SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
October 22, 1995
Date of Report (date of earliest event reported)
FIRST NATIONAL BANCORP
(exact name of registrant as specified in its charter)
Georgia 0-10657 58-1415138
(state or other (Commission (IRS Employer
jurisdiction of File No.) Identification
of incorporation) Number)
303 Jesse Jewell Parkway, Suite 700, Gainesville, Georgia 30501
(address of principal executive office)(zip code)
(770) 503-2000
(Registrant's telephone number, including area code)
No Change
(Former name or address, if changed since last report)
<PAGE>
Item 5. OTHER EVENTS
On October 22, 1995, Regions Financial Corporation ("Regions")
and First National Bancorp ("First National") entered into an
Agreement and Plan of Reorganization (the "Agreement"), pursuant to
which First National will be acquired by Regions. The Boards of
Directors of Regions and First National approved the Agreement and
the transactions contemplated thereby at separate meetings held on
October 22, 1995.
In accordance with the terms of the Agreement, Regions will
acquire First National pursuant to a merger (the "Merger") of First
National with and into a newly created wholly owned subsidiary of
Regions to be organized under the laws of the State of Georgia
("Regions Merger Subsidiary"), with Regions Merger Subsidiary as
the surviving entity resulting from the Merger.
Upon consummation of the Merger, each share of the $1.00 par
value common stock of First National ("First National Common
Stock") (excluding shares held by any First National company or by
any Regions company, in each case other than in a fiduciary
capacity or as a result of debts previously contracted) issued and
outstanding at the effective time of the Merger (as described in
the Agreement, the "Effective Time") shall be converted into and
exchanged for .76 of a share (the "Exchange Ratio") of the $.625
par value common stock of Regions ("Regions Common Stock").
In addition, at the Effective Time, all rights with respect to
First National Common Stock, pursuant to stock options, stock
appreciation rights, or stock awards granted by First National
under the existing stock loans of First National, which are
outstanding at the Effective Time, whether or not exercisable,
shall be converted into and become rights with respect to Regions
("Regions Common Stock").
In addition, at the Effective Time, all rights with respect to
First National Common Stock, pursuant to stock options, stock
appreciation rights, or stock awards granted by First National
under the existing stock plans of First National, which are
outstanding at the Effective Time, whether or not exercisable,
shall be converted into and become rights with respect to Regions
Common Stock on a basis that reflects the Exchange Ratio.
The Merger is intended to constitute a tax-free transaction
under the Internal Revenue Code of 1986, as amended, and be
accounted for as a pooling of interests.
In connection with executing the Agreement, Regions and First
National entered into a stock option agreement (the "Stock Option
Agreement") pursuant to which First National granted to Regions an
option to purchase up to 4,089,234 shares of First National Common
Stock, at a purchase price of $27.00 per share, upon certain terms
and in accordance with certain conditions.
Consummation of the Merger is subject to various conditions,
including: (i) receipt of the approval by the stockholders of First
National of appropriate matters relating to the Agreement, the Plan
of Merger, and the Merger required to be approved under applicable
law; (ii) receipt of the approval by the stockholders of Regions of
the issuance of shares of Regions Common Stock pursuant to the
Merger as required to be approved under applicable law; (iii)
receipt of certain regulatory approvals from the Board of Governors
of the Federal Reserve System, the Office of Thrift Supervision,
the Georgia Department of Banking and Finance, and the Florida
Department of Banking and Finance and other applicable regulatory
authorities; (iv) receipt of an opinion of counsel as to the tax-
free nature of certain aspects of the Merger; (v) receipt by
Regions of a letter from Ernst & Young LLP to the effect that the
Merger will qualify for pooling-of-interests accounting treatment;
and (vi) satisfaction of certain conditions. The Merger is also
subject to a ten-day due diligence review by Regions of First
National's operations.
Under the Agreement, First National has the right to terminate
the Agreement if the Average Closing Price (as defined below) of
Regions Common Stock (i) is less than $33.20 and (ii) reflects a
decline of more than 20% below a weighted index of the stock prices
of a group of 20 bank holding companies designated in the
Agreement. In the event that First National gives notice of its
intention to terminate the Agreement based on such provision,
Regions has the right to elect to adjust the Exchange Ratio in
accordance with the terms of the Agreement, and, thereby remove
First National's right to terminate.
For purposes of the Agreement, the Average Closing price shall
mean the average of the daily last sales prices of Regions Common
Stock as reported on the NASDAQ NMS (as reported by The Wall Street
Journal or, if not reported thereby, another authoritative source
as chosen by Regions) for the ten consecutive full trading days in
which such shares are traded on the NASDAQ NMS ending at the close
of trading on the Determination Date. The Determination Date shall
mean the date on which the consent of the Board of Governors of the
Federal Reserve System to the Merger is received.
The Agreement, the Plan of Merger, and the Merger will be
submitted for approval at a meeting of the stockholders of First
National. Similarly, the issuance of shares of Regions Common
Stock pursuant to the Merger will be submitted for approval at a
meeting of the stockholders of Regions. Prior to either
stockholders meeting, Regions will file a registration statement
with the Securities and Exchange Commission registering under the
Securities Act of 1933, as amended, the shares of Regions Common
Stock to be issued in exchange for the outstanding shares of First
National Common Stock. Such shares of stock of Regions will be
offered to the First National stockholders pursuant to a prospectus
that will also serve as a joint proxy statement for the separate
meetings of the stockholders of First National and Regions,
respectively.
In connection with announcing the Merger, Regions announced
that Regions and First National intend to repurchase up to
approximately 1.9 million shares of First National Common Stock or
up to approximately 1.4 million shares of Regions Common Stock, or
a combination of the two.
For additional information regarding the Agreement and the
Stock Option Agreement, please refer to the copies of those
documents which are incorporated herein by reference and included
as Exhibits to this Current Report on Form 8-K. The foregoing
discussion is qualified in its entirety by reference to such
documents.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned hereunto duly authorized.
FIRST NATIONAL BANCORP
(Registrant)
By:/s/C. Talmadge Garrison
C. Talmadge Garrison
Senior Vice President
Secretary & Treasurer
Date: October 25, 1995
<PAGE>
INDEX TO EXHIBITS
Sequential
Exhibit Page No.
2.1 Agreement and Plan of Reorganization,
dated as of October 22, 1995, by and
between Regions Financial Corporation
and First National Bancorp. . . . . . . . . .
2.2 Stock Option Agreement, dated as of
October 22, 1995, issued by First National
Bancorp to Regions Financial Corporation . . .
<PAGE>
EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
BY AND BETWEEN
FIRST NATIONAL BANCORP
AND
REGIONS FINANCIAL CORPORATION
Dated as of October 22, 1995
<PAGE>
TABLE OF CONTENTS
Page
Page 1
Preamble 1
ARTICLE I - TRANSACTIONS AND TERMS OF MERGER 2
1.1 Merger 2
1.2 Time and Place of Closing 2
1.3 Effective Time 2
1.4 Execution of Stock Option Agreement 2
ARTICLE 2 - TERMS OF MERGER 2
2.1 Charter 2
2.2 Bylaws 3
ARTICLE 3 - MANNER OF CONVERTING SHARES 3
3.1 Conversion of Shares 3
3.2 Anti-Dilution Provisions 3
3.3 Shares Held by First National or Regions 3
3.4 Fractional Shares 3
3.5 Conversion of Stock Rights 4
ARTICLE 4 - EXCHANGE OF SHARES 5
4.1 Exchange Procedures 5
4.2 Rights of Former First National Stockholders 6
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF FIRST
NATIONAL 7
5.1 Organization, Standing, and Power 7
5.2 Authority; No Breach By Agreement 7
5.3 Capital Stock 8
5.4 First National Subsidiaries 8
5.5 SEC Filings; Financial Statements 9
5.6 Absence of Undisclosed Liabilities 9
5.7 Absence of Certain Changes or Events 10
5.8 Tax Matters 10
5.9 Assets 11
5.10 Environmental Matters 12
5.11 Compliance with Laws 12
5.12 Labor Relations 13
5.13 Employee Benefit Plans 13
5.14 Material Contracts 15
5.15 Legal Proceedings 16
5.16 Reports 16
5.17 Statements True and Correct 16
5.18 Accounting, Tax, and Regulatory Matters 17
5.19 State Takeover Laws 17
5.20 Charter Provisions 17
5.21 Derivatives Contracts 17
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF REGIONS 17
6.1 Organization, Standing, and Power 17
6.2 Authority; No Breach By Agreement 18
6.3 Capital Stock 18
6.4 Regions Subsidiaries 19
6.5 SEC Filings; Financial Statements 19
6.6 Absence of Undisclosed Liabilities 20
6.7 Absence of Certain Changes or Events 20
6.8 Tax Matters 20
6.9 Environmental Matters 21
6.10 Compliance with Laws 21
6.11 Legal Proceedings 22
6.12 Reports 22
6.13 Statements True and Correct 23
6.14 Accounting, Tax, and Regulatory Matters 23
ARTICLE 7 - CONDUCT OF BUSINESS PENDING CONSUMMATION 23
7.1 Affirmative Covenants of First National 23
7.2 Negative Covenants of First National 24
7.3 Covenants of Regions 26
7.4 Adverse Changes in Condition 26
7.5 Reports 26
ARTICLE 8 - ADDITIONAL AGREEMENTS 27
8.1 Registration Statement; Proxy Statement;
Stockholder Approvals 27
8.2 Exchange Listing 27
8.3 Applications 27
8.4 Filings with State Offices 28
8.5 Agreement as to Efforts to Consummate 28
8.6 Investigation and Confidentiality 28
8.7 Press Releases 29
8.8 Certain Actions 29
8.9 Accounting and Tax Treatment 29
8.10 State Takeover Laws 29
8.11 Charter Provisions 29
8.12 Agreement of Affiliates 29
8.13 Employee Benefits and Contracts 30
8.14 Indemnification 31
8.15 Certain Modifications 31
8.16 Regions Merger Subsidiary Organization 31
ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO
CONSUMMATE 32
9.1 Conditions to Obligations of Each Party 32
9.2 Conditions to Obligations of Regions 32
9.3 Conditions to Obligations of First National 34
ARTICLE 10 - TERMINATION 35
10.1 Termination 35
10.2 Effect of Termination 38
10.3 Non-Survival of Representations and Covenants 39
ARTICLE 11 - MISCELLANEOUS 39
11.1 Definitions 39
11.2 Expenses 47
11.3 Brokers and Finders 47
11.4 Entire Agreement 48
11.5 Amendments 48
11.6 Waivers 48
11.7 Assignment 49
11.8 Notices 49
11.9 Governing Law 50
11.10 Counterparts 50
11.11 Captions 50
11.12 Interpretations 50
11.13 Enforcement of Agreement 50
11.14 Severability 51
Signatures 51
<PAGE>
LIST OF EXHIBITS
Exhibit Number Description
1. Form of Stock Option Agreement. (Section 1-4).
2. Form of Plan of Merger. (Section 1. 1).
3. Form of Affiliate Agreement. (Sections 8.13, 9.2(e)).
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement")
is made and entered into as of October 22, 1995, by and between
FIRST NATIONAL BANCORP ("First National"), a corporation organized
and existing under the laws of the State of Georgia, with its
principal office located in Gainesville, Georgia; and REGIONS
FINANCIAL CORPORATION ("Regions"), a corporation organized and
existing under the laws of the State of Delaware, with its
principal office located in Birmingham, Alabama.
Preamble
The Boards of Directors of First National and Regions are of
the opinion that the transactions described herein are in the best
interests of the parties to this Agreement and their respective
stockholders. This Agreement provides for the acquisition of First
National by Regions pursuant to the merger of First National with
and into a wholly owned subsidiary of Regions to be organized under
the laws of the State of Georgia ("Regions Merger Subsidiary"). At
the effective time of such merger, the outstanding shares of the
capital stock of First National shall be converted into shares of
the common stock of Regions (except as provided herein). As a
result, stockholders of First National shall become stockholders of
Regions and Regions Merger Subsidiary shall continue to conduct the
business and operations of First National as a wholly owned
subsidiary of Regions. The transactions described in this
Agreement are subject to the approvals of the stockholders of First
National, the stockholders of Regions, the Board of Governors of
the Federal Reserve System, the Office of Thrift Supervision, the
Georgia Department of Banking and Finance, and the Florida
Department of Banking and Finance, and the satisfaction of certain
other conditions described in this Agreement. It is the intention
of the parties to this Agreement that the Merger for federal income
tax purposes shall qualify as a "reorganization" within the meaning
of Section 368(a) of the Internal Revenue Code, and for accounting
purposes shall qualify for treatment as a pooling of interests.
Immediately after the execution and delivery of this
Agreement, as a condition and inducement to Regions' willingness to
enter into this Agreement, First National and Regions are entering
into a stock option agreement (the "Stock Option Agreement"), in
substantially the form of Exhibit 1, pursuant to which First
National is granting to Regions an option to purchase shares of
First National common stock.
Certain terms used in this Agreement are defined in Section
11.1 of this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth
herein, the Parties agree as follows:
ARTICLE I
TRANSACTIONS AND TERMS OF MERGER
1.1 Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time, First National shall be merged
with and into Regions Merger Subsidiary in accordance with the
provisions of Section 14-2-1 101 of the GBCC and with the effect
provided in Section 14-2-1106 of the GBCC (the "Merger"). Regions
Merger Subsidiary shall be the Surviving Corporation resulting from
the Merger and shall continue to be governed by the Laws of the
State of Georgia. The Merger shall be consummated pursuant to the
terms of this Agreement, which has been approved and adopted by the
respective Boards of Directors of First National and Regions, and
the Plan of Merger, in substantially the form of Exhibit 2, which
has been approved and adopted by the Board of Directors of First
National and will be approved and adopted by the Board of Directors
of Regions Merger Subsidiary upon its organization.
1.2 Time and Place of Closing. The Closing will take place
at 9:00 A.M. on the date that the Effective Time occurs (or the
immediately preceding day if the Effective Time is earlier than
9:00 A.M.), or at such other time as the Parties, acting through
their chief executive officers or chief financial officers, may
mutually agree. The place of Closing shall be at such location as
may be mutually agreed upon by the Parties.
1.3 Effective Time. The Merger and other transactions
contemplated by this Agreement shall become effective on the date
and at the time the Georgia Certificate of Merger reflecting the
Merger shall become effective with the Secretary of State of the
State of Georgia (the "Effective Time"). Subject to the terms and
conditions hereof, unless otherwise mutually agreed upon in writing
by the chief executive officers or chief financial officers of each
Party, the Parties shall use their reasonable efforts to cause the
Effective Time to occur on or before the tenth business day (as
designated by Regions) following the last to occur of (i) the
effective date (including expiration of any applicable waiting
period) of the last required Consent of any Regulatory Authority
having authority over and approving or exempting the Merger, and
(ii) the date on which the stockholders of Regions and First
National approve the matters relating to this Agreement and the
Plan of Merger required to be approved by such stockholders by
applicable Law.
1.4 Execution of Stock Option Agreement. Immediately after
the execution of this Agreement and as a condition thereto, First
National is executing and delivering to Regions the Stock Option
Agreement.
<PAGE>
ARTICLE 2
TERMS OF MERGER
2.1 Charter. The Articles of Incorporation of Regions
Merger Subsidiary in effect immediately prior to the Effective Time
shall be the Articles of Incorporation of the Surviving Corporation
until otherwise amended or repealed.
2.2 Bylaws. The Bylaws of Regions Merger Subsidiary in
effect immediately prior to the Effective Time shall be the Bylaws
of the Surviving Corporation until otherwise amended or repealed.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 Conversion of Shares. Subject to the provisions of
this Article 3, at the Effective Time, by virtue of the Merger and
without any action on the part of Regions or First National, or the
stockholders of either of the foregoing, the shares of the
constituent corporations shall be converted as follows:
(a) Each share of Regions Common Stock issued and
outstanding immediately prior to the Effective Time shall
remain issued and outstanding from and after the Effective
Time.
(b) Each share of Regions Merger Subsidiary Common
Stock issued and outstanding immediately prior to the
Effective Time shall remain issued and outstanding from and
after the Effective Time.
(c) Each share of First National Common Stock
(excluding shares held by any First National Company or any
Regions Company, in each case other than in a fiduciary
capacity or as a result of debts previously contracted) issued
and outstanding at the Effective Time shall cease to be
outstanding and shall be converted into and exchanged for .76
of a share of Regions Common Stock (subject to adjustment
pursuant to Section 10.1(h) of this Agreement, the "Exchange
Ratio").
3.2 Anti-Dilution Provisions. In the event Regions changes
the number of shares of Regions Common Stock issued and outstanding
prior to the Effective Time as a result of a stock split, stock
dividend, or similar recapitalization with respect to such stock
and the record date therefor (in the case of a stock dividend) or
the effective date thereof (in the case of a stock split or similar
recapitalization for which a record date is not established) shall
be prior to the Effective Time, the Exchange Ratio shall be
proportionately adjusted.
3.3 Shares Held by First National or Regions. Each of the
shares of First National Common Stock held by any First National
Company or by any Regions Company, in each case other than in a
fiduciary capacity or as a result of debts previously contracted,
shall be canceled and retired at the Effective Time and no
consideration shall be issued in exchange therefor.
3.4 Fractional Shares. Notwithstanding any other provision
of this Agreement, each holder of shares of First National Common
Stock exchanged pursuant to the Merger who would otherwise have
been entitled to receive a fraction of a share of Regions Common
Stock (after taking into account all certificates delivered by such
holder) shall receive, in lieu thereof, cash (without interest) in
an amount equal to such fractional part of a share of Regions
Common Stock multiplied by the market value of one share of Regions
Common Stock at the Effective Time. The market value of one share
of Regions Common Stock at the Effective Time shall be the closing
price of such common stock on the NASDAQ NMS (as reported by The
Wall Street Journal or, if not reported thereby, any other
authoritative source selected by Regions) on the last trading day
preceding the Effective Time. No such holder will be entitled to
dividends, voting rights, or any other rights as a stockholder in
respect of any fractional shares.
3.5 Conversion of Stock Rights.
(a) At the Effective Time, each award, option, or other
right to purchase or acquire shares of First National Common Stock
pursuant to stock options, stock appreciation rights, or stock
awards ("First National Rights") granted by First National under
the First National Stock Plans, which are outstanding at the
Effective Time, whether or not exercisable, shall be converted into
and become rights with respect to Regions Common Stock, and Regions
shall assume each First National Right, in accordance with the
terms of the First National Stock Plan and stock option agreement
by which it is evidenced, except that from and after the Effective
Time, (i) Regions and its Compensation Committee shall be
substituted for First National and the Committee of First
National's Board of Directors (including, if applicable, the entire
Board of Directors of First National) administering such First
National Stock Plan, (ii) each First National Right assumed by
Regions may be exercised solely for shares of Regions Common Stock
(or cash in the case of stock appreciation rights), (iii) the
number of shares of Regions Common Stock subject to such First
National Right shall be equal to the number of shares of First
National Common Stock subject to such First National Right
immediately prior to the Effective Time multiplied by the Exchange
Ratio, and (iv) the per share exercise price (or similar threshold
price, in the case of stock awards) under each such First National
Right shall be adjusted by dividing the per share exercise (or
threshold) price under each such First National Right by the
Exchange Ratio and rounding up to the nearest cent.
