<PAGE> 1
As filed with the Securities and Exchange Commission on October 21, 1997
Registration No. 333-37361
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
PRE-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-4
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
----------------------
Regions Financial Corporation
(Exact Name of Registrant as Specified in its Charter)
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Delaware 6711 63-0589368
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
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417 North 20th Street
Birmingham, AL 35203
(205) 326-7100
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
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Samuel E. Upchurch, Jr.
General Counsel and Corporate Secretary
417 North 20th Street
Birmingham, AL 35203
(205) 326-7860
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
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Copies to:
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STEVEN S. DUNLEVIE
CHARLES C. PINCKNEY FRANK M. CONNER III BETTY DERRICK
LANGE, SIMPSON, ROBINSON & ALSTON & BIRD WOMBLE, CARLYLE, SANDRIDGE
SOMERVILLE 601 PENNSYLVANIA AVENUE, N.W. & RICE, PLLC
417 NORTH 20TH STREET, SUITE 1700 NORTH BUILDING, SUITE 250 1275 PEACHTREE STREET, NE, SUITE 700
BIRMINGHAM, AL 35203 WASHINGTON, D.C. 20004 ATLANTA, GEORGIA 30309
(205) 250-5000 (202) 508-3303 (404) 888-7407
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Approximate date of commencement of proposed sale of securities to the
public: As soon as practicable after this Registration Statement becomes
effective.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
--------------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), shall
determine.
<PAGE> 2
REGIONS FINANCIAL CORPORATION
CROSS-REFERENCE SHEET
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CAPTION OR LOCATION IN
FORM S-4 ITEM PROXY STATEMENT/PROSPECTUS
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1. Forepart of registration statement and outside front
cover page of prospectus.............................. Outside Front Cover of Proxy
Statement/Prospectus; Facing Page of
Registration Statement; Cross-Reference Sheet.
2. Inside front and outside back cover of prospectus..... Available Information; Documents
Incorporated by Reference; Table of
Contents.
3. Risk factors, ratio of earnings to fixed charges and
other information..................................... Summary; Comparative Market Prices and Dividends.
4. Terms of the transaction.............................. Summary; Description of the Transaction;
Effect of the Merger on Rights of
Stockholders; Description of Regions
Common Stock.
5. Pro forma financial information....................... Summary; Pro Forma Financial Information.
6. Material contacts with the company being acquired..... Summary; Description of the Transaction.
7. Additional information required for re-offering by
persons and parties deemed to be underwriters......... Not applicable.
8. Interest of named experts and counsel................. Opinions.
9. Disclosure of Commission position on indemnification
for Securities Act liabilities........................ Not Applicable (See Part II, Item 20).
10. Information with respect to S-3 registrants........... Documents Incorporated by Reference;
Summary; Business of Regions.
11. Incorporation of certain information by reference..... Documents Incorporated by Reference.
12. Information with respect to S-2 or S-3 registrants.... Not Applicable.
13. Incorporation of certain information by reference..... Not Applicable.
14. Information with respect to registrants other than S-2
or S-3 registrants.................................... Not Applicable.
15. Information with respect to S-3 companies............. Business of GFB; Voting Securities and
Principal Stockholders of GFB
16. Information with respect to S-2 or S-3 companies...... Not Applicable.
17. Information with respect to companies other than S-2
or S-3 companies...................................... Not Applicable.
18. Information if proxies, consents, or authorizations
are to be solicited................................... Documents Incorporated by Reference; Summary;
The Special Meeting; Description of the Transaction;
Description of Regions Common Stock.
19. Information if proxies, consents, or authorizations
are not to be solicited or in an exchange offer....... Not Applicable.
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Dear GF Bancshares, Inc. Stockholder:
You are cordially invited to attend the Special Meeting of Stockholders of
GF Bancshares, Inc. ("GFB") to be held at GFB's main office, 327 West Taylor
Street, Griffin, Georgia, 30223 on November 25, 1997, at 4:30 p.m., local time,
notice of which is enclosed.
At the Special Meeting, you will be asked to consider and vote on a
proposal to approve an Agreement and Plan of Merger (the "Agreement"), entered
into with Regions Financial Corporation ("Regions") pursuant to which GFB will
merge (the "Merger") with and into Regions, and Griffin Federal Savings Bank
(the "Bank"), a wholly owned subsidiary of GFB, will become a wholly owned
subsidiary of Regions and will continue serving its current markets as a
federally-chartered stock savings bank until combined with Regions' principal
banking subsidiary. Upon consummation of the Merger, each share of GFB common
stock issued and outstanding (except for certain shares held by GFB, Regions, or
their respective subsidiaries, and shares held by stockholders who perfect their
dissenters' rights) will be converted into that fraction of a share of Regions
Common Stock obtained by dividing $18.00 by the average of the daily last sale
prices of Regions Common Stock on the Nasdaq National Market for the 10
consecutive trading days on which such shares are quoted on the Nasdaq National
Market ending on the last trading day immediately preceding the Special Meeting.
The accompanying Proxy Statement/Prospectus includes a description of the
proposed Merger and provides other specific information concerning the Special
Meeting. Please read these materials carefully and consider thoughtfully the
information set forth in them.
The Merger has been approved by your Board of Directors and is
recommended by the Board to you for approval. Six members of the Board of
Directors of GFB who held in the aggregate approximately 18.1% of the
outstanding common stock of GFB as of the record date have agreed to vote those
GFB shares over which such member has voting authority (other than in a
fiduciary capacity) in favor of the Merger. Consummation of the Merger is
subject to certain conditions, including approval of the Agreement by GFB
stockholders and approval of the Merger by various regulatory agencies.
Stockholders of GFB who perfect their dissenters' rights prior to the
proposed Merger and comply with applicable law will be entitled to receive the
fair value of their GFB shares in cash, as provided by applicable law.
It is important to understand that approval of the Agreement requires the
affirmative vote of a majority of the common stock of GFB entitled to vote at
the Special Meeting, not just a majority of the votes cast. Consequently, a
failure to vote will have the same effect as a vote against the Agreement.
Accordingly, whether or not you plan to attend the Special Meeting, you are
urged to complete, sign, and return promptly the enclosed proxy card. If you
attend the Special Meeting, you may vote in person if you wish, even if you
previously have returned your proxy card. The proposed Merger with Regions is a
significant step for GFB, and your vote on this matter is of great importance.
On behalf of the Board of Directors, I urge you to vote for approval of the
Merger by marking the enclosed proxy card "FOR" Item One.
Sincerely,
Ron J. Franklin
President and Chief Executive Officer
<PAGE> 4
GF BANCSHARES, INC.
327 WEST TAYLOR STREET, GRIFFIN, GEORGIA 30223
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 25, 1997
Notice is hereby given that a Special Meeting of Stockholders (the "Special
Meeting") of GF Bancshares, Inc. ("GFB"), a savings and loan holding company,
will be held at GFB's main office, 327 West Taylor Street, Griffin, Georgia,
30223, on November 25, 1997, at 4:30 p.m., local time, for the following
purposes:
1. Merger. To consider and vote on the Agreement and Plan of Merger, dated
as of May 29, 1997 (the "Agreement"), by and between GFB and Regions Financial
Corporation ("Regions") pursuant to which (i) Regions will acquire all of the
issued and outstanding common stock of GFB through the merger of GFB with and
into Regions (the "Merger"), (ii) each share of GFB common stock (except for
certain shares held by GFB, Regions, or their respective subsidiaries, and
shares held by stockholders who perfect their dissenters' rights) will be
converted into that fraction of a share of Regions Common Stock determined by
dividing $18.00 by the average of the daily last sale prices of Regions Common
Stock on the Nasdaq National Market for the 10 consecutive trading days on which
such shares are quoted on the Nasdaq National Market ending on the last trading
day immediately preceding the Special Meeting, and (iii) each GFB stockholder
will receive cash in lieu of any remaining fractional share interest, all as
described more fully in the accompanying Proxy Statement/Prospectus; and
2. Other Business. To transact such other business as may properly come
before the Special Meeting, including adjourning the Special Meeting to permit,
if necessary, further solicitation of proxies.
Only stockholders of record at the close of business on October 16, 1997,
are entitled to receive notice of and to vote at the Special Meeting or any
adjournment or postponement thereof.
Stockholders of GFB have a right to dissent from the Merger and obtain
payment of the fair value of their shares in cash by complying with the
applicable provisions of the Georgia Business Corporation Code, which are
attached to the accompanying Proxy Statement/Prospectus as Appendix C.
The Board of Directors of GFB recommends that holders of GFB common stock
vote to approve the proposals listed above.
We urge you to sign and return the enclosed proxy as promptly as possible,
whether or not you plan to attend the Special Meeting in person. The proxy may
be revoked by the person executing the proxy by filing with the Secretary of GFB
an instrument of revocation or a duly executed proxy bearing a later date or by
electing to vote in person at the Special Meeting.
