<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 2O549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. _____)*
ALLIED BANKSHARES, INC.
-----------------------------------------
(Name of Issuer)
Common Stock, $1.00 par value per share
-----------------------------------------
(Title of Class of Securities)
01880500
------------------------------
(CUSIP Number)
Richard D. Horsley
Vice Chairman and Executive Financial Officer
Regions Financial Corporation
417 North 20th Street
Birmingham, Alabama 35203
(205) 326-7100
---------------------------------------------
(Name, Address and Telephone Number
of Person Authorized to Receive
Notices and Communications)
June 13, 1996
------------------------------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this statement [X]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.
See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-l(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
THE INFORMATION REQUIRED ON THE REMAINDER OF THIS COVER PAGE SHALL NOT BE
DEEMED TO BE "FILED" FOR THE PURPOSE OF SECTION 18 OF THE SECURITIES EXCHANGE
ACT OF 1934 ("ACT") OR OTHERWISE SUBJECT TO THE LIABILITIES OF THAT SECTION OF
THE ACT BUT SHALL BE SUBJECT TO ALL OTHER PROVISIONS OF THE ACT (HOWEVER, SEE
THE NOTES).
<PAGE> 2
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CUSIP No.: 01880500
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1. Name of Reporting Person: Regions Financial Corporation
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S.S. or I.R.S. Identification No. of Above Person:
-------------------------
I.R.S. Identification No. 63-0589368
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2. Check the Appropriate Box if a Member of a Group (See Instructions):
a. [ ] b. [ ]
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3. SEC Use Only
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4. Source of Funds (see Instructions): [WC; 00]
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5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e): [ ]
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6. Citizenship or Place of Organization: Delaware
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7. Sole Voting Power: 2,513,286*
Number of -----------------------------------
Shares Beneficially 8. Shared Voting Power: 0
Owned by ---------------------------------
Each Reporting 9. Sole Dispositive Power: 2,513,286*
Person With -----------------------------
10. Shared Dispositive Power: 0
---------------------------
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11. Aggregate Amount Beneficially Owned by Each Reporting Person: 2,513,286*
-------------
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12. Check Box if the Aggregate Amount in Row 11 Excludes Certain Shares
(See Instructions): [ ]
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13. Percent of Class Represented by Amount in Row 11: 16.6%**
--------------------------
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14. Type of Reporting Person (See Instructions): CO
-------------------------------
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<PAGE> 3
*The shares indicated are purchasable by Regions Financial Corporation
("Regions") upon exercise of an option issued to Regions on June 13 , 1996, and
described in Item 4 of this report. Prior to the exercise of the option,
Regions is not entitled to any rights as a stockholder of Allied Bankshares,
Inc. ("Allied") as to the shares covered by the option. The option may only be
exercised upon the happening of certain events referred to in Item 4, none of
which has occurred as of the date hereof. Regions expressly disclaims
beneficial ownership of any of the shares of common stock of Allied which are
purchasable by Regions upon exercise of the option.
**The percentage indicated represents the percentage of the total outstanding
shares of common stock of Allied as of June 13, 1996, taking into
consideration the 2,513,286 shares of Allied Common Stock that would be issued
pursuant to the option. For the reasons discussed in the footnote above,
Regions expressly disclaims beneficial ownership of any of the shares of common
stock of Allied which are purchasable by Regions upon exercise of the option.
<PAGE> 4
ITEM 1. SECURITY AND ISSUER.
This statement relates to the common stock of Allied, $1.00 par value per
share ("Allied Common Stock"). Allied is a Georgia corporation whose principal
executive offices are located at 149 Main Street, Thomson, Georgia 30824.
ITEM 2. IDENTITY AND BACKGROUND.
This statement is being filed by Regions, a Delaware corporation whose
principal executive offices are located at 417 North 20th Street, Birmingham,
Alabama 35203.
To the best of Regions' knowledge, during the last five years, neither
Regions nor any of its directors or executive officers has been convicted in
any criminal proceedings (excluding traffic violations or similar misdemeanors)
nor has Regions or any of its directors or executive officers been a party to
any civil proceeding of a judicial or administrative body of competent
jurisdiction resulting in a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
Attached hereto is an appendix to Item 2 setting forth certain additional
information concerning the directors and executive officers of Regions.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
It is presently anticipated that shares of Allied Common Stock as
described in Item 4 would be purchased with working capital funds of Regions.
ITEM 4. PURPOSE OF TRANSACTION.
Pursuant to an Agreement and Plan of Merger, dated as of June 13, 1996
(the "Merger Agreement"), by and between Regions and Allied, and in
consideration thereof, Allied issued an option to Regions on June 13, 1996 (the
"Option") to purchase, under certain conditions, up to 2,513,286 shares of
Allied Common Stock subject to adjustment under certain circumstances at a
purchase price of $12.00 per share, subject to adjustment pursuant to
anti-dilution provisions (the "Purchase Price"). The Option was issued to
Regions pursuant to a Stock Option Agreement, dated as of June 13, 1996 (the
"Option Agreement"), between Regions and Allied.
The Merger Agreement provides, among other things, for the merger of
Allied with and into Regions (the "Merger"). Upon consummation of the Merger,
which is subject to the approval of the Allied stockholders, regulatory
approvals, and the satisfaction or waiver of various other terms and
conditions, each share of Allied Common Stock (excluding shares held by Allied,
or Regions, or any of their respective subsidiaries, in each case other than in
a fiduciary capacity or as a result of debts previously contracted or shares
held by stockholders who perfect their dissenters' rights of appraisal) issued
and outstanding shall be converted into and exchanged for .226 of a share,
subject to possible adjustment under certain circumstances as set forth in the
Merger Agreement, of the common stock of Regions, $.625 par value per share
("Regions Common Stock") (the "Exchange Ratio").
If (i) Regions is not in material breach of the agreements or covenants
contained in the Option 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
<PAGE> 5
States is in effect, Regions may exercise the Option in whole or in part, at
any time and from time to time following the occurrence of certain events (each
a "Purchase Event"), including, among others:
(A) Without Regions' prior written consent, Allied taking certain
actions (each an "Acquisition Transaction"), including, among
others, authorizing, recommending or entering into an agreement with
any third party to effect (1) a merger, consolidation or similar
transaction involving Allied or its subsidiaries (other than
transactions solely between Allied's subsidiaries), (2) except as
permitted under the Agreement, the disposition by sale, lease,
exchange or otherwise of 20% or more of the consolidated assets of
Allied and its subsidiaries, or (3) 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 Allied or any of its subsidiaries; or
(B) any third party acquiring, or obtaining the right to acquire,
beneficial ownership of 20% or more of the outstanding shares of
Allied Common Stock;
provided, that the Option will terminate and be of no further force and effect
upon the earliest to occur of: (i) the Effective Time; (ii) termination of the
Merger Agreement in accordance with the terms thereof (other than as a result
of a willful breach of any representation or warranty or breach of any covenant
whether or not willful by Allied (each a "Default Termination")) prior to the
occurrence of a Purchase Event or (A) the commencement by any third party of a
tender or exchange offer to purchase 15% or more of the outstanding shares of
Allied Common Stock, or (B) failure of the stockholders of Allied to approve
the Merger Agreement (each a "Preliminary Purchase Event") where in the case of
(A) or (B) it shall have been publicly announced that a third person has made,
or disclosed an intention to make, a proposal to engage in an Acquisition
Transaction, or commenced a tender offer or filed a registration statement
under the Securities Act of 1933, as amended, with respect to an exchange
offer, or 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; (iii) 15 months
after the termination of the Merger Agreement by Regions pursuant to a Default
Termination pursuant to Sections 10.1(a), 10.1(b), or 10.1(c) of the Merger
Agreement ("Default Termination"); or (iv) 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.