Notwithstanding the provisions of clause (iii) of the preceding
sentence, Regions shall not be obligated to issue any fraction of
a share of Regions Common Stock upon exercise of First National
Rights and any fraction of a share of Regions Common Stock that
otherwise would be subject to a converted First National Right
shall represent the right to receive a cash payment equal to the
product of such fraction and the difference between the market
value of one share of Regions Common Stock and the per share
exercise price of such Right. The market value of one share of
Regions Common Stock shall be the closing price of such common
stock on the Nasdaq NMS (as reported by The Wall Street Journal or,
if not reported thereby, any other authoritative source selected by
Regions) on the last trading day preceding the Effective Time. In
addition, notwithstanding the provisions of clauses (iii) and (iv)
of the first sentence of this Section 3.5, each First National
Right which is an "incentive stock option" shall be adjusted as
required by Section 424 of the Internal Revenue Code, and the
regulations promulgated thereunder, so as not to constitute a
modification, extension, or renewal of the option, within the
meaning of Section 424(h) of the Internal Revenue Code. Regions
agrees to take all necessary steps to effectuate the foregoing
provisions of this Section 3.5.
(b) As soon as reasonably practicable after the Effective
Time, Regions shall deliver to the participants in each First
National Stock Plan an appropriate notice setting forth such
participant's rights pursuant thereto and the grants pursuant to
such First National Stock Plan shall continue in effect on the same
terms and conditions (subject to the adjustments required by
Section 3.5(a) after giving effect to the Merger), and Regions
shall comply with the terms of each First National Stock Plan to
ensure, to the extent required by, and subject to the provisions
of, such First National Stock Plan, that First National Rights
which qualified as incentive stock options prior to the Effective
Time continue to qualify as incentive stock options after the
Effective Time. At or prior to the Effective Time, Regions shall
take all corporate action necessary to reserve for issuance
sufficient shares of Regions Common Stock for delivery upon
exercise of First National Rights assumed by it in accordance with
this Section 3.5. As soon as reasonably practicable after the
Effective Time, Regions shall file a registration statement on Form
S-3 or Form S-8, as the case may be (or any successor or other
appropriate forms), with respect to the shares of Regions Common
Stock subject to such options and shall use its reasonable efforts
to maintain the effectiveness of such registration statements (and
maintain the current status of the prospectus or prospectuses
contained therein) for so long as such options remain outstanding.
With respect to those individuals who subsequent to the Merger will
be subject to the reporting requirements under Section 16(a) of the
Exchange Act, where applicable, Regions shall administer the First
National Stock Plan assumed pursuant to this Section 3.5 in a
manner that complies with Rule 16b-3 promulgated under the Exchange
Act to the extent the First National Stock Plan complied with such
rule prior to the Merger.
(c) All restrictions or limitations on transfer with
respect to First National Common Stock awarded under the First
National Stock Plans or any other plan, program, or arrangement of
any First National Company, to the extent that such restrictions or
limitations shall not have already lapsed, and except as otherwise
expressly provided in such plan, program, or arrangement, shall
remain in full force and effect with respect to shares of Regions
Common Stock into which such restricted stock is converted pursuant
to Section 3.1 of this Agreement,
ARTICLE 4
EXCHANGE OF SHARES
4.1 Exchanging Procedures. Promptly after the Effective
Time, Regions and First National shall cause the exchange agent
selected by Regions (the "Exchange Agent") to mail to the former
stockholders of First National appropriate transmittal materials
(which shall specify that delivery shall be effected, and risk of
loss and title to the certificates theretofore representing shares
of First National Common Stock shall pass, only upon proper
delivery of such certificates to the Exchange Agent). After the
Effective Time, each holder of shares of First National Common
Stock (other than shares to be canceled pursuant to Section 3.3 of
this Agreement) issued and outstanding at the Effective Time shall
surrender the certificate or certificates representing such shares
to the Exchange Agent and shall promptly upon surrender thereof
receive in exchange therefor the consideration provided in Section
3.1 of this Agreement, together with all undelivered dividends or
distributions in respect of such shares (without interest thereon)
pursuant to Section 4.2 of this Agreement. To the extent required
by Section 3.4 of this Agreement, each holder of shares of First
National Common Stock issued and outstanding at the Effective Time
also shall receive, upon surrender of the certificate or
certificates representing such shares, cash in lieu of any
fractional share of Regions Common Stock to which such holder may
be otherwise entitled (without interest). Regions shall not be
obligated to deliver the consideration to which any former holder
of First National Common Stock is entitled as a result of the
Merger until such holder surrenders such holder's certificate or
certificates representing the shares of First National Common Stock
for exchange as provided in this Section 4. 1. The certificate or
certificates of First National Common Stock so surrendered shall be
duly endorsed as the Exchange Agent may require. Any other
provision of this Agreement notwithstanding, neither the Surviving
Corporation nor the Exchange Agent shall be liable to a holder of
First National Common Stock for any amounts paid or property
delivered in good faith to a public official pursuant to any
applicable abandoned property Law.
4.2 Rights of Former First National Stockholders. At the
Effective Time, the stock transfer books of First National shall be
closed as to holders of First National Common Stock immediately
prior to the Effective Time and no transfer of First National
Common Stock by any such holder shall thereafter be made or
recognized. Until surrendered for exchange in accordance with the
provisions of Section 4.1 of this Agreement, each certificate
theretofore representing shares of First National Common Stock
(other than shares to be canceled pursuant to Section 3.3 of this
Agreement) shall from and after the Effective Time represent for
all purposes only the right to receive the consideration provided
in Sections 3.1 and 3.4 of this Agreement in exchange therefor,
subject, however, to the Surviving Corporation's obligation to pay
any dividends or make any other distributions with a record date
prior to the Effective Time which have been declared or made by
First National in respect of such shares of First National Common
Stock in accordance with the terms of this Agreement and which
remain unpaid at the Effective Time. To the extent permitted by
Law, former stockholders of record of First National shall be
entitled to vote after the Effective Time at any meeting of Regions
stockholders the number of whole shares of Regions Common Stock
into which their respective shares of First National Common Stock
are converted, regardless of whether such holders have exchanged
their certificates representing First National Common Stock for
certificates representing Regions Common Stock in accordance with
the provisions of this Agreement. Whenever a dividend or other
distribution is declared by Regions on the Regions Common Stock,
the record date for which is at or after the Effective Time, the
declaration shall include dividends or other distributions on all
shares issuable pursuant to this Agreement, but beginning 30 days
after the Effective Time no dividend or other distribution payable
to the holders of record of Regions Common Stock as of any time
subsequent to the Effective Time shall be delivered to the holder
of any certificate representing shares of First National Common
Stock issued and outstanding at the Effective Time until such
holder surrenders such certificate for exchange as provided in
Section 4.1 of this Agreement. However, upon surrender of such
First National Common Stock certificate, both the Regions Common
Stock certificate (together with all such undelivered dividends or
other distributions without interest) and any undelivered dividends
and cash payments to be paid for fractional share interests
(without interest) shall be delivered and paid with respect to each
share represented by such certificate.
<PAGE>
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF FIRST NATIONAL
Except as set forth in the First National Disclosure
Memorandum, First National hereby represents and warrants to
Regions as follows:
5.1 Organization, Standing, and Power. First National is
a corporation duly organized, validly existing, and in good
standing under the Laws of the State of Georgia, and has the
corporate power and authority to carry on its business as now
conducted and to own, lease, and operate its material Assets.
First National is duly qualified or licensed to transact business
as a foreign corporation in good standing in the States of the
United States and foreign jurisdictions where the character of its
Assets or the nature or conduct of its business requires it to be
so qualified or licensed, except for such jurisdictions in which
the failure to be so qualified or licensed is not reasonably likely
to have, individually or in the aggregate, a Material Adverse
Effect on First National.
5.2 Authority; No Breach By Agreement.
(a) First National has the corporate power and authority
necessary to execute, deliver, and perform its obligations under
this Agreement and the Plan of Merger and to consummate the
transactions contemplated hereby and thereby. The execution,
delivery, and performance of this Agreement and the Plan of Merger,
as appropriate, and the consummation of the transactions
contemplated herein and therein, including the Merger, have been
duly and validly authorized by all necessary corporate action in
respect thereof on the part of First National, subject to the
approval of this Agreement and the Plan of Merger by the holders of
a majority of the outstanding shares of First National Common
Stock, which is the only stockholder vote required for approval of
this Agreement and the Plan of Merger and consummation of the
Merger by First National. Subject to such requisite stockholder
approval, this Agreement and the Plan of Merger represent legal,
valid, and binding obligations of First National, enforceable
against First National in accordance with their respective terms
(except in all cases as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or
similar Laws affecting the enforcement of creditors' rights
generally and except that the availability of the equitable remedy
of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding may be
brought).
(b) Neither the execution and delivery of this Agreement or
the Plan of Merger by First National, nor the consummation by First
National of the transactions contemplated hereby or thereby, nor
compliance by First National with any of the provisions hereof or
thereof, will (i) conflict with or result in a breach of any
provision of First National's Articles of Incorporation or Bylaws,
or, (ii) constitute or result in a Default under, or require any
Consent pursuant to, or result in the creation of any Lien on any
Asset of any First National Company under, any Contract or Permit
of any First National Company, where such Default or Lien, or any
failure to obtain such Consent, is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
First National, or, (iii) subject to receipt of the requisite
Consents referred to in Section 9.1(b) of this Agreement, violate
any Law or Order applicable to any First National Company or
any of their respective material Assets.
(c) Other than in connection or compliance with the
provisions of the Securities Laws, applicable state corporate and
securities Laws, and rules of the NASD, and other than Consents
required from Regulatory Authorities, and other than notices to or
filings with the Internal Revenue Service or the Pension Benefit
Guaranty Corporation with respect to any employee benefit plans, or
under the HSR Act, and other than Consents, filings, or
notifications which, if not obtained or made, are not reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect on First National, no notice to, filing with, or
Consent of, any public body or authority is necessary for the
consummation by First National of the Merger and the other
transactions contemplated in this Agreement and the Plan of Merger.
5.3 Capital Stock.
(a) The authorized capital stock of First National consists
of 30,000,000 shares of First National Common Stock, of which
20,548,917 shares are issued and outstanding as of the date of this
Agreement and not more than 21,001,539 shares will be issued and
outstanding at the Effective Time. All of the issued and
outstanding shares of First National Common Stock are duly and
validly issued and outstanding and are fully paid and nonassessable
under the GBCC. None of the outstanding shares of First National
Common Stock has been issued in violation of any preemptive rights
of the current or past stockholders of First National.
(b) Except as set forth in Section 5.3(a) of this
Agreement, or as provided pursuant to the Stock Option Agreement,
there are no shares of capital stock or other equity securities of
First National outstanding and no outstanding Rights relating to
the capital stock of First National.
5.4 First National Subsidiaries. First National has
disclosed in Section 5.4 of the First National Disclosure
Memorandum all of the First National Subsidiaries as of the date of
this Agreement. First National or one of its Subsidiaries owns all
of the issued and outstanding shares of capital stock of each First
National Subsidiary. No equity securities of any First National
Subsidiary are or may become required to be issued (other than to
another First National Company) by reason of any Rights, and there
are no Contracts by which any First National Subsidiary is bound to
issue (other than to another First National Company) additional
shares of its capital stock or Rights or by which any First
National Company is or may be bound to transfer any shares of the
capital stock of any First National Subsidiary (other than to
another First National Company). There are no Contracts relating
to the rights of any First National Company to vote or to dispose
of any shares of the capital stock of any First National
Subsidiary. All of the shares of capital stock of each First
National Subsidiary held by a First National Company are fully paid
and nonassessable under the applicable corporation Law of the
jurisdiction in which such Subsidiary is incorporated or organized
and are owned by the First National Company free and clear of any
Lien. Each First National Subsidiary is either a bank or a
corporation, and is duly organized, validly existing, and (as to
corporations) in good standing under the Laws of the jurisdiction
in which it is incorporated or organized, and has the corporate
power and authority necessary for it to own, lease, and operate its
Assets and to carry on its business as now conducted. Each First
National Subsidiary is duly qualified or licensed to transact
business as a foreign corporation in good standing in the States of
the United States and foreign jurisdictions where the character of
its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which
the failure to be so qualified or licensed is not reasonably likely
to have, individually or in the aggregate, a Material Adverse
Effect on First National. Each First National Subsidiary that is
a depository institution is an "insured institution" as defined in
the Federal Deposit Insurance Act and applicable regulations
thereunder, and the deposits in which are insured by the Bank
Insurance Fund or Savings Association Insurance Fund.
5.5 SEC Filings; Financial Statements.
(a) First National has filed and made available to Regions
all forms, reports, and documents required to be filed by First
National with the SEC since December 31, 1991 (collectively, the
"First National SEC Reports"). The First National SEC Reports (i)
at the time filed, complied in all material respects with the
applicable requirements of the Securities Act and the Exchange Act,
as the case may be, and (ii) did not at the time they were filed
(or if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing) contain any untrue
statement of a material fact or omit to state a material fact
required to be stated in such First National SEC Reports or
necessary in order to make the statements in such First National
SEC Reports, in light of the circumstances under which they were
made, not misleading. Except for First National Subsidiaries that
are registered as a broker, dealer, or investment advisor, none of
First National's Subsidiaries is required to file any forms,
reports, or other documents with the SEC.
(b) Each of the First National Financial Statements
(including, in each case, any related notes) contained in the First
National SEC Reports, including any First National SEC Reports
filed after the date of this Agreement until the Effective Time,
complied as to form in all material respects with the applicable
published rules and regulations of the SEC with respect thereto,
was prepared in accordance with GAAP applied on a consistent basis
throughout the periods involved (except as may be indicated in the
notes to such financial statements, or, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC), and fairly
presented the consolidated financial position of First National and
its Subsidiaries as at the respective dates and the consolidated
results of its operations and cash flows for the periods indicated,
except that the unaudited interim financial statements were or are
subject to normal and recurring year-end adjustments which were not
or are not expected to be material in amount.
5.6 Absence of Undisclosed Liabilities. To the Knowledge
of First National, no First National Company has any Liabilities
that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on First National, except
Liabilities which are accrued or reserved against in the
consolidated balance sheets of First National as of June 30, 1995
included in the First National Financial Statements or reflected in
the notes thereto. No First National Company has incurred or paid
any Liability since June 30, 1995, except for such Liabilities
incurred or paid in the ordinary course of business consistent with
past business practice and which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect
on First National.
5.7 Absence of Certain Changes or Events. Since June 30,
1995, (i) there have been no events, changes, or occurrences which
have had, or are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on First National, and (ii)
the First National Companies have not taken any action, or failed
to take any action, prior to the date of this Agreement, which
action or failure, if taken after the date of this Agreement, would
represent or result in a material breach or violation of any of the
covenants and agreements of First National provided in Article 7 of
this Agreement.
5.8 Tax Matters.
(a) All Tax Returns required to be filed by or on behalf of
any of the First National Companies have been timely filed or
requests for extensions have been timely filed, granted, and have
not expired for periods ended on or before December 31, 1994, and
on or before the date of the most recent fiscal year end
immediately preceding the Effective Time, except to the extent that
all such failures to file, taken together, are not reasonably
likely to have a Material Adverse Effect on First National, and all
Tax Returns filed are complete and accurate in all material
respects. All Taxes shown on filed Tax Returns have been paid.
There is no audit examination, deficiency, or refund Litigation
with respect to any Taxes that is reasonably likely to result in a
determination that would have, individually or in the aggregate, a
Material Adverse Effect on First National, except as reserved
against in the First National Financial Statements delivered prior
to the date of this Agreement. All Taxes and other Liabilities due
with respect to completed and settled examinations or concluded
Litigation have been paid.
(b) None of the First National Companies has executed an
extension or waiver of any statute of limitations on the assessment
or collection of any Tax due that is currently in effect.
(c) Adequate provision for any Taxes due or to become due
for any of the First National Companies for the period or periods
through and including the date of the respective First National
Financial Statements has been made and is reflected on such First
National Financial Statements.
(d) Deferred Taxes of the First National Companies have been
adequately provided for in the First National Financial Statements.
(e) Each of the First National Companies is in compliance
with, and its records contain all information and documents
(including properly completed IRS Forms W-9) necessary to comply
with, all applicable information reporting and Tax withholding
requirements under federal, state, and local Tax Laws, and such
records identify with specificity all accounts subject to backup
withholding under Section 3406 of the Internal Revenue Code, except
for such instances of noncompliance and such omissions as are not
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on First National.
(f) None of the First National Companies has made any
payments, is obligated to make any payments, or is a party to any
contract, agreement, or other arrangement that could obligate it to
make any payments that would be disallowed as a deduction under
Section 28OG or 162(m) of the Internal Revenue Code.
(g) There are no Liens with respect to Taxes upon any of
the assets of the First National Companies.
(h) There has not been an ownership change, as defined in
Internal Revenue Code Section 382(g), of the First National
Companies that occurred during or after any Taxable Period in which
the First National Companies incurred a net operating loss that
carries over to any Taxable Period ending after December 3 1, 1994.
(i) No First National Company has filed any consent under
Section 341(f) of the Internal Revenue Code concerning collapsible
corporations.
(j) All material elections with respect to Taxes affecting
the First National Companies as of the date of this Agreement have
been or will be timely made as set forth in Section 5.8 of the
First National Disclosure Memorandum. After the date hereof, no
election with respect to Taxes will be made without the prior
written consent of Regions, which consent will not be unreasonably
withheld.
(k) No First National Company has or has had a permanent
establishment in any foreign country, as defined in any applicable
tax treaty or convention between the United States and such foreign
country.
5.9 Assets. The First National Companies have good and
marketable title, free and clear of all Liens, to all of their
respective Assets. All tangible properties used in the businesses
of the First National Companies are in good condition, reasonable
wear and tear excepted, and are usable in the ordinary course of
business consistent with First National's past practices. All
Assets which are material to First National's business on a
consolidated basis, held under leases or subleases by any of the
First National Companies, are held under valid Contracts
enforceable in accordance with their respective terms (except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other Laws affecting the enforcement
of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief
is subject to the discretion of the court before which any
proceedings may be brought), and each such Contract is in full
force and effect. The First National Companies currently maintain
insurance similar in amounts, scope, and coverage to that
maintained by other peer banking organizations. None of the First
National Companies has received notice from any insurance carrier
that (i) such insurance will be canceled or that coverage
thereunder will be reduced or eliminated, or (ii) premium costs
with respect to such policies of insurance will be substantially
increased. There are presently no claims pending under such
policies of insurance and no notices have been given by any First
National Company under such policies. The Assets of the First
National Companies include all Assets required to operate the
business of the First National Companies as presently conducted.
<PAGE>
5.10 Environmental Matters.
(a) To the Knowledge of First National, each First National
Company, its Participation Facilities, and its Loan Properties are,
and have been, in compliance with all Environmental Laws, except
for violations which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
First National.
(b) There is no Litigation pending, Or, to the Knowledge of
First National, threatened before any court, governmental agency,
or authority or other forum in which any First National Company or
any of its Loan Properties or Participation Facilities (or any
First National Company in respect of any such Loan Property or
Participation Facility) has been or, with respect to threatened
Litigation, may be named as a defendant or potentially responsible
party (i) for alleged noncompliance (including by any predecessor)
with any Environmental Law or (ii) relating to the release into the
environment of any Hazardous Material, whether or not occurring at,
on, under, or involving any of its Loan Properties or Participation
Facilities, except for such Litigation pending or threatened that
is not reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on First National.
