AGREEMENT (SEE PAGE __)
Jefferson Savings and Union Planters entered into a stock option
agreement under which Jefferson Savings granted Union Planters an option to
purchase up to 1,983,274 shares of Jefferson Savings common stock under certain
circumstances if the merger is not consummated and a third party attempts to
take control of Jefferson Savings.
-8-
<PAGE> 19
HISTORICAL AND PRO FORMA COMPARATIVE PER SHARE DATA
The following table shows certain comparative per share data relating to
net income, cash dividends, and book value. The equivalent pro forma information
is based on an exchange ratio of .433. The acquisition of Jefferson Savings is
expected to be accounted for using the purchase method of accounting.
We present the pro forma and equivalent pro forma data for your
information only. It does not necessarily indicate the results of operations or
combined financial position that would have resulted had Union Planters
completed the merger at the times indicated, and it does not necessarily
indicate what future results of operations or combined financial position will
be.
You should read the information shown below in conjunction with the
historical consolidated financial statements of Union Planters and Jefferson
Savings and the notes provided with them and related financial information
appearing elsewhere in this proxy statement - prospectus. See "-- Selected
Consolidated Financial Data," "BUSINESS OF UNION PLANTERS" on page __ and "WHERE
YOU CAN FIND MORE INFORMATION" on page __.
-9-
<PAGE> 20
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
1999 2000
----------------------- -------------------
NET INCOME
<S> <C> <C>
Union Planters - Historical
Basic ....................................................... $ 2.88 $ 2.25
Diluted ..................................................... 2.85 2.24
Jefferson Savings - Historical
Basic ....................................................... 1.07 .91
Diluted ..................................................... 1.05 .90
Pro forma (Union Planters and Jefferson Savings)
Basic ....................................................... 2.87 2.25
Diluted ..................................................... 2.84 2.23
Jefferson Savings equivalent pro forma (1)
Basic ....................................................... 1.24 .97
Diluted ..................................................... 1.23 .97
CASH DIVIDENDS PER SHARE (2)
Union Planters ................................................... $ 2.00 $ 1.50
Jefferson Savings ................................................ .28 .21
Jefferson Savings equivalent pro forma (1) ....................... .87 .65
</TABLE>
<TABLE>
<CAPTION>
December 31, 1999 September 30, 2000
----------------- ------------------
<S> <C> <C>
BOOK VALUE
Union Planters - Historical ...................................... $19.90 $20.61
Jefferson Savings - Historical ................................... 13.28 14.07
Pro forma (Union Planters and Jefferson Savings).................. 20.21 20.97
Jefferson Savings equivalent pro forma (1) ....................... 8.75 9.08
</TABLE>
-----------------------------
(1) The equivalent pro forma per share data for Jefferson Savings is
computed by multiplying pro forma information by the exchange
ratio of .433.
(2) Union Planters has assumed that on a pro forma combined basis
its pro forma cash dividends per share would be equivalent to
Union Planters' historical cash dividends per share.
-10-
<PAGE> 21
SELECTED CONSOLIDATED FINANCIAL DATA
The following tables present for Union Planters and for Jefferson
Savings, selected consolidated financial data for the nine-month periods ended
September 30, 1999 and 2000, and for the five-year period ended December 31,
1999. The information is based on the consolidated financial statements
contained in reports Union Planters and Jefferson Savings have filed with the
SEC, including their September 30, 2000 Quarterly Reports on Form 10-Q. All of
these documents are incorporated by reference in this proxy
statement-prospectus. See "WHERE YOU CAN FIND MORE INFORMATION" on page __.
You should read the following tables in conjunction with the
consolidated financial statements of Union Planters and Jefferson Savings
described above and with the notes to them.
Historical results are not necessarily indicative of results to be
expected for any future period. In the opinion of the respective managements of
Union Planters and Jefferson Savings, all adjustments (which include only normal
recurring adjustments) necessary to arrive at a fair statement of interim
results of operations of Union Planters and Jefferson Savings, respectively,
have been included. With respect to Union Planters and Jefferson Savings,
results for the nine-month period ended September 30, 2000 are not necessarily
indicative of results which may be expected for any other interim period or for
the year as a whole.
-11-
<PAGE> 22
<TABLE>
<CAPTION>
Years Ended December 31,
-----------------------------------------------------------------------------
1995 1996 1997 1998 1999
------------- ------------- ------------- ------------- -------------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net interest income ............................ $ 1,010,501 $ 1,114,989 $ 1,199,899 $ 1,207,233 $ 1,256,531
Provision for loan losses ...................... (50,696) (86,381) (153,100) (204,056) (74,045)
Investment securities gains (losses) ........... 2,288 4,934 4,888 (9,074) 2,128
Other noninterest income ....................... 369,047 391,054 449,573 475,195 490,559
Noninterest expense ............................ (849,268) (865,409) (932,569) (991,619) (1,082,434)
Merger-related and other nonoperating items(1).. (10,335) (113,430) (52,842) (105,757) 26,093
------------- ------------- ------------- ------------- -------------
Income before income taxes ..................... 471,537 445,757 515,849 371,922 618,832
Income taxes ................................... 156,718 153,055 176,014 146,316 208,834
------------- ------------- ------------- ------------- -------------
Net income ..................................... $ 314,819 $ 292,702 $ 339,835 $ 225,606 $ 409,998
============= ============= ============= ============= =============
Cash operating earnings(2) ..................... $ 336,503 $ 381,233 $ 392,476 $ 351,866 $ 440,337
============= ============= ============= ============= =============
PER COMMON SHARE DATA:
Net earnings
Basic ...................................... $ 2.55 $ 2.28 $ 2.53 $ 1.61 $ 2.88
Diluted .................................... 2.47 2.21 2.47 1.58 2.85
Cash operating earnings(2)
Basic ...................................... 2.73 2.98 2.93 2.52 3.09
Diluted .................................... 2.64 2.87 2.85 2.47 3.06
Cash dividends ................................. .98 1.08 1.495 2.00 2.00
Book value ..................................... 18.93 20.13 20.96 20.86 19.90
BALANCE SHEET DATA (AT PERIOD END):
Total assets ................................... $ 26,131,594 $ 28,108,528 $ 29,974,463 $ 31,691,953 $ 33,280,353
Loans, net of unearned income .................. 16,614,031 16,614,031 18,811,441 20,302,969 19,576,826
Allowance for loan losses ...................... 255,103 270,439 324,474 321,476 342,300
Investment securities .......................... 6,425,174 6,185,699 6,414,197 8,301,703 7,472,455
Total deposits ................................. 20,322,078 21,330,304 22,875,879 24,896,455 23,372,116
Short-term borrowings(3) ....................... 1,086,369 1,758,027 1,824,513 1,648,039 5,422,504
Long-term debt(4)
Parent company ................................. 214,758 373,459 373,746 378,249 379,656
Subsidiary banks ............................... 1,219,744 1,451,712 1,365,753 1,060,483 738,114
Total stockholders' equity ..................... 2,312,892 2,557,117 2,874,473 2,984,078 2,776,109
Average assets ................................. 24,812,394 27,610,263 29,188,805 30,744,326 32,902,370
Average stockholders' equity ................... 2,125,796 2,417,913 2,755,209 2,931,703 2,980,664
Average shares outstanding (in thousands)
Basic ...................................... 119,995 125,449 132,451 139,034 141,854
Diluted .................................... 127,416 133,452 138,220 142,693 143,983
<CAPTION>
Nine Months Ended
September 30,
--------------------------------
1999 2000
-------------- --------------
<S> <C> <C>
INCOME STATEMENT DATA:
Net interest income ............................ $ 935,515 $ 930,110
Provision for loan losses ...................... (54,384) (56,941)
Investment securities gains (losses) ........... 1,968 77
Other noninterest income ....................... 372,041 403,118
Noninterest expense ............................ (798,726) (815,204)
Merger-related and other nonoperating items(1).. 15,522 (1,237)
Income before income taxes ..................... 471,936 459,923
Income taxes ................................... 159,288 154,120
------------ -------------
Net income ..................................... $ 312,648 $ 305,803
============ =============
Cash operating earnings(2) ..................... $ 336,459 $ 344,917
============ =============
PER COMMON SHARE DATA:
Net earnings
Basic ...................................... $ 2.19 $ 2.25
Diluted .................................... 2.16 2.24
Cash operating earnings(2)
Basic ...................................... 2.35 2.54
Diluted .................................... 2.33 2.52
Cash dividends ................................. 1.50 1.50
Book value ..................................... 20.67 20.61
BALANCE SHEET DATA (AT PERIOD END):
Total assets ................................... $ 33,154,492 $ 34,262,589
Loans, net of unearned income .................. 21,446,400 23,449,430
Allowance for loan losses ...................... 358,721 340,453
Investment securities .......................... 7,845,191 6,920,432
Total deposits ................................. 24,391,453 23,083,674
Short-term borrowings(3) ....................... 4,046,075 5,993,766
Long-term debt(4)
Parent company ................................. 379,619 379,267
Subsidiary banks ............................... 753,322 1,075,676
Total stockholders' equity ..................... 2,951,929 2,797,546
Average assets ................................. 32,822,086 33,775,630
Average stockholders' equity ................... 2,992,902 2,807,628
Average shares outstanding (in thousands)
Basic ...................................... 142,464 135,337
Diluted .................................... 144,680 136,821
</TABLE>
-12-
<PAGE> 23
UNION PLANTERS SELECTED CONSOLIDATED FINANCIAL DATA (CONTINUED)
<TABLE>
<CAPTION>
Years Ended December 31,
----------------------------------------------
1995 1996 1997 1998 1999
------ ------ ------ ------ -------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
PROFITABILITY AND CAPITAL RATIOS:
Return on average assets ..................................................... 1.27% 1.06% 1.16% .73% 1.25%
Return on average common equity .............................................. 15.14 12.26 12.45 7.71 13.80
Net interest margin .......................................................... 4.53 4.48 4.57 4.40 4.36
Net interest spread .......................................................... 3.80 3.71 3.79 3.60 3.69
Loan/deposits (period end) ................................................... 81.75 88.19 88.75 78.63 91.76
Common and preferred dividend payout ratio ................................... 30.46 40.03 48.84 113.67 69.93
Stockholders' equity/total assets (period end) ............................... 8.85 9.10 9.59 9.42 8.34
Average stockholders' equity/average
total assets............................................................... 8.57 8.76 9.44 9.54 9.06
Leverage ratio ............................................................... 8.54 9.40 9.62 8.86 6.65
Tier 1 capital/risk-weighted assets .......................................... 13.46 14.49 14.32 13.34 9.50
Total capital/risk-weighted assets ........................................... 15.75 16.66 16.39 16.78 12.69
CREDIT QUALITY RATIOS:
Allowance for losses on loans/period-end loans ............................... 1.63% 1.57% 1.71% 1.71% 1.64%
Nonperforming loans/total loans .............................................. .79 .79 .81 .83 .62
Allowance for losses on loans/nonperforming
loans ..................................................................... 207 199 210 206 264
Nonperforming assets/loans and fore-
closed properties ......................................................... 1.03 1.03 1.01 .97 .80
Provision for losses on loans/average loans .................................. .33 .52 .83 1.04 .36
Net charge-offs/average loans ................................................ .31 .47 .63 .95 .47
<CAPTION>
Nine Months Ended
September 30,
-----------------
1999 2000
------ -------
<S> <C> <C>
PROFITABILITY AND CAPITAL RATIOS:
Return on average assets ..................................................... 1.27% 1.21%
Return on average common equity .............................................. 14.01 14.60
Net interest margin .......................................................... 4.35 4.17
Net interest spread .......................................................... 3.67 3.48
Loan/deposits (period end) ................................................... 87.60 101.58
Common and preferred dividend payout ratio ................................... 69.00 67.02
Stockholders' equity/total assets (period end) ............................... 8.90 8.17
Average stockholders' equity/average
total assets............................................................... 9.12 8.31
Leverage ratio ............................................................... 7.03 6.36
Tier 1 capital/risk-weighted assets .......................................... 10.18 8.57
Total capital/risk-weighted assets ........................................... 13.46 11.59
CREDIT QUALITY RATIOS:
Allowance for losses on loans/period-end loans ............................... 1.72% 1.47%
Nonperforming loans/total loans .............................................. .72 .58
Allowance for losses on loans/nonperforming
loans ..................................................................... 240 252
Nonperforming assets/loans and fore-
closed properties ......................................................... .88 .76
Provision for losses on loans/average loans .................................. .36 .34
Net charge-offs/average loans ................................................ .40 .34
</TABLE>
--------------------------------------
(1) Reference is made to page 16 of the September 30, 2000 Quarterly
Report on Form 10-Q and Table 1 on page 31 of the 1999 Annual
Report to Stockholders for the merger-related and other
nonoperating items.
(2) Cash operating earnings are net earnings before merger-related
and other nonoperating items and goodwill and other intangibles
amortization, net of income taxes.
(3) Short-term borrowings include Federal Home Loan Bank (FHLB)
advances with original maturities of one year or less, federal
funds purchased and securities sold under agreements to
repurchase, Short-Term Senior Notes, and other short-term
borrowing (See Note 9 to Union Planters' financial statements on
page 54 of the 1999 Annual Report to Stockholders).
(4) Long-term debt includes Medium-Term Senior Notes, FHLB advances
with original maturities greater than one year, Trust Preferred
Securities, variable rate asset-backed certificates,
subordinated notes and debentures, obligations under capital
leases, mortgage indebtedness, and notes payable with original
maturities greater than one year. (See Note 9 to Union Planters'
financial statements on page 54 of the 1999 Annual Report to
Stockholders)
-13-
<PAGE> 24
JEFFERSON SAVINGS SELECTED CONSOLIDATED FINANCIAL DATA
<TABLE>
<CAPTION>
Years Ended December 31,
---------------------------------------------------------------------
1995 1996 1997 1998 1999
------ ------- ------- -------- -------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net interest income ....................... $ 22,746 $ 29,532 $ 37,162 $ 34,156 $ 41,195
Provision for losses on loans ............. 367 660 1,260 (1,200) 520
Other noninterest income .................. 2,482 1,118 3,513 4,353 4,852
Noninterest expense ....................... 14,955 25,192 22,814 26,085 28,489
----------- ----------- ----------- ---------- -----------
Income before income taxes ................ 9,906 4,798 16,601 13,624 17,038
Income tax expense ........................ 3,536 1,982 6,370 6,039 6,888
----------- ----------- ----------- ---------- -----------
Net income ................................ $ 6,370 $ 2,816 $ 10,231 $ 7,585 $ 10,150
=========== =========== =========== ========== ===========
PER COMMON SHARE DATA:
Net income
Basic ................................. $ .84 $ .37 $ 1.13 $ .81 $ 1.07
Diluted ............................... .80 .35 1.08 .78 1.05
Total book value .......................... 10.75 11.17 12.52 13.13 13.27
Cash dividends ............................ -- .16 .22 .28 .28
BALANCE SHEET DATA (AT PERIOD END):
Total assets .............................. $ 1,142,929 $ 1,148,079 $ 1,238,055 $ 1,383,460 $ 1,582,934
Loans, net of unearned income(1) .......... 793,181 891,934 933,102 1,125,149 1,245,864
Allowance for losses on loans ............. 5,096 6,529 8,182 6,659 6,938
Investment securities ..................... 48,590 85,702 129,997 154,611 103,342
Mortgage-backed securities ................ 232,883 95,203 85,480 32,364 118,447
Total deposits ............................ 870,179 947,069 1,044,881 1,038,177 974,965
Short-term borrowings(2) .................. 151,183 57,490 38,081 41,828 216,600
Total stockholders' equity ................ 80,251 89,919 116,260 123,839 126,081
Average assets ............................ 1,044,124 1,113,879 1,256,150 1,272,511 1,512,845
Average stockholders' equity .............. 76,972 82,116 107,825 120,818 125,238
Average shares outstanding (in thousands)
Basic ..................................... 7,622 7,541 9,035 9,365 9,489
Diluted ................................... 7,967 7,949 9,480 9,769 9,686
<CAPTION>
Nine Months Ended
September 30,
--------------------------
1999 2000
------------ -----------
<S> <C> <C>
INCOME STATEMENT DATA:
Net interest income ....................... $ 30,471 $ 33,310
Provision for losses on loans ............. -- 885
Other noninterest income .................. 2,644 5,756
Noninterest expense ....................... 20,637 24,153
------------ ------------
Income before income taxes ................ 12,478 14,028
Income tax expense ........................ 5,056 5,333
------------ ------------
Net income ................................ $ 7,422 $ 8,695
============ ============
PER COMMON SHARE DATA:
Net income
Basic ................................. $ .78 $ .91
Diluted ............................... .76 .90
Total book value .......................... 13.18 14.07
Cash dividends ............................ .21 .21
BALANCE SHEET DATA (AT PERIOD END):
Total assets .............................. $ 1,572,334 $ 1,728,251
Loans, net of unearned income(1) .......... 1,262,575 1,390,595
Allowance for losses on loans ............. 6,633 7,430
Investment securities ..................... 103,959 104,504
Mortgage-backed securities ................ 121,441 111,568
Total deposits ............................ 977,359 917,454
Short-term borrowings(2) .................. 163,852 372,764
Total stockholders' equity ................ 124,572 135,163
Average assets ............................ 1,491,568 1,625,550
Average stockholders' equity .............. 125,130 129,273
Average shares outstanding (in thousands)
Basic ..................................... 9,495 9,554
Diluted ................................... 9,703 9,708
</TABLE>
-------------------------------
(1) Includes loans net of unearned fees and discounts and excludes
allowance for losses.
(2) Includes FHLB borrowings with remaining maturities of one year
or less, borrowings under reverse repurchase agreements and, at
September 30, 2000, a note from Firstar maturing May 31, 2001.
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<PAGE> 25
JEFFERSON SAVINGS SELECTED CONSOLIDATED FINANCIAL DATA (CONTINUED)
<TABLE>
<CAPTION>
Nine Months Ended
Years Ended December 31, September 30,
--------------------------------------------------- -----------------
1995 1996 1997 1998 1999 1999 2000
---- ---- ---- ---- ---- ---- ----
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
PROFITABILITY AND CAPITAL RATIOS:
Return on average assets .61% .25% .81% .60% .67% .66% .71%
Return on average common equity 8.28 3.43 9.49 6.28 8.10 7.91 8.97
Net interest income (taxable-equivalent)/
average earning assets 2.24 2.75 3.10 2.81 2.83 2.83 2.87
Loan/deposits (period end) 90.57 93.49 88.52 107.74 127.07 128.50 150.76
Dividend payout ratio -- 43.24 19.47 34.57 26.17 26.92 23.08
Equity/assets (period end) 7.02 7.83 9.39 8.95 7.97 7.92 7.82
Average stockholders' equity/average
total assets 7.37 7.37 8.52 9,.49 8.28 8.39 7.95
Leverage ratio(1) (2) (2) (2) 6.79 6.69 6.53 7.02
Tier 1 capital/risk-weighted assets(1) (2) (2) (2) 10.65 10.35 10.47 10.29
Total capital/risk-weighted assets(1) (2) (2) (2) 11.34 10.90 11.03 10.83
CREDIT QUALITY RATIOS:
Allowance/period-end loans .65 .74 .88 .60 .56 .53 .54
Nonperforming loans/total loans .38 .18 .59 .44 .61 .71 .83
Allowance/nonperforming loans 168.57 402.53 149.74 135.24 91.72 74.25 64.81
Nonperforming assets/loans and fore-
closed properties .85 .68 1.05 .70 .73 .81 .96
Provision/average loans .05 .08 .13 (.13) .04 -- .07
Net charge-offs/average loans .02 .01 .08 .03 .02 -- .03
</TABLE>
-------------------------------------
(1) Regulatory capital ratios are for Jefferson Heritage Bank only.
Jefferson Savings Bancorp, Inc. does not have consolidated
regulatory capital requirements.
(2) Prior to January 1, 1998, Jefferson Savings Bancorp, Inc.
conducted its banking operations through two separate
subsidiaries, Jefferson Savings and Loan Association and First
Federal Savings Bank of North Texas. Each subsidiary was subject
to its own regulatory capital requirements. These capital
requirements are listed in footnote 4 to the consolidated
financial statements on pages 64-65 of Jefferson Savings' Annual
Report on form 10-K for the year ended December 31, 1999.
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<PAGE> 26
RISK FACTORS
GENERAL
If the merger is consummated, you will receive shares of Union Planters
common stock in exchange for your shares of Jefferson Savings common stock. You
should be aware of particular risks and uncertainties that are applicable to an
investment in Union Planters common stock. Specifically, there are risks and
uncertainties that bear on Union Planters' future financial results and that may
cause Union Planters' future earnings and financial condition to be less than
Union Planters' expectations.
Some of the risks and uncertainties involved in an investment in Union
Planters common stock relate to economic conditions generally and would affect
other financial institutions in similar ways. These aspects are discussed
previously in this proxy statement-prospectus under the heading "A WARNING ABOUT
FORWARD-LOOKING STATEMENTS." This section addresses particular risks and
uncertainties that are specific to Union Planters.
RISKS RELATING TO THE MERGER
UNION PLANTERS MAY NOT BE ABLE TO SUCCESSFULLY ASSIMILATE JEFFERSON
SAVINGS' OPERATIONS INTO UNION PLANTERS OPERATIONS.
The merger involves the assimilation of two companies that have
previously operated independently of each other. Successful assimilation of
Jefferson Savings' operations will depend primarily on Union Planters' ability
to consolidate operations, systems and procedures and to eliminate redundancies
and costs. We may not be able to assimilate our operations without encountering
difficulties including, without limitation:
- the loss of key employees and customers;
- possible inconsistencies in standards, control procedures and
policies; and
- unexpected problems with costs, operations, personnel,
technology or credit.
Further, although we anticipate cost savings as a result of the merger
to be meaningful, we may be unable to fully realize any of the potential cost
savings expected. Finally, any cost savings which are realized may be offset by
losses in revenues or other changes to earnings.
YOU WILL NOT KNOW THE MARKET VALUE OF THE UNION PLANTERS COMMON STOCK
YOU WILL RECEIVE IN THE MERGER UNTIL WE COMPLETE THE MERGER.
The precise value of the merger consideration to be paid to Jefferson
Savings' stockholders will not be known at the time of the special meeting. The
agreement and plan of reorganization provides that .433 of a share of Union
Planters common stock will be issued in the merger in exchange for each share of
Jefferson Savings' common stock (subject to possible
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<PAGE> 27
adjustment). The value of Jefferson Savings' common stock will fluctuate prior
to the effective time of the merger and may be either higher or lower than on
the date of the agreement and plan of reorganization or the date of the special
meeting.
THE VALUE OF JEFFERSON SAVINGS COMMON STOCK MAY VARY IN THE FUTURE.
If the merger is not completed, the value of Jefferson Savings common
stock could increase or decrease in the future. Such value could be either
higher or lower than the merger consideration being offered by Union Planters in
the merger.
UNION PLANTERS' ACQUISITION STRATEGY COULD POSE RISKS.
Union Planters has grown through acquisitions in recent years and Union
Planters from time to time evaluates strategic opportunities not only in the
banking industry but also related financial service industries. If Union
Planters makes acquisitions in the future, one or more of those possible future
acquisitions could be material to Union Planters. Union Planters may issue
common stock to pay for those future acquisitions, which could possibly dilute
the ownership interest of all Union Planters stockholders at the time of any
such acquisition. Union Planters may also use cash or other liquid assets or
incur debt to complete future acquisitions. In those events, Union Planters
could become more susceptible to economic downturns and competitive pressures.
JEFFERSON SAVINGS' STOCKHOLDERS WILL NOT CONTROL UNION PLANTERS' FUTURE
OPERATIONS.
Jefferson Savings' stockholders collectively own 100% of Jefferson
Savings and, in the aggregate, have the absolute power to approve or reject any
matters requiring the approval of stockholders under Delaware law and Jefferson
Savings' certificate of incorporation. After the merger, Jefferson Savings'
stockholders in the aggregate will hold approximately 3 1/4% of the outstanding
shares of Union Planters common stock. Even if all of the former Jefferson
Savings stockholders voted in concert on all matters presented to Union
Planters' stockholders from time to time, this number of shares of Union
Planters common stock likely will not be able to dictate whether these proposals
are ultimately approved or rejected.
SPECIAL MEETING OF JEFFERSON SAVINGS STOCKHOLDERS
PURPOSE
This proxy statement-prospectus is being furnished to you in connection
with the proxy solicitation by Jefferson Savings' board of directors. The
Jefferson Savings board of directors will use the proxies at the special meeting
of stockholders of Jefferson Savings and at any adjournments.
The special meeting of Jefferson Savings' stockholders will be held
at __________________, located at _________________, ________________________,
at __:__ _.m., local time, on January ___, 2001.
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<PAGE> 28
At the special meeting, you will be asked to vote upon a proposal to
approve the agreement and plan of reorganization, dated as of September 20,
2000, between Union Planters and Jefferson Savings, attached to this proxy
statement-prospectus as Appendix A, the related plan of merger, between
Jefferson Savings and Union Planters Holding Corporation, attached to this proxy
statement-prospectus as Appendix B and the transactions contemplated thereby,
including the merger. Pursuant to the agreement and plan of reorganization and
the plan of merger, Union Planters will acquire Jefferson Savings by means of
the merger of Jefferson Savings with and into Union Planters Holding
Corporation, a wholly-owned subsidiary of Union Planters. Union Planters Holding
Corporation will be the surviving corporation in the merger. The outstanding
shares of Jefferson Savings common stock will be converted into shares of Union
Planters common stock and associated preferred stock purchase rights. You will
receive cash in lieu of any fractional shares of Union Planters common stock.
You are requested to promptly sign, date, and return the accompanying
proxy card to Jefferson Savings in the enclosed postage-paid, addressed
envelope. If you do not return your properly executed card, or if you do not
attend and cast your vote at the special meeting, the effect will be a vote
against the merger.
RECORD DATE, VOTING RIGHTS, REQUIRED VOTE, AND REVOCABILITY OF PROXIES
Jefferson Savings' board of directors fixed the close of business on
December ___, 2000, as the record date for determining those Jefferson Savings
stockholders who are entitled to notice of and to vote at the special meeting.
Only holders of Jefferson Savings common stock of record on the books of
Jefferson Savings at the close of business on December ___, 2000 have the right
to receive notice of and to vote at the special meeting. On the record date,
there were _________ shares of Jefferson Savings common stock issued and
outstanding held by approximately ___ holders of record.
At the special meeting, Jefferson Savings stockholders will have one
vote for each share of Jefferson Savings common stock owned on the record date
(other than shares beneficially owned by any person or group of persons in
excess of 10% of the Jefferson Savings common stock outstanding in violation of
Jefferson Savings' certificate of incorporation, which shares are only entitled
to 1/100th of a vote each). The holders of a majority of the shares of Jefferson
Savings common stock outstanding and entitled to vote at the special meeting
must be present in order for a quorum to exist at the special meeting.
To determine if a quorum is present, Jefferson Savings intends to count
the following:
- shares of Jefferson Savings common stock present at the special
meeting either in person or by proxy;
- shares of Jefferson Savings common stock present in person at
the special meeting but not voting; and
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<PAGE> 29
- shares of Jefferson Savings common stock for which it has
received proxies but with respect to which holders of shares
have abstained on any matter.
Approval of the merger requires the vote of a majority of the votes entitled to
vote at the special meeting.
Only a broker can vote shares of Jefferson Savings common stock held in
street name for customers who are beneficial owners of such shares. Brokers who
hold shares in street name for customers who are the beneficial owners of such
shares may not give a proxy to vote those shares to approve the merger without
specific instructions from their customers. Each broker will provide
instructions on how to vote to each of its customers. Any abstention, non-voting
share or "broker non-vote" will have the same effect as a vote AGAINST the
approval of the merger. Therefore, it is imperative that you provide your broker
with voting instructions. If your shares are held in a street name and you plan
to attend the special meeting and vote in person, you must contact your broker
for instructions on how to vote in person.
Properly executed proxies that Jefferson Savings receives before the
vote at the special meeting that are 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 MERGER,
AND THE PROXY HOLDER MAY VOTE THE PROXY IN ITS DISCRETION AS TO ANY OTHER MATTER
WHICH MAY COME PROPERLY BEFORE THE SPECIAL MEETING, AS DIRECTED BY THE JEFFERSON
SAVINGS' BOARD OF DIRECTORS. IF NECESSARY, THE PROXY HOLDERS MAY VOTE IN FAVOR
OF A PROPOSAL TO ADJOURN THE SPECIAL MEETING IN ORDER TO PERMIT FURTHER
SOLICITATION OF PROXIES IF THERE ARE NOT SUFFICIENT VOTES TO APPROVE THE
PROPOSAL AT THE TIME OF THE SPECIAL MEETING. HOWEVER, NO PROXY HOLDER WILL VOTE
ANY PROXIES VOTED AGAINST APPROVAL OF THE MERGER IN FAVOR OF A PROPOSAL TO
ADJOURN THE SPECIAL MEETING TO SOLICIT ADDITIONAL PROXIES.
A Jefferson Savings stockholder who has given a proxy solicited by
Jefferson Savings' board of directors may revoke it at any time prior to its
exercise at the special meeting by (1) giving written notice of revocation to
the Secretary of Jefferson Savings, (2) properly submitting to Jefferson Savings
a duly executed proxy bearing a later date, or (3) attending the special meeting
and voting in person. All written notices of revocation and other communications
with respect to revocation of proxies should be sent to: Jefferson Savings
Bancorp, Inc., 15435 Clayton Road, Ballwin, Missouri 63011, Attention: Paul J.
Milano, Secretary.
If you are a participant in Jefferson Savings' employee stock ownership
plan, the "Jefferson Savings ESOP," you will have the opportunity to direct the
ESOP trustee as to how to vote your shares. The trustee of the plan will vote
the shares in the plan which are allocated to you in the manner you direct.
Subject to its common law and statutory fiduciary duties, the trustee will vote
unallocated shares in the plan in the same proportion as the participants as a
whole directed the trustee to vote their shares. If you do not direct the
trustee to vote your ESOP shares, they will be voted as if they were unallocated
shares.
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<PAGE> 30
The trustee for the Jefferson Savings ESOP has sought a fairness opinion
from a financial advisor; A.G. Edwards & Sons, Inc. We do not anticipate that
this fairness opinion will be substantially different from the fairness opinion
rendered by Jefferson Savings' financial advisor.
On the record date, Jefferson Savings' directors and executive officers,
including their immediate family members and affiliated entities, owned
_________ shares or approximately _____% of the outstanding shares of Jefferson
Savings common stock. These shares represent approximately _____% of the shares
required to approve the merger. [This number does not include shares subject to
options to purchase Jefferson Savings common stock which are not entitled to
vote at the special meeting.]
On the record date, none of the Union Planters' directors or executive
officers of Union Planters, their immediate family members or entities they
control, owned any shares of Jefferson Savings common stock. Union Planters held
no shares of Jefferson Savings common stock other than in a fiduciary capacity
for others, or as a result of debts previously contracted, and Jefferson Savings
held no shares of Jefferson Savings common stock other than in a fiduciary
capacity for others with respect to which it has sole or shared voting power.
SOLICITATION OF PROXIES
Directors, officers and employees of Jefferson Savings may solicit
proxies by mail, in person, or by telephone or telegraph. They will receive no
additional compensation for such services. Jefferson Savings may, however, hire
a professional proxy solicitor who will receive a fee for its services.
Jefferson Savings may also make arrangements with brokerage firms and other
custodians, nominees, and fiduciaries, if any, for the forwarding of
solicitation materials to the beneficial owners of Jefferson Savings common
stock held of record by such persons. Jefferson Savings will reimburse any such
brokers, custodians, nominees, and fiduciaries for the reasonable out-of-pocket
expenses incurred by them for such services. Jefferson Savings will pay its own
expenses in connection with the merger, except that Union Planters will pay one
half of the printing costs incurred in connection with the printing of the
registration statement and this proxy statement-prospectus, as provided in the
agreement and plan of reorganization. See "DESCRIPTION OF TRANSACTION --
Expenses and Fees."
NO DISSENTERS' RIGHTS
As a Jefferson Savings stockholder, you will not have any statutory
dissenters' rights in connection with the merger.
RECOMMENDATION
Jefferson Savings' board of directors has unanimously approved the
agreement and plan of reorganization, the related plan of merger and the
transactions contemplated thereby including the merger and believes that the
proposal to approve the agreement and plan of reorganization, the related plan
of merger and the transactions contemplated thereby, including the merger, is in
the best interests of Jefferson Savings and its stockholders. Jefferson Savings'
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<PAGE> 31
board of directors recommends that you vote FOR approval of the agreement and
plan of reorganization, the related plan of merger and the merger.
DESCRIPTION OF TRANSACTION
The following information describes material aspects of the merger. This
description does not provide a complete description of all the terms and
conditions of the agreement and plan of reorganization and the related plan of
merger. It is qualified in its entirety by the Appendices hereto, including the
text of the agreement and plan of reorganization and the related plan of merger,
which are attached as Appendices A and B, respectively, to this proxy
statement-prospectus. The agreement and plan of reorganization and the related
plan of merger are incorporated herein by reference. You are urged to read the
Appendices in their entirety.
GENERAL
The agreement and plan of reorganization provides for the acquisition of
Jefferson Savings by Union Planters pursuant to the merger of Jefferson Savings
into Union Planters Holding Corporation, a wholly-owned subsidiary of Union
Planters.
If we complete the merger, each Jefferson Savings stockholder will
receive .433 of a share of Union Planters common stock and associated preferred
stock purchase rights (subject to possible adjustment) for each share of
Jefferson Savings common stock held by such stockholder at the date the merger
is completed.
WHAT YOU WILL RECEIVE IN THE MERGER
Under the limited circumstances described below, the exchange ratio
could be increased pursuant to certain provisions of the agreement and plan of
reorganization. UNDER NO CIRCUMSTANCES WOULD THE EXCHANGE RATIO BE LESS THAN
.433 OF A SHARE OF UNION PLANTERS COMMON STOCK FOR EACH SHARE OF JEFFERSON
SAVINGS COMMON STOCK.
For purposes of the description of the provisions of the agreement and
plan of reorganization that provide for an adjustment of the exchange ratio and
their operation, the following definitions apply:
The "average closing price" is the average of the daily last sales
prices of Union Planters common stock as reported on the New York Stock Exchange
(as reported by The Wall Street Journal, or, if not reported thereby, by another
authoritative source selected by Union Planters) for the 10 consecutive full
trading days in which such shares are traded on the New York Stock Exchange
ending at the close of trading on the "determination date."
The "determination date" is the later of the date on which approval of
the merger by the Federal Reserve is received (without regard to any requisite
waiting period) and the date on which the special meeting of the Jefferson
Savings stockholders occurs.
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<PAGE> 32
The "starting date" is September 26, 2000, which is the fourth full
trading day after the announcement by press release of the merger.
The "starting price" is the closing price per share of Union Planters
common stock as reported on the New York Stock Exchange (as reported by The Wall
Street Journal or, if not reported thereby, another authoritative source as
chosen by Union Planters) on the starting date.
The "Union Planters ratio" is the number obtained by dividing the
"average closing price" by the starting price.
The "index price" is the weighted average of the closing prices of the
common stock of the bank holding companies described as the "index group" in the
agreement and plan of reorganization as of a given date.
The "index ratio" is the number obtained by dividing the index price on
the determination date by the index price on the starting date, less 20%.