At the request of Regions at any time, beginning on the first occurrence
of certain events (each a "Repurchase Event"), including, among others, the
acquisition of beneficial ownership or the right to acquire beneficial
ownership by a third party of 50% or more of the outstanding shares of Allied
Common Stock, and ending 12 months immediately thereafter, Allied will
repurchase from Regions (i) the Option, and (ii) all shares of Allied Common
Stock purchased by Regions pursuant to the Option Agreement, at a specified
price.
Upon the occurrence of certain events set forth in the Option Agreement,
the Option must be converted into, or exchanged for, an option, at the election
of Regions, of another corporation or Allied (the "Substitute Option"). The
terms of the Substitute Option are set forth in the Option Agreement.
A copy of the Merger Agreement is incorporated by reference herein as
Exhibit 1, and the foregoing summary is qualified in its entirety by reference
thereto.
<PAGE> 6
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
The 2,513,286 shares of Allied Common Stock which are purchasable by
Regions upon exercise of the Option are equal to approximately 19.9% of Allied
Common Stock, based on the 12,629,581 shares of Allied Common Stock issued and
outstanding on June 13, 1996 before taking into consideration the 2,513,286
shares of Allied Common Stock that would be issued pursuant to the Option.
The Option contains anti-dilution provisions which provide that the number
of shares of Allied Common Stock issuable upon exercise of the Option and the
Purchase Price will be adjusted upon the happening of certain events, including
the payment of a stock dividend or other distribution in Allied Common Stock or
the subdivision or reclassification of Allied Common Stock, as set forth in the
Option Agreement. If any additional shares of Allied Common Stock are issued
after the date of the Option Agreement other than those described in the
preceding sentence, the number of shares subject to the Option shall be
adjusted so that such number of shares following such issuance shall continue
to equal 19.9% of the number of shares of Allied Common Stock then issued and
outstanding.
Regions expressly disclaims any beneficial ownership of the shares of
Allied Common Stock which are purchasable by Regions upon exercise of the
Option because the Option is exercisable only in the circumstances referred to
in Item 4 above, none of which has occurred as of this date.
To the best of Regions' knowledge (i) neither Regions nor any subsidiary
or affiliate of Regions or any of its or their executive officers or directors
beneficially owns any shares of Allied Common Stock, and (ii) there have been
no transactions in the shares of Allied Common Stock effected during the past
60 days by Regions, nor to the best of Regions' knowledge, by any subsidiary or
affiliate of Regions or any of its or their executive officers or directors.
No other person is known by Regions to have the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the sale
of, the Allied Common Stock obtainable by Regions upon exercise of the Option.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES TO THE ISSUER.
Other than the Merger Agreement, including the Option Agreement, a copy of
which (excluding certain exhibits) is incorporated by reference herein, to the
best of Regions' knowledge there are at present no contracts, arrangements,
understandings or relationships (legal or otherwise) among the persons named in
Item 2 above and between such persons and any person with respect to any
securities of Allied.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
The Merger Agreement and the Option Agreement are attached hereto as
Exhibits 1 and 2.
<PAGE> 7
SIGNATURE.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
REGIONS FINANCIAL CORPORATION
Date: June 20, 1996 By: /s/ Richard D. Horsley
--------------------- -----------------------------
Richard D. Horsley
Vice Chairman and Executive
Financial Officer
<PAGE> 8
APPENDIX TO ITEM 2
<TABLE>
<CAPTION>
Principal occupation or
Position with employment, name of business,
Regions Financial principal business, and
Name Corporation principal business address
- ----------------- ------------------ -----------------------------
<S> <C> <C>
J. Stanley Mackin Chairman and Chief Chairman and Chief Executive
Executive Officer Officer, Regions and First
Alabama Bank (banking)
417 North 20th Street
Birmingham, Alabama 35202
Sheila S. Blair Director Executive Director, Greater
Birmingham Foundation (public
foundation)
P.O. Box 131027
Birmingham, Alabama 35213
William R. Boles, Sr. Director Attorney, Boles, Boles & Ryan
(law firm)
1805 Tower Drive
Monroe, Louisiana 71201-4937
James B. Boone, Jr. Director Chairman of the Board, Boone
Newspapers, Inc. (newspaper
publishing, management and
ownership)
P.O. Box 2370
Tuscaloosa, Alabama 35403
Albert P. Brewer Director Professor of Law and Government,
Samford University (educational
institution)
800 Lakeshore Dirve
Birmingham, Alabama 35229
James S.M. French Director Chairman and President, Dunn
Construction Co. (construction,
construction materials,
investments)
P.O. Box 247
Birmingham, Alabama 35201
Catesby ap C. Jones Director Proprietor, Mabry Securities Co.
(insurance agency)
P.O. Box 454
Selma, Alabama 36701
</TABLE>
<PAGE> 9
<TABLE>
<CAPTION>
Principal occupation or
employment, name of business,
Position with Regions principal business, and
Name Financial Corporation principal business address
- ---- --------------------- --------------------------------
<S> <C> <C>
Olin B. King Director Chairman and CEO, SCI Systems,
Inc. (diversified electronics
manufacturer)
P.O. Box 1000
Huntsville, Alabama 35804
Henry E. Simpson Director Attorney, Lange, Simpson,
Robinson & Somerville (law
firm)
1700 First Alabama Bank Building
417 North 20th Street
Birmingham, Alabama 35203
Robert E. Steiner, III Director and Attorney, Steiner, Crum & Baker
Assistant Secretary (law firm)
First Alabama Bank Building
P.O. Box 668
Montgomery, Alabama 36104
Lee J. Styslinger, Jr. Director Chairman, ALTEC Industries,
Inc. (manufacturer of mobile
utility equipment)
P.O. Box 10264
Birmingham, Alabama 35202
Richard D. Horsley Director Vice Chairman of the Board and
Executive Financial Officer,
Regions and First Alabama Bank
417 North 20th Street
Birmingham, Alabama 35202
Carl E. Jones, Jr. Regional President Regional President, Regions
417 North 20th Street
Birmingham, Alabama 35202
Joe M. Hinds, Jr. Regional President Regional President, Regions
417 North 20th Street
Birmingham, Alabama 35202
Sam P. Faucett Regional President Regional President, Regions
417 North 20th Street
Birmingham, Alabama 35202
</TABLE>
<PAGE> 10
<TABLE>
<CAPTION>
Principal occupation or
employment, name of business,
Position with Regions principal business, and
Name Financial Corporation principal business address
- ---- --------------------- --------------------------------
<S> <C> <C>
Wilbur B. Hufham Regional President Regional President, Regions
417 North 20th Street
Birmingham, Alabama 35202
William E. Jordan Regional President Regional President, Regions
417 North 20th Street
Birmingham, Alabama 35202
</TABLE>
<PAGE> 11
EXHIBIT 1
<PAGE> 12
EXHIBIT 1
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
ALLIED BANKSHARES, INC.
