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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. ______________)*
FFVA Financial Corporation
- --------------------------------------------------------------------------------
(Name of Issuer)
FFVA Financial Corporation Common Stock
- --------------------------------------------------------------------------------
(Title of Class of Securities)
30242X 10 2
-------------------------------------------------------
(CUSIP Number)
Merrill S. McIlwain
Senior Vice President and General Counsel
One Valley Bancorp
One Valley Square
P.O. Box 1793
Charleston, WV 25326
(304) 348-7000
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
December 16, 1997
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|.
Check the following box if a fee is being paid with the statement |_|. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7).
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
SEC 1746(12-91)
<PAGE>
- ----------------------
CUSIP NO. 30242X 10 2 PAGE 2 OF 16 PAGES
- ----------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
One Valley Bancorp
IRS #55-0609408
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS
WC*
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)
[ ]
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
West Virginia
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 490,000*
SHARES -----------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 0
EACH -----------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 490,000
WITH -----------------------------------------------------
10. SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
490,000*
- --------------------------------------------------------------------------------
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.9%
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------------
*BENEFICIAL OWNERSHIP OF 490,000 SHARES OF COMMON STOCK
REPORTED HEREUNDER IS SO BEING REPORTED SOLELY AS A RESULT
OF THE STOCK OPTION AGREEMENT DESCRIBED IN ITEM 4 HEREOF.
THE OPTION GRANTED PURSUANT TO SUCH STOCK OPTION AGREEMENT
HAS NOT YET BECOME EXERCISABLE. ONE VALLEY BANCORP EXPRESSLY
DISCLAIMS BENEFICIAL OWNERSHIP OF SUCH SHARES.
<PAGE>
ITEM 1. SECURITY AND ISSUER.
This statement relates to the common stock, par value $0.10 per share
("Common Stock"), of FFVA Financial Corporation, a Virginia corporation (the
"Company"), the principal executive offices of which are located at 925 West
Main Street, Lynchburg, Virginia 24504.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(c) and (f) This statement is being filed by One Valley Bancorp, a
West Virginia corporation registered as a bank holding company under the Bank
Holding Company Act of 1956, as amended ("One Valley"). The principal business
offices of One Valley are located at One Valley Square, P.O. Box 1793,
Charleston, West Virginia 25326. One Valley Bancorp has banking subsidiaries and
bank-related subsidiaries. The names of the directors and executive officers of
One Valley and their respective business addresses, citizenship and present
principal occupations or employment, as well as the names, principal businesses
and addresses of any corporations and other organizations in which such
employment is conducted, are set forth on Schedule I hereto, which Schedule is
incorporated herein by reference.
(d)-(e) Neither One Valley, nor, to the best of its knowledge, any of
the persons listed in Schedule I hereto has during the last five years been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors). Neither One Valley nor, to the best of its knowledge, any of the
persons listed in Schedule I hereto has during the last five years been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
-3-
<PAGE>
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
As more fully described in Item 4, the Company has granted to One
Valley an option pursuant to which One Valley has the right, upon the occurrence
of certain events (none of which has occurred), to purchase up to 490,000 shares
of Common Stock (subject to adjustment in certain circumstances) at a price per
share equal to $39.97 (the "Option"). Certain terms of the Option are summarized
in Item 4.
If the Option were exercisable and One Valley were to exercise the
Option on the date hereof, the funds required to purchase the shares of Common
Stock issuable upon such exercise would be $19,585,300.00. It is currently
anticipated that such funds would be derived from working capital.
Subject to market conditions and developments with respect to the
Merger (as defined below) One Valley may purchase shares of Common Stock in the
open market or in privately negotiated transactions. It is currently anticipated
that any funds used to make such purchases would be derived from working
capital.
ITEM 4. PURPOSE OF THE TRANSACTION.
(a)-(j) One Valley is seeking to acquire the entire equity interest in
the Company pursuant to the Merger (as defined below). The transactions reported
hereunder are intended to assist in the achievement of that purpose.
The Merger Agreement. The Company and One Valley have entered into an
Agreement and Plan of Merger, dated as of December 16, 1997 (the "Merger
Agreement"), pursuant to which the Company will be merged with and into One
Valley (the "Merger"), with One Valley being the surviving corporation (the
"Surviving Company"). At the effective time of the Merger (the "Effective
Time"), each outstanding share of Common Stock will be converted into 1.05
shares (the "Exchange Ratio") of common stock of One Valley ("One Valley Common
Stock").
In the event One Valley changes (or establishes a record date for
changing) the number of shares of One Valley Common Stock issued and outstanding
prior to the Effective Time as a result of a stock split, stock dividend,
recapitalization or similar transaction with respect to the outstanding One
Valley Common Stock and the record date therefor shall be prior to the Effective
Time, the Exchange
-4-
<PAGE>
Ratio will be proportionately adjusted. As of the Effective Time, each share of
Common Stock held directly or indirectly by the Company, other than shares held
in a fiduciary capacity or in satisfaction of a debt previously contracted, will
be canceled, and no exchange or payment will be made with respect thereto.
As a result of the Merger, the Company will cease to exist as a
separate legal entity.
The Merger is subject to various regulatory approvals, the approval of
the stockholders of the Company and the satisfaction of other terms and
conditions set forth in the Merger Agreement.
As a result of the Merger, Common Stock will be eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). In addition, Common Stock
will be eligible for delisting from the Nasdaq Stock Market's National Market
System, where it has been traded under the symbol "FFFC".
The Option Agreement. In connection with the Merger Agreement, One
Valley and the Company entered into a Stock Option Agreement, dated as of
December 16, 1997 (the "Option Agreement"). The Option Agreement is designed to
enhance the likelihood that the Merger will be successfully consummated in
accordance with the terms contemplated by the Merger Agreement. Pursuant to the
Option Agreement, the Company granted One Valley an Option to purchase, subject
to adjustments in certain circumstances, up to 490,000 fully paid and
non-assessable shares of Common Stock (the "Option Shares") at a price per share
equal to $39.97.
Subject to applicable law and regulatory restrictions, One Valley may
exercise the Option, in whole or in part, if, but only if, a Fee Event (as
defined below) has occurred prior to the occurrence of a Fee Termination Event
(as defined below), provided that written notice of such exercise as required by
the Option Agreement is provided within six months following such Fee Event (or
such later period as provided in the Option Agreement).
As used in the Option Agreement, "Fee Termination Event" means each of
the following: (i) the Closing Date; (ii) termination of the Merger Agreement in
accordance with the provisions thereof if such termination occurs prior to the
occurrence of a Preliminary Fee Event, except a
-5-
<PAGE>
termination by One Valley pursuant to Section 9.1(b) (One Valley may terminate
if the Company has made a material misrepresentation, or is in breach of a
representation or warranty made by it, in the Merger Agreement) or Section
9.1(g) (One Valley may terminate in certain circumstances if the Company enters
into negotiations with a third party in respect of an Acquisition Transaction
(defined below)); (iii) termination of the Merger Agreement following the
occurrence of a Preliminary Fee Event and the passage of 18 months after such
termination; or (iv) termination of the Merger Agreement pursuant to Section
9.1(b) or Section 9.1(g) thereof and the passage of 18 months after such
termination.
As used in the Option Agreement, "Preliminary Fee Event" means any of
the following events or transactions occurring on or after the date of signing
the Option Agreement:
(i) The Company or its wholly-owned subsidiary, First Federal Savings
Bank of Lynchburg (the "Subsidiary"), without having received One Valley's
prior written consent, shall have entered into an agreement to engage in an
Acquisition Transaction (as hereinafter defined) with any person (the term
"person" for purposes of the Option Agreement having the meaning assigned
thereto in Sections 3(a)(9) of the Securities Exchange Act of 1934, as
amended (the "1934 Act")) other than One Valley or any of its subsidiaries
or affiliates, or the Board of Directors of the Company (the "Company
Board") shall have approved, recommended, publicly proposed or publicly
announced an intention to authorize, recommend, propose or accept any
Acquisition Transaction with any person other than One Valley or any of its
subsidiaries or affiliates. For purposes of the Merger Agreement, (A)
"Acquisition Transaction" shall mean (x) a merger or consolidation, or any
similar transaction, involving the Company or the Subsidiary, (B) a
purchase, lease or other acquisition of all or substantially all of the
assets or deposits of the Company or the Subsidiary, or (C) a purchase or
other acquisition (including by way of merger, consolidation, share
exchange or otherwise) of securities representing 10% or more of the voting
power of the Company or the Subsidiary, provided that the term "Acquisition
Transaction" does not include any internal merger or consolidation
involving only the Company and the Subsidiary;
(ii) (A) Any person other than One Valley or any of its subsidiaries
or affiliates shall have acquired beneficial ownership or the right to
acquire beneficial
-6-
<PAGE>
ownership of 10% or more of the outstanding shares of Common Stock (the
term "beneficial ownership" for purposes of the Merger Agreement having the
meaning assigned thereto in Section 13(d) of the 1934 Act, and the rules
and regulations thereunder) or (B) any group (as such term "group" is
defined in Section 13(d)(3) of the Exchange Act), other than a group of
which any of One Valley or any of its subsidiaries or affiliates is a
member, shall have been formed that beneficially owns 10% or more of the
Common Stock then outstanding;
(iii) Any person other than One Valley or any of its subsidiaries or
affiliates shall have made a bona fide proposal to the Company or its
shareholders, by public announcement or written communication that is or
becomes the subject of public discourse, to engage in an Acquisition
Transaction (including, without limitation, any situation in which any
person other than One Valley or any of its subsidiaries or affiliates shall
have commenced (as the term is defined in Rule 14d-2 under the 1934 Act) or
shall have filed a registration statement under the Securities Act of 1933,
as amended (the "1933 Act"), with respect to, a tender offer ("Tender
Offer") or exchange offer ("Exchange Offer") to purchase any Common Stock
such that, upon consummation of such offer, such person would own or
control 10% of the then outstanding Common Stock);
(iv) 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 if the Merger
Agreement terminates, the Company shall have breached any representation,
covenant or obligation contained in the Merger Agreement and such breach
would entitle One Valley to terminate the Merger Agreement under Section
9.1(b) thereof (without regard to the cure period provided for therein
unless such cure is promptly effected without jeopardizing consummation of
the Merger); or
(v) The holders of Common Stock shall not have approved the Merger
Agreement at the meeting of shareholders set forth in Section 10 of the
Merger Agreement or the meeting of shareholders shall not have been held or
shall have been canceled prior to termination of the Merger Agreement, in
each case only after
-7-
<PAGE>
any person (other than One Valley or any of its subsidiaries or affiliates)
shall have (A) made, or disclosed an intention to make, a bona fide
proposal to engage in an Acquisition Transaction, (B) commenced a Tender
Offer or filed a registration statement under the 1933 Act with respect to
any Exchange Offer.
As used in the Option Agreement, "Fee Event" means any of the
following events or transactions occurring after the date of signing the Option
Agreement:
(i) The acquisition by any person, other than One Valley or any of its
subsidiaries or affiliates, or group of beneficial ownership of 30% or more
of the then outstanding Common Stock; or
(ii) The occurrence of the Preliminary Fee Event described in clause
(i) of the immediately preceding paragraph, except that the percentage
referred to in clause (C) of the second sentence thereof shall be 30%.
As provided in the Option Agreement, in the event that One Valley is
entitled to and wishes to exercise the Option, it is obligated to send to the
Company a written notice (the date of which being hereinafter referred to as the
"Notice Date") specifying (i) the total number of shares of Common Stock it
intends to purchase pursuant to such exercise and (ii) a place and date not
earlier than three business days nor later than 15 business days from the Notice
Date for the closing of such purchase (the "Closing Date"); provided, that if
prior notification to or approval of the Federal Reserve Board or any other
regulatory authority is required in connection with such purchase, the Company
shall cooperate with One Valley in the filing of the required notice or
application for approval and the obtaining of such approval and the Closing Date
shall occur immediately following such regulatory approvals (and any mandatory
waiting periods).
Under applicable law, One Valley may be required to obtain the prior
approval of the Federal Reserve Board prior to acquiring 5% or more of the
issued and outstanding shares of Common Stock. Certain other regulatory
approvals may also be required before such an acquisition could be completed.
Neither of the parties to the Option Agreement may assign any of its
rights or obligations under the Merger
-8-
<PAGE>
Agreement or the Option created thereunder to any other person, without the
express written consent of the other party, except that (i) One Valley may
assign the Option Agreement to a wholly-owned subsidiary of One Valley and (ii)
One Valley may assign its rights thereunder in whole or in part after the
occurrence of a Fee Event; provided, however, that until the Federal Reserve
Board has approved an application by One Valley to acquire the shares of Common
Stock subject to the Option, One Valley may not assign its rights under the
Option except in (i) a widely dispersed public distribution, (ii) a private
placement in which no one party acquires the right to purchase in excess of 2%
of the voting shares of the Company, (iii) an assignment to a single party
(e.g., a broker or investment banker) for the purpose of conducting a widely
dispersed public distribution on One Valley's behalf or (iv) any other manner
approved by the Federal Reserve Board.
In addition, any shares of Common Stock purchased upon the exercise of
the Option may be resold by One Valley pursuant to registration rights under the
Option Agreement.
In the event of any change in, or distributions in respect of, the
Common Stock by reason of stock dividends, split-ups, mergers,
recapitalizations, combinations, subdivisions, conversions, exchanges of shares
or the like, the type and number of shares or securities subject to the Option
will be appropriately adjusted and proper provision will be made in the
agreements governing such transaction so that One Valley would receive, upon
exercise of the Option, the number and class of share or other securities or
property that One Valley would have received in respect of Common Stock if the
Option had been exercised immediately prior to such event, or the record date
therefor, as applicable. If any additional shares of Common Stock are issued
after the date of the Merger Agreement (other than pursuant to an event
described in the preceding sentence), the number of shares of Common Stock
subject to the Option shall be adjusted so that, after such issuance, it equals
9.9% of the number of shares of Common Stock then issued and outstanding, after
giving effect to any shares subject to or issued pursuant to the Option.
At any time within 12 months after the occurrence of a Repurchase
Event (as defined below) at the request of One Valley, the Company (or any
successor thereto) must repurchase from One Valley (i) the Option and (ii) all
shares of Common Stock purchased by One Valley pursuant to the Option Agreement
in respect of which One Valley then has
-9-
<PAGE>
beneficial ownership, in each case at purchase prices provided for in the Option
Agreement.
A "Repurchase Event" will be deemed to have occurred upon the
occurrence of any of the following events or transactions after the date hereof:
(i) the acquisition by any person (other than One Valley or any of its
subsidiaries or affiliates) of beneficial ownership of 50% or more of the
then outstanding Common Stock; or
(ii) the consummation of any of the transactions described in clauses
(i), (ii) and (iii) of the immediately succeeding paragraph.
In the event that the Company enters into an agreement (i) to
consolidate with or merge into any person, other than One Valley or any of its
subsidiaries or affiliates and would not be the continuing or surviving
corporation of such consolidation or merger, (ii) to permit any person, other
than One Valley or any of its subsidiaries or affiliates, to merge into the
Company and the Company is the continuing or surviving or acquiring corporation,
but, in connection with such merger, the then outstanding shares of Common Stock
are changed into or exchanged for stock or other securities of any other person
or cash or any other property, or the then outstanding shares of Common Stock
after such merger represent less than 50% of the outstanding shares and share
equivalents of the merged or acquiring company, or (iii) to sell or otherwise
transfer all or a substantial part of its or the Subsidiary's assets or deposits
to any person, other than One Valley or any of its subsidiaries or affiliates,
then, and in each such case, the agreement governing such transaction must make
proper provision so that the Option will, upon the consummation of any such
transaction and upon the terms and conditions set forth in the Option Agreement,
be converted into, or exchanged for, an option (the "Substitute Option"), at the
election of the Holder, of either (A) the Acquiring Corporation (as defined in
the Option Agreement), (B) any person that controls the Acquiring Corporation or
(C) in the
-10-
<PAGE>
case of a merger described in clause (ii) of this paragraph, the Company.
One Valley may, at any time following a Repurchase Event and prior to
the occurrence of a Fee Termination Event (or such later period as provided in
the Option Agreement), relinquish the Option (together with any Option Shares
issued to and then owned by One Valley) to the Company in exchange for a cash
fee equal to the Surrender Price; provided, however, that One Valley may not
exercise such right if the Company has repurchased the Option (or any portion
thereof) or any Option Shares as described above. The "Surrender Price" will be
equal to $3.5 million (i) plus, if applicable, One Valley's purchase price
actually paid with respect to any Option Shares and (ii) minus, if applicable,
the excess of (A) the net cash amounts, if any, received by One Valley pursuant
to the arms' length sale of Option Shares (or any other securities into which
such Option Shares were converted or exchanged) to any unaffiliated party, over
(B) One Valley's purchase price of such Option Shares. One Valley's "profit"
under the Option is limited under certain circumstances to $6 million, as
provided for in the Option Agreement.
Copies of the Option Agreement and the Merger Agreement are filed as
exhibits to this Schedule 13D and are incorporated herein by reference. The
foregoing summary is not intended to be complete and is qualified in its
entirety by reference to such exhibits.
Purchase of Common Stock. Subject to market conditions and
developments with respect to the Merger, One Valley may purchase shares of
Common Stock in the open market or in privately negotiated transactions.
ITEM 5. INTEREST IN SECURITIES OF THE COMPANY.
(a) One Valley may be deemed to be the beneficial owner of the Option
Shares. As provided in the Option Agreement, One Valley may exercise the Option
only upon the happening of one or more events, none of which has occurred. See
Item 4 hereof. If the Option were exercised in full, the Option Shares would
represent approximately 9.9% of the currently outstanding Common Stock (after
giving effect to the issuance of such Option Shares). One Valley has no right to
vote or dispose of the shares of Common Stock subject to the Option unless and
until such time as the Option is exercised. One Valley expressly disclaims
beneficial ownership of such shares. To the best knowledge of One Valley, none
of the persons listed in Schedule I hereto beneficially owns any shares of
Common Stock.
-11-
<PAGE>
(b) If One Valley were to exercise the Option, it would have sole
power to vote and, subject to the terms of the Option Agreement, sole power to
direct the disposition of the shares of Common Stock covered thereby.
(c) One Valley acquired the Option in connection with the Merger
Agreement. See Item 4 hereof.
To the best knowledge of One Valley, none of the persons listed in
Schedule I hereto has effected any transactions in Common Stock during the past
60 days.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE
COMPANY.
Except as described in Item 4 and Item 5 hereof, neither One Valley
nor, to the best of its knowledge, any of the persons listed on Schedule I
hereto, has any contract, arrangement, understanding or relationship with any
other person with respect to any securities of the Company, including the
transfer or voting of any of the securities, finder's fees, joint ventures, loan
or option arrangements, puts or calls, guarantees of profits, division of
profits or losses, or the giving or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
2.1 Agreement and Plan of Merger, dated as of
December 16, 1997, by and between One Valley
and the Company.
99.1 Stock Option Agreement, dated as of December 16,
1997, between One Valley and the Company.
-12-
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
hereby certify that the information set forth in this statement is true,
complete and correct.
Dated: December 24, 1997
ONE VALLEY BANCORP
By:
---------------------------------
Name: Lawrence G. Jones
Title: Chief Financial Officer
-13-
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
ONE VALLEY BANCORP
The names, business addresses and present principal occupations of the
directors and executive officers of One Valley Bancorp are set forth below. If
no business address is given, the director's or officer's business address is
One Valley Square, P.O. Box 1793, Charleston, West Virginia 25326. The business
address of each of the directors of One Valley is also the business address of
such director's employer, if any. Directors of One Valley are identified by an
asterisk. Unless otherwise indicated, all directors and officers listed below
are citizens of the United States.