If during the ten-day period beginning two days after the determination
date:
(1) the average closing price is less than the product of the
starting price and 0.85; and
(2) the Union Planters ratio is less than the index ratio,
then the Jefferson Savings' board of directors may elect by a majority vote to
terminate the agreement and plan of reorganization. However, Union Planters may
then elect to increase the exchange ratio to equal the lesser of (i) the
quotient obtained by dividing (1) the product of 0.85, the starting price, and
the exchange ratio by (2) the average closing price, and (ii) the quotient
obtained by dividing (1) the product of the index ratio and the exchange ratio
by (2) the Union Planters ratio. If Union Planters makes such an election, no
termination will have occurred and the agreement and plan of reorganization will
remain in effect with the same terms and conditions, except for the modified
exchange ratio.
These conditions reflect the parties' agreement that the Jefferson
Savings stockholders will assume the risk of a decline in value of Union
Planters common stock between the starting date and the determination date, so
long as the percentage change in the value of Union Planters common stock
between the starting date and the determination date does not lag more than 20%
behind the percentage change in the value of a market basket of bank holding
company common stocks during the same time period. Jefferson Savings
stockholders will only assume the risk of a decline in Union Planters common
stock of up to 15% between the starting date and the determination date, if the
percentage change in value of Union Planters common stock between the starting
date and the determination date lags more than 20% behind the percentage change
in the value of a market basket of bank holding company common stocks during the
same time period.
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<PAGE> 33
In making its determination of whether to terminate the agreement and
plan of reorganization due to the factors discussed above, the Jefferson Savings
board of directors may 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 Union Planters (including the recent performance of
Union Planters common stock, the historical financial data of Union Planters,
customary statistical measurements of Union Planters' financial performance, and
the future prospects for Union Planters common stock following the merger), and
the advice of Jefferson Savings' financial advisors and legal counsel. If the
Jefferson Savings board of directors elects to terminate the agreement and plan
of reorganization, Union Planters would then determine whether to proceed with
the merger at the higher exchange ratio. In making this determination, the
principal factors Union Planters will consider include the projected effect of
the merger on Union Planters' pro forma earnings per share and whether Union
Planters' assessment of Jefferson Savings' earning potential as part of Union
Planters justifies the issuance of an increased number of Union Planters shares.
The operation of this termination and subsequent adjustment to the
exchange ratio provision can be illustrated by three scenarios. (For purposes of
the scenarios, it has been assumed that the initial exchange ratio is .433, the
starting price of Union Planters common stock is $30.00, and the index price, as
of the starting date, is $50.)
(1) The first scenario occurs if the average closing price
is $25.50 or greater. Since the ratio of the average closing price to
the starting price is not less than 0.85, regardless of any comparison
between the Union Planters ratio and the index ratio, Jefferson Savings
would not have the ability to terminate the agreement and plan of
reorganization and therefore trigger a possible adjustment to the
exchange ratio, even though the value of the consideration to be
received by Jefferson Savings stockholders could have fallen from a pro
forma $12.99 per share, as of the starting date, to a pro forma $11.04
per share, as of the determination date.
(2) The second scenario occurs if the average closing price
is less than $25.50, but does not represent a decline from the starting
price of more than 20% than the decline of the common stock prices of
the index group. Under this scenario, Jefferson Savings also would not
have the ability to terminate the agreement and plan of reorganization
and therefore trigger a possible adjustment to the exchange ratio, even
though the value of the consideration to be received by Jefferson
Savings stockholders would have fallen from a pro forma $12.99 per
share, as of the starting date, to an amount based on the then lower
average closing price of Union Planters common stock, as of the
determination date, of less than a pro forma $11.04 per share.
(3) The third scenario occurs if the average closing price
declines below $25.50 and the Union Planters ratio is below the index
ratio. Under this scenario, Jefferson Savings could elect to terminate
the agreement and plan of reorganization. If Jefferson Savings chooses
to do so, Union Planters may then make an adjustment to the exchange
ratio. This adjustment in the exchange ratio is designed to ensure,
subject to the Jefferson Savings board of directors exercising its
rights to terminate the agreement and plan of reorganization and the
Union Planters board of directors electing to avoid such termination,
that if the merger is
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<PAGE> 34
consummated the Jefferson Savings stockholders receive shares of Union
Planters common stock having a value (based on the average closing
price) that corresponds to at least $25.50 per Union Planters share or a
20% decline from the stock price performance reflected by the index
group, whichever is less.
Example -- If the average closing price were
$20.00, and the ending index price, as of the determination
date, were $45, the Union Planters ratio (.667) would be below
the index ratio (.70, or .90 minus .20), and Jefferson Savings
could terminate the agreement and plan of reorganization unless
Union Planters elected within five days to increase the exchange
ratio to equal .4544, which represents the lesser of (a) .552
(the result of dividing $11.04 (the product of 0.85, $30.00, and
the .433 exchange ratio) by the average closing price ($20.00),
rounded to the nearest ten-thousandth) and (b) .4544 (the result
of dividing the index ratio (.70) times .433 by the Union
Planters ratio (.667), rounded to the nearest ten-thousandth).
Based on the assumed $20.00 average closing price, the new
exchange ratio would represent a value to the Jefferson Savings
stockholders of $9.09 per share.
It is possible, however, that Jefferson Savings' board of directors
would not elect to exercise its termination right, even if the average closing
price is below $25.50 and the Union Planters ratio is below the index ratio.
Under these circumstances, the exchange ratio would remain at .433, regardless
of the fact that the average closing price is below $25.50. Conversely, it is
possible that if Jefferson Savings' board of directors does elect to exercise
its termination right, Union Planters' board of directors would not elect to
increase the exchange ratio to prevent such termination, and under these
circumstances the agreement and plan of reorganization would terminate.
The actual market value of a share of Union Planters common stock at the
effective time of the merger and at the time certificates for those shares are
delivered following surrender and exchange of certificates for shares of
Jefferson Savings common stock may be more or less than the average closing
price. You are urged to obtain current market prices for Union Planters common
stock and Jefferson Savings common stock. See "-- COMPARATIVE MARKET PRICES AND
DIVIDENDS" on page __.
EFFECT OF THE MERGER ON JEFFERSON SAVINGS OPTIONS
When the merger becomes effective, each option granted under Jefferson
Savings' stock plans that is outstanding (the "options"), whether or not
exercisable, will either, at the election of the holder of the option, (i) be
canceled in exchange for a cash payment that is equal to the value of each share
of Jefferson Savings common stock that is subject to the option less the
exercise price or (ii) become an option to purchase Union Planters common stock.
The value of each share of Jefferson Savings common stock will be equal to the
product of the exchange ratio (with adjustments) and the average closing price.
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<PAGE> 35
IF YOU ARE A HOLDER OF OPTIONS TO PURCHASE JEFFERSON SAVINGS COMMON
STOCK, YOU MUST MAKE A WRITTEN ELECTION AS TO WHETHER YOU WOULD LIKE TO EXCHANGE
YOUR JEFFERSON SAVINGS OPTION FOR A CASH PAYMENT OR FOR OPTIONS TO PURCHASE
UNION PLANTERS COMMON STOCK. SUCH WRITTEN ELECTION MUST BE MADE NO LATER THAN
5:00 P.M., CENTRAL TIME, ON THE 5TH DAY PRIOR TO THE DAY ON WHICH THE SCHEDULED
EFFECTIVE TIME OF THE MERGER OCCURS. IF YOU DO NOT PROVIDE UNION PLANTERS WITH
THIS WRITTEN ELECTION, YOU WILL RECEIVE A CASH PAYMENT IN EXCHANGE FOR YOUR
OPTIONS TO PURCHASE JEFFERSON SAVINGS COMMON STOCK.
If you choose to exchange your options to purchase Jefferson Savings
common stock for options to purchase Union Planters common stock, Union Planters
will assume each option you own in accordance with the terms of Jefferson
Savings' stock plans and stock option or other agreement that evidences the
option and will deliver to you Union Planters common stock upon the exercise of
each option. After the merger becomes effective,
(1) Union Planters and its Salary and Benefits Committee will be
substituted for Jefferson Savings and the committee of Jefferson
Savings' board of directors administering the Jefferson Savings'
plans;
(2) each option assumed by Union Planters may be exercised only for
shares of Union Planters common stock;
(3) the number of shares of Union Planters common stock subject to
the option will be equal to the number of shares of Jefferson
Savings common stock subject to the option immediately before
the merger becomes effective multiplied by the exchange ratio
(with adjustments) and rounding down to the nearest whole share;
and
(4) the per share exercise price under each option will be adjusted
by dividing it by the exchange ratio and rounding up to the
nearest cent.
Notwithstanding the foregoing, each Jefferson Savings option which is
converted into a Union Planters option and is an "incentive stock option" shall
be adjusted as required by Section 424 of the Internal Revenue Code, and the
regulations promulgated thereunder, so as not to constitute a modification,
extension or renewal of the option, within the meaning of Section 424(h) of the
Internal Revenue Code.
For information with respect to stock options held by Jefferson Savings'
management, see "-- Interests of Certain Persons in the Merger."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Union Planters and Jefferson Savings have not and do not intend to
seek a ruling from the Internal Revenue Service as to the federal income tax
consequences of the merger. The opinion of counsel, Lewis, Rice & Fingersh,
L.C., as to certain of the expected federal income tax consequences of the
merger is an exhibit to this proxy statement-prospectus and supports the
following discussion of the anticipated federal income tax consequences of the
merger to
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<PAGE> 36
stockholders of Jefferson Savings. The opinion is based in part upon certain
factual assumptions and upon certain factual representations made by Union
Planters and Jefferson Savings, which representations tax counsel has relied
upon and assumed to be true, correct and complete. If such representations are
inaccurate, the opinion could be adversely affected. Opinions of tax counsel are
not binding on the Internal Revenue Service or the courts, either of which could
take a contrary position. This discussion is based on current law. Future
legislative, judicial or administrative interpretations, which may be
retroactive, could alter or modify the statements set forth herein. This
discussion does not address, among other matters:
(1) state, local, or foreign tax consequences of the merger;
(2) the tax consequences to Jefferson Savings stockholders who are
subject to special rules under the Internal Revenue Code, such
as foreign persons, tax-exempt organizations, insurance
companies, financial institutions, dealers in stocks and
securities, and persons who hold their stock in a hedging
transaction or as part of a straddle or conversion transaction;
(3) the tax consequences affecting shares of Jefferson Savings
common stock acquired upon the exercise of stock options, stock
purchase plan rights, or otherwise as compensation;
(4) the tax consequences to holders of options to acquire shares of
Jefferson Savings common stock; and
(5) the tax consequences to Union Planters and Jefferson Savings of
any income and deferred gain recognized pursuant to Treasury
Regulations issued under Section 1502 of the Internal Revenue
Code.
Assuming that the merger is consummated in accordance with the agreement
and plan of reorganization, it is anticipated that the following federal income
tax consequences will occur:
(1) The merger will constitute a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code.
(2) No gain or loss will be recognized by the Jefferson Savings
stockholders who exchange of all of their shares of Jefferson
Savings common stock for Union Planters common stock pursuant to
the merger, except that a gain or loss will be recognized on the
receipt of any cash in lieu of a fractional share.
(3) The tax basis of Union Planters common stock to be received by
the Jefferson Savings stockholders, who exchange all of their
shares of Jefferson Savings common stock solely for Union
Planters common stock (including a fractional share interest in
Union Planters common stock deemed received and redeemed) in the
merger, will be the same as the tax basis of the Jefferson
Savings common stock surrendered in exchange
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<PAGE> 37
therefor (reduced by any amount allocable to a fractional share
interest for which cash is received).
(4) The holding period of the Union Planters common stock to be
received by Jefferson Savings stockholders, who exchange all of
their Jefferson Savings common stock solely for Union Planters
common stock (including a fractional share interest in Union
Planters common stock deemed received and redeemed) in the
merger, will include the holding period of the Jefferson Savings
common stock surrendered in exchange therefor, provided that
such Jefferson Savings shares were held as a capital asset by
the Jefferson Savings stockholders on the date of the exchange.
The obligation of Union Planters and Jefferson Savings to complete the
merger is conditioned on, among other things, receipt by Union Planters of an
opinion of Alston & Bird LLP and Jefferson Savings of an opinion of Lewis, Rice
& Fingersh, L.C., with respect to certain of the federal income tax consequences
of the merger. The conditions relating to the receipt of the tax opinion may be
waived by both Union Planters and Jefferson Savings. Neither Union Planters nor
Jefferson Savings currently intends to waive the conditions relating to the
receipt of the tax opinion. If the conditions relating to the receipt of the tax
opinion were waived and the material federal income tax consequences of the
merger were substantially different from those described in this proxy
statement-prospectus, Jefferson Savings would resolicit the approval of its
stockholders prior to completing the merger.
Tax consequences of the merger may vary depending upon the particular
circumstances of each Jefferson Savings stockholder. Accordingly, you are urged
to consult with your own tax advisors as to the specific tax consequences to you
because of the merger, including the applicability and effect of state, local,
and foreign tax laws.
BACKGROUND OF AND REASONS FOR THE MERGER
BACKGROUND OF THE MERGER.
Since Jefferson Savings became a publicly traded company in 1993, the
Jefferson Savings board of directors sought to position its thrift subsidiary,
Jefferson Heritage Bank, as an independent community banking alternative to the
regional bank holding companies which had entered the St. Louis metropolitan
area market. The Jefferson Savings board of directors believed that industry
consolidation had created growth opportunities for an independent community bank
and this strategy would result in the greatest long-term value for stockholders.
To implement this strategy, Jefferson Savings created a sales-oriented retail
banking culture in its branches and expanded through selective acquisitions into
market areas in which the Jefferson Savings board of directors believed that its
banking strategy would provide a competitive advantage.
Pursuant to an agreement dated May 5, 1999 among Jefferson Savings and
certain of its stockholders, namely, Gary L. Holland, The Gary Holland Trust,
Brad Barkau, William Drake, Mark K. Drake, The Mary K. Drake Family Limited
Partship, The William Drake Defined Benefit Plan,
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<PAGE> 38
Contango Limited Partnership, Howard Watson, Susan M. Watson and Intrepid, Ltd.,
two new nominees who advocated consideration of a wider range of strategic
alternatives were elected to the Jefferson Savings board of directors at the
Jefferson Savings' annual meeting of stockholders held on July 19, 1999. After
discussions among the board of directors at its regular board meetings during
the remainder of 1999, the Jefferson Savings board of directors concluded in
early 2000 that Jefferson Savings should retain a financial advisor to assist in
determining the future direction of Jefferson Savings. On January 11, 2000,
Jefferson Savings retained the investment banking firm of Sandler O'Neill &
Partners, L.P. as its financial advisor in order to assess its strategic
alternatives with the objective of enhancing value to Jefferson Savings'
stockholders.
Sandler O'Neill reviewed Jefferson Savings' current competitive
situation and discussed the projected relative returns to Jefferson Savings'
stockholders under a variety of operating strategies, including continuing as an
independent organization and pursuing its business plan or pursuing a business
combination with a larger bank or thrift institution. Sandler O'Neill also
evaluated various financial institutions that might potentially be interested in
discussing a business combination if the Jefferson Savings board of directors
chose to further explore this option. After extensive discussion, the Jefferson
Savings board of directors authorized Sandler O'Neill to approach various
financial institutions to determine their interest in entering into a business
combination with Jefferson Savings. Beginning shortly thereafter, Sandler
O'Neill, together with guidance from the senior management and the board of
directors of Jefferson Savings, initiated a comprehensive process designed to
determine levels of interest from outside parties regarding a potential
acquisition of Jefferson Savings.
During the period from January 2000 through April 2000, on behalf of
Jefferson Savings, Sandler O'Neill approached twenty-three bank and thrift
holding companies and acquisition companies which were considered by Sandler
O'Neill and senior management of Jefferson Savings to be potential merger
partners due to the past acquisition activity of such companies or the presence
of such companies in the markets served by Jefferson Savings. During this time,
Sandler O'Neill provided updates of their discussions to the executive committee
of the Jefferson Savings board of directors on a weekly basis and to the full
board of directors on a monthly basis. Of the companies initially contacted by
Sandler O'Neill, six entered into confidentiality agreements and received
offering memoranda regarding Jefferson Savings. After reviewing the offering
memorandum, three companies, one of which was Union Planters, expressed interest
in conducting further discussions regarding a business combination with
Jefferson Savings. On April 19, 2000, Sandler O'Neill discussed the three
interested parties with the Jefferson Savings board of directors. In early June
2000, Union Planters commenced a due diligence examination of Jefferson Savings.
Shortly thereafter, the other interested parties advised Sandler O'Neill that
they were not interested in Jefferson Savings' Missouri branches and declined to
proceed further.
After completing its preliminary due diligence examination of Jefferson
Savings in early July 2000, Union Planters made an initial proposal to acquire
Jefferson Savings at a price of $12.00 per share of Union Planters common stock,
or an implied exchange ration of .4008 of a share of Union Planters common
stock. After considering this proposal at its July 17, 2000 meeting, the
Jefferson Savings board of directors instructed Sandler O'Neill to submit a
counter-proposal to Union Planters of an exchange ratio of .4900 of a share of
Union Planters common stock for each share of Jefferson
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<PAGE> 39
Savings common stock. Based on the trading price of Union Planters common stock
at that time, this counter-proposal equated to approximately $14.67 per share of
Jefferson Savings common stock.
After exchanging a number of counter-proposals, Union Planters submitted
a revised offer in early August 2000 with an exchange ratio of .433 of a share
of Union Planters common stock for each share of Jefferson Savings common stock.
Based on an assumed average trading price of Union Planters common stock of
$30.00 per share, this counter-proposal equated to approximately $12.99 per
share of Jefferson Savings common stock. At a special meeting held on August 16,
2000, the Jefferson Savings board of directors authorized the continuation of
discussions with Union Planters using the .433 exchange ratio. During the last
week of August 2000, Union Planters and Jefferson Savings and their respective
advisors began the preparation and negotiation of the definitive documentation
for the proposed transaction and commenced further due diligence reviews of the
business and financial condition of each other.
Negotiations continued and, on September 20, 2000, a special meeting of
the Jefferson Savings board of directors was held to consider the proposed
transaction with Union Planters. The Jefferson Savings board of directors
reviewed in detail with Jefferson Savings' legal advisors, the terms of the
merger and the proposed agreement and plan of reorganization and stock option
agreement. Sandler O'Neill then rendered its opinion that the .433 exchange
ratio was fair to Jefferson Savings stockholders from a financial point of view.
After extensive and vigorous discussion, the Jefferson Savings board of
directors unanimously approved the merger, the agreement and plan of
reorganization and the stock option agreement.
Later that day, the agreement and plan of reorganization and the stock
option agreement were executed by Union Planters and Jefferson Savings and the
proposed merger was publicly announced before the domestic stock markets opened
on the next day.
REASONS FOR THE MERGER.
JEFFERSON SAVINGS. Jefferson Savings' board of directors has determined
that the merger is in the best interests of Jefferson Savings and the Jefferson
Savings stockholders and has unanimously approved the agreement and plan of
reorganization, the related plan of merger and the transactions contemplated
thereby, including the merger. In reaching its determination, Jefferson Savings'
board of directors considered a number of factors, including, but not limited
to, the following:
(1) Information with respect to the financial condition, results of
operations, business, and prospects of Jefferson Savings and
Union Planters (see "BUSINESS OF JEFFERSON SAVINGS," "BUSINESS
OF UNION PLANTERS," and "SUMMARY -- COMPARATIVE MARKET PRICES OF
COMMON STOCK") and a review, based in part on presentations by
Sandler O'Neill & Partners, L.P. and the due diligence reviews
by Sandler O'Neill & Partners, L.P. and management, of the
business, operations, financial condition, earnings, and
prospects of Union Planters;
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<PAGE> 40
(2) The structure of the contemplated transaction, together with the
exchange ratio in the merger from a number of valuation
perspectives, as presented by Sandler O'Neill & Partners, L.P.,
and the current market value of the merger to the Jefferson
Savings stockholders. Jefferson Savings' board of directors
considered that, based upon the closing prices of Union Planters
common stock and Jefferson Savings common stock on the last
trading day preceding its approval of the merger (September 19,
2000), the exchange ratio represented a market premium at such
time of $3.00 per share, or approximately 26.6%;
(3) The opinion of Sandler O'Neill & Partners, L.P. that as of
September 19, 2000, the exchange ratio of .433 of a share of
Union Planters common stock for each share of Jefferson Savings
common stock was fair to the Jefferson Savings stockholders from
a financial point of view (See "-- Opinion of Jefferson Savings'
Financial Advisor");
(4) The current and prospective economic and competitive environment
facing Jefferson Savings; the range of possible values available
to the Jefferson Savings stockholders by remaining independent
and by pursuing other strategic options, including the
likelihood of actually receiving those values; and the inability
of Jefferson Savings to achieve comparable value in the
foreseeable future by remaining independent;
(5) The potential ability of Union Planters, after the merger, to
enhance the products and services currently provided by
Jefferson Savings to its customers and the combined market
share, after the merger, of Jefferson Savings and Union Planters
in important markets in Missouri and Texas;
(6) The effect of the merger on Jefferson Savings' customers and the
communities it serves, including the impact of divestitures and
cost saving measures associated with the merger;
(7) The terms and conditions of the agreement and plan of
reorganization and the related plan of merger, including the
tax-free nature of the merger, the stock option agreement, and
the other documents executed in connection with the merger;
(8) The provision of the agreement and plan of reorganization that
permits Jefferson Savings' board of directors to terminate the
merger if the price of Union Planters common stock falls more
than a specified amount relative to an index based on the stock
of other financial institutions, unless Union Planters agrees to
adjust the exchange ratio upwards to offset the decrease in the
price of Union Planters common stock (see "-- What You Will
Receive in the Merger" and "-- Conditions to Consummation of the
Merger"); and
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<PAGE> 41
(9) An evaluation of the risks to consummation of the merger,
including, among others, the risks associated with obtaining all
necessary regulatory approvals without the imposition of any
condition which differs from conditions customarily imposed in
approving acquisitions of the type contemplated by the agreement
and plan of reorganization and compliance with which would
materially adversely affect the anticipated benefits of the
transaction to Union Planters.
(10) The consistency of the merger with Jefferson Savings' long-term
business strategy and our review of alternatives to the merger.
(11) Our view that the combination of Jefferson Savings and Union
Planters presents manageable execution risk in view of the
similar markets and customer demographics served by Jefferson
Savings and Union Planters, the similar business lines and
business cultures of the two companies and the prior experience
of Union Planters' management in successfully completing
acquisitions and integrating the acquired companies.
(12) The opinion of Sandler O'Neill & Partners, L.P. that the
consideration to be received by the stockholders of Jefferson
Savings pursuant to the agreement and plan of reorganization
remains fair to such stockholders from a financial point of
view.
(13) The likelihood that the merger will be approved by the
appropriate regulatory authorities. In this connection, we
considered that there is only a modest amount of branch overlap
in the St. Louis metropolitan market and that no divestitures of
assets and deposit liabilities of either company is expected to
be required by regulatory authorities in connection with the
merger.
The foregoing discussion of the information and factors considered by
Jefferson Savings' board of directors is not intended to be exhaustive, but
constitutes material factors considered by Jefferson Savings' board of
directors. In view of the variety of factors considered in connection with its
evaluation of the merger, Jefferson Savings' board of directors did not find it
practicable to, and did not, quantify or otherwise attempt to assign relative
weights to the specific factors considered in reaching its determination and
individual directors may have given different weight to different factors. In
considering and approving the merger, Jefferson Savings' board of directors
relied upon information and analysis prepared by its management and by Sandler
O'Neill & Partners, L.P. Throughout their deliberations, Jefferson Savings'
executive committee and Jefferson Savings' board of directors received the
advice of special counsel experienced in bank merger matters.
For the reasons set forth above, Jefferson Savings' board of directors
has determined that the merger is in the best interests of Jefferson Savings and
the Jefferson Savings stockholders. ACCORDINGLY, JEFFERSON SAVINGS' BOARD OF
DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE JEFFERSON SAVINGS STOCKHOLDERS VOTE
FOR THE AGREEMENT AND PLAN OF REORGANIZATION, THE RELATED PLAN OF MERGER AND THE
TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE MERGER.
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<PAGE> 42
UNION PLANTERS. Union Planters' board of directors has determined that
the merger is in the best interests of Union Planters and the Union Planters
stockholders and has unanimously approved the agreement and plan of
reorganization and the related plan of merger. In reaching its determination,
Union Planters' board of directors considered a number of factors, including,
but not limited to, the following:
(1) Transaction Strengthens Union Planters' Franchise. The merger
will increase Union Planters' presence in a number of markets.
This is particularly true in Metropolitan Statistical Areas
(i.e., non-rural) such as St. Louis, Missouri.
(2) Transaction Leverages Union Planters' Strategy and Investments.
The merger will allow Union Planters to apply its customer
information know-how and sales culture to a substantially
increased number of households. This should result in providing
additional and needed services to customers as well as greater
profitability.
(3) Information Concerning Jefferson Savings. Union Planters' board
of directors considered information in part derived from
presentations by Union Planters' management and the due
diligence review by Union Planters' management as well as its
financial and legal advisors concerning the business,
operations, earnings, asset quality, and financial condition of
Jefferson Savings, and aspects of the Jefferson Savings
franchise, including the market position of Jefferson Savings in
each of the markets in which it operates and the compatibility
of the community bank orientation of the operations of Jefferson
Savings to that of Union Planters. Union Planters' board of
directors concluded that Jefferson Savings is a well managed
financial institution which is well positioned in its market
areas and which presents an attractive opportunity for Union
Planters to strengthen its franchise in all markets in which
Jefferson Savings operates and to achieve certain economies of
scale that would allow the combined entity to increase
efficiency and enable cost savings in areas in which the
franchises overlap.
(4) Nonfinancial Terms of the Merger. Union Planters' board of
directors considered various nonfinancial aspects of the merger,
including the treatment of the merger as a tax-free exchange of
Jefferson Savings common stock for Union Planters common stock
for federal income tax purposes, and the likelihood of the
merger being approved by applicable regulatory authorities
without undue conditions or delay.
(5) Transaction Risks. Union Planters' board of directors also
considered the risk associated with the merger, including, among
others, the risks associated with obtaining all necessary
regulatory approvals without the imposition of any condition
which differs from conditions customarily imposed in approving
acquisitions of the type contemplated by the agreement and plan
of reorganization and compliance with which would materially
adversely affect the anticipated benefits of the transaction to
Union Planters.
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<PAGE> 43
The foregoing discussion of the information and factors considered by
Union Planters' board of directors is not intended to be exhaustive but includes
all material factors considered by Union Planters' board of directors. In
reaching its determination to approve the merger and the agreement and plan of
reorganization and the related plan of merger, Union Planters' board of
directors did not assign any relative or specific weights to the foregoing
factors, and individual directors may have given differing weights to different
factors. After deliberating with respect to the merger and the other
transactions contemplated by the agreement and plan of reorganization, and
considering, among other things, the matters discussed above and the opinion of
Union Planters' management referred to above, Union Planters' board of directors
determined that the merger is in the best interests of the Union Planters
stockholders and unanimously approved the agreement and plan of reorganization,
the related plan of merger and the merger.
OPINION OF JEFFERSON SAVINGS' FINANCIAL ADVISOR
By letter agreement dated as of January 11, 2000, Jefferson Savings
retained Sandler O'Neill & Partners, L.P. as an independent financial advisor in
connection with Jefferson Savings' consideration of a possible business
combination with a second party. Sandler O'Neill & Partners, L.P. is a
nationally recognized investment banking firm whose principal business specialty
is financial institutions. In the ordinary course of its investment banking
business, Sandler O'Neill & Partners, L.P. is regularly engaged in the valuation
of financial institutions and their securities in connection with mergers and
acquisitions and other corporate transactions.
Sandler O'Neill & Partners, L.P. acted as financial advisor to Jefferson
Savings in connection with the merger and participated in certain of the
negotiations leading to the merger agreement. At the request of the Jefferson
Savings board of directors, representatives of Sandler O'Neill & Partners, L.P.
attended the September 20, 2000 meeting of the Jefferson Savings board of
directors at which the board of directors considered and approved the merger
agreement. At the meeting, Sandler O'Neill & Partners, L.P. delivered to the
Jefferson Savings board of directors its oral opinion, subsequently confirmed in
writing, that, as of such date, the exchange ratio was fair to Jefferson Savings
stockholders from a financial point of view. Sandler O'Neill & Partners, L.P.
has also delivered to the Jefferson Savings board of directors a written opinion
dated the date of this proxy statement-prospectus which is substantially
identical to the September 20, 2000 opinion. THE FULL TEXT OF SANDLER O'NEILL &
PARTNERS, L.P.'S OPINION IS ATTACHED AS APPENDIX C TO THIS PROXY
STATEMENT-PROSPECTUS. THE OPINION OUTLINES THE PROCEDURES FOLLOWED, ASSUMPTIONS
MADE, MATTERS CONSIDERED AND QUALIFICATIONS AND LIMITATIONS ON THE REVIEW
UNDERTAKEN BY SANDLER O'NEILL & PARTNERS, L.P. IN RENDERING ITS OPINION. THE
OPINION OF SANDLER O'NEILL & PARTNERS, L.P. IS INCORPORATED BY REFERENCE INTO
THIS DESCRIPTION OF THE OPINION AND THIS DESCRIPTION IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE OPINION. YOU ARE URGED TO CAREFULLY READ THE
OPINION IN CONNECTION WITH YOUR CONSIDERATION OF THE PROPOSED MERGER.
SANDLER O'NEILL & PARTNERS, L.P.'S OPINION WAS DIRECTED TO THE JEFFERSON
SAVINGS BOARD OF DIRECTORS AND WAS PROVIDED FOR ITS INFORMATION IN CONSIDERING
THE MERGER. THE OPINION IS DIRECTED ONLY TO THE FAIRNESS OF THE EXCHANGE RATIO
TO YOU FROM A FINANCIAL POINT OF VIEW. IT DOES NOT ADDRESS THE UNDERLYING
BUSINESS DECISION OF JEFFERSON SAVINGS TO ENGAGE IN
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<PAGE> 44
THE MERGER OR ANY OTHER ASPECT OF THE MERGER AND IS NOT A RECOMMENDATION TO YOU
AS TO HOW YOU SHOULD VOTE AT THE SPECIAL MEETING WITH RESPECT TO THE MERGER OR
ANY OTHER RELATED MATTER.
In rendering its September 20, 2000 opinion, Sandler O'Neill & Partners,
L.P. performed a variety of financial analyses. The following is a summary of
the material analyses performed by Sandler O'Neill & Partners, L.P., but is not
a complete description of all the analyses underlying Sandler O'Neill &
Partners, L.P.'s opinion. The preparation of a fairness opinion is a complex
process involving subjective judgments as to the most appropriate and relevant
methods of financial analysis and the application of those methods to the
particular circumstances. The process, therefore, is not necessarily susceptible
to a partial analysis or summary description. Sandler O'Neill & Partners, L.P.
believes that its analyses must be considered as a whole and that selecting
portions of the factors and analyses considered without considering all factors
and analyses, or attempting to ascribe relative weights to some or all factors
and analyses, could create an incomplete view of the evaluation process
underlying its opinion. Also, no company included in Sandler O'Neill & Partners,
L.P.'s comparative analyses described below is identical to Jefferson Savings or
Union Planters and no transaction is identical to the merger. Accordingly, an
analysis of comparable companies or transactions is not mathematical; rather it
involves complex considerations and judgments concerning differences in
financial and operating characteristics of the companies and other factors that
could affect the public trading values or merger transaction values, as the case
may be, of Jefferson Savings and Union Planters and the companies to which they
are being compared.
The earnings projections for Jefferson Savings and Union Planters relied
upon by Sandler O'Neill & Partners, L.P. in its analyses were reviewed with
management and were based upon internal projections for the years ending
December 31, 2000 through December 31, 2002 of Jefferson Savings provided to
Sandler O'Neill & Partners, L.P. and on published IBES consensus earnings
estimates for 2000 and 2001 for Union Planters. For periods after 2002 for
Jefferson Savings, Sandler O'Neill & Partners, L.P. assumed, with the consent of
the management of Jefferson Savings an annual growth rate on earning assets of
6.25%. For periods after 2001 for Union Planters, Sandler O'Neill & Partners,
L.P. assumed an annual growth rate on earning assets of 7.5%. The earnings
projections of Jefferson Savings furnished to Sandler O'Neill & Partners, L.P.
were prepared by the senior management of Jefferson Savings for internal
purposes only and not with a view towards public disclosure. Those projections,
as well as the other earnings estimates relied upon by Sandler O'Neill &
Partners, L.P. in its analyses, were based on numerous variables and assumptions
which are inherently uncertain and accordingly, actual results could vary
materially from those set forth in such projections.
In performing its analyses, Sandler O'Neill also made numerous
assumptions with respect to industry performance, business and economic
conditions and various other matters, many of which cannot be predicted and are
beyond the control of Jefferson Savings, Union Planters and Sandler O'Neill &
Partners, L.P. The analyses performed by Sandler O'Neill are not necessarily
indicative of actual values or future results, which may be significantly more
or less favorable than suggested by such analyses. Sandler O'Neill & Partners,
L.P. prepared its analyses solely for purposes of rendering its opinion and
provided such analyses to the Jefferson Savings board of directors at its
meeting on September 20, 2000. Estimates on the values of companies do not
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<PAGE> 45
purport to be appraisals or necessarily reflect the prices at which companies or
their securities may actually be sold. Such estimates are inherently subject to
uncertainty and actual values may be materially different. Accordingly, Sandler
O'Neill & Partners, L.P.'s analyses do not necessarily reflect the value of
Jefferson Savings common stock or Union Planters common stock or the prices at
which Jefferson Savings common stock or Union Planters common stock may be sold
at any time.
SUMMARY OF PROPOSAL. Sandler O'Neill & Partners, L.P. reviewed the
financial terms of the proposed transaction. Based on the closing price of Union
Planters common stock on September 19, 2000, of $33.0625 and an exchange ratio
of 0.433, Sandler O'Neill & Partners, L.P. calculated an implied transaction
value per share of Jefferson Savings common stock of $14.32. The implied
aggregate capitalized transaction value was approximately $146.1 million, based
upon 10,206,484 fully diluted shares of Jefferson Savings common stock
outstanding, which was determined using the treasury stock method at the implied
value of $14.32. Based upon the implied transaction value and Jefferson
Savings's June 30, 2000 financial information, Sandler O'Neill & Partners, L.P.
calculated the following ratios:
<TABLE>
<S> <C>
Implied value/Book value 1.05x
Implied value/Tangible book value 1.23x
Implied value/Last Twelve Months Ended June 2000 EPS 12.34x
</TABLE>
For purposes of Sandler O'Neill & Partners, L.P.'s analyses, earnings per share
were based on fully diluted earnings per share. Sandler O'Neill & Partners, L.P.
noted that the implied transaction value represented a 26.6% premium over the
September 19, 2000 closing price of Jefferson Savings common stock of $11.3125.