AND
REGIONS FINANCIAL CORPORATION
DATED AS OF JUNE 13, 1996
<PAGE> 13
TABLE OF CONTENTS
PAGE
----
<TABLE>
<S> <C>
Parties ................................................................ 1
Preamble ............................................................... 1
ARTICLE 1 - TRANSACTIONS AND TERMS OF MERGER ........................... 1
1.1 Merger ..................................................... 1
1.2 Time and Place of Closing .................................. 2
1.3 Effective Time ............................................. 2
1.4 Execution of Stock Option Agreement ........................ 2
ARTICLE 2 - TERMS OF MERGER ............................................ 2
2.1 Charter .................................................... 2
2.2 Bylaws ..................................................... 2
2.3 Directors and Officers ..................................... 2
ARTICLE 3 - MANNER OF CONVERTING SHARES ................................ 3
3.1 Conversion of Shares ....................................... 3
3.2 Anti-Dilution Provisions ................................... 3
3.3 Shares Held by Allied or Regions ........................... 3
3.4 Fractional Shares .......................................... 3
3.5 Dissenting Stockholders .................................... 4
ARTICLE 4 - EXCHANGE OF SHARES ......................................... 4
4.1 Exchange Procedures ........................................ 4
4.2 Rights of Former Allied Stockholders ....................... 5
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF ALLIED ................... 5
5.1 Organization, Standing, and Power .......................... 5
5.2 Authority; No Breach By Agreement .......................... 6
5.3 Capital Stock .............................................. 6
5.4 Allied Subsidiaries ........................................ 7
5.5 SEC Filings; Financial Statements .......................... 7
5.6 Absence of Undisclosed Liabilities ......................... 8
5.7 Absence of Certain Changes or Events ....................... 8
5.8 Tax Matters ................................................ 8
5.9 Assets ..................................................... 10
5.10 Environmental Matters ...................................... 10
5.11 Compliance with Laws ....................................... 11
5.12 Labor Relations ............................................ 11
5.13 Employee Benefit Plans ..................................... 11
5.14 Material Contracts ......................................... 13
5.15 Legal Proceedings .......................................... 14
5.16 Reports .................................................... 14
5.17 Statements True and Correct ................................ 14
5.18 Accounting, Tax, and Regulatory Matters .................... 15
5.19 State Takeover Laws ........................................ 15
</TABLE>
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<PAGE> 14
<TABLE>
<S> <C>
5.20 Charter Provisions ......................................... 15
5.21 Derivatives Contracts ...................................... 15
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF REGIONS .................. 16
6.1 Organization, Standing, and Power .......................... 16
6.2 Authority; No Breach By Agreement .......................... 16
6.3 Capital Stock .............................................. 17
6.4 Regions Subsidiaries ....................................... 17
6.5 SEC Filings; Financial Statements .......................... 18
6.6 Absence of Undisclosed Liabilities ......................... 18
6.7 Absence of Certain Changes or Events ....................... 18
6.8 Tax Matters ................................................ 19
6.9 Environmental Matters ...................................... 19
6.10 Compliance with Laws ....................................... 20
6.11 Legal Proceedings .......................................... 20
6.12 Reports .................................................... 20
6.13 Statements True and Correct ................................ 21
6.14 Accounting, Tax, and Regulatory Matters..................... 21
ARTICLE 7 - CONDUCT OF BUSINESS PENDING CONSUMMATION ................... 21
7.1 Affirmative Covenants of Allied............................. 21
7.2 Negative Covenants of Allied ............................... 22
7.3 Covenants of Regions ....................................... 24
7.4 Adverse Changes in Condition ............................... 24
7.5 Reports .................................................... 24
ARTICLE 8 - ADDITIONAL AGREEMENTS ...................................... 25
8.1 Registration Statement; Statement; Stockholder Approval..... 25
8.2 Exchange Listing ........................................... 25
8.3 Applications ............................................... 25
8.4 Filings with State Offices ................................. 25
8.5 Agreement as to Efforts to Consummate ...................... 25
8.6 Investigation and Confidentiality .......................... 26
8.7 Press Releases ............................................. 26
8.8 Certain Actions ............................................ 27
8.9 Accounting and Tax Treatment ............................... 27
8.10 State Takeover Laws ........................................ 27
8.11 Charter Provisions ......................................... 27
8.12 Agreement of Affiliates .................................... 27
8.13 Employee Benefits and Contracts ............................ 28
8.14 Indemnification ............................................ 28
8.15 Certain Modifications ...................................... 30
ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO
CONSUMMATE......................................................... 30
9.1 Conditions to Obligations of Each Party .................... 30
9.2 Conditions to Obligations of Regions ....................... 32
9.3 Conditions to Obligations of Allied ........................ 33
</TABLE>
-ii-
<PAGE> 15
<TABLE>
<S> <C>
ARTICLE 10 - TERMINATION ............................................... 33
10.1 Termination ............................................... 33
10.2 Effect of Termination ..................................... 34
10.3 Non-Survival of Representations and Covenants.............. 35
ARTICLE 11 - MISCELLANEOUS ............................................. 35
11.1 Definitions ............................................... 35
11.2 Expenses .................................................. 43
11.3 Brokers and Finders ....................................... 43
11.4 Entire Agreement .......................................... 43
11.5 Amendments ................................................ 43
11.6 Waivers ................................................... 44
11.7 Assignment ................................................ 44
11.8 Notices ................................................... 44
11.9 Governing Law ............................................. 45
11.10 Counterparts .............................................. 45
11.11 Captions .................................................. 45
11.12 Interpretations ........................................... 46
11.13 Enforcement of Agreement .................................. 46
11.14 Severability .............................................. 46
Signatures ............................................................. 47
</TABLE>
-iii-
<PAGE> 16
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of June 13, 1996, by and between Parties ALLIED BANKSHARES, INC.
("Allied"), a corporation organized and existing under the laws of the State of
Georgia, with its principal office located in Thomson, 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 Allied 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 Allied by Regions pursuant to the merger of Allied with
and into Regions. At the effective time of such merger, the outstanding shares
of the capital stock of Allied shall be converted into shares of the common
stock of Regions (except as provided herein). As a result, stockholders of
Allied shall become stockholders of Regions and each of the subsidiaries of
Allied shall continue to conduct its business and operations as a wholly owned
subsidiary of Regions. The transactions described in this Agreement are subject
to the approvals of the stockholders of Allied, the Board of Governors of the
Federal Reserve System and the Georgia 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,
Allied and Regions are entering into a stock option agreement (the "Stock Option
Agreement"), in substantially the form of Exhibit 1, pursuant to which Allied is
granting to Regions an option to purchase shares of Allied common stock.
Certain terms used in this Agreement are defined in Section 11.1
of this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, the
Parties agree as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 MERGER. Subject to the terms and conditions of this
Agreement, at the Effective Time, Allied shall be merged with and into Regions
in accordance with the provisions of Section
-1-
<PAGE> 17
14-2-1107 of the GBCC and of Section 258 of the DGCL and with the effect
provided in Section 14-2-1106 of the GBCC and Section 259 of the DGCL (the
"Merger"). Regions shall be the Surviving Corporation resulting from the
Merger and shall continue to be governed by the Laws of the State of Delaware.
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 Allied
and Regions.
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 duly authorized officers, may mutually
agree. The place of Closing shall be at such location as may be mutually agreed
upon by the Parties.
1.3 EFFECTIVE TIME. The Merger and 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 and the Delaware
Certificate of Merger reflecting the Merger shall become effective with the
Secretary of State of the State of Delaware (the "Effective Time"). Subject to
the terms and conditions hereof, unless otherwise mutually agreed upon in
writing by the duly authorized officers of each Party, the Parties shall use
their reasonable efforts to cause the Effective Time to occur on or before the
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 Allied approve the matters relating to this Agreement required
to be approved by such stockholders by applicable Law or such later date within
30 days thereof as may be specified by Regions.