<TABLE>
<S> <C>
Name Present Principal Occupation or Employment and Address
- ---- ------------------------------------------------------
Charles M. Avampato* President, Clay Foundation, Inc., 1426 Kanawha
Boulevard, E., Charleston, WV 253301
Robert F. Baronner* Chairman of the Board, One Valley Bancorp of WV, Inc.,
P.O. Box 1793, Charleston, WV 25326
C. Michael Blair* President and CEO, One Valley Bank-North, Inc., P.O.
Drawer C, Moundsville, WV 26041
James K. Brown* Partner, Jackson and Kelly, 1600 Laidley Tower
Charleston, WV 25301
Nelle Ratrie Chilton* Director and Vice President, Dickinson Fuel Co., Inc.,
P.O. Box 311, Charleston, WV 25321
R. Marshall Evans, Jr.* President, Dickinson Company, 1401 Kanawha Valley
Building, Charleston, WV 25301
James Gabriel* President, Gabriel Brothers, Inc., 55 Scott Avenue
Morgantown, WV 26505
Phillip H. Goodwin* President, CAMC, P.O. Box 1547, Charleston, WV 25326
Thomas E. Goodwin* Chairman of the Board, One Valley Bank of Ronceverte,
Rt. 5 Box 30-A, Lewisburg, WV 24901
Robert E. Kamm, Jr.* President, One Valley Bank of Summersville, Inc.,
P.O. Box 370, Summersville, WV 26651
John D. Lynch* Vice President, Davis Lynch Glass Company,
P.O. Box 4268, Star City, WV 26504
Edward H. Maier* President, General Corporation, P.O. Box 6190
Charleston, WV 25362
Charles R. Neighborgall, III* President, The Neighborgall Construction Company,
714-13th Avenue, Huntington, WV 25701
Robert O. Orders, Sr.* Orders Construction Company, P.O. Box 1448
St. Albans, WV 25177
John L.D. Payne* President, Payne-Gallatin Mining Co.,
1280 One Valley Square, Charleston, WV 25301
Angus E. Peyton* Partner, Brown and Peyton,
One Valley Square, Suite 100, Charleston, WV 25301
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<PAGE>
Lacy I. Rice, Jr.* Partner, Bowles, Rice, McDavid, Graff & Love
P.O. Drawer 1419, Martinsburg, WV 25401-1419
Brent Robinson* President & CEO, One Valley Bank Martinsburg,
148 S. Queen Street, Martinsburg, WV 25401
James W. Thompson* Chairman of the Board, One Valley Bank of Mercer County, Inc.
107 Burgess Street, Princeton, WV 24740
John L. VanMetre, Jr.* Partner, Steptoe and Johnson, 126 E. Burke Street
Martinsburg, WV 25401
Richard B. Walker* Chairman of the Board and Chief Executive Officer, Cecil I. Walker Machinery,
P.O. Box 170, Hurricane, WV 25526
H. Bernard Wehrle, III* President, McJunkin Corporation, P.O. Box 513
Charleston, WV 25322
John H. Wick, III* Vice President, Dickinson Fuel Co.,
300 Virginia Avenue, Richmond, VA 23226
Thomas D. Wilkerson* Northwestern Mutual Life Insurance Co., 153 Summers
Street - Room 300, Charleston, WV 25301
R. Marshall Evans, Jr.* President, Dickinson Co., Quincy Coal Co. and Chesapeake Mining Co.,
3401 Northside Parkway, Atlanta, GA 30327
Bob M. Johnson* President & CEO, One Valley Bank-Central Virginia
2120 Langhorne Road, Lynchburg, VA 24505
Dennis M. Bone* President & CEO, Bell Atlantic-WV Inc., 1500 MacCorkle
Avenue SE, Charleston, WV 25314
H. Rodgin Cohen* Partner, Sullivan & Cromwell, 125 Broad Street
New York, NY 10004
Robert F. Baronner* Chairman of the Board of One Valley
J. Holmes Morrison* President and Chief Executive Officer of One Valley
Phyllis H. Arnold* Executive Vice President of One Valley
Frederick H. Belden, Jr. Executive Vice President of One Valley
Laurance G. Jones Executive Vice President of One Valley
James A. Winter Vice President and Chief Accounting Officer of One
Valley
Robert E. Kamm, Jr.* Senior Vice President of One Valley
Kenneth R. Summers Senior Vice President of One Valley
</TABLE>
-15-
<PAGE>
Exhibit Index
2.1 Agreement and Plan of Merger, dated as of December 16,
1997, by and between One Valley Bancorp and FFVA
Financial Corporation.
99.1 Stock Option Agreement, dated as of December 16,
1997, between One Valley and FFVA Financial
Corporation.
-15-
AGREEMENT
AND
PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (hereinafter sometimes referred to as
the "Agreement"), made and entered into as of the 16th day of December, 1997, by
and between One Valley Bancorp, Inc. ("One Valley") and FFVA Financial
Corporation ("FFVA Financial").
WITNESSETH:
RECITALS
A. One Valley is a West Virginia corporation duly organized and
validly existing under the laws of the State of West Virginia.
B. FFVA Financial is a Virginia corporation duly organized and validly
existing under the laws of the State of Virginia.
C. The Boards of Directors of FFVA Financial and of One Valley have
each approved this Agreement, authorized the execution hereof in counterparts,
and directed that it be submitted for shareholder approval.
D. As a condition and inducement to One Valley's willingness to enter
into this Agreement, immediately after the execution and delivery of this
Agreement, One Valley and
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FFVA Financial will enter into a Stock Option Agreement, dated as of the date
hereof (the "Option Agreement"), in the form attached hereto as Exhibit A,
pursuant to which FFVA Financial will grant to One Valley an option to purchase
authorized but unissued shares of FFVA Financial's common stock, par value $.10
per share, upon the terms and conditions therein contained.
E. One Valley and FFVA Financial intend, and it is a condition hereof,
that the Merger (as defined below) constitute a tax-free reorganization.
AGREEMENT
Now, therefore, for and in consideration of the premises and the mutual
agreements hereinafter set forth, and in accordance with the provisions of
applicable law, the parties agree as follows:
SECTION 1
THE PLAN OF MERGER
1.1 The Merger. On the Closing Date, FFVA Financial shall merge with
and into One Valley, under the Articles of Incorporation of One Valley (the
"Merger"). One Valley shall be the surviving corporation (hereinafter sometimes
called the "Surviving Corporation").
1.2 Effects of Merger. On the Closing Date, the corporate name and
existence of FFVA Financial shall cease and all of its purposes, powers and
objects, and all of its rights,
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assets, liabilities and obligations, shall pass to and vest in One Valley as the
Surviving Corporation without any conveyance or transfer, and One Valley as the
Surviving Corporation shall continue to be governed by the laws of the State of
West Virginia and shall also succeed to all rights, assets, liabilities and
obligations of FFVA Financial in accordance with the West Virginia Corporation
Act. Upon the Closing Date of the Merger, the separate existence and corporate
organization of FFVA Financial shall cease.
SECTION 2
ARTICLES OF INCORPORATION; BYLAWS;
BOARD OF DIRECTORS AND OFFICERS
2.1 Articles of Incorporation. The Articles of Incorporation of One
Valley shall continue unchanged as the Articles of Incorporation of One Valley
as the Surviving Corporation. From and after the Closing Date, said Articles of
Incorporation, as the same may be amended from time to time as provided by law,
shall be the Articles of Incorporation of the Surviving Corporation.
2.2 Bylaws. The Bylaws of One Valley as in effect on the Closing Date
shall continue as the Bylaws of the Surviving Corporation until the same shall
thereafter be altered, amended or repealed in accordance with law, its Articles
of Incorporation, or said Bylaws.
2.3 Directors and Officers. Except as provided in Section 11.3, the
directors and officers of One Valley on the Closing Date shall continue as the
directors and officers of the Surviving Corporation and shall hold office as
prescribed in the Bylaws of the Surviving Corporation and applicable law until
their successors shall have been elected and shall qualify.
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SECTION 3
CONVERSION OF SHARES AND OPTIONS
3.1 Conversion of Shares. On the Closing Date:
(a) All issued and outstanding shares of common stock of One Valley
shall remain issued and outstanding.
(b) Each share of common stock of FFVA Financial then issued and
outstanding, excluding any shares held in the treasury of FFVA Financial shall
be converted by the Merger into 1.05 (one and five hundredths) shares of common
stock of One Valley ("Fixed Exchange Ratio"). Each person who, but for the
provisions of this Section 3.1 (b), would be entitled to a fractional share
interest in the common stock of One Valley as a result of the conversion, upon
surrender of certificates theretofore representing shares of common stock of
FFVA Financial, shall receive in lieu thereof an amount in cash equal to such
fraction multiplied by the closing price for the common stock of One Valley
reported on the New York Stock Exchange on the business day immediately prior to
the Closing Date. Shares of One Valley common stock shall be issued with
associated rights pursuant to the terms of its Shareholder Protection Rights
Agreement, dated as of October 18, 1995, between One Valley Bancorp, Inc., and
One Valley Bank, National Association (as rights agent).
(c) Shareholders of One Valley asserting dissenters' rights under the
laws of the State of West Virginia shall have their rights determined pursuant
to W. Va. Code ss.ss.31-1-122 and 123 and shall be entitled to cash payment
pursuant to the terms and provisions of said law with funds to be provided by
One Valley.
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(d) From and after the Closing Date, the holders of the certificates
representing common stock of FFVA Financial shall cease to have any rights with
respect to such shares and their sole right shall be to receive cash and common
stock of One Valley as herein provided.
(e) If One Valley shall, at any time prior to the Closing Date, (i)
issue a dividend in shares of One Valley common stock, (ii) combine the
outstanding shares of One Valley common stock into a smaller number of shares,
(iii) subdivide the outstanding shares of One Valley common stock, or (iv)
reclassify the shares of One Valley common stock, then, in any such event, the
Fixed Exchange Ratio (as set forth in Section 3.1(b) hereof) shall be adjusted
by multiplying the Fixed Exchange Ratio by a fraction the numerator of which is
equal to the number of shares of One Valley common stock outstanding immediately
after the happening of such event and the denominator of which is equal to the
number of shares of One Valley common stock outstanding immediately prior to the
happening of such event.
3.2 Exchange of Certificates. As soon as practicable after the Closing
Date, the certificates representing the outstanding shares of FFVA Financial
shall be surrendered to Harris Trust and Savings Bank, or to such other entity
as One Valley may direct, as agent ("Exchange Agent") for One Valley and, upon
such surrender, the Exchange Agent shall issue and deliver in substitution
therefore, certificates representing the number of shares of common stock of One
Valley into which such surrendered shares have been converted as hereinbefore
provided, and cash in lieu of fractional shares (without interest). Certificates
representing shares of FFVA Financial which are not surrendered shall be deemed
for all purposes to evidence the ownership of the number of shares of common
stock of One Valley into which said shares of FFVA Financial shall have been
converted as hereinbefore set forth and the right to receive cash in the amount
determined pursuant to Section 3.1; provided, however, that One Valley will not
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distribute to the holder of an unsurrendered certificate for common stock of
FFVA Financial dividends declared with respect to common stock of One Valley
until such owner shall surrender such certificate, at which time the holder
thereof shall be paid the amount of the dividends having a record date on or
after the Closing Date theretofore declared with respect to common stock without
interest. All such dividends unclaimed at the end of one year from the Closing
Date shall be repaid by the Exchange Agent to One Valley, and thereafter the
holders of such outstanding certificates shall look, subject to applicable
escheat, unclaimed funds and other laws, as general creditors only to One Valley
for payment thereof.
3.3 Closing of Stock Transfer Books. At the close of business on the
business day immediately preceding the Closing Date, the stock transfer books of
FFVA Financial shall be deemed closed, and no shares of common stock of FFVA
Financial shall thereafter be transferred.
3.4 Conversion of Options. At the Closing Date, each option granted by
FFVA Financial to purchase shares of its common stock pursuant to the "FFVA
Financial Corporation 1994 Stock Option Plan" (the "Stock Option Plan"), which
is outstanding and unexercised immediately prior thereto, shall be converted
into an option to purchase shares of One Valley's common stock on the same terms
and conditions as are in effect immediately prior to the Merger as adjusted as
set forth below. Each such option that is converted shall be converted into an
option to purchase such number of shares of One Valley's common stock at such
exercise price as is determined as provided below (and otherwise having the same
duration and other terms as the original option):
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(a) the number of shares of One Valley's common stock to be subject to
the new option shall be equal to 1.05 times the number of shares of FFVA
Financial's common stock subject to the original option, rounded, if necessary,
up to the nearest whole share; and
(b) the exercise price per share of One Valley's common stock under the
new option shall be equal to the exercise price per share of FFVA Financial's
common stock under the original option divided by 1.05, rounded, if necessary,
up to the nearest cent. The adjustment provided herein with respect to any
options which are "incentive stock options" (as defined in Section 422 of the
Internal Revenue Code) shall be effected in a manner consistent with Section 424
(a) of the Internal Revenue Code.
FFVA shall take, or shall cause to be taken, all appropriate action
pursuant to the Stock Option Plan prior to the Closing Date to provide for the
conversion of options provided in this Section. One Valley will register the
shares to be issued pursuant to the Stock Option Plan in the Registration
Statement to be filed pursuant to Section 5.11 of this Agreement, and after the
Closing Date will take such other steps, including the filing of a Form S-8, as
may be necessary or appropriate.
SECTION 4
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF FFVA FINANCIAL
Except as set forth in the disclosure schedule to be delivered by FFVA
Financial to One Valley on or before 30 days from the date of this Agreement
(the "Disclosure Schedule"), FFVA Financial represents and warrants to and
covenants with One Valley that:
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4.1 Organization and Qualification of FFVA Financial and its
Subsidiary. FFVA Financial is duly organized, validly existing and in good
standing as a corporation under the laws of the State of Virginia and has the
corporate power to own all of its properties and assets and to carry on its
business as it is now being conducted. FFVA Financial is qualified to do
business in each jurisdiction in which such qualification is required. FFVA
Financial owns 100% of the issued and outstanding shares of stock of First
Federal Savings Bank of Lynchburg (the "Bank" or the "Subsidiary"), free and
clear of all liens, claims and encumbrances. The Bank is duly organized, validly
existing and in good standing as a federal savings bank under the laws of the
United States and has the corporate power to own all of its assets and to carry
on its business as it is now being conducted. The issued and outstanding shares
of stock of the Bank are all duly authorized, validly issued, fully paid and
nonassessable. Except for its Subsidiary, FFVA Financial has no other direct or
indirect subsidiaries, and does not own 5% or more of the shares of stock of any
other corporation.
4.2 Authorization of Agreement. The Board of Directors of FFVA
Financial has authorized the execution of this Agreement as set forth herein,
and subject to the approval of this Agreement and an amendment to Article 10 of
the FFVA Financial Restated Articles of Incorporation ("Articles Amendment") by
the shareholders of FFVA Financial and all appropriate regulatory authorities as
provided in Virginia Stock Corporation Act (the "VSCA") and the Rules and
Regulations of the Office of Thrift Supervision ("OTS"), FFVA Financial has the
corporate power and is duly authorized to merge with One Valley pursuant to this
Agreement, and upon its execution and delivery (and assuming due execution and
delivery by One Valley) this Agreement is a valid and binding agreement of FFVA
Financial enforceable in accordance with its terms.
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4.3 No Violation of Other Instruments. Subject to the receipt of the
authorizations set forth in Section 4.2, the execution and delivery of this
Agreement do not, and the consummation of the Merger in accordance with this
Agreement will not, (i) violate any provisions of FFVA Financial's Restated
Articles of Incorporation or Bylaws, (ii) violate any provision of, or result in
the acceleration of any obligation under or in the termination, if applicable,
of, any mortgage, deed of trust, note, lien, lease, franchise, license, permit,
agreement, instrument, order, arbitration award, judgment or decree to which
either FFVA Financial or its Subsidiary is a party or by which any of them is
bound except for such as would not have a material adverse effect on the
financial condition, business, properties, or results of operations of FFVA
Financial and its Subsidiary, taken as a whole, or the transactions contemplated
hereby, (iii) violate or conflict with any other material restriction of any
kind or character by which FFVA Financial or its Subsidiary is bound, or (iv)
enable any person to enjoin the transactions contemplated hereby. After the
approval of this Agreement and the Articles Amendment by the shareholders of
FFVA Financial, FFVA Financial will have taken all action required by law, the
Restated Articles of Incorporation of FFVA Financial, its Bylaws or otherwise to
authorize the execution and delivery of this Agreement and to authorize the
Merger of FFVA Financial with One Valley pursuant to this Agreement and the
consummation of the transactions contemplated hereby.
4.4 Financial Statements. The consolidated balance sheets of FFVA
Financial as of December 31, 1994, 1995 and 1996, and its statements of income
and cash flows for each of the twelve month periods ended on such dates,
heretofore delivered to One Valley, were prepared in accordance with generally
accepted accounting principles consistently applied and those financial
statements, as well as the unaudited balance sheet as of September 30, 1997, and
the statement of income and cash flows for the nine-month period ended September
30, 1997, both of which have been delivered to One Valley, fairly present its
financial condition and results of operations as of such date and for such
period, subject to normal year-end audit adjustments.
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4.5 No Material Adverse Change. There has been no material adverse
change, or development involving a reasonably foreseeable prospective material
adverse change, in or affecting the financial condition, businesses, properties,
results of operations or prospects of FFVA Financial or its Subsidiary, taken as
a whole, since December 31, 1996.
4.6 Form 10-K Annual Report and Other Reports. FFVA Financial's Annual
Report on Form 10-K filed with the Securities and Exchange Commission for the
fiscal year ended December 31, 1996, heretofore delivered to One Valley, does
not contain, as of the date thereof, an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in light
of the circumstances under which such statements were made, not misleading.
Since January 1, 1995, FFVA Financial has filed with the Securities and Exchange
Commission and the OTS all documents and reports required to be filed and such
reports do not contain, as of their respective dates, an untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which such statements were made,
not misleading. The Bank has filed with the OTS and the Federal Deposit
Insurance Corporation all documents and reports required to be filed and such
reports are accurate and complete in all material respects.
4.7 No Actions, Etc. There are no actions, suits, claims, proceedings
or investigations pending or, to the knowledge of the executive officers or
directors of FFVA Financial or its Subsidiary, threatened or contemplated
against or relating to FFVA Financial or its Subsidiary or any of their
properties which, individually or in the aggregate, could materially and
adversely affect the financial condition, businesses, properties or results of
operations of FFVA Financial and its Subsidiary, taken as a whole, or the
ability of FFVA Financial to consummate the transactions contemplated hereby,
and such officers and directors do not know of any basis for
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any such action or proceeding. Neither FFVA Financial nor its Subsidiary is
transacting business in violation of any applicable law or regulation which
could materially adversely affect the financial condition, businesses,
properties or results of operations of FFVA Financial or its Subsidiary, taken
as a whole, or the ability of FFVA Financial to consummate the transactions
contemplated hereby.