STOCK TRADING HISTORY. Sandler O'Neill & Partners, L.P. reviewed the
history of the reported trading prices and volume of Jefferson Savings common
stock and Union Planters common stock, and the relationship between the
movements in the prices of Jefferson Savings common stock and Union Planters
common stock, respectively, to movements in certain stock indices, including the
Standard & Poor's 500 Index, the NASDAQ Bank Index, and the median performance
of a composite group of publicly traded regional savings institutions of
comparable size selected by Sandler O'Neill & Partners, L.P. for Jefferson
Savings and a composite group of publicly traded commercial banks of comparable
size selected by Sandler O'Neill & Partners, L.P. for Union Planters. During the
one year period ending on September 18, 2000, the Jefferson Savings common stock
outperformed its composite group and underperformed the S&P Index and the NASDAQ
Bank Index, while the Union Planters common stock underperformed each of the
indices to which it was compared.
COMPARABLE COMPANY ANALYSIS. Sandler O'Neill & Partners, L.P. used
publicly available information to compare selected financial and market trading
information for Jefferson Savings and two groups of savings institutions
selected by Sandler O'Neill & Partners, L.P. The Regional Group consisted of
Jefferson Savings and the following ten publicly traded regional savings
institutions:
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<PAGE> 46
Alliance Bancorp Camco Financial Corp.
CFS Bancorp Inc. First Defiance Financial
First Federal Capital Corp. First Indiana Corp.
First Place Financial Corp. Metropolitan Financial Corp.
St. Francis Capital Corp. United Community Financial Corp.
The Highly Valued Group consisted of the following 11 publicly traded savings
institutions which had a return on average equity of greater than 14% (based on
last twelve months' earnings) and a price- to-tangible book value of greater
than 150%:
Downey Financial Corp. First Essex Bancorp.
First Federal Capital Corp. First Financial Holdings Inc.
FirstFed Financial Corp. MAF Bancorp Inc.
NASB Financial Inc. Queens County Bancorp Inc.
Roslyn Bancorp Inc. Washington Federal Inc.
Webster Financial Corp.
The analysis compared publicly available financial information for Jefferson
Savings and the median data for each of the Regional Group and Highly Valued
Group as of and for each of the years ended December 31, 1995 through 1999 and
as of and for the twelve months ended June 30, 2000. The table below sets forth
the comparative data as of and for the twelve months ended June 30, 2000.
<TABLE>
<CAPTION>
Jefferson Savings Regional Group
----------------- --------------
<S> <C> <C>
Total Assets in thousands................................... $ 1,634,214 $ 1,656,428
Annual growth rate of total assets.......................... 7.12% 10.55%
Tangible equity/total assets................................ 6.82 7.82
Intangible assets/total equity.............................. 14.69 5.24
Net loans/total assets...................................... 79.20 75.45
Cash and securities/total assets............................ 15.98 18.63
Gross loans/total deposits.................................. 132.70 117.99
Total borrowings/total assets............................... 30.70 25.28
Non-performing assets/total assets.......................... .63 .34
Loan loss reserves/gross loans.............................. .56 .74
Net interest margin......................................... 2.86 3.00
Loan loss provision/average assets.......................... .07 .08
Non-interest income/average assets.......................... .41 .52
Non-interest expense/average assets......................... 1.91 2.12
Efficiency ratio............................................ 57.04 62.23
Return on average assets.................................... .71 .74
Return on average equity.................................... 8.90 9.18
Price/tangible book value per share......................... 95.49 93.13
Price/earnings per share.................................... 9.59x 10.54x
Dividend yield.............................................. 2.52% 3.06%
Dividend payout ratio....................................... 24.14 31.03
<CAPTION>
Highly
Valued Group
------------
<S> <C>
Total Assets in thousands................................... $ 4,182,932
Annual growth rate of total assets.......................... 15.28%
Tangible equity/total assets................................ 5.77
Intangible assets/total equity.............................. 4.58
Net loans/total assets...................................... 81.95
Cash and securities/total assets............................ 16.00
Gross loans/total deposits.................................. 144.99
Total borrowings/total assets............................... 33.35
Non-performing assets/total assets.......................... .29
Loan loss reserves/gross loans.............................. .78
Net interest margin......................................... 3.07
Loan loss provision/average assets.......................... .03
Non-interest income/average assets.......................... .48
Non-interest expense/average assets......................... 1.33
Efficiency ratio............................................ 46.12
Return on average assets.................................... 1.08
Return on average equity.................................... 15.77
Price/tangible book value per share......................... 177.43
Price/earnings per share.................................... 10.63x
Dividend yield.............................................. 2.69%
Dividend payout ratio....................................... 32.20
</TABLE>
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<PAGE> 47
Sandler O'Neill & Partners, L.P. also used publicly available
information to perform a similar comparison of selected financial and market
trading information for Union Planters and two different groups of commercial
banks. The Union Planters Nationwide Group consisted of Union Planters and the
following 12 publicly traded commercial banks:
AmSouth Bancorp. BB&T Corp.
Comerica Inc. Fifth Third Bancorp
Huntington Bancshares Inc. Marshall & Ilsley Corp.
Mellon Financial Corp. Northern Trust Corp.
Regions Financial Corp. SouthTrust Corp.
Summit Bancorp UnionBanCal Corp.
The High Performing Group consisted of the following seven publicly traded
commercial banks that had a return on average equity of greater than 17% (based
on last twelve months' earnings) and a price to tangible book value of greater
than 280%:
BB&T Corp. Comerica Inc.
Fifth Third Bancorp Huntington Bancshares Inc.
Marshall & Ilsley Corp. Mellon Financial Corp.
Northern Trust Corp.
The analysis compared publicly available financial information for Union
Planters with the median data for each of the Union Planters Nationwide Group
and High Performing Group as of and for each of the years ended December 31,
1995 through 1999 and as of and for the twelve months ended June 30, 2000. The
table below sets forth the comparative data as of and for the twelve months
ended June 30, 2000.
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<PAGE> 48
<TABLE>
<CAPTION>
Union Planters Nationwide Group
-------------- ----------------
<S> <C> <C>
Total Assets in thousands................................... $ 34,226,813 $ 41,065,478
Annual growth rate of total assets.......................... 6.10% 7.93%
Tangible equity/total assets................................ 5.01 6.09
Intangible assets/total equity.............................. 36.51 15.92
Net loans/total assets...................................... 68.19 68.17
Cash and securities/total assets............................ 24.15 24.74
Gross loans/total deposits.................................. 101.69 101.69
Total bortrowings/total assets.............................. 21.67 23.98
Non-performing assets/total assets.......................... .51 .42
Loan loss reserves/gross loans.............................. 1.46 1.41
Net interest margin......................................... 4.36 3.83
Loan loss provision/average assets.......................... .23 .28
Non-interest income/average assets.......................... 1.52 1.84
Non-interest expense/average assets......................... 3.27 3.00
Efficiency ratio............................................ 56.17 53.47
Return on average assets.................................... 1.23 1.40
Return on average equity.................................... 14.15 17.15
Price/tangible book value per share......................... 262.04 290.64
Price/earnings per share.................................... 11.20x 12.84x
Dividend yield.............................................. 6.07% 3.08%
Dividend payout ratio....................................... 68.03 43.03
<CAPTION>
Highly
Valued Group
------------
<S> <C>
Total Assets in thousands................................... $ 41,065,478
Annual growth rate of total assets.......................... 10.45%
Tangible equity/total assets................................ 6.27
Intangible assets/total equity.............................. 15.92
Net loans/total assets...................................... 67.11
Cash and securities/total assets............................ 24.85
Gross loans/total deposits.................................. 102.89
Total bortrowings/total assets.............................. 24.9396
Non-performing assets/total assets.......................... .33
Loan loss reserves/gross loans.............................. 1.44
Net interest margin......................................... 3.83
Loan loss provision/average assets.......................... .23
Non-interest income/average assets.......................... 2.20
Non-interest expense/average assets......................... 3.11
Efficiency ratio............................................ 53.47
Return on average assets.................................... 1.50
Return on average equity.................................... 19.38
Price/tangible book value per share......................... 347.88
Price/earnings per share.................................... 16.75x
Dividend yield.............................................. 1.95%
Dividend payout ratio....................................... 42.71
</TABLE>
ANALYSIS OF SELECTED MERGER TRANSACTIONS. Sandler O'Neill & Partners,
L.P. reviewed certain other transactions announced from January 1, 2000 to
September 18, 2000, involving publicly traded savings institutions as acquired
institutions with transaction values greater than $15 million. Sandler O'Neill &
Partners, L.P. reviewed 26 transactions announced nationwide ("Nationwide
Transactions"), 10 transactions announced in the Midwest region, comprised of
Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri,
Nebraska, North Dakota, Ohio, South Dakota and Wisconsin (the "Midwest
Transactions"), and 18 transactions announced nationwide where the selling
institution's return on average equity was less than 10% (the "Selected
Transactions"). Sandler O'Neill & Partners, L.P. reviewed the multiples of
transaction value to last four quarters' earnings, relative buyer price to last
four quarters' earnings, transaction value to book value, relative buyer price
to book value, transaction value to tangible book value, and premium to market
and computed high, low, mean and median multiples and premiums for the
respective groups of transactions.
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<PAGE> 49
<TABLE>
<CAPTION>
Nationwide Transactions Midwest Transactions
----------------------- --------------------
High Low Median High Low Median
---- --- ------ ---- --- ------
<S> <C> <C> <C> <C> <C> <C>
Deal price/LTM EPS................................. 31.5.x 11.0.x 17.5.x 20.1 x 12.2 x 18.8 x
Relative buyer price/ LTM EPS...................... 301% 58% 142% 214% 58% 131%
Deal price/book value.............................. 2.42x 80x 1.40x 1.98x .80x 1.27x
Relative buyer price/book value.................... 282% 38% 87% 168% 38% 65%
Deal price/tangible book value..................... 2.42x 80x 1.43x 2.30x .80x 1.27x
Premium to trading market.......................... 87% -1% 25% 63% -1% 20%
</TABLE>
<TABLE>
<CAPTION>
Selected Transactions
---------------------
High Low Median
---- --- ------
<S> <C> <C> <C>
Deal price/LTM EPS................................. 29.0 x 12.2 x 18.8 x
Relative buyer price/ LTM EPS...................... 224% 89% 146%
Deal price/book value.............................. 1.69x .80x 1.35x
Relative buyer price/book value.................... 235% 38% 87%
Deal price/tangible book value..................... 1.77x .80x 1.40x
Premium to trading market.......................... 87% -1% 27%
</TABLE>
DISCOUNTED DIVIDEND STREAM AND TERMINAL VALUE ANALYSIS. Sandler O'Neill
& Partners, L.P. also performed an analysis which estimated the future stream of
after-tax dividend flows of Jefferson Savings through December 31, 2003 under
various circumstances, assuming Jefferson Savings' current dividend payout ratio
and that Jefferson Savings performed in accordance with the earnings forecasts
reviewed with management. To approximate the terminal value of Jefferson Savings
common stock at December 31, 2003, Sandler O'Neill & Partners, L.P. applied
price/earnings multiples ranging from 7x to 19.5x and applied multiples of
tangible book value ranging from 70% to 195%. The dividend income streams and
terminal values were then discounted to present values using different discount
rates ranging from 9% to 15% chosen to reflect different assumptions regarding
required rates of return of holders or prospective buyers of Jefferson Savings
common stock. As illustrated in the following table, this analysis indicated an
imputed range of values per share of Jefferson Savings common stock of $7.50 to
$22.93 when applying the price/earnings multiples and $7.74 to $23.72 when
applying multiples of tangible book value. As calculated by Sandler O'Neill &
Partners, L.P., the implied transaction value per share of Jefferson Savings
common stock in the merger was $14.32.
<TABLE>
<CAPTION>
Tangible Book
Price/Earnings Multiples Value Multiples
Discount ------------------------ ---------------
Rate 7x 19.5x .70x 1.95x
---- -- ----- ---- -----
<S> <C> <C> <C> <C>
9% $8.96 $22.93 $9.24 $23.72
11 8.43 21.55 8.70 22.29
13 7.95 20.27 8.20 20.97
15 7.50 19.09 7.74 19.74
</TABLE>
In connection with its analysis, Sandler O'Neill & Partners, L.P.
considered and discussed with the Jefferson Savings board of directors how the
present value analysis would be affected by changes in the underlying
assumptions, including variations with respect to the growth rate of assets, net
interest spread, non-interest income, non-interest expenses and dividend payout
ratio. Sandler O'Neill & Partners, L.P. noted that the discounted dividend
stream and terminal value analysis is a widely used valuation methodology, but
the results of such methodology are highly dependent upon the numerous
assumptions that must be made, and the results thereof are not necessarily
indicative of actual values or future results.
PRO FORMA MERGER ANALYSIS. Sandler O'Neill & Partners, L.P. analyzed
certain potential pro forma effects of the merger, based upon the exchange ratio
of 0.433, Union Planters' and
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<PAGE> 50
Jefferson Savings' current and projected income statements and balance sheets
and assumptions regarding the economic environment, accounting and tax treatment
of the merger, charges associated with the merger, operating efficiencies and
other adjustments discussed with the senior managements of Jefferson Savings and
Union Planters. As illustrated in the following table, for the twelve months
ending December 21, 2001 this analysis indicated that the merger would be
accretive to Union Planters' earnings per share and tangible book value per
share assuming the merger is completed in the fourth quarter of 2000. The
analysis also indicated that, from a Jefferson Savings stockholder's
perspective, as compared to the projected stand-alone performance of Jefferson
Savings, the merger would be accretive to Jefferson Savings' projected earnings
per share and dividend, and would be dilutive to tangible book value per share
for the twelve months ending December 31, 2001. The actual results achieved by
Union Planters and Jefferson Savings may vary from projected results and the
variations may be material.
<TABLE>
<CAPTION>
Twelve months ending Union Planters Jefferson Savings
-------------- -----------------
December 31, 2001 Stand-alone Pro Forma Stand-alone Pro Forma(1)
----------------- ----------- --------- ----------- ------------
<S> <C> <C> <C> <C>
Projected EPS.......................... $3.26 $3.26 $1.27 $1.42
Projected tangible book value.......... 14.92 15.29 12.94 6.62
Projected dividend..................... NM NM .32 .62
</TABLE>
---------------
(1) Determined by multiplying the Union Planters values by the exchange ratio
of .433.
CONTRIBUTION ANALYSIS. Sandler O'Neill & Partners, L.P. reviewed the
relative contributions to be made by Jefferson Savings and Union Planters to the
combined institution based on data at and for the twelve months ended June 30,
2000. This analysis indicated that the implied contributions to the combined
entity were as follows:
<TABLE>
<CAPTION>
Jefferson Savings Union Planters
----------------- --------------
<S> <C> <C>
Total Assets................................................ 4.56% 95.44%
Total net loans............................................. 5.25 94.75
Goodwill 1.91 98.09
Total deposits.............................................. 4.04 95.96
Total borrowings............................................ 6.34 93.66
Tangible equity............................................. 6.11 93.89
Total equity................................................ 4.62 95.38
GAAP earnings for the twelve months
ended June 30, 2000...................................... 2.66 97.34
GAAP earnings for the projected year
ended December 31, 2000.................................. 2.61 97.39
Percentage of pro forma shares owned(1)..................... 2.60 97.40
</TABLE>
-----------------------
(1) Determined using a fixed exchange ratio of .433.
In connection with rendering its September 20, 2000 opinion, Sandler
O'Neill & Partners, L.P. reviewed, among other things: (1) the agreement and
plan of reorganization and exhibits thereto, and the related plan of merger; (2)
the stock option agreement, dated September 20, 2000, by and between Jefferson
Savings and Union Planters; (3) certain publicly available financial
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<PAGE> 51
statements and other historical financial information of Jefferson Savings that
they deemed relevant; (4) certain publicly available financial statements and
other historical financial information of Union Planters that they deemed
relevant; (5) certain internal financial analyses and forecasts of Jefferson
Savings prepared by and/or reviewed with management of Jefferson Savings and the
views of senior management of Jefferson Savings, based on certain limited
discussions with certain members of senior management, regarding Jefferson
Savings' past and current business, financial condition, results of operations
and future prospects; (6) consensus earnings per share estimates for Union
Planters for the years ending December 31, 2000 and 2001 published by IBES and
the views of senior management of Union Planters, based on certain limited
discussions with certain members of senior management, regarding Union Planters'
past and current business, financial condition, results of operations and future
prospects; (7) the pro forma impact of the merger; (8) the publicly reported
historical price and trading activity for Jefferson Savings' and Union Planters'
common stock, including a comparison of certain financial and stock market
information for Jefferson Savings and Union Planters with similar publicly
available information for certain other companies the securities of which are
publicly traded; (9) the financial terms of recent business combinations in the
savings institution industry, to the extent publicly available; (10) the current
market environment generally and the banking environment in particular; and (11)
such other information, financial studies, analyses and investigations and
financial, economic and market criteria as they considered relevant.
In connection with rendering its opinion included as Appendix C to this
proxy statement-prospectus, Sandler O'Neill & Partners, L.P. confirmed the
appropriateness of its reliance on the analyses used to render its opinion dated
as of September 20, 2000 by performing procedures to update certain of such
analyses and by reviewing the assumptions upon which such analyses were based
and the other factors considered in rendering its opinion.
In performing its reviews and analyses, Sandler O'Neill & Partners, L.P.
assumed and relied upon the accuracy and completeness of all the financial
information, analyses and other information that was publicly available or
otherwise furnished to, reviewed by or discussed with it, and Sandler O'Neill &
Partners, L.P. did not assume any responsibility or liability for independently
verifying the accuracy or completeness of any of such information. Sandler
O'Neill & Partners, L.P. did not make an independent evaluation or appraisal of
the assets, the collateral securing assets or the liabilities, contingent or
otherwise, of Jefferson Savings or Union Planters or any of their respective
subsidiaries, or the collectibility of any such assets, nor was it furnished
with any such evaluations or appraisals. Sandler O'Neill & Partners, L.P. is not
an expert in the evaluation of allowances for loan losses and it has not made an
independent evaluation of the adequacy of the allowance for loan losses of
Jefferson Savings or Union Planters, nor has it reviewed any individual credit
files relating to Jefferson Savings or Union Planters. With Jefferson Savings'
consent, Sandler O'Neill & Partners, L.P. has assumed that the respective
allowances for loan losses for both Jefferson Savings and Union Planters are
adequate to cover such losses and will be adequate on a pro forma basis for the
combined entity. In addition, Sandler O'Neill & Partners, L.P. has not conducted
any physical inspection of the properties or facilities of Jefferson Savings or
Union Planters. With respect to all financial projections prepared by and/or
reviewed with each company's management and the published earnings per share
estimates of Union Planters used by Sandler O'Neill & Partners, L.P. in its
analyses, Sandler O'Neill & Partners, L.P. assumed that
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<PAGE> 52
they reflected the best currently available estimates and judgments of the
respective managements of the respective future financial performances of
Jefferson Savings and Union Planters and that such performances will be
achieved. Sandler O'Neill & Partners, L.P. expressed no opinion as to such
financial projections or the assumptions on which they were based.
Sandler O'Neill & Partners, L.P.'s opinion was necessarily based upon
market, economic and other conditions as they existed on, and could be evaluated
as of, the date of its opinion. Sandler O'Neill & Partners, L.P. assumed, in all
respects material to its analysis, that all of the representations and
warranties contained in the agreement and plan of reorganization and the related
plan of merger are true and correct, that each party to such agreements will
perform all of the covenants required to be performed by such party under such
agreements and that the conditions precedent in the Agreement are not waived.
Sandler O'Neill & Partners, L.P. also assumed, with Jefferson Savings' consent,
that there has been no material change in Jefferson Savings' or Union Planters'
assets, financial condition, results of operations, business or prospects since
the date of the last publicly filed financial statements made available to them,
that Jefferson Savings and Union Planters will remain as going concerns for all
periods relevant to its analyses, and that the merger will be accounted for as a
purchase and will qualify as a tax-free reorganization for federal income tax
purposes.
Jefferson Savings has agreed to pay Sandler O'Neill & Partners, L.P. a
transaction fee in connection with the merger, a substantial portion of which is
contingent upon the closing of the merger. Based on the closing price of Union
Planters common stock on _________, 2000 (the latest practicable date prior to
the date of this proxy statement-prospectus), Jefferson Savings would pay
Sandler O'Neill & Partners, L.P. a transaction fee of approximately $______, of
which $250,000 has been paid and the balance will be paid when the merger is
closed. Jefferson Savings has also agreed to reimburse Sandler O'Neill &
Partners, L.P. for its reasonable out-of-pocket expenses incurred in connection
with its engagement and to indemnify Sandler O'Neill & Partners, L.P. and its
affiliates and their respective partners, directors, officers, employees,
agents, and controlling persons against certain expenses and liabilities,
including liabilities under securities laws.
In the ordinary course of its business as a broker-dealer, Sandler
O'Neill & Partners, L.P. may also purchase securities from and sell securities
to Jefferson Savings and Union Planters and may actively trade the equity or
debt securities of Jefferson Savings and Union Planters and their respective
affiliates for its own account and for the accounts of customers and,
accordingly, may at any time hold a long or short position in such securities.
EFFECTIVE TIME OF THE MERGER
Subject to the conditions to the obligations of the parties to effect
the merger, the merger will become effective on the date and at the time
specified in the articles of merger reflecting the merger to be filed with the
Secretary of State of the state of Tennessee and the certificate of merger
reflecting the merger to be filed with the Secretary of State of the state of
Delaware. Unless Union Planters and Jefferson Savings agree otherwise, they will
use reasonable efforts to
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<PAGE> 53
cause the merger to become effective on the date designated by Union Planters
that is on or before the 15th day after the last to occur of:
(1) the effective date of the last consent of any regulatory
authority having authority over and approving or exempting the
merger (taking into account any required waiting period); and
(2) the date on which Jefferson Savings stockholders approve the
merger.
We anticipate that the merger will become effective during the first
quarter of 2001, however, delays could occur.
We cannot assure you that the necessary stockholder and regulatory
approvals of the merger will be obtained or that other conditions to
consummation of the merger can or will be satisfied. Either Jefferson Savings'
or Union Planters' board of directors may terminate the agreement and plan of
reorganization if the merger is not completed by June 30, 2001, unless it is not
completed because of the willful breach of the agreement and plan of
reorganization by the party seeking termination. See "-- Conditions to
Consummation of the Merger" and "-- Waiver, Amendment, and Termination."
DISTRIBUTION OF UNION PLANTERS STOCK CERTIFICATES
Promptly after the merger is completed you, as a former Jefferson
Savings stockholder, will be mailed a letter of transmittal and instructions for
the exchange of your certificates representing shares of Jefferson Savings
common stock for certificates representing shares of Union Planters common
stock.
YOU SHOULD NOT SEND IN YOUR JEFFERSON SAVINGS COMMON STOCK CERTIFICATES
UNTIL YOU RECEIVE A LETTER OF TRANSMITTAL AND INSTRUCTIONS.
After you surrender to the exchange agent your certificates for
Jefferson Savings common stock with a properly completed letter of transmittal,
the exchange agent will mail you a certificate or certificates representing the
number of shares of Union Planters common stock to which you are entitled and a
check for the amount to be paid in lieu of any fractional share (without
interest), if any, together with all undelivered dividends or distributions in
respect of the shares of Union Planters common stock (without interest thereon),
if any. Union Planters will not be obligated to deliver the consideration to
you, as a former Jefferson Savings stockholder, until you have surrendered your
Jefferson Savings common stock certificates.
Whenever a dividend or other distribution is declared by Union Planters
on Union Planters common stock with a record date after the date on which the
merger became effective, the declaration will include dividends or other
distributions on all shares of Union Planters common stock that may be issued in
the merger. However, Union Planters will not pay any dividend or other
distribution that is payable following 30 days after the effective date of the
merger to any former Jefferson Savings stockholder who has not surrendered his
or her Jefferson Savings common stock certificate until the holder surrenders
the certificate. If any Jefferson Savings stockholder's common stock
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<PAGE> 54
certificate has been lost, stolen, or destroyed, the exchange agent will issue
the shares of Union Planters common stock and any cash in lieu of fractional
shares upon the stockholder's submission of (i) an affidavit claiming the
certificate to be lost, stolen, or destroyed by the stockholder of record, (ii)
an open penalty lost securities bond from a reputable surety bonding company, as
indemnity against any claim that may be made against Union Planters with respect
to the certificate, and (iii) any other documents necessary to give effect to a
proper exchange of certificates.
At the time the merger becomes effective, the stock transfer books of
Jefferson Savings will be closed to Jefferson Savings' stockholders and no
transfer of shares of Jefferson Savings common stock by any stockholder will
thereafter be made or recognized. If certificates for shares of Jefferson
Savings common stock are presented for transfer after the merger becomes
effective, they will be canceled and exchanged for shares of Union Planters
common stock, a check for the amount due in lieu of fractional shares, if any,
and any undelivered dividends on the Union Planters common stock.
CONDITIONS TO CONSUMMATION OF THE MERGER
Union Planters and Jefferson Savings are required to complete the merger
only after the satisfaction of various conditions. These conditions include:
- the holders of a majority of the shares of Jefferson Savings
common stock outstanding and entitled to vote must approve the
merger;
- Union Planters must receive certain required regulatory
approvals, including approval from the Board of Governors of the
Federal Reserve System, and all applicable waiting periods
associated with such approval must expire, without any
conditions or restrictions (excluding requirements relating to
the raising of additional capital or the disposition of assets
or deposits) that would, in the reasonable judgment of Union
Planters' board of directors, so materially adversely impact the
economic benefits of the transactions contemplated by the
agreement and plan of reorganization as to render the
consummation of the merger inadvisable;
- Union Planters and Jefferson Savings must receive a written
opinion of their respective counsel as to the tax-free nature of
the merger;
- the shares of Union Planters common stock to be issued in the
merger must be approved for listing on the New York Stock
Exchange, subject to official notice of issuance;
- the representations and warranties of Jefferson Savings and
Union Planters as set forth in the agreement and plan of
reorganization must be accurate (under the applicable standards
set forth in the agreement and plan of reorganization) as of
September 20, 2000, and as of the date the merger becomes
effective;
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<PAGE> 55
- Jefferson Savings and Union Planters must perform all agreements
and comply with all covenants set forth in the agreement and
plan of reorganization, in all material respects;
- Union Planters and Jefferson Savings must receive all other
consents that may be required to complete the merger or to
prevent any default under any contract or permit which would be
reasonably likely to have, individually or in the aggregate, a
material adverse effect on Jefferson Savings or Union Planters;
- the absence of any law or order or any action taken by any
court, governmental, or regulatory authority of competent
jurisdiction prohibiting or restricting the merger or making it
illegal;
- Union Planters must receive agreements from each person
Jefferson Savings reasonably believes may be deemed an affiliate
of Jefferson Savings;
- The registration statement registering the shares of Union
Planters common stock must be effective under the Securities Act
of 1933, as amended;.
- Jefferson Savings must receive an updated opinion from its
financial advisor that the merger is fair to Jefferson Savings
stockholders from a financial point of view; and
- certain other conditions must be satisfied, including the
receipt of various certificates from the officers of Jefferson
Savings and Union Planters.
We cannot assure you as to when or if all of the conditions to the
merger can or will be satisfied or waived by the party permitted to do so. If
the merger is not effected on or before June 30, 2001, the board of directors of
either Jefferson Savings or Union Planters may terminate the agreement and plan
of reorganization and abandon the merger. See "-- Waiver, Amendment, and
Termination."
REGULATORY APPROVAL
Union Planters must receive certain regulatory approvals before the
merger can be completed. Union Planters and Jefferson Savings have agreed to
cooperate to obtain all required regulatory approvals. There is no assurance
that these regulatory approvals will be obtained, when they will be obtained,
or, if obtained, that there will not be litigation challenging these approvals.
There can likewise be no assurance that the U.S. Department of Justice or "DOJ"
or any state attorney general will not attempt to challenge the merger on
antitrust grounds, or, if a challenge is made, the result of the challenge.
It is a condition to the completion of the merger that Union Planters
and Jefferson Savings receive all necessary regulatory approvals to the merger
without the imposition by any regulator of any condition that, in the reasonable
judgment of the Union Planters board of directors, would
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<PAGE> 56
so materially adversely impact the financial or economic benefits of the merger
as to make consummation of the merger inadvisable. There can be no assurance
that the regulatory approvals of the merger will not contain terms, conditions
or requirements which would have such an impact.
Jefferson Savings and Union Planters are not aware of any material
governmental approvals or actions that are required to complete the merger,
except as described below. Should any other approval or action be required,
Jefferson Savings and Union Planters contemplate that they would seek such
approval or action.
The merger is subject to approval by the Federal Reserve pursuant to
Section 4 of the Bank Holding Company Act of 1956, as amended or "BHCA"; because
Jefferson Heritage Bank is a thrift institution, the BHCA treats the merger as a
non-bank acquisition by Union Planters. Union Planters will file the required
notification with the Federal Reserve Bank of St. Louis for approval of the
merger. Generally, for applications under Section 4, the Federal Reserve or the
appropriate Reserve Bank will consider whether the applicant's performance of
the non-bank activities can reasonably be expected to produce benefits to the
public, such as greater convenience, increased competition, and gains in
efficiency, that outweigh possible adverse effects, such as undue concentration
of resources, decreased or unfair competition, conflicts of interest, and
unsound banking practices. This includes an evaluation of the financial and
managerial resources of the applicant, including its subsidiaries and any
company to be acquired, the effect of the proposed transaction on those
resources, and the management expertise, internal control and risk-management
systems, and capital of the entity conducting the activity. The state banking
regulators in Missouri and Texas, where the subsidiary banks of both Jefferson
Savings and Union Planters maintain offices, will have an opportunity to comment
on the application to the Federal Reserve.
The Federal Reserve Bank of St. Louis permits an expedited notice
procedure for acquisitions of savings and loan holding companies if the
applicant is able to make a series of representations to the Reserve Bank,
including that:
- The applicant and its bank subsidiaries are well capitalized;
- The applicant's bank subsidiaries are well-managed;
- The proposed transaction would meet the convenience and needs of
the community, and the applicant's bank subsidiaries have
satisfactory or better Community Reinvestment Act ratings;
- There have been no timely and substantive public comments
adverse to the proposed transaction;
- The proposed transaction would not cause insured depository
institutions controlled by the acquiror to control more than 35%
of market deposits in any relevant banking market, and the
transaction would not cause the Herfindahl-
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<PAGE> 57
Hirschman Index to increase by more than 200 points in any
relevant banking market with a post-acquisition index of more
than 1800;
- The DOJ has not indicated that the transaction is likely to have
a significantly adverse effect on competition in any relevant
banking market;
- The aggregate risk-weighted assets of the target do not exceed
35% of the consolidated risk-weighted assets of the applicant,
and the total risk-weighted assets to be acquired do not exceed
$7.5 billion; and
- There have been no supervisory actions within the preceding
twelve months involving the applicant or any of its insured
depository institution subsidiaries.
Union Planters believes there is a reasonable likelihood that it can
make these representations, although some depend on events outside Union
Planters' control, including public comment and Justice Department review. In
addition, the Reserve Bank will ask for comment from the OTS, and there can be
no assurance that the OTS will support the merger, although Union Planters is
not aware of any reason for the OTS to oppose it.
Missouri law generally prohibits a merger or acquisition of a financial
institution when the resulting holding company subsidiaries would control more
than 13% of the insured deposits in the state. The Texas Department of Banking
similarly has advised that a transaction resulting in control of more than 20%
of the total deposits in Texas would be prohibited. The deposits controlled by
Union Planters' subsidiaries would not exceed either the 13% or 20% ceilings
after consummation of the merger.
WAIVER, AMENDMENT, AND TERMINATION
To the extent permitted by law, the boards of directors of Union
Planters and Jefferson Savings may agree in writing to amend the agreement and
plan of reorganization, whether before or after approval of the merger by the
Jefferson Savings' stockholders; provided, however, that after such stockholder
approval, no amendments may be made which modify the manner or basis of the
consideration to be received by the holders of the Jefferson Savings common
stock without further stockholder approval. In addition, before or at the time
the merger becomes effective, either Jefferson Savings or Union Planters, or
both, may waive any default in the performance of any term of the agreement and
plan of reorganization by the other party or may waive or extend the time for
the compliance or fulfillment by the other party of any and all of its
obligations under the agreement and plan of reorganization. In addition, either
Union Planters or Jefferson Savings may waive any of the conditions precedent to
its obligations under the agreement and plan of reorganization, unless a
violation of any law or governmental regulation would result. To be effective, a
waiver must be in writing and signed by an authorized officer of Jefferson
Savings or Union Planters, as the case may be.
At any time before the merger becomes effective, the boards of directors
of Union Planters and Jefferson Savings may agree to terminate the agreement and
plan of reorganization. In
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addition, either Jefferson Savings' board of directors or Union Planters' board
of directors may terminate the agreement and plan of reorganization in the
following circumstances:
(1) in certain circumstances, upon the inaccuracy of any
representation or warranty of a party contained in the agreement
and plan of reorganization if the inaccuracy cannot be or has
not been cured within 30 days after the giving of written notice
to the breaching party of such inaccuracy 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 and plan of reorganization (provided that the
terminating party is not then in breach of any representation or
warranty contained in the agreement and plan of reorganization
(under the applicable standard set forth in the agreement and
plan of reorganization) or in material breach of any covenant or
other agreement contained in the agreement and plan of
reorganization);
(2) if a material breach by the other party of any covenant or
agreement contained in the agreement and plan of reorganization
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 and
plan of reorganization under the applicable standard set forth
in the agreement and plan of reorganization or in material
breach of any covenant or other agreement contained in the
agreement and plan of reorganization);
(3) if any consent of any regulatory authority required to complete
the merger or other transactions contemplated by the agreement
and plan of reorganization has been denied by final
nonappealable action, or if any action taken by such authority
is not appealed within the time limit for appeal;
(4) if the stockholders of Jefferson Savings fail to approve the
merger at the special meeting;
(5) if the merger is not consummated by June 30, 2001, provided that
the failure to consummate is not caused by any willful breach of
the agreement and plan of reorganization by the party electing
to terminate; or
(6) if any of the conditions precedent to the obligations of a party
to consummate the merger cannot be satisfied by June 30, 2001
(provided that the terminating party is not then in breach of
any representation or warranty contained in the agreement and
plan of reorganization (under the applicable standard set forth
in the agreement and plan of reorganization) or in material
breach of any covenant or other agreement contained in the
agreement and plan of reorganization).
The agreement and plan of reorganization may also be terminated pursuant
to the relevant provisions of the agreement and plan of reorganization described
in " -- What You Will Receive in the Merger" on page __.
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If the merger is terminated, the agreement and plan of reorganization
and the related plan of merger will both become void and have no effect, except
that certain provisions of the agreement and plan of reorganization, including
those relating to the obligations to share certain expenses and maintain the
confidentiality of certain information obtained, will survive. Termination of
the agreement and plan of reorganization and the related plan of merger will not
relieve any breaching party from liability for any uncured willful breach of a
representation, warranty, covenant, or agreement. The stock option agreement is
governed by its own terms as to its termination. See "-- Expenses and Fees" and
"-- Stock Option Agreement."
CONDUCT OF BUSINESS PENDING THE MERGER
The agreement and plan of reorganization obligates Jefferson Savings to
conduct its business only in the usual, regular, and ordinary course before the
merger becomes effective and imposes certain limitations on the operations of
Jefferson Savings and its federal savings bank subsidiary. These items are
listed in Article 7 of the agreement and plan of reorganization which is
attached as Appendix A to this proxy statement-prospectus. The agreement and
plan of reorganization authorizes Jefferson Savings to declare and pay regular
quarterly dividends on the Jefferson Savings common stock at a rate of $.07 per
share with usual record and payment dates which conform to past practice. The
agreement and plan of reorganization contemplates that the merger will be timed
to occur at such a time that the Jefferson Savings stockholders will not fail to
receive a dividend during a quarterly period, nor will they receive a dividend
on both their Jefferson Savings common stock and the Union Planters common stock
they receive in the merger during the same quarterly period.