1.4 EXECUTION OF STOCK OPTION AGREEMENT. Immediately after the
execution of this Agreement and as a condition thereto, Allied is executing and
delivering to Regions the Stock Option Agreement.
ARTICLE 2
TERMS OF MERGER
2.1 CHARTER. The Certificate of Incorporation of Regions in
effect immediately prior to the Effective Time shall be the Certificate of
Incorporation of the Surviving Corporation until otherwise amended or repealed.
2.2 BYLAWS. The Bylaws of Regions in effect immediately prior
to the Effective Time shall be the Bylaws of the Surviving Corporation until
otherwise amended or repealed.
2.3 DIRECTORS AND OFFICERS. The directors of Regions in office
immediately prior to the Effective Time, together with such additional persons
as may thereafter be elected, shall serve as the directors of the Surviving
Corporation from and after the Effective Time in accordance
-2-
<PAGE> 18
with the Bylaws of the Surviving Corporation. The officers of Regions in
office immediately prior to the Effective Time, together with such additional
persons as may thereafter be elected, shall serve as the officers of the
Surviving Corporation from and after the Effective Time in accordance with the
Bylaws of the Surviving Corporation.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 CONVERSION OF SHARES. Subject to the provisions of this
Article 3, at the Effective Time, by virtue of the Merger and without any action
on the part of Regions or Allied, 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 Allied Common Stock (excluding shares
held by any Allied Company or any Regions Company, in each case other than in a
fiduciary capacity or as a result of debts previously contracted or shares held
by stockholders who perfect their dissenters' rights of appraisal) issued and
outstanding at the Effective Time shall cease to be outstanding and shall be
converted into and exchanged for .226 of a share of Regions Common Stock (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 ALLIED OR REGIONS. Each of the shares of
Allied Common Stock held by any Allied 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 Allied 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
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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 DISSENTING STOCKHOLDERS. Any holder of shares of Allied
Common Stock who perfects such holder's dissenters' rights of appraisal in
accordance with and as contemplated by Section 14-2-1302 of the GBCC shall be
entitled to receive the value of such shares in cash as determined pursuant to
such provision of Law; provided, that no such payment shall be made to any
dissenting stockholder unless and until such dissenting stockholder has complied
with the applicable provisions of the GBCC and surrendered to Allied the
certificate or certificates representing the shares for which payment is being
made. In the event that after the Effective Time a dissenting stockholder of
Allied fails to perfect, or effectively withdraws or loses, such holder's right
to appraisal and of payment for such holder's shares, Regions shall issue and
deliver the consideration to which such holder of shares of Allied Common Stock
is entitled under this Article 3 (without interest) upon surrender by such
holder of the certificate or certificates representing shares of Allied Common
Stock held by such holder.
ARTICLE 4
EXCHANGE OF SHARES
4.1 EXCHANGE PROCEDURES. Promptly after the Effective Time,
Regions and Allied shall cause the exchange agent selected by Regions (the
"Exchange Agent") to mail to the former stockholders of Allied appropriate
transmittal materials (which shall specify that delivery shall be effected, and
risk of loss and title to the certificates theretofore representing shares of
Allied Common Stock shall pass, only upon proper delivery of such certificates
to the Exchange Agent). After the Effective Time, each holder of shares of
Allied Common Stock (other than shares to be canceled pursuant to Section 3.3 of
this Agreement or as to which dissenters' rights have been perfected as provided
in Section 3.5 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
Allied 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 Allied
Common Stock is entitled as a result of the Merger until such holder surrenders
such holder's certificate or certificates representing the shares of Allied
Common Stock for exchange as provided in this Section 4.1, or otherwise complies
with the procedures of the Exchange Agent with respect to lost, stolen, or
destroyed certificates. The certificate or certificates of Allied Common Stock
so surrendered shall be duly endorsed as the Exchange Agent may require. Any
other provision of this Agreement notwithstanding, neither Regions, Allied, nor
the Exchange Agent shall be liable
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to a holder of Allied 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 ALLIED STOCKHOLDERS. At the Effective
Time, the stock transfer books of Allied shall be closed as to holders of Allied
Common Stock immediately prior to the Effective Time and no transfer of Allied
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 Allied
Common Stock (other than shares to be canceled pursuant to Section 3.3 of this
Agreement or as to which dissenters' rights have been perfected as provided in
Section 3.5 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 Allied in respect of such shares of Allied 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 Allied 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 Allied Common Stock are converted, regardless
of whether such holders have exchanged their certificates representing Allied
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 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 Allied 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 Allied 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.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF ALLIED
Allied hereby represents and warrants to Regions:
5.1 ORGANIZATION, STANDING, AND POWER. Allied 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.
Allied 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
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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 Allied.
5.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) Allied 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 Allied, subject to the approval of this Agreement by the required vote
of the holders of outstanding shares of Allied Common Stock, which is the only
stockholder vote required for approval of this Agreement and consummation of the
Merger by Allied. Subject to such requisite stockholder approval, this
Agreement represents a legal, valid, and binding obligation of Allied,
enforceable against Allied 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 Allied, nor the consummation by Allied of the transactions contemplated
hereby, nor compliance by Allied with any of the provisions hereof, will (i)
conflict with or result in a breach of any provision of Allied'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 Allied Company under, any Contract or Permit of any Allied 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
Allied, 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
Allied 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 Allied, no notice
to, filing with, or Consent of, any public body or authority is necessary for
the consummation by Allied of the Merger and the other transactions contemplated
in this Agreement.
5.3 CAPITAL STOCK.
(a) The authorized capital stock of Allied consists of
(i) 50,000,000 shares of Allied Common Stock, of which 12,629,581 shares are
issued and outstanding as of the date of
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this Agreement and not more than 12,629,581 shares will be issued and
outstanding at the Effective Time and (ii) 25,000,000 shares of preferred stock,
$1.00 par value, of which no shares are, or will be, issued and outstanding as
of the date of this Agreement or at the Effective Time, respectively. All of
the issued and outstanding shares of capital stock of Allied are duly and
validly issued and outstanding and are fully paid and nonassessable under the
GBCC. None of the outstanding shares of capital stock of Allied has been issued
in violation of any preemptive rights of the current or past stockholders of
Allied.
(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 Allied outstanding and no
outstanding Rights relating to the capital stock of Allied.
5.4 ALLIED SUBSIDIARIES. Allied has disclosed in Section 5.4 of
the Allied Disclosure Memorandum all of the Allied Subsidiaries as of the date
of this Agreement. Allied or one of its Subsidiaries owns all of the issued and
outstanding shares of capital stock of each Allied Subsidiary. No equity
securities of any Allied Subsidiary are or may become required to be issued
(other than to another Allied Company) by reason of any Rights, and there are no
Contracts by which any Allied Subsidiary is bound to issue (other than to
another Allied Company) additional shares of its capital stock or Rights or by
which any Allied Company is or may be bound to transfer any shares of the
capital stock of any Allied Subsidiary (other than to another Allied Company).
There are no Contracts relating to the rights of any Allied Company to vote or
to dispose of any shares of the capital stock of any Allied Subsidiary. All of
the shares of capital stock of each Allied Subsidiary held by an Allied 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 Allied Company free and clear of any Lien. Each Allied 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 Allied 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 Allied. Each Allied 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) Allied has filed and made available to Regions all
forms, reports, and documents required to be filed by Allied with the SEC since
December 31, 1991 (collectively, the "Allied SEC Reports"). The Allied SEC
Reports (i) at the time filed, complied in all material respects with the
applicable requirements of the 1933 Act and the 1934 Act, as the case may be,
and (ii) did not at the time they were filed (or if amended or superseded by a
filing prior to the
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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 Allied SEC Reports or necessary in order to make the statements
in such Allied SEC Reports, in light of the circumstances under which they were
made, not misleading. Except for Allied Subsidiaries that are registered as a
broker, dealer, or investment advisor, none of Allied's Subsidiaries is required
to file any forms, reports, or other documents with the SEC.