By Order of the Board of Directors
Robert H. Crossfield
Corporate Secretary
October 22, 1997
<PAGE> 5
GF BANCSHARES, INC. REGIONS FINANCIAL CORPORATION
PROXY STATEMENT PROSPECTUS
FOR SPECIAL MEETING OF STOCKHOLDERS COMMON STOCK
TO BE HELD NOVEMBER 25, 1997 (PAR VALUE $.625)
UP TO 667,234 SHARES
This Prospectus of Regions Financial Corporation, a regional bank holding
company organized and existing under the laws of the state of Delaware
("Regions"), relates to the shares of its common stock, par value $.625 per
share ("Regions Common Stock"), which are issuable to the stockholders of GF
Bancshares, Inc., a bank holding company organized and existing under the laws
of the state of Georgia ("GFB") upon consummation of the proposed merger (the
"Merger") described herein, by which GFB will merge with and into Regions
pursuant to the terms of an Agreement and Plan of Merger, dated as of May 29,
1997, by and between Regions and GFB (the "Agreement").
On the effective date of the Merger (the "Effective Date"), except as
otherwise described herein, (i) GFB will merge with and into Regions, (ii) each
outstanding share of the $1.00 par value common stock of GFB ("GFB Common
Stock") will be converted into that fraction of a share of Regions Common Stock
determined by dividing $18.00 by the average of the daily last sale prices of
Regions Common Stock on the Nasdaq National Market for the 10 consecutive
trading days on which such shares are quoted on the Nasdaq National Market
ending on the last trading day immediately preceding the Special Meeting (as
defined below) of GFB stockholders, and (iii) each holder of GFB Common Stock
will receive cash in lieu of any remaining fractional share interest. A copy of
the Agreement is attached to this Proxy Statement/Prospectus as Appendix A.
As a result of the Merger, the separate existence of GFB will cease, and
Griffin Federal Savings Bank, a wholly owned subsidiary of GFB (the "Bank"),
will become a wholly owned subsidiary of Regions. The Bank will continue in
operation serving its current markets as a federally-chartered stock savings
bank until combined with Regions' principal banking subsidiary (the "Bank
Merger"), which Regions contemplates will occur in 1998. For a further
description of the terms of the Merger, see "Description of the Transaction."
This Prospectus also constitutes a Proxy Statement of GFB and is being
furnished to the stockholders of GFB in connection with the solicitation of
proxies by the Board of Directors of GFB for use at its special meeting of
stockholders, including any adjournment or postponement thereof (the "Special
Meeting"), to be held on November 25, 1997, to consider and vote on the proposed
Merger and related matters. This Proxy Statement/Prospectus and the accompanying
proxy card are first being mailed to stockholders of GFB on or about October 22,
1997.
THE SECURITIES OFFERED HEREBY ARE NOT DEPOSITS, SAVINGS ACCOUNTS OR OTHER
OBLIGATIONS OF A DEPOSITORY INSTITUTION AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROXY
STATEMENT/PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Proxy Statement/Prospectus is October 22, 1997.
<PAGE> 6
AVAILABLE INFORMATION
Regions and GFB are subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and, in accordance
therewith, file reports, proxy statements, and other information with the
Securities and Exchange Commission (the "SEC"). Copies of such reports, proxy
statements, and other information can be obtained, at prescribed rates, from the
SEC by addressing written requests for such copies to the Public Reference
Section at the SEC at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C.
20549. In addition, such reports, proxy statements, and other information can be
inspected at the public reference facilities referred to above and at the
regional offices of the SEC at 7 World Trade Center, 13th Floor, New York, New
York 10048 and Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. The SEC also maintains a site on the World Wide Web at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the SEC.
This Proxy Statement/Prospectus constitutes part of the Registration
Statement on Form S-4 of Regions (including any exhibits and amendments thereto,
the "Registration Statement") filed with the SEC under the Securities Act of
1933, as amended (the "Securities Act"), relating to the securities offered
hereby. This Proxy Statement/Prospectus does not include all of the information
in the Registration Statement, certain portions of which have been omitted
pursuant to the rules and regulations of the SEC. For further information about
Regions and the securities offered hereby, reference is made to the Registration
Statement. The Registration Statement may be inspected and copied, at prescribed
rates, at the SEC's public reference facilities at the addresses set forth
above. Regions Common Stock is traded in the Nasdaq National Market. Reports,
proxy statements, and other information concerning Regions may be inspected at
the offices of the National Association of Securities Dealers, Inc. (the
"NASD"), 1735 K Street, N.W., Washington, D.C. 20006.
No person is authorized to give any information or to make any
representations other than those included in this Proxy Statement/Prospectus,
and if given or made, such information or representations must not be relied
upon as having been authorized by Regions or GFB. This Proxy
Statement/Prospectus does not constitute an offer to sell, or a solicitation of
an offer to buy, the securities offered hereby in any jurisdiction to or from
any person to or from whom it is unlawful to make such an offer or solicitation.
Neither the delivery of this Proxy Statement/Prospectus nor any distribution of
securities made hereunder shall under any circumstances create an implication
that there has been no change in the affairs of Regions or GFB since the date
hereof or that the information herein is correct as of any time subsequent to
the date hereof.
All information included or incorporated by reference in this Proxy
Statement/Prospectus with respect to Regions was supplied by Regions, and all
information included or incorporated by reference herein with respect to GFB was
supplied by GFB.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents previously filed with the SEC by Regions pursuant
to the Exchange Act are hereby incorporated by reference herein:
1. Regions' Annual Report on Form 10-K for the fiscal year ended
December 31, 1996;
2. Regions' Quarterly Reports on Form 10-Q for the three months ended
March 31 and June 30, 1997;
3. Regions' Report on Form 10-C filed June 20, 1997; and
<PAGE> 7
4. The description of Regions Common Stock under the heading "Item 1.
Capital Stock to be Registered" in the registration statement on Form 8-A
of Regions relating to Regions Common Stock and in any amendment or report
filed for the purpose of updating such description.
Regions' Annual Report on Form 10-K for the year ended December 31, 1996,
incorporates by reference specific portions of Regions' Annual Report to
Stockholders for that year (the "Regions Annual Report to Stockholders"), but
does not incorporate other portions of the Regions Annual Report to
- -Stockholders. Only those portions of the Regions Annual Report to Stockholders
captioned "Financial Summary & Review 1996," "Financial Statements and Notes,"
and "Historical Financial Summary" are incorporated herein. Other portions of
the Annual Report to Stockholders are NOT incorporated herein and are not a part
of the Registration Statement.
The following documents previously filed with the SEC by GFB pursuant to
the Exchange Act are hereby incorporated by reference herein:
1. GFB's Annual Report on Form 10-KSB for the fiscal year ended June 30,
1997, as amended.
All documents filed by Regions pursuant to Sections 13(a), 13(c), 14, or
15(d) of the Exchange Act after the date of this Proxy Statement/Prospectus and
prior to the date of the Special Meeting shall be deemed to be incorporated by
reference in this Proxy Statement/Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes hereof to the extent that a
statement contained herein or in any subsequently filed document which also is,
or is deemed to be, incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed to
constitute a part hereof, except as so modified or superseded.
This Proxy Statement/Prospectus incorporates documents by reference which
are not presented herein or delivered herewith. Those documents are available
upon request, without charge (except for the exhibits thereto), if filed by
Regions, from Ronald C. Jackson, Stockholder Assistance, Regions Financial
Corporation, 417 North 20th Street, Birmingham, Alabama 35203 (telephone (205)
326-7090), and if filed by GFB, from Ron J. Franklin, President and Chief
Executive Officer, 327 West Taylor Street, Griffin, Georgia, 30223 (telephone
(770) 228-2786). In order to ensure timely delivery of the documents, any
request should be made by November 18, 1997.