Jefferson Savings has also agreed that neither it nor any of its
representatives will directly or indirectly initiate, solicit, encourage or
knowingly facilitate any proposal for the acquisition of Jefferson Savings.
Jefferson Savings and its board of directors, however, may have discussions and
negotiations and furnish information to another party in response to an
unsolicited written acquisition proposal if the board of directors determines in
good faith and consistent with its fiduciary duties that the proposal could
result in a superior proposal. Prior to providing any information to the other
party, Jefferson Savings' board of directors must promptly notify Union Planters
of the proposal and receive an executed confidentiality agreement from the other
party with terms at least as stringent as the confidentiality agreement in place
with Union Planters.
Union Planters and Jefferson Savings have also agreed not to take any
action that would (1) materially adversely affect their ability to obtain any
consents required for the merger, or (2) materially adversely affect their
ability to perform their covenants and agreements under the agreement and plan
of reorganization.
MANAGEMENT AND OPERATIONS AFTER THE MERGER
The merger will not change the present management team or board of
directors of Union Planters. Information concerning the management of Union
Planters is included in the documents incorporated by reference in this proxy
statement-prospectus. Union Planters Holding Corporation will be the surviving
corporation resulting from the merger and will continue to be a wholly-
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owned subsidiary of Union Planters governed by the laws of the State of
Tennessee and operate in accordance with its charter and bylaws See "WHERE YOU
CAN FIND MORE INFORMATION." For additional information regarding the interests
of certain persons in the merger, see "-- Interests of Certain Persons in the
Merger."
INTERESTS OF CERTAIN PERSONS IN THE MERGER
General. Certain members of Jefferson Savings' management and Jefferson
Savings' board of directors may be deemed to have certain interests in the
merger that are in addition to their interests as stockholders of Jefferson
Savings generally. Jefferson Savings' board of directors was aware of these
interests and considered them, among other matters, in approving the merger and
the agreement and plan of reorganization.
Stock Options. Certain directors and officers of Jefferson Savings hold
options to purchase Jefferson Savings common stock. These options were issued
under Jefferson Savings' stock option plan. If the merger is consummated, those
options (whether or not they are exercisable at that time) will, at the election
of the holder of the option, be converted either into a cash payment or options
to purchase Union Planters common stock. Those options which would not otherwise
be exercisable at the effective time of the merger, will become exercisable as a
result of the merger, and the change-of-control provisions contained in these
options.
The following table sets forth, with respect to (1) each Jefferson
Savings' director and executive officer, (2) a group consisting of all the
executive officers, and (3) Jefferson Savings' non-executive officer directors
as a group, the number of shares of Jefferson Savings common stock covered by
outstanding Jefferson Savings options held by such persons as of the record
date, the number of options currently exercisable, their weighted average
exercise price and the aggregate value of the options.
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<TABLE>
<CAPTION>
Weighted
Directors and Options Currently Average Exercise Price Aggregate Value
Executive Officers Options Held Exercisable Per Option of Options (1)
------------------ ------------ ----------- ---------- --------------
<S> <C> <C> <C> <C>
William W. Canfield................. 53,172 53.172 $ 5.00
Lloyd D. Doerflinger................ 60.172 60.172 5.00
David V. McCay...................... 114,672 114,672 5.00
Joe L. Williams..................... 15,000 3,000 13.50
James M. Allison.................... 10,000 2,000 13.50
John P. Deves....................... 14,268 14,268 5.00
John A. Fox......................... 8,000 1,600 13.50
Lisa G. Frederick................... 8,000 -- 10.87
Mark R. Mesnier..................... 8,000 1,600 13.50
Paul J. Milano...................... 27,702 27,702 5.00
Bryan L. Sandlin.................... 8,000 1,600 13.50
Ellen A. Stanko..................... 14,268 14,268 5.00
Kevin M. Voss....................... 8,000 1,600 13.50
------------ -----------
Total directors and executive
officers......................... 349,254 295,654 $ 6.52
All executive officers.............. 235,910 182,310 $ 7.25
Non-executive officer directors..... 113,344 113,344 $ 5.00
</TABLE>
--------------------------
(1) Based on the closing price of Jefferson Savings common stock of $_____ as
listed on Nasdaq National Market on December ___, 2000, less the exercise
price of the options.
When the merger becomes effective, each option granted under Jefferson
Savings' stock plans that is outstanding, whether or not exercisable will
either, at the election of the holder of the option, (i) be canceled in exchange
for a cash payment that is equal to the value of each share of Jefferson Savings
common stock that is subject to the option less the exercise price or (ii)
become an option to purchase Union Planters common stock. See "-- Effect of the
Merger on Jefferson Savings Options."
Employment and Change in Control Agreements. Jefferson Savings has
employment or "change in control" agreements with 17 of its officers or other
employees, including the three most highly compensated executive officers: David
V. McCay, Chairman and Chief Executive Officer, Joe L. Williams, President and
Chief Operating Officer, and Paul J. Milano, Senior Vice President, Treasurer
and Chief Financial Officer. Although the exact terms of each Jefferson Savings
employment or change in control agreement may vary, each such agreement provides
that upon the occurrence of certain events, including termination of employment
(other than for "cause" as defined in such agreement) in connection with, or
within 12 months after, any change in control of Jefferson Savings or Jefferson
Heritage Bank or a material change in the circumstance of such employee's
employment, the employee will receive certain benefits, including a termination
payment in a lump sum amount based on the employee's annual compensation and/or
benefits. The merger will constitute a change in control of Jefferson Savings
and if there is "a material change in the circumstance of the Jefferson Savings
officers' employment, then, the Jefferson Savings officers, including the three
executive officers listed above, will be entitled to a lump sum
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termination payment. The following chart shows the amount of the termination
payment that each Jefferson Savings executive officer is entitled to:
<TABLE>
<CAPTION>
Executive Officer Payment Amount
----------------- --------------
<S> <C>
David V. McCay $882,050
Joe L. Williams $523,250
Paul J. Milano $124,000
</TABLE>
Supplemental Retirement Agreement. In order to secure the continuing
services of David V. McCay, the board of directors of Jefferson Heritage Bank
entered into a Supplemental Retirement Agreement with Mr. McCay. Pursuant to the
Supplemental Retirement Agreement, upon his retirement Mr. McCay will be
entitled to receive, for the remainder of his life, annual payments from
Jefferson Heritage Bank equal to (i) the product of his "vested percentage" and
75% of his "average annual compensation," minus (ii) 50% of the sum of the
annual social security benefits payable to Mr. McCay upon his retirement and the
annual amount Mr. McCay would receive if his employer-provided benefits under
Jefferson Savings' 401(k) Savings Plan were paid to him in the form of a 50%
joint and survivor annuity. Mr. McCay's "vested percentage" is determined
pursuant to a schedule in the Supplemental Retirement Agreement that increases
the vested percentage by 3% annually, based on the assumption that Mr. McCay
will continue as an employee until the age of 65. Mr. McCay's "average annual
compensation" means Mr. McCay's highest annual compensation for three of five
calendar years preceding his termination of employment. The Supplemental
Retirement Agreement also provides for alternative payments based on other
scenarios, such as the death of Mr. McCay while he is still an employee of
Jefferson Heritage Bank.
The following table sets forth the annual retirement benefits that Mr.
McCay would be entitled to receive under the Supplemental Retirement Agreement,
prior to required deductions, at various compensation levels at the specified
ages:
<TABLE>
<CAPTION>
AVERAGE
ANNUAL SPECIFIED AGE
COMPENSATION 55 56 59 62 65
------------ -- -- -- -- --
<S> <C> <C> <C> <C> <C>
$200,000 $100,000 $105,000 $120,000 $135,000 $150,000
350,000 175,000 183,750 210,000 236,250 262,500
500,000 250,000 262,500 300,000 337,500 375,000
750,000 375,000 393,750 450,000 506,250 562,500
</TABLE>
In the event of a "change in control" (as defined in Mr. McCay's
employment agreement), his vested percentage will automatically increase to 100%
and Jefferson Heritage Bank shall contribute to a grantor trust an amount of
cash equal to the present value of the benefits to which he is entitled under
his Supplemental Retirement Agreement.
Indemnification; Directors and Officers Insurance. For a period of six
years after the completion of the merger, Union Planters has agreed to indemnify
the present and former
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directors, officers, employees, and agents of Jefferson Savings and its
subsidiaries against certain liabilities arising out of actions or omissions
occurring at or prior to the time the merger becomes effective (including the
merger) to the full extent permitted under Delaware law and Jefferson Savings'
certificate of incorporation and bylaws and any indemnity agreements entered
into prior to the date of the agreement and plan of reorganization. Union
Planters has also agreed to use its reasonable efforts to maintain in effect,
for a period of not less than three years after completion of the merger,
Jefferson Savings' existing directors' and officers' liability insurance policy.
However, Union Planters may substitute the existing directors' and officers'
liability insurance policy for (i) insurance policies that would provide
Jefferson Savings' directors and officers at a minimum the same coverage, and
would contain terms and conditions that are substantially no less advantageous
than the existing insurance policy or (ii) prior to the effective time of the
merger, with the consent of Jefferson Savings, any other policy covering
liabilities for claims arising out of actions or omissions that occurred prior
to the effective time of the merger, that insures the persons currently covered
by Jefferson Savings' existing directors' and officers' liability insurance
policy. Union Planters is not obligated however, to make aggregate annual
premium payments for the policies during the three-year period that exceed 150%
of the premium payments made by Jefferson Savings on its policy as of September
20, 2000.
Employee Stock Ownership Plan. In connection with the merger, the
Jefferson Savings ESOP will terminate and all participant accounts will become
fully vested and nonforfeitable. After the effective time of the merger, it is
intended that each of the following will occur: (i) subject to the requirements
of state and federal securities laws, the Jefferson Savings ESOP will sell an
amount of shares of Union Planters common stock that it receives in connection
with the merger sufficient to fully retire the then outstanding balance of any
loans to the Jefferson Savings ESOP (including any accrued but unpaid interest);
(ii) all remaining shares of Union Planters common stock that are received by
the Jefferson Savings ESOP in connection with the merger and that are
attributable to unallocated shares in the Jefferson Savings ESOP shall be
allocated to the accounts of participants as earnings as of the effective time
of the merger; and (iii) subject to a favorable determination by the Internal
Revenue Service, the Jefferson Savings ESOP will make a distribution of benefits
to its participants. If the Internal Revenue Service in any way limits or
restricts any portion of the remaining and unallocated shares or refuses to
issue a determination letter with respect to the intended termination of the
Jefferson Savings ESOP, Union Planters and the Jefferson Savings ESOP Trustee
will cooperate to implement a resolution that will maximize the allocation of
the unallocated proceeds to its participants in accordance with applicable law.
Retention Bonuses. Union Planters and Jefferson Savings have established
a retention bonus committee composed of one person designated by Union Planters
and one person designated by Jefferson Savings. The retention bonus committee is
responsible for structuring and awarding any necessary incentive compensation to
the employees of Jefferson Savings to encourage the continued employment of key
operational employees through the effective time of the merger. The identity of
any award recipient, the amount of any award and the terms upon which the award
will be granted must have the approval of both members of the committee and the
aggregate incentive compensation that the retention bonus committee may award to
Jefferson
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Savings employees may not exceed $500,000. Union Planters may, in its sole
discretion, pay additional retention bonuses to any Jefferson Savings' employee.
ACCOUNTING TREATMENT
It is anticipated that the merger will be accounted for as a "purchase"
as that term is used pursuant to generally accepted accounting principles, for
accounting and financial reporting purposes. Under the purchase method of
accounting, the assets and liabilities of Jefferson Savings as of the effective
time of the merger will be recorded at their estimated respective fair values
and added to those of Union Planters. Financial statements of Union Planters
issued after the effective time of the merger will reflect such values and will
not be restated retroactively to reflect the historical financial position or
results of operations of Jefferson Savings.
EXPENSES AND FEES
Union Planters and Jefferson Savings will each pay its own expenses in
connection with the merger, including filing, registration and application fees,
and fees and expenses of its own financial or other consultants, investment
bankers, accountants, and counsel, except that each party will pay one-half of
the printing costs incurred in connection with the registration statement and
this proxy statement-prospectus.
RESALES OF UNION PLANTERS COMMON STOCK
Union Planters common stock to be issued to Jefferson Savings
stockholders in the merger will be registered under the Securities Act of 1933,
as amended. All shares of Union Planters common stock received by Jefferson
Savings stockholders in the merger will be freely transferable after the merger
by those Jefferson Savings stockholders who are not considered to be
"affiliates" of Jefferson Savings or Union Planters. "Affiliates" generally are
defined as persons or entities who control, are controlled by, or are under
common control with Jefferson Savings or Union Planters (generally, executive
officers, directors, and 10% or greater stockholders).
Rule 145, promulgated under the Securities Act of 1933, as amended,
restricts the sale of Union Planters common stock received in the merger by
affiliates of Jefferson Savings and certain of their family members and related
entities. Under the rule, during the first calendar year after the merger
becomes effective, affiliates of Jefferson Savings or Union Planters may resell
publicly the Union Planters common stock they receive in the merger but only
within certain limitations as to the amount of Union Planters common stock they
can sell in any three-month period and as to the manner of sale. After the
one-year period, affiliates of Jefferson Savings who are not affiliates of Union
Planters may resell their shares without restriction. Union Planters must
continue to satisfy its reporting requirements under the Securities Exchange Act
of 1934, as amended (the "Exchange Act") in order for affiliates to resell,
under Rule 145, shares of Union Planters common stock received in the merger.
Affiliates also would be permitted to resell Union Planters common stock
received in the merger pursuant to an effective registration statement under the
Securities Act of 1933, as amended, or an available exemption from the
Securities Act of 1933, as amended, registration requirements. This proxy
statement-prospectus does not cover any resales
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of Union Planters common stock received by persons who may be deemed to be
affiliates of Jefferson Savings or Union Planters.
Jefferson Savings has agreed to use its reasonable efforts to cause each
person who may be deemed to be an affiliate of Jefferson Savings to execute and
deliver to Union Planters prior to the effective time of the merger, an
affiliate agreement intended to ensure compliance with the Securities Act of
1933, as amended. Under such affiliate agreement, each Jefferson Savings
affiliate must agree not to sell, pledge, transfer, or otherwise dispose of any
Jefferson Savings common stock held by the affiliate except as contemplated by
the agreement and plan of reorganization or the affiliate agreement. In
addition, each Jefferson Savings affiliate must agree not to sell, pledge,
transfer or otherwise dispose of any Union Planters common stock received in the
merger except in compliance with the Securities Act of 1933, as amended, and the
rules and regulations under the Securities Act of 1933, as amended. The stock
certificates representing Union Planters common stock issued to affiliates in
the merger may bear a legend summarizing these restrictions on transfer. See "--
Conditions to Consummation of the Merger."
STOCK OPTION AGREEMENT
As an inducement and a condition to Union Planters entering into the
agreement and plan of reorganization, Jefferson Savings and Union Planters
entered into a stock option agreement, under which Jefferson Savings granted
Union Planters an option to purchase up to 1,983,274 shares (representing 19.9%
of the shares issued and outstanding before giving effect to the exercise of
such option) of Jefferson Savings common stock at a cash price per share equal
to $10.8125, under the circumstances described below, subject to possible
adjustment in certain circumstances. Under the stock option agreement, Union
Planters' total profit resulting from the exercise of the options may not exceed
$5 million.
The purpose of the option agreement is to increase the likelihood that
the merger will be completed by making it more difficult and more expensive for
a third party to gain control of Jefferson Savings. Accordingly, the options are
exercisable only on the occurrence of certain events that generally involve the
acquisition or attempted acquisition of Jefferson Savings, a significant portion
of its then outstanding common stock or all or at least 25% of its consolidated
assets.
Although the shares issuable upon exercise of the option would represent
approximately 16.6% of the Jefferson Savings common stock outstanding after
exercise, Union Planters may not acquire more than 5% of Jefferson Savings'
common stock, pursuant to the exercise of the option or otherwise, without prior
approval of the Federal Reserve. Unless and until it exercises its option, Union
Planters disclaims beneficial ownership of Jefferson Savings' common stock
subject to the option.
REPURCHASE OF SHARES
Union Planters anticipates that it will repurchase in the open market a
portion of the shares, up to all of the shares, to be issued to Jefferson
Savings stockholders pursuant to the
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merger. These repurchases will be made in compliance with applicable laws and
the regulations of the Securities and Exchange Commission.
EFFECT OF THE MERGER ON RIGHTS OF STOCKHOLDERS
In the merger, you will exchange your shares of Jefferson Savings common
stock for shares of Union Planters common stock. Jefferson Savings is a Delaware
corporation governed by the Delaware General Corporation Law and Jefferson
Savings' certificate of incorporation and bylaws. Union Planters is a Tennessee
corporation governed by the Tennessee Business Corporation Act and Union
Planters' amended and restated charter and bylaws. There are significant
differences between the rights of Jefferson Savings stockholders and Union
Planters stockholders. The following is a summary of relevant provisions of the
certificate of incorporation and bylaws of Jefferson Savings and the amended and
restated charter and bylaws of Union Planters setting forth the current rights
of Jefferson Savings stockholders and those of Union Planters' stockholders and
highlighting any significant differences to Jefferson Savings' stockholders as a
result of the merger.
The following summary is not intended to be complete and is qualified it
its entirety by reference to the Delaware General Corporation Law and the
Tennessee Business Corporation Act, as well as Union Planters' amended and
restated charter and bylaws and Jefferson Savings' certificate of incorporation
and bylaws.
ANTI-TAKEOVER PROVISIONS GENERALLY
Union Planters' amended and restated charter and bylaws contain certain
provisions designed to assist Union Planters' board of directors in playing a
role if any group or person attempts to acquire control of Union Planters so
that Union Planters' board of directors can protect the interests of Union
Planters and its stockholders under the circumstances. These provisions may help
Union Planters' board of directors determine whether a sale of control is in the
best interests of Union Planters' stockholders, or enhance Union Planters' board
of directors' ability to maximize the value to be received by the stockholders
upon a sale of control of Union Planters.
Although Union Planters' management believes that these provisions are
beneficial to Union Planters' stockholders, they also may tend to discourage
some takeover bids. As a result, Union Planters' stockholders may be deprived of
opportunities to sell their shares of Union Planters common stock at prices that
represent a premium over prevailing market prices. On the other hand, defeating
undesirable acquisition offers can be a very expensive and time-consuming
process. To the extent that these provisions discourage undesirable proposals,
Union Planters may be able to avoid those expenditures of time and money.
These provisions also may discourage open market purchases by a company
that may desire to acquire Union Planters. Open market purchases could increase
the market price of Union Planters common stock temporarily, and enable
stockholders to sell their shares at a price higher than that they might
otherwise obtain. In addition, these provisions may decrease the
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market price of Union Planters common stock by making the stock less attractive
to persons who invest in securities in anticipation of price increases from
potential acquisition attempts. The provisions may also make it more difficult
and time consuming for a potential acquiror to obtain control of Union Planters
by replacing the board of directors and management. Furthermore, the provisions
may make it more difficult for the Union Planters stockholders to replace Union
Planters' board of directors or management, even if a majority of the Union
Planters stockholders believe that replacing Union Planters' board of directors
or management is in the best interests of Union Planters. Because of these
factors, these provisions may tend to perpetuate the incumbent board of
directors and management. Jefferson Savings certificate of incorporation's
bylaws also contain certain anti-takeover provisions which are described below.
For more information about these provisions, see "--Authorized Capital Stock,"
"-- Amendment of Charter and Bylaws," "-- Classified Board of Directors and
Absence of Cumulative Voting," "-- Director Removal and Vacancies," "--
Limitations on Director Liability," "-- Indemnification," "-- Special Meetings
of Stockholders," "-- Stockholder Nominations and Proposals," and "-- Business
Combinations."
AUTHORIZED CAPITAL STOCK
UNION PLANTERS. Union Planters' amended and restated charter authorizes
the issuance of up to (1) 300,000,000 shares of Union Planters common stock, par
value $5.00 per share of which 134,756,611 shares were issued and outstanding as
of October 31, 2000, and (2) 10,000,000 shares of no par value preferred stock,
of which 797,683 shares of Union Planters Series E Preferred Stock were issued
and outstanding as of October 31, 2000. Union Planters' board of directors may
authorize the issuance of additional shares of Union Planters common stock
without further action by the Union Planters stockholders, unless it is required
to by applicable laws or regulations or by any stock exchange on which Union
Planters' capital stock is listed.
Union Planters may issue, without a stockholder vote, shares of its
preferred stock, in one or more classes or series, with voting, conversion,
dividend, and liquidation rights as it specifies in an amendment to its charter.
The Union Planters board of directors may determine, among other things, the
distinctive designation and number of shares comprising a series of preferred
stock, the dividend rate or rates on the shares of such series and the relation
of such dividends to the dividends payable on other classes of stock, whether
the shares of such series shall be convertible into or exchangeable for shares
of any other class or series of Union Planters capital stock, the voting powers,
if any, of such series, and any other preferences, privileges, and powers of
such series.
In the event of the voluntary or involuntary liquidation, dissolution,
distribution of assets, or winding up of Union Planters, holders of preferred
stock will have priority over holders of common stock.
The authority to issue additional shares of common stock or preferred
stock provides Union Planters with the flexibility necessary to meet its future
needs without the delay resulting from seeking stockholder approval. The
authorized but unissued shares of common stock and preferred stock may be issued
from time to time for any corporate purpose, including, stock splits, stock
dividends, employee benefit and compensation plans, acquisitions, and public or
private sales for cash as a means of raising capital. The shares could be used
to dilute the stock ownership of persons seeking to obtain
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control of Union Planters. The sale of a substantial number of shares of voting
stock to persons who have an understanding with Union Planters concerning the
voting of such shares, or the distribution or declaration of a dividend of
shares of voting stock (or the right to receive voting stock) to its
stockholders, may have the effect of discouraging or increasing the cost of
unsolicited attempts to acquire control of Union Planters.
Union Planters has a preferred stock purchase rights plan. Under the
plan, one preferred stock right is automatically distributed for each share of
Union Planters common stock. The preferred stock rights may deter coercive
takeover tactics and encourage persons interested in potentially acquiring
control of Union Planters to treat each stockholder on a fair and equal basis.
Each preferred stock right trades on the same basis with the share of Union
Planters common stock to which it relates until the occurrence of certain
events. Upon a potential change in control of Union Planters, the preferred
stock rights would separate from Union Planters common stock and each holder of
a preferred stock right (other than the potential acquiror) would be entitled to
purchase equity securities of Union Planters at prices below their market value.
Union Planters has authorized 300,000 shares of Series F preferred stock for
issuance under the preferred stock rights plan. No shares have been issued as of
the date of this proxy statement-prospectus. Until a preferred stock right is
exercised, the holder has no rights as a stockholder of Union Planters except
for the rights such holder may have as a holder of Union Planters common stock.
JEFFERSON SAVINGS. The authorized capital stock of Jefferson Savings
consists of (1) 20,000,000 shares of common stock, par value $.01 per share, of
which 10,100,112 shares were issued and 9,968,847 shares are outstanding as of
October 31, 2000 and (2) 5,000,000 shares of preferred stock, par value $.01 per
share, of which no shares were issued and outstanding as of October 31, 2000.
Jefferson Savings' board of directors may authorize the issuance of additional
shares of Jefferson Savings common stock without any further action by the
Jefferson Savings stockholders, unless it is required by applicable laws or
regulations or by any stock exchange or market on which Jefferson Savings'
capital stock is listed.
The Jefferson Savings board of directors may issue, without a
stockholder vote, shares of its preferred stock, in one or more classes or
series, with voting, conversion, dividend and liquidation rights as it specifies
in a certificate of designations. The Jefferson Savings board of directors may
determine, among other things, the distinctive designation and number of shares
comprising a series of preferred stock, the dividend rate or rates on the shares
of such series and the relation of such dividends to the dividends payable on
other classes of stock, whether the shares of such series shall be convertible
into or exchangeable for shares of any other class or series of Jefferson
Savings 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 Jefferson Savings, holders of preferred
stock will have priority over holders of common stock. Jefferson Savings has
adopted a rights agreement dated as of August 17, 1994, that is substantially
similar to Union Planters' preferred stock rights plan.
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PREEMPTIVE RIGHTS
UNION PLANTERS. The Tennessee Business Corporation Act provides that,
unless a Tennessee corporation's charter expressly provides for preemptive
rights, stockholders of a Tennessee corporation do not have a preemptive right
to acquire proportional amounts of the corporation's unissued shares upon a
decision of the board of directors to issue shares. Union Planters' charter does
not provide for preemptive rights to its stockholders.
JEFFERSON SAVINGS. Jefferson Savings' certificate of incorporation
provides that no stockholders of Jefferson Savings, regardless of the class of
shares a stockholder holds, will have preemptive rights.
AMENDMENT OF CHARTER AND BYLAWS
UNION PLANTERS. Union Planters may amend its charter in any manner
permitted by Tennessee law. The Tennessee Business Corporation Act provides that
a corporation's charter may be amended by a majority of votes entitled to be
cast on an amendment, subject to any condition the board of directors may place
on its submission of the amendment to the stockholders. Union Planters' charter
requires a vote of two-thirds or more of the shares of capital stock entitled to
vote in an election of directors to amend the articles of the charter governing
directors and to remove a director from office, whether with or without cause. A
two-thirds vote is also required to amend, alter, or repeal the article of the
charter relating to business combinations.
The Union Planters board of directors may adopt, amend, or repeal Union
Planters' bylaws by a majority vote of the entire board of directors. The bylaws
may also be amended or repealed by action of Union Planters' stockholders.
Union Planters' charter provides that the Union Planters board of
directors must exercise all powers unless otherwise provided by law. The board
of directors may designate an executive committee consisting of five or more
directors and may, subject to certain exceptions, authorize that committee to
exercise all of the authority of the board of directors.
JEFFERSON SAVINGS. To amend a Delaware corporation's certificate of
incorporation, the Delaware General Corporation Law generally provides that the
approval of a corporation's board of directors and the affirmative vote of a
majority of (1) all shares entitled to vote on the amendment and (2) the shares
of each class of stock entitled to vote on the amendment as a class is required,
unless the corporation's certificate of incorporation provides for a greater
voting requirement. Jefferson Savings' certificate of incorporation states that
its provisions regarding meetings of stockholders, notices for nominations and
proposals, directors, removal of directors, acquisition of capital stock, the
approval required for certain business combinations, the evaluation of business
combinations, indemnification of directors, officers and employees, limitations
on directors' liability, and amendments of bylaws and certificate of
incorporation may be amended or repealed only with the approval of the holders
of at least 80% of the outstanding shares of Jefferson Savings common stock.
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Jefferson Savings' certificate of incorporation also states that
Jefferson Savings' board of directors has the power to adopt, amend or repeal
its bylaws. A bylaw may be adopted, amended or repealed by stockholders of
Jefferson Savings but only with the approval of at least 80% of the outstanding
shares of Jefferson Savings common stock.
CLASSIFIED BOARD OF DIRECTORS AND ABSENCE OF CUMULATIVE VOTING
UNION PLANTERS. Union Planters' amended and restated charter provides
that Union Planters' board of directors is divided into three classes, with each
class to be as nearly equal in number as possible. The directors in each class
serve three-year terms of office. The effect of Union Planters having a
classified board of directors is that only approximately one third of the
members of Union Planters' board of directors are elected each year, which
effectively requires two annual meetings for the Union Planters stockholders to
change a majority of the members of Union Planters' board of directors.
The purpose of dividing Union Planters' board of directors into classes
is to facilitate continuity and stability of leadership of Union Planters by
ensuring that experienced personnel familiar with Union Planters will be
represented on Union Planters' board of directors at all times, and to permit
Union Planters' management to plan for the future for a reasonable time.
However, by potentially delaying the time within which an acquirer could obtain
working control of Union Planters' board of directors, this provision may
discourage some potential mergers, tender offers, or takeover attempts.
Pursuant to Union Planters' charter, each stockholder generally is
entitled to one vote for each share of Union Planters common stock held and is
not entitled to cumulative voting rights in the election of directors. With
cumulative voting, a stockholder has the right to cast a number of votes equal
to the total number of such holder's shares multiplied by the number of
directors to be elected. The stockholder has the right to distribute all of his
votes in any manner among any number of candidates or to accumulate such shares
in favor of one candidate.
Directors are elected by a plurality of the total votes cast by all
stockholders. With cumulative voting, it may be possible for minority
stockholders to obtain representation on the board of directors. Without
cumulative voting, the holders of more than 50% of the shares of Union Planters
common stock generally have the ability to elect 100% of the directors. As a
result, the holders of the remaining shares of Union Planters common stock
effectively may not be able to elect any person to Union Planters' board of
directors. The absence of cumulative voting makes it more difficult for a Union
Planters stockholder who acquires less than a majority of the shares of Union
Planters common stock to obtain representation on Union Planters' board of
directors.
JEFFERSON SAVINGS. Jefferson Savings' certificate of incorporation
specifically provides that the holders of the shares of Jefferson Savings
capital stock are not entitled to cumulative voting in the election of
directors. Jefferson Savings' certificate of incorporation also provides for a
classified board of directors that is substantially similar to the classified
board of directors for Union Planters.
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DIRECTOR REMOVAL AND VACANCIES
UNION PLANTERS. Union Planters' charter provides that: (1) a director
may be removed by the Union Planters stockholders only if the holders of
two-thirds of the voting power of all shares of Union Planters capital stock
entitled to vote generally in the election of directors vote for such removal;
and (2) vacancies on Union Planters' board of directors may be filled only by
Union Planters' board of directors. The purpose of these provisions is to
prevent a majority stockholder from circumventing the classified board system by
removing directors and filling the vacancies with new individuals selected by
that stockholder. Accordingly, the provisions may have the effect of impeding
efforts to gain control of Union Planters' board of directors by anyone who
obtains a controlling interest in Union Planters common stock. The term of a
director appointed to fill a vacancy expires at the next meeting of stockholders
at which directors are elected.
JEFFERSON SAVINGS. Jefferson Savings' certificate of incorporation
provides that a director may only be removed for cause and only with the
affirmative vote by at least 80% of the holders of Jefferson Savings capital
stock. However, if a director of Jefferson Savings is elected by holders of a
class of Jefferson Savings preferred stock entitled to elect a director, then
the foregoing sentence will not apply to that director.
LIMITATIONS ON DIRECTOR LIABILITY
UNION PLANTERS. Union Planters' charter does not address the issue of a
director's liability to the corporation. Section 48-18-301 of the Tennessee
Business Corporation Act provides that a director shall not be liable for any
action, or failure to take action if he or she discharges his or her duties:
- in good faith;
- with the care of an ordinarily prudent person in a like position
under similar circumstances; and
- in a manner the director reasonably believes to be in the best
interests of the corporation.
In discharging his or her duties, a director may rely on the information,
opinions, reports, or statements, including financial statements, if prepared or
presented by officers or employees of the corporation whom the director
reasonably believes to be reliable. The director may also rely on such
information prepared or presented by legal counsel, public accountants or other
persons as to matters that the director reasonably believes are within the
person's competence.
JEFFERSON SAVINGS. Jefferson Savings' certificate of incorporation
eliminates personal liability of its directors for monetary damages to either
Jefferson Savings or its stockholders, except:
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- for any breach of a director's duty of loyalty to Jefferson
Savings or its stockholders;
- for acts or omissions by a director that are not in good faith,
involve intentional misconduct, or a knowing violation of the
law;
- for unlawful payment of a dividend, or stock repurchase or
redemption; and
- for any transaction in which a director derived any improper
personal benefit.
INDEMNIFICATION
UNION PLANTERS. Under the Tennessee Business Corporation Act, a
corporation may indemnify any director against liability if the director:
- conducted himself or herself in good faith;
- reasonably believed, in the case of conduct in his or her
official capacity with the corporation, that his or her conduct
was in the best interests of the corporation;
- reasonably believed, in all other cases, that his or her conduct
was at least not opposed to the corporation's best interests;
and
- in the case of any criminal proceeding, had no reasonable cause
to believe his or her conduct was unlawful.
Unless limited by its charter, a Tennessee corporation must indemnify,
against reasonable expenses incurred by him or her, a director who was wholly
successful, on the merits or otherwise, in defending any proceeding to which he
or she was a party because he or she is or was a director of the corporation.
Expenses incurred by a director in defending a proceeding may be paid by the
corporation in advance of the final disposition of the proceeding if three
conditions are met:
(1) the director must furnish the corporation a written affirmation
of the director's good faith belief that he or she has met the
standard of conduct as set forth above;
(2) the director must furnish the corporation a written undertaking
by or on behalf of a director to repay such amount if it is
ultimately determined that he or she is not entitled to be
indemnified by the corporation against such expenses; and
(3) a determination must be made that the facts then known to those
making the determination would not preclude indemnification.
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A director may apply for court-ordered indemnification under certain
circumstances. Unless a corporation's charter provides otherwise,
(1) an officer of a corporation is entitled to mandatory
indemnification and is entitled to apply for court-ordered
indemnification to the same extent as a director,
(2) the corporation may indemnify and advance expenses to an
officer, employee, or agent of the corporation to the same
extent as to a director, and
(3) a corporation may also indemnify and advance expenses to an
officer, employee, or agent who is not a director to the extent,
consistent with public policy, that may be provided by its
charter, bylaws, general or specific action of its board of
directors, or contract.
Union Planters' 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 of 1933, as amended, may be permitted to directors, officers, or persons
controlling Union Planters under the provisions described above, Union Planters
has been informed that, in the opinion of the SEC, such indemnification is
against public policy as expressed in the Securities Act of 1933, as amended,
and is therefore unenforceable.
JEFFERSON SAVINGS. Jefferson Savings shall indemnify certain persons,
including its current or former directors, officers or employees, in (1) any
threatened, pending or completed action or lawsuit brought by or in the name of
Jefferson Savings or (2) any threatened, pending or completed action or lawsuit
other than a suit brought by or in the name of Jefferson Savings. In either
situation, generally a director, officer or employee will only be entitled to be
indemnified if (1) he or she is successful on the merits of the lawsuit or (2)
he or she acted in good faith and in a manner he or she reasonably believed to
be in, or not opposed to, the best interests of Jefferson Savings. In derivative
actions, directors, officers and employees are only entitled to indemnification
for expenses and may not be indemnified for any claim for which he or she has
been adjudged liable to Jefferson Savings unless the court in which the suit was
brought determines that, in view of all the circumstances, he or she is fairly
and reasonably entitled to indemnity for such expenses as the court deems
proper. Entitlement to indemnification may be determined by:
(1) a court;
(2) a majority of the disinterested directors of Jefferson Savings;
(3) an independent legal counsel appointed by a majority of
disinterested directors of Jefferson Savings; or
(4) the stockholders of Jefferson Savings.
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SPECIAL MEETINGS OF STOCKHOLDERS
UNION PLANTERS. Special meetings of Union Planters' stockholders may be
called for any purpose or purposes, at any time, by the Chairman of the board of
directors, the President, the Secretary, or the holders of not less than
one-tenth of the shares entitled to vote at such meeting.
JEFFERSON SAVINGS. Special meetings of Jefferson Savings' stockholders
may be called for any purpose or purposes by the board of directors or by a
committee of the board of directors but may not be called by any other person.