(c) To the Knowledge of First National, there is no
reasonable basis for any Litigation of a type described in
subsections (b) or (c), except such as is not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect
on First National.
(d) To the Knowledge of First National, there have been no
releases of Hazardous Material in, on, under, or affecting any
Participation Facility or Loan Property of a First National
Company, except such as are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
First National.
5.11 Compliance with Laws. First National is duly
registered as a bank holding company under the BHC Act and as a
savings and loan holding company under the HOLA. Each First
National Company has in effect all Permits necessary for it to own,
lease, or operate its material Assets and to carry on its business
as now conducted, except for those Permits the absence of which are
not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on First National, and there has occurred
no Default under any such Permit, other than Defaults which are not
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on First National. None of the First
National Companies:
(a) is in violation of any Laws, Orders, or Permits
applicable to its business or employees conducting its
business, except for violations which are not reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect on First National;
(b) has received any notification or communication from
any agency or department of federal, state, or local
government or any Regulatory Authority or the staff thereof
(i) asserting that any First National Company is not in
compliance with any of the Laws or Orders which such
governmental authority or Regulatory Authority enforces, where
such noncompliance is reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on First
National, (ii) threatening to revoke any Permits, the
revocation of which is reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on First
National, or (iii) requiring any First National Company to
enter into or consent to the issuance of a cease and desist
order, formal agreement, directive, commitment, or memorandum
of understanding, which restricts materially the conduct of
its business, or in any manner relates to its capital
adequacy, its credit or reserve policies, its management, or
the payment of dividends.
5.12 Labor Relations. No First National Company is the
subject of any Litigation asserting that it or any other First
National Company has committed an unfair labor practice (within the
meaning of the National Labor Relations Act or comparable state
law) or seeking to compel it or any other First National Company to
bargain with any labor organization as to wages or conditions of
employment, nor is there any strike or other labor dispute
involving any First National Company, pending or threatened, or to
the Knowledge of First National, is there any activity involving
any First National Company's employees seeking to certify a
collective bargaining unit or engaging in any other organization
activity.
5.13 Employee Benefit Plans.
(a) First National has disclosed in Section 5.13 of the
First National Disclosure Memorandum, and has delivered or made
available to Regions prior to the execution of this Agreement
copies in each case of, all pension, retirement, profit-sharing,
deferred compensation, stock option, employee stock ownership,
severance pay, vacation, bonus, or other incentive plan, all other
written employee programs, arrangements, or agreements, all
medical, vision, dental, or other health plans, all life insurance
plans, and all other employee benefit plans or fringe benefit
plans, including "employee benefit plans" as that term is defined
in Section 3(3) of ERISA, currently adopted, maintained by,
sponsored in whole or in part by, or contributed to by any First
National Company or ERISA Affiliate (as defined below) thereof for
the benefit of employees, retirees, dependents, spouses, directors,
independent contractors, or other beneficiaries and under which
employees, retirees, dependents, spouses, directors, independent
contractors, or other beneficiaries are eligible to participate
(collectively, the "First National Benefit Plans"). Any of the
First National Benefit Plans which is an "employee pension benefit
plan," as that term is defined in Section 3(2) of ERISA, is
referred to herein as a "First National ERISA Plan." Each First
National ERISA Plan which is also a "defined benefit plan" (as
defined in Section 414(j) of the Internal Revenue Code) is referred
to herein as a "First National Pension Plan." No First National
Pension Plan is or has been a multiemployer plan within the meaning
of Section 3(37) of ERISA.
(b) All First National Benefit Plans are in compliance with
the applicable terms of ERISA, the Internal Revenue Code, and any
other applicable Laws the breach or violation of which are
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on First National, and each First National
ERISA Plan which is intended to be qualified under Section 401(a)
of the Internal Revenue Code has received a favorable determination
letter from the Internal Revenue Service, and First National is not
aware of any circumstances likely to result in revocation of any
such favorable determination letter. To the Knowledge of First
National, no First National Company has engaged in a transaction
with respect to any First National Benefit Plan that, assuming the
taxable period of such transaction expired as of the date hereof,
would subject any First National Company to a Tax imposed by either
Section 4975 of the Internal Revenue Code or Section 502(i) of
ERISA in amounts which are reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on First National.
(c) No First National Pension Plan has any "unfunded
current liability," as that term is defined in Section 302(d)(8)(A)
of ERISA, and the fair market value of the assets of any such plan
exceeds the plan's "benefit liabilities," as that term is defined
in Section 4001(a)(16) of ERISA, when determined under actuarial
factors that would apply if the plan terminated in accordance with
all applicable legal requirements. Since the date of the most
recent actuarial valuation, there has been (i) no material change
in the financial position of any First National Pension Plan, (ii)
no change in the actuarial assumptions with respect to any First
National Pension Plan, and (iii) no increase in benefits under any
First National Pension Plan as a result of plan amendments or
changes in applicable Law which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
First National or materially adversely affect the funding status of
any such plan. Neither any First National Pension Plan nor any
"single-employer plan," within the meaning of Section 4001(a)(15)
of ERISA, currently or formerly maintained by any First National
Company, or the single-employer plan of any entity which is
considered one employer with First National under Section 4001 of
ERISA or Section 414 of the Internal Revenue Code or Section 302 of
ERISA (whether or not waived) (an "ERISA Affiliate") has an
"accumulated funding deficiency" within the meaning of Section 412
of the Internal Revenue Code or Section 302 of ERISA, which is
reasonably likely to have a Material Adverse Effect on First
National. No First National Company has provided, or is required
to provide, security to a First National Pension Plan or to any
single-employer plan of an ERISA Affiliate pursuant to Section
401(a)(29) of the Internal Revenue Code.
(d) Within the six-year period preceding the Effective
Time, no Liability under Subtitle C or D of Title IV of ERISA has
been or is expected to be incurred by any First National Company
with respect to any ongoing, frozen, or terminated single-employer
plan or the single employer plan of any ERISA Affiliate, which
Liability is reasonably likely to have a Material Adverse Effect on
First National. No First National Company has incurred any
withdrawal Liability with respect to a multiemployer plan under
Subtitle B of Title IV of ERISA (regardless of whether based on
contributions of an ERISA Affiliate), which Liability is reasonably
likely to have a Material Adverse Effect on First National. No
notice of a "reportable event," within the meaning of Section 4043
of ERISA for which the 30-day reporting requirement has not been
waived, has been required to be filed for any First National
Pension Plan or by any ERISA Affiliate within the 12-month period
ending on the date hereof
(e) No First National Company has any Liability for retiree
health and life benefits under any of the First National Benefit
Plans and there are no restrictions on the rights of such First
National Company to amend or terminate any such Plan without
incurring any Liability thereunder, which Liability is reasonably
likely to have a Material Adverse Effect on First
National.
(f) Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will
(i) result in any payment (including severance, unemployment
compensation, golden parachute, or otherwise) becoming due to any
director or any employee of any First National Company from any
First National Company under any First National Benefit Plan or
otherwise, (ii) increase any benefits otherwise payable under any
First National Benefit Plan, or (iii) result in any acceleration of
the time of payment or vesting of any such benefit, where such
payment, increase, or acceleration is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
First National.
(g) The actuarial present values of all accrued deferred
compensation entitlements (including entitlements under any
executive compensation, supplemental retirement, or employment
agreement) of employees and former employees of any First National
Company and their respective beneficiaries, other than entitlements
accrued pursuant to funded retirement plans subject to the
provisions of Section 412 of the Internal Revenue Code or Section
302 of ERISA, have been fully reflected on the First National
Financial Statements to the extent required by and in accordance
with GAAP.
5.14 Material Contracts. None of the First National
Companies, nor any of their respective Assets, businesses, or
operations, is a party to, or is bound or affected by, or receives
benefits under, (i) any employment, severance, termination,
consulting, or retirement Contract providing for aggregate payments
to any Person in any calendar year in excess of $100,000, (ii) any
Contract relating to the borrowing of money by any First National
Company or the guarantee by any First National Company of any such
obligation (other than Contracts evidencing deposit liabilities,
purchases of federal funds, fully-secured repurchase agreements,
and Federal Home Loan Bank advances of depository institution
Subsidiaries, trade payables, and Contracts relating to borrowings
or guarantees made in the ordinary course of business), and (iii)
any other Contract or amendment thereto that would be required to
be filed as an exhibit to a Form 10-K filed by First National with
the SEC as of the date of this Agreement that has not been filed as
an exhibit to First National's Form 10-K filed for the fiscal year
ended December 31, 1994, or in another SEC Document and identified
to Regions (together with all Contracts referred to in Sections 5.8
and 5.13(a) of this Agreement, the "First National Contracts").
With respect to each First National Contract: (i) the Contract is
in full force and effect; (ii) no First National Company is in
Default thereunder, other than Defaults which are not reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect on First National; (iii) no First National Company
has repudiated or waived any material provision of any such
Contract; and (iv) no other party to any such Contract is, to the
Knowledge of First National, in Default in any respect, other than
Defaults which are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on First National, or
has repudiated or waived any material provision thereunder. Except
for Federal Home Loan Bank advances, all of the indebtedness of any
First National Company for money borrowed is prepayable at any time
by such First National Company without penalty or premium.
5.15 Legal Proceedings.
(a) There is no Litigation instituted or pending, or, to
the Knowledge of First National, threatened (or unasserted but
considered probable of assertion and which if asserted would have
at least a reasonable probability of an unfavorable outcome)
against any First National Company, or against any Asset, employee
benefit plan, interest, or right of any of them, that is reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect on First National, nor are there any Orders of any
Regulatory Authorities, other governmental authorities, or
arbitrators outstanding against any First National Company, that
are reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on First National.
(b) Section 5.15(b) of the First National Disclosure
Memorandum includes a summary report of all Litigation as of the
date of this Agreement to which any First National Company is a
party and which names a First National Company as a defendant or
cross-defendant and where the maximum exposure is estimated to be
$100,000 or more.
5.16 Reports. Since January 1, 1992, or the date of
organization if later, each First National Company has timely filed
all reports and statements, together with any amendments required
to be made with respect thereto, that it was required to file with
any Regulatory Authorities (except, in the case of state securities
authorities, failures to file which are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect
on First National). As of their respective dates, each of such
reports and documents, including the financial statements,
exhibits, and schedules thereto, complied in all material respects
with all applicable Laws. As of its respective date, each such
report and document did not, in all material respects, contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which
they were made, not misleading.
5.17 Statements True and Correct. None of the information
supplied or to be supplied by any First National Company or any
Affiliate thereof for inclusion in the Registration Statement to be
filed by Regions with the SEC will, when the Registration Statement
becomes effective, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to make
the statements therein not misleading. None of the information
supplied or to be supplied by any First National Company or any
Affiliate thereof for inclusion in the Joint Proxy Statement to be
mailed to Regions' and First National's stockholders in connection
with the Stockholders' Meetings, and any other documents to be
filed by a First National Company or any Affiliate thereof with the
SEC or any other Regulatory Authority in connection with the
transactions contemplated hereby, will, at the respective time such
documents are filed, and with respect to the Joint Proxy Statement,
when first mailed to the stockholders of Regions and First
National, be false or misleading with respect to any material fact,
or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading, or, in the case of the Joint Proxy Statement or any
amendment thereof or supplement thereto, at the time of the
Stockholders' Meetings, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to
correct any statement in any earlier communication with respect to
the solicitation of any proxy for the Stockholders' Meetings. All
documents that any First National Company or any Affiliate thereof
is responsible for filing with any Regulatory Authority in
connection with the transactions contemplated hereby will comply as
to form in all material respects with the provisions of applicable
Law.
5.18 Accounting, Tax, and Regulatory Matters. No First
National Company or any Affiliate thereof has taken or agreed to
take any action or has any Knowledge of any fact or circumstance
that is reasonably likely to (i) prevent the transactions
contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment or as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code,
or (ii) materially impede or delay receipt of any Consents of
Regulatory Authorities referred to in Section 9. 1 (b) of this
Agreement or result in the imposition of a condition or restriction
of the type referred to in the last sentence of such Section.
5.19 State Takeover Laws. Each First National Company has
taken all necessary action to exempt the transactions contemplated
by this Agreement from any applicable "moratorium," "control
share," "fair price," "business combination," or other anti-
takeover laws and regulations of the State of Georgia
(collectively, "Takeover Laws"), including Sections 14-2-1111 and
14-2-1132 of the GBCC.
5.20 Charter Provisions. Each First National Company has
taken all action so that the entering into of this Agreement and
the Plan of Merger and the consummation of the Merger and the other
transactions contemplated by this Agreement and the Plan of Merger
do not and will not result in the grant of any rights to any Person
under the Articles of Incorporation, Bylaws, or other governing
instruments of any First National Company or restrict or impair the
ability of Regions or any of its Subsidiaries to vote, or otherwise
to exercise the rights of a stockholder with respect to, shares of
any First National Company that may be directly or indirectly
acquired or controlled by it.
5.21 Derivatives Contracts. Neither First National nor any
of its Subsidiaries is a party to or has agreed to enter into an
exchange-traded or over-the-counter swap, forward, future, option,
cap, floor, or collar financial contract, or any other interest
rate or foreign currency protection contract not included on its
balance sheet which is a financial derivative contract (including
various combinations thereof).
<PAGE>
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF REGIONS
Regions hereby represents and warrants to First National as
follows:
6.1 Organization, Standing, and Power. Regions is a
corporation duly organized, validly existing, and in good standing
under the Laws of the State of Delaware, and has the corporate
power and authority to carry on its business as now conducted and
to own, lease, and operate its material Assets. Regions is duly
qualified or licensed to transact business as a foreign corporation
in good standing in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or
conduct of its business requires it to be so qualified or licensed,
except for such jurisdictions in which the failure to be so
qualified or licensed is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
Regions.
6.2 Authority; No Breach By Agreement.
(a) Regions has the corporate power and authority necessary
to execute, deliver, and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby.
The execution, delivery, and performance of this Agreement and the
consummation of the transactions contemplated herein, including the
Merger, have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of Regions, subject
to the approval of the issuance of the shares of Regions Common
Stock pursuant to the Merger by a majority of the votes cast at the
Regions Stockholders' Meeting by holders of shares of Regions
Common Stock, which is the only stockholder vote required for the
consummation of the Merger by Regions. Subject to such requisite
stockholder approval, this Agreement represents a legal, valid, and
binding obligation of Regions, enforceable against Regions in
accordance with its terms (except in all cases as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar Laws affecting the
enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before
which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by
Regions, nor the consummation by Regions of the transactions
contemplated hereby, nor compliance by Regions with any of the
provisions hereof, will (i) conflict with or result in a breach of
any provision of Regions' Certificate of Incorporation or Bylaws,
or (ii) constitute or result in a Default under, or require any
Consent pursuant to, or result in the creation of any Lien on any
Asset of any Regions Company under, any Contract or Permit of any
Regions Company, where such Default or Lien, or any failure to
obtain such Consent, is reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Regions, or, (iii)
subject to receipt of the requisite Consents referred to in Section
9. 1 (b) of this Agreement, violate any Law or Order applicable to
any Regions Company or any of their respective material Assets.
(c) Other than in connection or compliance with the
provisions of the Securities Laws, applicable state corporate and
securities Laws, and rules of the NASD, and other than Consents
required from Regulatory Authorities, and other than notices to or
filings with the Internal Revenue Service or the Pension Benefit
Guaranty Corporation with respect to any employee benefit plans, or
under the HSR Act, and other than Consents, filings, or
notifications which, if not obtained or made, are not reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect on Regions, no notice to, filing with, or Consent
of, any public body or authority is necessary for the consummation
by Regions of the Merger and the other transactions contemplated in
this Agreement.
6.3 Capital Stock. The authorized capital stock of Regions
consists of 120,000,000 shares of Regions Common Stock, of which
45,397,944 shares were issued and outstanding and 1,474,579 shares
were held as treasury shares as of June 30, 1995. All of the
issued and outstanding shares of Regions Common Stock are, and all
of the shares of Regions Common Stock to be issued in exchange for
shares of First National Common Stock upon consummation of the
Merger, when issued in accordance with the terms of this Agreement,
will be, duly and validly issued and outstanding and fully paid and
nonassessable under the DGCL. None of the outstanding shares of
Regions Common Stock has been, and none of the shares of Regions
Common Stock to be issued in exchange for shares of First National
Common Stock upon consummation of the Merger will be, issued in
violation of any preemptive rights of the current or past
stockholders of Regions.
6.4 Regions Subsidiaries. Regions has disclosed in Section
6.4 of the Regions Disclosure Memorandum all of the Regions
Subsidiaries as of the date of this Agreement. Except as disclosed
in Section 6.4 of the Regions Disclosure Memorandum, Regions or one
of its Subsidiaries owns all of the issued and outstanding shares
of capital stock of each Regions Subsidiary. No equity securities
of any Regions Subsidiary are or may become required to be issued
(other than to another Regions Company) by reason of any Rights,
and there are no Contracts by which any Regions Subsidiary is bound
to issue (other than to another Regions Company) additional shares
of its capital stock or Rights or by which any Regions Company is
or may be bound to transfer any shares of the capital stock of any
Regions Subsidiary (other than to another Regions Company). There
are no Contracts relating to the fights of any Regions Company to
vote or to dispose of any shares of the capital stock of any
Regions Subsidiary. All of the shares of capital stock of each
Regions Subsidiary held by a Regions Company are fully paid and
nonassessable under the applicable corporation Law of the
jurisdiction in which such Subsidiary is incorporated or organized
and are owned by the Regions Company free and clear of any Lien.
Each Regions Subsidiary is either a bank or a corporation, and is
duly organized, validly existing, and (as to corporations) in good
standing under the Laws of the jurisdiction in which it is
incorporated or organized, and has the corporate power and
authority necessary for it to own, lease, and operate its Assets
and to carry on its business as now conducted. Each Regions
Subsidiary is duly qualified or licensed to transact business as a
foreign corporation in good standing in the States of the United
States and foreign jurisdictions where the character of its Assets
or the nature or conduct of its business requires it to be so
qualified or licensed, except for such jurisdictions in which the
failure to be so qualified or licensed is not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect
on Regions. Each Regions Subsidiary that is a depository
institution is an "insured institution" as defined in the Federal
Deposit Insurance Act and applicable regulations thereunder, and
the deposits in which are insured by the Bank Insurance Fund or
Savings Association Insurance Fund.
6.5 SEC Filings: Financial Statements.
(a) Regions has filed and made available to First National
all forms, reports, and documents required to be filed by Regions
with the SEC since December 3 1, 199 1, other than registration
statements on Forms S-4 and S-8 (collectively, the "Regions SEC
Reports"). The Regions SEC Reports (i) at the time filed, complied
in all material respects with the applicable requirements of the
Securities Act and the Exchange Act, as the case may be, and (ii)
did not at the time they were filed (or if amended or superseded by
a filing prior to the date of this Agreement, then on the date of
such filing) contain any untrue statement of a material fact or
omit to state a material fact required to be stated in such Regions
SEC Reports or necessary in order to make the statements in such
Regions SEC Reports, in light of the circumstances under which they
were made, not misleading.
