AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of the 31st day of August, 2000
(as it may be amended from time to time hereafter, this "Plan"), by and between
JWGENESIS FINANCIAL CORP. (the "Company") and FIRST UNION CORPORATION ("First
Union").
RECITALS:
(A) THE COMPANY. The Company is a corporation duly organized and
validly existing in good standing under the laws of the State of Florida, with
its principal executive offices located in Boca Raton, Florida. As of the date
hereof, the Company has 30,000,000 authorized shares of common stock, each of
$.001 par value ("Company Common Stock") and 5,000,000 authorized shares of
Preferred Stock, each of $.10 par value ("Company Preferred Stock")(no other
class of capital stock being authorized), of which 8,560,702 shares of Company
Common Stock and no shares of Company Preferred Stock were issued and
outstanding as of August 11, 2000.
(B) FIRST UNION. First Union is a corporation duly organized and
validly existing in good standing under the laws of the State of North Carolina,
with its principal executive offices located in Charlotte, North Carolina. First
Union is registered as a financial holding company and a bank holding company
under the Bank Holding Company Act of 1956, as amended.
(C) MERGING ENTITY. Promptly as practicable after the date hereof,
First Union shall cause the formation of a wholly-owned subsidiary of First
Union, which shall be incorporated under the laws of the State of Florida (the
"Merging Entity"). The Merging Entity shall be formed solely for the purpose of
engaging in the transactions contemplated by this Plan.
(D) RIGHTS, ETC. Except as Previously Disclosed (as hereinafter
defined), there are no shares of capital stock of the Company authorized and
reserved for issuance, the Company has no Rights (as hereinafter defined) issued
or outstanding and the Company has no commitment to authorize, issue or sell any
such shares or any Rights, except pursuant to this Plan. There are no preemptive
rights in respect of the Company Common Stock.
(E) APPROVALS. The Board of Directors of the Company and First Union
each has approved this Plan and has authorized the execution hereof in
counterparts.
(F) VOTING AGREEMENT. As a condition and inducement to First Union's
willingness to enter into this Plan, certain individuals have entered into an
agreement with First Union in the form attached hereto as ANNEX A (the "Voting
Agreement"), pursuant to which such individuals have agreed to vote all shares
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of Company Common Stock owned or acquired by them in favor of approval of the
transactions contemplated by this Plan.
(G) RETENTION PROGRAM. First Union and the Company have agreed, in
connection with the transactions contemplated hereby, to establish a retention
program on substantially the terms described herein, the purpose of which is to
retain the services of certain employees and Independent Contractors (as
hereinafter defined) of the Company and the Company Subsidiaries (as hereinafter
defined) following the consummation of the transactions contemplated hereby.
(H) EMPLOYMENT AGREEMENTS. In connection with the transactions
contemplated hereby, certain employees of the Company identified on ANNEX B
hereto have entered into employment agreements with First Union.
In consideration of their mutual promises and obligations, the parties
hereto adopt and make this Plan and prescribe the terms and conditions thereof
and the manner and basis of carrying it into effect, which shall be as follows:
I. THE MERGER.
1.01. THE MERGER. On the Effective Date (as hereinafter defined):
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(A) THE CONTINUING CORPORATION. The Merging Entity shall merge
with and into the Company (the "Merger"), the separate existence of the
Merging Entity shall cease and the Company (sometimes hereinafter
referred to as the "Continuing Corporation") shall survive the Merger
and the name of the Continuing Corporation shall be "First Union
Genesis Holdings, Inc". The Continuing Corporation shall continue to be
governed by the laws of the State of Florida, and the separate
corporate existence of the Continuing Corporation with all its rights,
privileges, immunities, powers and franchises shall continue unaffected
by the Merger. The Merger shall have the effects specified in the
Florida Business Corporation Act (the "FBCA").
(B) ARTICLES OF INCORPORATION; BYLAWS; DIRECTORS; OFFICERS.
The articles of incorporation and by-laws of the Continuing Corporation
shall be those of the Company in effect immediately prior to the
Effective Time (as hereinafter defined). The directors of the Merging
Entity in office immediately prior to the Effective Time shall be the
directors of the Continuing Corporation and the officers of the Merging
Entity and the Company in office immediately prior to the Effective
Time shall be the officers of the Continuing Corporation, in each case,
together with such additional directors and officers as may thereafter
be elected, who in the case of directors shall hold office until such
time as their successors are elected and qualified.
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1.02. EFFECTIVE DATE.
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(A) If the conditions set forth in SECTIONS 6.01(A) and (B)
and 6.03(C) through (H) have been satisfied or waived in writing on or
before January 2, 2001, the effective date (the "Effective Date") of
the Merger shall be January 2, 2001. If those conditions have not been
satisfied or waived on such date, the Effective Date shall occur on
such later date as the parties hereto mutually agree after such
conditions are satisfied or waived; provided, however, that if the
parties are not able to agree upon such date, the Effective Date shall
be such date as First Union shall notify the Company in writing not
less than five days prior thereto, which date shall not be more than 15
days after the satisfaction or waiver of such conditions.
Notwithstanding anything to the contrary in the preceding, the
occurrence of the Effective Date shall be subject to the satisfaction
or written waiver of all of the conditions set forth in ARTICLE VI.
(B) Prior to the Effective Date, the Merging Entity and the
Company shall execute and deliver to the Department of State of the
State of Florida, articles of merger, in accordance with applicable
law, specifying the date and time at which the Merger shall become
effective. The time on the Effective Date at which the Merger becomes
effective is referred to as the "Effective Time".
II. CONSIDERATION.
2.01. CONSIDERATION. Subject to the provisions of this Plan, at the
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Effective Time:
(A) OUTSTANDING MERGING ENTITY COMMON STOCK. Each of the shares of
Merging Entity common stock issued and outstanding immediately prior to the
Effective Time shall by virtue of the Merger, become and be converted into one
share of Company Common Stock, which shall be owned by First Union.
(B) OUTSTANDING COMPANY COMMON STOCK. Each share (excluding shares held
by the Company or any Company Subsidiaries or by First Union or any of its
subsidiaries, in each case other than in a fiduciary capacity, in connection
with any market making or proprietary trading activities or as a result of debts
previously contracted ("Excluded Shares")) of Company Common Stock issued and
outstanding immediately prior to the Effective Time shall, by virtue of the
Merger, automatically and without any action on the part of the holder thereof,
become and be converted into the right to receive, subject to any adjustment as
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provided in this SECTION 2.01(B), $12 in cash (as the same may be adjusted, the
"Merger Consideration"). Notwithstanding the foregoing, if:
(1) registered representatives of the JWG Broker-Dealers (as
hereinafter defined) as of the date hereof and accounting for at least
95% of the Aggregate Production (as hereinafter defined) do not both
(i) enter into Independent Contractor agreements with JWGFS (as
hereinafter defined) for the calendar year 2001 (substantially in the
customary form provided to First Union before the date of this Plan) on
or prior to the Effective Time and (ii) continue as registered
representatives of JWGFS and engage in their customary business
function as of the Effective Time, then the Merger Consideration shall
be reduced to $11; and
(2) registered representatives of the JWG Broker-Dealers as of
the date hereof and accounting for at least 90% of Aggregate Production
do not both (i) enter into Independent Contractor agreements with JWGFS
for the calendar year 2001 (substantially in the customary form
provided to First Union before the date of this Plan) on or prior to
the Effective Time or (ii) continue as registered representatives of
JWGFS and engage in their customary business function as of the
Effective Time, then the Merger Consideration shall be reduced further
to $10.00;
provided, however, that a registered representative of any JWG Broker-Dealer as
of the date hereof will be treated as having met the requirements of clauses (i)
and (ii) of SECTIONS 2.01(B)(1) and (2) if, as of the Effective Time, the
registered representative is an employee of First Union or an affiliate of it.
2.02. STOCKHOLDER RIGHTS; STOCK TRANSFERS. At the Effective Time,
holders of Company Common Stock shall cease to be, and shall have no rights as,
stockholders of the Company, other than to receive the Merger Consideration
provided under this ARTICLE II, without interest. After the Effective Time,
there shall be no transfers on the stock transfer books of the Company or the
Continuing Corporation of the shares of Company Common Stock which were issued
and outstanding immediately prior to the Effective Time.
2.03. PAYING AGENT AND EXCHANGE PROCEDURES.
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(A) First Union shall designate First Union National Bank to act
as agent for the exchange of the certificates representing shares of Company
Common Stock for the Merger Consideration upon surrender of the certificates for
the Company Common Stock (the "Exchange Agent"). As soon as reasonably
practicable after the Effective Date, the Exchange Agent will send or cause to
be sent to each former stockholder of the Company of record immediately prior to
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the Effective Time, transmittal materials for use in exchanging such
stockholder's certificates for Company Common Stock for the Merger
Consideration. The Merger Consideration will be delivered to such stockholder
only upon delivery to the Exchange Agent of (i) properly completed and duly
executed transmittal materials (in the form provided by the Exchange Agent) and
(ii) the certificates representing all of such shares of Company Common Stock
(or indemnity satisfactory to First Union and the Exchange Agent, in their
judgment, if any of such certificates are lost, stolen or destroyed). No
interest will be paid or shall accrue on the cash payable upon surrender of any
such certificates.
(B) Notwithstanding the foregoing, neither the Exchange Agent nor
any party hereto shall be liable to any former holder of Company Common Stock
for any amount properly delivered to a public official pursuant to applicable
abandoned property, escheat or similar laws.
2.04. EXCLUDED SHARES. Each of the Excluded Shares shall be canceled
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and retired at the Effective Time, and no consideration shall be issued in
exchange therefor.
2.05. COMPANY DERIVATIVE SECURITIES. As soon as practicable after the
date of this Plan, the Board of Directors of the Company (the "Company Board")
(or, if appropriate, any committee administering the Previously Disclosed stock
option plans of the Company (the "Company Stock Option Plans")) shall adopt such
resolutions or take or cause to be taken such other actions (if any) as may be
required, including without limitation, amending the Company Stock Option Plans
and/or obtaining any necessary consents or agreements from holders of Company
Options (as hereinafter defined), holders of Non-Plan Company Options (as
hereinafter defined) and/or holders of warrants to purchase shares of Company
Common Stock (the "Company Warrants"), to provide that:
(A) each stock option to purchase shares of Company Common
Stock pursuant to a Company Stock Option Plan (each, a "Company
Option") outstanding immediately prior to the Effective Time (whether
vested or unvested) shall be converted, at the Effective Time, into the
right to receive, in lieu of the shares of Company Common Stock
theretofore purchasable upon the exercise of the Company Option, an
amount in cash equal to (i) the excess, if any, of (1) the Merger
Consideration over (2) the exercise price per share of Company Common
Stock subject to such Company Option, multiplied by (ii) the number of
shares of Company Common Stock for which such Company Option shall not
theretofore have been exercised. At the Effective Time, each Company
Option with an exercise price equal to or greater than the Merger
Consideration shall be terminated without payment of any consideration.
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The Company shall provide to each holder of a Company Option any
required notice under the Company Option;
(B) each Company Warrant outstanding immediately prior to the
Effective Time shall be converted, at the Effective Time, into the
right to receive, in lieu of the shares of Company Common Stock
theretofore purchasable upon the exercise of the Company Warrant, an
amount in cash equal to (i) the excess, if any, of (1) the Merger
Consideration over (2) the exercise price per share of Company Common
Stock subject to such Company Warrant, multiplied by (ii) the number of
shares of Company Common Stock for which such Company Warrant shall not
theretofore have been exercised; PROVIDED that this Section 2.05(B)
does not require the Company to modify any put right Previously
Disclosed with respect to any Warrant. At the Effective Time, each
Company Warrant with an exercise price equal to or greater than the
Merger Consideration shall be terminated without payment of any
consideration. The Company shall provide to each holder of a Company
Warrant any required notice under the Company Warrant; and
(C) each stock option to purchase shares of Company Common
Stock that was not issued pursuant to a Company Stock Option Plan
(each, a "Non-Plan Company Option") outstanding immediately prior to
the Effective Time (whether vested or unvested) shall be converted, at
the Effective Time, in the same manner as Company Options pursuant to
Section 2.05(A). The Company has Previously Disclosed each Non-Plan
Option outstanding as of the date of this Plan.
The Company shall consult with First Union in connection with obtaining any
agreement or consent required in connection with this Section 2.05 and shall
from time to time (or at any time at the request of First Union) notify First
Union of the progress thereof. In furtherance of the preceding, the Company
agrees that, to the extent it determines (and under Applicable Law (as
hereinafter defined) is permitted) to allow holders of Company Options and/or
Non-Plan Company Options, as such, to participate directly or indirectly in the
distribution or transfer contemplated by Section 5.10(D), such participation
will be contingent on the holder consenting to the conversion of the holder's
Company Options and Non-Plan Company Options as provided in this Section 2.05.