(b) Each of the Allied Financial Statements (including,
in each case, any related notes) contained in the Allied SEC Reports, including
any Allied 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 Allied 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. No Allied Company has
any Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Allied, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of Allied as of
March 31, 1996 included in the Allied Financial Statements or reflected in the
notes thereto. No Allied Company has incurred or paid any Liability since March
31, 1996, 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
Allied.
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since March 31, 1996,
except as disclosed in Section 5.7 of the Allied 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 Allied, and (ii) the Allied 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 Allied
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 Allied Companies have been timely filed or requests for extensions
have been timely filed, granted, and have not expired for periods ended on or
before March 31, 1996, 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 Allied, 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
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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 Allied, except as reserved against in the Allied 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 Allied 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 Allied Companies for the period or periods through and
including the date of the respective Allied Financial Statements has been made
and is reflected on such Allied Financial Statements.
(d) Deferred Taxes of the Allied Companies have been
adequately provided for in the Allied Financial Statements.
(e) Each of the Allied 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 Allied.
(f) None of the Allied Companies has made any payments,
is obligated to make any payments, or is a party to any contract, agreement, or
other arrangement that could obligate it to make any payments that would be
disallowed as a deduction under Section 280G or 162(m) of the Internal Revenue
Code.
(g) There are no Liens with respect to Taxes upon any of
the assets of the Allied Companies.
(h) There has not been an ownership change, as defined
in Internal Revenue Code Section 382(g), of the Allied Companies that occurred
during or after any Taxable Period in which the Allied Companies incurred a net
operating loss that carries over to any Taxable Period ending after December 31,
1994.
(i) No Allied 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 Allied Companies as of the date of this Agreement have been or
will be timely made as set forth in Section 5.8 of the Allied 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.
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(k) No Allied 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 Allied 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 Allied Companies are in good
condition, reasonable wear and tear excepted, and are usable in the ordinary
course of business consistent with Allied's past practices. All Assets which
are material to Allied's business on a consolidated basis, held under leases or
subleases by any of the Allied 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 Allied Companies currently maintain insurance similar in amounts, scope, and
coverage to that maintained by other peer banking organizations. None of the
Allied 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 Allied Company
under such policies. The Assets of the Allied Companies include all Assets
required to operate the business of the Allied Companies as presently conducted.
5.10 ENVIRONMENTAL MATTERS.
(a) To the Knowledge of Allied, each Allied 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 Allied.
(b) There is no Litigation pending, or, to the Knowledge
of Allied, threatened before any court, governmental agency, or authority or
other forum in which any Allied Company or any of its Loan Properties or
Participation Facilities (or any Allied 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 a site owned, leased, or
operated by any Allied Company or 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 Allied.
(c) To the Knowledge of Allied, there have been no
releases of Hazardous Material in, on, under, or affecting any Participation
Facility or Loan Property of an Allied
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Company, except such as are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Allied.
5.11 COMPLIANCE WITH LAWS. Allied is duly registered as a bank
holding company under the BHC Act. Each Allied 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 Allied, 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 Allied. None of
the Allied 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 Allied; 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 Allied 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 Allied, (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 Allied, or (iii) requiring any Allied Company to enter into or
consent to the issuance of a cease and desist order, formal agreement,
directive, commitment, or memorandum of understanding, or to adopt any Board
resolution or similar undertaking, which restricts materially the conduct of its
business, or in any manner relates to its capital adequacy, its credit or
reserve policies, its management, or the payment of dividends.
5.12 LABOR RELATIONS. No Allied Company is the subject of any
Litigation asserting that it or any other Allied 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 Allied 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 Allied Company, pending
or threatened, or to the Knowledge of Allied, is there any activity involving
any Allied Company's employees seeking to certify a collective bargaining unit
or engaging in any other organization activity.
5.13 EMPLOYEE BENEFIT PLANS.
(a) Allied has disclosed in Section 5.13 of the Allied
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,
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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 Allied 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 "Allied Benefit
Plans"). Any of the Allied 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 an "Allied ERISA Plan." Each Allied 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 an "Allied Pension Plan." No Allied Pension Plan is or
has been a multiemployer plan within the meaning of Section 3(37) of ERISA.
(b) All Allied 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 Allied, and each
Allied 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 Allied is not aware of any circumstances likely to
result in revocation of any such favorable determination letter. To the
Knowledge of Allied, no Allied Company has engaged in a transaction with respect
to any Allied Benefit Plan that, assuming the taxable period of such transaction
expired as of the date hereof, would subject any Allied 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 Allied.
(c) No Allied 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 Allied Pension Plan, (ii) no change in the actuarial
assumptions with respect to any Allied Pension Plan, and (iii) no increase in
benefits under any Allied 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 Allied or materially adversely affect
the funding status of any such plan. Neither any Allied Pension Plan nor any
"single-employer plan," within the meaning of Section 4001(a)(15) of ERISA,
currently or formerly maintained by any Allied Company, or the single-employer
plan of any entity which is considered one employer with Allied 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 Allied. No Allied Company has provided, or is required to provide,
security to an Allied Pension Plan or to any single-employer plan of an ERISA
Affiliate pursuant to Section 401(a)(29) of the Internal Revenue Code.
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(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 Allied 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 Allied. No Allied 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 Allied. 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 Allied Pension Plan or by any ERISA Affiliate within the
12-month period ending on the date hereof.
(e) No Allied Company has any Liability for retiree
health and life benefits under any of the Allied Benefit Plans and there are no
restrictions on the rights of such Allied 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 Allied.
(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 Allied Company
from any Allied Company under any Allied Benefit Plan or otherwise, (ii)
increase any benefits otherwise payable under any Allied 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 Allied.
(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 Allied 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 Allied Financial Statements to the extent
required by and in accordance with GAAP.
5.14 MATERIAL CONTRACTS. Except as otherwise reflected in the
Allied Financial Statements, none of the Allied 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 Allied Company or the
guarantee by any Allied 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 Allied with the SEC as of the date of
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this Agreement that has not been filed as an exhibit to Allied's Form 10-K filed
for the fiscal year ended December 31, 1995, 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 "Allied Contracts"). With respect to each
Allied Contract: (i) the Contract is in full force and effect; (ii) no Allied
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
Allied; (iii) no Allied 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 Allied, 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 Allied, or has repudiated or waived any material provision
thereunder. Except for Federal Home Loan Bank advances, all of the indebtedness
of any Allied Company for money borrowed is prepayable at any time by such
Allied Company without penalty or premium.
5.15 LEGAL PROCEEDINGS.
(a) There is no Litigation instituted or pending, or, to
the Knowledge of Allied, 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 Allied 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
Allied, nor are there any Orders of any Regulatory Authorities, other
governmental authorities, or arbitrators outstanding against any Allied Company,
that are reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Allied.
(b) Section 5.15(b) of the Allied Disclosure Memorandum
includes a summary report of all Litigation as of the date of this Agreement to
which any Allied Company is a party and which names an Allied 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 Allied 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 Allied).