(b) Each of the Regions Financial Statements (including, in
each case, any related notes) contained in the Regions SEC Reports,
including any Regions SEC Reports filed after the date of this
Agreement until the Effective Time, complied as to form in all
material respects with the applicable published rules and
regulations of the SEC with respect thereto, was prepared in
accordance with GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes to such
financial statements or, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC), and fairly presented the
consolidated financial position of Regions and its Subsidiaries as
at the respective dates and the consolidated results of its
operations and cash flows for the periods indicated, except that
the unaudited interim financial statements were or are subject to
normal and recurring year-end adjustments which were not or are not
expected to be material in amount.
6.6 Absence of Undisclosed Liabilities. Except as
disclosed in Section 6.6 of the Regions Disclosure Memorandum, and
to the Knowledge of Regions, no Regions Company has any Liabilities
that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Regions, except Liabilities
which are accrued or reserved against in the consolidated balance
sheets of Regions as of June 30, 1995 included in the Regions
Financial Statements or reflected in the notes thereto. Except as
disclosed in Section 6.6 of the Regions Disclosure Memorandum, no
Regions Company has incurred or paid any Liability since June 30,
1995, except for such Liabilities incurred or paid in the ordinary
course of business consistent with past business practice and which
are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Regions.
6.7 Absence of Certain Changes or Events. Since June 30,
1995, except as disclosed in the Regions Financial Statements
delivered prior to the date of this Agreement or in Section 6.7 of
the Regions Disclosure Memorandum, (i) there have been no events,
changes or occurrences which have had, or are reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect
on Regions, and (ii) the Regions Companies have not taken any
action, or failed to take any action, prior to the date of this
Agreement, which action or failure, if taken after the date of this
Agreement, would represent or result in a material breach or
violation of any of the covenants and agreements of Regions
provided in Article 7 of this Agreement.
6.8 Tax Matters.
(a) All Tax Returns required to be filed by or on behalf of
any of the Regions Companies have been timely filed or requests for
extensions have been timely filed, granted, and have not expired
for periods ended on or before December 31, 1994, and on or before
the date of the most recent fiscal year end immediately preceding
the Effective Time, except to the extent that all such failures to
file, taken together, are not reasonably likely to have a Material
Adverse Effect on Regions, and all Tax Returns filed are complete
and accurate in all material respects. All Taxes shown on filed
Tax Returns have been paid. There is no audit examination,
deficiency, or refund Litigation with respect to any Taxes that is
reasonably likely to result in a determination that would have,
individually or in the aggregate, a Material Adverse Effect on
Regions, except as reserved against in the Regions Financial
Statements delivered prior to the date of this Agreement. All
Taxes and other Liabilities due with respect to completed and
settled examinations or concluded Litigation have been paid.
(b) Adequate provision for any Taxes due or to become due
for any of the Regions Companies for the period or periods through
and including the date of the respective Regions Financial
Statements has been made and is reflected on such Regions Financial
Statements.
(c) Deferred Taxes of the Regions Companies have been
adequately provided for in the Regions Financial Statements.
6.9 Environmental Matters.
(a) To the Knowledge of Regions, each Regions Company, its
Participation Facilities, and its Loan Properties are, and have
been, in compliance with all Environmental Laws, except for
violations which are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Regions.
(b) There is no Litigation pending, or, to the Knowledge of
Regions, threatened before any court, governmental agency, or
authority or other forum in which any Regions Company or any of its
Loan Properties or Participation Facilities (or any Regions Company
in respect of any such Loan Property or Participation Facility) has
been or, with respect to threatened Litigation, may be named as a
defendant or potentially responsible party (i) for alleged
noncompliance (including by any predecessor) with any Environmental
Law or (ii) relating to the release into the environment of any
Hazardous Material, whether or not occurring at, on, under, or
involving any of its Loan Properties or Participation Facilities,
except for such Litigation pending or threatened that is not
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Regions.
(c) To the Knowledge of Regions, there is no reasonable
basis for any Litigation of a type described in subsections (b) or
(c), except such as is not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on Regions.
(d) To the Knowledge of Regions, there have been no
releases of Hazardous Material in, on, under, or affecting any
Participation Facility or Loan Property of a Regions Company,
except such as are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Regions.
6.10 Compliance with Laws. Regions is duly registered as a
bank holding company under the BHC Act and as a savings and loan
holding company under the HOLA. Each Regions Company has in effect
all Permits necessary for it to own, lease, or operate its material
Assets and to carry on its business as now conducted, except for
those Permits the absence of which are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect
on Regions, and there has occurred no Default under any such
Permit, other than Defaults which are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect
on Regions. No Regions Company:
(a) is in violation of any Laws, Orders, or Permits
applicable to its business or employees conducting its
business, except for violations which are not reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect on Regions; and
(b) has received any notification or communication
from any agency or department of federal, state, or local
government or any Regulatory Authority or the staff thereof
(i) asserting that any Regions Company is not in compliance
with any of the Laws or Orders which such governmental
authority or Regulatory Authority enforces, where such
noncompliance is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Regions, (ii)
threatening to revoke any Permits, the revocation of which is
reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on Regions, or (iii) requiring any
Regions Company to enter into or consent to the issuance of a
cease and desist order, formal agreement, directive,
commitment, or memorandum of understanding, which restricts
materially the conduct of its business, or in any manner
relates to its capital adequacy, its credit or reserve
policies, its management, or the payment of dividends.
6.11 Legal Proceedings. There is no Litigation instituted
or pending, or, to the Knowledge of Regions, threatened (or
unasserted but considered probable of assertion and which if
asserted would have at least a reasonable probability of an
unfavorable outcome) against any Regions Company, or against any
Asset, interest, or right of any of them, that is reasonably likely
to have, individually or in the aggregate, a Material Adverse
Effect on Regions, nor are there any Orders of any Regulatory
Authorities, other governmental authorities, or arbitrators
outstanding against any Regions Company, that are reasonably likely
to have, individually or in the aggregate, a Material Adverse
Effect on Regions.
6.12 Reports. Since January 1, 1992, or the date of
organization if later, each Regions Company has filed all reports
and statements, together with any amendments required to be made
with respect thereto, that it was required to file with Regulatory
Authorities (except, in the case of state securities authorities,
failures to file which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
Regions). As of their respective dates, each of such reports and
documents, including the financial statements, exhibits, and
schedules thereto, complied in all material respects with all
applicable Laws. As of its respective date, each such report and
document did not, in all material respects, contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were
made, not misleading.
6.13 Statements True and Correct. None of the information
supplied or to be supplied by any Regions Company or any Affiliate
thereof for inclusion in the Registration Statement to be filed by
Regions with the SEC, will, when the Registration Statement becomes
effective, be false or misleading with respect to any material
fact, or omit to state any material fact necessary to make the
statements therein not misleading. None of the information
supplied or to be supplied by any Regions Company or any Affiliate
thereof for inclusion in the Joint Proxy Statement to be mailed to
Regions' and First National's stockholders in connection with the
Stockholders' Meetings, and any other documents to be filed by any
Regions Company or any Affiliate thereof with the SEC or any other
Regulatory Authority in connection with the transactions
contemplated hereby, will, at the respective time such documents
are filed, and with respect to the Joint Proxy Statement, when
first mailed to the stockholders of Regions and First National, be
false or misleading with respect to any material fact, or omit to
state any material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading, or, in the case of the Joint Proxy Statement or any
amendment thereof or supplement thereto, at the time of the
Stockholders' Meetings, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to
correct any statement in any earlier communication with respect to
the solicitation of any proxy for the Stockholders' Meetings. All
documents that any Regions Company or any Affiliate thereof is
responsible for filing with any Regulatory Authority in connection
with the transactions contemplated hereby will comply as to form in
all material respects with the provisions of applicable Law.
6.14 Accounting, Tax, and Regulatory Matters. No Regions
Company or any Affiliate thereof has taken or agreed to take any
action or has any Knowledge of any fact or circumstance that is
reasonably likely to (i) prevent the transactions contemplated
hereby, including the Merger, from qualifying for pooling-of-
interests accounting treatment or as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code, or (ii)
materially impede or delay receipt of any Consents of Regulatory
Authorities referred to in Section 9.1(b) of this Agreement or
result in the imposition of a condition or restriction of the type
referred to in the last sentence of such Section.
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 Affirmative Covenants of First National. Unless the
prior written consent of Regions shall have been obtained, and
except as otherwise expressly contemplated herein, First National
shall and shall cause each of its Subsidiaries to (i) operate its
business only in the usual, regular, and ordinary course, (ii)
preserve intact its business organization and Assets and maintain
its rights and franchises, (iii) use its reasonable efforts to
maintain its current employee relationships, and (iv) take no
action which would (a) adversely affect the ability of any Party to
obtain any Consents required for the transactions contemplated
hereby without imposition of a condition or restriction of the type
referred to in the last sentence of Section 9.1(b) of this
Agreement, or (b) adversely affect the ability of any Party to
perform its covenants and agreements under this Agreement.
7.2 Negative Covenants of First National. From the date of
this Agreement until the earlier of the Effective Time or the
termination of this Agreement, First National covenants and agrees
that it will not do or agree or commit to do, or permit any of its
Subsidiaries to do or agree or commit to do, any of the following
without the prior written consent of the chief executive officer or
chief financial officer of Regions:
(a) amend the Articles of Incorporation, Bylaws, or
other governing instruments of any First National Company, or
(b) incur any additional debt obligation or other
obligation for borrowed money (other than indebtedness of a
First National Company to another First National Company) in
excess of an aggregate of $250,000 (for the First National
Companies on a consolidated basis) except in the ordinary
course of the business of First National Subsidiaries
consistent with past practices (which shall include, for First
National Subsidiaries that are depository institutions,
creation of deposit liabilities, purchases of federal funds,
advances from the Federal Reserve Bank or Federal Home Loan
Bank, and entry into repurchase agreements fully secured by
U.S. government or agency securities), or impose, or suffer
the imposition, on any Asset of any First National Company of
any Lien or permit any such Lien to exist (other than in
connection with deposits, repurchase agreements, bankers
acceptances, "treasury tax and loan" accounts established in
the ordinary course of business, the satisfaction of legal
requirements in the exercise of trust powers, and Liens in
effect as of the date hereof that are disclosed in the First
National Disclosure Memorandum); or
(c) repurchase, redeem, or otherwise acquire or
exchange (other than exchanges in the ordinary course under
employee benefit plans), directly or indirectly, any shares,
or any securities convertible into any shares, of the capital
stock of any First National Company, or declare or pay any
dividend or make any other distribution in respect of First
National's capital stock, provided that First National may (to
the extent legally and contractually permitted to do so), but
shall not be obligated to, declare and pay regular quarterly
cash dividends on the shares of First National Common Stock at
a rate of $.2150 per share with such increases and usual and
regular record and payment dates in accordance with past
practice disclosed in Section 7.2(c) of the First National
Disclosure Memorandum and such dates may not be changed
without the prior written consent of Regions; provided, that,
notwithstanding the provisions of Section 1.3 of this
Agreement, the Parties shall cooperate in selecting the
Effective Time to ensure that, with respect to the quarterly
period in which the Effective Time occurs, the holders of
First National Common Stock do not receive both a dividend in
respect of their First National Common Stock and a dividend in
respect of Regions Common Stock or fail to receive any
dividend; or
(d) except for this Agreement, or pursuant to the
Stock Option Agreement or pursuant to the exercise of stock
options outstanding as of the date hereof and pursuant to the
terms thereof in existence on the date hereof, issue, sell,
pledge, encumber, authorize the issuance of, enter into any
Contract to issue, sell, pledge, encumber, or authorize the
issuance of, or otherwise permit to become outstanding, any
additional shares of First National Common Stock or any other
capital stock of any First National Company, or any stock
appreciation rights, or any option, warrant, conversion, or
other right to acquire any such stock, or any security
convertible into any such stock; or
(e) adjust, split, combine, or reclassify any
capital stock of any First National Company or issue or
authorize the issuance of any other securities in respect of
or in substitution for shares of First National Common Stock,
or sell, lease, mortgage, or otherwise dispose of or otherwise
encumber (x) any shares of capital stock of any First National
Subsidiary (unless any such shares of stock are sold or
otherwise transferred to another First National Company) or
(y) any Asset other than in the ordinary course of business
for reasonable and adequate consideration; or
(f) except for purchases of U.S. Treasury
securities or U.S. Government agency securities, which in
either case have maturities of three years or less, purchase
any securities or make any material investment, either by
purchase of stock or securities, contributions to capital,
Asset transfers, or purchase of any Assets, in any Person
other than a wholly owned First National Subsidiary, or
otherwise acquire direct or indirect control over any Person,
other than in connection with (i) foreclosures in the ordinary
course of business, (ii) acquisitions of control by a
depository institution Subsidiary in its fiduciary capacity,
or (iii) the creation of new wholly owned Subsidiaries
organized to conduct or continue activities otherwise
permitted by this Agreement; or
(g) grant any increase in compensation or benefits
to the employees or officers of any First National Company,
except in accordance with past practice disclosed in Section
7.2(g) of the First National Disclosure Memorandum or as
required by Law; pay any severance or termination pay or any
bonus other than pursuant to written policies or written
Contracts in effect on the date of this Agreement; enter into
or amend any severance agreements with officers of any First
National Company; grant any material increase in fees or other
increases in compensation or other benefits to directors of
any First National Company except in accordance with past
practice disclosed in Section 7.2(g) of the First National
Disclosure Memorandum; or voluntarily accelerate the vesting
of any stock options or other stock-based compensation or
employee benefits; or
(h) enter into or amend any employment Contract
between any First National Company and any Person (unless such
amendment is required by Law) that the First National Company
does not have the unconditional right to terminate without
Liability (other than Liability for services already
rendered), at any time on or after the Effective Time; or
(i) adopt any new employee benefit plan of any
First National Company or make any material change in or to
any existing employee benefit plans of any First National
Company other than any such change that is required by Law or
that, in the opinion of counsel, is necessary or advisable to
maintain the tax qualified status of any such plan-, or
(j) make any significant change in any Tax or
accounting methods or systems of internal accounting controls,
except as may be appropriate to conform to changes in Tax Laws
or regulatory accounting requirements or GAAP; or
(k) commence any Litigation other than in
accordance with past practice or settle any Litigation
involving any Liability of any First National Company for
material money damages or restrictions upon the operations of
any First National Company; or
(l) except in the ordinary course of business,
modify, amend, or terminate any material Contract or waive,
release, compromise, or assign any material rights or claims.
7.3 Covenants of Regions. From the date of this Agreement
until the earlier of the Effective Time or the termination of this
Agreement, Regions covenants and agrees that it shall (i) continue
to conduct its business and the business of its Subsidiaries in a
manner designed in its reasonable judgment, to enhance the long-
term value of the Regions Common Stock and the business prospects
of the Regions Companies, and (ii) take no action which would (a)
materially adversely affect the ability of any Party to obtain any
Consents required for the transactions contemplated hereby without
imposition of a condition or restriction of the type referred to in
the last sentence of Section 9. 1 (b) of this Agreement, or (b)
materially adversely affect the ability of any Party to perform its
covenants and agreements under this Agreement; provided, that the
foregoing shall not prevent any Regions Company from discontinuing
or disposing of any of its Assets or business if such action is, in
the judgment of Regions, desirable in the conduct of the business
of Regions and its Subsidiaries.
7.4 Adverse Changes in Condition. Each Party agrees to
give written notice promptly to the other Party upon becoming aware
of the occurrence or impending occurrence of any event or
circumstance relating to it or any of its Subsidiaries which (i) is
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on it or (ii) would cause or constitute a
material breach of any of its representations, warranties, or
covenants contained herein, and to use its reasonable efforts to
prevent or promptly to remedy the same.
7.5 Reports. Each Party and its Subsidiaries shall file all
reports required to be filed by it with Regulatory Authorities
between the date of this Agreement and the Effective Time and shall
deliver to the other Party copies of all such reports promptly
after the same are filed. If financial statements are contained in
any such reports filed with the SEC, such financial statements will
fairly present the consolidated financial position of the entity
filing such statements as of the dates indicated and the
consolidated results of operations, changes in stockholders'
equity, and cash flows for the periods then ended in accordance
with GAAP (subject in the case of interim financial statements to
normal recurring year-end adjustments that are not material). As
of their respective dates, such reports filed with the SEC will
comply in all material respects with the Securities Laws and will
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Any financial
statements contained in any other reports to another Regulatory
Authority shall be prepared in accordance with Laws applicable to
such reports.
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 Registration Statement; Joint Proxy Statement;
Stockholder Approvals. As soon as reasonably practicable after
execution of this Agreement, Regions shall file the Registration
Statement with the SEC, and shall use its reasonable efforts to
cause the Registration Statement to become effective under the 1933
Act (provided that the Parties shall cooperate to cause the
Registration Statement to be declared effective and the Joint Proxy
Statement to be mailed to the Parties' respective stockholders at
such time as will afford the Parties the maximum opportunity to
purchase shares of Regions Common Stock or First National Common
Stock in the open market) and take any action required to be taken
under the applicable state Blue Sky or securities Laws in
connection with the issuance of the shares of Regions Common Stock
upon consummation of the Merger. First National shall furnish all
information concerning it and the holders of its capital stock as
Regions may reasonably request in connection with such action.
First National shall call a Stockholders' Meeting, to be held as
soon as reasonably practicable after the Registration Statement is
declared effective by the SEC, for the purpose of voting upon
approval of this Agreement and the Plan of Merger and such other
related matters as it deems appropriate. Regions shall call a
Stockholders' Meeting, to be held as soon as reasonably practicable
after the Registration Statement is declared effective by the SEC,
for the purpose of voting upon the issuance of shares of Regions
Common Stock pursuant to the Merger and such other related matters
as it deems appropriate. In connection with the Stockholders'
Meetings, (i) Regions and First National shall prepare and file
with the SEC a Joint Proxy Statement and mail such Joint Proxy
Statement to their respective stockholders, (ii) the Parties shall
furnish to each other all information concerning them that they may
reasonably request in connection with such Joint Proxy Statement,
(iii) the Boards of Directors of Regions and First National shall
recommend (subject to compliance with their fiduciary duties as
advised by counsel) to their respective stockholders the approval
of the matters submitted for approval, and (iv) the Boards of
Directors and officers of Regions and First National shall (subject
to compliance with their fiduciary duties as advised by counsel)
use their reasonable efforts to obtain such stockholders'
approvals.
8.2 Exchange Listing. Regions shall use its reasonable
efforts to list, prior to the Effective Time, on the Nasdaq NMS,
subject to official notice of issuance, the shares of Regions
Common Stock to be issued to the holders of First National Common
Stock pursuant to the Merger.
8.3 Applications. Regions shall promptly prepare and file,
and First National shall cooperate in the preparation and, where
appropriate, filing of, applications with all Regulatory
Authorities having jurisdiction over the transactions contemplated
by this Agreement seeking the requisite Consents necessary to
consummate the transactions contemplated by this Agreement.
8.4 Filings with State Off-ices. Upon the terms and
subject to the conditions of this Agreement, Regions Merger
Subsidiary shall execute and file the Georgia Certificate of Merger
with the Secretary of State of the State of Georgia in connection
with the Closing.