2.06. RESERVATION OF RIGHT TO REVISE TRANSACTION. First Union may at
any time change the method of effecting the acquisition of the Company
(including without limitation the provisions of this ARTICLE II) if and to the
extent it deems such change to be desirable; PROVIDED, HOWEVER, that no such
change shall (A) alter or change the amount or kind of consideration to be
issued to holders of Company Common Stock as provided for in this Plan, (B)
materially impede or delay receipt of any approval referred to in SECTION 6.01
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or the consummation of the transactions contemplated by this Plan or (C)
materially and adversely affect the tax consequences to holders of Company
Common Stock as a result of receiving the consideration provided for in this
Plan.
III. ACTIONS PENDING CONSUMMATION.
3.01. FORBEARANCES OF THE COMPANY. From the date hereof until the
Effective Time, except as expressly contemplated by this Plan or as Previously
Disclosed (but subject to SECTIONS 5.10 and 5.11), without the prior written
consent of First Union, which consent shall not be unreasonably withheld, the
Company will not, and will cause each of the Company Subsidiaries not to:
(A) ORDINARY COURSE. Conduct the business of the Company and
the Company Subsidiaries other than in the ordinary and usual course or fail to
use reasonable efforts to preserve intact their business organizations and
assets and maintain their rights, franchises and existing relations with
clients, customers, suppliers, employees, business associates and any
independent contractors associated with the Company or the Company Subsidiaries
through the Company's or the Company Subsidiaries' affiliated branch offices
(the "Independent Contractors"), or take any action reasonably likely to have an
adverse effect upon the Company's ability to perform any of its obligations
under this Plan, or engage in any new lines of business. Without limiting the
generality of the definition of "Independent Contractor" in this SECTION
3.01(A), such term shall include each person that is a registered representative
of the Company or any Company Subsidiary and is not an employee of the Company
or a Company Subsidiary.
(B) CAPITAL STOCK. Other than pursuant to Rights Previously
Disclosed (on SCHEDULE 3.01(B)) and outstanding on the date hereof, (1) issue,
sell or otherwise permit to become outstanding, or authorize the creation of,
any additional shares of capital stock of the Company or any Rights, (2) enter
into any agreement with respect to the foregoing, or (3) permit any additional
shares of capital stock of the Company to become subject to new grants of
employee or director stock options, other Rights or similar stock-based employee
rights.
(C) DIVIDENDS, ETC. (1) Make, declare, pay or set aside for
payment any dividend (other than dividends from wholly owned Company
Subsidiaries to the Company or another wholly owned Company Subsidiary) on or in
respect of, or declare or make any distribution on, any shares of its capital
stock or (2) directly or indirectly adjust, split, combine, redeem, reclassify,
purchase or otherwise acquire, any shares of its capital stock.
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(D) COMPENSATION; EMPLOYMENT AGREEMENTS; ETC. Enter into,
amend, modify or renew any employment, consulting, severance or similar
agreements or arrangements with any director, officer or employee of the Company
or any Company Subsidiary or with any Independent Contractor, or grant any
salary, pay or wage increase or increase any employee benefit (including
incentive or bonus payments), except (1) for normal individual increases in
compensation to employees in the ordinary course of business consistent with
past practice, (2) for other changes that are required by applicable law, (3) to
satisfy Previously Disclosed (on SCHEDULE 3.01(D)) contractual obligations
existing as of the date hereof, or (4) for employment or other arrangements for,
or grants of awards to, newly hired employees or Independent Contractors in the
ordinary course of business consistent with past practice and, in the case of
non-support personnel or personnel with annual salaries exceeding $50,000, after
prior consultation with First Union (First Union has Previously Disclosed the
person with whom the Company shall consult, subject to change from time to time
on notice by First Union provided in accordance with Section 8.07).
(E) BENEFIT PLANS. Enter into, establish, adopt or amend
(except (i) as may be required by applicable law or (ii) to satisfy Previously
Disclosed (on SCHEDULE 3.01(E)) contractual obligations existing as of the date
hereof or for employment or other arrangements for, or grants of awards to,
newly hired employees or Independent Contractors in the ordinary course of
business consistent with past practice and after prior consultation with First
Union) any pension, retirement, stock option, stock purchase, savings, profit
sharing, deferred compensation, consulting, bonus, group insurance or other
employee benefit, incentive or welfare contract, plan or arrangement, or any
trust agreement (or similar arrangement) related thereto, in respect of any
director, officer or employee of the Company or any of the Company Subsidiaries
or in respect of any Independent Contractor, or take any action to accelerate
the vesting or exercisability of stock options, restricted stock or other
compensation or benefits payable thereunder.
(F) DISPOSITIONS. Except for the sale of securities or other
investments or assets in the ordinary course of business consistent with past
practice or as Previously Disclosed (on SCHEDULE 3.01(F)), sell, transfer,
mortgage, encumber or otherwise dispose of or discontinue any of its assets,
business or properties.
(G) ACQUISITIONS. Except for the purchase of securities or
other investments or assets in the ordinary course of business consistent with
past practice or as Previously Disclosed (on SCHEDULE 3.01(G)), acquire any
assets, business, securities or properties of any other entity.
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(H) GOVERNING DOCUMENTS. Amend the Company's Articles of
Incorporation, by-laws or the charter or by-laws (or similar governing
documents) of any of the Company Subsidiaries.
(I) ACCOUNTING METHODS. Implement or adopt any change in its
accounting principles, practices or methods, other than as may be required by
generally accepted accounting principles and after notifying First Union of any
such required change.
(J) CONTRACTS. Except in the ordinary course of business
consistent with past practice, enter into or terminate any material contract or
amend or modify in any material respect any of its existing material contracts.
(K) CLAIMS. Settle any claim, action or proceeding, except for
any claim, action or proceeding involving solely money damages in an amount,
individually and in the aggregate for all such settlements, not more than
$300,000 (net of the amount of applicable insurance coverage not disputed by the
insurance carrier) and which is not reasonably likely to establish an adverse
precedent or basis for subsequent settlements.
(L) ADVERSE ACTIONS. Knowingly take any action that is
intended or is reasonably likely to (1) result in any of its representations and
warranties set forth in this Plan being or becoming untrue in any material
respect (excluding any materiality provision relating thereto) at any time at or
prior to the Effective Time, (2) result in any of the conditions to the Merger
set forth in ARTICLE VI not being satisfied or (3) result in a material
violation of any provision of this Plan (excluding any materiality provision
relating thereto) except, in each case, as may be required by applicable law or
regulation.
(M) INDEBTEDNESS. (1) Incur any indebtedness for borrowed
money (including indebtedness relating to acquisitions of Company Common Stock)
other than in the ordinary course of business or (2) settle, modify or forgive
any indebtedness for borrowed money owed to the Company (including indebtedness
relating to acquisitions of Company Common Stock).
(N) COMMITMENTS. Agree, commit to or enter into any agreement
to take any of the actions referred to in SECTION 3.01(A) through (M).
3.02. FORBEARANCES OF FIRST UNION. From the date hereof until the
Effective Time, except as expressly contemplated by this Plan, without the prior
written consent of the Company, which consent shall not be unreasonably
withheld, First Union will not, and will cause each of its Subsidiaries not to,
knowingly take any action that is intended or is reasonably likely to (1) result
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in any of its representations and warranties set forth in this Plan being or
becoming untrue in any material respect (excluding any materiality provision
relating thereto) at any time at or prior to the Effective Time, (2) result in
any of the conditions to the Merger set forth in ARTICLE VI not being satisfied
or (3) result in a material violation of any provision of this Plan (excluding
any materiality provision relating thereto) except, in each case, as may be
required by applicable law or regulation.
IV. REPRESENTATIONS AND WARRANTIES.
4.01. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
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Company hereby represents and warrants to First Union as follows:
(A) RECITALS. The facts set forth in the Recitals of this Plan
with respect to it are true and correct.
(B) ORGANIZATION, STANDING, AUTHORITY AND REGISTRATIONS. The
Company is duly qualified to do business and is in good standing in the States
of the United States and foreign jurisdictions where its ownership or leasing of
property or the conduct of its business requires it to be so qualified and in
which the failure to be duly qualified, individually or in the aggregate, is
reasonably likely to have a Material Adverse Effect (as hereinafter defined) on
the Company. Each of the Company and the Company Subsidiaries has in effect all
federal, state, local, and foreign governmental authorizations necessary for it
to own or lease its properties and assets and to carry on its business as it is
now conducted, except for such authorizations, the absence of which,
individually or in the aggregate, is not reasonably likely to have a Material
Adverse Effect on the Company. Each of JWGenesis Financial Services, Inc.
("JWGFS"), JWGenesis Securities, Inc. ("JWG Securities"), JWGenesis Financial
Group, Inc. ("JWGFG"), JWGenesis Capital Markets, Inc. ("JWG Capital Markets"),
and DMG Securities, Inc. ("DMG" and, together with JWGFS, JWG Securities, JWGFG
and JWG Capital Markets the "JWG Broker-Dealers") is duly registered, qualified
to do business and in good standing as a broker-dealer with the Securities and
Exchange Commission (the "SEC"), each of the JWG Broker-Dealers is registered
with the National Association of Securities Dealers, Inc., (the "NASD"), JWG
Securities is a member in good standing of the New York Stock Exchange, Inc.
(the "NYSE"), and each of the JWG Broker-Dealers is a member in good standing of
all other securities and commodities exchanges in which the conduct of its
business requires membership or registration. JWGenesis Insurance, Inc. and each
of the JWG Broker-Dealers is licensed as an insurance agent in each state or
jurisdiction where the conduct of its business requires it to be so licensed.
(C) SHARES. The outstanding shares of Company Common Stock are
validly issued and outstanding, fully paid and nonassessable, and are subject to
no, and have not been issued in violation of any, preemptive or similar rights.
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As of the date hereof, except as Previously Disclosed, there are no shares of
Company Common Stock authorized and reserved for issuance, the Company does not
have any Rights issued or outstanding with respect to Company Common Stock, and
the Company does not have any commitment to authorize, issue or sell any Company
Common Stock or Rights. The number of shares of Company Common Stock which are
issuable and reserved for issuance upon exercise of Company Options and Company
Warrants as of the date hereof are Previously Disclosed. No holder of Company
Common Stock has any right to dissent to the Merger under the applicable
provisions of the FBCA.
(D) COMPANY SUBSIDIARIES.
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(1) The Company has Previously Disclosed a list of
all the Company Subsidiaries, including the states in which such
Company Subsidiaries are organized, a brief description of such Company
Subsidiaries' principal activities, and if any of such Company
Subsidiaries is not wholly-owned by the Company or a Company
Subsidiary, the percentage owned by the Company or any Company
Subsidiary and the names, addresses and percentage ownership by any
other individual or corporation, partnership, joint venture, business
trust, limited liability corporation or partnership, association or
other organization (each, a "Business Entity"). No equity securities of
any of the Company Subsidiaries are or may become required to be issued
(other than to the Company or a wholly-owned Company Subsidiary) by
reason of any Rights with respect thereto. Except as Previously
Disclosed, there are no contracts, commitments, understandings or
arrangements by which any of the Company Subsidiaries is or may be
bound to sell or otherwise issue any shares of its capital stock, and
there are no contracts, commitments, understandings or arrangements
relating to the rights of the Company to vote or to dispose of such
shares. All of the shares of capital stock of each Company Subsidiary
are fully paid and nonassessable and subject to no preemptive rights
and, except as Previously Disclosed, are owned by the Company or a
Company Subsidiary free and clear of any liens, encumbrances, charges,
security interests, restrictions (including restrictions on voting
rights or rights of disposition), defaults, or equities of any
character or claims or third party rights of whatever nature
(collectively, "Liens"). Each Company Subsidiary is in good standing
under the laws of the jurisdiction in which it is incorporated or
organized, and is duly qualified to do business and in good standing in
each jurisdiction where its ownership or leasing of property or the
conduct of its business requires it to be so qualified, except where
the failure to be duly qualified is not reasonably likely, individually
or in the aggregate, to have a Material Adverse Effect on the Company.
The term "Company Subsidiary" means each JWG Broker-Dealer and any
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Business Entity in which the Company, directly or indirectly, (i) owns
or controls 50% or more of any class of such entity's voting
securities, (ii) in the case of partnerships, serves as a general
partner, (iii) in the case of a limited liability company, serves as a
managing member, or (iv) otherwise has the ability to elect a majority
of the directors, trustees or managing members thereof.