4.8 Capitalization. The authorized capital stock of FFVA Financial
consists of (i) 11,500,000 shares of common stock, par value of $.10 per share,
4,523,885 of which as of the date hereof are issued and outstanding and are duly
authorized, validly issued, fully paid and nonassessable, and have not been
issued in violation of preemptive rights, and (ii) 500,000 shares of preferred
stock, par value of $.10 per share, none of which is issued. Other than stock
options granted under all of the stock option plan listed in the Disclosure
Schedule covering 603,862 shares of common stock of FFVA Financial (as listed
thereon), there are no options, warrants, calls, reservations for issuance or
commitments of any kind relating to, or securities convertible into, the common
stock of FFVA Financial or its Subsidiary.
4.9 Copies of All Contracts, Leases, Etc. FFVA Financial has furnished
or made available or will promptly furnish or make available to One Valley true
and complete copies of all material contracts, leases and other agreements to
which FFVA Financial or its Subsidiary is a party or by which any of them is
bound, and has listed on the Disclosure Schedule and will furnish to One Valley
true and complete copies of all employment, pension, retirement, stock option,
employee stock option, profit sharing, deferred compensation, consultant, bonus,
group insurance or similar plans with respect to any of the directors, officers
or other employees of FFVA Financial or its Subsidiary.
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4.10 Undisclosed Liabilities. Neither FFVA Financial nor its Subsidiary
has any material liabilities other than those liabilities disclosed on or
provided for in the balance sheet as of December 31, 1996, and liabilities
incurred since such date in the ordinary course of business consistent with past
practices.
4.11 Title to Properties. FFVA Financial and its Subsidiary have good
and marketable title to all their property and assets set forth in their balance
sheets as of December 31, 1996, except property and assets sold or otherwise
disposed of since December 31, 1996, in the ordinary course of business, subject
to no liens, mortgages, pledges, encumbrances or charges of any kind except
liens reflected on said balance sheet and except liens for taxes and assessments
not delinquent, pledges to secure deposits and such other liens and encumbrances
and imperfections of title as do not materially affect the value of such
property as reflected on said balance sheet and which do not interfere with or
impair its present or continued use, and all of their material leases are in
full force and effect and neither FFVA Financial nor its Subsidiary is in
default in any material respect thereunder.
4.12 Proxy Statement. The information pertaining to FFVA Financial
which has been or will be furnished by or on behalf of FFVA Financial or its
management for inclusion in the Proxy Statement referred to in Section 10 and
the Registration Statement referred to in Section 5.11 or any amendment or
supplement thereto 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, in light of the circumstances under which they
are made, not misleading.
4.13 Good Faith. FFVA Financial shall use its reasonable best efforts
in good faith to take or cause to be taken all action required under this
Agreement on its part to be taken as
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promptly as practicable so as to permit the consummation of this Agreement at
the earliest practicable date and cooperate fully with the other parties to that
end.
4.14 Absence of Regulatory Actions. Neither FFVA Financial nor its
Subsidiary is a party to any cease and desist order, written agreement or
memorandum of understanding with, or a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, or is a recipient of
any extraordinary supervisory letter from, federal governmental authorities
charged with the supervision or regulation of the operations of any of them nor
has it been advised by any such governmental authority that it is contemplating
issuing or requesting (or is considering the appropriateness of issuing or
requesting) any such order, directive, written agreement, memorandum of
understanding, extraordinary supervisory letter, commitment letter, board
resolutions or similar undertaking.
4.15 Employee Benefits.
(a) For purposes of this Agreement the following definitions shall
apply:
1. "Employee Pension Benefit Plan" has the meaning as set forth in
ERISA ss.3(2).
2. "Employee Welfare Benefit Plan" has the meaning set forth in
ERISA ss.3(1).
3. "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
4. "Multiemployer Plan" shall mean a plan described in ss.3(37)
and/or ss.4001(a)(3) of ERISA.
5. "FFVA ESOP" shall mean the Bank's Employee Stock Ownership Plan.
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6. "FFVA Retirement Plan" shall mean the Financial Institutions
Retirement Fund as adopted by the Bank.
7. "FFVA Employee" means an employee of either FFVA Financial or
the Bank.
8. "Employee Benefit Plan(s)" means any one or more of the
following in which a FFVA Employee is a participant in or benefits from as a
result of his employment (whether current or past with either FFVA Financial or
Bank): (a) Employee Pension Benefit Plan, (b) Employee Welfare Benefit Plan or
(c) any other deferred compensation plan, bonus plan, incentive, disability or
group insurance plan, stock option plan, employee stock purchase plan, vacation
plan, severance plan, sick leave plan or policy, holiday plan or policy,
maternity leave or policy, or any other benefit plan, program, agreement
(including employment and severance agreements), arrangements or commitments of
any kind whether or not subject to the requirements of ERISA.
9. "One Valley 401(k) Plan" shall mean the One Valley Bancorp of
West Virginia, Inc., 401(k) Plan.
10. "Code" means the Internal Revenue Code of 1986, as amended.
11. "Control Group" shall mean a controlled group of corporations
within the meaning of ss.414(b) of the Internal Revenue Code and entities under
common control within the meaning of ss.414 (c) of the Internal Revenue Code.
(b) Neither currently nor at any time during the preceding five
calendar years has FFVA Financial, or any entity which was in the same Control
Group with FFVA Financial at any time during such five-year period, or its
Subsidiary contributed to or had any obligation to contribute to any
Multiemployer Plan.
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(c) Neither currently nor in the past has FFVA Financial (i) had any
employees (who were not also employees of the Bank), or (ii) had any direct
obligation to fund or contribute to any Employee Benefit Plan.
(d) Each Employee Benefit Plan will be listed in the Disclosure
Schedule, and copies of such plans and accompanying Summary Plan Descriptions,
if required, have been furnished to One Valley.
(e) Each of the Employee Benefit Plans has been administered in all
material respects in compliance with the applicable requirements of ERISA, the
Code, other federal statutes, applicable federal regulations, applicable State
law (including without limitation State insurance law) and in accordance with
its terms. Each of the FFVA Retirement Plan and the FFVA ESOP has received a
favorable determination letter from the Internal Revenue Service with respect to
"TRA" (as defined in Section 1 of Rev. Proc. 93-39), and FFVA Financial is not
aware of any circumstances likely to result in revocation of such favorable
determination letters. All reports required by any governmental agency with
respect to each such Employee Benefit Plan has been timely and properly filed
and to the extent required, furnished to the participants in such plan. Bank has
paid all costs, benefits, premiums, contributions and any other amounts required
or coming due in connection with the Employee Benefit Plans and no accumulated
funding deficiency, as defined in ss.302(a)(2) of ERISA, exists with respect to
any Employee Benefit Plan. To the best of its knowledge, neither FFVA Financial
nor the Bank nor any fiduciary of any Employee Benefit Plan, has engaged in (i)
a transaction that would subject FFVA Financial or the Bank to any tax, penalty
or liability for prohibited transactions imposed by ERISA or by ss.4975 of the
Code, or (ii) any transaction in violation of ss.406(a) or ss.406(b) of ERISA
(for which no exemption exists under ss.408 of ERISA).
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(f) With the exception of Employee Pension Benefit Plans and except as
set forth in the Disclosure Schedule, none of the benefits provided under any of
the Employee Benefit Plans are vested, and the Bank retains full authority to
terminate or amend any of the Employee Benefit Plans.
(g) Each Employee Benefit Plan, other than the FFVA Retirement Plan, is
either fully insured and all premiums have been timely paid or, if not fully
insured, adequate reserves have been established on the books of the Bank in
connection with such benefits, and all required contributions have been made to
such plans.
(h) With the exception of the FFVA Retirement Plan, no Employee Benefit
Plan is subject to the provisions of Title IV of ERISA. No liability under
Subtitle C or D of Title IV of ERISA has been or is expected to be incurred by
FFVA Financial or its Subsidiary 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 either of them, or the
single-employer plan of any entity which is or was in the same Control Group as
FFVA Financial. 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 the FFVA Retirement Plan within the 12-month
period ending on the date hereof.
(i) FFVA Financial and the Bank represent and warrant that as of
December 31, 1996, the actuarially determined present value of all "benefit
liabilities", within the meaning of Section 4001 (a) (16) of ERISA (as
determined on the basis of the actuarial assumptions contained in the FFVA
Retirement Plan's most recent actuarial valuation), did not exceed the then
current value of the assets of the FFVA Retirement Plan. FFVA Financial and Bank
further warrant and represent that they have taken no action since that date by
amendment of that plan or
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otherwise, to increase the actuarially determined present value of the benefit
liabilities of the FFVA Retirement Plan except with respect to changes in normal
eligibility resulting from increased terms of service or compensation changes.
(j) As of the Closing Date the FFVA Retirement Plan will be either (i)
terminated, (ii) amended to cease all future benefit accruals, or (iii) merged
into the One Valley Retirement Plan. The parties agree that the preferred option
is merger of the FFVA Retirement Plan into the One Valley Retirement Plan, if
the merger of the plans can be accomplished without increasing the total
unfunded liability of the One Valley Retirement Plan (as to former FFVA
Employees) in excess of such unfunded liability in the FFVA Retirement Plan as
set forth in Section 4.15(i). The parties agree that at a minimum, participants
in the FFVA Retirement Plan will be entitled to their vested accrued benefit
under that plan as of the Closing Date plus such additional vested accrued
benefit to which they shall be entitled to for years of service with the Bank
subsequent to the Closing Date under the One Valley Retirement Plan.
(k) There has not been any (i) termination of the FFVA Retirement Plan
or (ii) the commencement of any proceeding to terminate such plan pursuant to
ERISA, or otherwise, or (iii) written notice given to FFVA Financial or Bank of
the intention to commence or seek the commencement of any such proceeding.
(l) Within 90 days following the Closing Date, the Bank shall
cause the FFVA ESOP to be terminated in accordance with its provisions. It is
understood that prior to the Closing Date, the Bank may make a final cash
contribution equal to the maximum amount allowable without penalty pursuant to
sections 404 and 415 of the Code with respect to the FFVA ESOP plan year ending
on or before June 30, 1998; provided, however, that the final cash contribution
shall not exceed the greater of the contributions made by the Bank for either
the year
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1996 or 1997. It is expressly warranted that such termination shall not result
in any additional funding obligation, including but not limited to any
obligation to pay off all stock obligations, to such ESOP and that sufficient
shares of stock held in the FFVA ESOP's Unallocated Stock Fund will be sold
pursuant to the provisions of the plan to fully pay off any stock obligation to
the extent that prior Bank contributions and dividend income on unallocated
stock are not sufficient to pay off such Stock Obligation as of the Closing
Date. Thereafter, any remaining unallocated ESOP assets shall be allocated as
trust earnings based upon account balances. Participants eligible to receive
distributions from the FFVA ESOP upon its termination shall be given the
opportunity to have such distribution transferred to the One Valley 401(k) Plan
pursuant to the provisions of ss.401(a)(31) of ERISA. Notwithstanding the
foregoing, FFVA Financial and the Bank shall make such amendments to the ESOP as
deemed appropriate to effectuate the purposes of the FFVA ESOP Plan and this
Section of the Agreement.
(m) From and after Closing, One Valley shall authorize the Bank to
adopt the One Valley 401(k) Plan and the One Valley Retirement Plan
(collectively "OVB Qualified Plans"). In adopting the OVB Qualified Plans it is
understood that such plans will recognize FFVA Employees years of employment
with Bank only for purposes of eligibility to participate in and vest under such
plans. It is specifically understood that FFVA Employees shall not be entitled
to any past service for benefit accrual purposes under any Employee Pension
Benefit Plans of One Valley, except that if the FFVA Retirement Plan and the One
Valley Retirement Plan are merged pursuant to Section 4.15(j), and in connection
with such merger it is decided that such past service can be granted without
increasing the unfunded liability of the One Valley Retirement Plan in excess of
such amount described in Section 4.15(j). It is further specifically understood
that, notwithstanding any provision hereof to the contrary, FFVA Employees shall
be employees at-will and that after the Closing Date, One Valley and/or the Bank
may alter, amend, or terminate any of its benefit programs covering such
employees.
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(n) Except as specifically provided elsewhere in this Agreement, Bank
shall continue for the calendar years 1997 and 1998 those Employee Benefits
Plans in existence as of the date of the execution of this Agreement and shall
not adopt any other such plans nor otherwise amend such plans except as
authorized by One Valley. Except as expressly provided for elsewhere in this
Agreement, Bank shall terminate or amend each such plan effective December 31,
1998. Bank shall adopt and One Valley shall authorize such adoption effective
January 1, 1999, of life, disability insurance, health, welfare, vacation and
other fringe benefits (collectively "fringe benefit programs") of the types and
in the amounts and at the contribution levels provided to other similarly
situated employees of One Valley. In determining eligibility, benefit levels and
required contributions under such fringe benefit programs all full time years of
employment with Bank shall be counted and preexisting conditions shall be
treated as such conditions were treated under any such predecessor plan.
(o) Notwithstanding the limitation in (n) above it is understood that
FFVA employees employed by the Bank as of the Closing Date shall (as long as
they otherwise remain eligible under the terms of the Bank's vacation policy) be
entitled to annual vacation and sick leave for 1998 and thereafter equal to the
greater of (i) the number of days of vacation and sick leave to which they were
entitled to in 1997 or (ii) such vacation and sick leave to which they are
entitled to under Bank's policies then in effect.
4.16 Labor Disputes. Neither FFVA Financial nor its Subsidiary is
directly or indirectly involved in or to the knowledge of them threatened
with any labor dispute or trouble or organizational effort, including, without
limitation, matters regarding actual or alleged discrimination by reason of
race, creed, sex, disability or national origin, which might materially and
adversely affect the financial condition, assets, businesses or results of
operations of any of
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them. Neither FFVA Financial nor its Subsidiary is a party to, nor has ever been
a party to, any collective bargaining agreement.
4.17 Reserve for Possible Loan Losses. The reserve for possible loan
losses shown on the consolidated balance sheet of FFVA Financial as of December
31, 1996, and shown on the unaudited balance sheet of FFVA Financial dated
September 30, 1997, is adequate as of the dates thereof. The reserve for
possible loan losses to be shown on the consolidated balance sheet of FFVA
Financial as of December 31, 1997, and future periods, if any, will be adequate
as of the dates thereof.
4.18 Knowledge as to Conditions. As of the date hereof:
(a) FFVA Financial knows of no reason relating to FFVA Financial
why the approvals, consents and waivers of governmental authorities referred to
in Sections 8.1 (b) and 8.1 (c) should not be obtained in a timely manner and
without the imposition of a condition of the type referred to in Section 8.1(g);
(b) FFVA Financial and its Subsidiary are not aware of any
conditions or provisions of any actions, reports of examinations or similar
regulatory reports or findings which is anticipated to delay or precludes FFVA
Financial or its Subsidiary from entering into the Agreement or obtaining prompt
regulatory approval of all applications to be filed in connection with the
transaction contemplated by this Agreement, including but not limited to
compliance with the Community Reinvestment Act ("CRA"); and
(c) Provided that shares of common stock of FFVA Financial held by
FFVA Financial as authorized but unissued shares are reissued before the Closing
Date pursuant to
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Section 4.22 (i), FFVA Financial and its Subsidiary are not aware of any reason
relating to FFVA Financial why the Merger will not be treated as a "pooling of
interests" for accounting purposes.
4.19 Taxes.
(a) FFVA Financial and Subsidiary have each filed on a timely
basis all Federal Income Tax Returns and all other federal, state, municipal and
other tax returns which each of them is required to file, and each has paid all
taxes shown to be due on such returns and, in the opinion of its respective
Chief Executive and Financial Officers, has adequately reserved for all current
taxes;
(b) Neither the Internal Revenue Service nor any other taxing
authority is now asserting against FFVA Financial or Subsidiary, or, to the
knowledge of either of them, threatening to assert against any of them, any
deficiency or claim for additional taxes, interest or penalty;
(c) There is no pending, or to the knowledge of FFVA Financial or
its Subsidiary, threatened examination of the Federal Income Tax Returns of FFVA
Financial or its Subsidiary and, except for tax years still subject to the
assessment and collection of additional federal income taxes under the
three-year period of limitations prescribed in Section 6501(a) of the Internal
Revenue Code, no tax year of FFVA Financial or its Subsidiary remains open to
the assessment and collection of additional Federal Income Taxes; and
(d) There is no pending or, to the knowledge of FFVA Financial or
Subsidiary, threatened examination of State Tax (the "Virginia Taxes") returns
of FFVA
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Financial or any of its Subsidiary and, except for tax years still subject to
the assessment and collection of additional Virginia Taxes under the applicable
statutes of limitations, no tax year of FFVA Financial or its Subsidiary remains
open to the assessment and collection of additional taxes.
4.20 Absence of Certain Changes. Since December 31, 1996:
(a) There has not been any damage, destruction or loss by reason
of fire, flood, accident or other casualty (whether insured or not insured)
materially and adversely affecting the assets, financial condition or operations
of FFVA Financial or its Subsidiary;
(b) Except in the ordinary course of business, neither FFVA
Financial nor its Subsidiary has disposed of, or agreed to dispose of, any of
its material properties or assets, nor has any of them leased to others, or
agreed to so lease, any of such material properties or assets;
(c) Except for the exercise of stock options there has not been
any change in the authorized, issued or outstanding capital stock of FFVA
Financial or its Subsidiary, except as provided for in this Agreement, or any
material change in the outstanding debt of FFVA Financial or its Subsidiary,
other than changes due to payments in accordance with the terms of such debt and
FHLB advances and reverse repurchase agreements to meet funding needs of the
Bank in the ordinary course of business;
(d) No change has occurred in the personnel who are key personnel
with respect to the operations of FFVA Financial or Subsidiary, nor has there
been any increase in the compensation or fees payable by either FFVA Financial
or its Subsidiary to their directors or officers other than increases in the
ordinary course of business in accordance with the personnel
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policies of FFVA Financial or its Subsidiary, or any material increase in any
bonus, insurance, pension or other Employee Benefit Plan, payment or arrangement
for or with any of such directors or officers;
(e) Neither FFVA Financial nor its Subsidiary has made any material
loan or advance other than in the ordinary course of business;
(f) Neither FFVA Financial nor its Subsidiary has made any expenditure
or major commitment for the purchase, acquisition, construction or improvement
of any material asset or assets which in the aggregate would be material;
(g) Neither FFVA Financial nor its Subsidiary has entered into any
other material transaction, contract or lease or incurred any other material
obligation or liability;
(h) The Bank has not incurred any unusual or extraordinary loan losses;
(i) There has not been any other event, condition or development of any
kind which materially and adversely affects the assets, financial condition or
results of operations of FFVA Financial and its Subsidiary, taken as a whole,
and neither FFVA Financial nor its Subsidiary has knowledge of any such event,
condition or development which may materially and adversely affect the assets,
financial condition or operations of FFVA Financial and its Subsidiary, taken as
a whole; and
(j) FFVA Financial and its Subsidiary are, and have been, in
substantial compliance with all environmental laws and regulations, and there is
no suit, claim, action, demand, executive or administrative order, directive,
investigation or proceeding pending, or, to
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the knowledge of FFVA Financial or its Subsidiary, threatened, before any court,
governmental agency or board or other forum against FFVA Financial or its
Subsidiary for alleged noncompliance with, or liability under, any environmental
law or relating to the release into the environment of any hazardous material or
oil.