3
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TABLE OF CONTENTS
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AVAILABLE INFORMATION.............................................................................................. 2
DOCUMENTS INCORPORATED BY REFERENCE................................................................................ 2
SUMMARY............................................................................................................ 6
The Parties................................................................................................... 6
Special Meeting of GFB Stockholders........................................................................... 7
Record Date; Vote Required.................................................................................... 7
The Merger; Exchange Ratio.................................................................................... 7
Dissenting Stockholders....................................................................................... 7
Reasons for the Merger; Recommendation of GFB's Board
of Directors................................................................................................. 8
Opinion of GFB's Financial Advisor............................................................................ 8
Effective Date................................................................................................ 8
Exchange of Stock Certificates................................................................................ 8
Regulatory Approvals and Other Conditions..................................................................... 9
Waiver, Amendment, and Termination of the Agreement........................................................... 9
Interests of Certain Persons in the Merger.................................................................... 9
Certain Federal Income Tax Consequences of the Merger......................................................... 9
Certain Differences in Stockholders' Rights................................................................... 10
Comparative Market Prices of Common Stock..................................................................... 10
Comparative Per Share Data.................................................................................... 11
Selected Financial Data....................................................................................... 12
THE SPECIAL MEETING................................................................................................ 16
General....................................................................................................... 16
Record Date; Vote Required.................................................................................... 16
DESCRIPTION OF THE TRANSACTION..................................................................................... 17
General....................................................................................................... 17
Treatment of GFB Options...................................................................................... 18
Background of and Reasons for the Merger...................................................................... 18
Opinion of GFB's Financial Advisor............................................................................ 19
Effective Date of the Merger.................................................................................. 21
Distribution of Regions Stock Certificates and
Payment for Fractional Shares............................................................................... 22
Conditions to Consummation of the Merger...................................................................... 22
Regulatory Approvals.......................................................................................... 23
Waiver, Amendment, and Termination of the Agreement........................................................... 23
Conduct of Business Pending the Merger........................................................................ 24
Management Following the Merger............................................................................... 25
Interests of Certain Persons in the Merger.................................................................... 25
Dissenting Stockholders....................................................................................... 26
Certain Federal Income Tax Consequences of the Merger......................................................... 28
Accounting Treatment.......................................................................................... 29
Expenses and Fees............................................................................................. 29
Resales of the Regions Common Stock........................................................................... 29
EFFECT OF THE MERGER ON RIGHTS OF STOCKHOLDERS..................................................................... 29
Antitakeover Provisions Generally............................................................................. 30
Authorized Capital Stock...................................................................................... 30
Amendment of Certificate of Incorporation and Bylaws.......................................................... 31
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Classified Board of Directors and Absence of Cumulative Voting................................................ 32
Removal of Directors.......................................................................................... 32
Limitations on Director Liability............................................................................. 32
Indemnification............................................................................................... 33
Special Meetings of Stockholders.............................................................................. 33
Actions by Stockholders Without a Meeting..................................................................... 33
Stockholder Nominations and Proposals......................................................................... 34
Mergers, Consolidations, and Sales of Assets Generally........................................................ 34
Business Combinations with Certain Persons.................................................................... 35
Dissenters' Rights............................................................................................ 35
Stockholders' Rights to Examine Books and Records............................................................. 36
Dividends..................................................................................................... 36
COMPARATIVE MARKET PRICES AND DIVIDENDS............................................................................ 36
BUSINESS OF GFB ............................................................................................... 38
VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS OF GFB................................................................ 38
BUSINESS OF REGIONS................................................................................................ 39
General....................................................................................................... 39
Recent Developments........................................................................................... 39
CERTAIN REGULATORY CONSIDERATIONS.................................................................................. 42
General....................................................................................................... 42
Payment of Dividends.......................................................................................... 42
Transaction with Affiliates................................................................................... 43
Capital Adequacy.............................................................................................. 44
Support of Subsidiary Institutions............................................................................ 45
Prompt Corrective Action...................................................................................... 45
FDIC Insurance Assessments.................................................................................... 46
DESCRIPTION OF REGIONS COMMON STOCK................................................................................ 47
STOCKHOLDER PROPOSALS.............................................................................................. 48
EXPERTS............................................................................................................ 48
OPINIONS........................................................................................................... 48
APPENDIX A--Agreement and Plan of Merger........................................................................... A-1
APPENDIX B--Opinion of The Robinson-Humphrey Company, Inc. ........................................................ B-1
APPENDIX C--Copy of Article 13 of the Georgia Business Corporation Code............................................ C-1
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SUMMARY
The following is a summary of certain information relating to the Special
Meeting, the proposed Merger, and the offering of shares of Regions Common Stock
to be issued upon consummation thereof. This summary does not purport to be
complete and is qualified in its entirety by the more detailed information
appearing elsewhere or incorporated by reference in this Proxy
Statement/Prospectus. Stockholders are urged to read carefully the entire Proxy
Statement/Prospectus, including the Appendices. As used in this Proxy
Statement/Prospectus, the terms "Regions" and "GFB" refer to those entities,
respectively, and, where the context requires, to those entities and their
respective subsidiaries.
THE PARTIES
GFB. GFB is a savings and loan holding company organized and existing
under the laws of the state of Georgia, headquartered in Griffin, Georgia. GFB
operates principally through the Bank, which is a wholly owned subsidiary of GFB
and a federally-chartered stock savings bank and which provides a range of
retail banking services through its main office in Griffin, Georgia. At June
30, 1997, GFB had total consolidated assets of approximately $98.4 million,
total consolidated deposits of approximately $79.4 million, and total
consolidated stockholders' equity of approximately $12.8 million. GFB's
principal executive office is located at 327 West Taylor Street, Griffin,
Georgia, 30223 and its telephone number at such address is (770) 228-2786.
Regions. Regions is a regional bank holding company organized and existing
under the laws of the state of Delaware and headquartered in Birmingham,
Alabama, with approximately 441 banking offices located in Alabama, Florida,
Georgia, Louisiana, and Tennessee as of June 30, 1997. At that date, Regions had
total consolidated assets of approximately $21.2 billion, total consolidated
deposits of approximately $16.8 billion, and total consolidated stockholders'
equity of approximately $1.8 billion. Regions is the second largest bank holding
company headquartered in Alabama in terms of assets, based on June 30, 1997
information. Regions operates banking subsidiaries in Alabama, Florida, Georgia,
Louisiana, and Tennessee and banking-related subsidiaries engaged in mortgage
banking, credit life insurance, leasing, and securities brokerage activities
with offices in various Southeastern states. Through its subsidiaries, Regions
offers a broad range of banking and banking-related services.
Since December 31, 1996, Regions has completed the acquisitions of eight
financial institutions, two of which are located in Florida, three in Georgia,
and three in Louisiana. In addition to the Merger, Regions has entered into
definitive agreements or letters of intent to acquire three financial
institutions in South Carolina. For information with respect to the completed
and pending transactions, see "Documents Incorporated by Reference" and
"Business of Regions--Recent Developments."
Regions commenced operations in 1971, under its former name First Alabama
Bancshares, Inc., as a registered bank holding company under the Bank Holding
Company Act of 1956, as amended (the "BHC Act"). Regions' principal executive
offices are located at 417 North 20th Street, Birmingham, Alabama 35203, and its
telephone number at such address is (205) 326-7100.
Additional information with respect to Regions and its subsidiaries is
included in documents incorporated by reference in this Proxy
Statement/Prospectus. See "Available Information," "Documents Incorporated by
Reference," and "Business of Regions."
6
<PAGE> 11
SPECIAL MEETING OF GFB STOCKHOLDERS
The Special Meeting will be held at 4:30 p.m., local time, on November 25,
1997, at GFB's main office, 327 West Taylor Street, Griffin, Georgia, 30223,
for the purpose of considering and voting on approval of the Agreement and to
transact such other business as may properly come before the meeting. See "The
Special Meeting."
RECORD DATE; VOTE REQUIRED
Only holders of record of GFB Common Stock at the close of business on
October 16, 1997 (the "Record Date"), will be entitled to vote at the Special
Meeting. The affirmative vote of a majority of the GFB Common Stock outstanding
and entitled to vote at the Special Meeting will be required to approve the
Agreement, and not just a majority of the votes cast. As of the Record Date,
there were 989,122 shares of GFB Common Stock outstanding and entitled to be
voted.
The directors and executive officers of GFB and their affiliates
beneficially owned, as of the Record Date, 256,888 shares (or approximately
25.9% of the outstanding shares) of GFB Common Stock. Six members of the
Board of Directors of GFB who held in the aggregate approximately 18.1% of the
outstanding common stock of GFB as of the record date have agreed to vote those
GFB shares over which such member has voting authority (other than in a
fiduciary capacity) in favor of the Merger. The directors and executive
officers of Regions and their affiliates beneficially owned, as of the Record
Date, no shares of GFB Common Stock. As of that date, neither GFB nor Regions
held any shares of GFB Common Stock in a fiduciary capacity for others. See
"The Special Meeting--Record Date; Vote Required."
THE MERGER; EXCHANGE RATIO
The Agreement provides for the acquisition of GFB by Regions pursuant to
the Merger of GFB with and into Regions. On the Effective Date, each share of
GFB Common Stock then issued and outstanding (except for shares held by GFB,
Regions, or their respective subsidiaries, in each case other than shares held
in a fiduciary capacity or as a result of debts previously contracted and shares
held by stockholders who perfect their dissenters' rights) will be converted
into that fraction of a share of Regions Common Stock (the "Exchange Ratio")
equal to the quotient obtained by dividing (i) $18.00 by (ii) the "Average
Closing Price" (defined to mean the average of the daily last sale prices of
shares of Regions Common Stock for the ten consecutive trading days on which
such shares are quoted on the Nasdaq National Market, as reported by The Wall
Street Journal, or, if not reported thereby, any other authoritative source
selected by Regions, ending on the last trading day immediately preceding the
date of the Special Meeting). No fractional shares of Regions Common Stock will
be issued. Rather, cash will be paid in lieu of any fractional share interest to
which any GFB stockholder would be entitled upon consummation of the Merger,
based on the closing price of Regions Common Stock on the Nasdaq National Market
(as reported by The Wall Street Journal, or, if not reported thereby, by another
authoritative source selected by Regions) on the last full trading day
immediately preceding the Effective Date. See "Description of the
Transaction--General."