(2) The Company has Previously Disclosed a list of
all equity securities it or a Company Subsidiary holds for its own
account and not in a bona fide fiduciary capacity, as of the date
hereof, involving, in the aggregate, ownership or control of 5% or more
of any class of the issuer's voting securities or 25% or more of the
issuer's equity (treating subordinated debt as equity). The Company has
Previously Disclosed a list of all partnerships, joint ventures or
similar entities in which it or any Company Subsidiary owns or controls
an interest and the nature and amount of such interest.
(E) CORPORATE POWER. The Company and each of the Company
Subsidiaries has the corporate power and authority to carry on its business as
it is now being conducted and to own or lease all its material properties and
assets.
(F) CORPORATE AUTHORITY. Subject to any necessary receipt of
approval by its stockholders referred to in SECTION 6.01(A), each of this Plan
and the transactions contemplated hereby has been authorized by all necessary
corporate action of the Company, and is a valid and binding agreement of the
Company enforceable in accordance with its terms, subject as to enforcement to
bankruptcy, insolvency and other similar laws of general applicability relating
to or affecting creditors' rights and to general equity principles.
(G) NO DEFAULTS. Subject to the approval by the stockholders
of the Company holding at least a majority of the votes entitled to be cast, the
required regulatory approvals Previously Disclosed, the Previously Disclosed
required filings under federal and state securities and insurance laws and the
Previously Disclosed approvals of the NYSE and any other applicable exchange of
the Merger and the other transactions contemplated hereby, the execution,
delivery and performance of this Plan and the consummation by the Company of the
transactions contemplated hereby, does not and will not (1) constitute a breach
or violation of, or a default under, or cause or allow the acceleration or
creation of a Lien (with or without the giving of notice, passage of time or
both) pursuant to, any law, rule or regulation or any judgment, decree, order,
governmental or non-governmental permit or license, or agreement, indenture or
instrument of it or any of the Company Subsidiaries or to which the Company or
any of the Company Subsidiaries or its or their properties is subject or bound,
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which breach, violation, default or Lien is reasonably likely, individually or
in the aggregate, to have a Material Adverse Effect on the Company, (2)
constitute a breach or violation of, or a default under, its Articles of
Incorporation, charter or Bylaws, or similar governing documents of the Company
or any Company Subsidiary, or (3) require any consent or approval under any such
law, rule, regulation, judgment, decree, order, governmental or non-governmental
permit or license or the consent or approval of any other party to any such
agreement, indenture or instrument, other than any such consent or approval,
which if not obtained, would not be reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect on the Company.
(H) COMPANY REPORTS. Except as Previously Disclosed, the
Company has timely filed all material reports, registrations, statements and
other filings, together with any amendments required to be made with respect
thereto, that were required to be filed since December 31, 1995 with (1) the
SEC, (2) any applicable federal, state, local or foreign governmental
authorities and (3) the NASD, the NYSE, the American Stock Exchange, Inc., the
Municipal Securities Rulemaking Board (the "MSRB") or any other non-governmental
self-regulatory agency, commission or authority (a "Self-Regulatory Body") (all
such reports and statements, including the financial statements, exhibits and
schedules thereto, being collectively referred to herein as the "Company
Reports"), including without limitation, all material reports, registrations,
statements and filings required under the Investment Company Act of 1940
(together with the rules and regulations thereunder, the "Investment Company
Act"), the Investment Advisers Act of 1940 (together with the rules and
regulations thereunder, the "Investment Advisers Act"), the Securities Exchange
Act of 1934 (together with the rules and regulations thereunder, the "Exchange
Act"), the Securities Act of 1933 (together with the rules and regulations
thereunder, the "Securities Act") and any applicable state securities or "blue
sky" laws. As of their respective dates (and without giving effect to any
amendments or modifications filed after the date of this Plan with respect to
Company Reports filed before the date of this Plan), each of the Company Reports
complied in all material respects with the statutes, rules, regulations and
orders enforced or promulgated by the Regulatory Authority (as hereinafter
defined) with which they were filed and did not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(I) FINANCIAL STATEMENTS. The Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1999, and all other documents filed
or to be filed by the Company or any Company Subsidiary subsequent to December
31, 1999, under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, in the
form filed with the SEC (in each case, the "Company Financial Reports"), did not
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and will not as of their respective dates contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading; and each of the balance sheets in or
incorporated by reference into the Company Financial Reports (including the
related notes and schedules thereto) fairly presents and will fairly present the
financial position of the entity or entities to which it relates as of its date
and each of the statements of income and changes in stockholders' equity and
cash flows or equivalent statements in the Company Financial Reports (including
any related notes and schedules thereto) fairly presents the results of
operations, changes in stockholders' equity and changes in cash flows, as the
case may be, of the entity or entities to which it relates for the periods set
forth therein, in each case in accordance with generally accepted accounting
principles consistently applied during the periods involved, except in each case
as may be noted therein, subject to normal and recurring year-end audit
adjustments in the case of unaudited statements.
(J) ABSENCE OF UNDISCLOSED LIABILITIES. Except as Previously
Disclosed or disclosed in the Company Financial Statements prior to the date
hereof, none of the Company or the Company Subsidiaries has any obligation or
liability (whether accrued, contingent or otherwise), including liabilities
under Environmental Laws (as hereinafter defined), that, individually or in the
aggregate, is reasonably likely to have a Material Adverse Effect on the
Company.
(K) ABSENCE OF CERTAIN CHANGES. Since December 31, 1999, the
business of the Company and the Company Subsidiaries has been conducted in the
ordinary and usual course, consistent with past practice and there has not been:
(1) any event, occurrence, development or state of
circumstances or facts which has had or could reasonably be expected to
constitute or result in a Material Adverse Effect on the Company; or
(2) except as Previously Disclosed or disclosed in
the Company Financial Statements prior to the date hereof, any event,
occurrence, development or state of circumstances or facts which would
result in a violation of the covenants set forth in ARTICLE III of this
Plan had such event, occurrence, development or state of circumstances
or facts occurred after the date hereof.
(L) PROPERTIES; SECURITIES. Except as specifically reserved
against or otherwise disclosed in the Company Financial Statements (including
the related notes and schedules thereto) and except for those properties and
assets that have been sold or otherwise disposed of in the ordinary course of
business, and except as Previously Disclosed, the Company and the Company
Subsidiaries have good and marketable title, free and clear of all Liens, to all
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of the properties and assets, tangible and intangible, reflected in the Company
Financial Statements as being owned by the Company or the Company Subsidiaries
as of the dates thereof, other than those Liens that, individually or in the
aggregate, are not reasonably likely to have a Material Adverse Effect on the
Company. The Company and the Company Subsidiaries do not, directly or
indirectly, control any real property not used in the ordinary course of their
business, except as Previously Disclosed. All buildings and all fixtures,
equipment, and other property and assets which are held under leases or
subleases by any of the Company or the Company Subsidiaries are held under valid
leases or subleases enforceable in accordance with their respective terms,
except for instances where the failure to be so enforceable is not reasonably
likely, individually or in the aggregate, to have a Material Adverse Effect on
the Company. Each of the Company and the Company Subsidiaries has good and
marketable title to all securities held by it (except securities sold under
repurchase agreements or held in any fiduciary or agency capacity), free and
clear of any Lien, except to the extent such securities are pledged in the
ordinary course of business consistent with prudent business practices to secure
obligations of each of the Company or any of the Company Subsidiaries. Such
securities are valued on the books of the Company or the Company Subsidiaries in
accordance with generally accepted accounting principles.
(M) LITIGATION; REGULATORY ACTION. Except as Previously
Disclosed, (1) no litigation, proceeding or controversy ("Litigation") before
any court, arbitrator, mediator or Regulatory Authority (as hereinafter defined)
is pending against the Company or the Company Subsidiaries which, individually
or in the aggregate, has or is reasonably likely to have a Material Adverse
Effect on the Company, and, to the Company's knowledge, no such Litigation has
been threatened; (2) neither the Company nor any of the Company Subsidiaries or
properties is a party to or is subject to any order, decree, agreement,
memorandum of understanding or similar arrangement with, or a commitment letter
or similar submission to, any federal, state, local, municipal or foreign
governmental agency or authority or Self-Regulatory Body (the "Regulatory
Authorities") charged with the supervision or regulation of broker-dealers,
securities underwriting or trading, stock exchanges, commodities exchanges,
investment companies, investment advisers or insurance agents and brokers
(including without limitation, the SEC, the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board"), , the NYSE, the NASD, the American
Stock Exchange, Inc., the MSRB, and the Federal Trade Commission) or the
supervision or regulation of the Company or any of the Company Subsidiaries; and
(3) neither the Company nor any of the Company Subsidiaries has been advised by
any such Regulatory Authority that such Regulatory Authority is contemplating
issuing or requesting (or is considering the appropriateness of issuing or
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requesting) any such order, decree, agreement, memorandum or understanding,
commitment letter or similar submission. Previously Disclosed is a true and
complete list, as of the date hereof, of all Litigation pending or threatened
relating to the Company or any of the Company Subsidiaries or arising out of any
state of facts relating to the sale of investment products by the Company, the
Company Subsidiaries or any employees thereof or any Independent Contractor
(including without limitation, equity or debt securities, mutual funds,
insurance contracts, annuities, partnership and limited partnership interests,
interests in real estate, investment banking services, securities underwritings
in which the Company or any Company Subsidiary was a manager, co-manager,
syndicate member or distributor, Derivatives Contracts (as hereinafter defined)
or structured notes).