STOCKHOLDER NOMINATIONS AND PROPOSALS
UNION PLANTERS. Union Planters' charter and bylaws do not address
whether a stockholder may nominate members of the board of directors. Holders of
Union Planters common stock are entitled to submit proposals to be presented at
an annual meeting of Union Planters stockholders. Union Planters' bylaws provide
that any proposal of a stockholder which is to be presented at any annual
meeting of stockholders must be sent so it is to be received by Union Planters
not less than 120 days in advance of the anniversary date of the proxy statement
issued in connection with the previous year's annual meeting.
JEFFERSON SAVINGS. Any stockholder of Jefferson Savings wishing to
nominate one or more directors or bring any other business before a meeting of
stockholders must provide notice in writing to Jefferson Savings at least 30
days before, and no more than sixty (60) days prior to the meeting, provided
that if less than 40 days notice of the meeting is given, stockholders have up
to 10 days after the notice to provide the required written notice.
BUSINESS COMBINATIONS
UNION PLANTERS. Union Planters' charter provides that, unless more
restrictively required by applicable law, the affirmative vote of the holders of
two-thirds or more of the outstanding shares entitled to vote for the election
of directors is required to authorize (1) any merger or consolidation of Union
Planters into another entity or (2) any sale, lease, or other disposition of all
or substantially all of Union Planters' assets to another person or entity,
except where any of these transactions will occur between Union Planters and any
of its majority-owned, direct or indirect, subsidiaries.
The requirement of a supermajority vote of stockholders to approve
certain business transactions may discourage a change in control of Union
Planters by allowing a minority of Union Planters' stockholders to prevent a
transaction favored by the majority of the stockholders. Also, in some
circumstances, the board of directors could cause a two-thirds vote to be
required to approve a transaction and thereby enable management to retain
control over the affairs of Union Planters. The primary purpose of the
supermajority vote requirement is to encourage negotiations with Union Planters'
management by groups or corporations interested in acquiring control of Union
Planters and to reduce the danger of a forced merger or sale of assets.
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As a Tennessee corporation, Union Planters is or could be subject to
certain restrictions on business combinations under Tennessee law, including,
but not limited to, combinations with interested stockholders.
Tennessee has three anti-takeover acts which are applicable to Union
Planters, the Tennessee Business Combination Act, the Tennessee Greenmail Act,
and the Tennessee Investor Protection Act. The Tennessee Control Share
Acquisition Act does not apply to Union Planters, because Union Planters'
charter does not include a provision electing to be covered by that act.
The Tennessee Business Combination Act. The Tennessee Business
Combination Act generally prohibits a "business combination" by Union Planters
or a subsidiary with an "interested stockholder" within 5 years after the
stockholder becomes an interested stockholder. But Union Planters or a
subsidiary can enter into a business combination within that period if, before
the interested stockholder became such, the Union Planters board of directors
approved:
- the business combination; or
- the transaction in which the interested stockholder became an
interested stockholder.
After that 5 year moratorium, the business combination with the
interested stockholder can be consummated only if it satisfies certain fair
price criteria or is approved by two-thirds of the other stockholders.
For purposes of the Tennessee Business Combination Act, a "business
combination" includes mergers, share exchanges, sales and leases of assets,
issuances of securities, and similar transactions. An "interested stockholder"
is generally any person or entity that beneficially owns 10% or more of the
voting power of any outstanding class or series of Union Planters stock.
Tennessee law also severely limits the extent to which Union Planters or
any of its officers or directors could be held liable for resisting any business
combination. Under the Tennessee Business Corporation Act, neither a Tennessee
corporation having any stock registered or traded on a national securities
exchange, nor any of its officers or directors, may be held liable for:
- failing to approve the acquisition of shares by an interested
stockholder on or before the date the stockholder acquired such
shares;
- seeking to enforce or implement the provisions of Tennessee law;
- failing to adopt or recommend any charter or by-law amendment or
provision relating to such provisions of Tennessee law; or
- opposing any merger, exchange, tender offer, or significant
asset sale because of a good faith belief that such transaction
would adversely affect the
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corporation's employees, customers, suppliers, the communities
in which the corporation or its subsidiaries operate or any
other relevant factor.
But the officers and directors can only consider such factors if the
corporation's charter permits the board to do so in connection with the
transaction.
The Tennessee Greenmail Act. The Tennessee Greenmail Act applies to a
Tennessee corporation that has a class of voting stock registered or traded on a
national securities exchange or registered with the SEC pursuant to Section
12(g) of the Securities Exchange Act of 1934. Under the Tennessee Greenmail Act,
Union Planters may not purchase any of its shares at a price above the market
value of such shares from any person who holds more than 3% of the class of
securities to be purchased if such person has held such shares for less than two
years, unless the purchase has been approved by the affirmative vote of a
majority of the outstanding shares of each class of voting stock issued by Union
Planters or Union Planters makes an offer, of at least equal value per share, to
all stockholders of such class.
The Tennessee Investor Protection Act. The Tennessee Investor Protection
Act generally requires the registration, or an exemption from registration,
before a person can make a tender offer for shares of a Tennessee corporation
which, if successful, would result in the offeror beneficially owning more than
10% of any class of shares. Registration requires the filing with the Tennessee
Commissioner of Commerce and Insurance of a registration statement, a copy of
which must be sent to the target company, and the public disclosure of the
material terms of the proposed offer. Additional requirements are imposed under
that act if the offeror beneficially owns 5% or more of any class of equity
securities of the target company, any of which was purchased within one year
prior to the proposed takeover offer. The Tennessee Investor Protection Act also
prohibits fraudulent and deceptive practices in connection with takeover offers,
and provides remedies for violations.
The Tennessee Investor Protection Act does not apply to an offer
involving a vote by holders of equity securities of the offeree company,
pursuant to its charter, on a merger, consolidation or sale of corporate assets
in consideration of the issuance of securities of another corporation, or on a
sale of its securities in exchange for cash or securities of another
corporation. Also excepted from the Tennessee Investor Protection Act are tender
offers which are open on substantially equal terms to all stockholders, are
recommended by the board of directors of the target company and include full
disclosure of all terms.
The Tennessee Investor Protection Act applies to tender offers for
corporations with substantial ties in Tennessee, including corporations
incorporated in Tennessee or which have their principal offices in the state.
The Sixth Circuit Court of Appeals has held that the application of this act,
and Tennessee's other takeover statutes, to a target company that wasn't
organized under Tennessee law is unconstitutional. Tyson Foods, Inc. v.
McReynolds, 865 F.2d 99 (6th Cir. 1989).
The acts described above along with the provisions of Union Planters'
charter regarding business combinations might be deemed to make Union Planters
less attractive as a candidate for
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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 two-thirds of the outstanding shares of Union
Planters common stock, the acquirer would not thereby obtain the ability to
replace a majority of the Union Planters board of directors until at least the
second annual meeting of stockholders following the acquisition. Furthermore the
acquirer would not obtain the ability immediately to effect a merger,
consolidation, or other similar business combination unless the described
conditions were met.
As a result, Union Planters' stockholders may be deprived of
opportunities to sell some or all of their shares at prices that represent a
premium over prevailing market prices in a takeover context. The provisions
described above also may make it more difficult for Union Planters' stockholders
to replace the Union Planters board of directors or management, even if the
holders of a majority of the Union Planters common stock should believe that
such replacement is in the interests of Union Planters. As a result, such
provisions may tend to perpetuate the incumbent Union Planters board of
directors and management.
JEFFERSON SAVINGS. Jefferson Savings' certificate of incorporation
provides that the affirmative vote of the holders of not less than 80% of the
outstanding shares of Jefferson Savings common stock is required to approve
certain transactions with Jefferson Savings or any affiliate of Jefferson
Savings specified therein, including any merger, consolidation, sale of all or
substantially all of its assets, share exchange, or dissolution. The
supermajority provision is inapplicable if the transaction has been approved (or
in the case of a dissolution recommended for stockholder approval) by two-thirds
of all directors of Jefferson Savings then in office or if the other entity is a
corporation of which a majority of the outstanding shares of all classes of
stock entitled to vote in elections of directors is owned of record or
beneficially by Jefferson Savings or its affiliates. The merger was unanimously
approved by Jefferson Savings' board of directors, making the supermajority
provision inapplicable to it.
For purposes of such provision, an "affiliate" is any individual,
corporation, partnership, trust, estate, or other entity who directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, the party specified. Jefferson Savings'
certificate of incorporation further provides that the board of directors, when
evaluating the merits of any transaction described in such provision, including
any merger, consolidation, sale of assets, or share exchange, or any offer of a
party to make a tender or exchange offer for any equity security of Jefferson
Savings, shall, in connection with the exercise of its judgment in determining
what is in the best interest of Jefferson Savings and its stockholders, give due
consideration to all relevant factors, including, without limitation, the social
and economic effects on the employees, depositors, customers, suppliers, and
other constituents of Jefferson Savings and its affiliates, and on the
communities in which Jefferson Savings and its affiliates operate or are
located.
The supermajority provision of Jefferson Savings' certificate of
incorporation may have the effect of delaying, deferring, or preventing a change
in control of Jefferson Savings, which some holders of Jefferson Savings common
stock may deem to be in their best interests.
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The constituency provision of Jefferson Savings' certificate of
incorporation may discourage or make more difficult certain acquisition
proposals or business combinations and, therefore, may adversely affect the
ability of stockholders to benefit from certain transactions opposed by
Jefferson Savings' board of directors. The constituency provision would allow
Jefferson Savings' board of directors to take into account the effects of an
acquisition proposal on a broad number of constituencies and to consider any
potential adverse effect in determining whether to accept or reject such
proposal.
As a Delaware corporation, Jefferson Savings is or could be subject to
certain restrictions on business combinations with interested stockholders under
Delaware law. Under the Delaware General Corporation Law, Jefferson Savings may
not engage in a "business combination" with an "interested stockholder" for a
period of three years after the stockholder became an interested stockholder
unless:
- prior to the time the person became an interested stockholder,
the board of directors approved either the business combination
or the transaction in which the person became an interested
stockholder;
- the person becomes the owner of at least 85% of Jefferson
Savings' outstanding voting stock (excluding shares held by
management or in certain benefit plans) as part of the
transaction in which they became an interested stockholder; or
- the business combination is approved by the board of directors
and at least a two-thirds' of the outstanding voting stock
(excluding shares owned by the interested stockholder).
For purposes of the Delaware statute, an interested stockholder is any
person who owns 15% or more of the corporation's voting stock. Business
combinations include mergers of a corporation or its majority owned
subsidiaries, sales, leases and other dispositions of assets, issuances of
securities, and similar transactions involving the interested stockholder.
DISSENTERS' RIGHTS OF APPRAISAL
UNION PLANTERS. Under the Tennessee Business Corporation Act, a
stockholder is generally entitled to dissent from a corporate action and obtain
payment of the fair value of his or her shares in certain events. These events
generally include:
(1) mergers, share exchanges and sales of substantially all of the
corporation's assets other than in the usual and regular course
of business, if the stockholder is entitled to vote on the
transaction;
(2) certain types of amendments of the corporation's charter that
materially and adversely affects a stockholder's rights; or
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(3) other corporate actions taken pursuant to a stockholder vote, to
the extent the charter, bylaws, or a resolution of the board of
directors provide for dissenters' rights. Union Planters'
charter and bylaws do not provide for any such additional
dissenters' rights.
Under the Tennessee Business Corporation Act, a stockholder will not
have the right to dissent as to any shares which are listed on a national
securities exchange registered under Section 6 of the Exchange Act or are
national market system securities under the Exchange Act rules. Union Planters
common stock is currently listed on the New York Stock Exchange. Accordingly,
stockholders of Union Planters will NOT be able to assert dissenters' rights
with respect to their shares of Union Planters common stock even if Union
Planters were to engage in one of the actions listed above.
JEFFERSON SAVINGS. Because Jefferson Savings is a Delaware corporation
with its common stock listed on the Nasdaq National Market, holders of Jefferson
Savings common stock do not have statutory dissenters' rights, unless they are
required to accept a form of consideration other than stock in the acquiring
corporation, stock which is listed on a national securities exchange or national
market system or held by more than 2,000 holders or cash in lieu of fractional
shares. Since Jefferson Savings' stockholders will receive stock in Union
Planters in the merger, they will not be entitled to exercise dissenters'
rights..
STOCKHOLDERS' RIGHTS TO EXAMINE BOOKS AND RECORDS
UNION PLANTERS. The Tennessee Business Corporation Act provides that a
stockholder of a Tennessee corporation may inspect and copy books and records of
the corporation during regular business hours, if he or she gives the
corporation written notice of his or her demand at least five business days
before the date of the inspection. In order to inspect certain records, written
demand must also be made in good faith and for a proper purpose and must
describe with reasonable particularity the purpose of the request and the
records the stockholder desires to inspect.
JEFFERSON SAVINGS. The Delaware General Corporation Law provides that
any stockholder of a Delaware corporation may inspect and copy books and records
of the corporation during normal business hours, if he or she gives the
corporation a proper written demand, under oath, that states the purpose of the
inspection, prior to the time the stockholder wants to examine the books and
records of the corporation. If a stockholder makes a proper written demand on
the corporation to inspect the books and records, and five business days have
elapsed since the written demand was given, then the stockholder may seek help
from a court to compel the corporation to corporate with the stockholder's
demand to inspect its books and records.
DIVIDENDS
UNION PLANTERS. Union Planters' ability to pay dividends on its common
stock is governed by the Tennessee Business Corporation Act. Under the Tennessee
Business Corporation Act, 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
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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 stockholders whose preferential rights
are superior to those receiving the distribution.
There are various statutory limitations on the ability of the Union
Planters' banking subsidiaries to pay dividends to Union Planters. See "CERTAIN
REGULATORY CONSIDERATIONS -- Payment of Dividends."
JEFFERSON SAVINGS. Jefferson Savings' ability to pay dividends on
Jefferson Savings common stock is substantially similar to Union Planters'
ability to do so as described above.
COMPARATIVE MARKET PRICES AND DIVIDENDS
Union Planters common stock is traded on the New York Stock Exchange
under the symbol "UPC." Jefferson Savings common stock is traded on the Nasdaq
National Market under the symbol "JSBA." The following table sets forth, for the
indicated periods, the high and low closing sale prices for the Union Planters
and Jefferson Savings common stock as reported by the New York Stock Exchange
and Nasdaq National Market, respectively, and the cash dividends declared per
share of Union Planters and Jefferson Savings common stock for the indicated
periods. The stock prices do not include retail mark-ups, mark-downs or
commissions.
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<TABLE>
<CAPTION>
UNION PLANTERS JEFFERSON SAVINGS
------------------------------------ -----------------------------------------------
Cash Cash
Price Range Dividends Paid Price Range Dividends Paid
----------- -----------
High Low Per Share High Low Per Share
---- --- --------- ---- --- ---------
<S> <C> <C> <C> <C> <C> <C>
1998
-----------------------------
First Quarter............. $67.31 $58.38 $ .50 $30.25 $19.88 $ .07
Second Quarter ........... 62.56 53.94 .50 31.88 29.13 .07
Third Quarter............. 61.94 40.25 .50 31.56 16.00 .07
Fourth Quarter............ 50.25 43.19 .50 16.31 11.00 .07
-------- -------
Total.................. $2.00 .28
======== =======
1999 .07
-----------------------------
First Quarter............. $48.75 $43.00 $ .50 16.75 11.38 $ .07
Second Quarter............ 45.31 40.31 .50 14.50 10.63 .07
Third Quarter............. 49.00 39.19 .50 13.00 10.69 .07
Fourth Quarter ........... 46.06 38.56 .50 12.25 10.44 .07
-------- -------
Total............... $2.00 .28
======== =======
2000
-----------------------------
First Quarter............ $37.25 $25.63 $ .50 $13.44 $10.63 $ .07
Second Quarter........... 33.88 27.69 .50 11.50 10.56 .07
Third Quarter............ 33.81 28.69 .50 13.75 9.75 .07
Fourth Quarter (through
___________, 2000)....... .50 .07
-------- -------
Total.................. $2.00 $ .28
======== =======
</TABLE>
On December ___, 2000, the closing sale price of Union Planters common
stock as reported on the New York Stock Exchange was $_____ per share and the
closing sale price of Jefferson Savings common stock as reported on the Nasdaq
National Market was $_____ per share. On September 19, 2000, the last business
day prior to public announcement of the merger, the last sale price of Union
Planters common stock as reported by the New York Stock Exchange was $33.06 per
share and the last sale price of Jefferson Savings common stock as reported on
the Nasdaq National Market was $11.31 per share.
The holders of Union Planters common stock are entitled to receive
dividends when and if declared by Union Planters' board of directors out of
funds legally available therefor. Although Union Planters currently intends to
continue to pay quarterly cash dividends on the Union Planters common stock,
there can be no assurance that Union Planters' dividend policy will remain
unchanged after completion of the merger. The declaration and payment of
dividends thereafter will depend upon business conditions, operating results,
capital and reserve requirements, and the Union Planters board of directors'
consideration of other relevant factors.
The holders of Jefferson Savings common stock are entitled to receive
dividends when and if declared by Jefferson Savings' board of directors out of
funds legally available therefor. Jefferson Savings has paid cash dividends each
quarter since the first quarter of 1996. The
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declaration and payment of dividends will depend upon business conditions,
operating results, capital and reserve requirements, and the Jefferson Savings
board of directors' consideration of other relevant factors.
Union Planters and Jefferson Savings are legal entities separate and
distinct from their subsidiaries and their revenues depend in significant part
on the payment of dividends from their respective subsidiary depository
institutions. Union Planters' and Jefferson Savings' subsidiary depository
institutions are subject to certain legal restrictions on the amount of
dividends they are permitted to pay. See "CERTAIN REGULATORY CONSIDERATIONS --
Payment of Dividends."
BUSINESS OF JEFFERSON SAVINGS
Jefferson Savings, a Delaware corporation, is a unitary savings and loan
holding company. On September 30, 2000, Jefferson Savings had, on a consolidated
basis, total assets of approximately $1.7 billion, total loans of approximately
$1.4 billion, total deposits of approximately $917.5 million, and total
stockholders' equity of approximately $135.2 million.
Jefferson Savings conducts its business activities through Jefferson
Heritage Bank, its federal savings bank subsidiary. Through Jefferson Heritage
Bank and its four subsidiaries, Jefferson Heritage Mortgage Company, Jefferson
Financial, Inc., Jefferson Financial Corporation and First Service Corporation,
Inc., Jefferson Savings offers a broad range of financial services, in both
Missouri and Texas. Jefferson Heritage Bank has nine branches in Missouri and
seventeen branches in Texas.
BUSINESS OF UNION PLANTERS
Union Planters, a Tennessee corporation, is a registered bank holding
company. On September 30, 2000, Union Planters had, on a consolidated basis,
total assets of approximately $34.3 billion, total loans of approximately $23.4
billion, total deposits of approximately $23.1 billion, and total stockholders'
equity of approximately $2.8 billion.
Union Planters is the largest bank holding company headquartered in
Tennessee and, as of June 30, 2000, was the 27th largest bank holding company
headquartered in the United States based on total assets.
Union Planters conducts its business activities through Union Planters
Bank, National Association, its principal bank subsidiary, and a number of other
banking and banking-related subsidiaries. Through its various subsidiaries,
Union Planters provides a diversified range of financial services, maintaining
on September 30, 2000, 863 banking offices and 1,056 ATMs in the states in which
it operates, as follows:
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<TABLE>
<CAPTION>
Full Service and
Limited Service
State Branches ATMs
----- -------- ----
<S> <C> <C>
Alabama............................ 21 19
Arkansas........................... 35 31
Florida............................ 80 86
Illinois........................... 56 59
Indiana............................ 78 86
Iowa............................... 28 34
Kentucky........................... 40 37
Louisiana.......................... 25 21
Mississippi........................ 137 127
Missouri........................... 135 170
Tennessee.......................... 213 366
Texas.............................. 15 20
-------- ----------
863 1,056
======== ==========
</TABLE>
Acquisitions have been an important part of Union Planters' business
strategy. Union Planters completed 4 acquisitions in 1999, after completing 18
acquisitions (in 9 states) in 1998. Information about the banking organizations
acquired by Union Planters since January 1, 1997, their asset size and the
consideration paid, is included in the table titled "Acquisitions Completed
Since January 1, 1997" on page 14 of the 1999 Union Planters Corporation
Shareholders Report, which is incorporated by reference in its Form 10-K for
1999, and is incorporated by reference herein. Union Planters has made one
non-banking acquisition in 2000 prior to entering into the agreement and plan of
reorganization with Jefferson Savings.
Beginning in 1998, Union Planters implemented a strategy of
consolidating and streamlining substantially all of its banking operations. As a
part of this strategy, local management retains broad discretion in serving
Union Planters' local customer base and making customer decisions, while banking
products are being standardized, new methods of product delivery, such as
Internet banking, are being developed, and operational functions, including
accounting, deposit services, item processing, mortgage servicing, and credit
administration, are being centralized on a company-wide or regional basis. The
goal of this strategy, which is ongoing, is to improve efficiency and customer
service and to enable Union Planters to realize cost savings and to benefit from
the economies of scale available as a result of its growth through acquisitions.
In the short-term, this strategy demands a significant amount of management time
and attention. In addition, there are a number of factors that could affect its
ultimate success, including customer response in the communities in which Union
Planters has banking offices.
Union Planters expects to continue to take advantage of the
consolidation of the financial services industry by further developing its
franchise through strategic acquisitions of financial institutions. Future
acquisitions may entail the payment by Union Planters of consideration in excess
of the book value of the underlying net assets acquired, may result in the
issuance of additional shares of Union Planters capital stock or the incurring
of additional indebtedness by
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Union Planters, and could have a dilutive effect on the earnings or book value
per share of Union Planters common stock. Moreover, significant charges against
earnings are sometimes required incidental to acquisitions.
The principal executive offices of Union Planters are located at 7130
Goodlett Farms Parkway, Memphis, Tennessee 38018, and its telephone number at
such address is (901) 580-6000. Additional information with respect to Union
Planters and its subsidiaries is included in documents incorporated by reference
in this proxy statement-prospectus. See "WHERE YOU CAN FIND MORE INFORMATION."
CERTAIN REGULATORY CONSIDERATIONS
Union Planters is a bank holding company registered with the Federal
Reserve. As such, Union Planters and its non-bank subsidiaries are subject to
the supervision, examination, and reporting requirements of the BHCA and the
regulations of the Federal Reserve. Jefferson Savings is a unitary savings and
loan holding company and as such, it and its subsidiaries are subject to the
supervision, examination and reporting requirements of the Home Owners' Loan Act
and the regulations of the Office of Thrift Supervision. Union Planters' and
Jefferson Savings' banking subsidiaries are also subject to supervision and
examinations by federal banking authorities. The following discussion summarizes
the regulatory framework applicable to banks, savings banks, and their
respective holding companies and provides specific information related to Union
Planters. Information relating to Jefferson Savings is included in Jefferson
Savings' 1999 Annual Report on Form 10-K. A more complete discussion of Union
Planters is included in Union Planters' 1999 Annual Report on Form 10-K. See
"WHERE YOU CAN FIND MORE INFORMATION."
In determining whether a particular activity is permissible, the Federal
Reserve must consider whether the performance of such an activity reasonably can
be expected to produce benefits to the public that outweigh possible adverse
effects. Possible benefits the Federal Reserve considers include greater
convenience, increased competition, or gains in efficiency. Possible adverse
effects include undue concentration of resources, decreased or unfair
competition, conflicts of interest, or unsound banking practices. Despite prior
approval, the Federal Reserve has the power to order a holding company or its
subsidiaries to terminate any activity or to terminate its ownership or control
of any subsidiary when it has reasonable cause to believe that a serious risk to
the financial safety, soundness, or stability of any bank subsidiary of that
bank holding company may result from such activity.
The banks owned by Union Planters are members of the Federal Deposit
Insurance Corporation. Their deposits are insured by the Federal Deposit
Insurance Corporation to the extent provided by law. Each bank is also subject
to numerous state and federal statutes and regulations that affect its business,
activities, and operations, and each is supervised and examined by one or more
state or federal bank regulatory agencies.
The Federal Deposit Insurance Corporation in the case of state-chartered
nonmember banks, the Office of Thrift Supervision in the case of state and
federally chartered thrift institutions, the Federal Reserve in the case of
state-chartered member banks, and the Office of
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<PAGE> 85
the Comptroller of the Currency in the case of national banks, supervise the
subsidiaries of Union Planters and Jefferson Savings and regularly examine the
operations of such institutions. Appropriate state regulators also have
comparable authority over state-chartered banking and thrift institutions.
Jefferson Savings does not have any subsidiaries that are regulated by state
regulatory authorities. The federal and state regulators 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.
The BHCA prohibits Union Planters from:
(1) engaging in activities other than banking, managing, or
controlling banks or other permissible subsidiaries; and
(2) acquiring or retaining direct or indirect control of any company
engaged in any activities other than those activities determined
by the Federal Reserve to be so closely related to banking or
managing or controlling banks as to be a proper incident
thereto.
As explained in "DESCRIPTION OF TRANSACTION - Regulatory Approval,"
above, the acquiring of control of a savings and loan holding company by a bank
holding company is a non-banking activity that requires prior approval of the
Reserve Bank. The Reserve Bank applies several criteria to this kind of
acquisition, and, while Union Planters believes it can satisfy the Reserve Bank,
there can be no assurance that approval will be granted. Although the state
banking regulators in Missouri and Texas will have an opportunity to comment on
the application to the Federal Reserve, only the prior approval of the Federal
Reserve is required to consummate the merger. There can be no assurance that the
state banking regulators will comment favorably on the application to the
Federal Reserve, although Union Planters and Jefferson Savings have no reason to
believe that those comments will be adverse to the merger.
Under the Gramm-Leach-Bliley Act which became effective in March 2000
and significantly relaxed prior restrictions on bank holding company activities,
an eligible bank holding company may elect to be a "financial holding company"
and thereafter may engage in a range of activities that are financial in nature
and that were not previously permissible for banks and bank holding companies.
For a bank holding company to be eligible for financial holding company status,
all of its subsidiary financial institutions must be well-capitalized and well
managed. A bank holding company may effect financial holding company status by
filing a declaration with the Federal Reserve that it elects to be a financial
holding company. A financial holding company may engage directly or through a
subsidiary in the statutorily authorized activities of securities dealing,
underwriting, and market making, insurance underwriting and agency activities,
merchant banking, and insurance company portfolio investments, and in any
activity that the Federal Reserve determines by rule or order to be financial in
nature or incidental to such financial activity. The Federal Reserve has
proposed limits on certain securities and merchant banking activities. The
Federal Reserve must deny expanded authority to any bank holding company that
seeks to effect financial holding company status if that bank holding company
received less than a satisfactory rating on its most recent Community
Reinvestment Act review as of the time it submits its declaration.
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<PAGE> 86
Although Union Planters currently meets the prerequisites for financial holding
company status, it has not filed an election with the Federal Reserve.
The Gramm-Leach-Bliley Act also permits securities brokerage firms and
insurance companies to own banks and bank holding companies. The Act also seeks
to streamline and coordinate regulation of integrated financial holding
companies, providing generally for "umbrella" regulation of financial holding
companies by the Federal Reserve, and for functional regulation of banking
activities by bank regulators, securities activities by securities regulators,
and insurance activities by insurance regulators.
Union Planters previously has acquired bank holding companies and their
subsidiary banks. These transactions are subject to certain restrictions under
the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994. This
statute does not apply, however, to the acquisition of a savings and loan
holding company or its subsidiary savings bank. The Missouri Division of Finance
has advised that a state law prohibiting acquisitions in which subsidiaries of
the resulting holding company would control more than 13% of the total deposits
in the state may apply to a transaction involving the acquisition of a savings
and loan holding company. The Texas Department of Banking similarly has advised
that a transaction resulting in control of more than 20% of the states' total
deposits would be prohibited. The deposits controlled by Union Planters
subsidiaries would not exceed either the 13% or the 20% ceiling after
consummation of the transaction.
PAYMENT OF DIVIDENDS
Union Planters is a legal entity separate and distinct from its banking,
thrift, and other subsidiaries. The principal sources of cash flow of Union
Planters, including cash flow to pay dividends to its stockholders, are
dividends from its subsidiary depository institutions. There are statutory and
regulatory limitations on the payment of dividends by these subsidiary
depository institutions to Union Planters, as well as by Union Planters and
Jefferson Savings to its stockholders.
As to the payment of dividends, each of Union Planters' state-chartered
banking subsidiaries is subject to the laws and regulations of the state in
which the bank is located, and to the regulations of the bank's primary federal
regulator. Union Planters' subsidiaries that are thrift institutions, including
Jefferson Heritage Bank if the merger is consummated, are subject to the Office
of Thrift Supervision's capital distributions regulations, and those that are
national banks, such as Union Planters Bank, National Association, are subject
to the regulations of the Office of the Comptroller of the Currency. Jefferson
Heritage Bank is a thrift institution.
If the federal banking regulator determines that a depository
institution under its jurisdiction is engaged in or is about to engage in an
unsafe or unsound practice, the regulator may require, after notice and hearing,
that the institution cease and desist from such practice. Depending on the
financial condition of the depository institution, an unsafe or unsound practice
could include the payment of dividends. The federal banking agencies have
indicated that paying dividends that deplete a depository institution's capital
base to an inadequate level would be an unsafe and unsound banking practice.
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<PAGE> 87
Under the Federal Deposit Insurance Corporation Improvement Act of 1991, 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." The federal agencies have also issued policy statements that
provide that bank holding companies and insured banks should generally only pay
dividends out of current operating earnings.
At October 1, 2000, under dividend restrictions imposed under federal
and state laws, Union Planters' banking subsidiaries, without obtaining
governmental approvals, could declare aggregate dividends to Union Planters of
approximately $196 million. The dividends to be paid in the fourth quarter of
2000 will be limited by management to approximately $78 million due to capital
and liquidity requirements of individual financial institutions. At September
30, 2000, under dividend restrictions imposed under federal and state laws,
Jefferson Heritage Bank, without obtaining governmental approvals could declare
a dividend to Jefferson Savings of approximately $9.7 million.
The payment of dividends by Union Planters and its bank subsidiaries may
also be affected or limited by other factors, such as the requirement to
maintain adequate capital above regulatory guidelines.
CAPITAL ADEQUACY
Union Planters and its banking subsidiaries are required to comply with
the capital adequacy standards established by the Federal Reserve in the case of
Union Planters, and the appropriate federal banking regulator in the case of
each Union Planters bank. There are two basic measures of capital adequacy for
bank holding companies and the depository institutions that they own: a
risk-based measure and a leverage measure. All applicable capital standards must
be satisfied for a bank holding company to be considered in compliance.
The risk-based capital standards are designed to make regulatory capital
requirements more sensitive to differences in risk profiles 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 to risk-weighted assets (including certain off-balance-sheet items, such
as standby letters of credit) is 8.0%. At least half of Total Capital must be
composed of common equity, undivided profits, minority interests in the equity
accounts of consolidated subsidiaries, noncumulative perpetual preferred stock,
and a limited amount of cumulative perpetual preferred stock, less goodwill and
certain other intangible assets ("Tier 1 Capital"). The remainder may consist of
subordinated debt, other preferred stock, and a limited amount of loan loss
reserves ("Tier 2 Capital"). At September 30, 2000, Union Planters' consolidated
Total Capital Ratio and its Tier 1 Capital Ratio (i.e., the ratio of Tier 1
Capital to risk-weighted assets) were 11.59% and 8.57%, respectively.
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<PAGE> 88
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 total assets, less
goodwill and certain other intangible assets, of 5% 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 4%. Union Planters' leverage ratio at September 30,
2000, was 8.17%. The guidelines also provide that bank holding companies that
experience internal growth or make acquisitions will be expected to maintain
strong capital positions substantially above the minimum supervisory levels
without significant reliance on intangible assets. The Federal Reserve will
consider a "tangible Tier 1 Capital Leverage Ratio" (deducting all intangibles)
and other indicia of capital strength in evaluating proposals for expansion or
new activities.
Each of the Union Planters' banks is subject to risk-based and leverage
capital requirements adopted by its federal banking regulator. Those
requirements are similar to those adopted by the Federal Reserve for bank
holding companies. Each of Union Planters' banks was in compliance with those
minimum capital requirements as of September 30, 2000. No federal banking agency
has advised Union Planters or its bank subsidiaries of any higher specific
minimum capital ratio requirement applicable to it.
A bank or thrift that fails to meet its capital guidelines may be
subject to a variety of enforcement remedies and certain other restrictions on
its business. Remedies could include the issuance of a capital directive, the
termination of deposit insurance by the Federal Deposit Insurance Corporation,
and a prohibition on the taking of brokered deposits. As described below,
substantial additional restrictions can be imposed upon Federal Deposit
Insurance Corporation-insured depository institutions that fail to meet their
capital requirements. See "-- Prompt Corrective Action."
The federal bank regulators continue to indicate their desire to raise
the capital requirements that apply to banks beyond their current levels. The
Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of
the Comptroller of the Currency have proposed an amendment to the risk-based
capital standards that would calculate the change in a bank's net economic value
attributable to increases and decreases in market interest rates and would
require banks with excessive interest rate risk exposure to hold additional
amounts of capital against such exposures. The Office of Thrift Supervision has
already included an interest-rate risk component in its risk-based capital
guidelines for savings associations that it regulates.
SUPPORT OF SUBSIDIARY INSTITUTIONS
Under Federal Reserve policy, Union Planters is expected to act as a
source of financial strength for, and commit its resources to support, each
Union Planters' bank subsidiary. This support may be required at times when
Union Planters may not be inclined to provide it. In addition, any capital loans
by a bank holding company to any of its bank subsidiaries are subordinate to the
payment of deposits and to certain other indebtedness. In the event of a bank
holding company's bankruptcy, any commitment by the bank holding company to a
federal bank regulatory agency to maintain the capital of a bank subsidiary will
be assumed by the bankruptcy trustee and entitled to a priority of payment.
While the OTS does not have the same formal policy with
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<PAGE> 89
respect to holding companies that control savings banks, it often in practice
will look to the holding company to support a subsidiary that the OTS deems is
troubled.
A depository institution insured by the Federal Deposit Insurance
Corporation can be held liable for any loss incurred by, or reasonably expected
to be incurred by, the Federal Deposit Insurance Corporation in connection with
the default of a commonly controlled Federal Deposit Insurance
Corporation-insured depository institution or any assistance provided by the
Federal Deposit Insurance Corporation to any commonly controlled Federal Deposit
Insurance Corporation-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 Federal Deposit Insurance Corporation's claim for
damages is superior to claims of stockholders of the insured depository
institution or its holding company, but is subordinate to claims of depositors,
secured creditors, and holders of subordinated debt (other than affiliates) of
the commonly controlled insured depository institution. Union Planters' banks
are subject to these cross-guarantee provisions. As a result, any loss suffered
by the Federal Deposit Insurance Corporation in respect of any of Union
Planters' bank subsidiaries would likely result in assertion of the
cross-guarantee provisions, the assessment of estimated losses against Union
Planters' banking or thrift affiliates, and a potential loss of Union Planters'
investments in its other banks.