DISSENTING STOCKHOLDERS
Holders of GFB Common Stock entitled to vote on approval of the Agreement
have the right to dissent from the Merger and, upon consummation of the Merger
and the satisfaction of certain specified procedures and conditions, to receive
fair value of such holders' shares of GFB Common Stock in cash in accordance
with the applicable provisions of the Georgia Business Corporation Code (the
"Georgia Act"). The procedures to
7
<PAGE> 12
be followed by dissenting stockholders are summarized under "Description of the
Transaction--Dissenting Stockholders," and the applicable provisions of the
Georgia Act are reproduced as Appendix C.
REASONS FOR THE MERGER; RECOMMENDATION OF GFB'S BOARD OF DIRECTORS
GFB's Board of Directors has approved the Merger and the Agreement and has
determined that the Merger is fair to, and in the best interests of, GFB and its
stockholders. Accordingly, GFB's Board recommends that GFB's stockholders vote
FOR approval of the Agreement. In approving the Merger and the Agreement, GFB's
directors considered GFB's financial condition, the financial terms and the
income tax consequences of the Merger, the alternatives to the Merger
(including remaining as an independent savings and loan holding company), the
Merger consideration to be received by GFB's stockholders relative to Regions'
book value and earnings per share of Regions Common Stock, the increased
liquidity of the Regions Common Stock to be received in the Merger, the
competitive and regulatory environments for financial institutions generally,
the anticipated synergies and operating efficiencies and enhanced resources and
capabilities that would result from the Merger, the tax-free share exchange
income tax aspects of the Merger, and the likelihood that the Merger would be
approved by applicable regulatory authorities without undue conditions or
delay. See "Description of the Transaction--Background of and Reasons for the
Merger."
OPINION OF GFB'S FINANCIAL ADVISOR
The Robinson-Humphrey Company, Inc. ("Robinson-Humphrey") has rendered an
opinion to GFB that, based on and subject to the procedures, matters and
limitations described in its opinion and such other matters as it considers
relevant, including current market and economic conditions, as of the date of
its opinion, the terms of the Merger are fair, from a financial point of view,
to the stockholders of GFB. Robinson- Humphrey's opinion is attached as Appendix
B to this Proxy Statement/Prospectus. Stockholders are urged to read the opinion
in its entirety for a description of the procedures followed, matters
considered, and limitations on the reviews undertaken in connection therewith.
See "Description of the Transaction--Background of and Reasons for the Merger,
and --Opinion of GFB's Financial Advisor."
EFFECTIVE DATE
Subject to the conditions to the obligations of the parties to effect the
Merger, the Effective Date will occur on the date and at the time that the
Delaware Certificate of Merger and the Georgia Certificate of Merger become
effective with, respectively, the Delaware Secretary of State and the Georgia
Secretary of State. Unless otherwise agreed upon by Regions and GFB, and subject
to the conditions to the obligations of the parties to effect the Merger, the
parties will use their reasonable efforts to cause the Effective Date to occur
by the last day of the month in which the last of the following events occurs:
(i) the effective date (including the expiration of any applicable waiting
period) of the last federal or state regulatory approval required for the Merger
and (ii) the date on which the Agreement is approved by the requisite vote of
GFB stockholders. The parties expect that all conditions to consummation of the
Merger will be satisfied so that the Merger can be consummated during the fourth
quarter of 1997, although there can be no assurance as to whether or when the
Merger will occur. See "Description of the Transaction-- Effective Date of the
Merger," "--Conditions to Consummation of the Merger," and "--Waiver, Amendment,
and Termination of the Agreement."
8
<PAGE> 13
EXCHANGE OF STOCK CERTIFICATES
Promptly after the Effective Date, Regions will cause an exchange agent
selected by Regions (the "Exchange Agent") to mail to the former stockholders of
GFB a form letter of transmittal, together with instructions for the exchange of
such stockholders' certificates representing shares of GFB Common Stock for
certificates representing shares of Regions Common Stock. GFB stockholders
should not send in their stock certificates until they receive the form letter
of transmittal and instructions. See "Description of the
Transaction--Distribution of Regions Stock Certificates and Payment for
Fractional Shares."
REGULATORY APPROVALS AND OTHER CONDITIONS
The Merger is subject to approval by the Board of Governors of the Federal
Reserve System (the "Federal Reserve"). Application for the requisite approval
has been filed by Regions with the Federal Reserve, which has issued its
approval of the Merger.
Consummation of the Merger is subject to various other conditions,
including receipt of the required approval of GFB stockholders, receipt of an
opinion of counsel as to the tax-free nature of certain aspects of the Merger,
and certain other customary conditions. See "Description of the Transaction--
Conditions to Consummation of the Merger."
WAIVER, AMENDMENT, AND TERMINATION OF THE AGREEMENT
The Agreement may be terminated, and the Merger abandoned, at any time
prior to the Effective Date by mutual consent of the Boards of Directors of both
GFB and Regions, or by action of the Board of Directors of either company under
certain circumstances, including if the Merger is not consummated by March 31,
1998, unless the failure to consummate by such time is due to a breach of the
Agreement by the party seeking to terminate. If for any reason the Merger is not
consummated, GFB will continue to operate as a savings and loan holding company
under its present management. See "Description of the Transaction--Waiver,
Amendment, and Termination of the Agreement."
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Certain members of GFB's management and Board of Directors have interests
in the Merger in addition to their interests as stockholders of GFB generally.
Those interests relate to, among other things, provisions in the Agreement
regarding indemnification and eligibility for certain Regions employee benefits,
and treatment of outstanding options to acquire GFB Common Stock. See
"Description of the Transaction--Interests of Certain Persons in the Merger."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
Consummation of the Merger is conditioned on the receipt of an opinion of
counsel to the effect that, among other things, (i) the Merger will constitute a
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "Code"), and (ii) the exchange in the Merger of GFB
Common Stock for Regions Common Stock will not give rise to gain or loss to GFB
stockholders, except to the extent of any cash received in lieu of fractional
share interests or as a result of the exercise of dissenters' rights. Gain
recognition, if any, will not be in excess of the amount of cash received.
Subject to the provisions and limitations of Section 302(a) of the Code, gain or
loss will be recognized upon the receipt of cash in lieu of fractional share
interests and cash received by dissenters. See "Description of the
Transaction--Certain Federal Income Tax Consequences of the Merger."
9
<PAGE> 14
Because certain tax consequences of the Merger may vary depending upon the
particular circumstance of each stockholder and other circumstances, each GFB
stockholder is urged to consult such holder's own tax advisor to determine the
particular tax consequences to such holder of the Merger (including the
application and effect of state, local and foreign income and other tax laws).
CERTAIN DIFFERENCES IN STOCKHOLDERS' RIGHTS
On the Effective Date, GFB stockholders, whose rights are governed by the
Georgia Act and by GFB's Articles of Incorporation and Bylaws, will
automatically become Regions stockholders, and their rights as Regions
stockholders will be determined by the Delaware General Corporation Law (the
"Delaware GCL") and by Regions' Certificate of Incorporation and Bylaws.
The rights of Regions stockholders differ from the rights of GFB
stockholders in certain important respects, some of which constitute additional
antitakeover provisions provided for in Regions' governing documents. See
"Effect of the Merger on Rights of Stockholders."
COMPARATIVE MARKET PRICES OF COMMON STOCK
Regions Common Stock is traded in the over-the-counter market and quoted on
the Nasdaq National Market. GFB Common Stock is not traded in any established
market. The following table sets forth, as of the indicated dates, (i) the last
sale price of Regions Common Stock, (ii) the last reported sales price of GFB
Common Stock, and (iii) the equivalent per share price (as explained below) of
GFB Common Stock. The indicated dates of June 10, 1997, and October 17, 1997
represent, respectively, the last trading day immediately preceding public
announcement of the proposed acquisition of GFB by Regions and the latest
practicable date prior to the mailing of this Proxy Statement/Prospectus.