(N) COMPLIANCE WITH LAWS. Except as Previously Disclosed:
(1) each of the Company and the Company Subsidiaries,
in the conduct of its respective business (including without
limitation, municipal securities and NASDAQ market-making activities),
is in compliance in all respects with all applicable federal, state,
local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders or decrees applicable thereto or to the employees and
Independent Contractors conducting such businesses, and the rules of
all Self-Regulatory Bodies applicable thereto (collectively,
"Applicable Law"), except for such instances of noncompliance which are
not reasonably likely, individually or in the aggregate, to have a
Material Adverse Effect on the Company;
(2) each of the Company, the Company Subsidiaries,
their respective officers and employees of any of the preceding and the
Independent Contractors has all permits, licenses, authorizations,
orders and approvals of, and has made all filings, applications and
registrations with, all Regulatory Authorities that are required in
order to permit the Company and the Company Subsidiaries to own and
operate their businesses as presently conducted and that are material
to the business of the Company and the Company Subsidiaries, taken as a
whole; all such permits, licenses, certificates of authority, orders
and approvals are in full force and effect and, to the Company's
knowledge, no suspension or cancellation of any of them is threatened
or reasonably likely; and all such filings, applications and
registrations are current;
(3) None of the Company or the Company Subsidiaries
has received a notification or communication from any Regulatory
Authority (a) asserting that any of them (or any of their respective
directors, officers, employees or controlling persons or any
Independent Contractor) is not in compliance with any of the statutes,
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rules, regulations or ordinances which such Regulatory Authority
enforces, or has otherwise engaged in any unlawful business practice,
which, as a result of such noncompliance in any such instance,
individually or in the aggregate, is reasonably likely to have a
Material Adverse Effect on the Company, (b) threatening to revoke any
license, franchise, permit, or governmental authorization which
revocation, individually or in the aggregate, is reasonably likely to
have a Material Adverse Effect on the Company, (c) requiring any of
them (or any of their respective directors, officers, employees or
controlling persons or any Independent Contractor) to enter into a
cease and desist order, agreement, or memorandum of understanding (or
requiring the board of directors of any of them to adopt any resolution
or policy) or (d) restricting or disqualifying the activities of the
Company or any of the Company Subsidiaries (except for restrictions
generally imposed by rule, regulation or administrative policy on
broker-dealers generally);
(4) To the knowledge of the Company, there is no
pending or threatened investigation, review or disciplinary proceeding
by any Regulatory Authority against the Company, any Company Subsidiary
or any officer, director, employee or Independent Contractor thereof,
except for such investigation, review or disciplinary proceedings which
are not reasonably likely, individually or in the aggregate, to have a
Material Adverse effect on the Company;
(5) None of the Company, the Company Subsidiaries or,
to the Company's knowledge, any "affiliated person" (as defined in the
Investment Company Act) of any of the preceding is ineligible pursuant
to Section 9(a) or 9(b) of the Investment Company Act to serve as an
investment advisor (or in any other capacity contemplated by the
Investment Company Act) to an Investment Company. None of the Company,
the Company Subsidiaries or any "associated person" (as defined in the
Investment Advisers Act) of any of the preceding is ineligible pursuant
to Section 203 of the Investment Advisers Act to serve as an investment
advisor or as an associated person to a registered investment advisor;
(6) None of the Company, the Company Subsidiaries or,
to the Company's knowledge, any affiliate of any of the preceding is
subject to a "statutory disqualification" as defined in Section
3(a)(39) of the Exchange Act or is subject to a disqualification that
would be a basis for limitations on the activities, functions or
operations of, or suspension or revocation of the registration of any
broker-dealer Company Subsidiary as a broker-dealer, municipal
securities dealer, government securities broker or government
securities dealer under Section 15, Section 15B or Section 15C of the
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Exchange Act and, to the Company's knowledge, there is no reasonable
basis for, or proceeding or investigation, whether preliminary or
otherwise, that is reasonably likely to result in, any such
limitations, suspension or revocation;
(7) None of the Company or the Company Subsidiaries
is required to be registered as an investment company, commodity
trading advisor, commodity pool operator, futures commission merchant,
introducing broker, or transfer agent under any federal, state, local
or foreign statutes, laws, rules or regulations;
(8) None of the Company or the Company Subsidiaries,
in the conduct of its business with respect to employee benefit plans
subject to Title I of ERISA (as hereinafter defined), has (a) breached
any applicable fiduciary duty under Part 4 of Title I of ERISA which
would subject it to liability under Sections 405 or 409 of ERISA or (b)
engaged in a "prohibited transaction" within the meaning of Section 406
of ERISA or Section 4975(c) of the Code (as hereinafter defined) which
would subject the Company to liability or Taxes (as hereinafter
defined) under Sections 409 or 502(i) of ERISA or Section 4975(a) of
the Code, except for such instances of the foregoing which are not
reasonably likely, individually or in the aggregate, to have a Material
Adverse Effect on the Company;
(9) Each of the Company and the Company Subsidiaries
has conducted a "reasonable investigation" of the business and affairs
of each person the securities of which it has underwritten (within the
meaning of Section 2(11) of the Securities Act) within the three years
preceding the date of this Plan or within the period between the date
of this Plan and the Effective Time; and
(10) None of the Company or the Company Subsidiaries
is subject to regulation under the Investment Company Act. The Company
and the Company Subsidiaries are and, except for instances of
noncompliance which are not reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect on the Company, each of
their employees and each of the Independent Contractors which are or
who are required to be registered as a broker-dealer, an investment
advisor, a registered representative, an insurance agent or a sales
person (or in similar capacity) with the SEC, the securities or
insurance commission of any state or foreign jurisdiction or any
Self-Regulatory Body are duly registered as such and such registrations
are in full force and effect. All federal, state, local and foreign
registration requirements have been complied with in all material
respects and such registrations as currently filed, and all periodic
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reports required to be filed with respect thereto, are accurate and
complete in all material respects. The Company has made available to
First Union true and correct copies of (a) each Form G-37/G-38 filed by
the Company (or any predecessor) with the MSRB since January 1, 1996,
and (b) all records required to be kept by the Company under Rule
G-8(a)(xvi) of the MSRB. There has been no contributions or payments,
and there is not any other information, that would be required to be
disclosed by the Company or any of the Company Subsidiaries under MSRB
rules and regulations, except for noncompliance of the foregoing which
is not reasonably likely, individually or in the aggregate, to have a
Material Adverse Effect on the Company.
(O) CONTRACTS.
(1) MATERIAL CONTRACTS. The Company has Previously
Disclosed each of the following contracts, agreements, commitments,
arrangements, leases, insurance policies, or other instruments to which
either the Company or any Company Subsidiary is a party, or by which
any of them is bound or to which any of their properties or assets is
subject (each, a "Material Contract"):
(i) any contract providing for annual
payments in excess of $50,000 or aggregate payments in excess
of $100,000;
(ii) any lease of real property;
(iii) any partnership, joint venture or
similar contract, or any Rights to acquire from any person any
capital stock, voting securities or securities convertible
into or exchangeable for capital stock or voting securities of
such person;
(iv) any executory contract relating to the
acquisition or disposition of any business (whether by merger,
sale of stock, sale of assets or otherwise);
(v) any outstanding indenture, mortgage,
promissory note, loan agreement, guarantee or other contract
or commitment for the borrowing of money by the Company or any
Company Subsidiary or the deferred purchase price of property
in excess of $50,000 (in either case, whether incurred,
assumed, guaranteed or secured by any asset);
(vi) any license, franchise or similar
contract material to the Company or any Company Subsidiary or
any agreement relating to any trade name or Intellectual
Property (as hereinafter defined) that is material to the
Company or any Company Subsidiary;
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(vii) any exclusive dealing arrangement or
other contract or arrangement containing covenants which limit
the ability of the Company or any Company Subsidiary to
compete in any line of business or with any person or which
involve any restriction of geographical area in which, or
method by which, the Company or any Company Subsidiary may
carry on its business (other than as may be required by law or
any applicable Regulatory Authority);
(viii) any contracts between any affiliate
(for purposes of this SECTION 4.01(O), within the meaning of
Rule 144 under the Securities Act) of the Company, on the one
hand, and the Company or any Company Subsidiary, on the other
hand; and
(ix) any other contract that is material to
the Company; provided that any such contract made in the
ordinary course of business need not be Previously Disclosed
under this SECTION 4.01(O) unless it is of the type specified
in Item 601(b)(10(ii) of the SEC's Regulation S-K.
A copy of each such contract has been supplied or made available to
First Union.
(2) DEFAULTS. Except as Previously Disclosed, as of
the date hereof, neither the Company nor any Company Subsidiary is in
default under any Material Contract or any other contract, agreement,
commitment, arrangement, lease, insurance policy, or other instrument
to which it is a party, by which its respective assets, business, or
operations may be bound or affected, or under which it or its
respective assets, business, or operations receives benefits (each,
collectively with the Material Contracts, a "Contract"), which default,
individually or in the aggregate, is reasonably likely to have a
Material Adverse Effect on the Company, and there has not occurred any
event that, with the lapse of time or the giving of notice or both,
would constitute such a default.
(3) CONTRACTS WITH CLIENTS. Except for instances of
noncompliance with the following representations (SECTION
4.01(O)(3)(A-B)) which would not be reasonably likely, individually or
in the aggregate, to have a Material Adverse Effect on the Company:
(A) Each of the Company and the Company
Subsidiaries is in compliance with the terms of each contract
with any customer to whom the Company or any Company
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Subsidiary provides services (a "Client"), and each such
contract is in full force and effect with respect to the
applicable Client. There are no disputes pending or, to the
Company's knowledge, threatened with any Client under the
terms of any such contract or with any former Client. The
Company has provided or made available to First Union true and
complete copies of the standard form of all advisory,
sub-advisory and similar agreements with Clients; and
(B) Each extension of credit by the Company
or any of the Company Subsidiaries or, to the knowledge of the
Company, by Fiserv Clearing, Inc. ("Fiserv") or Bear Stearns
Clearing, Inc. ("Bear Stearns") to any Client (i) is in full
compliance with Regulation T of the Federal Reserve Board or
any substantially similar regulation of any Regulatory
Authority, (ii) is fully secured, and (iii) the Company or a
Company Subsidiary or, to the knowledge of the Company, Fiserv
or Bear Stearns, as the case may be, has a first priority
perfected security interest in the collateral securing such
extension.
(P) NO BROKERS. All negotiations relative to this Plan and the
transactions contemplated hereby have been carried on by it directly with the
other parties hereto and no action has been taken by it that would give rise to
any valid claim against any party hereto or its affiliates for a brokerage
commission, finder's fee or other like payment, excluding a fee Previously
Disclosed to First Union to be paid by the Company to Berkshire Capital
Corporation.
(Q) EMPLOYEE BENEFIT PLANS.
(1) Previously Disclosed is a complete list of all
bonus, deferred compensation, pension, retirement, profit-sharing,
thrift, savings, employee stock ownership, stock bonus, stock purchase,
restricted stock and stock option plans, all employment or severance
contracts, all medical, dental, health and life insurance plans, all
other employee benefit plans, contracts or arrangements and any
applicable "change of control" or similar provisions in any plan,
contract or arrangement maintained or contributed to by it or any of
the Company Subsidiaries for the benefit of employees, former
employees, directors, former directors or their beneficiaries (the
"Compensation and Benefit Plans"). True and complete copies of all
Compensation and Benefit Plans, including, but not limited to, any
trust instruments and/or insurance contracts, if any, forming a part
thereof, and all amendments thereto have been supplied to First Union.
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(2) All "employee benefit plans" within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), other than "multiemployer plans" within the
meaning of Section 3(37) of ERISA ("Multiemployer Plans"), covering
employees or former employees of the Company and the Company
Subsidiaries (the "ERISA Plans"), to the extent subject to ERISA, are
in substantial compliance with ERISA. Each ERISA Plan which is an
"employee pension benefit plan" within the meaning of Section 3(2) of
ERISA ("Pension Plan") and which is intended to be qualified, under
Section 401(a) of the Code, has received a favorable determination
letter from the Internal Revenue Service with respect to "TRA" (as
defined in Section 1 of Internal Revenue Service Revenue Procedure
93-39), and it is not aware of any circumstances reasonably likely to
result in the revocation or denial of any such favorable determination
letter. There is no pending or, to its knowledge, threatened litigation
relating to the Compensation and Benefit Plans. Neither the Company nor
any of the Company Subsidiaries has engaged in a transaction with
respect to any ERISA Plan that would subject it or any of the Company
Subsidiaries to a tax or penalty imposed by either Section 4975 of the
Code or Section 502(i) of ERISA in an amount which would be material.
(3) No liability under Subtitle C or D of Title IV of
ERISA has been or is expected to be incurred by it or any of the
Company Subsidiaries with respect to any ongoing, frozen or terminated
"single-employer plan", within the meaning of Section 4001(a)(15) of
ERISA, currently or formerly maintained by any of them, or the
single-employer plan of any entity which is considered one employer
with it under Section 4001(a)(15) of ERISA or Section 414 of the Code
(an "ERISA Affiliate"). Neither it nor any of the Company Subsidiaries
presently contributes to a Multiemployer Plan, nor have they
contributed to such a plan within the past five calendar years. No
notice of a "reportable event", within the meaning of Section 4043 of
ERISA for which the 30-day reporting requirement has not been waived,
has been required to be filed for any Pension Plan or by any ERISA
Affiliate within the past 12-month period or will be required to be
filed in connection with the transactions contemplated by this Plan.
(4) All contributions required to be made under the
terms of any Compensation and Benefit Plan have been timely made.
Neither any Pension Plan nor any single-employer plan of an ERISA
Affiliate has an "accumulated funding deficiency" (whether or not
waived) within the meaning of Section 412 of the Code or Section 302 of
ERISA. Neither it nor any of the Company Subsidiaries has provided, or
is required to provide, security to any Pension Plan or to any
single-employer plan of an ERISA Affiliate pursuant to Section
401(a)(29) of the Code.
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(5) Neither the Company nor its ERISA Affiliates have
at any time sponsored, contributed to, or been obligated under Title I
or IV of ERISA to contribute to a "defined benefit plan" (as defined in
ERISA Section 3(35)). Neither the Company nor its ERISA Affiliates have
had an "obligation to contribute" (as defined in ERISA Section 4212) to
a "multiemployer plan" (as defined in ERISA Section 4001(a)(3) and
3(37)(A)) on or after September 26, 1980.
(6) Neither the Company nor any of the Company
Subsidiaries has any obligations for retiree health and life benefits
under any plan. There are no restrictions on the rights of the Company
or any of the Company Subsidiaries to amend or terminate any such plan
without incurring any liability thereunder. Except as Previously
Disclosed, there has been no amendment to, announcement by the Company
or any of the Company Subsidiaries relating to, or change in
eligibility criteria for employee participation or coverage under, any
Compensation and Benefit Plan which would increase materially the
expense of maintaining such Plan above the level of the expense
incurred therefor for the most recent fiscal year.
(7) Except as Previously Disclosed, neither the
execution and delivery of this Plan nor the consummation of the
transactions contemplated hereby will (a) result in any payment
(including, without limitation, severance, unemployment compensation,
golden parachute or otherwise) becoming due to any director or any
employee of it or any of the Company Subsidiaries under any
Compensation and Benefit Plan or otherwise from it or any of the
Company Subsidiaries, (b) increase any benefits otherwise payable under
any Compensation and Benefit Plan, (c) result in any acceleration of
the time of payment, vesting or funding through a grantor trust, or
otherwise of any such benefit, or (d) result in the imposition to the
recipient of any excise tax pursuant to Section 4999 of the Code.