4.21 Negative Covenants. Except as otherwise expressly contemplated
hereby, between the date hereof and the Closing Date, or the time when this
Agreement terminates as provided herein, neither FFVA Financial nor its
Subsidiary, respectively, will, without the prior written consent of One Valley,
which consent shall not be unreasonably withheld:
(a) Make any change in its authorized capital stock or corporate
structure;
(b) Issue any shares of its capital stock, securities convertible
into its common stock or any long-term debt securities of FFVA Financial or its
Subsidiary, other than shares of capital stock issued pursuant to the exercise
of outstanding stock options granted prior to the date of this Agreement under
the Stock Option Plan; provided, however, that FFVA Financial shall, following
approval of the Merger by its shareholders and receipt of all requisite
regulatory approvals, issue shares of its common stock held as authorized but
unissued shares, which issuance is necessary in order that the Merger be treated
as a "pooling of interests" for accounting purposes pursuant to Section 4.22
(i);
(c) Issue or grant any options, warrants or other rights to
purchase shares of its common stock or preferred stock;
(d) Declare or pay any dividends or other distributions on any
shares of common stock, except a cash dividend in an amount not to exceed
fifteen cents ($.15) per share
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per quarter, in accordance with past practice, for each quarter prior to the
Closing Date, to be paid on or before the Closing Date;
(e) Purchase, redeem or otherwise acquire, or agree to purchase, redeem
or acquire, for consideration any shares of its capital stock, securities
convertible into its common stock or any long-term debt securities of FFVA
Financial or its Subsidiary;
(f) Enter into or amend (except as otherwise specifically contemplated
by this Agreement or disclosed in the Disclosure Schedule) any Employee Benefit
Plan, consultant, or similar plan in respect of any of its directors, officers
or other employees or increase its contribution to any Employee Benefit Plan;
(g) Take any action materially and adversely affecting the transactions
contemplated hereby or this Agreement or the financial condition, businesses,
properties or results of operations of FFVA Financial and its Subsidiary, taken
as a whole;
(h) Acquire any other company or acquire any branch or deposits or,
other than in the ordinary course of business, any assets of any other company;
(i) Mortgage, pledge or subject to a lien or any other encumbrance any
of its assets, dispose of any of its assets, incur or cancel any debts or claims
or take any other action not in the ordinary course of its business as
heretofore conducted;
(j) Except as may be necessary to comply with this Agreement, amend its
Restated Articles of Incorporation or Bylaws;
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(k) Sell, pledge or otherwise dispose of or encumber any of its stock,
or any of the stock of its Subsidiary or change the capital structure of any of
them;
(l) Sell any securities from its investment portfolio, except in the
ordinary course of business;
(m) Increase the compensation of or pay any benefit to any director,
officer or employee during or for the calendar years 1997 or 1998 other than in
the ordinary course of business and, in any event, in the aggregate not in
excess of 5% of the total salary expense of the Bank; or
(n) Enter into any agreement to do any of the foregoing.
4.22 Additional Covenants. Except as otherwise contemplated by this
Agreement, FFVA Financial covenants and agrees:
(a) That, subsequent to the date of this Agreement and prior to the
Closing Date, it will operate its business and the businesses of its Subsidiary
only in the normal course and in a normal manner consistent with past practices;
(b) That it will take no action which would adversely affect or delay
the ability of One Valley, FFVA Financial or its Subsidiary to obtain any
necessary approvals, consents or waivers of any governmental authority required
for the transaction contemplated hereby or to perform its covenants and
agreements on a timely basis under this Agreement;
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(c) That immediately upon the execution of this Agreement it will
direct its accountants and attorneys to give One Valley access, upon reasonable
notice, to all relevant and material information, documents and working papers
pertaining to FFVA Financial and Subsidiary that it may reasonably request;
(d) That it will use its reasonable best efforts in good faith to take
or cause to be taken all action required under this Agreement on its part to be
taken as promptly as practicable so as to permit the consummation of the Merger
at the earliest possible date and cooperate fully with the other parties to that
end;
(e) That neither FFVA Financial nor its directors, officers or
representatives or agents will, directly or indirectly, take any action to
solicit, support or encourage any offer or proposal from any other person to
acquire FFVA Financial or its assets, or shares of its common stock, or of its
Subsidiary, or engage in negotiations with or provide information to such person
with respect to such offer or proposal; provided, however that FFVA Financial
may engage in negotiations or provide information if the Board of Directors of
FFVA Financial concludes after receipt of legal advice from its counsel, that
their fiduciary duties to the shareholders of FFVA Financial so require;
provided further, however, in the case of any action pursuant to the immediately
preceeding proviso regarding the specific terms and structure of a possible
Acquisition Transaction (as hereinafter defined) (but excluding actions taken to
determine whether an unsolicited offer by a third party is a bona fide offer),
One Valley may, in its sole discretion, terminate this Agreement at any time
before the Closing Date. FFVA Financial will immediately notify One Valley if
any such negotiations occur, if such information is provided, or if such offer
or proposal is made, and will keep One Valley informed of any such negotiations,
offers, proposals, or transactions. Nothing contained in this Section 4.22 (e)
shall prohibit the
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Board of Directors of FFVA Financial from complying with Rule 14e-2 promulgated
under the Securities Exchange Act of 1934;
(f) That it will promptly advise One Valley of any material adverse
change in the financial condition, assets, businesses, results of operations or
prospects of FFVA Financial or its Subsidiary, and any material breach of any
representation, warranty, covenant or agreement made by FFVA Financial or its
Subsidiary in this Agreement known to FFVA Financial;
(g) That it will maintain in full force and effect adequate fire,
casualty, public liability, employer fidelity and other insurance coverage in
accordance with prudent practices to protect FFVA Financial and Subsidiary
against losses for which insurance can reasonably be obtained;
(h) That it will consult with One Valley as to the form and substance
of any press release or other public disclosure concerning matters related
hereto, and, except as required by law or within good faith, shall not issue
such release or disclosure without the reasonable consent of One Valley;
(i) That it will issue approximately 750,000 shares of its common stock
held as authorized but unissued shares, or such other amount as the parties may
agree, at such time as is necessary in order that the Merger be treated as a
"pooling of interests" for accounting purposes, and shall take no action which
would have the effect of precluding treatment of the Merger as a "pooling of
interests" for accounting purposes, and will cooperate fully with One Valley to
assure that the Merger can be treated as a "pooling of interests" for accounting
purposes;
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(j) That it will immediately after the execution of this Agreement
enter into the Option Agreement with One Valley granting to One Valley the right
to purchase a specified number of shares of common stock of FFVA Financial under
certain specified conditions;
(k) That it will enforce its rights under, and the provisions of, all
confidentiality agreements it has or may have with third parties; and
(l) That it will take, in accordance with applicable law or NASDAQ
rules and its Restated Articles of Incorporation and Bylaws, all action
necessary to convene an appropriate meeting of its shareholders to consider and
vote upon the approval and adoption of this Agreement, the Articles Amendment,
and any other matters required to be approved by its shareholders for
consummation of the Merger (including any adjournment or postponement) as
promptly as practicable after the registration statement is declared effective.
Except to the extent that its Board of Directors concludes after receipt of
legal advice from its counsel that its fiduciary duties require otherwise, its
Board of Directors shall recommend such approval and it shall take all
reasonable, lawful action to solicit such approval by its shareholders.
4.23. Dissenters' Rights. The shareholders of FFVA Financial do not
have dissenters' rights pursuant to Virginia Code ss. 13.1 - 730.c.
4.24 Takeover Law FFVA Financial has taken all action required to be
taken by it in order to exempt this Agreement, the Stock Option Agreement and
the transactions contemplated hereby and thereby from, and this Agreement, the
Stock Option Agreement and the transactions contemplated hereby and thereby (the
"Covered Transactions") are exempt from, the requirements of any "moratorium",
"control share", "fair price", "affiliate transaction", "business combination"
or other antitakeover laws and regulations of any state (collectively, "Takeover
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Laws"), including, without limitation, the Commonwealth of Virginia, and
including, without limitation, Sections 13.1-725 through 13.1-728 of the VSCA
(because a majority of FFVA Financial's disinterested directors approved such
transactions for such purposes prior to any "determination date" with respect to
One Valley) and Sections 13.1-728.1 through 13.1-728.9 of the VSCA.
SECTION 5
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF ONE VALLEY
One Valley represents and warrants to and covenants with FFVA Financial that:
5.1 Organization and Qualification of One Valley. One Valley is a
corporation duly organized, validly existing and in good standing under the laws
of the State of West Virginia and has the corporate power to own all of its
properties and assets and to carry on its business as it is now being conducted.
Each of the banking subsidiary companies owned by One Valley is duly organized,
validly existing and in good standing as either a state banking corporation
under the laws of West Virginia or a national bank under the laws of the United
States and each has the corporate power to own all of its assets and to carry on
its business as it is now being conducted. One Valley is duly registered as a
bank holding company with the Board of Governors of the Federal Reserve. One
Valley owns directly or indirectly 100% of the issued and outstanding capital
sock of each of its Significant Subsidiaries (as defined in Regulation S-X),
free and clear of all liens, claims and encumbrances.
5.2 Authorization of Agreement. The Board of Directors of One Valley
has authorized the execution of this
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Agreement as set forth herein, and subject to the approval of this Agreement by
the shareholders of One Valley and all appropriate regulatory authorities, One
Valley has the corporate power to execute and deliver this Agreement, and has
taken all action required by law, its Articles of Incorporation, its Bylaws or
otherwise to authorize such execution and delivery, the Merger and the
consummation of the transactions contemplated hereby, and upon its execution and
delivery (and assuming due execution and delivery by FFVA Financial) this
Agreement is a valid and binding agreement of One Valley enforceable in
accordance with its terms.
5.3 No Violation of Other Instruments. Subject to the receipt of the
authorizations set forth in Section 5.2, the execution and delivery of this
Agreement do not, and the consummation of the Merger will not, (i) violate any
provision of the Articles of Incorporation or Bylaws of One Valley, (ii) violate
any provision of, or result in the acceleration of any obligation under or in
the termination, if applicable, of, any mortgage, deed of trust, note, lien,
lease, franchise, license, permit, agreement, instrument, order, arbitration
award, judgment or decree to which One Valley or any of its subsidiaries is a
party or by which it is bound except for such as would not have a material
adverse effect on the financial condition, business, properties, or results of
operations of One Valley and its subsidiaries, taken as a whole, or the
transactions contemplated hereby, (iii) violate or conflict with any other
material restriction of any kind or character to which One Valley or any of its
Subsidiaries is subject, or (iv) enable any person to enjoin the transactions
contemplated hereby. After approval of this Agreement by the shareholders of One
Valley, by the Board of Governors of the Federal Reserve, the West Virginia
Board of Banking and Financial Institutions, and the State Corporation
Commission of the Commonwealth of Virginia, One Valley will have taken all
action required by law and its Articles of Incorporation and Bylaws necessary to
authorize the execution and delivery of this Agreement and to authorize the
Merger of FFVA Financial with One Valley and the consummation of the
transactions contemplated hereby.
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5.4 Regulatory Approvals. Prior to the Closing Date, One Valley,
separately and jointly with FFVA Financial, shall use its reasonable best
efforts in good faith to take or cause to be taken as promptly as practicable
all such steps as shall be necessary to obtain: (i) the prior approval of the
Merger by the Board of Governors of the Federal Reserve System under the Bank
Holding Company Act of 1956, as amended, the State Corporation Commission of the
Commonwealth of Virginia, and the West Virginia Board of Banking and Financial
Institutions; and (ii) all other consents and approvals of governmental agencies
as are required by law or otherwise, and shall do any and all things deemed by
One Valley and FFVA Financial to be necessary or appropriate in order to cause
the Merger to be consummated on the terms provided herein.
5.5 Financial Statements. One Valley's consolidated balance sheets as
of December 31, 1994, 1995 and 1996, and its statement of income for each of the
twelve months ended on such dates, heretofore delivered to FFVA Financial, were
prepared in accordance with generally accepted accounting principles
consistently applied and those financial statements, as well as the unaudited
balance sheet as of September 30, 1997, and the statement of income for the
nine-month period ended September 30, 1997, fairly present its financial
condition and results of operations as of such respective dates and for such
respective periods, subject to normal year-end audit adjustments.
5.6 No Material Adverse Change. There has been no material adverse
change, or development involving a reasonably foreseeable prospective material
adverse change, in or affecting the financial condition, businesses, properties
or results of operations of One Valley and its subsidiaries, taken as a whole,
since December 31, 1996.
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5.7 Form 10-K Annual Report and Other Reports. One Valley's Annual
Report on Form 10-K filed with the Securities and Exchange Commission for the
year ended December 31, 1996, heretofore delivered to FFVA Financial, does not
contain, as of the date thereof, any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in light of
the circumstances under which such statements were made, not misleading. Since
January 1, 1994, One Valley has filed with the Securities and Exchange
Commission all documents and reports required to be filed and such reports do
not contain, as of their respective dates, an untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which such statements were made, not
misleading.
5.8 No Actions, Etc. There are no actions, proceedings or
investigations pending or, to the knowledge of the executive officers or
directors of One Valley, threatened or contemplated against or relating to One
Valley or any of its subsidiaries or any of its properties, which, individually
or in the aggregate, could materially and adversely affect the financial
condition, businesses, properties or operations of One Valley and its
subsidiaries, taken as a whole, or the ability of One Valley to consummate the
transactions contemplated hereby, and such officers and directors do not know of
any basis for any action or proceeding. Neither One Valley, nor any of its
subsidiaries, is transacting business in violation of any applicable law or
regulation which could materially adversely affect the financial condition,
businesses, properties or operations of One Valley and its subsidiaries, taken
as a whole, or the ability of One Valley to consummate the transactions
contemplated hereby.
5.9 Capitalization. As of the date hereof, the authorized capital stock
of One Valley consists of (i) Forty Million shares of common stock, par value of
$10 per share, of which 27,172,342 are, as of December 9, 1997, issued and
outstanding and are fully paid and
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nonassessable, and (ii) One Million shares of preferred stock, par value of $10
per share, none of which is issued.
5.10 Good Faith. One Valley shall use its reasonable best efforts in
good faith to take or cause to be taken all action required under this Agreement
on its part to be taken as promptly as practicable so as to permit the
consummation of this Agreement at the earliest practicable date and cooperate
fully with the other parties to that end, including obtaining the approval of
the New York Stock Exchange ("NYSE") for the listing of the One Valley common
stock issuable hereunder, subject to official notice of issuance.
5.11 Registration. One Valley will cause a Registration Statement (or
other appropriate form) to be filed with and declared effective by the
Securities and Exchange Commission, appropriate agencies regulating securities,
and other governmental agencies having jurisdiction, with respect to the
securities to be issued in conjunction with the Merger. The information
pertaining to One Valley which will appear in the Registration Statement and
Proxy Statement will contain no untrue statement of any material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they are made, not
misleading.
5.12 Copies of Public Information One Valley has made or will make
available for review by FFVA Financial all information publicly available
concerning One Valley and all pension, retirement, thrift, group insurance or
similar plans with respect to any of the directors, officers or other employees
of One Valley or its subsidiaries.
5.13 Undisclosed Liabilities; Taxes. One Valley has no material
liabilities other than those liabilities disclosed on or provided for in its
balance sheet as of December 31, 1996, and
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liabilities incurred since such date in the ordinary course of business. One
Valley has paid all federal, state and local taxes now due and payable and there
are no material tax items now in dispute or anticipated to be disputed.
5.14 Title to Properties. One Valley has good and marketable title to
all its property and assets set forth on its balance sheet as of December 31,
1996, except property and assets sold or otherwise disposed of since December
31, 1996, in the ordinary course of business, subject to no liens, mortgages,
pledges, encumbrances or charges of any kind except liens reflected on said
balance sheet and except liens for taxes and assessments not delinquent, pledges
to secure deposits, and such other liens and encumbrances and imperfections of
title as do not materially affect the value of such property as reflected on
said balance sheet and which do not interfere with or impair its present or
continued use, and all of its leases are in full force and effect and One Valley
is not in default thereunder.
5.15 Absence of Regulatory Actions. Neither One Valley nor any of its
banking subsidiaries is a party to any cease and desist order, written agreement
or memorandum of understanding with, or a party to any commitment letter or
similar undertaking to, or is subject to any order or directive by, or is a
recipient of any extraordinary supervisory letter from, or has adopted any board
resolutions at the request of, federal or state governmental authorities charged
with the supervision or regulation of the operations of any of them nor has it
been advised by any such government authority that it is contemplating issuing
or requesting (or is considering the appropriateness of issuing or requesting)
any such order, directive, written agreement, memorandum of understanding,
extraordinary supervisory letter, commitment letter, board resolutions or
similar undertaking.
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5.16 Labor Disputes. One Valley is not directly or indirectly involved
in or threatened with any labor dispute or trouble or organizational effort,
including, without limitation, matters regarding actual or alleged
discrimination by reason of race, creed, sex, disability or national origin,
which might materially and adversely affect its financial condition, assets,
businesses or results of operations.
5.17 Reserve for Possible Loan Losses. The reserve for possible loan
losses shown on the consolidated balance sheet of One Valley as of December 31,
1996, and shown on the unaudited balance sheet of One Valley dated September 30,
1997, is adequate as of the dates thereof. The reserve for possible loan losses
to be shown on the consolidated balance sheet of One Valley as of December 31,
1997, and future periods, if any, will be adequate as of the dates thereof.
5.18 Knowledge as to Conditions. As of the date hereof, One Valley
knows of no reason relating to One Valley why the approvals, consents and
waivers of governmental authorities referred to in Sections 8.1 (b) and 8.1 (c)
should not be obtained in a timely manner; One Valley and One Valley
Subsidiaries are not aware of any conditions or provisions of any actions,
reports of examinations or similar regulatory reports or findings which is
anticipated to delay or precludes One Valley or any of One Valley Subsidiaries
from entering into the Agreement or obtaining prompt regulatory approval of all
applications to be filed in connection with the transaction contemplated by this
Agreement, including but not limited to compliance with the Community
Reinvestment Act ("CRA").
5.19 Other Transactions. One Valley has had, and will continue to have,
negotiations for the acquisition of other organizations. Nothing contained
herein shall in any manner limit the ability of One Valley to acquire additional
banking institutions or other corporations or entities,
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either before or after the Closing Date, for such consideration (cash, notes,
common or preferred stock) and upon such terms and conditions as One Valley
deems appropriate. Notwithstanding the foregoing, One Valley will not, and will
cause its subsidiaries to not, make or agree to make any acquisition or take any
action that materially adversely affects its ability to consummate the
transaction contemplated hereby in a reasonably timely manner.
5.20 Press Release. One Valley will consult with FFVA Financial as to
the form and substance of any press release or other public disclosure
concerning matters related hereto, and, except as required by law or within good
faith, shall not issue such release or disclosure without the consent of FFVA
Financial.
5.21 Indemnification. One Valley shall indemnify, and advance expenses
(including legal fees and expenses) in matters that may be subject to
indemnification to, persons who served as directors and officers of FFVA
Financial and its Subsidiary on or before the Closing Date of the Merger with
respect to liabilities and claims (and related expenses) made against them
resulting from their service as such prior to the Closing Date of the Merger in
accordance with and subject to the requirements and other provisions of One
Valley's Articles of Incorporation and Bylaws in effect on the date of this
Agreement and applicable provisions of law to the same extent as One Valley is
obliged thereunder to indemnify and advance expenses to its own directors and
officers with respect to liabilities and claims made against them resulting from
their service as such to One Valley.