PROMPT CORRECTIVE ACTION
The Federal Deposit Insurance Corporation Improvement Act of 1991
establishes a system of prompt corrective action to resolve the problems of
undercapitalized institutions. Under this system, which became effective in
December 1992, the federal banking regulators are required to establish five
capital categories (well capitalized, adequately capitalized, undercapitalized,
significantly undercapitalized, and critically undercapitalized). With respect
to institutions in the three undercapitalized categories, the regulators must
take certain supervisory actions, and are authorized to take other discretionary
actions. The severity of the actions will depend upon the capital category in
which the institution is placed. Generally, subject to a narrow exception, the
Federal Deposit Insurance Corporation Improvement Act of 1991 requires the
banking regulator to appoint a receiver or conservator for an institution that
is critically undercapitalized. The federal banking agencies have specified the
relevant capital level for each category.
A depository institution is deemed to be well capitalized if it:
- has a Total Capital Ratio of 10.0% or greater;
- has a Tier 1 Capital Ratio of 6.0% or greater;
- has a leverage ratio of 5.0% or greater; and
- is not subject to any written agreement, order, capital
directive, or prompt corrective action directive issued by its
federal banking agency.
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<PAGE> 90
A depository institution is considered to be adequately capitalized if it has:
- a Total Capital Ratio of 8.0% or greater;
- a Tier 1 Capital Ratio of 4.0% or greater; and
- a leverage ratio of 4.0% or greater.
A depository institution is considered to be undercapitalized if it has:
- a Total Capital Ratio of less than 8.0%;
- a Tier 1 Capital Ratio of less than 4.0%; or
- a leverage ratio of less than 4.0%.
A depository institution is considered to be significantly undercapitalized if
it has:
- a Total Capital Ratio of less than 6.0%;
- a Tier 1 Capital Ratio of less than 3.0%; or
- a leverage ratio of less than 3.0%.
An institution that has a tangible equity capital to assets ratio equal to or
less than 2.0% is deemed to be critically undercapitalized. "Tangible equity"
includes core capital elements counted as Tier 1 Capital for purposes of the
risk-based capital standards, plus the amount of outstanding cumulative
perpetual preferred stock (including related surplus), minus all intangible
assets, with certain exceptions. A depository institution may be deemed to be in
a capitalization category that is lower than is indicated by its actual capital
position if it receives an unsatisfactory examination rating.
An institution that is categorized as undercapitalized, significantly
undercapitalized, or critically undercapitalized is required to submit an
acceptable capital restoration plan to its appropriate federal banking agency.
In addition, a bank holding company must guarantee that a subsidiary bank meet
its capital restoration plan. This obligation to fund a capital restoration plan
is limited to the lesser of 5.0% of an undercapitalized subsidiary's assets or
the amount required to meet regulatory capital requirements. Except in
accordance with an accepted capital restoration plan or with the approval of the
Federal Deposit Insurance Corporation, an undercapitalized institution is also
generally prohibited from increasing its average total assets, making
acquisitions, establishing any branches, or engaging in any new line of
business. In addition, its federal banking agency is given authority with
respect to any undercapitalized institution to take any of the actions it is
required to or may take with respect to a significantly undercapitalized
institution if it determines "that those actions are necessary to carry out the
purpose" of the Federal Deposit Insurance Corporation Improvement Act of 1991.
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For those institutions that are significantly undercapitalized or
undercapitalized and either fail to submit an acceptable capital restoration
plan or fail to implement an approved capital restoration plan, its federal
banking agency must require the institution to:
(1) sell enough shares, including voting shares, to become
adequately capitalized;
(2) merge with (or be sold to) another institution (or holding
company), but only if grounds exist for appointing a conservator
or receiver;
(3) restrict certain transactions with its banking affiliates;
(4) restrict transactions with bank or non-bank affiliates;
(5) restrict interest rates that the institution pays on deposits to
"prevailing rates" in the institution's "region";
(6) restrict asset growth or reduce total assets;
(7) alter, reduce, or terminate activities;
(8) hold a new election of directors;
(9) dismiss any director or senior executive officer who held office
for more than 180 days immediately before the institution became
undercapitalized, provided that in requiring dismissal of a
director or senior officer, the agency must comply with certain
procedural requirements, including the opportunity for an appeal
in which the director or officer will have the burden of proving
his or her value to the institution;
(10) employ "qualified" senior executive officers;
(11) cease accepting deposits from correspondent depository
institutions;
(12) divest certain nondepository affiliates which pose a danger to
the institution; or
(13) be divested by a parent holding company.
In addition, without the prior approval of its federal banking agency, a
significantly undercapitalized institution may not pay any bonus to any senior
executive officer or increase the rate of compensation for such an officer.
DESCRIPTION OF UNION PLANTERS CAPITAL STOCK
Union Planters' charter currently authorizes the issuance of 300,000,000
shares of Union Planters common stock and 10,000,000 shares of Union Planters
preferred stock. On October 31,
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2000, 134,756,611 shares of Union Planters common stock were outstanding and
approximately 19,122,877 shares were earmarked for issuance in connection with
currently outstanding Union Planters options, Union Planters' dividend
reinvestment plan, two small convertible debt issues and with respect to
conversion rights of currently outstanding Union Planters Series E preferred
stock. In addition, on October 31, 2000, 797,683 shares of Union Planters' 8%
Cumulative, Convertible Series E preferred stock, were outstanding. On October
31, 2000, none of Union Planters' 300,000 authorized shares of Series F
preferred stock were issued and outstanding and management is unaware of the
existence of circumstances from which it may be inferred that such issuance is
imminent. THE CAPITAL STOCK OF UNION PLANTERS DOES NOT REPRESENT OR CONSTITUTE A
DEPOSIT ACCOUNT AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE BANK INSURANCE FUND, THE SAVINGS ASSOCIATION INSURANCE FUND, OR ANY
GOVERNMENTAL AGENCY.
UNION PLANTERS COMMON STOCK
GENERAL. Shares of Union Planters common stock may be issued at such
time or times and for such consideration as the Union Planters board of
directors may deem advisable, subject to such limitations as may be set forth in
the laws of the State of Tennessee, Union Planters' amended and restated charter
or bylaws or the rules of the New York Stock Exchange. Union Planters Bank,
National Association is the Registrar, Transfer Agent and Dividend Disbursing
Agent for shares of Union Planters common stock. Its address is Union Planters
Bank, Corporate Trust Department, 1 South Church Street, Belleville, Illinois
62220.
DIVIDENDS. Subject to the preferential dividend rights applicable to
outstanding shares of the Union Planters preferred stock and subject to
applicable requirements, if any, with respect to the setting aside of sums for
purchase, retirement, or sinking funds, if any, for all outstanding Union
Planters preferred stock, the holders of the Union Planters common stock are
entitled to receive, to the extent permitted by law, only such dividends as may
be declared from time to time by the Union Planters board of directors.
Union Planters has the right to, and may from time to time, enter into
borrowing arrangements or issue other debt instruments, the provisions of which
may contain restrictions on payment of dividends and other distributions on
Union Planters common stock and Union Planters preferred stock. Union Planters
has no such arrangements in effect at the date hereof. In December 1996, Union
Planters caused to be issued $200,000,000 in aggregate liquidation amount of
8.20% Capital Trust Pass-through Securities ("Union Planters Capital
Securities") through a Delaware trust subsidiary. Pursuant to the terms of the
governing instruments, Union Planters would be prohibited from paying dividends
on any Union Planters common stock or Union Planters preferred stock if all
quarterly payments on the Union Planters Capital Securities had not been paid in
full. The Union Planters Capital Securities mature in 2026 and may be redeemed
under certain circumstances prior to maturity.
LIQUIDATION RIGHTS. In the event of the voluntary or involuntary
liquidation, dissolution, distribution of assets, or winding-up of Union
Planters, after distribution in full of the preferential amounts required to be
distributed to the holders of Union Planters preferred stock, holders of Union
Planters common stock will be entitled to receive all of the remaining assets of
Union Planters, of whatever kind, available for distribution to stockholders
ratably in proportion to the number of shares of Union
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Planters common stock held. The Union Planters board of directors may distribute
in kind to the holders of Union Planters common stock such remaining assets of
Union Planters or may sell, transfer, or otherwise dispose of all or any part of
such remaining assets to any other person or entity and receive payment therefor
in cash, stock, or obligations of such other person or entity, and may sell all
or any part of the consideration so received and distribute any balance thereof
in kind to holders of Union Planters common stock. Neither the merger or
consolidation of Union Planters into or with any other corporation, nor the
merger of any other corporation into Union Planters, nor any purchase or
redemption of shares of stock of Union Planters of any class, shall be deemed to
be a dissolution, liquidation, or winding-up of Union Planters for purposes of
this paragraph.
Because Union Planters is a holding company, its right and the rights of
its creditors and stockholders, including the holders of Union Planters
preferred stock and Union Planters common stock, to participate in the
distribution of assets of a subsidiary on its liquidation or recapitalization
may be subject to prior claims of such subsidiary's creditors except to the
extent that Union Planters itself may be a creditor having recognized claims
against such subsidiary.
For a further description of Union Planters common stock, see "EFFECT OF
THE MERGER ON RIGHTS OF STOCKHOLDERS."
UNION PLANTERS PREFERRED STOCK
SERIES E PREFERRED STOCK. As of October 31, 2000, 797,683 shares of
Series E preferred stock were outstanding. All shares of Series E preferred
stock have a stated value of $25.00 per share. Dividends are payable at the rate
of $0.50 per share per quarter and are cumulative. The Series E preferred stock
is convertible at the rate of 1.25 shares of Union Planters common stock for
each share of Series E preferred stock. The Series E preferred stock is not
subject to any sinking fund provisions and has no preemptive rights. Such shares
have a liquidation preference of $25.00 per share plus unpaid dividends accrued
thereon and, at Union Planters' option and with the prior approval of the
Federal Reserve, are subject to redemption by Union Planters at any time at a
redemption price of $25.00 per share plus any unpaid dividends accrued thereon.
Holders of Series E preferred stock have no voting rights except as required by
law and in certain other limited circumstances. See "CERTAIN REGULATORY
CONSIDERATIONS -- Payment of Dividends."
SERIES F PREFERRED STOCK. The Union Planters board of directors has
adopted a new stockholder rights plan, which became effective upon the
expiration of the former stockholder rights plan on January 19, 1999. Under the
new plan, each share of common stock received a tax-free dividend of one
preferred share purchase right. The rights are not exercisable unless a third
party acquires 15% of the common stock, or an offer is commenced for 15% or more
of the common stock. At that time, the rights can be exercised to purchase units
of Union Planters' Series F preferred stock. Each unit has the same voting and
dividend rights as one share of the common stock and each right entitles the
holder to purchase one unit at a 50% discount from the then market value of one
share of the common stock. If a third party merges with or otherwise
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acquires Union Planters, each right can be exercised to purchase one share of
common stock of the acquiring company at a 50% discount from the then market
value of that stock. rights held by the potential acquiring company cannot be
exercised. The Union Planters board of directors may extend the time period
before the rights become exercisable or redeem the rights at $.01 per right.
These provisions give the board of directors the flexibility to negotiate a
transaction with a potential acquiring company in the bear interests of the
stockholders. The new plan will expire on January 19, 2009. Union Planters has
authorized 300,000 shares of Series F Preferred Stock for issuance under the
plan, none of which has been issued or is outstanding. As of the date of this
proxy statement-prospectus, Union Planters' management is not aware of any facts
that would suggest issuance of these shares is imminent.
OTHER MATTERS
As of the date of this proxy statement-prospectus, Jefferson Savings'
board of directors does not know of any matters that will be presented for
consideration at the special meeting other than as described in this proxy
statement-prospectus. However, if any other matters properly come before the
special meeting or any adjournment or postponement of the special meeting and
are voted upon, the enclosed proxy will be deemed to confer discretionary
authority to the individuals named as proxies to vote the shares represented by
such proxies as to any such matters, including a proposal to adjourn the special
meeting in order to permit further solicitation of proxies. No proxy holder,
however, will vote any proxies voted against approval of the merger in favor of
a proposal to adjourn the special meeting to solicit additional proxies.
STOCKHOLDER PROPOSALS
Jefferson Savings will hold its 2001 annual meeting of stockholders only
if the merger is not consummated. In order to be eligible for inclusion in
Jefferson Savings' proxy materials for the 2001 annual meeting, if held, any
Jefferson Savings stockholder proposal to take action at such meeting must be
received at Jefferson Savings' executive offices at 15435 Clayton Road, Ballwin,
Missouri 63011, no later than February 13, 2001. Any such proposals shall be
subject to the requirements of the proxy rules adopted under the Securities
Exchange Act of 1934, Delaware law and Jefferson Savings' certificate of
incorporation and bylaws.
Union Planters expects to hold its next annual meeting of stockholders
on April 19, 2001, after the merger. Under the SEC rules, proposals of Union
Planters stockholders intended to be presented at that meeting must have been
received by Union Planters at its principal executive offices no later than
November 18, 2000, to be included in the proxy statement for the meeting. Any
such proposals shall be subject to the requirements of the proxy rules adopted
under the Securities Exchange Act of 1934, Tennessee law and Union Planters'
amended and restated charter and bylaws.
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EXPERTS
The consolidated financial statements of Union Planters and subsidiaries
incorporated in this proxy statement-prospectus by reference to the Annual
Report to Shareholders on Form 10-K for the year ended December 31, 1999, have
been so incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
The consolidated financial statements of Jefferson Savings Bancorp, Inc.
and subsidiaries as of December 31, 1999 and 1998, and for each of the years in
the three-year period ended December 31, 1999, have been incorporated herein by
reference and in the registration statement in reliance upon the report of KPMG
LLP, independent accountants, incorporated herein by reference, given on the
authority of said firm as experts in accounting and auditing.
OPINIONS
The legality of the shares of Union Planters common stock to be issued
in the merger will be passed upon by E. James House, Jr., Secretary and Manager
of the Legal Department of Union Planters. E. James House, Jr. is an officer of
and stockholder in, and receives compensation from, Union Planters.
Certain tax consequences of the transaction have been passed upon by
Lewis, Rice & Fingersh, L.C., St. Louis, Missouri.
WHERE YOU CAN FIND MORE INFORMATION
Union Planters and Jefferson Savings file annual, quarterly and current
reports, proxy and information statements, and other information with the SEC
under the Securities Exchange Act of 1934. You may read and copy this
information at the Public Reference Section at the SEC at 450 Fifth Street,
N.W., Judiciary Plaza, Washington, D.C. 20549. You may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The
SEC maintains an Internet site that contains reports, proxy and information
statements, and other information about issuers that file electronically with
the SEC. The address of that site is http://www.sec.gov. In addition, you can
read and copy this information at the regional offices of the SEC at 7 World
Trade Center, 13th Floor, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. You can also inspect
reports, proxy and information statements, and other information about Union
Planters at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
Union Planters filed a registration statement with the SEC under the
Securities Act of 1933, as amended, relating to the Union Planters common stock
offered to the Jefferson Savings stockholders. The registration statement
contains additional information about Union Planters and the Union Planters
common stock. The SEC allows Union Planters to omit certain
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information included in the registration statement from this proxy
statement-prospectus. The registration statement may be inspected and copied at
the SEC's public reference facilities described above.
This proxy statement-prospectus incorporates important business and
financial information about Union Planters and Jefferson Savings that is not
included in or delivered with this proxy statement-prospectus. The following
documents filed with the SEC by Union Planters are incorporated by reference in
this proxy statement-prospectus (SEC File No. 001-10160):
(1) Union Planters' Annual Report on Form 10-K for the fiscal year
ended December 31, 1999;
(2) Union Planters' Quarterly Reports on Form 10-Q for the three
months ended March 31, 2000, six months ended June 30, 2000, and
nine months ended September 30, 2000;
(3) Union Planters' current reports on Form 8-K dated January 20,
2000, April 20, 2000, July 20, 2000 and October 19, 2000; and
(4) The description of Union Planters' current management and Union
Planters' board of directors contained in Union Planters' proxy
statement filed pursuant to Section 14(a) of the Exchange Act
for Union Planters' Annual Meeting of Stockholders held on April
20, 2000.
The following documents filed with the SEC by Jefferson Savings are
incorporated by reference in this proxy statement-prospectus (SEC File No.
000-21466):
(1) Jefferson Savings' Annual Report on Form 10-K for the fiscal
year ended December 31, 1999;
(2) Jefferson Savings' Quarterly Reports on Form 10-Q for the three
months ended March 31, 2000, six months ended June 30, 2000, and
nine months ended September 30, 2000; and
(3) The description of Jefferson Savings' current management, board
of directors and their respective employment and retirement
agreements contained in Jefferson Savings' proxy statement filed
pursuant to Section 14(a) of the Exchange Act for Jefferson
Savings' Annual Meeting of Stockholders held on July 17, 2000.
Union Planters and Jefferson Savings also incorporate by reference
additional documents filed by them pursuant to Sections 13(a), 13(c), 14, or
15(d) of the Exchange Act after the date of this proxy statement-prospectus and
prior to final adjournment of the special meeting. Any statement contained in
this proxy statement-prospectus or in a document incorporated or deemed to be
incorporated by reference in this proxy statement-prospectus shall be deemed to
be modified or superseded to the extent that a statement contained herein or in
any subsequently filed
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document which also is, or is deemed to be, incorporated by reference herein
modifies or supersedes such statement.
You may obtain copies of the information incorporated by reference in
this proxy statement-prospectus upon written or oral request. The inside front
cover of this proxy statement-prospectus contains information about how such
requests should be made.
All information contained in this proxy statement-prospectus or
incorporated herein by reference with respect to Union Planters was supplied by
Union Planters, and all information contained in this proxy statement-prospectus
with respect to Jefferson Savings was supplied by Jefferson Savings.
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APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
BY AND BETWEEN
JEFFERSON SAVINGS BANCORP, INC.
AND
UNION PLANTERS CORPORATION
DATED AS OF SEPTEMBER 20, 2000
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TABLE OF CONTENTS
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Preamble . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A- 6
ARTICLE 1 - TRANSACTIONS AND TERMS OF MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A- 7
1.1 Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A- 7
1.2 Time and Place of Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A- 7
1.3 Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A- 7
1.4 Execution of Stock Option Agreement . . . . . . . . . . . . . . . . . . . . . . . . A- 7
1.5 Restructure of Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . A- 7
ARTICLE 2 - TERMS OF MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A- 8
2.1 Charter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A- 8
2.2 Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A- 8
2.3 Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A- 8
ARTICLE 3 - MANNER OF CONVERTING SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A- 9
3.1 Conversion of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A- 9
3.2 Anti-Dilution Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A- 9
3.3 Shares Held by Jefferson or UPC . . . . . . . . . . . . . . . . . . . . . . . . . . A- 9
3.4 Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-10
3.5 Conversion of Stock Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-10
ARTICLE 4 - EXCHANGE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12
4.1 Exchange Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12
4.2 Rights of Former Jefferson Stockholders . . . . . . . . . . . . . . . . . . . . . . A-12
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF JEFFERSON . . . . . . . . . . . . . . . . . . . . . . . . . A-13
5.1 Organization, Standing, and Power . . . . . . . . . . . . . . . . . . . . . . . . . A-13
5.2 Authority; No Breach By Agreement . . . . . . . . . . . . . . . . . . . . . . . . . A-14
5.3 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-15
5.4 Jefferson Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-15
5.5 SEC Filings; Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . A-16
5.6 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . A-16
5.7 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . A-17
5.8 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-17
5.9 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-18
5.10 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-19
5.11 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-20
5.12 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-20
5.13 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-21
5.14 Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-23
5.15 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-24
5.16 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-24
</TABLE>
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<TABLE>
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5.17 Statements True and Correct . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-24
5.18 Tax and Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-25
5.19 State Takeover Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-25
5.20 Charter Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-25
5.21 Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-25
5.22 Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-26
5.23 Opinion of Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . A-26
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF UPC . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-26
6.1 Organization, Standing, and Power . . . . . . . . . . . . . . . . . . . . . . . . . A-26
6.2 Authority; No Breach By Agreement . . . . . . . . . . . . . . . . . . . . . . . . . A-26
6.3 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-27
6.4 UPC Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-27
6.5 SEC Filings; Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . A-28
6.6 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . A-29
6.7 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . A-29
6.8 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-29
6.9 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-30
6.10 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-31
6.11 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-32
6.12 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-32
6.13 Statements True and Correct . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-32
6.14 Tax and Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-33
6.15 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-33
6.16 Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-34
ARTICLE 7 - CONDUCT OF BUSINESS PENDING CONSUMMATION . . . . . . . . . . . . . . . . . . . . . . . . . . A-34
7.1 Affirmative Covenants of Both Parties . . . . . . . . . . . . . . . . . . . . . . . A-34
7.2 Negative Covenants of Jefferson . . . . . . . . . . . . . . . . . . . . . . . . . . A-34
7.3 Adverse Changes in Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . A-37
7.4 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-37
ARTICLE 8 - ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-37
8.1 Registration Statement; Proxy Statement; Stockholder Approval . . . . . . . . . . . A-37
8.2 Exchange Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-38
8.3 Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-38
8.4 Filings with State Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-38
8.5 Agreement as to Efforts to Consummate . . . . . . . . . . . . . . . . . . . . . . . A-38
8.6 Investigation and Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . A-39
8.7 Press Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-39
8.8 Certain Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-40
8.9 Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-40
8.10 State Takeover Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-41
8.11 Charter Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-41
</TABLE>
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8.12 Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-41
8.13 Agreement of Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-41
8.14 Employee Benefits and Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . A-41
8.15 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-42
ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE . . . . . . . . . . . . . . . . . . . . . . A-44
9.1 Conditions to Obligations of Each Party . . . . . . . . . . . . . . . . . . . . . . A-44
9.2 Conditions to Obligations of UPC . . . . . . . . . . . . . . . . . . . . . . . . . A-45
9.3 Conditions to Obligations of Jefferson . . . . . . . . . . . . . . . . . . . . . . A-47
ARTICLE 10 - TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-48
10.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-48
10.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-51
10.3 Non-Survival of Representations and Covenants . . . . . . . . . . . . . . . . . . . A-51
ARTICLE 11 - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-51
11.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-51
11.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-63
11.3 Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-63
11.4 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-64
11.5 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-64
11.6 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-64
11.7 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-65
11.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-65
11.9 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-66
11.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-66
11.11 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-66
11.12 Interpretations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-66
11.13 Enforcement of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-67
11.14 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-68
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-69
</TABLE>
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LIST OF EXHIBITS
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EXHIBIT NUMBER DESCRIPTION
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1. Form of Stock Option Agreement. (Section 1.4).
2. Form of Plan of Merger. (Section 1.1)
3. Form of Affiliate Agreement. (Sections 8.13, 9.2(d)).
</TABLE>
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made and
entered into as of September 20, 2000, by and between JEFFERSON SAVINGS
BANCORP, INC. ("Jefferson"), a corporation organized and existing under the
Laws of the State of Delaware, with its principal office located in Ballwin,
Missouri; 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 Jefferson 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 Jefferson by UPC pursuant to the merger (the
"Merger") of Jefferson 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 Jefferson shall be converted into shares of the
common stock of UPC (except as provided herein). As a result, stockholders of
Jefferson shall become stockholders of UPC, and UPHC shall continue to conduct
the business and operations of Jefferson as a wholly-owned subsidiary of UPC.
The transactions described in this Agreement are subject to the approvals of
the stockholders of Jefferson, 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 be
treated as a purchase transaction.
Immediately after the execution and delivery of this
Agreement, as a condition and inducement to UPC's willingness to enter into
this Agreement, Jefferson and UPC are entering into a stock option agreement
(the "Stock Option Agreement"), in substantially the form of Exhibit 1,
pursuant to which Jefferson is granting to UPC an option to purchase shares of
Jefferson 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:
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ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 MERGER. Subject to the terms and conditions of this
Agreement, at the Effective Time, Jefferson shall be merged with and into UPHC
in accordance with the provisions of Section 252 of the DGCL and with the
effect provided in Section 259 of the DGCL 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
respective Boards of Directors of Jefferson and 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 Jefferson and will be approved and adopted by the Board
of Directors of UPHC and by UPC as the sole shareholder of UPHC. UPC shall
cause UPHC to execute the Plan of Merger 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., Central Time, on the date
that the Effective Time occurs (or the immediately preceding day if the
Effective Time is earlier than 9:00 A.M., Central Time), 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 Certificate of Merger shall become effective with the
Secretary of State of the State of Delaware and the Articles of Merger shall
become effective with the Secretary of State of the State of Tennessee (the
"Effective Time"). Subject to the terms and conditions hereof, unless
otherwise mutually agreed upon in writing by the 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 Jefferson 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, Jefferson is
executing and delivering to UPC the Stock Option Agreement.
1.5 RESTRUCTURE OF TRANSACTION. UPC shall, in its
reasonable discretion, have the unilateral right to revise the structure of the
Merger contemplated by this Agreement in order
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to achieve tax benefits or for any other reason which UPC may deem advisable;
provided, however, that UPC shall not have the right, without the approval of
the Board of Directors of Jefferson and, if required by applicable Law, the
holders of the Jefferson Common Stock, to make any revision to the structure of
the Merger which: (i) changes the amount of the consideration which the holders
of shares of Jefferson Common Stock are entitled to receive (determined in the
manner provided in Section 3.1 of this Agreement); (ii) changes the intended
tax-free effects of the Merger to UPC, Jefferson, or the holders of shares of
Jefferson Common Stock; (iii) would permit UPC to pay the consideration other
than by delivery of UPC Common Stock registered with the SEC (in the manner
described in Section 4.1 of this Agreement); (iv) would be materially adverse
to the interests of Jefferson or adverse to the holders of shares of Jefferson
Common Stock; (v) would materially impede or delay consummation of the Merger;
or (vi) would require a vote of UPC's stockholders under relevant state Law.
UPC may exercise this right of revision by giving written notice to Jefferson
in the manner provided in Section 11.8 of this Agreement which notice shall be
in the form of an amendment to this Agreement or in the form of an Amended and
Restated Agreement and Plan of Reorganization. The Parties shall execute such
documents as necessary to effect the revised structure of the Merger, including
such changes as required to retain the tax-free character of the Merger.
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 as the officers of the Surviving Corporation from and
after the Effective Time in accordance with the Bylaws of the Surviving
Corporation.
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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 Jefferson, 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 and be unaffected solely as
a result of the Merger.
(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 and be unaffected
solely as a result of the Merger.
(c) Each share of Jefferson Common Stock (including any
associated Preferred Stock Purchase Rights, but excluding shares held by
any Jefferson 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 .433 of a
share of UPC Common Stock (as possibly adjusted pursuant to 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 Jefferson Common Stock shall be
accompanied by a UPC Right.
3.2 ANTI-DILUTION PROVISIONS. In the event Jefferson
changes (or establishes a record date for changing) the number of shares of
Jefferson 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 (or establishes a record
date for changing) 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 JEFFERSON OR UPC. Each of the shares
of Jefferson Common Stock held by any Jefferson 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.
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3.4 FRACTIONAL SHARES. Notwithstanding any other
provision of this Agreement, each holder of shares of Jefferson 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.
3.5 CONVERSION OF STOCK RIGHTS.
(a) At the Effective Time, each award, option, or
other right to purchase or acquire shares of Jefferson Common Stock pursuant to
stock options, stock appreciation rights, or stock awards ("Jefferson Rights")
granted by Jefferson under the Jefferson Stock Plans, which are outstanding at
the Effective Time, whether or not exercisable, shall be, at the election of
the holder of such Jefferson Right either (i) canceled in exchange for a cash
payment for each share of Jefferson Common Stock subject to such Jefferson
Right (the "Option Settlement Payment") or (ii) converted into and become
rights with respect to UPC Common Stock, and UPC shall assume each Jefferson
Right, in accordance with the Jefferson Stock Plans and stock option agreement
by which it is evidenced (the "Conversion Option"). A holder of a Jefferson
Right must make such election in writing delivered to UPC no later than 5:00
P.M., Central Time, on the fifth day prior to the day on which the Effective
Time occurs. To the extent a holder does not provide UPC with such written
election, that holder shall receive the Option Settlement Payment for each
share of Jefferson Common Stock subject to any Jefferson Right held by such
holder. The Option Settlement Payment shall be equal to the difference between
(i) the product of (1) the Exchange Ratio and (2) the Option Settlement Closing
Price and (ii) the price per share of Jefferson Common Stock pursuant to which
the holder of such Jefferson Right may purchase the shares of Jefferson Common
Stock to which such Jefferson Right relates. At the Effective Time, each such
Jefferson Right for which the holder has selected the Option Settlement Payment
shall no longer represent the right to purchase shares of Jefferson Common
Stock, but in lieu thereof shall represent only the nontransferable right to
receive the Option Settlement Payment, which payment (without interest) shall
be made to such holder within five business days after the Effective Time upon
presentation of the agreement representing such Jefferson Right for
cancellation.
(b) With respect to the Conversion Option, the
Jefferson Stock Plans shall be amended hereby such that from and after the
Effective Time, (i) UPC and its Salary and Benefits Committee shall be
substituted for Jefferson and the committee of Jefferson's Board of Directors
(including, if applicable, the entire Board of Directors of Jefferson)
administering such
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Jefferson Stock Plan, (ii) each Jefferson 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 Jefferson Right shall be equal to the number of shares of Jefferson Common
Stock subject to such Jefferson 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 shall be adjusted by dividing the per
share exercise (or threshold) price under each such Jefferson 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
3.6(b), each Jefferson 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).
(c) As soon as reasonably practicable after the
Effective Time, UPC shall deliver to the participants in each Jefferson Stock
Plan selecting the Conversion Option an appropriate notice setting forth such
participant's rights pursuant thereto and the grants pursuant to such Jefferson
Stock Plan shall continue in effect on the same terms and conditions (subject
to the adjustments required by Section 3.5(a) and (b) after giving effect to
the Merger), and UPC shall comply with the terms of each Jefferson Stock Plan
to ensure, to the extent required by, and subject to the provisions of, such
Jefferson Stock Plan, that Jefferson 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 Jefferson 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.
(d) All restrictions or limitations on transfer
with respect to Jefferson Common Stock awarded under the Jefferson Stock Plans
or any other plan, program, or arrangement of any Jefferson 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.
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ARTICLE 4
EXCHANGE OF SHARES
4.1 EXCHANGE PROCEDURES. As soon as reasonably
practicable after the Effective Time, UPC and Jefferson shall cause the
exchange agent selected by UPC (the "Exchange Agent") to mail to the former
stockholders of Jefferson appropriate transmittal materials (which shall
specify that delivery shall be effected, and risk of loss and title to the
certificates theretofore representing shares of Jefferson Common Stock shall
pass, only upon proper delivery of such certificates to the Exchange Agent).
If any certificate shall have been lost, stolen, mislaid, or destroyed, upon
receipt of (i) an affidavit of that fact from the holder claiming such
certificate to be lost, mislaid, stolen, or destroyed, (ii) such guarantee as
UPC or the Exchange Agent may require, including an open penalty lost
securities bond, as indemnity, and (iii) any other documents necessary to
evidence and effect the bona fide exchange thereof, the Exchange Agent shall
issue to such holder the consideration into which the shares represented by
such lost, stolen, mislaid, or destroyed certificate shall have been converted.
The Exchange Agent may establish such other reasonable and customary rules and
procedures in connection with its duties as it may deem appropriate. After the
Effective Time, each holder of shares of Jefferson Common Stock (other than
shares to be canceled pursuant to Section 3.3 of this Agreement) issued and
outstanding at the Effective Time shall surrender the certificate or
certificates representing such shares to the Exchange Agent and shall promptly
upon surrender thereof receive in exchange therefor the consideration provided
in Section 3.1 of this Agreement, together with all undelivered dividends or
distributions in respect of such shares (without interest thereon) pursuant to
Section 4.2 of this Agreement. To the extent required by Section 3.4 of this
Agreement, each holder of shares of Jefferson 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 Jefferson Common Stock is entitled
as a result of the Merger until such holder surrenders such holder's
certificate or certificates representing the shares of Jefferson Common Stock
for exchange as provided in this Section 4.1. The certificate or certificates
of Jefferson 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 Jefferson 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 JEFFERSON STOCKHOLDERS. At the
Effective Time, the stock transfer books of Jefferson shall be closed as to
holders of Jefferson Common Stock immediately prior to the Effective Time and
no transfer of Jefferson Common Stock by any such holder shall thereafter be
made or recognized. Until surrendered for exchange in accordance with the
provisions of Section 4.1 of this Agreement, each certificate theretofore
representing shares of Jefferson Common Stock (other than shares to be canceled
pursuant to Section 3.3 of this
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Agreement) shall from and after the Effective Time represent for all purposes
only the right to receive the consideration provided in Sections 3.1 and 3.4 of
this Agreement in exchange therefor, subject, however, to the Surviving
Corporation's obligation to pay any dividends or make any other distributions
with a record date prior to the Effective Time which have been declared or made
by Jefferson in respect of such shares of Jefferson 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 Jefferson
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 Jefferson Common Stock are converted, regardless of
whether such holders have exchanged their certificates representing Jefferson
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 Jefferson 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 Jefferson
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
REPRESENTATIONS AND WARRANTIES OF JEFFERSON
Except as set forth in the Jefferson Disclosure Memorandum
referencing a specific section of this Agreement, Jefferson hereby represents
and warrants to UPC as follows:
5.1 ORGANIZATION, STANDING, AND POWER. Jefferson is a
corporation duly organized, validly existing, and in good standing under the
Laws of the State of Delaware, and has the corporate power and authority to
carry on its business as now conducted and to own, lease, and operate its
Material Assets. Jefferson is duly qualified or licensed to transact business
as a foreign corporation in good standing in the States of the United States
and foreign jurisdictions where the character of its Assets or the nature or
conduct of its business requires it to be so qualified or licensed, except for
such jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Jefferson.
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5.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) Jefferson 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 Jefferson, subject to the approval of this Agreement and the Plan of
Merger by holders of the requisite number of shares of Jefferson 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 Jefferson. Subject to such requisite stockholder
approval, this Agreement and the Plan of Merger represent legal, valid, and
binding obligations of Jefferson, enforceable against Jefferson 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 Jefferson, nor the consummation by
Jefferson of the transactions contemplated hereby or thereby, nor compliance by
Jefferson with any of the provisions hereof or thereof, will (i) conflict with
or result in a breach of any provision of Jefferson's Certificate 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 Jefferson Company under, any Contract or Permit of any Jefferson
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 Jefferson, 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 Jefferson Company or any of their respective Material Assets.
(c) Other than in connection or compliance with
the provisions of the Securities Laws, applicable state corporate, banking and
securities Laws, and rules of the NASD, and other than Consents required from
Regulatory Authorities, and other than notices to or filings with the Internal
Revenue Service or the Pension Benefit Guaranty Corporation with respect to any
employee benefit plans, or under the HSR Act, and other than Consents, filings,
or notifications which, if not obtained or made, are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Jefferson,
no notice to, filing with, or Consent of, any public body or authority is
necessary for the consummation by Jefferson of the Merger and the other
transactions contemplated in this Agreement and the Plan of Merger.
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5.3 CAPITAL STOCK.
(a) The authorized capital stock of Jefferson
consists, as of the date of this Agreement, of (i) 20,000,000 shares of
Jefferson Common Stock, of which 10,100,112 shares are issued and 9,966,205
shares are outstanding as of the date of this Agreement and, not more than
10,453,108 shares will be issued and outstanding at the Effective Time, and
(ii) 5,000,000 shares of Jefferson 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 Jefferson Common Stock are duly and validly issued and
outstanding and are fully paid and nonassessable under the DGCL. None of the
outstanding shares of Jefferson Common Stock has been issued in violation of
any preemptive rights of the current or past stockholders of Jefferson.