10
<PAGE> 15
<TABLE>
<CAPTION>
Equivalent
per
Share Price
Regions GFB of GFB
Market Price Per Share at: Common Stock Common Stock Common Stock
- -------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
June 10, 1997 $ 30.63 $ 17.00 $ 18.00
October 17, 1997 37.88 17.00 18.00
</TABLE>
The equivalent per share price of GFB Common Stock at each specified date
represents the last sale price of a share of Regions Common Stock on such date
multiplied by the assumed Exchange Ratios of .5877 (based on an Average Closing
Price of $30.63) and .4752 (based on an Average Closing Price of $37.88),
respectively. See "Description of the Transaction--General." Stockholders are
advised to obtain current market quotations for Regions Common Stock and GFB
Common Stock. No assurance can be given as to the market price of Regions Common
Stock at or after the Effective Date.
COMPARATIVE PER SHARE DATA
The following table sets forth certain comparative per share data relating
to net income, cash dividends, and book value on (i) an historical basis for
Regions and GFB, (ii) a pro forma combined basis per share of Regions Common
Stock, giving effect to the Merger, and (iii) an equivalent pro forma basis per
share of GFB Common Stock, giving effect to the Merger. The Regions and GFB pro
forma combined information and the GFB pro forma Merger equivalent information
give effect to the Merger on a purchase accounting basis and assume an Exchange
Ratio of .5688, based on an Average Closing Price of $31.643. See "Description
of the Transaction--Accounting Treatment." The pro forma data are presented for
information purposes only and are not necessarily indicative of the results of
operations or combined financial position that would have resulted had the
Merger been consummated at the dates or during the periods indicated, nor are
they necessarily indicative of future results of operations or combined
financial position.
The information shown below should be read in conjunction with, and is
qualified in its entirety by, the historical financial statements of Regions and
GFB, including the respective notes thereto. Historical per share information
for Regions has been adjusted to reflect a 2-for-1 stock split effected by
Regions on June 13, 1997. See "Documents Incorporated by Reference," and
"--Selected Financial Data."
11
<PAGE> 16
<TABLE>
<CAPTION>
Six Months Ended
June 30, Year Ended December 31,(1)
------------- ----------------------------
1997 1996 1996 1995 1994
(Unaudited) (Unaudited except Regions historical)
<S> <C> <C> <C> <C> <C>
NET INCOME PER COMMON SHARE
Regions historical....................................... $ 1.05 $ .92 $ 1.85 $ 1.61 $ 1.55
GFB historical ......................................... .69 .93
Regions and GFB pro forma combined(2).................... 1.05 1.85
GFB pro forma Merger equivalent(3)....................... .60 1.05
DIVIDENDS DECLARED PER COMMON
SHARE
Regions historical....................................... .40 .35 .70 .66 .60
GFB historical........................................... 1.20 1.07 .89 .83
GFB pro forma Merger equivalent(4)....................... .23 .20 .40 .38 .34
BOOK VALUE PER COMMON SHARE
(PERIOD END)
Regions historical....................................... 13.29
GFB historical........................................... 13.10
Regions and GFB pro forma combined(2).................... 13.28
GFB pro forma Merger equivalent(3)....................... 7.55
</TABLE>
- ----------------
(1) In the case of pro forma combined and GFB historical information, reflects
information for GFB for the four quarters ended December 31. GFB's fiscal
year end is June 30 and Regions' fiscal year end is December 31.
(2) Represents the combined results of Regions and GFB as if the Merger were
consummated on January 1, 1996 (or June 30, 1997, in the case of Book Value
Per Share Data), and were accounted for as a purchase.
(3) Represents pro forma combined information multiplied by the Exchange Ratio
of .5688, based on an assumed Average Closing Price of $31.643.
(4) Represents historical dividends declared per share by Regions multiplied by
the Exchange Ratio of .5688, based on an assumed Average Closing Price of
$31.643.
(5) The combined and equivalent pro forma per share data assuming a minimum
Exchange Ratio of .4286 (corresponding to an Average Closing Price of
$42.00) and a maximum Exchange Ratio of .60 (corresponding to an Average
Closing Price of $30.00), is as follows:
<TABLE>
<CAPTION>
Exchange Ratio
-------------------------------------------------------------------
.4286 .60
-------------------------------- --------------------------------
Six Months Year Six Months Year
Ended Ended Ended Ended
June 30, 1997 December 31, 1996 June 30, 1997 December 31, 1996
------------- ----------------- ------------- -----------------
(Unaudited)
<S> <C> <C> <C> <C>
NET INCOME PER COMMON SHARE
Regions and GFB pro forma combined.............. $ 1.05 $ 1.85 $ 1.05 $ 1.85
GFB pro forma equivalent........................ .45 .79 .63 1.11
DIVIDENDS DECLARED PER COMMON
SHARE
GFB pro forma equivalent........................ .17 .30 .24 .42
BOOK VALUE PER COMMON SHARE
(PERIOD END)
Regions and GFB pro forma combined.............. 13.28 13.28
GFB pro forma equivalent........................ 5.69 7.97
</TABLE>
SELECTED FINANCIAL DATA
The following tables present certain selected historical financial
information for Regions and GFB. The per share data for Regions have been
adjusted to reflect a 2-for-1 stock split effected by Regions on June 13,
12
<PAGE> 17
1997. The data should be read in conjunction with the historical financial
statements, related notes, and other financial information concerning Regions
and GFB incorporated by reference or included herein. Interim unaudited data for
the six months ended June 30, 1997 and 1996, of Regions reflect, in the opinion
of the management of Regions, all adjustments (consisting only of normal
recurring adjustments) necessary for a fair presentation of such data. Results
for the interim periods are not necessarily indicative of results which may be
expected for any other interim period or for the year as a whole. See "Documents
Incorporated by Reference."
13
<PAGE> 18
Selected Historical Financial Data of Regions
<TABLE>
<CAPTION>
Six Months
Ended June 30, Year Ended December 31,
------------------- -----------------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
(Unaudited)
(In thousands except per share data and ratios)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Total interest income ....... $ 793,260 $ 677,911 $ 1,386,122 $ 1,259,600 $ 991,693 $ 746,544 $ 737,094
Total interest expense ...... 391,192 334,264 685,656 635,336 436,157 296,195 324,420
Net interest income ......... 402,068 343,647 700,466 624,264 555,536 450,349 412,674
Provision for loan losses ... 20,557 14,316 29,041 30,271 20,580 24,695 39,367
Net interest income after
loan loss provision .... 381,511 329,331 671,425 593,993 534,956 425,654 373,307
Total noninterest income
excluding security
gains (losses) ......... 123,147 107,770 217,624 187,830 171,705 169,318 147,943
Security gains (losses) ..... 501 154 3,115 (424) 344 831 2,417
Total noninterest expense ... 290,032 265,607 553,801 487,461 442,376 383,130 343,279
Income tax expense .......... 71,392 57,342 108,677 96,109 84,109 66,169 56,405
Net income .................. 143,735 114,306 229,686 197,829 180,520 146,504 123,983
PER SHARE DATA:
Net income .................. $ 1.05 $ .92 $ 1.85 $ 1.61 $ 1.55 $ 1.41 $ 1.21
Cash dividends .............. .40 .35 .70 .66 .60 .52 .46
Book value .................. 13.29 11.85 12.76 11.69 10.63 9.93 8.57
OTHER INFORMATION:
Average number of
shares outstanding .......... 136,536 124,182 124,272 123,340 116,412 104,306 102,384
STATEMENT OF
CONDITION DATA
(PERIOD END):
Total assets ................ $21,214,942 $17,920,608 $ 18,930,175 $16,851,774 $15,810,076 $13,163,161 $10,457,676
Securities .................. 4,292,000 3,967,645 3,870,595 3,863,781 3,346,291 2,993,417 2,255,732
Loans, net of
unearned income ....... 15,149,584 12,371,967 13,311,1721 1,542,311 10,855,195 8,430,931 6,657,557
Total deposits .............. 16,824,389 14,614,716 15,048,336 13,497,612 12,575,593 11,025,376 8,923,801
Long-term debt .............. 419,513 457,189 447,269 632,019 599,476 525,820 151,460
Stockholders' equity ........ 1,817,228 1,442,783 1,598,726 1,429,253 1,286,322 1,106,361 886,116
PERFORMANCE RATIOS:
Return on average
assets(1)(6) ........... 1.41% 1.32% 1.29% 1.21% 1.27% 1.38% 1.29%
Return on average
stockholders'
equity(1)(6) ........... 16.22 15.53 15.19 14.29 15.26 15.76 15.04
Net interest margin ......... 4.32 4.31 4.27 4.21 4.37 4.77 4.85
Efficiency (2)(6) ........... 54.31 59.90 59.44 58.79 59.44 60.23 59.62
Dividend payout ............. 38.10 38.04 37.84 41.12 38.71 37.01 37.60
ASSET QUALITY RATIOS:
Net charge-offs to
average loans, net
of unearned income(1) .. .19% .09% .15% .17% .19% .23% .36%
Problem assets to
net loans and
other real estate (3) .. .68 .53 .56 .59 .75 1.12 1.29
Nonperforming assets
to net loans and
other real estate (4) .. .82 .68 .76 .68 .80 1.28 1.39
Allowance for loan
losses to loans,
net of unearned income . 1.29 1.39 1.32 1.38 1.32 1.48 1.51
Allowance for loan losses to
nonperforming
assets (4) ............. 157.61 204.53 173.65 202.55 164.48 115.88 107.97
LIQUIDITY AND CAPITAL RATIOS:
Average stockholders'
equity to average
assets ................. 8.70% 8.49% 8.49% 8.44% 8.35% 8.76% 8.60%
Average loans to
average deposits ....... 88.19 84.54 85.90 86.12 79.90 76.41 71.59
Tier 1 risk-based capital (5) 9.98 10.87 10.81 11.14 10.69 11.13 11.68
Total risk-based capital (5) 12.44 14.27 13.59 14.61 14.29 13.48 14.44
Tier 1 leverage (5) ......... 7.58 7.44 7.44 7.49 8.21 10.11 8.44
</TABLE>
- ---------------------
(1) Interim period ratios are annualized.