5.22 Employee Benefits. Each of One Valley's employee benefit plans has
been administered in all material respects in compliance with the applicable
requirements of ERISA, the Code, other federal statutes, applicable federal
regulations, applicable state law (including without limitation state insurance
law) and in accordance with its terms. All reports required by
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any governmental agency with respect to each such employee benefit plan has been
timely and properly filed and to the extent required furnished to the
participants in such plan. One Valley has paid all costs, benefits, premiums and
any other amounts coming due in connection with the employee benefit plans and
no accumulated funding deficiency, as defined in ss.302(a)(2) of ERISA, exists
with respect to any employee benefit plan. One Valley has not engaged in a
transaction that would subject One Valley to any tax, penalty or liability for
prohibited transactions imposed by ERISA or by ss.4975 of ERISA. One Valley has
not engaged in any transaction in violation of ss.406(a) or ss.406(b) of ERISA
(for which no exemption exists under ss.408 of ERISA).
5.23 Environmental Matters. One Valley is, and has been, in substantial
compliance with all environmental laws and regulations, and there is no suit,
claim, action, demand, executive or administrative order, directive,
investigation or proceeding pending, or, to the knowledge of One Valley,
threatened, before any court, governmental agency or board or other forum
against One Valley for alleged noncompliance with, or liability under, any
environmental law or relating to the release into the environment of any
hazardous material or oil.
5.24 Shareholder Approval. One Valley will take, in accordance with
applicable law or NYSE rules and its Articles of Incorporation and Bylaws, all
action necessary to convene an appropriate meeting of its shareholders to
consider and vote upon the approval and adoption of this Agreement and any other
appropriate matters to be approved by its shareholders for consummation of the
Merger (including any adjournment or postponement) as promptly as practicable
after the registration statement is declared effective. Except to the extent
that its Board of Directors concludes after receipt of legal advice from its
counsel that its fiduciary duties require otherwise, its Board of Directors
shall recommend such approval and it shall take all reasonable, lawful action to
solicit such approval by its shareholders.
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SECTION 6
INVESTIGATION AND CONFIDENTIALITY
6.1 Investigation. Prior to the Closing Date, either party may directly
and through its representatives, make such reasonable investigation of the
assets and business of the other party and its subsidiaries as deemed necessary
or advisable. Each party and its representatives shall have, at reasonable times
after the date of execution hereof, during normal business hours and upon
reasonable request, full access to the premises and to all the relevant and
material books and records of the other party and its subsidiaries.
6.2 Confidentiality. One Valley and FFVA Financial each agree to treat
as strictly confidential and agree not to divulge to any other person, natural
or corporate (other than employees of, and attorneys and accountants for, such
party) any proprietary financial statements, schedules, contracts, agreements,
instruments, papers, documents and other information relating to FFVA Financial
or One Valley (as the case may be) by which it may come to know or which may
come into its possession during the course of its investigation in connection
with the transaction contemplated hereby, of FFVA Financial or One Valley, as
the case may be, and, if the Merger contemplated hereby are not consummated for
any reason, One Valley agrees promptly to return to FFVA Financial (and FFVA
Financial to One Valley) all written proprietary material furnished in
connection with such investigation; and thereafter all such information shall
continue to not be disclosed by One Valley and FFVA Financial and their
directors, officers, employees, or advisors to third parties without One
Valley's or FFVA Financial's written consent, as the case may be.
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SECTION 7
NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES
Other than Section 5.21 hereof, the representations and warranties
included or provided herein shall not survive the Closing Date.
SECTION 8
CONDITIONS PRECEDENT; CLOSING DATE
8.1 Conditions Precedent. The consummation of this Agreement and the
Merger is conditioned upon the following:
(a) The shareholders of FFVA Financial and One Valley shall have
approved this Agreement and any required charter amendments by such vote as may
be required by law or the rules of any stock exchange;
(b) No governmental 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 Agreement.
(c) The Federal Reserve, the State Corporation Commission of the
Commonwealth of Virginia, and the Board of Banking and Financial Institutions of
the State of West Virginia shall have approved the acquisition of control of
FFVA Financial and Subsidiary by One Valley;
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(d) The Registration Statement shall have become effective under
the 1933 Act, no stop order suspending the effectiveness of such Registration
Statement shall be in effect and no proceedings for such purpose shall have been
initiated or threatened by or before the Securities and Exchange Commission. All
state securities and "blue sky" permits or approvals required (in the opinion of
One Valley) to carry out the transactions contemplated by this Agreement shall
have been received;
(e) All other consents, approvals and permissions and the
satisfaction of all the requirements prescribed by law which are necessary to
the carrying out of the transactions contemplated hereby shall have been
procured;
(f) All delay periods and all periods for review, objection or
appeal of or to any of the consents, approvals or permissions required with
respect to the consummation of the Merger and this Agreement shall have expired;
(g) Unless waived by One Valley, the approvals referred to in
subparagraphs (b), (c) and (d) hereof shall not have required the divestiture or
cessation of any significant part of the present operations conducted by One
Valley, FFVA Financial, and their respective subsidiaries, taken as a whole, and
shall not have imposed any other condition which One Valley reasonably deems to
be materially disadvantageous or burdensome;
(h) Unless waived by One Valley, the representations and
warranties of FFVA Financial contained in this Agreement shall be correct on and
as of the Closing Date in all material respects with the same effect as though
made on and as of such date, except as affected by the transactions contemplated
by this Agreement and except for changes which are not, in the
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aggregate, material and adverse to the financial condition, businesses,
properties or operations of FFVA Financial, and FFVA Financial shall have
performed in all material respects all its obligations and agreements hereunder
theretofore to be performed by it; and One Valley shall have received on the
Closing Date an appropriate certificate to the foregoing effect dated the
Closing Date and executed on behalf of FFVA Financial by one or more appropriate
executive officers of FFVA Financial;
(i) Unless waived by FFVA Financial, the representations and
warranties of One Valley contained in this Agreement shall be correct on and as
of the Closing Date in all material respects with the same effect as though made
on and as of such date, except as affected by the transactions contemplated by
this Agreement and except for changes which are not, in the aggregate, material
and adverse to the financial condition, businesses, properties, results of
operations or prospects of One Valley, and One Valley shall have performed in
all material respects all of its obligations and agreements hereunder
theretofore to be performed by it; and FFVA Financial shall have received on the
Closing Date an appropriate certificate to the foregoing effect dated the
Closing Date and executed on behalf of One Valley by one or more appropriate
executive officers;
(j) One Valley shall have received from legal counsel to FFVA
Financial a written opinion pertaining to the transactions herein provided for,
dated the Closing Date, in form and substance acceptable to counsel for One
Valley, and FFVA Financial shall have received from legal counsel to One Valley
a customary written opinion pertaining to the transactions herein provided for,
dated the Closing Date, in form and substance acceptable to counsel for FFVA
Financial;
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(k) Unless waived by One Valley, One Valley shall have received an
opinion of Sullivan & Cromwell, special counsel to One Valley, dated the Closing
Date, to the effect that, on the basis of facts, representations and assumptions
set forth in such opinion, the Merger constitutes a reorganization under Section
368 of the Internal Revenue Code. In rendering its opinion, Sullivan & Cromwell
may require and rely upon representations contained in letters from FFVA
Financial, One Valley and shareholders of FFVA Financial;
(l) Unless waived by FFVA Financial, FFVA Financial shall have
obtained an opinion of counsel to the effect that, as to each holder of FFVA
Financial common stock who receives One Valley common stock in exchange for his
or her FFVA Financial common stock, no gain will be recognized by such
shareholder on such exchange; the basis of the One Valley common stock to be
received by such FFVA Financial shareholders will be the same as the basis of
the FFVA Financial common stock surrendered in exchange therefor; and the
holding period of the One Valley common stock to be received by such FFVA
Financial shareholders includes the holding period of the FFVA Financial common
stock surrendered in exchange therefor, provided their FFVA Financial common
stock was held as a capital asset at the time of the exchange;
(m) FFVA Financial shall have delivered to One Valley a list of
all persons known to FFVA Financial who may be deemed to be "affiliates" of FFVA
under Rule 145 of the Securities Act of 1933, as amended, and shall use its best
efforts to cause each affiliate to deliver to One Valley prior to the Closing
Date a letter substantially in the form attached hereto as Exhibit B;
(n) Unless waived by One Valley, FFVA Financial shall have issued
up to 750,000 shares of its common stock held as authorized but unissued shares;
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(o) The shares of One Valley common stock to be issued in the
Merger shall have been approved for listing on the NYSE, subject to official
notice of issuance; and
(p) The Board of Directors of FFVA Financial shall have received
an opinion at the time of the mailing of the proxy statement to the FFVA
Financial shareholders from Sandler O'Neill & Partners, L.P., to the effect that
as of the day of the mailing of such proxy statement that the consideration to
be received by the holders of FFVA Financial common stock in the Merger is fair
to such holders from a financial point of view.
8.2 Closing Date. The time and date of closing (the "Closing Date")
shall be selected by One Valley and shall be within thirty (30) days of
approvals of this Agreement by the shareholders of FFVA Financial or the receipt
of all of the approvals (including any statutory waiting periods) referred to in
Section 8.1(b), (c), (d), (e) and (f), whichever is later. One Valley shall
cause the Articles of Merger with respect to the Merger to be filed with the
Secretary of State of West Virginia and of the Commonwealth of Virginia.
SECTION 9
TERMINATION OF AGREEMENT
9.1 Grounds for Termination. This Agreement and the transactions
contemplated hereby may be terminated at any time prior to the Closing Date
either before or after the meeting of the shareholders of FFVA Financial:
(a) By mutual consent of FFVA Financial and One Valley;
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(b) By One Valley if there has been a material misrepresentation
or breach of warranty in the representations and warranties of FFVA Financial
set forth herein, or by FFVA Financial if there has been a material
misrepresentation or breach of warranty in the representations and warranties of
One Valley set forth herein, which material misrepresentation or breach of
warranty has not been cured to the satisfaction of the non-breaching party
within 30 days thereof;
(c) By either FFVA Financial or One Valley upon written notice to
the other, if the Closing Date does not occur on or before midnight on October
1, 1998;
(d) By either FFVA Financial or One Valley if the Merger shall
violate any nonappealable final order, decree or judgment of any court or
governmental body having competent jurisdiction;
(e) In the event that the Disclosure Schedule or One Valley's
investigation of FFVA Financial and Subsidiary discloses matters which One
Valley in good faith believes either (i) to be inconsistent in any material and
adverse respect with any of the representations or warranties of FFVA Financial
(without giving effect to the Disclosure Schedule) or (ii) in the reasonable
judgment of the Board of Directors of One Valley either (A) to be of such
significance as to materially and adversely affect the financial condition or
results of operations of FFVA Financial and the Subsidiary, taken as a whole, or
(B) to deviate materially and adversely from the financial statements for the
year ended December 31, 1996, of FFVA Financial, the Board of Directors of One
Valley may elect to terminate this Agreement by giving notice of termination to
FFVA Financial within or at the end of the 30 day period following the date of
the delivery by FFVA Financial to One Valley of the Disclosure Schedule;
provided, however, that actions taken by FFVA Financial as contemplated in this
Agreement concerning
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the FFVA ESOP, FFVA Retirement Plan, or the Stock Option Plan shall not trigger
One Valley's right to terminate hereunder or otherwise violate any term of this
Agreement and that matters or items disclosed in material reviewed by One Valley
prior to the execution hereof as listed in a pre-signing disclosure letter may
not serve as a basis for any right of One Valley to terminate hereunder;
(f) In the event that FFVA Financial's investigation of One Valley
and its subsidiaries discloses matters which FFVA Financial in good faith
believes either (i) to be inconsistent in any material and adverse respect with
any of the representations or warranties of One Valley or (ii) in the reasonable
judgment of the Board of Directors of FFVA Financial either (A) to be of such
significance as to materially and adversely affect the financial condition or
results of operations of One Valley and its subsidiaries taken as a whole, or
(B) to deviate materially and adversely from the financial statements for the
year ended December 31, 1996, of One Valley, the Board of Directors of FFVA
Financial may elect to terminate this Agreement by giving notice of termination
to One Valley within or at the end of the 30 day period following the date of
this Agreement; provided, however that matters or items disclosed in material
reviewed by FFVA Financial prior to the execution hereof as listed in a
pre-signing disclosure letter may not serve as a basis for any right of FFVA
Financial to terminate hereunder;
(g) By One Valley in accordance with the provisions of Section
4.22(e);
(h) By One Valley in the event FFVA Financial fails to execute the
Option Agreement specified in ss.4.22(k) of this Agreement within twenty-four
hours following the execution of this Agreement;
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(i) By FFVA Financial at any time during the five-day period
commencing after the Determination Date if both of the following conditions are
satisfied:
(1) the Converted Value shall be less than $36.54; and
(2) (i) the quotient obtained by dividing the Closing Value by
$40.94 (such number being referred to herein as the "One Valley Ratio") shall be
less than (ii) 90% of the quotient obtained by dividing the Index Price on the
Determination Date by the Index Price on the Starting Date;
subject, however, to the following three sentences. If FFVA Financial determines
not to consummate the Merger pursuant to this Subsection, it shall give prompt
written notice of election to terminate to One Valley, which notice may be
withdrawn at any time prior to the close of the ten-day period commencing after
the Determination Date. During the five-day period commencing with its receipt
of such notice, One Valley shall have the option to elect to increase the Fixed
Exchange Ratio to a number such that the Converted Value is no less than $36.54.
The election contemplated by the preceding sentence shall be made by giving
notice to FFVA Financial of such election and the revised Fixed Exchange Ratio,
whereupon no termination shall have occurred pursuant to this Subsection and
this Agreement shall remain in effect in accordance with its terms (except as
the Fixed Exchange Ratio shall have been so modified), and any references in
this Agreement to "Fixed Exchange Ratio" shall thereafter be deemed to refer to
the Fixed Exchange Ratio as adjusted pursuant to this Subsection. If the Closing
Date shall occur during the five-day period such option is in effect, the
Closing Date shall be extended until the fifth business day following the close
of such five-day period.
For purposes of this Subsection, the following terms shall have the
meanings indicated:
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"Converted Value" shall mean the product of the Closing Value
multiplied by the Fixed Exchange Ratio of 1.05.
"Closing Value" shall mean the average of the closing prices per share
of the One Valley common stock on the NYSE Composite Transactions Tape (as
reported by The Wall Street Journal) for the ten trading days (determined by
excluding days on which the NYSE is closed) immediately preceding the
Determination Date (the tenth day to be determined by counting the day preceding
the Determination Date as the first day).
"Determination Date" shall mean the tenth calendar day preceding the
date designated by One Valley as the Closing Date.
"Index Group" shall mean the nineteen (19) bank holding companies
listed below, the common stocks of all of which shall be publicly traded and as
to which there shall not have been, since the Starting Date and before the
Determination Date, any public announcement of a proposal for such company to be
acquired or for such company to acquire another company or companies in
transactions with a value exceeding 25% of the acquirior's market
capitalization. In the event that any such company or companies are removed from
the Index Group, the weights (which have been determined based upon the number
of shares of outstanding common stock) shall be redistributed proportionately
for purposes of determining the Index Price. The 19 bank holding companies and
the weights attributed to them as follows:
- -------------- ----------------------------------------------------------------
Bank Holding Companies % Weighting
- -------------- ----------------------------------------------------------------
FMER FirstMerit Corp. 10.48%
- -------------- ----------------------------------------------------------------
FVB First Virginia Banks Inc. 8.26%
- -------------- ----------------------------------------------------------------
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- -------------- ----------------------------------------------------------------
KSTN Keystone Financial Inc. 8.16%
- -------------- ----------------------------------------------------------------
NCBC National Commerce Bancorp. 8.00%
- -------------- ----------------------------------------------------------------
FULT Fulton Financial Corp. 7.56%
- -------------- ----------------------------------------------------------------
PFGI Provident Financial Group Inc. 6.92%
- -------------- ----------------------------------------------------------------
VLY Valley National Bancorp 6.66%
- -------------- ----------------------------------------------------------------
BNK CNB Bancshares Inc. 5.34%
- -------------- ----------------------------------------------------------------
WILM Wilmington Trust Corp. 5.30%
- -------------- ----------------------------------------------------------------
RIGS Riggs National Corp. 4.79%
- -------------- ----------------------------------------------------------------
HUBC HUBCO Inc. 4.45%
- -------------- ----------------------------------------------------------------
OLDB Old National Bancorp 4.37%
- -------------- ----------------------------------------------------------------
CBC Centura Banks Inc. 4.17%
- -------------- ----------------------------------------------------------------
SUSQ Susquehanna Bancshares Inc. 3.55%
- -------------- ----------------------------------------------------------------
CCB CCB Financial Corp. 3.27%
- -------------- ----------------------------------------------------------------
FMBI First Midwest Bancorp Inc. 2.64%
- -------------- ----------------------------------------------------------------
FFBC First Financial Bancorp. 2.61%
- -------------- ----------------------------------------------------------------
FCNCA First Citizens BancShares Inc. 2.00%
- -------------- ----------------------------------------------------------------
PRK Park National Corp. 1.49%
--------------
- -------------- ----------------------------------------------------------------
Total 100.00%
==============
- -------------- ----------------------------------------------------------------
"Index Price" on a given date shall mean the weighted average (weighted
in accordance with the "% Weighting" listed above) of the closing sales prices
of the companies composing the Index Group (determined as provided with respect
to the Determination Value).
"Starting Date" shall mean the date prior to the date of this
Agreement.
If any company belonging to the Index Group or One Valley declares or
effects a stock dividend, reclassification, recapitalization, split-up,
combination, exchange of shares, or similar
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transaction between the Starting Date and the Determination Date, the prices for
the common stock of such company or One Valley and any calculations hereunder
shall be appropriately adjusted for the purposes of applying this Subsection.
9.2 Effect of Termination; Right to Proceed. In the event this
Agreement shall be terminated pursuant to Section 9.1, all further obligations
of One Valley and FFVA Financial under this Agreement shall terminate (other
than this Section 9.2 and Sections 6.2, 9.3, 18.2, 18.3, and 18.4 hereof, all of
which shall remain in full force and effect) without further liability of the
parties to one another, except for any liability arising out of any uncured
willful breach of any covenant or other agreement contained in this Agreement or
any fraudulent breach of a representation or warranty.
9.3 Return of Documents in Event of Termination. In the event of the
termination of this Agreement for any reason, each party shall forthwith deliver
to the other all documents, work papers and other material obtained from it
relating to the transactions contemplated hereby, whether obtained before or
after the execution hereof, including information obtained pursuant to Section 6
hereof, and will take reasonable steps to have any information so obtained kept
confidential.
SECTION 10
MEETINGS OF SHAREHOLDERS
FFVA Financial and One Valley shall each take all steps necessary to
call and hold a special meeting of shareholders, in accordance with applicable
law and the respective Certificate of Incorporation, Restated Articles of
Incorporation, and Bylaws of each of them, as soon as practicable for the
purpose of submitting this Agreement and, in the case of FFVA Financial, the
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Articles Amendment, to its shareholders for their consideration and approval.
FFVA Financial and One Valley will each prepare and send to its shareholders for
purposes of such meetings a proxy statement, which will be in the form contained
in the Registration Statement on Form S-4, or any amendments thereto, prepared
and filed by One Valley (the "Proxy Statement"). The Boards of Directors of FFVA
Financial and One Valley will each recommend shareholder approval of this
Agreement and will not withdraw such recommendation unless such Board of
Directors concludes (after receipt of legal advice from its counsel) that the
fiduciary duties such persons owe to the shareholders of FFVA Financial or One
Valley, respectively, require otherwise.
SECTION 11
OTHER AGREEMENTS
11.1 Post-Merger Operation of the Bank. Upon the Closing Date or as
soon thereafter as is practicable, it is anticipated that the Bank will be
merged into and become a part of One Valley Bank - Central Virginia, National
Association.