(b) Except (i) as set forth in Section 5.3(a) of
this Agreement, (ii) with respect to shares of Jefferson Common Stock issuable
under the outstanding options under the Jefferson Stock Plans, or (iii) as
provided pursuant to the Stock Option Agreement or the Jefferson Rights
Agreement, there are no shares of capital stock or other equity securities of
Jefferson outstanding and no outstanding Jefferson Rights relating to the
capital stock of Jefferson.
5.4 JEFFERSON SUBSIDIARIES. Jefferson has disclosed in
Section 5.4 of the Jefferson Disclosure Memorandum all of the Jefferson
Subsidiaries as of the date of this Agreement. Jefferson or one of its
Subsidiaries owns all of the issued and outstanding shares of capital stock of
each Jefferson Subsidiary. No equity securities of any Jefferson Subsidiary
are or may become required to be issued (other than to another Jefferson
Company) by reason of any Rights, and there are no Contracts by which any
Jefferson Subsidiary is bound to issue (other than to another Jefferson
Company) additional shares of its capital stock or Rights or by which any
Jefferson Company is or may be bound to transfer any shares of the capital
stock of any Jefferson Subsidiary (other than to another Jefferson Company).
There are no Contracts relating to the rights of any Jefferson Company to vote
or to dispose of any shares of the capital stock of any Jefferson Subsidiary.
All of the shares of capital stock of each Jefferson Subsidiary held by a
Jefferson 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 Jefferson Company free and clear of any Lien. Each Jefferson
Subsidiary is either a federal savings bank or a corporation, and is duly
organized, validly existing, and (as to corporations) in good standing under
the Laws of the jurisdiction in which it is incorporated or organized, and has
the corporate power and authority necessary for it to own, lease, and operate
its Material Assets and to carry on its business as now conducted. Each
Jefferson Subsidiary is duly qualified or licensed to transact business as a
foreign corporation in good standing in the States of the United States and
foreign jurisdictions where the character of its Assets or the nature or
conduct of its business requires it to be so qualified or licensed, except for
such jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to
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have, individually or in the aggregate, a Material Adverse Effect on Jefferson.
Each Jefferson Subsidiary that is a depository institution is an "insured
depository 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) Jefferson has filed and made available to UPC
all forms, reports, and documents required to be filed by Jefferson with the
SEC since December 31, 1994 (collectively, the "Jefferson SEC Reports"). The
Jefferson 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 Jefferson SEC Reports or necessary
in order to make the statements in such Jefferson SEC Reports, in light of the
circumstances under which they were made, not misleading. Except for Jefferson
Subsidiaries that are registered as a broker, dealer, or investment advisor or
filings required due to fiduciary holdings of the Jefferson Subsidiaries, none
of Jefferson's Subsidiaries is required to file any forms, reports, or other
documents with the SEC.
(b) Each of the Jefferson Financial Statements
(including, in each case, any related notes) contained in the Jefferson SEC
Reports, including any Jefferson 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 (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
Jefferson 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 Jefferson
Company has any Liabilities that are reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Jefferson, except Liabilities
which are accrued or reserved against in the consolidated balance sheets of
Jefferson as of June 30, 2000, included in the Jefferson Financial Statements
or reflected in the notes thereto and except for Liabilities incurred in the
ordinary course of business subsequent to June 30, 2000. No Jefferson Company
has incurred or paid any Liability since June 30, 2000, 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 Jefferson.
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5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since June 30,
2000, except as disclosed in the Jefferson 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
Jefferson and (ii) the Jefferson 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 Jefferson 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, 1999, and, to the Knowledge of
Jefferson, 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 by Jefferson if due on or before the Effective Time or requests for
extensions (if permitted) will be timely filed by Jefferson if due after the
Effective Time. All Taxes shown on filed Tax Returns have been paid. There is
no presently on-going 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
Jefferson, except to the extent reserved against in the Jefferson 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 Jefferson 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 Jefferson Companies for the period or periods through
and including the date of the respective Jefferson Financial Statements has
been made and is reflected on such Jefferson Financial Statements.
(d) Each of the Jefferson 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 reasonable
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 Jefferson.
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(e) None of the Jefferson 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 Jefferson Companies except Liens for Taxes
not yet due or being contested in good faith and for which adequate provision
has been made.
(g) No Jefferson Company has filed any consent
under Section 341(f) of the Internal Revenue Code concerning collapsible
corporations.
(h) There has not been an ownership change, as
defined in Internal Revenue Code Section 382(g), of the Jefferson Companies
that occurred during or after any Taxable Period in which the Jefferson
Companies incurred a net operating loss that carries over to any Taxable Period
ending after December 31, 1998.
(i) After the date of this Agreement, no Material
election with respect to Taxes will be made without the prior consent of UPC,
which consent will not be unreasonably withheld.
5.9 ASSETS. The Jefferson 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 Jefferson. All tangible properties used in the businesses of the
Jefferson Companies are in good condition, reasonable wear and tear excepted,
and are usable in the ordinary course of business consistent with Jefferson 's
past practices. All Assets which are Material to Jefferson's business on a
consolidated basis, held under leases or subleases by any of the Jefferson
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 Jefferson Companies
currently maintain insurance in amounts, scope, and coverage reasonably
necessary for their operations. None of the Jefferson 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 Jefferson Companies include all Assets required to operate
the business of the Jefferson Companies as presently conducted.
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5.10 ENVIRONMENTAL MATTERS.
(a) To the Knowledge of Jefferson, each Jefferson
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 Jefferson.
(b) There is no Litigation pending or, to the
Knowledge of Jefferson, threatened before any court, governmental agency, or
authority, or other forum in which any Jefferson 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 Jefferson 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 Jefferson.
(c) There is no Litigation pending, or to the
Knowledge of Jefferson, threatened before any court, governmental agency, or
board, or other forum in which any of its Loan Properties (or Jefferson 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 Jefferson.
(d) To the Knowledge of Jefferson, 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 Jefferson.
(e) To the Knowledge of Jefferson, during the
period of (i) any Jefferson Company's ownership or operation of any of their
respective current properties, (ii) any Jefferson Company's participation in
the management of any Participation Facility, or (iii) any Jefferson 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 Jefferson. To the Knowledge
of Jefferson, prior to the period of (i) any Jefferson Company's ownership or
operation of any of their respective current properties, (ii) any Jefferson
Company's participation in the management of any Participation Facility, or
(iii) any Jefferson Company's holding of a security interest in a Loan
Property, to the Knowledge of Jefferson, there were no releases of Hazardous
Material in, on, under, or affecting any such property,
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Participation Facility, or Loan Property, except such as are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Jefferson.
5.11 COMPLIANCE WITH LAWS. Jefferson is duly registered
as a unitary savings and loan holding company under the SLHCA and subject to
regulation by the OTS. Each Jefferson 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 Jefferson, 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 Jefferson. None
of the Jefferson 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 Jefferson; 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
Jefferson Company is not in compliance with any of the Laws or Orders
which such governmental authority or Regulatory Authority enforces, where
such noncompliance is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Jefferson, (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 Jefferson,
or (iii) requiring any Jefferson 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 Jefferson Company is the subject
of any Litigation asserting that it or any other Jefferson 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
Jefferson Company to bargain with any labor organization as to wages or
conditions of employment, nor is any Jefferson 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 Jefferson Company, pending or, to the
Knowledge of Jefferson, threatened, or to the Knowledge of Jefferson, is there
any activity involving any Jefferson Company's employees seeking to certify a
collective bargaining unit or engaging in any other organization activity.
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5.13 EMPLOYEE BENEFIT PLANS.
(a) Jefferson has disclosed to UPC in writing
prior to the execution of the Agreement and in Section 5.13 of the Jefferson
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 Jefferson Benefits Plans. For purposes of this Agreement, "Jefferson
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 Jefferson 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 Jefferson 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 "Jefferson ERISA Plan." Any Jefferson 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
"Jefferson Pension Plan." Neither Jefferson nor any Jefferson 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 Jefferson 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 Jefferson Company has any Liability, is disclosed as
such in Section 5.13 of the Jefferson Disclosure Memorandum.
(b) Jefferson 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 agreements or other funding arrangements for
such Jefferson Benefit Plans (including insurance contracts), and all
amendments thereto, (ii) with respect to any such Jefferson 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 Jefferson Benefit Plan with respect to
the most recent plan year, and (iv) the most recent summary plan descriptions
and any modifications thereto.
(c) All Jefferson Benefit Plans are in Material
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
Jefferson. Each Jefferson ERISA Plan which is intended to be qualified under
Section 401(a) of the Internal Revenue Code has received a favorable
determination letter from
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the Internal Revenue Service, and Jefferson is not aware of any circumstances
which could reasonably result in revocation of any such favorable determination
letter. Each trust created under any Jefferson ERISA Plan has been determined
to be exempt from Tax under Section 501(a) of the Internal Revenue Code and
Jefferson is not aware of any circumstance which could reasonably result in
revocation of such exemption. With respect to each Jefferson Benefit Plan to
the Knowledge of Jefferson, 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
Jefferson. There is no Material pending or, to the Knowledge of Jefferson,
threatened Litigation (other than routine claims for benefits) relating to any
Jefferson ERISA Plan.
(d) No Jefferson Company has engaged in a
transaction with respect to any Jefferson Benefit Plan that, assuming the
Taxable Period of such transaction expired as of the date of this Agreement,
would subject any Jefferson 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 Jefferson. Neither Jefferson nor, to the
Knowledge of Jefferson, any administrator or fiduciary of any Jefferson 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 Jefferson 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 Jefferson. Except as disclosed under Section 5.13 of the
Jefferson Disclosure Memorandum, no oral or written representation or
communication with respect to any aspect of the Jefferson Benefit Plans has
been made to employees of any Jefferson 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 Jefferson.
(e) No Jefferson 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 Jefferson 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 which would be used by the
Pension Benefit Guaranty Corporation in an involuntary plan termination under
ERISA Section 4042. 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 Jefferson Pension Plan, (ii) no change in the actuarial
assumptions with respect to any Jefferson Pension Plan, and (iii) no increase
in benefits under any Jefferson 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 Jefferson.
Neither any Jefferson Pension Plan nor any "single-employer plan," within the
meaning of Section 4001(a)(15) of ERISA, currently or formerly maintained by
any Jefferson Company, or the single-employer plan of any entity which
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is considered one employer with Jefferson under Section 4001 of ERISA or
Section 414 of the Internal Revenue Code or Section 302 of ERISA (a "Jefferson
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 Jefferson Pension Plan or any
single-employer plan of a Jefferson 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 Jefferson Company has provided, or is required to provide,
security to a Jefferson Pension Plan or to any single-employer plan of a
Jefferson 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 Jefferson, except to the extent any failure would not have
a Material Adverse Effect on Jefferson.
(f) No Liability under Title IV of ERISA has been
or is expected to be incurred by any Jefferson Company with respect to any
defined benefit plan currently or formerly maintained by any of them or by any
Jefferson 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 Jefferson.
(g) No Jefferson Company has any obligations for
retiree health and retiree life benefits under any of the Jefferson Benefit
Plans other than with respect to benefit coverage mandated by applicable Law.
(h) 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 Jefferson Company from any Jefferson Company under any
Jefferson Benefit Plan or otherwise, (ii) increase any benefits otherwise
payable under any Jefferson Benefit Plan, or (iii) result in any acceleration
of the time of payment or vesting of any such benefit.
5.14 MATERIAL CONTRACTS. None of the Jefferson 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 Jefferson Company
or the guarantee by any Jefferson Company of any such obligation (other than
Contracts evidencing deposit liabilities, purchases of federal funds,
fully-secured repurchase agreements, and Federal Home Loan Bank advances of
depository institution Subsidiaries, trade payables, and Contracts relating to
borrowings or guarantees made in the ordinary course of business), 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 Jefferson with the SEC as of the date of
this Agreement that has not been filed or incorporated by
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reference as an exhibit to Jefferson 's Form 10-K filed for the fiscal year
ended December 31, 1999, or in another SEC Document (together with all
Contracts referred to in Sections 5.9 and 5.13(a) of this Agreement, the
"Jefferson Contracts"). With respect to each Jefferson Contract: (i) the
Contract is in full force and effect; (ii) no Jefferson 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 Jefferson; (iii)
no Jefferson 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 Jefferson, 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 Jefferson, or, to the Knowledge of Jefferson, 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 Jefferson, 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 Jefferson Company) against any
Jefferson 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 Jefferson, nor are there any Orders of
any Regulatory Authorities, other governmental authorities, or arbitrators
outstanding against any Jefferson Company, that are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Jefferson.
(b) Section 5.15(b) of the Jefferson Disclosure
Memorandum includes a summary report of all Litigation as of the date of this
Agreement to which any Jefferson Company is a party and which names a Jefferson
Company as a defendant or cross-defendant.
5.16 REPORTS. Since January 1, 1995, or the date of
organization if later, each Jefferson 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 Jefferson. 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 Jefferson Company regarding Jefferson 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 Jefferson Company for inclusion
in the Proxy Statement to be mailed to Jefferson 's stockholders in connection
with the Stockholders' Meeting will, when first mailed to the stockholders of
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Jefferson, 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 Jefferson 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 TAX AND REGULATORY MATTERS. No Jefferson Company or
any Affiliate thereof has taken or agreed to take any action, and Jefferson has
no Knowledge of any fact or circumstance that is reasonably likely to (i)
prevent the transactions contemplated hereby, including the Merger, from being
treated 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 Jefferson 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 Section 203 of the DGCL, of the State of Delaware
(collectively, "Takeover Laws").
5.20 CHARTER PROVISIONS. Each Jefferson 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 Certificate of Incorporation, Bylaws, or
other governing instruments of any Jefferson 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 Jefferson Company that
may be directly or indirectly acquired or controlled by it.
5.21 RIGHTS AGREEMENT. Jefferson has taken all necessary
action (including, if required, redeeming all of the outstanding Preferred
Stock Purchase Rights or amending or terminating the Jefferson Rights
Agreement) so that the entering into of this Agreement and the Plan of Merger,
the acquisition of shares pursuant to, or other exercise of rights under, the
Stock Option Agreement and consummation of the Merger and the other
transactions contemplated hereby and thereby do not and will not result in any
Person becoming able to exercise any Preferred Stock Purchase Rights under the
Jefferson Rights Agreement or enabling or requiring the Preferred Stock
Purchase Rights to be separated from the shares of Jefferson Common Stock to
which they are attached or to be triggered or to become exercisable.
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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 Jefferson's own account, or
for the account of one or more the Jefferson 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 OPINION OF FINANCIAL ADVISOR. Jefferson has received
the verbal opinion of its financial advisor, Sandler O'Neill & Partners, L.P.,
to the effect that the Exchange Ratio is fair, from the financial point of
view, to the holders of Jefferson Common Stock, and a signed copy thereof,
dated as of the date of this Agreement, will be delivered to UPC within five
business days of the date of this Agreement.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF UPC
UPC hereby represents and warrants to Jefferson as follows:
6.1 ORGANIZATION, STANDING, AND POWER. UPC is a
corporation duly organized, validly existing, and in good standing under the
Laws of the State of Tennessee, and has the corporate power and authority to
carry on its business as now conducted and to own, lease, and operate its
Material Assets. UPC is duly qualified or licensed to transact business as a
foreign corporation in good standing in the States of the United States and
foreign jurisdictions where the character of its Assets or the nature or
conduct of its business requires it to be so qualified or licensed, except for
such jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on UPC.
6.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) UPC has the corporate power and authority
necessary to execute, deliver, and perform its obligations under this Agreement
and to consummate the transactions 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. 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).
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(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, (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.
(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) 300,000,000 shares of UPC Common Stock, of which 134,740,096
shares were issued and outstanding as of June 30, 2000 and (ii) 10,000,000
shares of UPC Preferred Stock, of which 799,633 shares of UPC Series E
Preferred Stock were issued and outstanding as of June 30, 2000. All of the
issued and outstanding shares of UPC Capital Stock are, and all of the shares
of UPC Common Stock to be issued in exchange for shares of Jefferson 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 Jefferson 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. 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
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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 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 corporations)
in good standing under the Laws of the jurisdiction in which it is incorporated
or organized, and has the corporate power and authority necessary for it to
own, lease, and operate its Assets and to carry on its business as now
conducted. Each UPC Subsidiary is duly qualified or licensed to transact
business as a foreign corporation in good standing in the States of the United
States and foreign jurisdictions where the character of its Assets or the
nature or conduct of its business requires it to be so qualified or licensed,
except for such jurisdictions in which the failure to be so qualified or
licensed is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on UPC. Each UPC Subsidiary that is a depository
institution is an "insured depository 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.
6.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) UPC has filed and made available to Jefferson
all forms, reports, and documents required to be filed by UPC with the SEC
since December 31, 1994 (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 (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
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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
June 30, 2000, 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 June 30, 2000. No UPC Company has incurred or paid any
Liability since June 30, 2000, 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 June 30,
2000, 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, and have not expired for periods
ended on or before December 31, 1999, 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.
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(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.
(h) There has not been an ownership change, as
defined in Internal Revenue Code Section 382(g), of the UPC Companies that
occurred during or after any Taxable Period in which the UPC Companies incurred
a net operating loss that carries over to any Taxable Period ending after
December 31, 1998.
6.9 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 an 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
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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 form 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 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.
6.10 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
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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 noncompliance 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.
6.11 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.
6.12 REPORTS. Since January 1, 1995, 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.
6.13 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 Jefferson's stockholders in connection with the
Stockholders' Meeting, will, when first mailed to the stockholders of
Jefferson, be false or misleading with respect to any Material fact, or contain
any misstatement of
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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
contemplated hereby will comply as to form in all Material respects with the
provisions of applicable Law.
6.14 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
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.
6.15 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 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 SEC.
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6.16 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.
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 JEFFERSON. From the date of
this Agreement until the earlier of the Effective Time or the termination of
this Agreement, Jefferson covenants and agrees that it will not do or agree or
commit to do, or permit any of its Subsidiaries to do or agree or commit to do,
any of the following without the prior written consent of the chief executive
officer or chief financial officer of UPC, which consent shall not be
unreasonably withheld:
(a) amend the Certificate of Incorporation,
Bylaws, or other governing instruments of any Jefferson Company or,
except as expressly contemplated by this Agreement, the Jefferson
Rights Agreement, or
(b) incur, guarantee, or otherwise become
responsible for, any additional debt obligation or other obligation
for borrowed money (other than indebtedness of a Jefferson Company to
another Jefferson Company) in excess of an aggregate of $250,000 (for
the Jefferson Companies on a consolidated basis), except in the
ordinary course of the business consistent with past practices (which
shall include, for Jefferson Subsidiaries that are depository
institutions, creation of deposit liabilities, purchases of federal
funds, advances from the Federal Reserve Bank or Federal Home
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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 Jefferson 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 Jefferson
Disclosure Memorandum or the Jefferson Financial Statements); 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 Jefferson
Company, or declare or pay any dividend or make any other distribution
in respect of Jefferson 's capital stock, provided that Jefferson 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 Jefferson Common Stock at a rate of $0.07
per share (with usual and regular record and payment dates in
accordance with past practice as disclosed in Section 7.2(c) of the
Jefferson 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 Jefferson Common Stock do not receive both a
dividend in respect of their Jefferson 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 Jefferson 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
Jefferson Common Stock or any other capital stock of any Jefferson
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 Jefferson Company or issue or authorize the
issuance of any other securities in respect of or in substitution for
shares of Jefferson Common Stock, or sell, lease, mortgage, or
otherwise dispose of or otherwise encumber (i) any shares of capital
stock of any Jefferson Subsidiary (unless any such shares of stock are
sold or otherwise transferred to another Jefferson Company) or (ii)
any Asset having a book value in excess of $250,000 other than in the
ordinary course of business for reasonable and adequate consideration;
or
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(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 Jefferson 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 Jefferson 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 Jefferson Company; grant
any Material increase in fees or other increases in compensation or
other benefits to directors of any Jefferson 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 Jefferson Company and any Person (unless such amendment is
required by Law or a pre-existing contractual obligation) that the
Jefferson 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
Jefferson Company or make any Material change in or to any existing
employee benefit plans of any Jefferson 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 that is contemplated by the Supplemental Letter or this
Agreement; 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 as may be required under this
Agreement; 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 Jefferson Company for
Material money damages or restrictions upon the operations of any
Jefferson Company; or
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(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
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
APPROVAL. 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. Jefferson
shall furnish all information concerning it and the holders of its capital
stock as UPC may reasonably request in connection with such action. Jefferson
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) UPC and Jefferson shall prepare
and, to the extent required by the Securities Laws, file with the SEC a
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Proxy Statement and mail such Proxy Statement to the Jefferson 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 Jefferson shall recommend to its stockholders the
approval of the matters submitted for approval, and (iv) the Board of Directors
of Jefferson shall use their reasonable efforts to obtain such stockholders'
approval, provided that Jefferson may withdraw, modify, or change in an adverse
manner to UPC its recommendations if the Board of Directors of Jefferson, 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 reasonably constitute a breach of the fiduciary duties of
Jefferson'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 Jefferson 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
or NASD.
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 Jefferson Common Stock pursuant to the Merger.
8.3 APPLICATIONS. As soon as reasonably practicable
after execution of this Agreement, UPC shall prepare and file, and Jefferson
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. To
the extent required by the HSR Act, each of the Parties will promptly file with
the United States Federal Trade Commission and the United States Department of
Justice the notification and report form required for the transactions
contemplated hereby and any supplemental or additional information which may
reasonably be requested in connection therewith pursuant to the HSR Act and
will comply in all material respects with the requirements of the HSR Act.
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 Certificate of Merger with the Secretary of State of the State of
Delaware and the Articles of Merger with 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
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Order adversely affecting its ability to consummate the transactions
contemplated herein and to cause to be satisfied the conditions referred to in
Article 9 of this Agreement; provided, that nothing herein shall preclude
either Party from exercising its rights under this Agreement. 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 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
Jefferson shall consult with each other as to the form and substance of any
press release or other public
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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 (provided such Party shall give advance notice of such
disclosure to the other Party to the extent practicable).
8.8 CERTAIN ACTIONS. Except with respect to this
Agreement and the Plan of Merger and the transactions contemplated hereby and
thereby, no Jefferson Company nor any Affiliate thereof nor any Representative
thereof retained by any Jefferson Company shall, directly or indirectly,
initiate, solicit, encourage, or knowingly facilitate (including by way of
furnishing information) any inquiries or the making of any Acquisition
Proposal. Notwithstanding anything herein to the contrary, Jefferson and its
Board of Directors shall be permitted (i) to the extent applicable, to comply
with Rule 14d-9 and Rule 14e-2 promulgated under the 1934 Act with regard to an
Acquisition Proposal, (ii) to engage in any discussions or negotiations with,
or provide any information to, any Person in response to an unsolicited bona
fide written Acquisition Proposal by any such Person, if and only to the extent
that (a) Jefferson's Board of Directors concludes in good faith and consistent
with its fiduciary duties to Jefferson's stockholders under applicable Law that
such Acquisition Proposal could reasonably be expected to result in a Superior
Proposal, (b) prior to providing any information or data to any Person in
connection with an Acquisition Proposal by any such Person, Jefferson's Board
of Directors receives from such Person an executed confidentiality agreement
containing confidentiality terms at least as stringent as those contained in
the Confidentiality Agreement, and (c) prior to providing any information or
data to any Person or entering into discussions or negotiations with any
Person, Jefferson's Board of Directors notifies UPC promptly of such inquiries,
proposals, or offers received by, any such information requested from, or any
such discussions or negotiations sought to be initiated or continued with, any
of its Representatives indicating, in connection with such notice, the name of
such Person and the material terms and conditions of any inquiries, proposals
or offers. Jefferson agrees that it will promptly keep UPC informed of the
status and terms of any such proposals or offers and the status and terms of
any such discussions or negotiations. Jefferson agrees that it will, and will
cause its officers, directors, and Representatives to, immediately cease and
cause to be terminated any activities, discussions, or negotiations existing as
of the date of this Agreement with any parties conducted heretofore with
respect to any Acquisition Proposal. Jefferson agrees that it will use
reasonable best efforts to promptly inform its directors, officers, key
employees, agents, and Representatives of the obligations undertaken in this
Section 8.8. Nothing in this Section 8.8 shall (i) permit Jefferson to
terminate this Agreement (except as specifically provided in Article 10) or
(ii) affect any other obligation of UPC or Jefferson under this Agreement.
8.9 TAX TREATMENT. Each of the Parties undertakes and
agrees to use its reasonable efforts to cause the Merger, and to take no action
before or after the Effective Time which would cause the Merger not, to be
treated as a "reorganization" within the meaning of Section 368(a) of the
Internal Revenue Code for federal income tax purposes.
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8.10 STATE TAKEOVER LAWS. Each Jefferson 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.
8.11 CHARTER PROVISIONS. Each Jefferson Company shall
take all necessary action to ensure that the entering into of this Agreement
and the Plan of Merger and the consummation of the Merger and the other
transactions contemplated hereby and thereby do not and will not result in the
grant of any rights to any Person under the Certificate of Incorporation,
Bylaws, or other governing instruments of any Jefferson 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 Jefferson
Company that may be directly or indirectly acquired or controlled by it.
8.12 RIGHTS AGREEMENT. Jefferson shall take all necessary
action (including, if required, redeeming all of the outstanding Preferred
Stock Purchase Rights or amending or terminating the Jefferson Rights
Agreement) so that the entering into of this Agreement, the acquisition of
shares pursuant to the Stock Option Agreement, and consummation of the Merger
and the other transactions contemplated hereby do not and will not result in
any Person becoming able to exercise any Preferred Stock Purchase Rights under
the Jefferson Rights Agreement or enabling or requiring the Preferred Stock
Purchase Rights to be separated from the shares of Jefferson Common Stock to
which they are attached or to be triggered or to become exercisable.
8.13 AGREEMENT OF AFFILIATES. Jefferson has disclosed in
Section 8.13 of the Jefferson Disclosure Memorandum each Person whom it
reasonably believes may be deemed an "affiliate" of Jefferson for purposes of
Rule 145 under the 1933 Act. Jefferson shall use its reasonable efforts to
cause each such Person to deliver to UPC 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 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. 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.
8.14 EMPLOYEE BENEFITS AND CONTRACTS. Following the
Effective Time, but in no event earlier than the consolidation of Jefferson 's
depository institution Subsidiaries with UPC's depository institution
Subsidiaries, UPC shall provide to officers and employees of the Jefferson
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 plan) under such employee benefit plans, (i) service
under any qualified
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defined benefit or contribution plans of Jefferson shall be treated as service
under UPC's qualified defined benefit or contribution plans and (ii) service
under any other employee benefit plans of Jefferson 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 Jefferson '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 plans. Prior
to the commencement of the Continuing Employees' 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
Jefferson Benefit Plans, as in effect immediately prior to the Effective Time.
During such transition period, the coverage under and participation in the
Jefferson 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. UPC shall and also shall cause UPHC (as the
survivor in the Merger) and the Jefferson Subsidiaries to honor all
employment, severance, retention, consulting, and other compensation Contracts
disclosed in Section 8.14 of the Jefferson Disclosure Memorandum to UPC between
any Jefferson Company and any current or former director, officer, independent
contractor, or employee thereof, and all provisions of the Jefferson Benefit
Plans. The provisions of the immediately preceding sentence of this Section
8.14 are intended to be for the benefit of, and shall be enforceable by each
person described therein.
8.15 INDEMNIFICATION.
(a) For a period of six years after the Effective
Time, UPC shall indemnify, defend and hold harmless the present and former
directors, officers, employees, and agents of Jefferson or any of Jefferson '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 Delaware Law and by Jefferson 's Certificate 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
Jefferson Companies and any director, officer, employee, or agent of any of the
Jefferson 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 Jefferson shall cooperate prior to the Effective
Time in these efforts) to maintain in
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effect for a period of three years after the Effective Time, Jefferson '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 Jefferson 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 Jefferson 's
directors and officers, 150% of the annual premium payments on Jefferson '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 8.15, upon learning of any
such Liability or Litigation, shall promptly notify UPC thereof, provided that
the failure so to notify shall not affect the obligations of UPC under this
Section 8.15 unless and to the extent such failure materially increases UPC's
Liability under this Section 8.15. 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
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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
8.15.
(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 8.15.
(g) The provisions of this Section 8.15 are
intended to be for the benefit of, and shall be enforceable by, each
Indemnified Party and his or her heirs or representatives.
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 APPROVAL. The stockholders of
Jefferson 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, by the provisions of any
governing instruments, and by the rules of the NASD.
(b) REGULATORY APPROVALS. All Consents of,
filings and registrations with, and notifications to, all Regulatory
Authorities required for consummation of the Merger shall have been obtained or
made and shall be in full force and effect and all waiting periods required by
Law shall have expired. No Consent obtained from any Regulatory Authority
which is necessary to consummate the transactions contemplated hereby shall be
conditioned or restricted in a manner (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
consummation 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.
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(d) LEGAL PROCEEDINGS. No court or governmental
or Regulatory Authority of competent jurisdiction shall have enacted, issued,
promulgated, enforced, or entered any Law or Order (whether temporary,
preliminary, or permanent) or taken any other action which prohibits,
restricts, or makes illegal consummation of the transactions contemplated by
this Agreement.
(e) REGISTRATION STATEMENT. The Registration
Statement shall be effective under the 1933 Act, no stop orders suspending the
effectiveness of the Registration Statement shall have been issued, no action,
suit, proceeding, or investigation by the SEC to suspend the effectiveness
thereof shall have been initiated and be continuing, and all necessary
approvals under state securities Laws or the 1933 Act or 1934 Act relating to
the issuance or trading of the shares of UPC Common Stock issuable pursuant to
the Merger shall have been received.
(f) EXCHANGE LISTING. The shares of UPC Common
Stock issuable pursuant to the Merger shall have been approved for listing on
the NYSE, subject to official notice of issuance.
(g) TAX MATTERS. Jefferson shall have received a
written opinion from Lewis, Rice & Fingersh, L.C. and UPC shall have received
a written opinion from Alston & Bird LLP, in each case, in a form reasonably
satisfactory to the Party to whom it was delivered (each a "Tax Opinion"),
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 Jefferson Common Stock who exchange all of their Jefferson 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 Jefferson
Common Stock who exchange all of their Jefferson Common Stock solely for UPC
Common Stock in the Merger will be the same as the tax basis of the Jefferson
Common Stock surrendered in exchange for the UPC Common Stock (reduced by any
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 Jefferson Common Stock solely for UPC
Common Stock in the Merger will be the same as the holding period of the
Jefferson Common Stock surrendered in exchange therefor, provided that such
Jefferson 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 Jefferson and UPC reasonably satisfactory in
form and substance to such counsel.
9.2 CONDITIONS TO OBLIGATIONS OF UPC. The obligations of
UPC to perform this Agreement and consummate the Merger and the other
transactions contemplated hereby are
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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
Jefferson 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
Jefferson 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 Jefferson 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 Jefferson 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 Jefferson; 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 Jefferson or to a matter being "known" by Jefferson shall be
deemed not to include such qualifications.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS.
Each and all of the agreements and covenants of Jefferson 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. Jefferson 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
Jefferson'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 Jefferson the affiliates agreement referred to
in Section 8.12 of this Agreement.
(e) RIGHTS AGREEMENT. None of the events
described in Sections 1(o), 23, or 24 of the Jefferson Rights Agreement shall
have occurred, and the Preferred Stock Purchase Rights shall not have become
non-redeemable or exercisable for capital stock of UPC upon consummation of the
Merger.
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9.3 CONDITIONS TO OBLIGATIONS OF JEFFERSON. The
obligations of Jefferson 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
Jefferson 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 and UPHC 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
Jefferson (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
and UPHC's Board of Directors and stockholders (in the case of UPHC) evidencing
the taking of all corporate action necessary to authorize the execution,
delivery, and performance of this Agreement, and the consummation of the
transactions contemplated hereby, all in such reasonable detail as Jefferson
and its counsel shall request.
(d) FAIRNESS OPINION. Jefferson shall have
received a written opinion of its financial advisor, Sandler O'Neill &
Partners, L.P. dated within five business days of the date of the Proxy
Statement, to the effect that the exchange ratio is fair, from the financial
point of view, to the holders of Jefferson Common Stock.
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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 Jefferson, 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 Jefferson; 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 Jefferson 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 representation
or warranty of the other Party contained in this Agreement which cannot
be or has not been cured within 30 days after the giving of written
notice to the breaching Party of such inaccuracy and which inaccuracy
would provide the terminating Party the ability to refuse to consummate
the Merger under the applicable standard set forth in Section 9.2(a) of
this Agreement in the case of Jefferson 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 Jefferson 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 or (ii) the stockholders of Jefferson
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
(e) By the Board of Directors of either Party in the
event that the Merger shall not have been consummated by June 30, 2001,
if the failure to consummate
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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 Jefferson 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 Jefferson, if it
determines by a vote of a majority of the members of its entire Board,
at any time during the ten-day period commencing two days after the
Determination Date, if both of the following conditions are satisfied:
(1) the Average Closing Price shall be less
than the product of (i) 0.85 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 0.20 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 Jefferson 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 0.85, 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 Jefferson
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).
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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 10 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 on which (i) the Consent of the Board of Governors of the
Federal Reserve System (without regard to any requisite waiting
period thereof) to the Merger shall be received by UPC and (ii)
the Stockholders' Meeting occurs.
"Index Group" shall mean the 13 bank holding
companies listed below, the common stocks of all of which shall
be publicly traded and as to which there shall not have been,
since the Starting Date and before the Determination Date, any
public announcement of a proposal for such company to be
acquired or for such company to acquire another company or
companies in transactions with a value exceeding 25% of the
acquiror's market capitalization. In the event that any such
company or companies are removed from the Index Group, the
weights (which shall be determined based upon the number of
outstanding shares of common stock) shall be redistributed
proportionately for purposes of determining the Index Price. The
13 bank holding companies and the weights attributed to them are
as follows:
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<TABLE>
<CAPTION>
Common Percent
Shares of
Bank Outstanding Total
-------------------------------------- ------------------ -------------
<S> <C> <C>
AmSouth Bancorporation 376,713,817 14.04%
BB&T Corporation 399,893,490 14.91%
Comerica Incorporated 156,496,000 5.83%
Fifth Third Bancorp 465,002,511 17.33%
First Tennessee National Corporation 129,681,012 4.83%
Huntington Bancshares, Inc. 251,330,858 9.37%
M&T Bank Corporation 7,654,758 0.29%
National Commerce Bancorporation 111,059,797 4.14%
Old Kent Financial Corporation 136,925,615 5.10%
Regions Financial Corporation 218,841,161 8.16%
SouthTrust Corporation 168,233,823 6.27%
Summit Bancorp 173,926,726 6.48%
Zions Bancorporation 86,884,952 3.24%
TOTAL 2,682,644,520 100.00%
</TABLE>
"Index Price" on a given date shall mean the
weighted average (weighted in accordance with the factors listed
above) of the closing prices of the companies composing the
Index Group.
"Starting Date" shall mean the fourth full
trading day after the announcement by press release of the
Merger.
"Starting Price" shall mean the closing price
per share of UPC Common Stock as reported on the NYSE (as
reported by The Wall Street Journal or, if not reported thereby,
another authoritative source as chosen by UPC) on the Starting
Date.