8.5 Agreement as to Efforts to Consummate. Subject to the
terms and conditions of this Agreement, each Party agrees to use,
and to cause its Subsidiaries to use, its reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper, or advisable under applicable
Laws to consummate and make effective, as soon as reasonably
practicable after the date of this Agreement, the transactions
contemplated by this Agreement, including using its reasonable
efforts to lift or rescind any Order adversely affecting its
ability to consummate the transactions contemplated herein and to
cause to be satisfied the conditions referred to in Article 9 of
this Agreement; provided, that nothing herein shall preclude either
Party from exercising its rights under this Agreement. The Parties
shall cooperate and take all reasonable effort to prevent Regions
from becoming an interstate multiple savings and loan holding
company as a result of the Merger. Each Party shall use, and shall
cause each of its Subsidiaries to use, its reasonable efforts to
obtain all Consents necessary or desirable for the consummation of
the transactions contemplated by this Agreement.
8.6 Investigation and Confidentiality.
(a) Prior to the Effective Time, each Party shall keep the
other Party advised of all material developments relevant to its
business and to consummation of the Merger and shall permit the
other Party to make or cause to be made such investigation of the
business and properties of it and its Subsidiaries and of their
respective financial and legal conditions as the other Party
reasonably requests, provided that such investigation shall be
reasonably related to the transactions contemplated hereby and,
after November 1, 1995, shall not interfere unnecessarily with
normal operations. No investigation by a Party shall affect the
representations and warranties of the other Party.
(b) In addition to the Parties' respective obligations
under the Confidentiality Agreements, each Party shall, and shall
cause its advisers and agents to, maintain the confidentiality of
all confidential information furnished to it by the other Party
concerning its and its Subsidiaries' businesses, operations, and
financial positions and shall not use such information for any
purpose except in furtherance of the transactions contemplated by
this Agreement. If this Agreement is terminated prior to the
Effective Time, each Party shall promptly return or certify the
destruction of all documents and copies thereof, and all work
papers containing confidential information received from the other
Party.
(c) Each Party agrees to give the other Party notice as
soon as practicable after any determination by it of any fact or
occurrence relating to the other Party which it has discovered
through the course of its investigation and which represents, or is
reasonably likely to represent, either a material breach of any
representation, warranty, covenant, or agreement of the other Party
or which has had or is reasonably likely to have a Material Adverse
Effect on the other Party.
8.7 Press Releases. Prior to the Effective Time, Regions
and First National shall consult with each other as to the form and
substance of any press release or other public disclosure
materially related to this Agreement or any other transaction
contemplated hereby; provided, that nothing in this Section 8.7
shall be deemed to prohibit any Party from making any disclosure
which its counsel deems necessary or advisable in order to satisfy
such Party's disclosure obligations imposed by Law.
8.8 Certain Actions. Except with respect to this Agreement
and the Plan of Merger and the transactions contemplated hereby or
thereby, no First National Company nor any Affiliate thereof nor
any Representatives thereof retained by any First National Company
shall directly or indirectly solicit any Acquisition Proposal by
any Person. Except to the extent necessary to comply with the
fiduciary duties of First National's Board of Directors as advised
by counsel, no First National Company or any Affiliate or
Representative thereof shall furnish any non-public information
that it is not legally obligated to furnish, negotiate with respect
to, or enter into any Contract with respect to, any Acquisition
Proposal, but First National may communicate information about such
an Acquisition Proposal to its stockholders if and to the extent
that it is required to do so in order to comply with its legal
obligations as advised by counsel. First National shall promptly
notify Regions orally and in writing in the event that it receives
any inquiry or proposal relating to any such transaction. First
National shall (i) immediately cease and cause to be terminated any
existing activities, discussions, or negotiations with any Persons
conducted heretofore with respect to any of the foregoing, and (ii)
direct and use its reasonable efforts to cause of all its
Representatives not to engage in any of the foregoing.
8.9 Accounting and Tax Treatment. Each of the Parties
undertakes and agrees to use its reasonable efforts to cause the
Merger, and to take no action which would cause the Merger not, to
qualify for treatment as a pooling of interests for accounting
purposes or as a "reorganization" within the meaning of Section
368(a) of the Internal Revenue Code for federal income tax
purposes.
8.10 State Takeover Laws. Each First National Company shall
take all necessary steps to exempt the transactions contemplated by
this Agreement from, or if necessary challenge the validity or
applicability of, any applicable Takeover Laws, including Sections
14-2-1111 and 14-2-1132 of the GBCC.
8.11 Charter Provisions. Each First National Company shall
take all necessary action to ensure that the entering into of this
Agreement and the Plan of Merger and the consummation of the Merger
and the other transactions contemplated hereby or thereby do not
and will not result in the grant of any rights to any Person under
the Articles of Incorporation, Bylaws, or other governing
instruments of any First National Company or restrict or impair the
ability of Regions or any of its Subsidiaries to vote, or otherwise
to exercise the fights of a stockholder with respect to, shares of
any First National Company that may be directly or indirectly
acquired or controlled by it.
8.12 Agreement of Affiliates. First National has disclosed
in Section 8.12 of the First National Disclosure Memorandum each
Person whom it reasonably believes is an "affiliate" of First
National for purposes of Rule 145 under the 1933 Act. First
National shall use its reasonable efforts to cause each such Person
to deliver to Regions not later than 30 days prior to the Effective
Time, a written agreement, in substantially the form of Exhibit 3,
providing that such Person will not sell, pledge, transfer, or
otherwise dispose of the shares of First National Common Stock held
by such Person except as contemplated by such agreement or by this
Agreement and will not sell, pledge, transfer, or otherwise dispose
of the shares of Regions Common Stock to be received by such Person
upon consummation of the Merger except in compliance with
applicable provisions of the 1933 Act and the rules and regulations
thereunder and until such time as financial results covering at
least 30 days of combined operations of Regions and First National
have been published within the meaning of Section 201.01 of the
SEC's Codification of Financial Reporting Policies. Shares of
Regions Common Stock issued to such affiliates of First National in
exchange for shares of First National Common Stock shall not be
transferable until such time as financial results covering at least
30 days of combined operations of Regions and First National have
been published within the meaning of Section 201.01 of the SEC's
Codification of Financial Reporting Policies, regardless of whether
each such affiliate has provided the written agreement referred to
in this Section 8.12 (and Regions shall be entitled to place
restrictive legends upon certificates for shares of Regions Common
Stock issued to affiliates of First National pursuant to this
Agreement to enforce the provisions of this Section 8.12). Regions
shall not be required to maintain the effectiveness of the
Registration Statement under the 1933 Act for the purposes of
resale of Regions Common Stock by such affiliates.
8.13 Employee Benefits and Contracts. Following the
Effective Time, but in no event earlier than the consolidation of
First National's banking Subsidiaries with Regions' banking
Subsidiaries located in the same states, Regions shall provide
generally to officers and employees of the First National
Companies, who at or after the Effective Time become employees of
a Regions Company, employee benefits under employee benefit plans
(other than stock option or other plans involving the potential
issuance of Regions Common Stock except as set forth in this
Section 8.13), on terms and conditions which when taken as a whole
are substantially similar to those currently provided by the
Regions Companies to their similarly situated officers and
employees. For purposes of participation and vesting (but not
accrual of benefits) under such employee benefit plans, (i) service
under any qualified defined benefit plans of First National should
be treated as service under Regions' qualified defined benefit
plans, (ii) service under any qualified defined contribution plans
of First National shall be treated as service under Regions'
qualified defined contribution plans, and (iii) service under any
other employee benefit plans of First National shall be treated as
service under any similar employee benefit plans maintained by
Regions. Regions also shall cause First National and its
Subsidiaries to honor on terms reasonably agreed upon by the
Parties all employment, severance, consulting, and other
compensation Contracts disclosed in Section 8.13 of the First
National Disclosure Memorandum to Regions between any First
National Company and any current or former director, officer, or
employee thereof, and all provisions for vested benefits or other
vested amounts earned or accrued through the Effective Time under
the First National Benefit Plans.
8.14 Indemnification.
(a) Regions shall indemnify, defend, and hold harmless the
present and former directors, officers, employees, and agents of
the First National Companies (each, an "Indemnified Party") against
all Liabilities arising out of actions or omissions occurring at or
prior to the Effective Time (including the transactions
contemplated by this Agreement) to the full extent permitted under
Georgia Law and by First National's Articles of Incorporation and
Bylaws as in effect on the date hereof, including provisions
relating to advances of expenses incurred in the defense of any
Litigation. Without limiting the foregoing, in any case in which
approval by Regions is required to effectuate any indemnification,
Regions shall direct, at the election of the Indemnified Party,
that the determination of any such approval shall be made by
independent counsel mutually agreed upon between Regions and the
Indemnified Party.
(b) If Regions or any of its successors or assigns shall
consolidate with or merge into any other Person and shall not be
the continuing or surviving Person of such consolidation or merger
or shall transfer all or substantially all of its assets to any
Person, then and in each case, proper provision shall be made so
that the successors and assigns of Regions shall assume the
obligations set forth in this Section 8.14.
(c) The provisions of this Section 8.14 are intended to be
for the benefit of and shall be enforceable by, each Indemnified
Party, his or her heirs and representatives.
8.15 Certain Modifications. Regions and First National
shall consult with respect to their loan, litigation, and real
estate valuation policies and practices (including loan
classifications and levels of reserves) and First National shall
make such modifications or changes to its policies and practices,
if any, prior to the Effective Time, as may be mutually agreed
upon. Regions and First National also shall consult with respect
to the character, amount, and timing of restructuring and Merger-
related expense charges to be taken by each of the Parties in
connection with the transactions contemplated by this Agreement and
the Plan of Merger and shall take such charges in accordance with
GAAP, prior to the Effective Time, as may be mutually agreed upon
by the Parties. Neither Parties' representations, warranties, and
covenants contained in this Agreement shall be deemed to be
inaccurate or breached in any respect as a consequence of any
modifications or charges undertaken solely on account of this
Section 8.15.
8.16 Regions Merger Subsidiary Organization. Regions shall
organize Regions Merger Subsidiary under the Laws of the State of
Georgia. Prior to the Effective Time, the outstanding capital
stock of Regions Merger Subsidiary shall consist of 1,000 shares of
Regions Merger Subsidiary Common Stock, all of which shares shall
be owned by Regions. Prior to the Effective Time, Regions Merger
Subsidiary shall not (i) conduct any business operations whatsoever
or (ii) enter into any Contract or agreement of any kind, acquire
any assets or incur any Liability, except as may be specifically
contemplated by this Agreement or the Plan of Merger or as the
Parties may otherwise agree. Regions, as the sole stockholder of
Regions Merger Subsidiary, shall vote prior to the Effective Time
the shares of Regions Merger Subsidiary Common Stock in favor of
the Plan of Merger.
<PAGE>
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 Conditions to Obligations of Each Party. The
respective obligations of each Party to perform this Agreement and
the Plan of Merger and to consummate the Merger and the other
transactions contemplated hereby and thereby are subject to the
satisfaction of the following conditions, unless waived by both
Parties pursuant to Section 11.6 of this Agreement:
(a) Stockholder Approvals. The stockholders of
First National shall have approved this Agreement and the Plan
of Merger, and the consummation of the transactions
contemplated hereby and thereby, including the Merger, as and
to the extent required by Law, by the provisions of any
governing instruments, or by the rules of the NASD. The
stockholders of Regions shall have approved the issuance of
shares of Regions Common Stock pursuant to the Merger, as and
to the extent required by Law, by the provisions of any
governing instruments, or by the rules of the NASD.
(b) Regulatory Approvals. All Consents of, filings
and registrations with, and notifications to, all Regulatory
Authorities required for consummation of the Merger shall have
been obtained or made and shall be in full force and effect
and all waiting periods required by Law shall have expired.
No Consent obtained from any Regulatory Authority which is
necessary to consummate the transactions contemplated hereby
shall be conditioned or restricted in a manner (including
requirements relating to the raising of additional capital or
the disposition of Assets) which in the reasonable judgment of
the Board of Directors of Regions would so materially
adversely impact the economic or business benefits of the
transactions contemplated by this Agreement that, had such
condition or requirement been known, Regions would not, in its
reasonable judgment, have entered into this Agreement.
(c) Consents and Approvals. Each Party shall have
obtained any and all Consents required for consummation of the
Merger (other than those referred to in Section 9. I (b) of
this Agreement) or for the preventing of any Default under any
Contract or Permit of such Party which, if not obtained or
made, is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on such Party.
(d) Legal Proceedings. No court or governmental or
regulatory authority of competent jurisdiction shall have
enacted, issued, promulgated, enforced, or entered any Law or
Order (whether temporary, preliminary, or permanent) or taken
any other action which prohibits, restricts, or makes illegal
consummation of the transactions contemplated by this
Agreement or the Plan of Merger.
(e) Registration Statement. The Registration
Statement shall be effective under the 1933 Act, no stop
orders suspending the effectiveness of the Registration
Statement shall have been issued, no action, suit, proceeding,
or investigation by the SEC to suspend the effectiveness
thereof shall have been initiated and be continuing, and all
necessary approvals under state securities Laws or the 1933
Act or 1934 Act relating to the issuance or trading of the
shares of Regions Common Stock issuable pursuant to the Merger
shall have been received.
(f) Exchange Listing. The shares of Regions Common
Stock issuable pursuant to the Merger shall have been approved
for listing on the Nasdaq NMS, subject to official notice of
issuance.
(g) Tax Matters. Each Party shall have received a
written opinion or opinions from Alston & Bird in a form
reasonably satisfactory to such Parties (the "Tax Opinion"),
to the effect that (i) the Merger will constitute a
reorganization within the meaning of Section 368(a) of the
Internal Revenue Code and (ii) the exchange in the Merger of
First National Common Stock for Regions Common Stock will not
give rise to gain or loss to the stockholders of First
National with respect to such exchange (except to the extent
of any cash received). In rendering such Tax Opinion, such
counsel shall be entitled to rely upon representations of
officers of First National and Regions reasonably satisfactory
in form and substance to such counsel.
(h) Pooling Letter. Each of the Parties shall have
received a letter, dated as of the Effective Time, in form and
substance reasonably acceptable to such Party, from Ernst &
Young LLP to the effect that the Merger will qualify for
pooling-of-interests accounting treatment.
9.2 Conditions to Obligations of Regions. The obligations
of Regions to perform this Agreement and consummate the Merger and
the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by Regions
pursuant to Section 11.6(a) of this Agreement:
(a) Representations and Warranties. For purposes
of this Section 9.2(a), the accuracy of the representations
and warranties of First National set forth in this Agreement
shall be assessed as of the date of this Agreement and as of
the Effective Time with the same effect as though all such
representations and warranties had been made on and as of the
Effective Time (provided that representations and warranties
which are confined to a specified date shall speak only as of
such date). The representations and warranties of First
National set forth in Section 5.3 of this Agreement shall be
true and correct (except for inaccuracies which are de minimus
in amount). The representations and warranties of First
National set forth in Sections 5.18, 5.19, and 5.20 of this
Agreement shall be true and correct in all material respects.
There shall not exist inaccuracies in the representations and
warranties of First National set forth in this Agreement
(including the representations and warranties set forth in
Sections 5.3, 5.18, 5.19, and 5.20) such that the aggregate
effect of such inaccuracies has, or is reasonably likely to
have, a Material Adverse Effect on First National; provided
that, for purposes of this sentence only, those
representations and warranties which are qualified by
references to "material" or "Material Adverse Effect" or to
the "Knowledge" of First National or to a matter being "known"
by First National shall be deemed not to include such
qualifications.
(b) Performance of Agreements and Covenants. Each
and all of the agreements and covenants of First National to
be performed and complied with pursuant to this Agreement and
the other agreements contemplated hereby prior to the
Effective Time shall have been duly performed and complied
with in all material respects.
(c) Certificates. First National shall have
delivered to Regions (i) a certificate, dated as of the
Effective Time and signed on its behalf by its chief executive
officer and its chief financial officer, to the effect that
the conditions of its obligations set forth in Section 9.2(a)
and 9.2(b) of this Agreement have been satisfied, and (ii)
certified copies of resolutions duly adopted by First
National's Board of Directors and stockholders evidencing the
taking of all corporate action necessary to authorize the
execution, delivery, and performance of this Agreement and the
Plan of Merger, and the consummation of the transactions
contemplated hereby and thereby, all in such reasonable detail
as Regions and its counsel shall request.
(d) Affiliate Agreements. Regions shall have
received from each affiliate of First National the affiliates
agreement referred to in Section 8.12 of this Agreement, to
the extent necessary to assure in the reasonable judgment of
Regions that the transactions contemplated hereby will qualify
for pooling-of-interests accounting treatment.
9.3 Conditions to Obligations of First National. The
obligations of First National to perform this Agreement and the
Plan of Merger and consummate the Merger and the other transactions
contemplated hereby and thereby are subject to the satisfaction of
the following conditions, unless waived by First National pursuant
to Section IL 6(b) of this Agreement:
(a) Representations and Warranties. For purposes
of this Section 9.3(a), the accuracy of the representations
and warranties of Regions set forth in this Agreement shall be
assessed as of the date of this Agreement and as of the
Effective Time with the same effect as though all such
representations and warranties had been made on and as of the
Effective Time (provided that representations and warranties
which are confined to a specified date shall speak only as of
such date). The representations and warranties of Regions set
forth in Section 6.3 of this Agreement shall be true and
correct (except for inaccuracies which are de minimus in
amount). The representations and warranties of Regions set
forth in Section 6.14 of this Agreement shall be true and
correct in all material respects. There shall not exist
inaccuracies in the representations and warranties of Regions
set forth in this Agreement (including the representations and
warranties set forth in Sections 6.3 and 6.14) such that the
aggregate effect of such inaccuracies has, or is reasonably
likely to have, a Material Adverse Effect on Regions; provided
that, for purposes of this sentence only, those
representations and warranties which are qualified by
references to "material" or "Material Adverse Effect" or to
the "Knowledge" of Regions or to a matter being "known" by
Regions shall be deemed not to include such qualifications.
(b) Performance of Agreements and Covenants. Each and
all of the agreements and covenants of Regions to be performed
and complied with pursuant to this Agreement and the other
agreements contemplated hereby prior to the Effective Time
shall have been duly performed and complied with in all
material respects.