11.2 Directors of the Bank. The directors of the Bank on the Closing
Date shall be elected to the Board of Directors of One Valley Bank - Central
Virginia, National Association, and shall hold office as prescribed in the
Bylaws and applicable law until their successors shall have been elected and
shall qualify. Directors' fees of those directors shall not be changed for the
first eighteen months following the Closing Date, but thereafter all policies
applicable to directors of One Valley generally (including board fees and
mandatory retirement) shall apply; provided, however, that the mandatory
retirement policy shall be implemented incrementally so as to require the
retirement of not more than two of the former FFVA Financial directors in any
one year.
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11.3 Director of One Valley. Promptly after the Closing Date, One
Valley shall, by action of its Board of Directors, elect James L. Davidson, Jr.,
and one other additional person to be designated by FFVA Financial, as members
of the Board of Directors of One Valley, each for a term expiring on the date of
the next Annual Meeting of Shareholders of One Valley. In addition, at its
Annual Meeting of Shareholders to be held in April, 1999, One Valley shall
nominate and recommend James L. Davidson, Jr., and one other additional person
to be designated by FFVA Financial, each for a three-year term as members of the
Board of Directors of One Valley.
SECTION 12
BROKERS, ETC.
FFVA Financial represents and warrants to One Valley, that no broker,
or finder, or financial analyst except Sandler O'Neill & Partner, L.P., pursuant
to an agreement previously provided to One Valley, has been employed by FFVA
Financial or its Subsidiary, or is entitled to a fee, commission or other
compensation from FFVA Financial or its Subsidiary, with respect to this
Agreement or the transactions contemplated hereby. One Valley represents and
warrants to FFVA Financial, that no broker, or finder, or financial analyst
except Merrill Lynch, Pierce, Fenner & Smith, Incorporated, has been employed by
One Valley, or is entitled to a fee, commission or other compensation from One
Valley, with respect to this Agreement or the transactions contemplated hereby.
SECTION 13
GOVERNING LAW; SUCCESSORS AND ASSIGNS;
COUNTERPARTS; ENTIRE AGREEMENT
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This Agreement (a) shall be governed by and construed under and in
accordance with the laws of the State of West Virginia; (b) shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns, provided, however, that this Agreement may not be
assigned by any party without the written consent of the other parties hereto;
(c) may be executed in one or more counterparts, all of which shall be
considered one and the same agreement, and shall become effective and binding
when one or more counterparts shall have been signed and delivered; and (d)
embodies the entire agreements and understandings between FFVA Financial and One
Valley relating to the subject matter hereof. One Valley shall not enter into
any agreement providing for the acquisition of One Valley unless in connection
with such acquisition the entity effecting such acquisition agrees to assume One
Valley's obligations under this Agreement.
SECTION 14
EFFECT OF CAPTIONS
The captions in this Agreement are included for convenience only and
shall not in any way affect the interpretation or construction of any of the
provisions hereof.
SECTION 15
SEVERABILITY
The Parties expressly agree that it is not the intention of any party
to violate any public policy, law, rule, regulation, treaty or decision of any
government or agency thereof of any state or country. If any provision of this
Agreement is judicially or administratively interpreted to be in violation of
any such provision in any state or country, such provisions, sentences, words,
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clauses or combination thereof shall be inoperative in each such state or
country; and the remainder of this Agreement shall remain binding upon the
parties hereto in each such state or country with this Agreement as a whole
unaffected elsewhere.
SECTION 16
NOTICES
Any notices or other communications required or permitted hereunder
shall be sufficiently given if sent by registered mail, postage prepaid,
addressed as follows:
To FFVA Financial:
FFVA Financial Corporation
925 Main Street
Lynchburg, Virginia 24504
Attention: James L. Davidson, Jr., President and CEO
With a copy to:
Charles E. Sloane, Esquire
Malizia, Spidi, Sloane & Fisch, P.C.
One Franklin Square
1301 K. Street, N.W., Suite 700 East
Washington, DC 20005
To One Valley:
One Valley Bancorp, Inc.
One Valley Square
P. O. Box 1793
Charleston, West Virginia 25326
Attention: J. Holmes Morrison
With a copy to:
Merrell S. McIlwain, Esquire
One Valley Bancorp of West Virginia, Inc.
One Valley Square
P. O. Box 1793
Charleston, West Virginia 25326
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or such other addresses as shall be furnished in writing by either party to the
other party. Any such notice or communication shall be deemed to have been given
as of the date so mailed.
SECTION 17
AMENDMENTS
This Agreement may be amended by the written agreement of One Valley
and FFVA Financial and without the approval of the shareholders before or after
the meeting of shareholders at any time prior to the Closing Date with respect
to any of the terms contained herein; provided, however, that if amended after
such meeting of shareholders, no such amendment shall be materially adverse to
the shareholders of FFVA Financial.
SECTION 18
EXPENSES
18.1 General. Except as otherwise provided herein, each of the parties
hereto agrees to pay, without a right of reimbursement from the other party and
whether or not the transactions contemplated by this Agreement shall be
consummated, the costs incurred by it incident to the performance of its
obligations under this Agreement and to the consummation of the Merger and the
other transactions contemplated herein, including the fees and disbursements of
counsel, accountants and consultants employed by such party in connection
therewith; provided, however, that One Valley shall bear the full expense of the
printing and mailing of the proxy statement to be used in connection with the
special meeting of shareholders referenced in Section 10.
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18.2 Expenses of One Valley. FFVA Financial hereby agrees that if this
Agreement or the transactions contemplated hereby are terminated by One Valley
pursuant to Sections 9.1(b) or 9.1(e) as a result of a willful breach by FFVA
Financial, FFVA Financial shall promptly (and in any event within ten (10)
business days after such termination) pay all Expenses of One Valley. "Expenses
of One Valley" as used in this Section 18.2 shall include all reasonable in
amount and reasonably incurred out-of-pocket expenses of One Valley (including
all fees and expenses of counsel, accountants, investment bankers, experts and
consultants to One Valley and its Affiliates) incurred by it or on its behalf in
connection with its preparations regarding the transactions contemplated by this
Agreement.
18.3 Expenses of FFVA Financial. One Valley hereby agrees that if this
Agreement or the transactions contemplated hereby are terminated by FFVA
Financial pursuant to Section 9.1(b) or 9.1(f) as a result of a willful breach
by One Valley, One Valley shall promptly (and in any event within ten (10)
business days after such termination) pay all Expenses of FFVA Financial. For
purposes of this Section 18.3, the "Expenses of FFVA Financial" shall include
all reasonable out-of-pocket expenses (including all fees and expenses of
counsel, accountants, investment bankers, experts and consultants to FFVA
Financial and its Affiliates) incurred by it or on its behalf in connection with
its preparations regarding the transactions contemplated by this Agreement.
18.4 Termination Fee. (a) FFVA Financial hereby agrees to pay One
Valley and One Valley shall be entitled to payment of, a fee (the "Termination
Fee") of $3.5 million following the occurrence of a Fee Event (as defined
below), provided that One Valley shall have sent written notice of such
entitlement within 90 days after One Valley actually becomes aware of such
occurrence. Such payment shall be made in immediately available funds within
five business days after delivery of a notice from One Valley requesting such
payment. The right to
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receive the Termination Fee shall terminate if any of the following (a "Fee
Termination Event") occurs prior to a Fee Event: (i) the Closing Date, (ii)
termination of this Agreement in accordance with the provisions hereof if such
termination occurs prior to the occurrence of a Preliminary Fee Event (as
defined below), except termination by One Valley pursuant to Section 9.1(b) or
Section 9.1(g), (iii) termination of this Agreement following the occurrence of
a Preliminary Fee Event and the passage of 18 months after such termination; or
(iv) termination of the Agreement by One Valley pursuant to Section 9.1(b) or
Section 9.1(g) and the passage of 18 months after such termination.
(b) The term "Preliminary Fee Event" shall mean any of the following
events or transactions occurring after the date hereof:
(1) FFVA Financial or its Subsidiary without having received One
Valley's prior written consent, shall have entered into an agreement to engage
in any Acquisition Transaction (as defined below) with any person (the term
"person" for purposes of this Agreement having the meaning assigned thereto in
Section 3(a)(9) of the Securities Exchange Act of 1934, as amended ("Exchange
Act")) other than One Valley or any of its subsidiaries or affiliates or the
Board of Directors of FFVA Financial shall have approved, recommended, publicly
proposed or publicly announced an intention to authorize, recommend, propose or
accept any Acquisition Transaction with any person other than One Valley or any
of its subsidiaries or affiliates. For purposes of this Agreement, "Acquisition
Transaction" shall mean (A) a merger or consolidation, or similar transaction,
involving FFVA Financial or the Bank, (B) a purchase, lease or other acquisition
of all or substantially all of the assets or deposits of FFVA Financial or the
Bank, (C) a purchase or other acquisition (including by way of merger,
consolidation, share exchange or otherwise) of securities representing 10% or
more of the voting power of FFVA Financial or the Bank; provided that the term
"Acquisition Transaction" does
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not include any internal merger or consolidation involving only FFVA Financial
and its Subsidiary;
(2) (A) any person (other than One Valley or any of its
subsidiaries or affiliates) shall have acquired beneficial ownership or the
right to acquire beneficial ownership of 10% or more of the outstanding FFVA
Financial common stock (the term "beneficial ownership" for purposes of this
Agreement having the meaning assigned thereto in Section 13(d) of the Securities
Exchange Act), or (B) any group (as such term "group" is defined in Section
13(d)(3) of the Securities Exchange Act), other than a group of which any of One
Valley or any of its subsidiaries or affiliates is a member, shall have been
formed that beneficially owns 10% or more of FFVA Financial common stock then
outstanding;
(3) any person other than One Valley or any of its subsidiaries or
affiliates shall have made a bona fide proposal to FFVA Financial or its
shareholders, by public announcement or written communication that is or becomes
the subject of public disclosure, to engage in a Acquisition Transaction
(including, without limitation, any situation in which any person other than One
Valley or any of its subsidiaries or affiliates shall have commenced (as the
term is defined in Rule 14d-2 under the Exchange Act) or shall have filed a
registration statement under the Securities Act of 1933, as amended, with
respect to, a tender offer or exchange offer to purchase any FFVA Financial
common stock such that, upon consummation of such offer, such person would own
or control 10% or more of the then outstanding FFVA Financial common stock (such
an offering referred to herein as a "Tender Offer" or an "Exchange Offer,"
respectively);
(4) after a proposal is made by a third party to FFVA Financial or
its shareholders to engage in an Acquisition Transaction, or such third party
states its intention to
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FFVA Financial to make such a proposal if this Agreement terminates, FFVA
Financial shall have breached any representation, covenant or obligation
contained in this Agreement and such breach would entitle One Valley to
terminate this Agreement under Section 9.1(b) (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 FFVA common stock shall not have approved this
Agreement at the meeting of shareholders set forth in Section 10 hereof or the
meeting of shareholders shall not have been held or shall have been canceled
prior to termination of this Agreement, in each case only after any person
(other than One Valley or any of its subsidiaries or affiliates) shall have (A)
made, or disclosed an intention to make, a bona fide proposal to engage in an
Acquisition Transaction or (B) commenced a Tender Offer or filed a registration
statement under the Securities Act of 1933, as amended, with respect to an
Exchange Offer.
(c) The term "Fee Event" shall mean either of the following events
or transactions occurring after the date hereof:
(1) the acquisition by any person, other than One Valley or any of
its subsidiaries or affiliates, alone or together with such person's affiliates
and associates, or group (as defined in Section 13(d)(3) of the Securities
Exchange Act), of beneficial ownership of 30% or more of the outstanding shares
of FFVA Financial common stock; or
(2) the occurrence of a Preliminary Fee Event described in clause
(b)(1) above, except that the percentage referred to in clause (C) shall be 30%
or more of the outstanding shares of FFVA Financial common stock.
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SECTION 19
AGREEMENT TO TAKE NECESSARY AND DESIRABLE ACTIONS
FFVA Financial and One Valley each agree to use their reasonable best
efforts to execute and deliver such other documents, certificates, agreements
and other writings and to take such other actions as may be necessary or
desirable in order to consummate or implement expeditiously the transactions
contemplated by this Agreement.
IN WITNESS WHEREOF, One Valley and FFVA Financial have each caused this
Agreement to be executed on its behalf by its officers thereunto duly authorized
all as of the day and year first written above.
ONE VALLEY BANCORP, INC.
By____________________________________________
Its President and Chief Executive Officer
FFVA FINANCIAL CORPORATION
By____________________________________________
Its President and Chief Executive Officer
60
EXHIBIT A
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of the 16th day of December, 1997 (the
"Agreement"), by and between FFVA Financial Corporation ("FFVA Financial") and
One Valley Bancorp, Inc. ("One Valley").
WHEREAS, One Valley and FFVA Financial have entered into an Agreement
and Plan of Merger, dated as of the 16th day of December, 1997 (the "Merger
Agreement"), providing for, among other things, the merger of FFVA Financial
with and into One Valley, with One Valley as the surviving corporation; and
WHEREAS, as a condition and inducement to One Valley's execution of the
Merger Agreement, One Valley has required that FFVA Financial agree, and FFVA
Financial has agreed, to grant One Valley the Option (as defined below);
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Merger Agreement, and intending to be legally bound hereby, FFVA Financial
and One Valley agree as follows:
1. DEFINED TERMS. Capitalized terms which are used but not defined
herein shall have the meanings ascribed to such terms in the Merger Agreement.
2. GRANT OF OPTION. Subject to the terms and conditions set forth
herein, FFVA Financial hereby grants to One Valley an irrevocable option (the
"Option") to purchase up to 490,000 shares (as adjusted as set forth herein)
(the "Option Shares", which shall include the Option Shares before and after any
transfer of such Option Shares) of Common Stock, par value $.10 per share ("FFVA
Financial Common Stock"), of FFVA Financial at a purchase price per Option Share
(the "Purchase Price") equal to the average closing bid and ask prices on the
next business day following the public announcement of the Merger.
3. EXERCISE OF OPTION.
(a) One Valley may exercise the Option, in whole or in part, at any
time and from time to time following (but only following) the occurrence of a
Fee Event (as defined in the Merger Agreement); provided, however, that the
Option shall terminate and be of no further force and effect upon the occurrence
of a Fee Termination Event (as defined in the Merger Agreement); and provided,
further, that One Valley shall have sent the written notice of such exercise as
provided for below within six months following such Fee Event (or such later
period as provided in Section 12(k)). The rights set forth in Section 8 of this
Agreement shall terminate when the right to exercise the Option terminates
(other than as a result of a complete exercise of the Option) as set forth
herein. This Option may not be exercised at any time when One Valley shall be in
material and willful breach of any of its covenants or agreements contained in
the Merger Agreement such that FFVA Financial shall be entitled to terminate the
Merger Agreement pursuant to Section 9.1(b) thereof.
(b) In the event One Valley wishes to exercise the option, it shall
send to FFVA Financial a written notice (the date of which being herein referred
to as the "Notice Date") specifying (i) the total number of Option Shares it
intends to purchase pursuant to such exercise and (ii) a place and date not
earlier than three business days nor later than 15 business days from the Notice
Date for the closing (the "Closing") of such purchase (the "Closing Date"). If
prior notification to or approval of the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board") or any other regulatory authority
is required in connection with such purchase, FFVA Financial shall cooperate
with One Valley in the filing of the required notice or application for approval
and the obtaining of such approval and the Closing shall occur immediately
following such regulatory approvals (and any mandatory waiting periods).
4. PAYMENT AND DELIVERY OF CERTIFICATES.
(a) On each Closing Date, One Valley shall (i) pay to FFVA Financial,
in immediately available funds by wire transfer to a bank account designated by
FFVA Financial, an amount equal to the Purchase Price multiplied by the number
of Option Shares to be purchased on such Closing Date, and (ii) present and
surrender this Agreement to FFVA Financial at the address of FFVA Financial
specified in Section 12(f) hereof.
(b) At each Closing, simultaneously with the delivery of immediately
available funds and surrender of this Agreement as provided in Section 4(a), (i)
FFVA Financial shall deliver to One Valley (A) a certificate or certificates
representing the Option Shares to be purchased at such Closing, which Option
Shares shall be free and clear of all liens, claims, charges and encumbrances of
any kind whatsoever and subject to no preemptive rights, and (B) if the Option
is exercised in part only, an executed new agreement with the same terms as this
Agreement
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evidencing the right to purchase the balance of the shares of FFVA Financial
Common Stock purchasable hereunder, and (ii) One Valley shall deliver to FFVA
Financial a letter agreeing that One Valley shall not offer to sell or otherwise
dispose of such Option Shares in violation of applicable federal and state law
or of the provisions of this Agreement.
(c) In addition to any other legend that is required by applicable law,
certificates for the Option Shares delivered at each Closing shall be endorsed
with a restrictive legend which shall read substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND PURSUANT
TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF DECEMBER 16, 1997. A COPY
OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF WITHOUT CHARGE UPON
RECEIPT BY FFVA FINANCIAL OF A WRITTEN REQUEST THEREFOR.
It is understood and agreed that the above legend shall be removed by
delivery of substitute certificate(s) without such legend if One Valley shall
have delivered to FFVA Financial a copy of a letter from the staff of the SEC,
or an opinion of counsel in form and substance reasonably satisfactory to FFVA
Financial and its counsel, to the effect that such legend is not required under
the Securities Act.
5. REPRESENTATIONS AND WARRANTIES OF FFVA FINANCIAL. FFVA Financial
hereby represents and warrants to One Valley as follows:
(a) DUE AUTHORIZATION. FFVA Financial has all requisite corporate power
and authority to enter into this Agreement and, subject to any approvals
referred to herein, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of FFVA Financial. This Agreement has been duly
executed and delivered by FFVA Financial.
(b) AUTHORIZED STOCK. FFVA Financial has taken all necessary corporate
and other action to authorize and reserve and to permit it to issue, and, at all
times from the date hereof until the obligation to deliver FFVA Financial Common
Stock upon the exercise of the Option terminates, will have reserved for
issuance, upon exercise of the Option, the number of shares of FFVA Financial
Common Stock necessary for One Valley to exercise the Option, and FFVA Financial
will take all necessary corporate action to authorize and reserve for issuance
all additional shares of FFVA Financial Common Stock or other securities which
may be issued pursuant to Section 7 upon exercise of the Option. The shares of
FFVA Financial Common Stock to be issued upon due exercise of the Option,
including all additional shares of FFVA Financial Common Stock or other
securities which may be issuable pursuant to Section 7, upon issuance pursuant
hereto, shall be duly and validly issued, fully paid and nonassessable, and
shall be delivered free and clear of all liens, claims, charges and encumbrances
of any kind or nature whatsoever, including any preemptive rights of any
stockholder of FFVA Financial.
6. REPRESENTATIONS AND WARRANTIES OF ONE VALLEY. One Valley hereby
represents and warrants to FFVA Financial that:
(a) DUE AUTHORIZATION. One Valley has all requisite corporate power and
authority to enter into this Agreement and, subject to any required approvals or
consents, to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of One Valley. This Agreement has been duly executed and delivered by One
Valley.
(b) PURCHASE NOT FOR DISTRIBUTION. This Option is not being, and any
Option Shares or other securities acquired by One Valley upon exercise of the
Option will not be, acquired with a view to the public distribution thereof and
will not be transferred or otherwise disposed of except in a transaction
registered or exempt from registration under the Securities Act.
7. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.