(R) NO KNOWLEDGE. It knows of no reason why the regulatory
approvals referred to in SECTION 6.01(B) should not be obtained without the
imposition of any condition of the type referred to in the proviso following
such SECTION 6.01(B).
(S) LABOR RELATIONS. Each of the Company and the Company
Subsidiaries is in material compliance with all currently applicable laws
respecting employment and employment practices, terms and conditions of
employment and wages and hours, including, without limitation, the Immigration
Reform and Control Act, the Worker Adjustment and Retraining Notification Act,
any such laws respecting employment discrimination, disability rights or
benefits, equal opportunity, plant closure issues, affirmative action, workers'
23
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compensation, employee benefits, severance payments, labor relations, employee
leave issues, wage and hour standards, occupational safety and health
requirements and unemployment insurance and related matters. None of the Company
or any of the Company Subsidiaries is engaged in any unfair labor practice and
there is no unfair labor practice complaint pending or threatened against any of
the Company or the Company Subsidiaries before the National Labor Relations
Board. Neither it nor any of the Company Subsidiaries is a party to, or is bound
by, any collective bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization, nor is it or any of the
Company Subsidiaries the subject of a proceeding asserting that it or any such
Company Subsidiary has committed an unfair labor practice (within the meaning of
the National Labor Relations Act) or seeking to compel it or such subsidiary to
bargain with any labor organization as to wages and conditions of employment,
nor is there any strike or other labor dispute involving it or any of the
Company Subsidiaries, pending or, to the best of its knowledge, threatened, nor
is it aware of any activity involving its or any of the Company Subsidiaries'
employees seeking to certify a collective bargaining unit or engaging in any
other organization activity.
(T) INSURANCE. The Company and the Company Subsidiaries are
insured with reputable insurers against such risks and in such amounts as the
management of the Company reasonably has determined to be prudent in accordance
with industry practices. All of the insurance policies, binders, or bonds
maintained by the Company or the Company Subsidiaries are in full force and
effect; the Company and the Company Subsidiaries are not in default thereunder;
and all claims thereunder have been filed in due and timely fashion. Previously
Disclosed is a list of all insurance policies maintained by or for the benefit
of the Company or the Company Subsidiaries or their directors, officers,
employees, agents or independent contractors.
(U) STATE TAKEOVER LAWS; ARTICLES OF INCORPORATION. The
Company has taken all necessary action to exempt this Plan and the transactions
contemplated hereby from, and this Plan and the transactions contemplated hereby
are exempt from, (1) any applicable state takeover laws, including, without
limitation, the provisions of the Florida Control Share Acquisition Act (FBCA
607.0902), (2) any applicable takeover provisions in the Company's Articles of
Incorporation or by-laws, and (3) except as Previously Disclosed, any change of
control or other takeover provisions set forth in any agreement to which the
Company is a party or may be bound.
(V) NO FURTHER ACTION. The Company has taken all action so
that the entering into of this Plan, and the consummation of the transactions
contemplated hereby (including without limitation the Merger) or any other
action or combination of actions, or any other transactions, contemplated hereby
do not and will not (1) require a vote of stockholders (other than the
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affirmative vote of a majority of the votes entitled to be cast by the holders
of shares of Company Common Stock), or (2) result in the grant of any rights to
any person under the Articles of Incorporation, charter or by-laws of the
Company or any Company Subsidiary or under any agreement to which the Company or
any of the Company Subsidiaries is a party (except as provided in 8.09), or (3)
restrict or impair in any way the ability of First Union to exercise the rights
granted hereunder. The Company Board has received the opinion of its financial
advisors, Berkshire Capital Corporation, to the effect that the consideration to
be received by the holders of shares of Company Common Stock in the Merger is
fair to such holders from a financial point of view. It is agreed and understood
that such opinion is for the benefit of the Company Board and may not be relied
on by First Union.
(W) ENVIRONMENTAL MATTERS. The Company and the Company
Subsidiaries have obtained and maintained in effect all material licenses,
permits and other authorizations required under all applicable laws, regulations
and other requirements of governmental or regulatory authorities relating to
pollution or to the protection of the environment ("Environmental Laws") and is
in compliance in all material respects with all Environmental Laws and with all
such licenses, permits and authorizations. It has not received notice of
liability to any person, governmental entity or Business Entity under the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
" 9601 et seq. or any other Environmental Laws with respect to real property
owned or leased by the Company or the Company Subsidiaries.
(X) TAXES. Except as Previously Disclosed, (1) all reports and
returns with respect to Taxes (as defined below) and Tax related information
reporting requirements that are required to be filed with any taxing authority
or retained by or with respect to it or the Company Subsidiaries, including
without limitation consolidated federal income tax returns of it and the Company
Subsidiaries that are includible therein (collectively, the "Company Tax
Returns"), have been duly filed or in the case of Company Tax Returns to be
retained by the Company or the Company Subsidiaries has properly completed
Company Tax Returns in the Company's or Company Subsidiaries' files, or requests
for extensions have been timely filed and have not expired, and such Company Tax
Returns were true, complete and accurate in all material respects, (2) all taxes
(which shall mean federal, state, local or foreign income, gross receipts,
windfall profits, severance, property, production, sales, use, license, excise,
franchise, employment, premium, recording, documentary, documentary stamps, real
estate transfer, transfer, back-up withholding or similar taxes imposed on the
income, properties or operations of it or the Company Subsidiaries, together
with any interest, additions, or penalties with respect thereto and with respect
to any information reporting requirements imposed by the Code or any similar
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provision of foreign, state or local law, together with any interest in respect
of such additions or penalties, collectively the "Taxes") shown to be due on the
Company Tax Returns have been paid in full, (3) the Company Tax Returns have
been examined by the Internal Revenue Service or the appropriate state, local or
foreign taxing authority or the period for assessment of the Taxes in respect of
which such Company Tax Returns were required to be filed has expired, (4) all
Taxes due with respect to completed and settled examinations have been (or prior
to the Effective Time will be) paid in full, (5) no issues have been raised by
the relevant taxing authority in connection with the examination of any of the
Company Tax Returns which are reasonably likely, individually or in the
aggregate, to result in a determination that would have a Material Adverse
Effect on the Company, except as reserved against in the Company Financial
Statements prior to the date of this Plan, (6) no currently effective waivers of
statutes of limitations have been given by or requested with respect to any
Taxes of the Company or the Company Subsidiaries, (7) none of the Company, the
Company Subsidiaries, First Union or any direct or indirect subsidiary of First
Union, as a consequence of the Company's actions prior to the Effective Time,
will be obligated to make a payment to an individual that would be a "parachute
payment" as such term is defined in Section 280G of the Code without regard to
whether such payment is to be paid in the future and (8) the Company and the
Company Subsidiaries have never been a member of an affiliated, combined,
consolidated or unitary tax group for purposes of filing any consolidated
Company Tax Return, other than, for purposes of filing U.S. federal income tax
returns, groups of which the Company is, and JWGenesis, Inc. was, the common
parent.
(Y) ACCURACY OF INFORMATION. The statements with respect to
the Company and the Company Subsidiaries contained in this Plan, the Schedules,
the Exhibits, the Annexes and any other written documents executed and delivered
by or on behalf of it (by an authorized officer of the Company) pursuant to the
terms of this Plan (and designated as such) are true and correct in all material
respects, and such statements and documents do not omit any material fact
necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading.
(Z) ACCOUNTING CONTROLS. Each of the Company and the Company
Subsidiaries has devised and maintained systems of internal accounting controls
sufficient to provide reasonable assurances, that all material transactions are
recorded as necessary to permit the preparation of financial statements in
conformity with generally accepted accounting principles consistently applied
with respect to broker-dealers or any other criteria applicable to such
statements.
(AA) PROPRIETARY RIGHTS. The Company and the Company
Subsidiaries have the right to use the names, servicemarks, trademarks and other
intellectual property (collectively, "Intellectual Property") material to the
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conduct of their business, all such Intellectual Property has been Previously
Disclosed, such right of use is free and clear of any Liens and no other person
has the right to use any such Intellectual Property except for instances which
are not reasonably likely, individually or in the aggregate, to have a Material
Adverse Effect on the Company.
(BB) INVESTMENT ADVISORY ACTIVITIES.
(1) Except as Previously Disclosed, none of the
Company Subsidiaries provide investment management, investment
advisory, sub-advisory, administration, distribution or certain other
services to persons registered under the Investment Company Act.
(2) Except as Previously Disclosed, none of the
Company or any Company Subsidiary is or has been during the past five
years an "investment adviser" (within the meaning of the Investment
Advisers Act), required to be registered, licensed or qualified as an
investment advisor under the Investment Advisers Act or subject to any
material liability or disability by reason of any failure to be so
registered, licensed or qualified, except for any such failure to be so
registered, licensed or qualified that would not, individually or in
the aggregate, reasonably be likely to have a Material Adverse Effect
on the Company.
(CC) DISCRETIONARY ACCOUNTS. Each of the Company and the
Company Subsidiaries has operated its investment accounts for which it has
investment discretion in accordance with the investment objectives and
guidelines in effect for each such investment account, except when lack of
compliance would not be reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect on the Company.
(DD) DERIVATIVES. All exchange-traded or over-the-counter
swap, forward, future, option, cap, floor or collar financial contract or any
other similar arrangement, whether entered into for the Company's account, or
for the account of one or more of the Company Subsidiaries or their customers
(except for transactions entered into by the Company or the Company Subsidiaries
on listed options effected on an agency basis for customers), were entered into
(1) in accordance with prudent business practices and all applicable laws,
rules, regulations and regulatory policies and (2) with counterparties believed
to be financially responsible at the time; and each of them constitutes the
valid and legally binding obligation of the Company or Company Subsidiary,
enforceable in accordance with its terms (except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws of general applicability relating to or
affecting creditors' rights or by general equity principles), and are in full
force and effect, except to the extent the failure of any of the foregoing is
not reasonably likely, individually or in the aggregate, to have a Material
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Adverse Effect on the Company. Neither the Company nor a Company Subsidiary, nor
to the Company's knowledge any other party thereto, is in material breach of any
of its obligations under any such agreement or arrangement except for such
instances which are not reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect on the Company. As of their respective dates, the
Company's Financial Reports disclose the value of such agreements and
arrangements on a mark-to-market basis in accordance with generally accepted
accounting principles and, since December 31, 1999, there has not been a change
in such value that, individually or in the aggregate, has resulted or is
reasonably likely to result in a Material Adverse Effect on the Company.
(EE) AGGREGATE PRODUCTION. The Company has Previously
Disclosed the correct amount of the aggregate trading commissions earned for the
twelve months ended July 31, 2000 by each registered representative (as of
August 30, 2000) of the Company or any Company Subsidiary. The Company will
update such Previously Disclosed amounts before the close of business on
September 5, 2000 to provide the correct amount of such aggregate trading
commissions for each such registered representative as of the close of business
on the date of this Plan. (To the Company's knowledge, there is no reason why
such update should differ materially from the Previously Disclosed amounts.)
Such updated amounts will be used to determine the Merger Consideration pursuant
to SECTION 2.01(B) and the satisfaction of SECTION 6.03(E), and the aggregate of
all such updated amounts is referred to in this Plan as the "Aggregate
Production"; provided that, if a registered representative dies or becomes
disabled before the Effective Time, the registered representative will be
excluded from the calculation of Aggregate Production and from the calculations
of SECTIONS 2.01(B) and 6.03(E).
4.02. FIRST UNION REPRESENTATIONS AND WARRANTIES. First Union hereby
represents and warrants to the Company, as follows:
(A) RECITALS. The facts set forth in the Recitals of this Plan
with respect to First Union are true and correct.
(B) CORPORATE AUTHORITY. Subject to the required regulatory
approvals referred to in SECTION 6.01(B), this Plan has been authorized by all
necessary corporate action of First Union and is a valid and binding agreement
of it enforceable against First Union in accordance with its terms, subject as
to enforcement to bankruptcy, insolvency and other similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
(C) NO DEFAULTS. Subject to any required filings under federal
and state securities and insurance laws, and the approvals of the NYSE and the
other securities exchanges referred to in SECTION 4.01(G), of the Merger and the
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other transactions contemplated hereby, the execution, delivery and performance
of this Plan, and the consummation of the transactions contemplated hereby by
it, does not and will not (1) constitute a breach or violation of, or a default
under, any law, rule or regulation or any judgment, decree, order, governmental
permit or license, or agreement, indenture or instrument of it or of any of its
subsidiaries or to which it or any of its subsidiaries or properties is subject
or bound, which breach, violation or default is reasonably likely to have a
Material Adverse Effect on First Union, (2) constitute a breach or violation of,
or a default under, its Certificate of Incorporation or by-laws, or (3) require
any consent or approval under any such law, rule, regulation, judgment, decree,
order, governmental permit or license, or the consent or approval of any other
party to any such agreement, indenture or instrument other than such consent or
approval, which if not obtained, would not be reasonably likely, individually or
in the aggregate, to have a Material Adverse Effect on First Union.