(2) Noninterest expense divided by the sum of net interest income
(taxable-equivalent basis) and noninterest income net of gains (losses)
from security transactions.
(3) Problem assets include loans on a nonaccrual basis, restructured loans,
and foreclosed properties.
(4) Nonperforming assets include loans on a nonaccrual basis, restructured
loans, loans 90 days or more past due, and foreclosed properties.
(5) The risk-based capital ratios are based upon 1992 risk-based
capital guidelines. Under the 1992 rules, the required minimum Tier 1 and
total capital ratios are 4% and 8%, respectively. The minimum leverage
ratio of Tier 1 capital to total assets is 3% to 5%. The ratios for prior
periods have not been restated to reflect the combination with First
National Bancorp effected March 1, 1996, and accounted for as a pooling of
interests, or any other pooling-of-interests transactions.
(6) Ratios for 1996 excluding $19.0 million (after-tax) charged for SAIF
assessment and merger expenses are as follows: Return on average stock-
holders' equity - 16.45%, Return on average total assets - 1.40%, and
Efficiency - $56.16%.
<PAGE> 19
Selected Historical Financial Data of GFB
<TABLE>
<CAPTION>
Year Ended June 30,
-------------------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
(In thousands except per share data and ratios)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Total interest income ............... $ 8,299 $ 7,885 $ 7,310 $ 8,108 $ 7,409
Total interest expense .............. 4,180 4,080 3,666 3,690 3,748
Net interest income ................. 4,119 3,805 3,644 4,418 3,661
Provision for loan losses ........... 67 30 20 106 134
Net interest income after
loan loss provision ............. 4,052 3,775 3,624 4,312 3,527
Total noninterest income excluding
security gains .................. 935 680 (285) 822 1,886
Security gains (losses) ............. 0 0 598 0 0
Total noninterest expense ........... 3,486 2,904 3,009 2,936 2,216
Income tax expense .................. 495 532 303 718 1,111
Net income .......................... 1,006 1,019 625 1,480 2,086
PER SHARE DATA:
Net income .......................... $ 1.03 $ 1.05 $ .66 $ 1.60 $ 2.32
Cash dividends....................... 1.05 .95 .87 .79 .59
Book Value .......................... 13.10 13.12 13.22 13.61 12.93
OTHER INFORMATION:
Average number of shares outstanding. 977 970 947 925 898
STATEMENT OF CONDITION DATA
(PERIOD END):
Total Assets ........................ $ 98,439 $ 94,159 $ 95,098 $ 97,528 $ 106,617
Securities .......................... 3,896 4,209 6,403 2,612 1,679
Loans, net of unearned income ....... 82,085 76,524 65,935 59,905 99,147
Total deposits ...................... 79,379 78,490 80,813 81,520 80,176
Stockholders' equity ................ 12,802 12,726 12,523 12,593 11,609
PERFORMANCE RATIOS:
Return on average assets............. 1.04% 1.09% .66% 1.36% 2.18%
Return on average stockholders'
equity ............................ 7.85 8.13 4.98 11.23 19.35
Net interest margin ................. 4.37 4.15 4.01 4.27 4.09
Efficiency (1) ...................... 69.90 65.19 90.12 57.19 40.94
Dividend payout ..................... 101.94 90.48 131.82 49.38 25.43
ASSET QUALITY RATIOS:
Net charge-offs to average loans,
net of unearned income ............ .02% .03% .02% .03% .12%
Problem assets to net loans and
other real estate (2) ............. 3.01 1.86 1.51 2.07 1.36
Nonperforming assets to net loans
and other real estate (3)........ 3.38 2.45 1.94 2.08 1.81
Allowance for loan losses to loans,
net of unearned income........... .90 .90 1.04 1.12 .50
Allowance for loan losses to
nonperforming assets (3) ........ 26.50 36.52 52.86 53.59 27.36
LIQUIDITY AND CAPITAL RATIOS:
Average stockholders' equity to
average assets ..................... 13.23 13.41 13.24 12.15 11.26
Average loans to average deposits .... 110.65 94.88 84.17 112.99 104.22
Tier 1 risk-based capital (4) ........ 14.80 14.30 12.20 12.70 8.05
Total risk-based capital (4) ......... 15.60 15.00 12.90 13.20 8.40
Tier 1 leverage (4) .................. 11.30 11.80 11.50 12.70 10.90
</TABLE>
(1) Noninterest expense divided by the sum of net interest income
(taxable-equivalent basis) and noninterest income net of gains (losses)
from security transactions.
(2) Problem assets include loans on a nonaccrual basis, restructured loans,
and foreclosed properties.
(3) Nonperforming assets include loans on a nonaccrual basis, restructured
loans, loans 90 days or more past due, and foreclosed properties.
(4) The risk-based capital ratios are based upon 1992 risk-based capital
guidelines. Under the 1992 rules, the required minimum Tier 1 and total
capital ratios are 4% and 8%, respectively. The minimum leverage ratio of
Tier 1 capital to total assets is 3% to 5%.
<PAGE> 20
THE SPECIAL MEETING
GENERAL
This Proxy Statement/Prospectus is being furnished to the holders of GFB
Common Stock in connection with the solicitation by the GFB Board of Directors
of proxies for use at the Special Meeting, at which GFB stockholders will be
asked to vote upon a proposal to approve the Agreement. The Special Meeting will
be held at 4:30 p.m., local time, on November 25, 1997, at the main offices of
GFB, located at 327 West Taylor Street, Griffin, Georgia, 30223.
GFB stockholders are requested promptly to sign, date, and return the
accompanying proxy card to GFB in the enclosed postage-paid, addressed envelope.
A stockholder's failure to return a properly executed proxy card or to vote at
the Special Meeting will have the same effect as a vote against the Agreement.
Any GFB stockholder who has delivered a proxy may revoke it at any time
before it is voted by giving notice of revocation in writing or submitting to
GFB a signed proxy card bearing a later date, provided that such notice or proxy
card is actually received by GFB before the vote of stockholders or in open
meeting prior to the taking of the stockholder vote at the Special Meeting. Any
notice of revocation should be sent to GF Bancshares, Inc., 327 West Taylor
Street, Griffin, Georgia, 30223, Attention: Corporate Secretary. A proxy will
not be revoked by death or supervening incapacity of the stockholder executing
the proxy unless, before the vote, notice of such death or incapacity is filed
with the Secretary. The shares of GFB Common Stock represented by properly
executed proxies received at or prior to the Special Meeting and not
subsequently revoked will be voted as directed in such proxies. If instructions
are not given, shares represented by proxies received will be voted for approval
of the Agreement and in the discretion of the proxy holder as to any other
matters that properly may come before the Special Meeting. If necessary, and
unless contrary instructions are given, the proxy holder also may vote in favor
of a proposal to adjourn the special meeting to permit further solicitation of
proxies in order to obtain sufficient votes to approve the Agreement. As of the
date of this Proxy Statement/Prospectus, GFB is unaware of any other matter to
be presented at the Special Meeting.
Solicitation of proxies will be made by mail but also may be made by
telephone or telegram or in person by the directors, officers, and employees of
GFB, who will receive no additional compensation for such solicitation but may
be reimbursed for out-of-pocket expenses. Brokerage houses, nominees,
fiduciaries, and other custodians will be requested to forward solicitation
materials to beneficial owners and will be reimbursed for their reasonable
out-of-pocket expenses.
GFB stockholders should not forward any stock certificates with their
proxy cards.