(a) In the event of any change in FFVA Financial Common Stock by reason
of a stock dividend, stock split, split-up, recapitalization, combination,
exchange of shares or similar transaction, the type and number of shares or
securities subject to the Option, and the Purchase Price therefor, shall be
adjusted appropriately, and proper provision shall be made in the agreements
governing such transaction so that One Valley shall receive, upon exercise of
the Option, the number and class of shares or other securities or property that
One Valley would have received in respect of FFVA Financial Common Stock if the
Option had been exercised immediately prior to such event, or the record date
therefor, as applicable. If any additional shares of FFVA Financial Common Stock
are issued after the date of this Agreement (other than pursuant to an event
described in the first sentence of this Section 7(a)), the number of shares of
FFVA Financial Common Stock subject to the Option shall be adjusted so that,
after
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such issuance, it, together with any shares of FFVA Financial Common Stock
previously issued pursuant hereto, equals 9.9 % of the number of shares of FFVA
Financial Common Stock then issued and outstanding, after giving effect to any
shares subject to or issued pursuant to the Option.
(b) In the event that FFVA Financial or its Subsidiary shall enter into
an agreement: (i) to consolidate with or merge into any person, other than One
Valley or one of its subsidiaries, and shall not be the continuing or surviving
corporation of such consolidation or merger, (ii) to permit any person, other
than One Valley or one of its subsidiaries, to merge into FFVA Financial and
FFVA Financial shall be the continuing or surviving corporation, but, in
connection with such merger, the then outstanding shares of FFVA Financial
Common Stock shall be changed into or exchanged for stock or other securities of
FFVA Financial or any other person or cash or any other property or the
outstanding shares of FFVA Financial Common Stock immediately prior to such
merger shall after such merger represent less than 50% of the outstanding shares
and share equivalents of the merged company, or (iii) to sell or otherwise
transfer all or substantially all of its assets or the assets of its subsidiary
to any person, other than One Valley or one of its subsidiaries, then, and in
each such case, the agreement governing such transaction shall make proper
provisions so that the Option shall, upon the consummation of any such
transaction and upon the terms and conditions set forth herein, be converted
into, or exchanged for, an option (the "Substitute Option"), at the election of
One Valley, of either (x) the Acquiring Corporation (as defined below), (y) any
person that controls the Acquiring Corporation, or (z) in the case of a merger
described in clause (ii), FFVA Financial (such person being referred to as the
"Substitute Option Issuer").
(c) The Substitute Option shall have the same terms as the Option,
provided, that if the terms of the Substitute Option cannot, for legal reasons,
be the same as the Option, such terms shall be as similar as possible and in no
event less advantageous to One Valley. The Substitute Option Issuer shall also
enter into an agreement with the then holder or holders of the Substitute Option
in substantially the same form as this Agreement, which shall be applicable to
the Substitute Option.
(d) The Substitute Option shall be exercisable for such number of
shares of the Substitute Common Stock (as is hereinafter defined) as is equal to
the Assigned Value (as is hereinafter defined) multiplied by the number of
shares of FFVA Financial Common Stock for which the Option was theretofore
exercisable, divided by the Average Price (as is hereinafter defined). The
exercise price of the Substitute Option per share of the Substitute Common Stock
(the "Substitute Purchase Price") shall be equal to the Purchase Price
multiplied by a fraction in which the numerator is the number of shares of FFVA
Financial Common Stock for which the Option was theretofore exercisable and the
denominator is the number of shares of the Substitute Common Stock for which the
Substitute Option is exercisable.
(e) The following terms have the meanings indicated:
(I) "Acquiring Corporation" shall mean (i) the continuing or surviving
corporation of a consolidation or merger with FFVA Financial (if other than FFVA
Financial), (ii) FFVA Financial in a merger in which FFVA Financial is the
continuing or surviving person, and (iii) the transferee of all or any
substantial part of FFVA Financial 's assets (or a substantial part of the
assets of its subsidiaries taken as a whole).
(II) "Substitute Common Stock" shall mean the common stock issued by
the Substitute Option Issuer upon exercise of the Substitute Option.
(III) "Assigned Value" shall mean the highest of (i) the price per
share of FFVA Financial Common Stock at which a Tender Offer or Exchange Offer
therefor has been made by any person (other than One Valley), (ii) the price per
share of FFVA Financial Common Stock to be paid by any person (other than One
Valley) pursuant to an agreement with FFVA Financial, and (iii) the highest
closing sales price per share of FFVA Financial Common Stock quoted on the
NASDAQ/NMS (or if FFVA Financial Common Stock is not quoted on the NASDAQ/NMS,
the highest bid price per share on any day as quoted on the principal trading
market or securities exchange on which such shares are traded as reported by a
recognized source chosen by One Valley) within the six-month period immediately
preceding the agreement; provided, however, that in the event of a sale of less
than all of FFVA Financial 's assets, the Assigned Value shall be the sum of the
price paid in such sale for such assets and the current market value of the
remaining assets of FFVA Financial as determined by a nationally recognized
investment banking firm selected by One Valley (or by a majority in interest of
the grantees if there shall be more than one grantee (a "Grantee Majority")),
divided by the number of shares of FFVA Financial Common Stock outstanding at
the time of such sale. In the event that an exchange offer is made for FFVA
Financial Common Stock or an agreement is entered into for a merger or
consolidation involving consideration other than cash, the value of the
securities or other property issuable or deliverable in exchange for FFVA
Financial Common Stock shall be determined by a nationally recognized investment
banking firm selected by One Valley. (If there shall then be more than one
grantee, any such selection shall be made by a Grantee Majority.)
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(IV) "Average Price" shall mean the average closing price of a share of
the Substitute Common Stock for the one year immediately preceding the agreement
referred to in subsection (b) of Section 7, but in no event higher than the
closing price of the shares of the Substitute Common Stock on the day preceding
such agreement; provided that if FFVA Financial is the issuer of the Substitute
Option, the Average Price shall be computed with respect to a share of common
stock issued by FFVA Financial, the person merging into FFVA Financial or by any
company which controls or is controlled by such person, as One Valley may elect.
(f) In no event, pursuant to any of the foregoing paragraphs, shall the
Substitute Option be exercisable for more than 9.9% of the aggregate of the
shares of the Substitute Common Stock outstanding after exercise of the
Substitute Option. In the event that the Substitute Option would be exercisable
for more than 9.9% of the aggregate of the shares of the Substitute Common Stock
but for this subsection (f), the Substitute Option Issuer shall make a cash
payment to One Valley equal to the excess of (i) the value of the Substitute
Option without giving effect to the limitation in this subsection (f) over (ii)
the value of the Substitute Option after giving effect to the limitation in this
subsection (f). This difference in value shall be determined by a nationally
recognized investment banking firm selected by One Valley (or a Grantee
Majority).
(g) FFVA Financial shall not enter into any transaction described in
subsection (b) of this Section 7 unless the Acquiring Corporation and any person
that controls the Acquiring Corporation assume in writing all the obligations of
FFVA Financial hereunder and take all other actions that may be necessary so
that the provisions of this Section 7 are given full force and effect
(including, without limitation, any action that may be necessary so that the
holders of the other shares of common stock issued by the Substitute Option
Issuer are not entitled to exercise any rights by reason of the issuance or
exercise of the Substitute Option and the shares of the Substitute Common Stock
are otherwise in no way distinguishable from or have lesser economic value than
other shares of common stock issued by the Substitute Option Issuer). In
addition, FFVA Financial shall not enter into any agreement of the type
described in Section 7(b) unless the other party thereto commits to provide the
funding required for FFVA Financial to pay the Section 8 Repurchase
Consideration.
(h) The provisions of Sections 8, 9 and 10 shall apply, with
appropriate adjustments, to any securities for which the Option becomes
exercisable pursuant to this Section 7 and, as applicable, references in such
sections to "FFVA Financial," "Option," "Purchase Price" and "FFVA Financial
Common Stock" shall be deemed to be references to "Substitute Option Issuer,"
"Substitute Option," "Substitute Purchase Price" and "Substitute Common Stock,"
respectively.
8. REPURCHASE AT THE OPTION OF ONE VALLEY.
(a) Subject to the second last sentence of Section 3(a) hereof, at the
request of One Valley at any time commencing upon the first occurrence of a
Repurchase Event (as defined in Section 8(d) below) and ending 12 months
immediately thereafter, FFVA Financial shall repurchase from One Valley (I) the
Option and (II) all shares of FFVA Financial Common Stock purchased by One
Valley pursuant hereto with respect to which One Valley then has beneficial
ownership. The date on which One Valley exercised its rights under this Section
8 is referred to as the "Request Date." Such repurchase shall be at an aggregate
price (the "Section 8 Repurchase Consideration") equal to the sum of:
(i) the aggregate Purchase Price paid by One Valley for any shares of
FFVA Financial Common Stock acquired pursuant to the option with respect to
which One Valley then has beneficial ownership;
(ii) the excess, if any, of (x) the Applicable Price (as defined below)
for each share of FFVA Financial Common Stock over (y) the Purchase Price
(subject to adjustment pursuant to Section 7), multiplied by the number of
shares of FFVA Financial Common Stock with respect to which the Option has not
been exercised; and
(iii) the excess, if any, of (x) the Applicable Price over (y) the
Purchase Price (subject to adjustment pursuant to Section 7) paid (or, in the
case of Option Shares with respect to which the Option has been exercised but
the Closing Date has not occurred, payable) by One Valley for each share of FFVA
Financial Common Stock with respect to which the Option has been exercised and
with respect to which One Valley then has beneficial ownership, multiplied by
the number of such shares.
(b) If One Valley exercises its rights under this Section 8, FFVA
Financial shall, within 10 business days after the Request Date, pay the Section
8 Repurchase Consideration to One Valley in immediately available funds, and
contemporaneously with such payment One Valley shall surrender to FFVA Financial
the Option and the certificates evidencing the shares of FFVA Financial Common
Stock purchased thereunder with respect to which One Valley then has beneficial
ownership, and One Valley shall warrant that it has sole record and beneficial
ownership of such shares and that the same are then free and clear of all liens,
claims, charges and encumbrances of any kind whatsoever. Notwithstanding the
foregoing, to the extent that prior notification to or approval of the Office of
Thrift Supervision or other regulatory authority is required in connection with
the payment of all or any portion of the Section 8 Repurchase Consideration, One
Valley shall have the ongoing option to revoke its request
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for repurchase pursuant to Section 8, in whole or in part, or to require that
FFVA Financial deliver from time to time that portion of the Section 8
Repurchase Consideration that it is not then so prohibited from paying and
promptly file the required notice or application for approval and expeditiously
process the same (and each party shall cooperate with the other in the filing of
any such notice or application and the obtaining of any such approval). If the
Office of Thrift Supervision or any other regulatory authority disapproves of
any part of FFVA Financial's proposed repurchase pursuant to this Section 8,
FFVA Financial shall promptly give notice of such fact to One Valley. If the
Office of Thrift Supervision or other agency prohibits the repurchase in part
but not in whole, then One Valley shall have the right (i) to revoke the
repurchase request or (ii) to the extent permitted by the Office of Thrift
Supervision or other agency, require the repurchase of the Option and/or Option
Shares, and One Valley shall thereupon have the right to exercise the Option as
to the number of Option Shares for which the Option was exercisable at the
Request Date less the sum of the number of shares covered by the Option in
respect of which payment has been made pursuant to Section 8(a)(ii). One Valley
shall notify FFVA Financial of its determination under the preceding sentence
within five (5) business days of receipt of notice of partial disapproval of the
repurchase.
Notwithstanding anything herein to the contrary, all of One Valley's
rights under this Section 8 shall terminate on the date of termination of this
Option pursuant to Section 3(a).
(c) For purposes of this Agreement, the "Applicable Price" means the
highest of (i) the highest price per share of FFVA Financial Common Stock paid
for any such share by the person or groups described in Section 8(d)(i), (ii)
the price per share of FFVA Financial Common Stock received by holders of FFVA
Financial Common Stock in connection with any merger or other business
combination transaction described in Section 7(b)(i), 7(b)(ii) or 7(b)(iii), or
(iii) the highest closing sales price per share of FFVA Financial Common Stock
quoted on the NASDAQ/NMS (or if FFVA Financial Common Stock is not quoted on the
NASDAQ/NMS, the highest bid price per share as quoted on the principal trading
market or securities exchange on which such shares are traded as reported by a
recognized source chosen by One Valley) during the 30 business days preceding
the Request Date; provided, however, that in the event of a sale of less than
all of FFVA Financial's assets, the Applicable Price shall be the sum of the
price paid in such sale for such assets and the current market value of the
remaining assets of FFVA Financial as determined by a nationally recognized
investment banking firm selected by One Valley, divided by the number of shares
of FFVA Financial Common Stock outstanding at the time of such sale. If the
consideration to be offered, paid or received pursuant to either of the
foregoing clauses (i) or (ii) shall be other than in cash, the value of such
consideration shall be determined in good faith by an independent nationally
recognized investment banking firm selected by One Valley and reasonably
acceptable to FFVA Financial, which determination shall be conclusive for all
purposes of this Agreement.
(d) As used herein, a "Repurchase Event" shall occur if (i) any person
(other than One Valley or any subsidiary of One Valley) shall have acquired
beneficial ownership of (as such term is defined in Rule 13d-3 promulgated under
the Securities Exchange Act) or the right to acquire beneficial ownership of, or
any "group" (as such term is defined under the Exchange Act) shall have been
formed which beneficially owns or has the right to acquire beneficial ownership
of, 50% or more of the then outstanding shares of FFVA Financial Common Stock,
or (ii) any of the transactions described in Section 7(b)(i), 7(b)(ii) or
7(b)(iii) shall be consummated.
9. REGISTRATION RIGHTS. One Valley shall have the registration rights
set forth in Annex A hereto.
10. QUOTATION; LISTING. If FFVA Financial Common Stock or any other
securities to be acquired upon exercise of the Option are then authorized for
quotation or trading or listing on the NASDAQ/NMS or any securities exchange,
FFVA Financial, upon the request of One Valley, will promptly file an
application, if required, to authorize for quotation or trading or listing the
shares of FFVA Financial Common Stock or other securities to be acquired upon
exercise of the Option on the NASDAQ/NMS or such other securities exchange and
will use its best efforts to obtain approval, if required, of such quotation or
listing as soon as practicable.
11. DIVISION OF OPTION. This Agreement (and the Option granted hereby)
is exchangeable, without expense, at the option of One Valley, upon presentation
and surrender of this Agreement at the principal office of FFVA Financial for
other Agreements providing for Options of different denominations entitling the
holder thereof to purchase in the aggregate the same number of shares of FFVA
Financial Common Stock purchasable hereunder. The terms "Agreement" and "Option"
as used herein include any other Agreements and related Options for which this
Agreement (and the Option granted hereby) may be exchanged. Upon receipt by FFVA
Financial of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Agreement, and (in the case of loss, theft or
destruction) of reasonably satisfactory indemnification, and upon surrender and
cancellation of this Agreement, if mutilated, FFVA Financial will execute and
deliver a new Agreement of like tenor and date. Any such new Agreement executed
and delivered shall constitute an additional contractual obligation on the part
of FFVA Financial, whether or not the Agreement so lost, stolen, destroyed or
mutilated shall at any time be enforceable by anyone.
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12. MISCELLANEOUS.
(a) EXPENSES. Except as otherwise provided in Section 9, each of the
parties hereto shall bear and pay all costs and expenses incurred by it or on
its behalf in connection with the transactions contemplated hereunder, including
fees and expenses of its own financial consultants, investment bankers,
accountants and counsel.
(b) WAIVER AND AMENDMENT. Any provision of this Agreement may be waived
at any time by the party that is entitled to the benefits of such provision.
This Agreement may not be modified, amended, altered or supplemented except upon
the execution and delivery of a written agreement executed by the parties
hereto.
(c) ENTIRE AGREEMENT: NO THIRD-PARTY BENEFICIARY; SEVERABILITY. This
Agreement, together with the Merger Agreement and the other documents and
instruments referred to herein and therein, between One Valley and FFVA
Financial (i) constitutes the entire agreement and supersedes all prior
agreements and understanding, both written and oral, between the parties with
respect to the subject matter hereof and (ii) is not intended to confer upon any
person other than the parties hereto (other than any parties indemnified under
Section 9 and transferees of the Option Shares or any permitted transferee of
this Agreement pursuant to Section 11(h)) any rights or remedies hereunder. If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction or a federal or state regulatory agency to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. If for any
reason such court or regulatory agency determines that the Option does not
permit One Valley to acquire, or does not require FFVA Financial to repurchase,
the full number of shares of FFVA Financial Common Stock as provided in Sections
3 and 8 (as adjusted pursuant to Section 7), it is the express intention of FFVA
Financial to allow One Valley to acquire or to require FFVA Financial to
repurchase such lesser number of shares as may be permissible without any
amendment or modification hereof.
(d) GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of West Virginia without regard to any
applicable conflicts of law rules.
(e) DESCRIPTIVE HEADINGS. The descriptive headings contained herein are
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
(f) 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):
To FFVA Financial:
FFVA Financial Corporation
925 Main Street
Lynchburg, Virginia 24504
Attention: James L. Davidson, Jr., President and CEO
With a copy to:
Charles E. Sloane, Esquire
Malizia, Spidi, Sloane & Fisch, P.C.
One Franklin Square
1301 K. Street, N.W., Suite 700 East
Washington, DC 20005
To One Valley:
One Valley Bancorp, Inc.
One Valley Square
P. O. Box 1793
Charleston, West Virginia 25326
Attention: J. Holmes Morrison
With a copy to:
Merrell S. McIlwain, Esquire
One Valley Bancorp, Inc.
One Valley Square
P. O. Box 1793
Charleston, West Virginia 25326
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(g) COUNTERPARTS. This Agreement and any amendments hereto may be
executed in two counterparts, each of which shall be considered one and the same
agreement and shall become effective when both counterparts have been signed, it
being understood that both parties need not sign the same counterpart.
(h) ASSIGNMENT. Neither this Agreement nor any of the rights, interests
or obligations hereunder or under the Option shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other party, except that One Valley may assign this
Agreement to a wholly owned subsidiary of One Valley and One Valley may assign
its rights hereunder in whole or in part after the occurrence of a Fee Event;
provided, however, that until the Federal Reserve Board has approved an
application by One Valley to acquire the shares of FFVA Financial Common Stock
subject to the Option, One Valley may not assign its rights under the Option
except in (i) a widely dispersed public distribution, (ii) a private placement
in which no one party acquires the right to purchase in excess of 2% of the
voting shares of FFVA Financial, (iii) an assignment to a single party (e.g., a
broker or investment banker) for the purpose of conducting a widely dispersed
public distribution on One Valley's behalf or (iv) any other manner approved by
the Federal Reserve Board. Subject to the preceding sentence, this Agreement
shall be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and assigns. Any such assignment shall be in
compliance with all applicable laws.
(i) FURTHER ASSURANCES. In the event of any exercise of the Option by
One Valley, FFVA Financial and One Valley shall execute and deliver all other
documents and instruments and take all other action that may be reasonably
necessary in order to consummate the transactions provided for by such exercise.
(j) SPECIFIC PERFORMANCE. The parties hereto agree that this Agreement
may be enforced by either party through specific performance, injunctive relief
and other equitable relief. Both parties further agree to waive any requirement
for the securing or posting of any bond in connection with the obtaining of any
such equitable relief and that this provision is without prejudice to any other
rights that the parties hereto may have for any failure to perform this
Agreement.