(D) NO KNOWLEDGE. It knows of no reason why the regulatory
approvals referred to in SECTION 6.01(B) should not be obtained without the
imposition of any condition of the type referred to in the proviso following
such SECTION 6.01(B).
(E) ACCURACY OF INFORMATION. The statements with respect to
First Union contained in this Plan, the Schedules, the Exhibits, the Annexes and
any other written documents executed and delivered by or on behalf of it
pursuant to the terms of this Plan are true and correct in all material
respects, and such statements and documents do not omit any material fact
necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading.
(F) CAPITAL RESOURCES. First Union has sufficient cash to provide
for payment of the Merger Consideration in accordance with the provisions set
forth on ARTICLE II.
V. COVENANTS.
The Company hereby covenants to First Union, and First Union hereby
covenants to the Company, as applicable, that:
5.01. EFFORTS. Subject to the terms and conditions of this Plan, it
shall, and shall cause its subsidiaries to, use reasonable best efforts in good
faith to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or desirable, or advisable under applicable
laws, so as to permit consummation of the Merger as promptly as reasonably
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practicable and to otherwise enable consummation of the transactions
contemplated hereby and shall cooperate fully with each other to that end.
Without limiting the generality of the foregoing, the Company agrees to use its
reasonable best efforts, and to cause the Company Subsidiaries to use reasonable
best efforts, to obtain (A) any consents of Clients necessary in connection with
the "assignment" of the Contracts pursuant to which the Company or any Company
Subsidiary provides investment advisory, sub-advisory or management services to
a Client within the meaning of the Investment Advisers Act ("Advisory
Agreements") resulting from the consummation of the Merger; provided that First
Union agrees that other than with respect to any Advisory Agreement which by its
terms expressly requires written consent to its assignment, effective consent to
such "assignment" of an Advisory Agreement may be obtained for all purposes
hereunder and under applicable law by informing such Client of (1) the intention
to complete the Merger, which may result in a deemed assignment of such Advisory
Agreement, (2) the Company's or the Company Subsidiaries' intention to continue
the advisory services pursuant to the existing Advisory Agreement with such
Client after the Effective Date if such Client does not terminate such agreement
prior to the Effective Date, and (3) that the consent of such Client will be
deemed to have been granted if such Client continues to accept such advisory
services for at least 40 days after receipt of such notice without termination,
and (B) the consent or approval of all persons party to a Contract with the
Company, to the extent such consent or approval is required in order to
consummate the Merger and for the Continuing Corporation to receive the benefits
thereof.
5.02. COMPANY PROXY STATEMENT; STOCKHOLDER APPROVAL. As promptly as
reasonably practicable following the date hereof, the Company shall prepare and
file with the SEC a proxy statement (the "Proxy Statement"), and the Company
shall use its reasonable best efforts to respond as promptly as practicable to
any comments of the SEC or its staff with respect thereto and to cause the Proxy
Statement to be mailed to the holders of Company Common Stock in connection with
the transactions contemplated hereby as promptly as practicable following the
date hereof. The Company shall notify First Union upon the receipt of any
comments from the SEC or its staff or any request from the SEC or its staff for
amendments or supplements to the Proxy Statement and shall provide First Union
with copies of all correspondence between the Company and its representatives,
on the one hand, and the SEC and its staff, on the other hand. Notwithstanding
the foregoing, prior to filing or mailing the Proxy Statement (or any amendment
or supplement thereto) the Company (i) shall provide First Union an opportunity
to review and comment on such document or response and (ii) shall include in
such document or response all comments reasonably proposed by First Union. In
connection with the foregoing, the Company shall call a special meeting (the
"Meeting") of the holders of Company Common Stock to be held as soon as
practicable for purposes of voting upon the approval of this Plan and the
Company shall use its reasonable best efforts to solicit and obtain votes of the
holders of Company Common Stock in favor of the approval of this Plan. The
Company Board shall recommend approval of this Plan by such holders, unless the
Company Board determines in good faith after consultation with outside legal
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counsel that withdrawal of its recommendation is required in order for its
directors to comply with their fiduciary duties under applicable law.
<PAGE>
5.03. COMPLIANCE WITH SECURITIES LAWS. The Company shall ensure that
the Proxy Statement and all amendments or supplements thereto (A) will comply in
all material respects with the provisions of the Exchange Act and any other
applicable statutory or regulatory requirements, and (B) will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements contained therein not
misleading; PROVIDED, HOWEVER, in no event shall the Company be liable for any
untrue statement of a material fact or omission to state a material fact in the
Proxy Statement made in reliance upon, and in conformity with, written
information concerning First Union or the Merging Entity furnished by or on
behalf of First Union or the Merging Entity specifically for use in the Proxy
Statement.
5.04. PRESS RELEASES. The Company will not, without the prior approval
of First Union (which approval shall not be unreasonably withheld or delayed),
and First Union will not, without the prior approval of the Company (which
approval shall not be unreasonably withheld or delayed), issue any press release
or written statement for general circulation relating to the transactions
contemplated hereby, or otherwise publicly disclose the terms and conditions of
such transactions, except as otherwise required by law.
5.05. ACCESS; INFORMATION. (A) Subject to applicable law, upon
reasonable notice, the Company shall afford First Union and its officers,
employees, counsel, accountants and other authorized representatives, access,
during normal business hours throughout the period prior to the Effective Time,
to all of its properties, books, contracts, data processing system files,
commitments and records and, during such period, the Company shall furnish
promptly to First Union (1) a copy of each material report, schedule and other
document filed by the Company and the Company Subsidiaries with any Regulatory
Authority, and (2) all other information concerning the business, properties and
personnel of the Company and the Company Subsidiaries as First Union may
reasonably request, PROVIDED that no investigation pursuant to this SECTION 5.05
shall affect or be deemed to modify or waive any representation or warranty made
by the Company or the conditions to the obligations of the Company or First
Union to consummate the transactions contemplated by this Plan; and (B) First
Union will not use any information obtained pursuant to this SECTION 5.05 for
any purpose unrelated to the consummation of the transactions contemplated by
this Plan and, if this Plan is terminated, will hold all information and
documents obtained pursuant to this paragraph in confidence (as provided in
SECTION 8.06) unless and until such time as (i) such information or documents
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become publicly available other than by reason of any action or failure to act
by First Union, (ii) any such information or document is required by law or
applicable published stock exchange rule to be disclosed, or (iii) First Union
determines, in its reasonable discretion, that such information or document is
responsive to any examination or similar request of a Regulatory Authority
charged with supervision of it or any of its subsidiaries or that prudent
business practices require its disclosure to such Regulatory Authority (subject
to prior notice to, and consultation with, the Company, if the circumstances
reasonably permit in light of customary practice with such Regulatory
Authority). In the event of the termination of this Plan, First Union will, upon
request by the Company, deliver to the Company or destroy all documents so
obtained by First Union (except to the extent such information is incorporated
into the minutes of its board of directors or similar corporate records, in
which case it will continue to be held in confidence as provided in this SECTION
5.05).
5.06. ACQUISITION PROPOSALS. In the case of the Company, it shall not,
and it shall cause the Company Subsidiaries not to, solicit or encourage
inquiries or proposals with respect to, or furnish any nonpublic information
relating to or participate in any negotiations or discussions concerning, any
acquisition or purchase of all or a substantial portion of the assets of, or a
substantial equity interest in, the Company or any of the Company Subsidiaries
or any merger or other business combination with the Company or any of the
Company Subsidiaries other than as contemplated by this Plan; it shall instruct
its and the Company Subsidiaries' officers, directors, agents, advisors and
affiliates to refrain from taking any action that would violate or conflict with
any of the foregoing; and it shall notify First Union immediately if any such
inquiries or proposals are received by, or any such negotiations or discussions
are sought to be initiated with, the Company or any of the Company Subsidiaries.
However, nothing in this Plan will prevent the Company or the Company Board from
(1) providing information in response to a request therefor by a person who has
made an unsolicited BONA fide written proposal for an acquisition or purchase of
the type described in the preceding sentence, if the Company receives from the
person an executed confidentiality agreement on terms substantially similar to
those contained in SECTION 5.05, or (2) engaging in any negotiations or
discussions with any person who has made such an unsolicited BONA FIDE written
proposal, if and only to the extent that, (A) in each such case referred to in
clause (1) or (2), the Company Board determines in good faith (after
consultation with its financial advisor) that the proposal, if accepted, is
reasonably likely to be consummated without significant delay, taking into
account all legal, financial and regulatory aspects of the proposal and the
person making the proposal, and would, if consummated, result in a transaction
more favorable to the holders of shares of Company Common Stock from a financial
point of view than the Merger. If negotiations or discussions are initiated in
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accordance with the preceding sentence, the Company agrees that it will notify
First Union immediately and will from time-to-time (or at any time at the
request of First Union) notify First Union of the progress thereof (including
all current terms and any other information that First Union may from
time-to-time request). The Company agrees that it will immediately cease and
cause to be terminated any existing activities, discussions or negotiations with
any parties conducted heretofore with respect to any such acquisition or
purchase. The Company agrees to use all reasonable efforts to enforce any
confidentiality and/or "stand-still" contract to which it is a party and not to
amend, terminate, waive or release any provision of any such contract in a
manner that is material and adverse to its rights under the contract.
5.07. STATE TAKEOVER LAWS; ARTICLES OF INCORPORATION. In the case of
the Company, it shall not take any action that would cause the transactions
contemplated by this Plan to be subject to any applicable state takeover statute
and the Company shall take all necessary steps to exempt (or ensure the
continued exemption of) the transactions contemplated by this Plan from (A) any
applicable state takeover law, as now or hereafter in effect, (B) any applicable
takeover provisions in the Company's Articles of Incorporation or By-laws, and
(C) any takeover provisions set forth in any agreement to which the Company or
any Company Subsidiary is a party or may be bound.
5.08. REGULATORY APPLICATIONS. In the case of each of the parties
hereto, it shall use its reasonable best efforts (A) promptly to prepare and
submit applications to the appropriate Regulatory Authorities for approval of
the Merger, and (B) promptly make all other appropriate filings to secure all
other approvals, consents and rulings which are necessary for the consummation
of the Merger. Each of the parties hereto agrees to cooperate with the other
and, subject to the terms and conditions set forth in this Agreement, use its
reasonable best efforts to prepare and file all necessary permits, consents,
orders, approvals and authorizations of, or any exemption by, all third parties
and regulatory authorities necessary or advisable to consummate the transactions
contemplated by this Agreement, including, without limitation, the regulatory
approvals referred to in SECTION 6.01. Each of the Company and First Union shall
have the right to review in advance, and to the extent practicable each will
consult with the other, in each case subject to applicable laws relating to the
exchange of information, with respect to all written information submitted to,
any third party or any regulatory authorities in connection with the
transactions contemplated by this Plan. In exercising the foregoing right, each
of the parties hereto agrees to act reasonably and as promptly as practicable.
Each party hereto agrees that it will consult with the other party hereto with
respect to the obtaining of all material permits, consents, approvals and
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authorizations of all third parties and regulatory authorities necessary or
advisable to consummate the transactions contemplated by this Plan and each
party will keep the other party apprised of the status of material matters
relating to completion of the transactions contemplated hereby.
5.09. CURRENT INFORMATION.
-------------------
(A) During the period from the date of this Plan to the
Effective Date, each of the Company and First Union shall, and shall cause its
representatives to, confer on a regular and frequent basis with representatives
of the other, including without limitation, with respect to all aspects of the
Reorganization (as hereinafter defined).
(B) The Company shall promptly notify First Union of (1) any
material change in the business or operations of the Company or any Company
Subsidiary, including without limitation, any actions with respect to the
Reorganization, (2) any material complaints, investigations or hearings (or
communications indicating that the same may be contemplated) of any Regulatory
Authority relating to the Company or any Company Subsidiary, (3) the institution
or the threat of material Litigation involving or relating to the Company or any
Company Subsidiary, or (4) any event or condition that might be reasonably
expected to cause any of the Company's representations or warranties set forth
herein not to be true and correct as of the Effective Time or prevent the
Company from fulfilling its obligations hereunder; and in each case shall keep
First Union informed with respect thereto.