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 Allied 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
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necessary to make the statements therein not misleading. None of the
information supplied or to be supplied by any Allied Company or any Affiliate
thereof for inclusion in the Proxy Statement to be mailed to Allied's
stockholders in connection with the Stockholders' Meeting, and any other
documents to be filed by an Allied 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 Proxy Statement, when first mailed to the stockholders of
Allied, 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 Proxy Statement or any amendment thereof or supplement thereto, at the time
of the Stockholders' Meeting, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of any
proxy for the Stockholders' Meeting. All documents that any Allied 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. Except as
specifically contemplated by this Agreement, no Allied 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 Allied 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 Allied Company has taken all
action so that the entering into of this Agreement and the consummation of the
Merger and the other transactions contemplated by this Agreement 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 Allied 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
Allied Company that may be directly or indirectly acquired or controlled by it.
5.21 DERIVATIVES CONTRACTS. Neither Allied 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).
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ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF REGIONS
Regions hereby represents and warrants to Allied 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, 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
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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 62,182,540
shares were issued and outstanding as of March 18, 1996. 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 Allied 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 Allied 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 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 rights 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 (except pursuant to 12 USC
Section 55 in the case of national banks and comparable, applicable state Law,
if any, in the case of state depository institutions) 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.
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6.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Regions has filed and made available to Allied all
forms, reports, and documents required to be filed by Regions with the SEC since
December 31, 1991, 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. 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 March 31, 1996 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 March 31, 1996, 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 March 31, 1996,
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.
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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, 1995, 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 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.
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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, or to adopt any Board
resolution or similar undertaking, which restricts materially the conduct of its
business, or in any manner relates to its capital adequacy, its credit or
reserve policies, its management, or the payment of dividends.
6.11 LEGAL PROCEEDINGS. There is no Litigation instituted or
pending, or, to the Knowledge of 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
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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 Proxy Statement to be mailed to Allied's stockholders in connection with
the Stockholders' Meeting, 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 Proxy Statement, when
first mailed to the stockholders of Allied, 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 Proxy Statement or any amendment thereof
or supplement thereto, at the time of the Stockholders' Meeting, be false or
misleading with respect to any material fact, or omit to state any material fact
necessary to correct any statement in any earlier communication with respect to
the solicitation of any proxy for the Stockholders' Meeting. 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. Except as
specifically contemplated by this Agreement, 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 treatment 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 ALLIED. Unless the prior written
consent of Regions shall have been obtained, and except as otherwise expressly
contemplated herein, Allied 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
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(b) adversely affect the ability of any Party to perform its covenants and
agreements under this Agreement.
7.2 NEGATIVE COVENANTS OF ALLIED. From the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement, Allied 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 an authorized officer of Regions:
(a) amend the Articles of Incorporation, Bylaws, or
other governing instruments of any Allied Company, or
(b) incur any additional debt obligation or other
obligation for borrowed money (other than indebtedness of an Allied Company to
another Allied Company) in excess of an aggregate of $150,000 (for the Allied
Companies on a consolidated basis) except in the ordinary course of the business
of Allied Subsidiaries consistent with past practices (which shall include, for
Allied 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 Allied 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
Allied 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 Allied Company, or declare or pay any
dividend or make any other distribution in respect of Allied's capital stock,
provided that Allied 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 Allied Common Stock at a rate of $.09 per share with
usual and regular record and payment dates in accordance with past practice
disclosed in Section 7.2(c) of the Allied 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 Allied
Common Stock do not receive both a dividend in respect of their Allied 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, 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,
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any additional shares of Allied Common Stock or any other capital stock of any
Allied 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 Allied Company or issue or authorize the issuance of any other
securities in respect of or in substitution for shares of Allied Common Stock,
or sell, lease, mortgage, or otherwise dispose of or otherwise encumber (x) any
shares of capital stock of any Allied Subsidiary (unless any such shares of
stock are sold or otherwise transferred to another Allied 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 Allied
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 Allied Company, except in accordance with past
practice disclosed in Section 7.2(g) of the Allied 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
Allied Company; grant any material increase in fees or other increases in
compensation or other benefits to directors of any Allied Company except in
accordance with past practice disclosed in Section 7.2(g) of the Allied
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 Allied Company and any Person (unless such amendment is required by Law)
that the Allied 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 Allied
Company or make any material change in or to any existing employee benefit plans
of any Allied 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
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(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
Allied Company for material money damages or restrictions upon the operations of
any Allied 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.
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ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 REGISTRATION STATEMENT; PROXY STATEMENT; STOCKHOLDER
APPROVAL. 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 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. Allied shall furnish all
information concerning it and the holders of its capital stock as Regions may
reasonably request in connection with such action. Allied 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 such other related matters as it
deems appropriate. In connection with the Stockholders' Meeting, (i) Allied
shall mail the Proxy Statement to its stockholders, (ii) the Parties shall
furnish to each other all information concerning them that they may reasonably
request in connection with such Proxy Statement, (iii) the Board of Directors of
Allied shall recommend (subject to compliance with their fiduciary duties as
advised by counsel) to its stockholders the approval of the matters submitted
for approval, and (iv) the Board of Directors and officers of Allied shall
(subject to compliance with their fiduciary duties as advised by counsel) use
their reasonable efforts to obtain such stockholders' approval.
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 Allied Common Stock pursuant to the Merger.
8.3 APPLICATIONS. Regions shall promptly prepare and file, and
Allied shall cooperate in the preparation and, where appropriate, filing of,
applications with all Regulatory Authorities having jurisdiction over the
transactions contemplated by this Agreement seeking the requisite Consents
necessary to consummate the transactions contemplated by this Agreement.
8.4 FILINGS WITH STATE OFFICES. Upon the terms and subject to
the conditions of this Agreement, Regions shall execute and file the Georgia
Certificate of Merger with the Secretary of State of the State of Georgia and
execute and file the Delaware Certificate of Merger with the Secretary of State
of the State of Delaware 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 best 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 best 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
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shall preclude either Party from exercising its rights under this Agreement.
Each Party shall use, and shall cause each of its Subsidiaries to use, its
reasonable best efforts to obtain all Consents necessary or desirable for the
consummation of the transactions contemplated by this Agreement.
8.6 INVESTIGATION AND CONFIDENTIALITY.
(a) Prior to the Effective Time, each Party shall keep
the other Party advised of all material developments relevant to its business
and to consummation of the Merger and shall permit the other Party to make or
cause to be made such investigation of the business and properties of it and its
Subsidiaries and of their respective financial and legal conditions as the other
Party reasonably requests, provided that such investigation shall be reasonably
related to the transactions contemplated hereby and shall not interfere
unnecessarily with normal operations. No investigation by a Party shall affect
the representations and warranties of the other Party.
(b) Each Party shall, and shall cause its advisers and
agents to, maintain the confidentiality of all confidential information
furnished to it by the other Party concerning its and its Subsidiaries'
businesses, operations, and financial positions ("Confidential Information") and
shall not use such information for any purpose except in furtherance of the
transactions contemplated by this Agreement. Each Party shall maintain the
confidentiality of all Confidential Information obtained in connection with this
Agreement or the transactions contemplated hereby unless (i) such information
becomes publicly available through no fault of such Party, or was, is, or
becomes available to that Party from a source other than the other Party or its
Representatives, which source was itself not bound by a confidentiality
agreement with, or other contractual, legal, or fiduciary obligation of
confidentiality with respect to that information, or (ii) the furnishing or use
of such information is required by proper judicial, administrative, or other
legal proceeding, provided that the other Party is promptly notified in writing
of such request, unless such notification is not, in the opinion of counsel,
permitted by Law. Each Party and its Representatives will hold and maintain all
Confidential Information in confidence and will not disclose to any third party
or permit any third party access to any Confidential Information or the
substance thereof provided that a Party may disclose Confidential Information to
such of its Representatives who need to know such information in connection with
the transactions contemplated hereby. 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
Allied 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
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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 transactions contemplated hereby, no Allied Company nor any Affiliate
thereof nor any Representatives thereof retained by any Allied Company shall
directly or indirectly solicit any Acquisition Proposal by any Person. Except
to the extent necessary to comply with the fiduciary duties of Allied's Board of
Directors as advised by counsel, no Allied 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 Allied 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. Allied shall promptly notify Regions orally
and in writing in the event that it receives any inquiry or proposal relating to
any such transaction. Allied 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 Allied 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 Allied Company shall take all
necessary action to ensure that the entering into of this Agreement and the
consummation of the Merger and the other transactions contemplated hereby 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 Allied 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 Allied Company that may be directly or indirectly acquired or controlled by
it.