RECORD DATE; VOTE REQUIRED
GFB's Board of Directors has established the close of business on October
16, 1997, as the Record Date for determining the GFB stockholders entitled to
notice of and to vote at the Special Meeting. Only GFB stockholders of record
as of the Record Date will be entitled to vote at the Special Meeting. The
affirmative vote of the holders of a majority of the GFB Common Stock
outstanding and entitled to vote at the Special Meeting is required in order to
approve the Agreement. Therefore, an abstention or failure to return a properly
executed proxy card will have the same effect as a vote against the Agreement,
as will a broker's submitting a proxy card without exercising discretionary
voting authority with respect to the Agreement. As of the Record Date, there
were approximately 400 holders of 989,122 shares of GFB Common Stock
outstanding and entitled to vote at the Special Meeting, with each share
entitled to one vote. For information as to persons known by GFB to
beneficially own more than 5.0% of the outstanding shares of GFB Common Stock
as of the Record Date, see "Voting Securities and Principal Stockholders of
GFB."
16
<PAGE> 21
The presence, in person or by proxy, of a majority of the outstanding
shares of GFB Common Stock is necessary to constitute a quorum of the
stockholders in order to take action at the Special Meeting. For these purposes,
shares of GFB Common Stock that are present, or represented by proxy, at the
Special Meeting will be counted for quorum purposes regardless of whether the
holder of the shares or proxy fails to vote on the Agreement or whether a broker
with discretionary authority fails to exercise its discretionary voting
authority with respect to the Agreement. Once a quorum is established, approval
of the Agreement requires the affirmative vote of the holders of a majority of
the GFB Common Stock outstanding and entitled to vote at the Special Meeting.
The directors and executive officers of GFB and their affiliates
beneficially owned, as of the Record Date, 256,888 shares (or approximately
25.9% of the outstanding shares) of GFB Common Stock. The directors and
executive officers of Regions and their affiliates beneficially owned, as of the
Record Date, no shares of GFB Common Stock. As of that date, no subsidiary of
either GFB or Regions held any shares of GFB Common Stock in a fiduciary
capacity for others.
DESCRIPTION OF THE TRANSACTION
The following material describes certain aspects of the Merger. This
description does not purport to be complete and is qualified in its entirety by
reference to the Appendices hereto, including the Agreement, which is attached
as Appendix A to this Proxy Statement/Prospectus and incorporated herein by
reference. All stockholders are urged to read the Appendices in their entirety.
GENERAL
Each share of GFB Common Stock (excluding any shares held by GFB, Regions,
or their respective subsidiaries, other than shares held in a fiduciary capacity
or as a result of debts previously contracted, and shares held by stockholders
who perfect their dissenters' rights) issued and outstanding at the Effective
Date will be converted into that fraction of a share of Regions Common Stock
equal to the quotient obtained by dividing (i) $18.00 by (ii) the "Average
Closing Price" (defined to mean the average of the daily last sale prices of
shares of Regions Common Stock for the ten consecutive trading days on which
such shares are quoted on the Nasdaq National Market, as reported by The Wall
Street Journal, or, if not reported thereby, any other authoritative source
selected by Regions, ending on the last trading day immediately preceding the
date of the Special Meeting.) Each share of Regions Common Stock outstanding
immediately prior to the Effective Date will remain outstanding and unchanged as
a result of the Merger.
No fractional shares of Regions Common Stock will be issued in connection
with the Merger. In lieu of issuing fractional shares, Regions will make a cash
payment equal to the fractional part of a share which a GFB stockholder would
otherwise receive multiplied by the closing price of Regions Common Stock on the
Nasdaq National Market (as reported by The Wall Street Journal, or, if not
reported thereby, by another authoritative source selected by Regions), on the
last full trading day prior to the Effective Date.
The effect of the provisions in the Agreement pertaining to the conversion
of GFB Common Stock into Regions Common Stock is to provide to the holders of
GFB Common Stock shares of Regions Common Stock having an equivalent per share
value of $18.00 per share of GFB Common Stock. The Agreement provides for the
valuation of Regions Common Stock for this purpose over the ten consecutive full
trading days on the Nasdaq National Market, ending on the last trading day
before the Special Meeting. Accordingly, the holders of GFB Common Stock do not
bear the risk of any decrease in the trading price of Regions Common Stock prior
to the specified valuation period, but would not benefit from any increase in
such trading price prior to the valuation period. Moreover, because the Exchange
Ratio is based on an average of quoted last sale prices of Regions Common Stock,
and because the valuation period will occur prior to the Effective Date, the
equivalent per share value of the Regions Common Stock issued in the Merger may
be more or less than $18.00 per share of GFB Common Stock as of the Effective
Date.
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TREATMENT OF GFB OPTIONS
The Agreement provides that all rights with respect to GFB Common Stock
pursuant to stock options or stock appreciation rights granted by GFB under its
stock option plans which are outstanding at the Effective Date, whether or not
then exercisable, will be converted into and will become rights with respect to
Regions Common Stock, and Regions will assume each of such options in accordance
with the terms of the plan under which it was issued and the agreement by which
it is evidenced. After the Effective Date, those options will become options to
purchase Regions Common Stock, with the exercise price and number of shares of
Regions Common Stock purchasable thereunder adjusted to reflect the Exchange
Ratio as set forth in the Agreement. The executive officers and directors of GFB
hold exercisable options to purchase 34,051 shares of GFB Common Stock, in the
aggregate as of the date of this Proxy Statement/Prospectus.
BACKGROUND OF AND REASONS FOR THE MERGER
Background of the Merger. During the last several years, there have been
significant developments in the banking and financial services industry. These
developments have included the increased emphasis and dependence on automation,
specialization of products and services, increased competition from other
financial institutions, and a trend toward consolidation and geographic
expansion, coupled with a relaxation of regulatory restrictions on interstate
conduct of business of financial institutions.
GFB and its Board of Directors concluded that it could best serve its
stockholders, employees, customers and community by combining with a regional
banking organization, provided that GFB could obtain a fair price for its
stockholders. Accordingly, GFB and Regions entered into negotiations which
culminated in the Agreement.
GFB's Reasons for the Merger. In approving the Merger, the directors of GFB
considered a number of factors. Without assigning any relative or specific
weights to the factors, the GFB Board of Directors considered the following
material factors:
(a) the information presented to the directors by management of Regions
concerning the business, operations, earnings, asset quality, financial
condition of Regions, including compliance with regulatory capital
requirements on an historical and prospective basis;
(b) the alternatives to the Merger, including remaining as an independent
savings and loan holding company in light of current market and
economic conditions of GFB's primary markets and the competition
presented by larger financial institutions operating in such markets;
(c) the Merger consideration to be received by GFB's stockholders relative
to Regions' book value and earnings per share of Regions Common Stock;
(d) the current lack of marketability of GFB's Common Stock, contrasted
with the ability of GFB's stockholders to exchange their GFB Common
Stock for Regions Common Stock in connection with the Merger, and
thereafter have the ability to trade such securities in the NASDAQ
National Market;
(e) the competitive and regulatory environment for financial institutions
in general;
(f) the anticipated synergies and operating efficiencies, increased access
to capital, increased utilization of capital for lending, and the
increased managerial resources and enhanced service capabilities that
would result from the Merger;
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(g) the income tax aspects of the Merger as a tax-free share exchange of
GFB Common Stock for Regions Common Stock;
(h) the likelihood that the Merger will be approved by applicable
regulatory authorities without undue conditions or delay;
(g) the fairness opinion of The Robinson-Humphrey Company, Inc. that, from
a financial viewpoint, the exchange of GFB Common Stock for Regions
Common Stock on the terms and conditions set forth in the Agreement is
fair to the holders of GFB Common Stock.
The terms of the Merger were the result of arms-length negotiations between
representatives of GFB and representatives of Regions. Based upon the
consideration of the foregoing factors, the Board of Directors of GFB approved
the Merger as being in the best interests of GFB and its stockholders.
GFB's Board of Directors recommends that GFB stockholders vote for
approval of the Agreement.
Regions' Reasons for the Merger. The Regions Board of Directors has
approved the Agreement and determined that the Merger is in the best interests
of Regions and its stockholders. In approving the Agreement, the Regions Board
considered a number of factors. Without assigning any relative or specific
weights to the factors, the Regions Board of Directors considered the following
material factors:
(a) a review, based in part on a presentation by Regions management, of (i)
the business, operations, earnings, and financial condition, including the
capital levels and asset quality, of GFB on an historical, prospective, and pro
forma basis and in comparison to other financial institutions in the area, (ii)
the demographic, economic, and financial characteristics of the markets in which
GFB operates, including existing competition, history of the market areas with
respect to financial institutions, and average demand for credit, on an
historical and prospective basis, and (iii) the results of Regions' due
diligence review of GFB; and
(b) a variety of factors affecting and relating to the overall strategic
focus of Regions, including Regions' desire to expand into markets in the
general vicinity of its core markets.