(C) First Union shall notify the Company of (1) any event or
condition that might reasonably be expected to cause any of First Union's
representations or warranties set forth herein not to be true and correct as of
the Effective Date or prevent First Union from fulfilling its obligations
hereunder and (2) of any denial of any application filed by First Union with any
Regulatory Authority with respect to this Plan, and in each case shall keep the
Company informed with respect thereto.
5.10. COMPANY REORGANIZATION. As promptly as reasonably practicable
following the date of this Plan, the Company shall use its reasonable best
efforts to take all action necessary to effect the Previously Disclosed
reorganization of the Company's and the Company Subsidiaries' operations, in
each case in compliance with Applicable Law (the "Reorganization"). The Company
shall consult with First Union on a regular and frequent basis with respect to
the implementation of the Reorganization, all aspects of which shall be
completed not later than December 31, 2000 and shall be in form and substance
reasonably satisfactory to First Union. First Union recognizes that, in order to
complete the Reorganization, the Company will require the waiver of provisions
of this Plan. First Union agrees to consider promptly and reasonably each
request for such a waiver. If First Union denies a waiver requested in
connection with the Reorganization, the Company and First Union agree to
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negotiate in good faith with a view toward permitting the Company to complete
the Reorganization on mutually satisfactory terms in compliance with the terms
of this Section 5.10.
5.11. RETENTION PROGRAM. As promptly as practicable following the date
of this Plan, the Company shall establish a retention program to retain certain
key employees and Independent Contractors of the Company and the Company
Subsidiaries (the "Retention Program"). The total amount of the Retention
Program and the amount allocated to each employee and Independent Contractor has
been Previously Disclosed by the Company. The Form of documentation relating to
the Retention Program (and any waiver or modification of, or consent or similar
action under, any such documentation) shall be subject to First Union's consent
(not to be unreasonably withheld or delayed). If an employee or Independent
Contractor who has been selected to participate in the Retention Program
forfeits the amount (or any portion thereof) allocated to that individual, such
amount (or portion) shall be cancelled and not re-allocated. To the extent that
implementation of the Retention Program requires the waiver of provisions of
this Plan, First Union agrees to consider promptly and reasonably each request
for such a waiver.
5.12. TERMINATION OF STOCK PURCHASE PLANS. Prior to the Effective Time,
the Company shall suspend all payroll deductions and cash contributions to the
Company's stock purchase plans and shall take all actions necessary to
discontinue and terminate such plans prior to the Effective Time.
5.13. INDEMNIFICATION/LIABILITY COVERAGE.
(A) For six years after the Effective Date, First Union shall
cause the Continuing Corporation to indemnify, defend and hold harmless the
present and former directors, officers and employees of the Company and the
Company Subsidiaries (each, an "Indemnified Party") against all liabilities
arising out of actions or omissions occurring at or prior to the Effective Date
(including, without limitation, the transactions contemplated by this Plan) to
the extent such persons are indemnified under the FBCA and the Company's
Articles of Incorporation and by-laws as in effect on the date hereof, including
provisions relating to advances of expenses incurred in the defense of any
litigation.
(B) First Union shall use its reasonable best efforts to
maintain the Company's existing directors' and officers' liability insurance
policy (or a policy, including First Union's existing policy, providing
comparable coverage amount on terms no less favorable) covering persons who are
currently covered by such insurance for a period of three years after the
Effective Date; PROVIDED, that First Union shall not be obligated to make an
annual premium payment in respect of such policy (or replacement policy) which
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exceeds, for the portion related to the Company's directors and officers, 150%
of the annual premium payment on the Company's current policy in effect as of
the date of this Plan; PROVIDED, FURTHER, that if such coverage can only be
obtained upon the payment of an annual premium in excess of 150% of the annual
premium payment of the Company's current policy, First Union shall obtain such
coverage as can reasonably be obtained by paying a premium of 150% of the annual
premium payment of the Company's current policy in effect as of the date of this
Plan.
(C) Any Indemnified Party wishing to claim indemnification
under SECTION 5.13(A), upon learning of such claim, action, suit, proceeding or
investigation, shall promptly notify First Union thereof; PROVIDED, that the
failure so to notify shall not affect the obligations of First Union and the
Continuing Corporation under SECTION 5.13(A) (unless such failure materially
increases First Union's liability under such Section). In the event of any such
claim, action, suit, proceeding or investigation (whether arising before or
after the Effective Date), (1) First Union or the Continuing Corporation shall
have the right to assume the defense thereof, if it so elects, and First Union
or the Continuing Corporation shall pay all reasonable fees and expenses of
counsel for the Indemnified Parties promptly as statements therefor are
received; PROVIDED, HOWEVER, that First Union shall be obligated pursuant to
this subsection (C) to pay for only one firm of counsel for all Indemnified
Parties in any jurisdiction for any single action, suit or proceeding or any
group of actions, suits or proceedings arising out of or related to a common
body of facts, (2) the Indemnified Parties will cooperate in the defense of any
such matter, and (3) First Union shall not be liable for any settlement effected
without its prior written consent.
5.14 CLEARING AGREEMENT. As promptly as practicable following
the date of this Plan, the parties will cause JWGFS and First Clearing
Corporation to enter into a correspondent clearing agreement containing
customary terms and conditions and will negotiate in good faith in that regard.
VI. CONDITIONS TO CONSUMMATION OF THE MERGER.
6.01. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of each of First Union and the Company to consummate the
Merger is subject to the fulfillment or written waiver by First Union and the
Company prior to the Effective Time of each of the following conditions:
(A) STOCKHOLDER APPROVALS. This Plan and the Merger shall have
been duly adopted by the requisite vote of the stockholders of the Company.
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(B) REGULATORY APPROVALS. All regulatory approvals required to
consummate the Merger, shall have been obtained and shall remain in full force
and effect and all statutory waiting periods in respect thereof shall have
expired; provided, however, no such approvals shall contain any conditions,
restrictions or requirements which First Union reasonably determines would,
following the Effective Time, have a Material Adverse Effect on the Continuing
Corporation or a material adverse effect on the benefits of the transactions
contemplated hereby to First Union.
(C) NO INJUNCTION. No Regulatory Authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, judgment, decree, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and prohibits
consummation of the transactions contemplated by this Plan.
6.02. CONDITIONS TO OBLIGATION OF THE COMPANY. The obligation of the
Company to consummate the Merger is also subject to the fulfillment or written
waiver by the Company prior to the Effective Time of each of the following
conditions:
(A) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of First Union set forth in this Plan shall be true and correct in
all material respects (excluding the effect of any qualification set forth
therein relating to "materiality" or "Material Adverse Effect") as of the date
of this Plan and as of the Effective Date as though made on and as of the
Effective Date (except that representations and warranties that by their terms
speak as of the date of this Plan or some other date shall be true and correct
as of such date), and the Company shall have received a certificate, dated the
Effective Date, signed on behalf of First Union by an officer of First Union to
such effect.
(B) PERFORMANCE OF OBLIGATIONS OF FIRST UNION. First Union
shall have performed in all material respects all obligations required to be
performed by it under this Plan at or prior to the Effective Time, and the
Company shall have received a certificate, dated the Effective Date, signed on
behalf of First Union by an officer of First Union to such effect.
6.03. CONDITIONS TO OBLIGATION OF FIRST UNION. The obligation of First
Union to consummate the Merger is also subject to the fulfillment or written
waiver by First Union prior to the Effective Time of each of the following
conditions:
(A) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company set forth in this Plan shall be true and correct in
all material respects (excluding the effect of any qualification set forth
therein relating to "materiality" or "Material Adverse Effect") as of the date
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of this Plan and as of the Effective Date as though made on and as of the
Effective Date (except that representations and warranties that by their terms
speak as of the date of this Plan or some other date shall be true and correct
as of such date), and First Union shall have received a certificate, dated the
Effective Date, signed on behalf of the Company by the Chief Executive Officer
and the Chief Financial Officer of the Company to such effect.
(B) PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company
shall have performed in all material respects all obligations required to be
performed by it under this Plan at or prior to the Effective Time, and First
Union shall have received a certificate, dated the Effective Date, signed on
behalf of the Company by the Chief Executive Officer and the Chief Financial
Officer of the Company to such effect.
(C) COMPANY THIRD PARTY CONSENTS. The Company shall have
obtained the consent or approval of each individual or Business Entity whose
approval shall be required under any Contract in order to consummate the
transactions contemplated by this Plan, except for those the failure of which to
obtain, individually or in the aggregate, is not reasonably likely to have a
Material Adverse Effect on the Continuing Corporation or a material adverse
effect on the benefits of the transactions contemplated hereby to First Union.
(D) THE REORGANIZATION. The Reorganization shall have been
effected in accordance with the provisions set forth in SECTION 5.10.
(E) EXISTING REGISTERED REPRESENTATIVES. Registered
representatives of the JWG Broker-Dealers (as hereinafter defined) as of the
date hereof and accounting for at least 70% of the Aggregate Production shall
(i) have entered into Independent Contractor agreements with JWGFS for the
calendar year 2001 (substantially in the customary form provided to First Union
before the date of this Plan) and (ii) continue as registered representatives of
JWGFS and engage in their customary business function as of the Effective Time;
provided, however, that a registered representative of any JWG Broker-Dealer as
of the date hereof will be treated as having met the requirements of clauses (i)
and (ii) of this SECTION 6.03(E) if, as of the Effective Time, the registered
representative is an employee of First Union or an affiliate of it.
(F) COMPANY DERIVATIVE SECURITIES. The events contemplated by
SECTION 2.05 shall have been effected as set forth therein; PROVIDED that this
Section 6.03(F) will be satisfied if the holders of Company Options, Non-Plan
Company Options and Warrants collectively representing no more than 135,000
shares of underlying Company Common Stock fail to convert as contemplated by
SECTION 2.05(A), (B) and (C).
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(G) EMPLOYMENT AGREEMENTS. The Employment Agreements referred
to in RECITAL H of this Plan shall be in effect (other than as a consequence of
death or disability).
(H) MVP.COM DISTRIBUTION. The Company shall have received the
opinion of Kilpatrick Stockton LLP, counsel to the Company, to the effect that
any direct or indirect distribution of its interest in MVP.Com, Inc. was not
required to be registered under the Securities Act or was appropriately
registered (such opinion to be reasonably satisfactory to First Union in form
and substance).
VII. TERMINATION.
This Plan may be terminated prior to the Effective Date, either before
or after receipt of required stockholder approvals:
7.01. MUTUAL CONSENT. By the mutual consent of First Union and the
Company.
7.02. BREACH. By First Union or the Company, in the event of (A) a
breach by the other party of any representation or warranty contained herein,
which breach cannot be or has not been cured within thirty (30) days after the
giving of written notice to the breaching party of such breach (provided that a
party may terminate this Plan pursuant to this SECTION 7.02(A) only with respect
to a breach or breaches that would permit such party not to consummate the
Merger under the standards set forth in SECTION 6.02(A) or SECTION 6.03(A), as
the case may be), or (B) a breach by the other party of any of the covenants or
agreements contained herein, which breach cannot be or has not been cured within
thirty (30) days after the giving of written notice to the breaching party of
such breach.
7.03. DELAY. By First Union or the Company, in the event that the
Merger is not consummated by March 31, 2001.
7.04. NO STOCKHOLDER OR REGULATORY APPROVAL. By the Company or First
Union, in the event that any stockholder approval contemplated by SECTION
6.01(A) is not obtained at the Meeting, including any adjournment or
adjournments thereof, or in the event that written notice is received which
states that any required regulatory approval contemplated by SECTION 6.01(B)
will not be approved or has been denied.
7.05. FAILURE TO RECOMMEND, ETC. At any time prior to the stockholder
approval contemplated by SECTION 6.01(A), by First Union if the Company Board
shall have (i) failed to make its recommendation referred to in SECTION 5.02,
(ii) withdrawn such recommendation, (iii) modified or changed such
recommendation in a manner materially adverse to the interests of First Union,
or (iv) failed to reconfirm such recommendation following the receipt of an
inquiry or proposal of a type referred to in SECTION 5.06 within five business
days after a written request by First Union to do so.