(c) Certificates. Regions shall have delivered to
First National (i) a certificate, dated as of the Effective
Time and signed on its behalf by its chief executive officer
and its chief financial officer, to the effect that the
conditions of its obligations set forth in Section 9.3(a) and
9.3(b) of this Agreement have been satisfied, and (ii)
certified copies of resolutions duly adopted by Regions' Board
of Directors and stockholders evidencing the taking of all
corporate action necessary to authorize the execution,
delivery, and performance of this Agreement, and the
consummation of the transactions contemplated hereby, all in
such reasonable detail as First National and its counsel shall
request
ARTICLE 10
TERMINATION
10.1 Termination. Notwithstanding any other provision of
this Agreement, and notwithstanding the approval of this Agreement
by the stockholders of First National or Regions, this Agreement
and the Plan of Merger may be terminated and the Merger abandoned
at any time prior to the Effective Time:
(a) By mutual consent of the Board of Directors of
Regions and the Board of Directors of First National; or
(b) By the Board of Directors of either Party
(provided that the terminating Party is not then in breach of
any representation or warranty contained in this Agreement
under the applicable standard set forth in Section 9.2(a) of
this Agreement in the case of First National and Section
9.3(a) of this Agreement in the case of Regions or in material
breach of any covenant or other agreement contained in this
Agreement) in the event of an inaccuracy of any representation
or warranty of the other Party contained in this Agreement
which cannot be or has not been cured within 30 days after the
giving of written notice to the breaching Party of such
inaccuracy and which inaccuracy would provide the terminating
Party the ability to refuse to consummate the Merger under the
applicable standard set forth in Section 9.2(a) of this
Agreement in the case of First National and Section 9.3(a) of
this Agreement in the case of Regions; or
(c) By the Board of Directors of either Party in
the event of a material breach by the other Party of any
covenant or agreement contained in this Agreement which cannot
be or has not been cured within 30 days after the giving of
written notice to the breaching Party of such breach; or
(d) By the Board of Directors of either Party in
the event (i) any Consent of any Regulatory Authority required
for consummation of the Merger and the other transactions
contemplated hereby shall have been denied by final
nonappealable action of such authority or if any action taken
by such authority is not appealed within the time limit for
appeal, or (ii) the stockholders of Regions or First National
fail to vote their approval of the matters submitted for the
approval by such stockholders at the Stockholders' Meetings
where the transactions were presented to such stockholders for
approval and voted upon; or
(e) By the Board of Directors of either Party in
the event that the Merger shall not have been consummated by
September 30, 1996, if the failure to consummate the
transactions contemplated hereby on or before such date is not
caused by any breach of this Agreement by the Party electing
to terminate pursuant to this Section 10.1(e); or
(f) By the Board of Directors of either Party
(provided that the terminating Party is not then in breach of
any representation or warranty contained in this Agreement
under the applicable standard set forth in Section 9.2(a) of
this Agreement in the case of First National and Section
9.3(a) of this Agreement in the case of Regions or in material
breach of any covenant or other agreement contained in this
Agreement) in the event that any of the conditions precedent
to the obligations of such Party to consummate the Merger
cannot be satisfied or fulfilled by the date specified in
Section 10.1(e) of this Agreement; or
(g) By the Board of Directors of Regions, at any
time prior to 5:00 p.m. Eastern time, on November 1, 1995,
without any Liability if it determines in its reasonable good
faith judgment that the Asset quality of First National, the
status of litigation involving First National (or any other
liability or undisclosed contingency of First National), any
information in the First National Disclosure Memorandum, or
the projected ability of First National to reduce its non-
interest expenses are materially less favorable to Regions
than as set forth in materials previously disclosed or
provided to Regions by First National and its financial
advisor; or
(h) By the Board of Directors of First National, if
it determines by a vote of a majority of the members of its
entire Board, at any time during the ten-day period commencing
two days after the Determination Date, if both of the
following conditions are satisfied:
(1) the Average Closing Price of shares of
Regions Common Stock shall be less than $33.20; and
(2) (i) the quotient obtained by dividing the
Average Closing Price by $41.50 (such number being
referred to herein as the "Regions Ratio") shall be
less than (ii) the quotient obtained by dividing the
Index Price on the Determination Date by the Index
Price on the Starting Date and subtracting 0.20 from
the quotient in this clause (2)(ii) (such number being
referred to herein as the "Index Ratio");
subject, however, to the following three sentences. If First
National refuses to consummate the Merger pursuant to this Section
10.1(h), it shall give prompt written notice thereof to Regions;
provided, that such notice of election to terminate may be
withdrawn at any time within the aforementioned ten-day period.
During the five-day period commencing with its receipt of such
notice, Regions shall have the option to elect to increase the
Exchange Ratio to equal the lesser of (i) the quotient obtained by
dividing (1) the product of $33.20 and the Exchange Ratio (as then
in effect) by (2) the Average Closing Price, and (ii) the quotient
obtained by dividing (1) the product of the Index Ratio and the
Exchange Ratio (as then in effect) by (2) the Regions Ratio. If
Regions makes an election contemplated by the preceding sentence,
within such five-day period, it shall give prompt written notice to
First National of such election and the revised Exchange Ratio,
whereupon no termination shall have occurred pursuant to this
Section 10.1(h) and this Agreement shall remain in effect in
accordance with its terms (except as the Exchange Ratio shall have
been so modified), and any references in this Agreement to
"Exchange Ratio" shall thereafter be deemed to refer to the
Exchange Ratio as adjusted pursuant to this Section 10.1(h).
For purposes of this Section 10.1(h), the following terms
shall have the meanings indicated:
"Average Closing Price" shall mean the average of the
daily last sales prices of Regions Common Stock as reported on
the Nasdaq NMS (as reported by The Wall Street Journal or, if
not reported thereby, another authoritative source as chosen
by Regions) for the ten consecutive full trading days in which
such shares are traded on the Nasdaq NMS ending at the close
of trading on the Determination Date.
"Determination Date" shall mean the date on which the
Consent of the Board of Governors of the Federal Reserve
System shall be received.
"Index Group" shall mean the 20 bank holding companies
listed below, the common stocks of all of which shall be
publicly traded and as to which there shall not have been,
since the Starting Date and before the Determination Date, any
public announcement of a proposal for such company to be
acquired or for such company to acquire another company or
companies in transactions with a value exceeding 25% of the
acquiror's market capitalization. In the event that any such
company or companies are removed from the Index Group, the
weights (which shall be determined based upon the number of
outstanding shares of common stock) shall be redistributed
proportionately for purposes of determining the Index Price.
The 20 bank holding companies and the weights attributed to
them are as follows:
Bank Holding Companies Weighting
AmSouth Bancorporation 4.73%
Barnett Banks, Inc. 7.80
Central Fidelity Banks, Inc. 3.23
Compass Bancshares, Inc. 3.09
Crestar Financial Corporation 3.05
Deposit Guaranty Corporation 1.52
First American Corporation 2.06
First Commerce Corporation 2.35
First Maryland Bancorp 1.37
First Tennessee National Corporation 2.72
First Union Corporation 13.91
First Virginia Banks, Inc. 2.75
Hibernia Corporation 9.65
Mercantile Bankshares Corporation 3.84
National Commerce Bancorporation 2.00
SouthTrust Corporation 6.75
SunTrust Banks, Inc. 9.24
Trustmark Corporation 2.83
Union Planters Corporation 3.31
Wachovia Corporation 13.80
TOTAL 100.00%
"Index Price" on a given date shall mean the weighted
average (weighted in accordance with the factors listed above)
of the closing prices of the companies composing the Index
Group.
"Starting Date" shall mean October 20, 1995.
If any company belonging to the Index Group or Regions
declares or effects a stock dividend, reclassification,
recapitalization, split-up, combination, exchange of shares, or
similar transaction between the Starting Date and the Determination
Date, the prices for the common stock of such company or Regions
shall be appropriately adjusted for the purposes of applying this
Section 10.1(h).
10.2 Effect of Termination. In the event of the termination
and abandonment of this Agreement pursuant to Section 10.01 of this
Agreement, this Agreement and the Plan of Merger shall become void
and have no effect, except that (i) the provisions of this Section
10.2 and Article 11 and Section 8.6(b) of this Agreement shall
survive any such termination and abandonment, and (ii) a
termination pursuant to Sections 10.1(b), 10.01(c), or 10.1(f) of
this Agreement shall not relieve the breaching Party from Liability
for an uncured willful breach of a representation, warranty,
covenant, or agreement giving rise to such termination. The Stock
Option Agreement shall be governed by its own terms as to its
termination.
10.3 Non-Survival of Representations and Covenants. The
respective representations, warranties, obligations, covenants, and
agreements of the Parties shall not survive the Effective Time
except this Section 10.3 and Articles 2, 3, 4, and 11 and Sections
8.12 and 8.14 of this Agreement.
ARTICLE 11
MISCELLANEOUS
11.1 Definitions.
(a) Except as otherwise provided herein, the capitalized terms
set forth below shall have the following meanings:
"Acquisition Proposal" with respect to a Party shall
mean any tender offer or exchange offer or any proposal for a
merger, acquisition of all of the stock or assets of, or other
business combination involving such Party or any of its
Subsidiaries or the acquisition of a substantial equity
interest in, or a substantial portion of the assets of, such
Party or any of its Subsidiaries.
"Affiliate" of a Person shall mean: (i) any other
Person directly, or indirectly through one or more
intermediaries, controlling, controlled by or under common
control with such Person; (ii) any officer, director, partner,
employer, or direct or indirect beneficial owner of any 10% or
greater equity or voting interest of such Person; or (iii) any
other Person for which a Person described in clause (ii) acts
in any such capacity.
"Agreement" shall mean this Agreement and Plan of
Reorganization, including the Exhibits (other than the Stock
Option Agreement) delivered pursuant hereto and incorporated
herein by reference.
"Assets" of a Person shall mean all of the assets,
properties, businesses, and rights of such Person of every
kind, nature, character, and description, whether real,
personal, or mixed, tangible or intangible, accrued or
contingent, or otherwise relating to or utilized in such
Person's business, directly or indirectly, in whole or in
part, whether or not carried on the books and records of such
Person, and whether or not owned in the name of such Person or
any Affiliate of such Person and wherever located.
"BHC Act" shall mean the federal Bank Holding Company
Act of 1956, as amended.
"Closing Date" shall mean the date on which the Closing
occurs.
"Confidentiality Agreements" shall mean those certain
Confidentiality Agreements, dated October 21, 1995, between
First National and Regions.
" Consent" shall mean any consent, approval,
authorization, clearance, exemption, waiver, or similar
affirmation by any Person pursuant to any Contract, Law,
Order, or Permit.
"Contract" shall mean any written or oral agreement,
arrangement, authorization, commitment, contract, indenture,
instrument, lease, obligation, plan, practice, restriction,
understanding, or undertaking of any kind or character, or
other document to which any Person is a party or that is
binding on any Person or its capital stock, Assets, or
business.
"Default" shall mean (i) any breach or violation of or
default under any Contract, Order, or Permit, (ii) any
occurrence of any event that with the passage of time or the
giving of notice or both would constitute a breach or
violation of or default under any Contract, Order, or Permit,
or (iii) any occurrence of any event that with or without the
passage of time or the giving of notice would give rise to a
fight to terminate or revoke, change the current terms of, or
renegotiate, or to accelerate, increase, or impose any
Liability under, any Contract, Order, or Permit, where, in any
such event, such Default is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
a Party.
"DGCL" shall mean the Delaware General Corporation Law.
"Environmental Laws" shall mean all Laws relating to
pollution or protection of human health or the environment
(including ambient air, surface water, ground water, land
surface, or subsurface strata) and which are administered,
interpreted, or enforced by the United States Environmental
Protection Agency and state and local agencies with
jurisdiction over, and including common law in respect of,
pollution or protection of the environment, including the
Comprehensive Environmental Response Compensation and
Liability Act, as amended, 42 U.S.C. 9601 et seq. ("CERCLA"),
the Resource Conservation and Recovery Act, as amended, 42
U.S. C. 6901 et seq. ("RCRA"), and other Laws relating to
emissions, discharges, releases, or threatened releases of any
Hazardous Material, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport, or handling of any Hazardous Material.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
"Exhibits" 1 through 3, inclusive, shall mean the
Exhibits so marked, copies of which are attached to this
Agreement. Such Exhibits are hereby incorporated by reference
herein and made a part hereof, and may be referred to in this
Agreement and any other related instrument or document without
being attached hereto.
"First National Common Stock" shall mean the $1.00 par
value common stock of First National.
"First National Companies" shall mean, collectively,
First National and all First National Subsidiaries.
"First National Disclosure Memorandum" shall mean the
written information entitled "First National Bancorp
Disclosure Memorandum" delivered prior to 5:00 p.m., Eastern
time, on October 27, 1995, to Regions describing in reasonable
detail the matters contained therein and, with respect to each
disclosure made therein, specifically referencing each Section
or subsection of this Agreement under which such disclosure is
being made. Information disclosed with respect to one Section
or subsection shall not be deemed to be disclosed for purposes
of any other Section or subsection not specifically referenced
with respect thereto.
"First National Financial Statements" shall mean (i)
the consolidated balance sheets (including related notes and
schedules, if any) of First National as of June 30, 1995, and
as of December 31, 1994 and 1993, and the related statements
of income, changes in stockholders' equity, and cash flows
(including related notes and schedules, if any) for the six
months ended June 30, 1995, and for each of the three fiscal
years ended December 3 1, 1994, 1993, and 1992, as filed by
First National in SEC Documents, and (ii) the consolidated
balance sheets of First National (including related notes and
schedules, if any) and related statements of income, changes
in stockholders' equity, and cash flows (including related
notes and schedules, if any) included in SEC Documents filed
with respect to periods ended subsequent to June 30, 1995.
"First National Stock Plans" shall mean the existing
stock option and other stock-based compensation plans of First
National disclosed in Section 3.5(b) of the First National
Disclosure Memorandum.
"First National Subsidiaries" shall mean the
Subsidiaries of First National, which shall include the First
National Subsidiaries described in Section 5.4 of this
Agreement and any corporation, bank, savings association, or
other organization acquired as a Subsidiary of First National
in the future and owned by First National at the Effective
Time.
"GAAP" shall mean generally accepted accounting
principles, consistently applied during the periods involved.
"GBCC" shall mean the Georgia Business Corporation
Code.
"Georgia Certificate of Merger" shall mean the
Certificate of Merger to be executed by Regions Merger
Subsidiary and filed with the Secretary of State of the State
of Georgia relating to the Merger as contemplated by Section
1.1 of this Agreement.
"Hazardous Material" shall mean (i) any hazardous
substance, hazardous material, hazardous waste, regulated
substance, or toxic substance (as those terms are defined by
any applicable Environmental Laws) and (ii) any chemicals,
pollutants, contaminants, petroleum, petroleum products, or
oil (and specifically shall include asbestos requiring
abatement, removal, or encapsulation pursuant to the
requirements of governmental authorities and any
polychlorinated biphenyls).
"HOLA" shall mean the Home Owners' Loan Act of 1933, as
amended.
"HSR Act" shall mean Section 7A of the Clayton Act, as
added by Title 11 of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and
regulations promulgated thereunder.
"Internal Revenue Code" shall mean the Internal Revenue
Code of 1986, as amended, and the rules and regulations
promulgated thereunder.
"Joint Proxy Statement" shall mean the joint proxy
statement used by Regions and First National to solicit the
approval of their respective stockholders of the transactions
contemplated by this Agreement, which shall include the
prospectus of Regions relating to the issuance of the Regions
Common Stock to holders of First National Common Stock.
"Knowledge" as used with respect to a Person (including
references to such Person being aware of a particular matter)
shall mean the personal knowledge of the chairman, president,
chief financial officer, chief accounting officer, chief
credit officer, general counsel, any assistant or deputy
general counsel, or any senior or executive vice president of
such Person and the knowledge of any such persons obtained or
which would have been obtained from a reasonable
investigation.
"Law" shall mean any code, law, ordinance, regulation,
reporting or licensing requirement, rule, or statute
applicable to a Person or its Assets, Liabilities, or
business, including those promulgated, interpreted, or
enforced by any Regulatory Authority.
"Liability" shall mean any direct or indirect, primary
or secondary, liability, indebtedness, obligation, penalty,
cost, or expense (including costs of investigation,
collection, and defense), claim, deficiency, guaranty, or
endorsement of or by any Person (other than endorsements of
notes, bills, checks, and drafts presented for collection or
deposit in the ordinary course of business) of any type,
whether accrued, absolute or contingent, liquidated or
unliquidated, matured or unmatured, or otherwise.
"Lien" shall mean any conditional sale agreement,
default of title, easement, encroachment, encumbrance,
hypothecation, infringement, lien, mortgage, pledge,
reservation, restriction, security interest, title retention,
or other security arrangement, or any adverse fight or
interest, charge, or claim of any nature whatsoever of, on, or
with respect to any property or property interest, other than
(i) Liens for current property Taxes not yet due and payable,
and (ii) for depository institution Subsidiaries of a Party,
pledges to secure deposits, and other Liens incurred in the
ordinary course of the banking business
"Litigation" shall mean any action, arbitration, cause
of action, claim, complaint, criminal prosecution, demand
letter, governmental or other examination or investigation,
hearing, inquiry, administrative or other proceeding, or
notice (written or oral) by any Person alleging potential
Liability or requesting information relating to or affecting
a Party, its business, its Assets (including Contracts related
to it), or the transactions contemplated by this Agreement,
but shall not include regular, periodic examinations of
depository institutions and their Affiliates by Regulatory
Authorities.
"Loan Property" shall mean any property owned, leased,
or operated by the Party in question or by any of its
Subsidiaries or in which such Party or Subsidiary holds a
security or other interest (including an interest in a
fiduciary capacity), and, where required by the context,
includes the owner or operator of such property, but only with
respect to such property.
"Material" for purposes of this Agreement shall be
determined in light of the facts and circumstances of the
matter in question; provided that any specific monetary amount
stated in this Agreement shall determine materiality in that
instance.
"Material Adverse Effect" on a Party shall mean an
event, change, or occurrence which, individually or together
with any other event, change, or occurrence, has a material
adverse impact on (i) the financial position, business, or
results of operations of such Party and its Subsidiaries,
taken as a whole, or (ii) the ability of such Party to perform
its obligations under this Agreement or to consummate the
Merger or the other transactions contemplated by this
Agreement, provided that "Material Adverse Effect" shall not
be deemed to include the impact of (a) changes in banking and
similar Laws of general applicability or interpretations
thereof by courts or governmental authorities, (b) changes in
GAAP or regulatory accounting principles generally applicable
to banks and their holding companies, (c) actions and
omissions of a Party (or any of its Subsidiaries) taken with
the prior informed consent of the other Party in contemplation
of the transactions contemplated hereby, (d) circumstances
affecting regional bank holding companies generally, and (e)
the Merger and compliance with the provisions of this
Agreement on the operating performance of the Parties.
"NASD" shall mean the National Association of
Securities Dealers, Inc.
"Nasdaq NMS" shall mean the National Market Service of
Nasdaq.
"1933 Act" shall mean the Securities Act of 1933, as
amended.
"1934 Act" shall mean the Securities Exchange Act of
1934, as amended.
"Order" shall mean any administrative decision or
award, decree, injunction, judgment, order, quasi-judicial
decision or award, ruling, or writ of any federal, state,
local, or foreign or other court, arbitrator, mediator,
tribunal, administrative agency, or Regulatory Authority.
"Participation Facility" shall mean any facility or
property in which the Party in question or any of its
Subsidiaries participates in the management and, where
required by the context, said term means the owner or operator
of such facility or property, but only with respect to such
facility or property.
"Party" shall mean either First National or Regions,
and "Parties" shall mean both First National and Regions.
"Permit" shall mean any federal, state, local, and
foreign governmental approval, authorization, certificate,
easement, filing, franchise, license, notice, permit, or right
to which any Person is a party or that is or may be binding
upon or inure to the benefit of any Person or its securities,
Assets, or business.
"Person" shall mean a natural person or any legal,
commercial, or governmental entity, such as, but not limited
to, a corporation, general partnership, joint venture, limited
partnership, limited liability company, trust, business
association, group acting in concert, or any person acting in
a representative capacity.
"Plan of Merger" shall mean the plan of merger
providing for the Merger, in substantially the form of Exhibit
2.
"Regions Common Stock" shall mean the $.625 par value
common stock of Regions.
"Regions Companies" shall mean, collectively, Regions
and all Regions Subsidiaries.