8.12 AGREEMENT OF AFFILIATES. Allied has disclosed in Section
8.12 of the Allied Disclosure Memorandum each Person whom it reasonably believes
is an "affiliate" of Allied for purposes of Rule 145 under the 1933 Act. Allied
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 2, providing that such Person will not sell,
pledge, transfer, or otherwise dispose of the shares of Allied Common Stock held
by such Person except as contemplated by such agreement or by this Agreement and
will not sell, pledge, transfer, or
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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 Allied 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 Allied in exchange for shares of
Allied Common Stock shall not be transferable until such time as financial
results covering at least 30 days of combined operations of Regions and Allied
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 Allied 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, Regions shall provide generally to officers and employees of the Allied
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 Allied
should be treated as service under Regions' qualified defined benefit plans,
(ii) service under any qualified defined contribution plans of Allied shall be
treated as service under Regions' qualified defined contribution plans, and
(iii) service under any other employee benefit plans of Allied shall be treated
as service under any similar employee benefit plans maintained by Regions.
Regions also shall cause Allied 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 Allied Disclosure
Memorandum to Regions between any Allied 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
Allied Benefit Plans.
8.14 INDEMNIFICATION.
(a) Regions shall indemnify, defend, and hold harmless
the present and former directors, officers, employees, and agents of the Allied
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 Allied's Articles of Incorporation and Bylaws as in effect
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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
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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 Allied shall consult
with respect to their loan, litigation, and real estate valuation policies and
practices (including loan classifications and levels of reserves) and Allied
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 Allied
also shall consult with respect to the character, amount, and timing of
restructuring and Merger-related expense charges to be taken by each of the
Parties in connection with the transactions contemplated by this Agreement and
shall take such charges in accordance with GAAP, 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.
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 to consummate the Merger
and the other transactions contemplated hereby are subject to the satisfaction
of the following conditions, unless waived by both Parties pursuant to Section
11.6 of this Agreement:
(a) STOCKHOLDER APPROVAL. The stockholders of Allied
shall have approved this Agreement, and the consummation of the transactions
contemplated hereby, 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.
(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
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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 9.1(b) of this Agreement) or for the
preventing of any Default under any Contract or Permit of such Party which, if
not obtained or made, is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on such Party. No Consent so obtained
which is necessary to consummate the transactions contemplated hereby shall be
conditioned or restricted in a manner 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 so as to
render inadvisable the consummation of the Merger.
(d) LEGAL PROCEEDINGS. No court or governmental or
regulatory authority of competent jurisdiction shall have enacted, issued,
promulgated, enforced, or entered any Law or Order (whether temporary,
preliminary, or permanent) or taken any other action which prohibits, restricts,
or makes illegal consummation of the transactions contemplated by this
Agreement.
(e) REGISTRATION STATEMENT. The Registration Statement
shall be effective under the 1933 Act, no stop orders suspending the
effectiveness of the Registration Statement shall have been issued, no action,
suit, proceeding, or investigation by the SEC to suspend the effectiveness
thereof shall have been initiated and be continuing, and all necessary approvals
under state securities Laws or the 1933 Act or 1934 Act relating to the issuance
or trading of the shares of 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 Allied Common Stock for
Regions Common Stock will not give rise to gain or loss to the stockholders of
Allied 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 Allied 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
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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
Allied 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
Allied 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 Allied 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 Allied 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
Allied; 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 Allied or to a matter being "known" by
Allied shall be deemed not to include such qualifications.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and
all of the agreements and covenants of Allied 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. Allied shall have delivered to
Regions (i) a certificate, dated as of the Effective Time and signed on its
behalf by its duly authorized officers, to the effect that the conditions of its
obligations set forth in Sections 9.2(a) and 9.2(b) of this Agreement have been
satisfied, and (ii) certified copies of resolutions duly adopted by Allied'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 consummation of the transactions contemplated hereby, all in
such reasonable detail as Regions and its counsel shall request.
(d) AFFILIATE AGREEMENTS. Regions shall have received
from each affiliate of Allied 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.
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9.3 CONDITIONS TO OBLIGATIONS OF ALLIED. The obligations of
Allied 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 Allied pursuant to Section 11.6(b) of
this Agreement:
(a) REPRESENTATIONS AND WARRANTIES. For purposes of
this Section 9.3(a), the accuracy of the representations and warranties of
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
Allied (i) a certificate, dated as of the Effective Time and signed on its
behalf by its duly authorized officers, to the effect that the conditions of
its obligations set forth in Sections 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 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 Allied 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 Allied, this Agreement may be terminated and the Merger
abandoned at any time prior to the Effective Time:
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(a) By mutual consent of the Board of Directors of
Regions and the Board of Directors of Allied; 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 Allied 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 Allied 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 Allied fail to vote their approval of the matters submitted for
the approval by such stockholders at the Stockholders' Meeting where the
transactions were presented to such stockholders for approval and voted upon; or
(e) By the Board of Directors of either Party in the
event that the Merger shall not have been consummated by March 31, 1997, 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 Allied 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.
10.2 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to Section 10.1 of this Agreement, this
Agreement 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
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pursuant to Sections 10.1(b), 10.1(c), or 10.1(f) of this Agreement shall not
relieve the breaching Party from Liability for an uncured willful breach of a
representation, warranty, covenant, or agreement giving rise to such
termination. The Stock Option Agreement shall be governed by its own terms 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
Merger, including the Exhibits (other than the Stock Option Agreement) delivered
pursuant hereto and incorporated herein by reference.
"ALLIED COMMON STOCK" shall mean the $1.00 par value
common stock of Allied.
"ALLIED COMPANIES" shall mean, collectively, Allied
and all Allied Subsidiaries.
"ALLIED DISCLOSURE MEMORANDUM" shall mean the
written information entitled "Allied Bancorp Disclosure Memorandum" delivered
prior to 5:00 p.m., Eastern time, on the seventh day after the date of this
Agreement, 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
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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.
"ALLIED FINANCIAL STATEMENTS" shall mean (i) the
consolidated balance sheets (including related notes and schedules, if any) of
Allied as of March 31, 1996, and as of December 31, 1995, and 1994, and the
related statements of income, changes in stockholders' equity, and cash flows
(including related notes and schedules, if any) for three months ended March 31,
1996 and for each of the three fiscal years ended December 31, 1995, 1994, and
1993, as filed by Allied in SEC Documents, and (ii) the consolidated balance
sheets of Allied (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 March 31, 1996.
"ALLIED SUBSIDIARIES" shall mean the Subsidiaries of
Allied, which shall include the Allied Subsidiaries described in Section 5.4 of
this Agreement and any corporation, bank, savings association, or other
organization acquired as a Subsidiary of Allied in the future and owned by
Allied at the Effective Time.