(k) EXTENSION OF PERIODS. Any period for the exercise of any right
hereunder shall be extended: (i) to the extent necessary to obtain all
regulatory approvals for the exercise of such rights (for so long as the
relevant person is using commercially reasonable efforts to obtain such
regulatory approvals), and for the expiration of all statutory waiting periods;
and (ii) to the extent necessary to avoid liability under Section 16(b) of the
Securities Exchange Act of 1934 by reason of such exercise.
13. OTHER PROVISIONS. (a)(i) Notwithstanding any other provision of
this Agreement, in no event shall One Valley's Total Profit (as hereinafter
defined) exceed $6 million and, if it otherwise would exceed such amount, One
Valley, as its sole election, shall either (a) reduce the number of shares of
Common Stock subject to this Option, (b) deliver to FFVA Financial for
cancellation Option Shares previously purchased by One Valley, (c) pay cash to
FFVA Financial, or (d) do any combination thereof, so that One Valley's actually
realized Total Profit shall not exceed $6 million after taking into account the
foregoing actions.
(ii) Notwithstanding any other provision of this Agreement, this Option
may not be exercised for a number of shares as would, as of date of exercise,
result in a Notional Total Profit (as defined below) of more than $6 million,
provided that nothing in this sentence shall restrict any exercise of the Option
permitted hereby on any subsequent date.
(iii) As used herein, the term "Total Profit" shall mean the aggregate
amount (before taxes) of the following: (i) the amount received by One Valley
pursuant to FFVA Financial's repurchase of the Option (or any portion thereof)
pursuant to Section 8, (ii) (x) the amount received by One Valley pursuant to
FFVA Financial's repurchase of Option Shares pursuant to Section 8, less (y) One
Valley's purchase price for such Option Shares, (iii) (x) the net cash amounts
received by One Valley pursuant to the sale of Option Shares (or any other
securities into which such Option Shares are converted or exchanged) to any
unaffiliated party, less (y) One Valley's purchase price of such Option Shares,
(iv) any amounts received by One Valley on the transfer of the Option (or any
portion thereof) to any unaffiliated party, and (v) any amount equivalent to the
foregoing with respect to the Substitute Option.
(iv) As used herein, the term "Notional Total Profit" with respect to
any number of shares as to which One Valley may propose to exercise this Option
shall be the Total Profit determined as of the date of such proposed exercise
assuming that this Option were exercised on such date for such number of shares
and assuming that such shares, together with all other Option Shares held by One
Valley and its affiliates as of such date, were sold for cash at the closing
market price for the Common Stock as of the close of business on the preceding
trading day (less customary brokerage commissions).
(b) (i) One Valley may, at any time following a Repurchase Event and
prior to the occurrence of a Fee Termination Event (or such later period as
provided herein), relinquish the Option (together with any Option Shares issued
to and then owned by One Valley) to FFVA Financial in exchange for a cash fee
equal to the Surrender Price;
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provided, however, that One Valley may not exercise it rights pursuant to this
Section 13(b) if FFVA Financial has repurchased the Option (or any portion
thereof) or any Option Shares pursuant to Section 8. The "Surrender Price" shall
be equal to $3.5 million (i) plus, if applicable, One Valley's purchase price
with respect to any Option Shares and (ii) minus, if applicable, the excess of
(A) the net cash amounts, if any, received by One Valley pursuant to the arms'
length sale of Option Shares (or any other securities into which such Option
Shares were converted or exchange) to any unaffiliated party, over (B) One
Valley's purchase price of such Option Shares.
(ii) One Valley may exercise its right to relinquish the Option and any
Option Shares pursuant to this Section 13(b) by surrendering to FFVA Financial,
at its principal office, a copy of this Agreement together with certificates for
Option Shares, if any, accompanied by a written notice stating (i) that One
Valley elects to relinquish the Option and Option Shares, if any, in accordance
with the provisions of this Section 13(b) and (ii) the Surrender Price. The
Surrender Price shall be payable in immediately available funds on or before the
second business day following receipt of such notice by FFVA Financial.
(iii) To the extent that FFVA Financial is prohibited under applicable
law or regulation, or as a consequence of administrative policy, from paying the
Surrender Price to One Valley in full, FFVA Financial shall immediately so
notify One Valley and thereafter deliver or cause to be delivered from time to
time, to One Valley, the portion of the Surrender Price that it is no longer
prohibited from paying, within five business days after the date on which FFVA
Financial is no longer so prohibited; provided, however, that if FFVA Financial
at any time after delivery of a notice of surrender pursuant to paragraph (ii)
of this Section 13(b) is prohibited under applicable law or regulation, or as a
consequence of administrative policy, from paying to One Valley the Surrender
Price in full, (i) FFVA Financial shall (A) use its reasonable best efforts to
obtain all required regulatory and legal approvals and to file any required
notices as promptly as practicable in order to make such payments, (B) within
five days of the submission or receipt of any documents relating to any such
regulatory and legal approvals, provide One Valley with copies of the same, and
(c) keep One Valley advised of both the status of any such request for
regulatory and legal approvals, as well as any discussions with any relevant
regulatory or other third party reasonably related to the same and (ii) One
Valley may revoke such notice of surrender by delivery of a notice of revocation
to FFVA Financial and, upon delivery of such notice revocation, the Fee
Termination Date shall be extended to a date six months from the date on which
the Fee Termination Date would have occurred if not for the provisions of this
Section 13(b)(iii) (during which period One Valley may exercise any of its
rights hereunder, including any and all rights pursuant to this Section 13(b)).
IN WITNESS WHEREOF, FFVA Financial and One Valley have caused this
Stock Option Agreement to be signed by their respective officers thereunto duly
authorized, all as of the day and year first written above.
ONE VALLEY BANCORP, INC.
By______________________________
Its President and CEO
FFVA Financial Corporation
By______________________________
Its President and CEO
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ANNEX A
REGISTRATION RIGHTS
(1) DEMAND REGISTRATION RIGHTS. FFVA Financial shall, subject to the
conditions of Section (3) below, if requested by One Valley (or, if applicable,
a Grantee Majority), as expeditiously as possible prepare and file a
registration statement under the Securities Act if such registration is
necessary in order to permit the sale or other disposition of any or all shares
of FFVA Financial Common Stock or other securities that have been acquired by or
are issuable to One Valley upon exercise of the Option in accordance with the
intended method of sale or other disposition stated by One Valley in such
request, including without limitation a "shelf" registration statement under
Rule 415 under the Securities Act or any successor provision, and FFVA Financial
shall use its best efforts to qualify such shares or other securities for sale
under any applicable state securities laws.
(2) ADDITIONAL REGISTRATION RIGHTS. If FFVA Financial at any time after
the exercise of the Option proposes to register any shares of FFVA Financial
Common Stock under the Securities Act in connection with an underwritten public
offering of such FFVA Financial Common Stock, FFVA Financial promptly will give
written notice to One Valley (and any permitted transferee) of its intention to
do so and, upon the written request of One Valley (or any such permitted
transferee of One Valley) given within 30 days after receipt of any such notice
(which request shall specify the number of shares of FFVA Financial Common Stock
intended to be included in such underwritten public offering by One Valley (or
such permitted transferee)), FFVA Financial will cause all such specified
shares, the holders of which shall have requested participation in such
registration, to be so registered and included in such underwritten public
offering; provided, however, that FFVA Financial may elect to not cause any such
shares to be so registered (i) if the underwriters in good faith object for
valid business reasons, or (ii) in the case of a registration solely to
implement an employee benefit plan or a registration filed on Form S-4;
provided, further, however, that such election pursuant to (i) may only be made
one time. If some but not all the shares of FFVA Financial Common Stock, with
respect to which FFVA Financial shall have received requests for registration
pursuant to this section (2), shall be excluded from such registration, FFVA
Financial shall make appropriate allocation of shares to be registered among One
Valley and any such permitted transferee desiring to register their shares pro
rata in the proportion that the number of shares requested to be registered by
each such holder bears to the total number of shares requested to be registered
by all such holders then desiring to have FFVA Financial Common Stock registered
for sale.
(3) CONDITIONS TO REQUIRED REGISTRATION. FFVA Financial shall use all
reasonable efforts to cause each registration statement referred to in Section
(1) above to become effective and to obtain all consents or waivers of other
parties which are required therefor and to keep such registration statement
effective; provided, however, that FFVA Financial may delay any registration of
Option Shares required pursuant to Section (1) above for a period not exceeding
90 days provided FFVA Financial shall in good faith determine that any such
registration would adversely affect an offering or contemplated offering of
other securities by FFVA Financial. FFVA Financial shall not be required to
register Option Shares under the Securities Act pursuant to Section (1) above:
(i) on more than two occasions;
(ii) more than once during any calendar year;
(iii) within 90 days after the effective date of a
registration referred to in Section 2 above pursuant to which the holder or
holders of the Option Shares concerned were afforded the opportunity to register
such shares under the Securities Act and such shares were registered as
requested; and
(iv) unless a request therefor is made to FFVA Financial
by the holder or holders of at least 25% or more of the aggregate number of
Option Shares then outstanding.
In addition to the foregoing, FFVA Financial shall not be required to
maintain the effectiveness of any registration statement after the expiration of
nine months from the effective date of such registration statement. FFVA
Financial shall use all reasonable efforts to make any filings, and take all
steps, under all applicable state securities laws to the extent necessary to
permit the sale or other disposition of the Option Shares so registered in
accordance with the intended method of distribution for such shares; provided,
however, that FFVA Financial shall not be required to consent to general
jurisdiction or qualify to do business in any state where it is not otherwise
required to so consent to such jurisdiction or to so qualify to do business.
(4) EXPENSES. Except where applicable state law prohibits such
payments, FFVA Financial will pay all expenses (including without limitation
registration fees, qualification fees, blue sky fees and expenses (including the
fees and expenses of counsel), legal expenses including the reasonable fees and
expenses of one counsel to the holders whose Option Shares are being registered,
printing expenses and the costs of special audits or "cold comfort" letters,
expenses of underwriters, excluding discounts and commissions but including
liability insurance if FFVA Financial so desires or the underwriters so require,
and the reasonable fees and expenses of any necessary
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special experts) in connection with each registration pursuant to Section (1) or
(2) above (including the related offerings and sales by holders of Option
Shares) and all other qualifications, notifications or exemptions pursuant to
Section (1) or (2) above.
(5) INDEMNIFICATION. In connection with any registration under Section
(1) or (2) above, FFVA Financial hereby indemnifies the holder of the Option
Shares, and each underwriter thereof, including each person, if any, who
controls such holder or underwriter within the meaning of Section 15 of the
Securities Act, against all expenses, losses, claims, damages and liabilities
caused by any untrue, or alleged untrue, statement of a material fact contained
in any registration statement or prospectus or notification or offering circular
(including any amendments or supplements thereto) or any preliminary prospectus,
or caused by any omission, or alleged omission, to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such expenses, losses, claims, damages or
liabilities of such indemnified party are caused by any untrue statement or
alleged untrue statement that was included by FFVA Financial in any such
registration statement or prospectus or notification or offering circular
(including any amendments or supplements thereto) in reliance upon and in
conformity with, information furnished in writing to FFVA Financial by such
indemnified party expressly for use therein, and FFVA Financial and each
officer, director and controlling person of FFVA Financial shall be indemnified
by such holder of the Option Shares, or by such underwriter, as the case may be,
for all such expenses, losses, claims, damages and liabilities caused by any
untrue, or alleged untrue, statement that was included by FFVA Financial in any
such registration statement or prospectus or notification or offering circular
(including any amendments or supplements thereto) in reliance upon, and in
conformity with, information furnished in writing to FFVA Financial by such
holder or such underwriter, as the case may be, expressly for such use.
Promptly upon receipt by a party indemnified under this Section (5) of
notice of the commencement of any action against such indemnified party in
respect of which indemnity or reimbursement may be sought against any
indemnifying party under this Section (5), such indemnified party shall notify
the indemnifying party in writing of the commencement of such action, but the
failure so to notify the indemnifying party shall not relieve it of any
liability which it may otherwise have to any indemnified party under this
Section (5). In the event that notice of commencement of any such action shall
be given to the indemnifying party as above provided, the indemnifying party
shall be entitled to participate in and, to the extent it may wish, jointly with
any other indemnifying party similarly notified, to assume the defense of such
action at its own expense, with counsel chosen by it and satisfactory to such
indemnified party. The indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel (other than reasonable costs of investigation)
shall be paid by the indemnified party unless (i) the indemnifying party either
agrees to pay the same, (ii) the indemnifying party fails to assume the defense
of such action with counsel satisfactory to the indemnified party, or (iii) the
indemnified party has been advised by counsel that one or more legal defenses
may be available to the indemnifying party that may be contrary to the interest
of the indemnified party, in which case the indemnifying party shall be entitled
to assume the defense of such action notwithstanding its obligation to bear fees
and expenses of such counsel. No indemnifying party shall be liable for any
settlement entered into without its consent, which consent may not be
unreasonably withheld.
If the indemnification provided for in this Section (5) is unavailable
to a party otherwise entitled to be indemnified in respect of any expenses,
losses, claims, damages or liabilities referred to herein, then the indemnifying
party, in lieu of indemnifying such party otherwise entitled to be indemnified,
shall contribute to the amount paid or payable by such party to be indemnified
as a result of such expenses, losses, claims, damages or liabilities in such
proportion as is appropriate to reflect the relative benefits received by FFVA
Financial, the selling shareholders and the underwriters from the offering of
the securities and also the relative fault of FFVA Financial, the selling
shareholders and the underwriters in connection with the statements or omissions
which resulted in such expenses, losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The amount paid or payable by a
party as a result of the expenses, losses, claims, damages and liabilities
referred to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any action or claim; provided, however, that in no case shall One Valley or any
of its subsidiaries or affiliates be responsible, in the aggregate, for any
amount in excess of the net offering proceeds attributable to its Option Shares
included in the offering. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. Any obligation by any holder to indemnify shall be several
and not joint with other holders.
In connection with any registration pursuant to Section (1) or (2)
above, FFVA Financial and each holder of any Option Shares (other than One
Valley) shall enter into an agreement containing the indemnification provisions
of this Section (5).
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(6) MISCELLANEOUS REPORTING. FFVA Financial shall comply with all
reporting requirements and will do all such other things as may be necessary to
permit the expeditious sale at any time of any Option Shares by the holder
thereof in accordance with and to the extent permitted by any rule or regulation
promulgated by the SEC from time to time, including, without limitation, Rule
144A. FFVA Financial shall at its expense provide the holder of any Option
Shares with any information necessary in connection with the completion and
filing of any reports or forms required to be filed by them under the Securities
Act or the Exchange Act, or required pursuant to any state securities laws or
the rules of any stock exchange.
(7) ISSUE TAXES. FFVA Financial will pay all stamp taxes in connection
with the issuance and the sale of the Option Shares and in connection with the
exercise of the Option, and will save One Valley harmless, without limitation as
to time, against any and all liabilities, with respect to all such taxes.
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EXHIBIT B
[DATE]
One Valley Bancorp, Inc.
One Valley Square
P.O. Box 1793
Charleston, WV 25326
ATTN: General Counsel
Ladies and Gentlemen:
I have been advised that I might be considered an "affiliate" of FFVA
Financial Corporation ("FFVA Financial"), for purposes of paragraphs (c) and (d)
of Rule 145 of the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "Act"), and as such term relates to
pooling of interests accounting treatment for certain business combinations
under generally accepted accounting principles and the interpretation of the SEC
or its staff, including, without limitation, Section 201.01 of the SEC's
Codification of Financial Reporting Policies and the SEC's Staff Accounting
Bulletin No. 65.
One Valley Bancorp, Inc. ("One Valley"), and FFVA Financial have
entered into an "Agreement and Plan of Merger", dated as of the 16th day of
December, 1997 (the "Merger Agreement"). Upon consummation of the transaction
contemplated by the Merger Agreement (the "Merger"), I will receive shares of
the Common Stock, par value $10.00 per share ("One Valley Common Stock"), of One
Valley, plus cash in lieu of fractional shares, for all shares of Common Stock,
par value $.10 per share ("FFVA Financial Common Stock"), of FFVA Financial that
I own or as to which I may have an interest. I understand that One Valley and
FFVA Financial will consummate the Merger in reliance on my entering into the
agreement set forth in this letter (the "Letter Agreement").
A. I represent and warrant to, and agree with, One Valley that:
1. I have read this Letter Agreement and the Merger Agreement and, to
the extent I have felt necessary, have discussed with my counsel or the counsel
to FFVA Financial the requirements of such agreements and other applicable
limitations upon my ability to sell, pledge, transfer or otherwise dispose of
any shares of FFVA Financial Common Stock or One Valley Common Stock.
2. I shall not make any offer, sale, pledge, transfer or other
disposition in violation of the Act or the rules or regulations of the SEC under
the Act of the shares of One Valley Common Stock I receive pursuant to the
Merger.
3. Notwithstanding the foregoing and any other agreements to which I am
a party relating to any shares of FFVA Financial Common Stock or One Valley
Common Stock, I hereby agree that I will not sell or otherwise reduce my risk
relative to any shares of FFVA Financial Common Stock or One Valley Common Stock
during the period commencing on the date of this Letter Agreement and ending on
the date that financial results covering at least thirty days of combined
operations of One Valley and FFVA Financial are published following the
effective date of the Merger.
B. I understand and agree that:
1. I have been advised that any issuance of shares of One Valley Common
Stock to me pursuant to the Merger has been registered with the SEC. However, I
have also been advised that, since I may be or have been an "affiliate" of FFVA
Financial at the time the Merger will be or was submitted for a vote of the
stockholders of FFVA Financial and my disposition of shares has not been
registered under the Act, I must hold such shares indefinitely unless (i) such
disposition of shares is subject to an effective registration statement under
the Act, (ii) a sale of such shares is made in conformity with the provisions of
Rule 145(d) under the Act or (iii) in an opinion of counsel, in form and
substance reasonably satisfactory to One Valley, some other exemption from
registration is available with respect to any such proposed disposition of such
shares.
2. Stop transfer instructions in accordance with this Letter Agreement
will be given to the transfer agents of One Valley and FFVA Financial with
respect to the FFVA Financial Common Stock and One Valley Common Stock in
connection with the restrictions set forth herein, and there will be placed on
the certificate or certificates representing shares of One Valley Common Stock I
receive pursuant to the Merger, or any certificates delivered in substitution
therefor, a legend stating in substance:
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The shares represented by this certificate were issued in a transaction
to which Rule 145 under the Securities Act of 1933 applies. The shares
represented by this certificate may be transferred only in accordance with the
terms of an agreement between the registered holder hereof and One Valley
Bancorp, Inc., a copy of which agreement is on file at the principal offices of
One Valley Bancorp, Inc.
It is understood and agreed that this Letter Agreement shall terminate
and be of no further force and effect if the Merger Agreement is terminated
pursuant to its terms. It is also understood and agreed that this Letter
Agreement shall terminate and be of no further force and effect with respect to
One Valley Common Stock (and the legends and stock transfer restrictions
provided for herein shall be removed), immediately as of the later of (i) such
time as financial results covering at least thirty days of combined operations
following the effective date of the Merger have been published, and (ii)
delivery by the undersigned to One Valley of a copy of a letter from the staff
of the SEC, an opinion of counsel in form and substance reasonably satisfactory
to One Valley, or other evidence reasonably satisfactory to One Valley, to the
effect that my transfer of my shares of One Valley Common Stock will not violate
the Act or any of the rules and regulations of the SEC under the Act.
The Letter Agreement shall be binding on my heirs, legal
representatives and successors.
Very Truly Yours,
(name of affiliate)
Agreed to this day of
_______________, 199__
ONE VALLEY BANCORP, INC.
By:_____________________
Its:____________________
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