"Regions Disclosure Memorandum" shall mean the written
information entitled "Regions Financial Corporation Disclosure
Memorandum" delivered prior to the execution of this Agreement
to First National describing in reasonable detail the matters
contained therein and, with respect to each disclosure made
therein, specifically referencing each Section or subsection
of this Agreement under which such disclosure is being made.
Information disclosed with respect to one Section or
subsection shall not be deemed to be disclosed for purposes of
any other Section or subsection not specifically referenced
with respect thereto.
"Regions Financial Statements" shall mean (i) the
consolidated statements of condition (including related notes
and schedules, if any) of Regions as of June 30, 1995, and as
of December 31, 1994 and 1993, and the related statements of
income, changes in stockholders' equity, and cash flows
(including related notes and schedules, if any) for the six
months ended June 30, 1995, and for each of the three years
ended December 31, 1994, 1993, and 1992, as filed by Regions
in SEC Documents, and (ii) the consolidated statements of
condition of Regions (including related notes and schedules,
if any) and related statements of income, changes in
stockholders' equity, and cash flows (including related notes
and schedules, if any) included in SEC Documents filed with
respect to periods ended subsequent to June 30, 1995.
"Regions Merger Subsidiary" shall mean the wholly owned
subsidiary of Regions to be organized to effect the Merger
under the Laws of the State of Georgia and with the name of
Regions Merger Subsidiary, Inc.
"Regions Merger Subsidiary Common Stock" shall mean the
$1.00 par value common stock of Regions Merger Subsidiary.
"Regions Subsidiaries" shall mean the Subsidiaries of
Regions, which shall include the Regions Subsidiaries
described in Section 6.4 of this Agreement and any
corporation, bank, savings association, or other organization
acquired as a Subsidiary of Regions in the future and owned by
Regions at the Effective Time.
"Registration Statement" shall mean the Registration
Statement on Form S-4, or other appropriate form, including
any pre-effective or post-effective amendments or supplements
thereto, filed with the SEC by Regions under the 1933 Act with
respect to the shares of Regions Common Stock to be issued to
the stockholders of First National in connection with the
transactions contemplated by this Agreement.
"Regulatory Authorities" shall mean, collectively, the
Federal Trade Commission, the United States Department of
Justice, the Board of the Governors of the Federal Reserve
System, the Office of the Comptroller of the Currency, the
Federal Deposit Insurance Corporation, the Office of Thrift
Supervision, all state regulatory agencies having jurisdiction
over the Parties and their respective Subsidiaries, the NASD,
and the SEC.
"Representative" shall mean any investment banker,
financial advisor, attorney, accountant, consultant, or other
representative of a Person.
"Rights" shall mean all arrangements, calls,
commitments, Contracts, options, rights to subscribe to,
scrip, understandings, warrants, or other binding obligations
of any character whatsoever relating to, or securities or
rights convertible into or exchangeable for, shares of the
capital stock of a Person or by which a Person is or may be
bound to issue additional shares of its capital stock or other
Rights.
"SEC Documents" shall mean all forms, proxy statements,
registration statements, reports, schedules, and other
documents filed, or required to be filed, by a Party or any of
its Subsidiaries with any Regulatory Authority pursuant to the
Securities Laws.
"Securities Laws" shall mean the 1933 Act, the 1934
Act, the Investment Company Act of 1940, as amended, the
Investment Advisors Act of 1940, as amended, the Trust
Indenture Act of 1939, as amended, and the rules and
regulations of any Regulatory Authority promulgated
thereunder.
"Stock Option Agreement" shall mean the stock option
agreement by and between First National and Regions, in
substantially the form of Exhibit 1.
"Stockholders' Meetings" shall mean the respective
meetings of the stockholders of Regions and First National to
be held pursuant to Section 8.1 of this Agreement, including
any adjournment or adjournments thereof.
"Subsidiaries" shall mean all those corporations,
banks, associations, or other entities of which the entity in
question owns or controls 50% or more of the outstanding
equity securities either directly or through an unbroken chain
of entities as to each of which 50% or more of the outstanding
equity securities is owned directly or indirectly by its
parent; provided, there shall not be included any such entity
acquired through foreclosure or any such entity the equity
securities of which are owned or controlled in a fiduciary
capacity.
"Surviving Corporation" shall mean Regions Merger
Subsidiary as the surviving corporation resulting from the
Merger.
"Tax" or "Taxes" shall mean all federal, state, local,
and foreign taxes, charges, fees, levies, imposts, duties, or
other assessments, including income, gross receipts, excise,
employment, sales, use, transfer, license, payroll, franchise,
severance, stamp, occupation, windfall profits, environmental,
federal highway use, commercial rent, customs duties, capital
stock, paid-up capital, profits, withholding, Social Security,
single business and unemployment, disability, real property,
personal property, registration, ad valorem, value added,
alternative or add-on minimum, estimated, or other tax or
governmental fee of any kind whatsoever, imposed or required
to be withheld by the United States or any state, local,
foreign government or subdivision or agency thereof, including
any interest, penalties or additions thereto.
"Taxable Period" shall mean any period prescribed by
any governmental authority, including the United States or any
state, local, foreign government or subdivision or agency
thereof for which a Tax Return is required to be filed or Tax
is required to be paid.
"Tax Return" shall mean any report, return, information
return, or other information required to be supplied to a
taxing authority in connection with Taxes, including any
return of an affiliated or combined or unitary group that
includes a Party or its Subsidiaries.
(b) The terms set forth below shall have the meanings ascribed
thereto in the referenced sections:
Average Closing Price Section 10.1(h)
Closing Section 1.2
Determination Date Section 10.1(h)
Effective Time Section 1.3
ERISA Affiliate Section 5.12(c)
Exchange Agent Section 4.1
Exchange Ratio Section 3.1(c)
First National Benefit Plans Section 5.13(a)
First National Contracts Section 5.14
First National ERISA Plan Section 5.13(a)
First National Rights Section 3.5(a)
First National Pension Plan Section 5.13(a)
First National SEC Reports Section 5.5(a)
Indemnified Party Section 8.14
Index Group Section 10.1(h)
Index Price Section 10.1(h)
Index Ratio Section 10.1(h)
Merger Section 1.1
Regions Ratio Section 10.1(h)
Regions SEC Reports Section 6.5(a)
Starting Date Section 10.1(h)
Takeover Laws Section 5.19
Tax Opinion Section 9.1(g)
(c) Any singular term in this Agreement shall be deemed to
include the plural, and any plural term the singular. Whenever the
words "include," "includes," or "including" are used in this
Agreement, they shall be deemed followed by the words "without
limitation."
11.2 Expenses.
(a) Except as otherwise provided in this Section 11.2, each
of the Parties shall bear and pay all direct costs and expenses
incurred by it or on its behalf in connection with the transactions
contemplated hereunder, including filing, registration, and
application fees, printing fees, and fees and expenses of its own
financial or other consultants, investment bankers, accountants,
and counsel, except that each of the Parties shall bear and pay
one-half of the printing costs incurred in connection with the
printing of the Registration Statement and the Joint Proxy
Statement.
(b) Nothing contained in this Section 11.2 shall constitute
or shall be deemed to constitute liquidated damages for the willful
breach by a Party of the terms of this Agreement or otherwise limit
the rights of the nonbreaching Party
11.3 Brokers and Finders. Except for Morgan Stanley & Co.
Incorporated as to First National and except for Bear, Steams & Co.
Inc. as to Regions, each of the Parties represents and warrants
that neither it nor any of its officers, directors, employees, or
Affiliates has employed any broker or finder or incurred any
Liability for any financial advisory fees, investment bankers'
fees, brokerage fees, commissions, or finders' fees in connection
with this Agreement or the transactions contemplated hereby. In
the event of a claim by any broker or finder based upon his, her,
or its representing or being retained by or allegedly representing
or being retained by First National or Regions, each of First
National and Regions, as the case may be, agrees to indemnify and
hold the other Party harmless of and from any Liability in respect
of any such claim.
11.4 Entire Agreement. Except as otherwise expressly
provided herein, this Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement
between the Parties with respect to the transactions contemplated
hereunder and supersedes all prior arrangements or understandings
with respect thereto, written or oral (except for the
Confidentiality Agreements). Nothing in this Agreement expressed
or implied, is intended to confer upon any Person, other than the
Parties or their respective successors, any rights, remedies,
obligations, or liabilities under or by reason of this Agreement,
other than as provided in Sections 8.12 and 8.14 of this Agreement.
11.5 Amendments. To the extent permitted by Law, this
Agreement may be amended by a subsequent writing signed by each of
the Parties upon the approval of the Boards of Directors of each of
the Parties, whether before or after stockholder approval of this
Agreement has been obtained; provided, that the provisions of this
Agreement or the Plan of Merger relating to the manner or basis in
which shares of First National Common Stock will be exchanged for
Regions Common Stock shall not be amended after the Stockholders'
Meetings without the requisite approval of the holders of the
issued and outstanding shares of Regions Common Stock and First
National Common Stock entitled to vote thereon.
11.6 Waivers.
(a) Prior to or at the Effective Time, Regions, acting
through its Board of Directors, chief executive officer, chief
financial officer, or other authorized officer, shall have the
right to waive any Default in the performance of any term of this
Agreement by First National, to waive or extend the time for the
compliance or fulfillment by First National of any and all of its
obligations under this Agreement, and to waive any or all of the
conditions precedent to the obligations of Regions under this
Agreement, except any condition which, if not satisfied, would
result in the violation of any Law. No such waiver shall be
effective unless in writing signed by a duly authorized officer of
Regions.
(b) Prior to or at the Effective Time, First National,
acting through its Board of Directors, chief executive officer,
chief financial officer, or other authorized officer, shall have
the right to waive any Default in the performance of any term of
this Agreement by Regions, to waive or extend the time for the
compliance or fulfillment by Regions of any and all of its
obligations under this Agreement, and to waive any or all of the
conditions precedent to the obligations of First National under
this Agreement, except any condition which, if not satisfied, would
result in the violation of any Law. No such waiver shall be
effective unless in writing signed by a duly authorized officer of
First National.
(c) The failure of any Party at any time or times to
require performance of any provision hereof shall in no manner
affect the right of such Party at a later time to enforce the same
or any other provision of this Agreement. No waiver of any
condition or of the breach of any term contained in this Agreement
in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a
waiver of any other condition or of the breach of any other term of
this Agreement.
11.7 Assignment. Except as expressly contemplated hereby,
neither this Agreement nor any of the rights, interests, or
obligations hereunder shall be assigned by any Party hereto
(whether by operation of Law or otherwise) without the prior
written consent of the other Party. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit
of, and be enforceable by the Parties and their respective
successors and assigns.
11.8 Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient
if delivered by hand, by facsimile transmission, by registered or
certified mail, postage pre-paid, or by courier or overnight
carrier, to the persons at the addresses set forth below (or at
such other address as may be provided hereunder), and shall be
deemed to have been delivered as of the date so delivered:
<PAGE>
First National: First National Bancorp
303 Jesse Jewell Parkway
Suite 700
Gainesville, Georgia 30501
Telecopy Number: (770) 503 -2700
Attention: Peter D. Miller
President, Chief
Administrative, and
Chief Financial
Officer
Copy to Counsel: Stewart, Melvin & Frost
Hunt Tower
200 Main Street
Gainesville, Georgia 30501
Telecopy Number: (770) 532-5071
Attention: T. Treadwell Syfan
Powell, Goldstein, Frazer & Murphy
Sixteenth Floor
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
Telecopy Number: (404) 572-5958
Attention: Walter G. Moeling IV
Regions: Regions Financial Corporation
417 N. 20th Street
Birmingham, Alabama 35203
Telecopy Number: (205) 326-7571
Attention: Richard D. Horsley
Vice Chairman and
Executive
Financial Officer
Copy to Counsel: Regions Financial Corporation
417 N. 20th Street
Birmingham, Alabama 35203
Telecopy Number: (205) 326-7571
Attention: Samuel E. Upchurch,
Jr., General Counsel
11.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Delaware,
without regard to any applicable conflicts of Laws, except to the
extent that the Laws of the State of Georgia relate to the
consummation of the Merger.
11.10 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same
instrument.
11.11 Captions. The captions contained in this Agreement are
for reference purposes only and are not part of this Agreement.
11.12 Interpretations. Neither this Agreement nor any
uncertainty or ambiguity herein shall be construed or resolved
against any party, whether under any rule of construction or
otherwise. No Party to this Agreement shall be considered the
draftsman. The Parties acknowledge and agree that this Agreement
has been reviewed, negotiated, and accepted by all Parties and
their attorneys and shall be construed and interpreted according to
the ordinary meaning of the words used so as fairly to accomplish
the purposes and intentions of the Parties.
11.13 Enforcement of Agreement. The Parties hereto agree
that irreparable damage would occur in the event that any of the
provisions of this Agreement was not performed in accordance with
its specific terms or was otherwise breached. It is accordingly
agreed that the Parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or
in equity.
11.14 Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to
that jurisdiction, be ineffective to the extent of such invalidity
or unenforceability without rendering invalid or unenforceable the
remaining terms and provisions of this Agreement or affecting the
validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall
be interpreted to be only so broad as is enforceable.
<PAGE>
IN WITNESS WHEREOF, each of the Parties has caused this
Agreement to be executed on its behalf and its corporate seal to be
hereunto affixed and attested by officers thereunto as of the day
and year first above written.
ATTEST: FIRST NATIONAL BANCORP
By: /s/ C. Talmadge Garrison By: /s/ Peter D. Miller
C. Talmadge Garrison Peter D. Miller
Secretary President, Chief
Administrative, and
Chief Financial Officer
[CORPORATE SEAL]
ATTEST: REGIONS FINANCIAL CORPORATION
By: /s/ Samuel E. Upchurch, Jr. By: /s/ J. Stanley Mackin
Samuel E. Upchurch, Jr. J. Stanley Mackin
Corporate Secretary Chairman of the Board and
Chief Executive Officer
[CORPORATE SEAL]
<PAGE>
EXHIBIT 2.2
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of October 22, 1995 (the
"Agreement"), by and between First National Bancorp, a Georgia
corporation ("Issuer"), and Regions Financial Corporation, a
Delaware corporation ("Grantee").
WHEREAS, Grantee and Issuer have entered into that certain
Agreement and Plan of Reorganization, dated as of October 22, 1995
(the "Merger Agreement"), providing for, among other things, the
merger of Issuer with and into a wholly owned Subsidiary of Grantee
with such Subsidiary as the surviving entity; and
WHEREAS, as a condition and inducement to Grantee's execution
of the Merger Agreement, Grantee has required that Issuer agree,
and Issuer has agreed, to grant Grantee the Option (as defined
below);
NOW, THEREFORE, in consideration of the respective
representations, warranties, covenants, and agreements set forth
herein and in the Merger Agreement, and intending to be legally
bound hereby, Issuer and Grantee 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, Issuer hereby grants to Grantee an irrevocable
option (the "Option") to purchase up to 4,089,234 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 $1.00 per share ("Issuer
Common Stock"), of Issuer at a purchase price per Option Share (the
"Purchase Price") equal to $27.00.
3. Exercise of Option.
(a) Provided that (i) Grantee shall not be in material
breach of the agreements or covenants contained in this Agreement
or the Merger Agreement, and (ii) no preliminary or permanent
injunction or other order against the delivery of shares covered by
the Option issued by any court of competent jurisdiction in the
United States shall be in effect, Grantee may exercise the Option,
in whole or in part, at any time and from time to time following
the occurrence of a Purchase Event; provided that the Option shall
terminate and be of no further force and effect upon the earliest
to occur of (A) the Effective Time, (B) termination of the Merger
Agreement in accordance with the terms thereof prior to the
occurrence of a Purchase Event or a Preliminary Purchase Event
(other than a termination of the Merger Agreement by Grantee
pursuant to Section 10.1(b) (but only if such termination was a
result of a willful breach by Issuer) or by Grantee pursuant to
Section I 0. I (c) thereof or by Grantee and Issuer pursuant to
Section I 0. I (a) thereof if Grantee shall at that time have been
entitled to terminate the Merger Agreement pursuant to Section
10.1(b) (but only if such termination was a result of a willful
breach by Issuer) or Section 10.01(c) thereof (each a "Default
Termination")), (C) 15 months after the termination of the Merger
Agreement by Grantee pursuant to a Default Termination, and (D) 15
months after termination of the Merger Agreement (other than
pursuant to a Default Termination) following the occurrence of a
Purchase Event or a Preliminary Purchase Event; provided, further,
that any purchase of shares upon exercise of the Option shall be
subject to compliance with applicable law, including, without
limitation, the Bank Holding Company Act of 1956, as amended (the
"BHC Act"). The rights set forth in Section 8 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.
(b) As used herein, a "Purchase Event" means any of the
following events subsequent to the date of this Agreement:
(i) without Grantee's prior written consent, Issuer
shall have authorized, recommended, publicly proposed, or
publicly announced an intention to authorize, recommend, or
propose, or entered into an agreement with any person (other
than Grantee or any Subsidiary of Grantee) to effect an
Acquisition Transaction (as defined below). As used herein,
the term Acquisition Transaction shall mean (A) a merger,
consolidation, or similar transaction involving Issuer or any
of its Subsidiaries (other than transactions solely between
Issuer's Subsidiaries), (B) except as permitted pursuant to
Section 7.2 of the Merger Agreement, the disposition, by sale,
lease, exchange, or otherwise, of Assets of Issuer or any of
its Subsidiaries representing in either case 20% or more of
the consolidated Assets of Issuer and its Subsidiaries, or (C)
the issuance, sale, or other disposition of (including by way
of merger, consolidation, share exchange, or any similar
transaction) securities representing 20% or more of the voting
power of Issuer or any of its Subsidiaries (any of the
foregoing an "Acquisition Transaction"); or
(ii) any person (other than Grantee or any Subsidiary
of Grantee) shall have acquired beneficial ownership (as such
term is defined in Rule 13d-3 promulgated under the Exchange
Act) of 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, 20% or more of the
then-outstanding shares of Issuer Common Stock.
(c) As used herein, a "Preliminary Purchase Event" means any
of the following events:
(i) any person (other than Grantee or any Subsidiary
of Grantee) shall have commenced (as such term is defined in
Rule 14d-2 under the Exchange Act), or shall have filed a
registration statement under the Securities Act with respect
to, a tender offer or exchange offer to purchase any shares of
Issuer Common Stock such that, upon consummation of such
offer, such person would own or control 15% or more of the
then outstanding shares of Issuer Common Stock (such an offer
being referred to herein as a "Tender Offer" or an "Exchange
Offer," respectively); or
(ii) the holders of Issuer Common Stock shall not have
approved the Merger Agreement at the meeting of such
stockholders held for the purpose of voting on the Merger
Agreement, such meeting shall not have been held or shall have
been canceled prior to termination of the Merger Agreement, or
Issuer's Board of Directors shall have withdrawn or modified
in a manner adverse to Grantee the recommendation of Issuer's
Board of Directors with respect to the Merger Agreement, in
each case after it shall have been publicly announced that any
person (other than Grantee or any Subsidiary of Grantee) shall
have (A) made, or disclosed an intention to make, a proposal
to engage in an Acquisition Transaction, (B) commenced a
Tender Offer or filed a registration statement under the
Securities Act with respect to an Exchange Offer, or (C) filed
an application (or given a notice), whether in draft or final
form, under the BHC Act, the Bank Merger Act, or the Change in
Bank Control Act of 1978, for approval to engage in an
Acquisition Transaction.