"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.
"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
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Contract, Order, or Permit, or (iii) any occurrence of any event that with or
without the passage of time or the giving of notice would give rise to a right
to terminate or revoke, change the current terms of, or renegotiate, or to
accelerate, increase, or impose any Liability under, any Contract, Order, or
Permit, where, in any such event, such Default is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on a Party.
"DELAWARE CERTIFICATE OF MERGER" shall mean the
Certificate of Merger to be executed by Regions and filed with the Secretary of
State of the State of Delaware relating to the Merger as contemplated by Section
1.1 of this Agreement.
"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 and 2, inclusive, shall mean the
Exhibits so marked, copies of which are attached to this Agreement. Such
Exhibits are hereby incorporated by reference herein and made a part hereof, and
may be referred to in this Agreement and any other related instrument or
document without being attached hereto.
"GAAP" shall mean generally accepted accounting
principles, consistently applied during the periods involved.
"GBCC" shall mean the Georgia Business Corporation
Code.
"GEORGIA CERTIFICATE OF MERGER" shall mean the
Certificate of Merger to be executed by Regions 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,
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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 II of the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"INTERNAL REVENUE CODE" shall mean the Internal
Revenue Code of 1986, as amended, and the rules and regulations promulgated
thereunder.
"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 right
or interest, charge, or claim of any nature whatsoever of, on, or with respect
to any property or property interest, other than (i) Liens for 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
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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, and (d)
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.
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"PARTY" shall mean either Allied or Regions, and
"PARTIES" shall mean both Allied 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.
"PROXY STATEMENT" shall mean the proxy statement
used by Allied to solicit the approval of its 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 Allied Common
Stock.
"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 date of this Agreement to Allied 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 March 31, 1996, and the restated consolidated statements
of condition (including related notes and schedules, if any) of Regions as of
December 31, 1995 and 1994, the related statements of income, changes in
stockholders' equity, and cash flows (including related notes and schedules, if
any) for the three months ended March 31, 1996 and the related restated
statements of income, changes in stockholders' equity, and cash flows (including
related notes and schedules, if any) for each of the three years ended December
31, 1995, 1994, and 1993, as filed by Regions in SEC Documents and reflecting
the acquisition of First National Bancorp accounted for as a pooling of
interests 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
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any) included in SEC Documents filed with respect to periods ended subsequent to
March 31, 1996.
"REGIONS SUBSIDIARIES" shall mean the Subsidiaries
of Regions 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 Allied 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" shall mean the United States Securities and
Exchange Commission.
"SEC DOCUMENTS" shall mean all forms, proxy
statements, registration statements, reports, schedules, and other documents
filed, or required to be filed, by a Party or any of its Subsidiaries with any
Regulatory Authority pursuant to the Securities Laws.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934
Act, the Investment Company Act of 1940, as amended, the Investment Advisors Act
of 1940, as amended, the Trust Indenture Act of 1939, as amended, and the rules
and regulations of any Regulatory Authority promulgated thereunder.
"STOCK OPTION AGREEMENT" shall mean the stock option
agreement by and between Allied and Regions, in substantially the form of
Exhibit 1.
"STOCKHOLDERS' MEETING" shall mean the meeting of
the stockholders of Allied to be held pursuant to Section 8.1 of this Agreement,
including any adjournment or adjournments thereof.
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"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 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:
Closing Section 1.2
Effective Time Section 1.3
ERISA Affiliate Section 5.13(c)
Exchange Agent Section 4.1
Exchange Ratio Section 3.1(b)
Allied Benefit Plans Section 5.13(a)
Allied Contracts Section 5.14
Allied ERISA Plan Section 5.13(a)
Allied Pension Plan Section 5.13(a)
Allied SEC Reports Section 5.5(a)
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Indemnified Party Section 8.14
Merger Section 1.1
Regions SEC Reports Section 6.5(a)
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 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 Financial Consulting
Associates, Inc. as to Allied, 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 Allied or Regions, each of Allied 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
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Directors of each of the Parties, whether before or after stockholder approval
of this Agreement has been obtained; provided, that the provisions of this
Agreement relating to the manner or basis in which shares of Allied Common Stock
will be exchanged for Regions Common Stock shall not be amended after the
Stockholders' Meeting without the requisite approval of the holders of the
issued and outstanding shares of Allied 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 Allied, to waive or extend
the time for the compliance or fulfillment by Allied 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, Allied, 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 Allied 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 Allied.
(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:
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Allied: Allied Bankshares, Inc.
149 Main Street
Thomson, Georgia 30824
Telecopy Number: (706) 595-1149
Attention: Boone A. Knox
Chairman and Chief Executive
Officer
Copy to Counsel: Gilbert, Harrell, Gilbert, Sumerford & Martin
777 Gloucester Street, Suite 200
Brunswick, Georgia 31520
Telecopy Number: (912) 264-3917
Attention:H. Hall Ware III
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.
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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.
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IN WITNESS WHEREOF, each of the Parties has caused this Agreement
to be executed on its behalf and its corporate seal to be hereunto affixed and
attested by officers thereunto as of the day and year first above written.
ATTEST: ALLIED BANKSHARES, INC.
By: /s/ Ben O. Howell, Jr. By: /s/ Boone A. Knox
-------------------------- --------------------------------------
Ben O. Howell, Jr. Boone A. Knox
Secretary Chairman and Chief Executive 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]
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EXHIBIT 2
<PAGE> 64
EXHIBIT 2
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of June 13, 1996 (the
"Agreement"), by and between Allied Bankshares, Inc., 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 Merger, dated as of June 13, 1996 (the "Merger
Agreement"), providing for, among other things, the merger of Issuer with and
into Grantee with Grantee 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 2,513,286 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 First National
Bancorp's common stock (omit the $ sign)?"$1.00 per share ("Issuer Common
Stock"), of Issuer at a purchase price per Option Share (the "Purchase Price")
equal to $12.00.
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 (x)
by Grantee pursuant to Section 10.1(b) (but only if such termination was a
result of a willful breach by Issuer), (y) by Grantee pursuant to Section
10.1(c) thereof, or (z) by Grantee and Issuer pursuant to Section 10.1(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 10.1(c) thereof (each a "Default
Termination")), (C) 15 months after the termination of
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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
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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 pre-emptive 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.
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(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 JUNE 13,
1996. 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 rights of any stockholder of Issuer.
6. REPRESENTATIONS AND WARRANTS OF GRANTEE. Grantee hereby
represents and warrants to Issuer that:
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(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
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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
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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.
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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
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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
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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;
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(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
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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
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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.
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13. MISCELLANEOUS.
(a) EXPENSES. Except as otherwise provided in Section
11, 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):
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If to Issuer to: Allied Bankshares, Inc.
149 Main Street
Thomson, Georgia 30824
Telecopy Number: (706) 595-1149
Attention: Boone A. Knox
Chairman and Chief
Executive Officer
with a copy to: Gilbert, Harrell, Gilbert, Sumerford &
Martin
777 Gloucester Street, Suite 200
Brunswick, Georgia 31520
Telecopy Number: (912) 264-3917
Attention: H. Hall Ware III
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 rights 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.
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(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.
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: ALLIED BANKSHARES, INC.
By: /s/ Ben O. Howell, Jr. By: /s/ Boone A. Knox
---------------------------- -----------------------------
Ben O. Howell, Jr. Boone A. Knox
Secretary Chairman and Chief Executive
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]
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