If any company belonging to the Index Group or UPC
declares or effects a stock dividend, reclassification,
recapitalization, split-up, combination, exchange of shares, or similar
transaction between the date of this Agreement and the Determination
Date, the prices for the common stock of such company or UPC shall be
appropriately adjusted for the purposes of applying this Section
10.1(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 and no Party shall have
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any Liability or further obligation to any other Party hereunder, 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 8.13 and 8.15 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) and the Supplement Letter delivered
pursuant hereto and incorporated herein by reference.
"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 relating to the Merger as
contemplated by Section 1.1 of this Agreement.
"ASSETS" of a Person shall mean all of the
assets, properties, businesses, and rights of such Person of
every kind, nature, character, and
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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.
"CERTIFICATE OF MERGER" shall mean the
certificate of merger to be executed by UPHC and filed with the
Secretary of State of the State of Delaware, relating to the
Merger as contemplated by Section 1.1 of this Agreement.
"CONFIDENTIALITY AGREEMENTS" shall mean those
certain Confidentiality Agreements, entered into prior to the
date of this Agreement, between Jefferson and UPC.
"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.
"DGCL" shall mean the Delaware General
Corporation Law.
"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
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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, contaminants, petroleum, petroleum
products, or oil (and specifically shall include asbestos
requiring abatement, removal, or encapsulation pursuant to the
requirements of governmental authorities and any polychlorinated
biphenyls).
"HSR ACT" shall mean Section 7A of the Clayton
Act, as added by Title II of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and
regulations promulgated thereunder.
"INTERNAL REVENUE CODE" shall mean the Internal
Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder.
"JEFFERSON COMMON STOCK" shall mean the $.01 par
value common stock of Jefferson.
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"JEFFERSON COMPANIES" shall mean, collectively,
Jefferson and all Jefferson Subsidiaries.
"JEFFERSON DISCLOSURE MEMORANDUM" shall mean the
written information entitled "Jefferson 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 disclosure made therein, specifically
referencing each Section or subsection of this Agreement under
which such disclosure is being made.
"JEFFERSON FINANCIAL STATEMENTS" shall mean (i)
the consolidated statements of condition (including related
notes and schedules, if any) of Jefferson as of June 30, 2000,
and as of December 31, 1999 and 1998, and the related statements
of income, changes in stockholders' equity, and cash flows
(including related notes and schedules, if any) for the six
months ended June 30, 2000, and for each of the three years
ended December 31, 1998, 1999, and 1997, as filed by Jefferson
in SEC Documents and (ii) the consolidated statements of
condition of Jefferson (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 June 30, 2000.
"JEFFERSON PREFERRED STOCK" shall mean the $.01
par value Preferred Stock of Jefferson.
"JEFFERSON RIGHTS AGREEMENT" shall mean that
certain Rights Agreement, dated August 17, 1994, between
Jefferson and Boatmen's Trust Company, as Rights Agent.
"JEFFERSON STOCK PLANS" shall mean the existing
stock option and other stock-based compensation plans of
Jefferson, including without limiting the generality for the
foregoing: Jefferson Savings Bancorp, Inc. 1993 Stock Option and
Incentive Plan; Jefferson Savings Bancorp, Inc. Management
Recognition Plan "A"; Jefferson Savings Bancorp, Inc. Management
Recognition Plan "B"; Jefferson Savings Bancorp, Inc. Management
Recognition Plan "C"; and Jefferson Savings Bancorp, Inc.
Management Recognition Plan "D."
"JEFFERSON SUBSIDIARIES" shall mean the
Subsidiaries of Jefferson, which shall include the Jefferson
Subsidiaries described in Section 5.4 of this Agreement and any
corporation, bank, savings association, or other organization
acquired as a Subsidiary of Jefferson in the future and owned by
Jefferson at the Effective Time.
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"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
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fiduciary capacity), and, where required by the context,
includes the owner or operator of such property, but only with
respect to such property.
"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, (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 Jefferson as a result of the Merger constituting a
change of control) on the operating performance of the Parties,
including expenses incurred by the Parties in consummating the
transactions contemplated by the Agreement, and (e) changes in
economic conditions affecting financial institutions generally.
"NASD" shall mean the National Association of
Securities Dealers, Inc.
"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.
"OPTION SETTLEMENT CLOSING PRICE" shall mean the
average of the daily last sales prices of UPC Common Stock at
the close of regular trading 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 ten
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 fifth trading day
immediately preceding the Effective Time.
"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.
"OTS" shall mean the Office of Thrift
Supervision.
"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 Jefferson or UPC, and
"PARTIES" shall mean both Jefferson 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.
"PLAN OF MERGER" shall mean the plan of merger
providing for the Merger, in substantially the form of Exhibit
2.
"PREFERRED STOCK PURCHASE RIGHTS" shall mean the
preferred stock purchase rights issued pursuant to the Jefferson
Rights Agreement.
"PROXY STATEMENT" shall mean the proxy statement
included as part of the Registration Statement used by Jefferson
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 Jefferson Common Stock.
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"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 Jefferson 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.
"SLHCA" shall mean the provisions relating to
savings and loan holding companies in the federal Home Owners'
Loan Act, as amended.
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"STOCK OPTION AGREEMENT" shall mean the stock
option agreement by and between Jefferson and UPC, in
substantially the form of Exhibit 1.
"STOCKHOLDERS' MEETING" shall mean the meetings
of the stockholders of Jefferson 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.
"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.
"SUPERIOR PROPOSAL" means, with respect to
Jefferson, any written Acquisition Proposal made by a Person
other than UPC which is for (i) (a) a merger, reorganization,
consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution, or similar
transaction involving Jefferson as a result of which either (1)
Jefferson's stockholders prior to such transaction (by virtue of
their ownership of Jefferson's shares) in the aggregate cease to
own at least 50% of the voting securities of the entity
surviving or resulting from such transaction (or the ultimate
parent entity thereof) or (2) the individuals comprising the
Board of Directors of Jefferson prior to such transaction do not
constitute a majority of the board of directors of such ultimate
parent entity, (b) a sale, lease, exchange, transfer, or other
disposition of at least 50% of the Assets of Jefferson and its
Subsidiaries, taken as a whole, in a single transaction or a
series of related transactions, or (c) the acquisition, directly
or indirectly, by a Person of beneficial ownership of 25% or
more of the common stock of Jefferson whether by merger,
consolidation, share exchange, business combination, tender, or
exchange offer or otherwise, and (ii) which is otherwise on
terms which the Board of Directors of Jefferson in good faith
concludes (after consultation with its financial advisors and
outside counsel), taking into account, among other things, all
legal, financial, regulatory, and other aspects of the proposal
and the Person making the proposal, (a) would, if consummated,
result in a transaction that is more favorable to its
stockholders (in their capacities as stockholders), from a
financial point of view,
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than the transactions contemplated by this Agreement, and (b) is
reasonably capable of being completed.
"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 as in effect at the Effective Time.
"UPC CAPITAL STOCK" shall mean, collectively,
the UPC Common Stock, the UPC Preferred Stock and any other
class or series of capital stock of UPC.
"UPC COMMON STOCK" shall mean the $5.00 par
value common stock of UPC.
"UPC COMPANIES" shall mean, collectively, UPC
and all UPC Subsidiaries.
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"UPC FINANCIAL STATEMENTS" shall mean (i) the
consolidated balance sheets (including related notes and
schedules, if any) of UPC as of June 30, 2000, and as of
December 31, 1999 and 1998, and the related statements of
earnings, changes in stockholders' equity, and cash flows
(including related notes and schedules, if any) for the six
months ended June 30, 2000 and for each of the three years ended
December 31, 1999, 1998 and 1997, 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 June 30, 2000.
"UPC PREFERRED STOCK" shall mean the no par
value preferred stock of UPC and shall include the (i) Series E
8% Cumulative, Convertible Preferred Stock, of UPC ("UPC Series
E Preferred Stock") and (ii) Series F Preferred Stock of UPC.
"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, 1999, 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:
Business Combination Section 3.2
Closing Section 1.2
Conversion Option Section 3.5
Effective Time Section 1.3
Exchange Agent Section 4.1
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Exchange Ratio Section 3.1(c)
Indemnified Party Section 8.15
Jefferson Benefit Plans Section 5.13(a)
Jefferson Contracts Section 5.14
Jefferson ERISA Affiliate Section 5.13(e)
Jefferson ERISA Plan Section 5.13(a)
Jefferson Rights Section 3.6
Jefferson Pension Plan Section 5.13(a)
Jefferson SEC Reports Section 5.5(a)
Merger Section 1.1
Option Settlement Payment Section 3.6
Takeover Laws Section 5.19
Tax Opinion Section 9.1(g)
UPC ERISA Affiliate Section 6.17
UPC Plan Section 6.15
UPC SEC Reports Section 6.5(a)
(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 Sandler O'Neill &
Partners, L.P. as to Jefferson and except for Stifel Nicolaus & Co. 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
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Jefferson or UPC, each of Jefferson 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 8.13 and 8.15 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 Jefferson 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 Jefferson Common
Stock entitled to vote thereon.
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 Jefferson, to waive or
extend the time for the compliance or fulfillment by Jefferson of any and all of
its obligations under this Agreement, and to waive any or all of the conditions
precedent to the obligations of UPC under this Agreement, except any condition
which, if not satisfied, would result in the violation of any Law. No such
waiver shall be effective unless in writing signed by a duly authorized officer
of UPC.
(b) Prior to or at the Effective Time, Jefferson,
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 Jefferson 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 Jefferson.
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(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. If, between the date hereof and the Effective Time, UPC shall merge,
consolidate or agree to consolidate or merge with or into another Person, then
provision shall be made as part of the terms of such transaction that the Person
with whom UPC consolidates or merges shall assume UPC's obligations under this
Agreement in accordance with its terms.
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:
Jefferson: JEFFERSON SAVINGS BANCORP, INC.
15435 Clayton Road
Ballwin, Missouri 63011
Telecopy Number: (636) 238-4321
Attention: David V. McCay
Chairman and Chief Executive Officer
Copy to Counsel: LEWIS, RICE & FINGERSH, L.C.
500 North Broadway
Suite 2000
St. Louis, Missouri 63102-2147
Telecopy Number: (314) 241-6056
Attention: John K. Pruellage
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UPC: UNION PLANTERS CORPORATION
7130 Goodlett Farms Parkway
Memphis, Tennessee 38018
Telecopy Number: (901) 580-2939
Attention: Jackson W. Moore
Chairman and Chief Executive Officer
Copy to Counsel: UNION PLANTERS CORPORATION
7130 Goodlett Farms Parkway
Memphis, Tennessee 38018
Telecopy Number: (901) 580-2939
Attention: E. James House, Jr.
ALSTON & BIRD LLP
601 Pennsylvania Avenue, N.W.
North Building, 11th Floor
Washington, D.C. 20004
Telecopy Number: (202) 756-3333
Attention: Frank M. Conner III
11.9 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Tennessee, without regard
to any applicable conflicts of Laws, except to the extent that the Laws of the
State of Delaware relate to the consummation of the Merger.
11.10 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
11.11 CAPTIONS. The captions contained in this Agreement are
for reference purposes only and are not part of this Agreement.
11.12 INTERPRETATIONS. Neither this Agreement nor any
uncertainty or ambiguity herein shall be construed or resolved against any
Party, whether under any rule of construction or otherwise. No Party to this
Agreement shall be considered the draftsman. The Parties acknowledge and agree
that this Agreement has been reviewed, negotiated, and accepted by all Parties
and their attorneys and shall be construed and interpreted according to the
ordinary meaning of the words used so as fairly to accomplish the purposes and
intentions of the Parties.
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
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Parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
11.14 SEVERABILITY. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
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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: JEFFERSON SAVINGS BANCORP, INC.
By: /s/ Paul J. Milano By: /s/ David V. McCay
------------------------- ------------------------------------
Paul J. Milano David V. McCay
Secretary Chairman and Chief Executive Officer
[CORPORATE SEAL]
ATTEST: UNION PLANTERS CORPORATION
By /s/ E. James House, Jr. By: /s/ Jackson W. Moore
-------------------------- ------------------------------------
E. James House, Jr. Jackson W. Moore
Secretary Chairman and Chief Executive Officer
[CORPORATE SEAL]
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APPENDIX B
PLAN OF MERGER
OF
JEFFERSON SAVINGS BANCORP, INC.
INTO AND WITH
UNION PLANTERS HOLDING CORPORATION
Pursuant to this Plan of Merger dated as of__________,2000
("Plan of Merger"), JEFFERSON SAVINGS BANCORP, INC. ("Jefferson"), a corporation
organized and existing under the Laws of the State of Delaware, 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:
1.1 "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 relating to the Merger as contemplated by Section 2.1 of this Plan of
Merger.
1.2 "CERTIFICATE OF MERGER" shall mean the Certificate of
Merger to be executed by UPHC and filed with the Secretary of State of the State
of Delaware relating to the Merger as contemplated by Section 2.1 of this Plan
of Merger.
1.3 "CONSENT" shall mean any consent, approval,
authorization, clearance, exemption, waiver, or similar affirmation by any
Person pursuant to any Contract, Law, Order, or Permit.
1.4 "DGCL" shall mean the Delaware General Corporation Law.
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1.5 "EFFECTIVE TIME" shall mean the date and time on which
the Merger becomes effective pursuant to the Laws of the States of Delaware and
Tennessee as defined in Section 2.2 of this Plan of Merger.
1.6 "EXCHANGE AGENT" shall mean the exchange agent selected
by UPC, as defined in the Merger Agreement.
1.7 "INTERNAL REVENUE CODE" shall mean the Internal Revenue
Code of 1986, as amended, and the rules and regulations promulgated thereunder.
1.8 "JEFFERSON COMMON STOCK" shall mean the $.01 par value
common stock of Jefferson.
1.9 "JEFFERSON COMPANIES" shall mean, collectively,
Jefferson and all Jefferson Subsidiaries.
1.10 "JEFFERSON RIGHTS AGREEMENT" shall mean that certain
Rights Agreement, dated August 17, 1994, between Jefferson and Boatmen's Trust
Company, as Rights Agent.
1.11 "JEFFERSON STOCK PLANS" shall have the meaning set forth
in the Merger Agreement.
1.12 "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.
1.13 "MERGER" shall mean the merger of Jefferson into and
with UPHC as provided in Section 2.1 of this Plan of Merger.
1.14 "MERGER AGREEMENT" shall mean the Agreement and Plan of
Reorganization, dated as of September 20, 2000, by and between UPC and
Jefferson.
1.15 "NASD" shall mean the National Association of Securities
Dealers, Inc.
1.16 "NYSE" shall mean the New York Stock Exchange, Inc.
1.17 "PREFERRED STOCK PURCHASE RIGHTS" shall mean the
preferred stock purchase rights issued pursuant to the Jefferson Rights
Agreement.
1.18 "SEC" shall mean the United States Securities and
Exchange Commission.
1.19 "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
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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.
1.20 "SURVIVING CORPORATION" shall mean UPHC as the surviving
corporation resulting from the Merger.
1.21 "TBCA" shall mean the Tennessee Business Corporation
Act, as in effect at the Effective Time.
1.22 "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.
1.23 "UPC COMMON STOCK" shall mean the $5.00 par value common
stock of UPC.
1.24 "UPC COMPANIES" shall mean, collectively, UPC and all
UPC Subsidiaries.
1.25 "UPC PREFERRED STOCK" shall mean the no par value
preferred stock of UPC and shall include the (i) Series E, 8% Cumulative,
Convertible Preferred Stock, of UPC ("UPC Series E Preferred Stock"), and (ii)
Series F Preferred Stock of UPC.
1.26 "UPC RIGHTS" shall mean the preferred stock purchase
rights issued pursuant to the UPC Rights Agreement.
1.27 "UPC RIGHTS AGREEMENT" shall mean that certain Rights
Agreement, dated January 19, 1999, between UPC and Union Planters Bank, National
Association, as Rights Agent.
1.28 "UPHC COMMON STOCK" shall mean the $1.00 par value
common stock of UPHC.
Any capitalized term not defined herein shall have the meaning
ascribed to it in the Merger Agreement.
ARTICLE 2
TRANSACTIONS AND TERMS OF MERGER
2.1 MERGER. Subject to the terms and conditions of this Plan
of Merger, at the Effective Time, Jefferson shall be merged with and into UPHC
in accordance with the provisions of Section 252 of the DGCL and with the effect
provided in Section 259 of the DGCL and in accordance with the provisions of
Section 48-21-109 of the TBCA and with the effect provided in
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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.
2.2 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 Certificate of Merger shall become effective with the Secretary of
State of the State of Delaware and the Articles of Merger shall become effective
with the Secretary of State of the State of Tennessee (the "Effective Time").
Subject to the terms and conditions hereof, unless otherwise mutually agreed
upon in writing by the 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 Jefferson approve the matters relating to this Plan of Merger required to be
approved by such stockholders by applicable Law.
2.3 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.
2.4 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.
2.5 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
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 Jefferson, or the stockholders of either of the foregoing,
the shares of the constituent corporations shall be converted as follows:
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(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 and be unaffected
solely as a result of the Merger.
(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 and be unaffected
solely as a result of the Merger.
(c) Each share of Jefferson Common Stock (including
any associated Preferred Stock Purchase Rights, but excluding shares
held by any Jefferson 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 .433 of a share of UPC Common Stock (as possibly adjusted
pursuant to the Merger 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 Jefferson Common Stock
shall be accompanied by a UPC Right.
3.2 ANTI-DILUTION PROVISIONS. In the event Jefferson changes
the number of shares of Jefferson Common Stock or 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 (or
establishes a record date for changing) 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 JEFFERSON OR UPC. Each of the shares of
Jefferson Common Stock held by any Jefferson 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 Plan of Merger, each holder of shares of Jefferson 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)
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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 Jefferson Common Stock pursuant to
stock options, stock appreciation rights, or stock awards ("Jefferson Rights")
granted by Jefferson under the Jefferson Stock Plans, which are outstanding at
the Effective Time, whether or not exercisable, shall be, at the election of the
holder of such Jefferson Right either (i) canceled in exchange for a cash
payment for each share of Jefferson Common Stock subject to such Jefferson Right
(the "Option Settlement Payment") or (ii) converted into and become rights with
respect to UPC Common Stock, and UPC shall assume each Jefferson Right, in
accordance with the Jefferson Stock Plans and stock option agreement by which it
is evidenced (the "Conversion Option"). A holder of a Jefferson Right must make
such election in writing delivered to UPC no later than 5:00 P.M., Central Time,
on the fifth day prior to the day on which the Effective Time occurs. To the
extent a holder does not provide UPC with such written election, that holder
shall receive the Option Settlement Payment for each share of Jefferson Common
Stock subject to any Jefferson Right held by such holder. The Option Settlement
Payment shall be equal to the difference between (i) the product of (1) the
Exchange Ratio and (2) the Option Settlement Closing Price and (ii) the price
per share of Jefferson Common Stock pursuant to which the holder of such
Jefferson Right may purchase the shares of Jefferson Common Stock to which such
Jefferson Right relates. At the Effective Time, each such Jefferson Right for
which the holder has selected the Option Settlement Payment shall no longer
represent the right to purchase shares of Jefferson Common Stock, but in lieu
thereof shall represent only the nontransferable right to receive the Option
Settlement Payment, which payment (without interest) shall be made to such
holder within five business days after the Effective Time upon presentation of
the agreement representing such Jefferson Right for cancellation.
(b) With respect to the Conversion Option, the
Jefferson Stock Plans shall be amended hereby such that from and after the
Effective Time, (i) UPC and its Salary and Benefits Committee shall be
substituted for Jefferson and the committee of Jefferson's Board of Directors
(including , if applicable, the entire Board of Directors of Jefferson)
administering such Jefferson Stock Plan, (ii) each Jefferson 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 Jefferson Right shall be equal to the number of shares of
Jefferson Common Stock subject to such Jefferson 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 shall be adjusted by dividing
the per share exercise (or threshold) price under each such Jefferson 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(b), each Jefferson 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).
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(c) As soon as reasonably practicable after the
Effective Time, UPC shall deliver to the participants in each Jefferson Stock
Plan selecting the Conversion Option an appropriate notice setting forth such
participant's rights pursuant thereto and the grants pursuant to such Jefferson
Stock Plan shall continue in effect on the same terms and conditions (subject to
the adjustments required by Section 3.5(a) and (b) after giving effect to the
Merger), and UPC shall comply with the terms of each Jefferson Stock Plan to
ensure, to the extent required by, and subject to the provisions of, such
Jefferson Stock Plan, that Jefferson 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 Jefferson 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.
(d) All restrictions or limitations on transfer with
respect to Jefferson Common Stock awarded under the Jefferson Stock Plans or any
other plan, program, or arrangement of any Jefferson 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.
ARTICLE 4
EXCHANGE OF SHARES
4.1 EXCHANGE PROCEDURES. As soon as reasonably practicable
after the Effective Time, UPC and Jefferson shall cause the exchange agent
selected by UPC (the "Exchange Agent") to mail to the former stockholders of
Jefferson appropriate transmittal materials (which shall specify that delivery
shall be effected, and risk of loss and title to the certificates theretofore
representing shares of Jefferson Common Stock shall pass, only upon proper
delivery of such certificates to the Exchange Agent). If any Certificate shall
have been lost, stolen, mislaid, or destroyed, upon receipt of (i) an affidavit
of that fact from the holder claiming such Certificate to be lost, mislaid,
stolen, or destroyed, (ii) such guarantee as UPC or the Exchange Agent may
require, including an open penalty lost securities bond, as indemnity, and (iii)
any other documents necessary to evidence and effect the bona fide exchange
thereof, the Exchange Agent shall issue to such holder the consideration into
which the shares represented by such lost, stolen, mislaid, or destroyed
Certificate shall have been converted. The Exchange Agent may establish such
other reasonable and customary rules and procedures in connection with its
duties as it may deem appropriate. After the Effective Time, each holder of
shares of Jefferson Common Stock (other than shares to be canceled pursuant to
Section 3.3 of this Plan of Merger)
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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 Jefferson 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 Jefferson Common Stock is entitled
as a result of the Merger until such holder surrenders such holder's certificate
or certificates representing the shares of Jefferson Common Stock for exchange
as provided in this Section 4.1. The certificate or certificates of Jefferson
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
Jefferson 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 JEFFERSON STOCKHOLDERS. At the
Effective Time, the stock transfer books of Jefferson shall be closed as to
holders of Jefferson Common Stock immediately prior to the Effective Time and no
transfer of Jefferson 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 Jefferson 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 3.4 of this Plan of Merger in exchange therefor, subject,
however, to the Surviving Corporation's obligation to pay any dividends or make
any other distributions with a record date prior to the Effective Time which
have been declared or made by Jefferson in respect of such shares of Jefferson
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 Jefferson 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 Jefferson Common Stock
are converted, regardless of whether such holders have exchanged their
certificates representing Jefferson 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 all 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 Jefferson
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 Jefferson Common Stock certificate,
both the UPC Common Stock certificate (together with all such undelivered
dividends or other distributions
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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
5.1 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 Jefferson shall be conditioned on the
satisfaction of, or waiver by Jefferson of, of the conditions precedent to the
Merger set forth in Sections 9.1 and 9.3 of the Merger Agreement.
5.2 TERMINATION. This Plan of Merger may be terminated at
any time prior to the Effective Time by the parties hereto as provided in
Article 10 of the Merger Agreement.
5.3 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.
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IN WITNESS WHEREOF, the parties have caused their duly
authorized officers to execute this Plan of Merger as of the date first above
written.
JEFFERSON SAVINGS BANCORP, INC.
ATTEST: By:
----------------------------- --------------------------------
Paul J. Milano David V. McCay
Secretary Chairman and Chief Executive Officer
UNION PLANTERS HOLDING
CORPORATION
ATTEST: By:
----------------------------- --------------------------------
E. James House, Jr. Jackson W. Moore
Secretary President
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APPENDIX C
____________, 2000
Board of Directors
Jefferson Savings Bancorp, Inc.
15435 Clayton Road
Ballwin, MO 63011
Ladies and Gentlemen:
Jefferson Savings Bancorp, Inc. ("Jefferson") and Union Planters
Corporation ("UPC") have entered into an Agreement and Plan of Reorganization,
dated as of September 20, 2000 (the "Agreement"), pursuant to which Jefferson
will be merged with and into a wholly-owned subsidiary of UPC (the "Merger").
Upon consummation of the Merger, each share of Jefferson common stock, par value
$.01 per share (together with the rights attached thereto issued pursuant to the
Rights Agreement, dated August 17, 1994, between Jefferson and Boatmen's Trust
Company, as Rights Agent), issued and outstanding immediately prior to the
Merger (the "Jefferson Shares"), other than certain shares specified in the
Agreement, will be converted into the right to receive 0.433 of a share (the
"Exchange Ratio") of UPC common stock, par value $5.00 per share (together with
the rights attached thereto issued pursuant to the Rights Agreement, dated as of
January 19, 1999, between UPC and Union Planters Bank, National Association, as
Rights Agent). The Exchange Ratio is subject to adjustment under certain
circumstances as set forth in the Agreement. The terms and conditions of the
Merger are more fully set forth in the Agreement. You have requested our opinion
as to the fairness, from a financial point of view, of the Exchange Ratio to the
holders of Jefferson Shares.
Sandler O'Neill & Partners, L.P., as part of its investment banking
business, is regularly engaged in the valuation of financial institutions and
their securities in connection with mergers and acquisitions and other corporate
transactions. In connection with this opinion, we have reviewed, among other
things: (i) the Agreement and exhibits thereto; (ii) the Stock Option Agreement,
dated as of September 20, 2000, by and between Jefferson and UPC; (iii) certain
publicly available financial statements and other historical financial
information of Jefferson that we deemed relevant; (iv) certain publicly
available financial statements and other historical financial information of UPC
that we deemed relevant; (v) certain internal financial analyses and forecasts
of Jefferson prepared by and/or reviewed with management of Jefferson and the
views of senior management of Jefferson, based on certain limited discussions
with certain members of senior management, regarding Jefferson's past and
current business, financial condition, results of operations and future
prospects; (vi) consensus earnings per share estimates for UPC for the years
ending December 31, 2000 and 2001 published by I/B/E/S and the views of senior
management of UPC, based on certain limited discussions with
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Board of Directors
Jefferson Savings Bancorp, Inc.
____________, 2000
Page 2
certain members of senior management, regarding UPC's past and current business,
financial condition, results of operations and future prospects; (vii) the pro
forma impact of the Merger; (viii) the publicly reported historical price and
trading activity for Jefferson's and UPC's common stock, including a comparison
of certain financial and stock market information for Jefferson and UPC with
similar publicly available information for certain other companies the
securities of which are publicly traded; (ix) the financial terms of recent
business combinations in the savings institution industry, to the extent
publicly available; (x) the current market environment generally and the banking
environment in particular; and (xi) such other information, financial studies,
analyses and investigations and financial, economic and market criteria as we
considered relevant.
In performing our review, we have relied upon the accuracy and
completeness of all of the financial and other information that was available to
us from public sources, that was provided to us by Jefferson or UPC or their
respective representatives or that was otherwise reviewed by or discussed with
us and have assumed such accuracy and completeness for purposes of rendering
this opinion. We have not been asked to and have not undertaken an independent
verification of any of such information and we do not assume any responsibility
or liability for the accuracy or completeness thereof. We did not make an
independent evaluation or appraisal of the specific assets, the collateral
securing assets or the liabilities (contingent or otherwise) of Jefferson or UPC
or any of their subsidiaries, or the collectibility of any such assets, nor have
we been furnished with any such evaluations or appraisals. We did not make an
independent evaluation of the adequacy of the allowance for loan losses of
Jefferson or UPC nor have we reviewed any individual credit files relating to
Jefferson or UPC and, with your permission, we have assumed that the respective
allowances for loan losses for both Jefferson and UPC are adequate to cover such
losses and will be adequate on a pro forma basis for the combined entity. We are
not accountants and have relied upon the reports of the independent accountants
for each of Jefferson and UPC for the accuracy and completeness of the financial
statements furnished to us. With respect to the financial projections and
earnings estimates prepared by and/or reviewed with the respective managements
of Jefferson and UPC, we have assumed that they have been reasonably prepared
and that they reflect the best currently available estimates and judgments of
the respective managements of the respective future financial performances of
Jefferson and UPC and that such performances will be achieved, and we express no
opinion as to such financial projections or estimates or the assumptions on
which they are based. We have also assumed that there has been no material
change in Jefferson's or UPC's assets, financial condition, results of
operations, business or prospects since the date of the most recent financial
statements made available to us. We have assumed in all respects material to our
analysis that Jefferson and UPC will remain as going concerns for all periods
relevant to our analyses, that all of the representations and warranties
contained in the Agreement and all related agreements are true and correct, that
each party to such agreements will perform all of the covenants required to be
performed by such party under such agreements, that the conditions precedent in
the Agreement are not waived and that the Merger will be accounted for as a
purchase and will qualify as a tax-free reorganization
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Board of Directors
Jefferson Savings Bancorp, Inc.
____________, 2000
Page 3
for federal income tax purposes.
Our opinion is necessarily based on financial, economic, market and
other conditions as in effect on, and the information made available to us as
of, the date hereof. Events occurring after the date hereof could materially
affect this opinion. We have not undertaken to update, revise, reaffirm or
withdraw this opinion or otherwise comment upon events occurring after the date
hereof. We are expressing no opinion herein as to what the value of UPC common
stock will be when issued to Jefferson's shareholders pursuant to the Agreement
or the prices at which Jefferson's or UPC's common stock will trade at any time.
We have acted as Jefferson's financial advisor in connection with the
Merger and will receive a fee for our services, a significant portion of which
is contingent upon consummation of the Merger. In addition, in the ordinary
course of our business as a broker-dealer, we may purchase securities from and
sell securities to Jefferson and UPC. We may also actively trade the debt and
equity securities of Jefferson and UPC for our own account and for the accounts
of our customers and, accordingly, may at any time hold a long or short position
in such securities.
Our opinion is directed to the Board of Directors of Jefferson in
connection with its consideration of the Merger and does not constitute a
recommendation to any shareholder of Jefferson as to how such shareholder should
vote at any meeting of shareholders called to consider and vote upon the Merger.
Our opinion is not to be quoted or referred to, in whole or in part, in a
registration statement, prospectus, proxy statement or in any other document,
nor shall this opinion be used for any other purposes, without Sandler O'Neill's
prior written consent; provided, however, that we hereby consent to the
inclusion of this opinion as an appendix to Jefferson's and UPC's Proxy
Statement/Prospectus dated the date hereof and to the references to this opinion
therein.
Based upon and subject to the foregoing, it is our opinion, as of the
date hereof, that the Exchange Ratio is fair, from a financial point of view, to
the holders of Jefferson Shares.
Very truly yours,
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Amended and 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.
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ITEM 21. EXHIBITS.
The following exhibits are filed herein or have been, as noted,
previously filed:
<TABLE>
<CAPTION>
Exhibit No. Description
------------- ----------------------------------------------------------------
<S> <C>
2.1 Agreement and Plan of Reorganization, dated as of September 20,
2000, by and between Jefferson Savings Bancorp, Inc. and Union
Planters Corporation (included as Appendix A to the proxy
statement-prospectus included in this Registration Statement).
2.2 Plan of Merger, dated as of __________, 200_, by and between
Jefferson Savings Bancorp, Inc. and Union Planters Holding
Corporation (included as Appendix B to the proxy
statement-prospectus included in this Registration Statement).
5.1 Opinion of E. James House, Jr., General Counsel and Corporate
Secretary of Union Planters Corporation as to the validity of
the shares of Union Planters Corporation common stock.
8.1 Opinion of Lewis, Rice & Fingersh, L.C. as to federal income tax
consequences.
23.1 Consent of PricewaterhouseCoopers LLP (for Union Planters).
23.2 Consent of KPMG LLP (for Jefferson Savings).
23.3 Consent of E. James House, Jr., General Counsel and Corporate
Secretary of Union Planters Corporation (included in Exhibit
5.1).
23.4 Consent of Lewis, Rice & Fingersh, L.C. (to be filed by
amendment and included in Exhibit 8.1).
23.5 Consent of Sandler O'Neill & Partners, L.P. (to be filed by amendment).
24.1 Power of Attorney (contained on the signature page hereof).
99.1 Form of Proxy of Jefferson Savings.
</TABLE>
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<PAGE> 181
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 SEC 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
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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.
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<PAGE> 183
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this amendment to the registration statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Memphis, State of Tennessee on this the 14th day of November, 2000.
REGISTRANT
UNION PLANTERS CORPORATION
By: /s/ Jackson W. Moore
-----------------------------------
Jackson W. Moore
Chairman and Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned directors and officers of Union Planters Corporation do
hereby constitute and appoint Jackson W. Moore and E. James House, Jr. , and
each of them, our true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for us and in our name, place and stead, in
any and all capacities, to sign any and all amendments to this Registration
Statement and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, and we do
hereby ratify and confirm all that said attorneys-in-fact and agents, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
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<PAGE> 184
Pursuant to the requirements of the Securities Act of 1933, as
amended, this registration statement has been signed below by the following
persons in the capacities and at the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ Jackson W. Moore Chairman and Chief Executive November 14, 2000
--------------------- Officer
Jackson W. Moore
/s/ Bobby L. Doxey Senior Executive Vice President, November 14, 2000
--------------------- Chief Financial Officer and
Bobby L. Doxey Chief Accounting Officer
/s/ Albert M. Austin Director November 14, 2000
---------------------
Albert M. Austin
/s/ George W. Bryan Director November 14, 2000
---------------------
George W. Bryan
/s/ James E. Harwood Director November 14, 2000
---------------------
James E. Harwood
/s/ Parnell S. Lewis, Jr. Director November 14, 2000
--------------------------
Parnell S. Lewis, Jr.
</TABLE>
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<PAGE> 185
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
Director
------------------------
Dr. V. Lane Rawlins
/s/ Donald F. Schuppe Director November 14, 2000
------------------------
Donald F. Schuppe
Director
------------------------
David M. Thomas
/s/ Richard A. Trippeer Director November 14, 2000
------------------------
Richard A. Trippeer, Jr.
Director
------------------------
Spence L. Wilson
</TABLE>
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<PAGE> 186
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
------------- ----------------------------------------------------------------
<S> <C>
2.1 Agreement and Plan of Reorganization, dated as of September 20,
2000, by and between Jefferson Savings Bancorp, Inc. and Union
Planters Corporation (included as Appendix A to the proxy
statement-prospectus included in this Registration Statement).
2.2 Plan of Merger, dated as of __________, 200_, by and between
Jefferson Savings Bancorp, Inc. and Union Planters Holding
Corporation (included as Appendix B to the proxy
statement-prospectus included in this Registration Statement).
5.1 Opinion of E. James House, Jr., General Counsel and Corporate
Secretary of Union Planters Corporation as to the validity of
the shares of Union Planters Corporation common stock.
8.1 Opinion of Lewis, Rice & Fingersh, L.C. as to federal income tax
consequences.
23.1 Consent of PricewaterhouseCoopers LLP (for Union Planters).
23.2 Consent of KPMG LLP (for Jefferson Savings).
23.3 Consent of E. James House, Jr., General Counsel and Corporate
Secretary of Union Planters Corporation (included in Exhibit
5.1).
23.4 Consent of Lewis, Rice & Fingersh, L.C. (to be filed by
amendment and included in Exhibit 8.1).
23.5 Consent of Sandler O'Neill & Partners, L.P. (to be filed by amendment).
24.1 Power of Attorney (contained on the signature page hereof).
99.1 Form of Proxy of Jefferson Savings.
</TABLE>