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7.06. TERMINATION FEE. (A) The Company hereby agrees to pay First Union
and First Union shall be entitled to payment of, a nonperformance fee (the
"Termination Fee") of $3.5 million following the occurrence of a Payment Event
(as hereinafter defined). Such payment shall be made in immediately available
funds within five business days after delivery of a notice from First Union
requesting such payment. The right to receive the Termination Fee shall
terminate if any of the following (a "Fee Termination Event") occurs prior to a
Payment Event: (i) the Effective Date, (ii) termination of this Plan in
accordance with the provisions hereof if such termination occurs prior to the
occurrence of a Preliminary Payment Event (as defined below), except a
termination by First Union pursuant to SECTION 7.02 OR 7.05, (iii) termination
of this Plan following the occurrence of a Preliminary Payment Event and the
passage of eighteen (18) months after such termination, or (iv) termination of
this Plan by First Union pursuant to SECTION 7.02 OR 7.05, and the passage of
eighteen (18) months after such termination.
(B) The term "Preliminary Payment Event" shall mean any of the
following events or transactions occurring after the date hereof:
(1) The Company without having received First Union's prior
written consent, shall have entered into an agreement to engage in any
Acquisition Transaction (as hereinafter defined) with any person (the
term "person" for purposes of this SECTION 7.06 having the meaning
assigned thereto in Section 3(a)(9) and 13(d)(3) of the Exchange Act)
other than First Union or any of its subsidiaries or affiliates, or the
Company Board shall have recommended that the stockholders of the
Company approve or accept any Acquisition Transaction with any person
other than First Union or any of its subsidiaries or affiliates. For
purposes of this Plan, "Acquisition Transaction" shall mean (a) a
merger or consolidation, or any similar transaction, involving the
Company, (b) a purchase, lease or other acquisition of all or
substantially all of the assets of the Company, (c) a purchase or other
acquisition (including by way of merger, consolidation, share exchange
or otherwise) of securities representing 20% or more of the voting
power of the Company; PROVIDED that the term "Acquisition Transaction"
does not include any internal merger or consolidation involving only
the Company and/or any of the Company Subsidiaries;
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(2) (a) any person other than First Union or any of its
subsidiaries or affiliates shall have acquired beneficial ownership or
the right to acquire beneficial ownership of 20% or more of the
outstanding shares of Company Common Stock (the term "beneficial
ownership" for purposes of this SECTION 7.06 having the meaning
assigned thereto in Section 13(d) of the Exchange Act, or (b) any group
(as such term is defined in Section 13(d)(3) of the Exchange Act),
other than a group of which any of First Union or any of its
subsidiaries or affiliates is a member, shall have been formed that
beneficially owns 20% or more of the Company Common Stock then
outstanding;
(3) any person other than First Union or any of its
subsidiaries or affiliates shall have made a proposal to the Company or
its shareholders, by public announcement or written communication that
is or becomes the subject of public disclosure, to engage in an
Acquisition Transaction (including, without limitation, any situation
in which any person other than First Union or any of its subsidiaries
or affiliates shall have commenced (as such term is defined in Rule
14d-2 under the Exchange Act) or shall have filed a registration
statement under the Securities Act, with respect to, a tender offer or
exchange offer to purchase any shares of Company Common Stock such
that, upon consummation of such offer, such person would own or control
20% or more of the then outstanding shares of Company Common Stock
(such offering referred to herein as a "Tender Offer" or an "Exchange
Offer", respectively));
(4) after a proposal is made by a third party to the Company
or its shareholders to engage in an Acquisition Transaction, or such
third party states its intention to the Company to make such a
proposal, the Company shall have breached any representation, covenant
or obligation contained in this Plan and such breach would entitle
First Union to terminate this Plan under SECTION 7.02 (without regard
to the cure period provided for therein unless such cure is promptly
effected without jeopardizing consummation of the Merger); or
(5) the holders of shares of Company Common Stock shall not
have approved this Plan at the Meeting or the Meeting shall not have
been held or shall have been canceled prior to termination of this
Plan, in each case after any person other than First Union or any of
its subsidiaries or affiliates shall have (a) made, or disclosed an
intention to make, a proposal to engage in an Acquisition Transaction
or (b) commenced a Tender Offer or filed a registration statement under
the Securities Act, with respect to an Exchange Offer.
(C) The term "Payment Event" shall mean either of the
following events or transactions occurring after the date hereof:
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(1) the acquisition by any person other than First Union or
any of its subsidiaries or affiliates, alone or together with such
person's affiliates and associates, or any group (as defined in Section
13(d)(3) of the Exchange Act), of beneficial ownership of 50% or more
of the outstanding shares of Company Common Stock (unless the Company
shall have breached Section 5.06, in which case the percentage referred
to in this SECTION 7.06(C)(1) shall be reduced to 25%); or
(2) the occurrence of a Preliminary Payment Event described in
(x) clause (B)(1) above, except that the percentage referred to in
clause (c) thereof shall be 25%, or (y) clause (B)(5) above.
(D) The Company shall notify First Union promptly in writing
of its knowledge of the occurrence of any Preliminary Payment Event or
Payment Event; PROVIDED, HOWEVER, that the giving of such notice by the
Company shall not be a condition to the right of First Union to the
Termination Fee.
VIII. OTHER MATTERS.
8.01. SURVIVAL. SECTION 5.12 and this ARTICLE VIII (OTHER THAN SECTION
8.10) shall survive the Effective Time. If this Plan is terminated pursuant to
ARTICLE VII prior to the Effective Time, SECTIONS 4.01(Q), 5.05(B), 7.06 AND
this ARTICLE VIII (OTHER THAN SECTION 8.10) shall survive such termination. All
other representations, warranties, covenants and agreements in this Plan will
not survive the Effective Time or termination pursuant to Article VII, PROVIDED
that no such termination will relieve any party of any liability or damages
resulting from any willful or intentional breach of this Plan.
8.02. WAIVER; AMENDMENT. Prior to the Effective Date, any provision of
this Plan may be (A) waived in writing by the party benefiting by the provision
or (B) amended or modified at any time, in either case by an agreement in
writing among the parties hereto approved or authorized by their respective
Boards of Directors and executed in the same manner as this Plan, except that,
after the vote by the stockholders of the Company, no amendment may be made that
requires further approval of such stockholders under applicable law without
obtaining such approval.
8.03. COUNTERPARTS. This Plan may be executed in one or more
counterparts, each of which shall be deemed to constitute an original. This Plan
shall become effective when one counterpart has been signed by each party
hereto.
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8.04. GOVERNING LAW. This Plan shall be governed by, and interpreted in
accordance with, the laws of the State of North Carolina.
8.05. EXPENSES. Each party hereto will bear all expenses incurred by it
in connection with this Plan and the transactions contemplated hereby.
8.06. CONFIDENTIALITY. Except as otherwise provided in SECTION 5.05(B),
each of the parties hereto and their respective agents, attorneys and
accountants will maintain the confidentiality of all information provided in
connection herewith which has not been publicly disclosed.
8.07. NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, telecopied (with
confirmation) or mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
If to First Union,
to: First Union Corporation
One First Union Center
Charlotte, North Carolina 28288-1207
Telecopy Number: (704) 715-4401
Attention: Donald McMullen
Copy to: First Union Corporation
One First Union Center
Charlotte, North Carolina 28288-0013
Telecopy Number: (704) 374-3425
Attention: Mark C. Treanor
General Counsel
If to the Company,
to: JWGenesis Financial Corp.
980 North Federal Highway, Suite 210
Boca Raton, Florida 33432
Telecopy Number: (561) 338-2727
Attention: Marshall Leeds
Copy to: W. Randy Eaddy, Esq.
Kilpatrick Stockton LLP
1100 Peachtree Street
Atlanta, Georgia 30309
Telecopy Number: (404) 815-6555
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8.08. DEFINITIONS. Any term defined anywhere in this Plan shall have
the meaning ascribed to it for all purposes of this Plan (unless expressly noted
to the contrary). In addition:
(A) the term "Material Adverse Effect", when applied to a
party, means an event, occurrence or circumstance (including without
limitation, any breach of a representation or warranty contained herein
by such party) which (1) has a material adverse effect on the financial
condition, results of operations, business or prospects of such party
and its subsidiaries, taken as a whole, or (2) would materially impair
any party's ability to timely perform its obligations under this Plan
or the consummation of any of the transactions contemplated hereby;
PROVIDED, that a Material Adverse Effect with respect to a party shall
not include events or conditions generally affecting the securities
industry or effects resulting from general economic conditions
(including changes in interest rates), changes in accounting practices
or changes to statutes, regulations or regulatory policies, that do not
have a materially more adverse effect on such party than that
experienced by similarly situated financial services companies, and
PROVIDED FURTHER, a Material Adverse Effect with respect to First Union
shall not include events, occurrences, circumstances, conditions,
charges or effects relating to, or otherwise resulting from, any
acquisitions by First Union or any of its subsidiaries or any
dispositions of any of its subsidiaries or any of First Union's or its
subsidiaries' assets or lines of business or any terminations of, or
reductions in, any lines of business;
(B) the term "individually or in the aggregate" as used in
ARTICLE IV of this Plan includes all events, occurrences and
circumstances described in any paragraph of ARTICLE IV, and is not
linked to any specific paragraph;
(C) the term "Previously Disclosed" by a party means
information set forth in a Schedule, correspondingly enumerated to the
representation, warranty or covenant to which it relates, that is
delivered by such party to the other party contemporaneously with the
execution of this Plan (it being understood that notwithstanding any
other provision herein such information shall be disclosed in light of
the particular standard of "materiality" set forth in the
representation, warranty or covenant to which such information
relates); and
(D) the term "Rights" means securities or obligations
convertible into or exchangeable for, or giving any person any right to
subscribe for or acquire, or any options, calls or commitments relating
to, shares of capital stock (and shall include stock appreciation
rights and all similar derivative rights).
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8.09. ENTIRE UNDERSTANDING; NO THIRD PARTY BENEFICIARIES. This Plan and
all Schedules, Exhibits and Annexes hereto represents the entire understanding
of the parties hereto with reference to the transactions contemplated hereby and
supersede any and all other oral or written agreements heretofore made. Nothing
in this Plan, expressed or implied, is intended to confer upon any person, other
than the parties hereto or their respective successors, any rights, remedies,
obligations or liabilities under or by reason of this Plan, except that Section
5.12 is intended to confer on the persons named therein those rights expressly
stated in such Section.
8.10. EMPLOYEE MATTERS. (a) As soon as administratively practicable
after the Effective Time, employees of the Company and the Company Subsidiaries
shall be generally entitled to participate in the pension, benefit, welfare,
incentive compensation, sick pay, vacation, fringe benefit and similar plans of
First Union, such participation shall be on substantially the same terms and
conditions applied to retail securities brokerage employees of First Union
Securities, Inc. and its subsidiaries from time to time. For the purpose of
determining eligibility to participate in such plans and the vesting of benefits
under such plans (but not for the accrual of benefits under such plans), First
Union shall give effect to years of service with the Company or the Company
Subsidiaries, as the case may be, as if such service had been with First Union
or its subsidiaries. No employee of the Company who elects coverage under a
First Union medical insurance plan shall be excluded from coverage under such
plan (for such employee or any other covered person) on the basis of a
pre-existing condition that was not also excluded under the Company's medical
insurance plans.
(b) The Company hereby agrees to provide to First Union the federal and
state employment history and data related to the Company, as necessary. The
Company understands that in order to obtain certain favorable state unemployment
rates and any related transfer of state unemployment wage history for optimal
rate calculations, it may be necessary to file certain documents with applicable
state authorities and provide certain payroll data. It is also understood by the
Company that certain states have statutory time limitations for filing such
documents to allow these transfers. The Company hereby agrees to complete such
state unemployment documents and provide such data as is necessary to effectuate
the transfer of unemployment history and unemployment rates in the respective
states, and to execute these documents within the time necessary to complete the
transfer.
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8.11. HEADINGS. The headings contained in this Plan are for reference
purposes only and are not part of this Plan.
8.12. INTERPRETATION; EFFECT. When a reference is made in this Plan to
Sections, Exhibits, Annexes or Schedules, such reference shall be to a Section
of, or Exhibit or Annex or Schedule to, this Plan unless otherwise indicated.
Whenever the words "include," "includes" or "including" are used in this Plan,
they shall be deemed to be followed by the words "without limitation". No
provision of this Plan shall be construed to require the Company, First Union or
any of their respective Subsidiaries, affiliates or directors to take any action
which would violate applicable law (whether statutory or common law), rule or
regulation.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed in counterparts by their duly authorized officers, all as of the day
and year first above written.
FIRST UNION CORPORATION
By: /s/ Daniel J. Ludeman
Name:Daniel J. Ludeman
Title:Senior Vice President
JWGENESIS FINANCIAL CORP.
By: /s/ Marshall T. Leeds
Name: Marshall T. Leeds
Title: President