As used in this Agreement, "person" shall have the meaning
specified in Sections 3(a)(9) and 13(d)(3) of the Exchange Act.
(d) In the event Grantee wishes to exercise the Option, it
shall send to Issuer 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,
Issuer shall cooperate with Grantee 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, Grantee shall (i) pay to Issuer,
in immediately available funds by wire transfer to a bank account
designated by Issuer, 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 the
Issuer at the address of the Issuer specified in Section 13(f).
(b) At each Closing, simultaneously with the delivery of
immediately available funds and surrender of this Agreement as
provided in Section 4(a), (i) Issuer shall deliver to Grantee (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 evidencing the right to purchase
the balance of the shares of Issuer Common Stock purchasable
hereunder, and (ii) Grantee shall deliver to Issuer a letter
agreeing that Grantee 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 OCTOBER 22,1995. A COPY OF SUCH
AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF WITHOUT CHARGE
UPON RECEIPT BY THE ISSUER 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
Grantee shall have delivered to Issuer a copy of a letter from the
staff of the SEC, or an opinion of counsel in form and substance
reasonably satisfactory to Issuer and its counsel, to the effect
that such legend is not required for purposes of the Securities
Act.
5. Representations and Warranties of Issuer. Issuer hereby
represents and warrants to Grantee as follows:
(a) Issuer 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 Issuer. This Agreement has
been duly executed and delivered by Issuer.
(b) Issuer 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 Issuer Common Stock upon the exercise of the Option
terminates, will have reserved for issuance, upon exercise of
the Option, the number of shares of Issuer Common Stock
necessary for Grantee to exercise the Option, and Issuer will
take all necessary corporate action to authorize and reserve
for issuance all additional shares of Issuer Common Stock or
other securities which may be issued pursuant to Section 7
upon exercise of the Option. The shares of Issuer Common
Stock to be issued upon due exercise of the Option, including
all additional shares of Issuer 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 fights of
any stockholder of Issuer.
6. Representations and Warrants of Grantee. Grantee hereby
represents and warrants to Issuer that:
(a) Grantee has all requisite corporate power and
authority to enter into this Agreement and, subject to any
approvals or consents 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 Grantee. This Agreement has
been duly executed and delivered by Grantee.
(b) This Option is not being, and any Option Shares or
other securities acquired by Grantee 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 Laws.
7. Adjustment upon Changes in Capitalization, etc.
(a) In the event of any change in Issuer 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 Grantee
shall receive, upon exercise of the Option, the number and
class of shares or other securities or property that Grantee
would have received in respect of Issuer 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 Issuer 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 Issuer Common Stock subject to the Option shall be adjusted
so that, after such issuance, it, together with any shares of
Issuer Common Stock previously issued pursuant hereto, equals
19.9% of the number of shares of Issuer Common Stock then
issued and outstanding, without giving effect to any shares
subject to or issued pursuant to the Option.
(b) In the event that Issuer shall enter in an
agreement: (i) to consolidate with or merge into any person,
other than Grantee 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
Grantee or one of its Subsidiaries, to merge into Issuer and
Issuer shall be the continuing or surviving corporation, but,
in connection with such merger, the then outstanding shares of
Issuer Common Stock shall be changed into or exchanged for
stock or other securities of Issuer or any other person or
cash or any other property or the outstanding shares of Issuer
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 to
any person, other than Grantee 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 Grantee, 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), the Issuer (in each case, 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 Grantee. 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 hereinafter
defined) as is equal to the Assigned Value (as hereinafter defined)
multiplied by the number of shares of the Issuer Common Stock for
which the Option was theretofore exercisable, divided by the
Average Price (as hereinafter defined). The exercise price of the
Substitute Option per share of the Substitute Common Stock (the
"Substitute Purchase Price") shall then be equal to the Purchase
Price multiplied by a fraction in which the numerator is the number
of shares of the Issuer Common Stock for which the Option was
theretofore exercisable and the denominator is the number of shares
for which the Substitute Option is exercisable.
(e) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean (x) the
continuing or surviving corporation of a consolidation or
merger with Issuer (if other than Issuer), (y) Issuer in a
merger in which Issuer is the continuing or surviving person,
and (z) the transferee of all or any substantial part of the
Issuer's Assets (or the Assets of its Subsidiaries),
(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 (x)
the price per share of the Issuer Common Stock at which a
Tender Offer or Exchange Offer therefor has been made by any
person (other than Grantee), (y) the price per share of the
Issuer Common Stock to be paid by any person (other than the
Grantee) pursuant to an agreement with Issuer, and (z) the
highest closing sales price per share of Issuer Common Stock
quoted on the Nasdaq National Market (or if Issuer Common
Stock is not quoted on the Nasdaq National Market, 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 Grantee)
within the six-month period immediately preceding the
agreement; provided, that in the event of a sale of less than
all of Issuer'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 Issuer as determined
by a nationally recognized investment banking firm selected by
Grantee (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 the Issuer Common Stock
outstanding at the time of such sale. In the event that an
exchange offer is made for the Issuer 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 the Issuer Common Stock shall be determined by a
nationally recognized investment banking firm mutually
selected by Grantee and Issuer (or if applicable, Acquiring
Corporation), provided that if a mutual selection cannot be
made as to such investment banking firm, it shall be selected
by Grantee. (If there shall be more than one Grantee, any such
selection shall be made by a Grantee Majority.)
(iv) "Average Price" shall mean the average closing
price of a share of the Substitute Common Stock for the one
year immediately preceding the consolidation, merger, or sale
in question, but in no event higher than the closing price of
the shares of the Substitute Common Stock on the day preceding
such consolidation, merger, or sale; provided that if Issuer
is the Issuer of the Substitute Option, the Average Price
shall be computed with respect to a share of common stock
issued by Issuer, the person merging into Issuer or by any
company which controls or is controlled by such merger person,
as Grantee may elect.
(f) In no event pursuant to any of the foregoing paragraphs
shall the Substitute Option be exercisable for more than 19.9% of
the aggregate of the shares of the Substitute Common Stock
outstanding prior to exercise of the Substitute Option. In the
event that the Substitute Option would be exercisable for more than
19.9% of the aggregate of the shares of Substitute Common Stock but
for this clause (f), the Substitute Option Issuer shall make a cash
payment to Grantee equal to the excess of (i) the value of the
Substitute Option without giving effect to the limitation in this
clause (f) over (ii) the value of the Substitute Option after
giving effect to the limitation in this clause (f). This
difference in value shall be determined by a nationally recognized
investment banking firm selected by Grantee (or a Grantee
Majority).
(g) Issuer 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 Issuer 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 shares of
Substitute Common Stock are in no way distinguishable from or have
lesser economic value than other shares of common stock issued by
the Substitute Option Issuer).
(h) The provisions of Sections 8, 9, 10 and 11 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 "Issuer," "Option,"
"Purchase Price," and "Issuer 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 Grantee.
(a) Subject to the last sentence of Section 3(a), at the
request of Grantee at any time commencing upon the first occurrence
of a Repurchase Event (as defined in Section 8(d)) and ending 12
months immediately thereafter, Issuer shall repurchase from Grantee
the Option and all shares of Issuer Common Stock purchased by
Grantee pursuant hereto with respect to which Grantee then has
beneficial ownership. The date on which Grantee exercises 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 Grantee for
any shares of Issuer Common Stock acquired pursuant to the
Option with respect to which Grantee then has beneficial
ownership;
(ii) the excess, if any, of (x) the Applicable Price
(as defined below) for each share of Issuer Common Stock over
(y) the Purchase Price (subject to adjustment pursuant to
Section 7), multiplied by the number of shares of Issuer
Common Stock with respect to which the Option has not been
exercised; and
(iii) the excess, if any, of the Applicable Price over
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 Grantee for each share of Issuer
Common Stock with respect to which the Option has been
exercised and with respect to which Grantee then has
beneficial ownership, multiplied by the number of such shares.
(b) If Grantee exercises its rights under this Section 8,
Issuer shall, within ten business days after the Request Date, pay
the Section 8 Repurchase Consideration to Grantee in immediately
available funds, and contemporaneously with such payment Grantee
shall surrender to Issuer the Option and the certificates
evidencing the shares of Issuer Common Stock purchased thereunder
with respect to which Grantee then has beneficial ownership, and
Grantee 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 Federal Reserve Board or
other regulatory authority is required in connection with the
payment of all or any portion of the Section 8 Repurchase
Consideration, Grantee shall have the ongoing option to revoke its
request for repurchase pursuant to Section 8, in whole or in part,
or to require that Issuer 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 Federal Reserve Board or any other regulatory authority
disapproves of any part of Issuer's proposed repurchase pursuant to
this Section 8, Issuer shall promptly give notice of such fact to
Grantee. If the Federal Reserve Board or other agency prohibits
the repurchase in part but not in whole, then Grantee shall have
the right (i) to revoke the repurchase request or (ii) to the
extent permitted by the Federal Reserve Board or other agency,
determine whether the repurchase should apply to the Option and/or
Option Shares and to what extent to each, and Grantee 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)
and the number of shares covered by the portion of the Option (if
any) that has been repurchased. Grantee shall notify Issuer of its
determination under the preceding sentence within five business
days of receipt of notice of disapproval of the repurchase.
Notwithstanding anything herein to the contrary, all of
Grantee'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 Issuer
Common Stock paid for any such share by the person or groups
described in Section 8(d)(i), (ii) the price per share of Issuer
Common Stock received by holders of Issuer 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 Issuer Common
Stock quoted on the Nasdaq National Market (or if Issuer Common
Stock is not quoted on the Nasdaq National Market, 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 Grantee) during the 60 business days
preceding the Request Date; provided, however, that in the event of
a sale of less than all of Issuer'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 Issuer as
determined by an independent nationally recognized investment
banking firm selected by Grantee and reasonably acceptable to
Issuer (which determination shall be conclusive for all purposes of
this Agreement), divided by the number of shares of the Issuer
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 Grantee and reasonably acceptable to Issuer, which
determination shall be conclusive for all purposes of this
Agreement.
(d) As used herein, "Repurchase Event" shall occur if (i)
any person (other than Grantee or any Subsidiary of Grantee) shall
have acquired beneficial ownership (as such term is defined in Rule
13d-3 promulgated under the Exchange Act), or the right to acquire
beneficial ownership, or any "group" (as such term is defined under
the Exchange Act) shall have been formed which beneficially owns or
has the right to acquire beneficial ownership of 50% or more of the
then-outstanding shares of Issuer Common Stock, or (ii) any of the
transactions described in Section 7(b)(i), 7(b)(ii), or 7(b)(iii)
shall be consummated.
10. Registration Rights.
(a) Issuer shall, subject to the conditions of subparagraph
(c) below, if requested by Grantee (or if applicable, a Grantee
Majority), as expeditiously as possible prepare and file a
registration statement under the Securities Laws if necessary in
order to permit the sale or other disposition of any or all shares
of Issuer Common Stock or other securities that have been acquired
by or are issuable to Grantee upon exercise of the Option in
accordance with the intended method of sale or other disposition
stated by Grantee in such request, including, without limitation,
a "shelf' registration statement under Rule 415 under the
Securities Act or any successor provision, and Issuer shall use its
best efforts to qualify such shares or other securities for sale
under any applicable state securities laws.
(b) If Issuer at any time after the exercise of the Option
proposes to register any shares of Issuer Common Stock under the
Securities Laws in connection with an underwritten public offering
of such Issuer Common Stock, Issuer will promptly give written
notice to Grantee (and any permitted transferee) of its intention
to do so and, upon the written request of Grantee (or any such
permitted transferee of Grantee) given within 30 days after receipt
of any such notice (which request shall specify the number of
shares of Issuer Common Stock intended to be included in such
underwritten public offering by Grantee (or such permitted
transferee)), Issuer will cause all such shares, the holders of
which shall have requested participation in such registration, to
be so registered and included in such underwritten public offering;
provided, that Issuer 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 a dividend reinvestment or similar plan, an
employee benefit plan or a registration filed on Form S-4;
provided, further, that such election pursuant to clause (i) may
only be made one time. If some but not all the shares of Issuer
Common Stock, with respect to which Issuer shall have received
requests for registration pursuant to this subparagraph (b), shall
be excluded from such registration, Issuer shall make appropriate
allocation of shares to be registered among Grantee (and any such
permitted transferee desiring to register their shares) and any
other person (other than Issuer) who or which is permitted to
register their shares of Issuer Common Stock in connection with
such registration 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 Issuer Common Stock registered for
sale.
(c) Issuer shall use all reasonable efforts to cause each
registration statement referred to in subparagraph (a) 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, that Issuer may delay any
registration of Option Shares required pursuant to subparagraph (a)
above for a period not exceeding 90 days provided Issuer shall in
good faith determine that any such registration would adversely
affect an offering or contemplated offering of other securities by
Issuer, and Issuer shall not be required to register Option Shares
under the Securities Laws pursuant to subparagraph (a) above:
(i) prior to the earliest of (a) termination of the
Merger Agreement pursuant to Section 10.1 thereof, (b) failure
to obtain the requisite stockholder approval pursuant to
Section 9. 1 (a) of the Merger Agreement, and (c) a Purchase
Event or a Preliminary Purchase Event-,
(ii) on more than two occasions;
(iii) more than once during any calendar year;
(iv) within 90 days after the effective date of a
registration referred to in subparagraph (b) above pursuant to
which the holder or holders of the Option Shares concerned
were afforded the opportunity to register such shares under
the Securities Laws and such shares were registered as
requested; and
(v) unless a request therefor is made to Issuer 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, Issuer 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. Issuer 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, that
Issuer 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.
(d) Except where applicable state law prohibits such
payments, Issuer will pay all expenses (including without
limitation registration fees, qualification fees, blue sky fees and
expenses (including the fees and expenses of counsel), accounting
expenses, legal expenses, including the reasonable fees and
expenses of one counsel to the holders whose Option Shares are
being registered, printing expenses, expenses of underwriters,
excluding discounts and commissions but including liability
insurance if Issuer so desires or the underwriters so require, and
the reasonable fees and expenses of any necessary special experts)
in connection with each registration pursuant to subparagraph (a)
or (b) above (including the related offerings and sales by holders
of Option Shares) and all other qualifications, notifications or
exemptions pursuant to subparagraph (a) or (b) above. Underwriting
discounts and commissions relating to Option Shares, fees and
disbursements of counsel to the holders of Option Shares being
registered, and any other expenses incurred by such holders in
connection with any such registration shall be borne by such
holders.
(e) In connection with any registration under subparagraph
(a) or (b) above Issuer 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 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 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
Issuer 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 Issuer by such indemnified
party expressly for use therein, and Issuer and each officer,
director, and controlling person of Issuer 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 Issuer 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 Issuer by such
holder or such underwriter, as the case may be, expressly for such
use.
Promptly upon receipt by a party indemnified under this
subparagraph (e) 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 subparagraph (e), 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 subparagraph (e). In case 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
falls 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 subparagraph (e)
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 Issuer, the selling stockholders, and
the underwriters from the offering of the securities and also the
relative fault of Issuer, the selling stockholders, 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, that in no case shall the holders of the
Option Shares 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 subparagraph
(a) or (b) above, issuer and each holder of any Option Shares
(other than Grantee) shall enter into an agreement containing the
indemnification provisions of this subparagraph (e).
(f) Issuer 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, Rules 144 and 144A. Issuer 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 Laws, or required pursuant to any state securities laws
or the rules of any stock exchange.
(g) Issuer 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 Grantee harmless, without
limitation as to time, against any and all liabilities, with
respect to all such taxes.
11. Quotation; Listing. If Issuer 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
National Market or any other securities exchange or any automated
quotations system maintained by a self-regulatory organization,
Issuer, upon the request of Grantee, will promptly file an
application, if required, to authorize for quotation or trading or
listing the shares of Issuer Common Stock or other securities to be
acquired upon exercise of the Option on the Nasdaq National Market
or any other securities exchange or any automated quotations system
maintained by a self-regulatory organization and will use its best
efforts to obtain approval, if required, of such quotation or
listing as soon as practicable.
12. Division of Option. This Agreement (and the Option
granted hereby) are exchangeable, without expense, at the option of
Grantee, upon presentation and surrender of this Agreement at the
principal office of Issuer for other Agreements providing for
Options of different denominations entitling the holder thereof to
purchase in the aggregate the same number of shares of Issuer
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 Issuer 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, Issuer 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 Issuer, whether or not the
Agreement so lost, stolen, destroyed, or mutilated shall at any
time be enforceable by anyone.
13. Miscellaneous.
(a) Expenses. Except as otherwise provided in Section II,
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 Grantee and Issuer (a) constitutes the entire
agreement and supersedes all prior agreements and understandings,
both written and oral, between the parties with respect to the
subject matter hereof and (b) is not intended to confer upon any
person other than the parties hereto (other than any transferees of
the Option Shares or any permitted transferee of this Agreement
pursuant to Section 13(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 Grantee to acquire, or does not require Issuer to
repurchase, the full number of shares of Issuer Common Stock as
provided in Sections 3 and 8 (as adjusted pursuant to Section 7),
it is the express intention of Issuer to allow Grantee to acquire
or to require Issuer 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 Delaware
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):
If to Issuer to: First National Bancorp
303 Jesse Jewell Parkway
Suite 700
Gainesville, Georgia 30501
Telecopy Number: (770) 503-2700
Attention: Peter D. Miller
President, Chief
Administrative, and
Chief Financial Officer
with a copy to: Stewart, Melvin & Frost
Hunt Tower
200 Main Street
Gainesville, Georgia 30501
Telecopy Number: (770) 532-5071
Attention: T. Treadwell Syfan
and a copy to: Powell, Goldstein, Frazer & Murphy
Sixteenth Floor
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
Telecopy Number: (404) 572-5958
Attention: Walter G. Moeling IV
<PAGE>
If to Grantee to: Regions Financial Corporation
417 N. 20th Street
Birmingham, Alabama 35203
Telecopy Number: (205) 326-7571
Attention: Richard D. Horsley Vice
Chairman and Executive
Financial Officer
with a copy to: Regions Financial Corporation
417 N. 20th Street
Birmingham, Alabama 35203
Telecopy Number: (205) 326-7571
Attention: Samuel E. Upchurch, Jr.
General Counsel
(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 Grantee may assign this Agreement to
a wholly owned Subsidiary of Grantee and Grantee may assign its
fights hereunder in whole or in part after the occurrence of a
Purchase Event. 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.
(i) Further Assurances. In the event of any exercise of the
Option by Grantee, Issuer and Grantee 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.
<PAGE>
IN WITNESS WHEREOF, Issuer and Grantee 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.
ATTEST: FIRST NATIONAL BANCORP
By: /s/ C. Talmadge Garrison By: /s/ Peter D. Miller
C. Talmadge Garrison Peter D. Miller
Secretary President, Chief Administrative,
and Chief Financial Officer
[CORPORATE SEAL]
ATTEST: REGIONS FINANCIAL CORPORATION
By:/s/ Samuel E. Upchurch, Jr. By:/s/J. Stanley Mackin
Samuel E. Upchurch, Jr. J. Stanley Mackin
Corporate Secretary Chairman of the Board and
Chief Executive Officer
[CORPORATE SEAL]