OPINION OF GFB'S FINANCIAL ADVISOR
General. GFB retained Robinson-Humphrey to act as its financial adviser in
connection with the Merger. Robinson-Humphrey has rendered an opinion to GFB's
Board of Directors that, based on the matters set forth therein, consideration
to be received pursuant to the Merger is fair, from a financial point of view,
to GFB's stockholders. The text of such opinion is set forth in Appendix B to
this Proxy Statement/Prospectus and should be read in its entirety by GFB
stockholders. Robinson-Humphrey's opinion to GFB's Board of Directors on the
Merger does not constitute a recommendation to any GFB stockholder regarding how
such stockholder should vote at the Special Meeting.
The consideration to be received by GFB stockholders in the Merger was
determined by GFB and Regions in their negotiations. No limitations were imposed
by the Board of Directors or management of GFB upon Robinson-Humphrey with
respect to the investigations made or the procedures followed by
Robinson-Humphrey in rendering its opinion.
In connection with rendering its opinion to GFB's Board of Directors,
Robinson-Humphrey performed a variety of financial analyses. However, the
preparation of a fairness opinion involves various determinations as to the most
appropriate and relevant methods of financial analysis and the application of
those methods to the particular circumstances, and, therefore, such an opinion
is not readily susceptible to summary description. Robinson-Humphrey, in
conducting its analysis and in arriving at its opinion, has not conducted a
physical inspection of any of the properties or assets of GFB, and has not made
or obtained any independent valuation
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or appraisals of any properties, assets or liabilities of GFB. Robinson-Humphrey
has assumed and relied upon the accuracy and completeness of the financial and
other information that was provided to it by GFB or that was publicly available.
Its opinion is necessarily based on economic, market and other conditions as in
effect on, and the information made available to it as of the date of, its
analyses.
Valuation Methodologies. In connection with its opinion on the Merger and
the presentation of the opinion to GFB's Board of Directors, Robinson-Humphrey
performed two valuation analyses with respect to GFB: (i) an analysis of
comparable prices and terms of recent transactions involving financial
institutions purchasing thrift institutions; and (ii) a discounted cash flow
analysis. Each of these methodologies is discussed briefly below.
Comparable Transaction Analysis. Robinson-Humphrey performed analyses of
premiums paid for selected thrift institutions with comparable characteristics
to GFB. Comparable transactions were considered to be (i) transactions since
January 1, 1995, where the seller was a thrift institution headquartered in
Georgia, and (ii) transactions since January 1, 1996, where the seller was a
Southeastern thrift institution with assets less than $160 million.
Based on the first of the foregoing transactions, financial institutions
purchasing Georgia thrift institutions since January 1, 1995, the analysis
yielded a range of transaction values to book value of 1.29 times to 1.95 times,
with a mean of 1.56 times and a median of 1.46 times. These compare to a
transaction value for the Merger of approximately 1.32 times GFB's book value as
of June 30, 1997.
The analysis yielded a range of transaction values as a multiple of
tangible book value for the comparable transactions ranging from 1.29 times to
3.11 times, with a mean of 1.84 times and a median of 1.51 times. These compare
to a transaction value for the Merger of approximately 1.32 times GFB's book
value as of June 30, 1997.
The analysis yielded a range of transaction values as a multiple of
trailing twelve month earnings per share. These values ranged from 7.67 times to
16.78 times, with a mean of 12.65 times and a median of 12.36 times. These
compare to a transaction value to GFB's last twelve months earnings as of
June 30, 1997 of approximately 15.93 times for the Merger.
The analysis yielded a range of transaction values as a percent of total
assets. These values ranged from 9.28 percent to 26.77 percent, with a mean of
15.54 percent and a median of 13.74 percent. These compare to a transaction
value to the June 30, 1997 total assets of GFB of 17.61 percent for the
Merger.
Based on the second of the foregoing transactions, financial institutions
purchasing Southeastern thrift institutions with assets under $160 million since
January 1, 1996, the analysis yielded a range of transaction values to book
value of 1.02 times to 2.25 times, with a mean of 1.57 times and a median of
1.52 times. These compare to a transaction value for the Merger of approximately
1.32 times GFB's book value as of June 30, 1997.
The analysis yielded a range of transaction values as a multiple of
tangible book value for the comparable transactions ranging from 1.02 times to
2.25 times, with a mean of 1.59 times and a median of 1.52 times. These compare
to a transaction value for the Merger of approximately 1.32 times GFB's book
value as of June 30, 1997.
The analysis yielded a range of transaction values as a multiple of
trailing twelve month earnings per share. These values ranged from 9.07 times to
34.09 times, with a mean of 17.68 times and a median of 12.16 times. These
compare to a transaction value to GFB's last twelve months earnings as of
June 30, 1997 of approximately 15.93 times for the Merger.
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The analysis yielded a range of transaction values as a percent of total
assets. These values ranged from 5.60 percent to 35.63 percent, with a mean of
14.30 percent and a median of 11.60 percent. These compare to a transaction
value to the June 30, 1997 total assets of GFB of 17.61 percent for the
Merger.
No company or transaction used in the comparable transaction analyses is
identical to GFB. Accordingly, an analysis of the foregoing necessarily involves
complex considerations and judgments, as well as other factors that affect the
public trading value or the acquisition value of the company to which it is
being compared.
Discounted Cash Flow Analysis. Using discounted cash flow analysis,
Robinson-Humphrey estimated the present value of the future stream of after-tax
cash flows that GFB could produce through 2000, under various circumstances,
assuming that GFB performed in accordance with the earnings/return projections
of management at the time that GFB entered into acquisition discussions.
Robinson-Humphrey estimated the terminal value for GFB at the end of the period
by applying multiples of earnings ranging from 11.0 times to 13.0 times and
then discounting the cash flow streams, dividends paid to stockholders and
terminal value using differing discount rates ranging from 13.0 percent to 15.0
percent chosen to reflect different assumptions regarding the required rates of
return of GFB and the inherent risk surrounding the underlying projections.
This discounted cash flow analysis indicated a reference range of $16.4 million
to $18.9 million, or $16.75 to $19.20 per share, for GFB.
Compensation of Robinson-Humphrey. Pursuant to an engagement letter dated
February 14, 1996 between GFB and Robinson-Humphrey, GFB agreed to pay
Robinson-Humphrey a $90,000 fairness opinion fee and an incremental success fee
(to be paid at closing) equal to 5.00% of the principal amount of any
consideration paid that is above $19.048 per share. GFB has also agreed to
indemnify and hold harmless Robinson-Humphrey and its officers and employees
against certain liabilities in connection with its services under the engagement
letter, except for liabilities resulting from the negligence of
Robinson-Humphrey.
As part of its investment banking business, Robinson-Humphrey is regularly
engaged in the valuation of securities in connection with mergers and
acquisitions, negotiated underwritings, secondary distributions of listed and
unlisted securities, private placements, and valuations for estate, corporate
and other purposes. GFB's Board of Directors decided to retain Robinson-Humphrey
based on its experience as a financial advisor in mergers and acquisitions of
financial institutions, particularly transactions in the Southeastern region of
the U.S.
EFFECTIVE DATE OF THE MERGER
Subject to the conditions to the obligations of the parties to effect the
Merger, the Effective Date will occur on the date and at the time that the
Delaware Certificate of Merger and the Georgia Certificate of Merger relating to
the Merger become effective with, respectively, the Delaware Secretary of State
and the Georgia Secretary of State. Unless otherwise agreed upon by Regions and
GFB, and subject to the conditions to the obligations of the parties to effect
the Merger, the parties will use their reasonable efforts to cause the Effective
Date to occur on the last business day of the month in which the last of the
following events occur: (i) the effective date (including the expiration of any
applicable waiting period) of the last federal or state regulatory approval
required for the Merger and (ii) the date on which the Agreement is approved by
the requisite vote of GFB stockholders.
No assurance can be provided that the necessary stockholder and regulatory
approvals can be obtained or that other conditions precedent to the Merger can
or will be satisfied. Regions and GFB anticipate that all conditions to
consummation of the Merger will be satisfied so that the Merger can be
consummated during the fourth quarter of 1997. However, delays in the
consummation of the Merger could occur.
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The Board of Directors of either Regions or GFB generally may terminate the
Agreement if the Merger is not consummated by March 31, 1998, unless the failure
to consummate by that date is the result of a breach of the Agreement by the
party seeking termination. See "--Conditions to Consummation of the Merger" and
"--Waiver, Amendment, and Termination of the Agreement."
DISTRIBUTION OF REGIONS STOCK CERTIFICATES AND PAYMENT FOR FRACTIONAL SHARES
Promptly after the Effective Date, Regions will cause an exchange agent
selected by Regions (the "Exchange Agent") to mail to the former stockholders of
GFB a form letter of transmittal, together with instructions for the exchange of
such stockholders' certificates representing shares of GFB Common Stock for
certificates representing shares of Regions Common Stock.
GFB stockholders should not send in their certificates until they receive
the form letter of transmittal and instructions. Upon surrender to the Exchange
Agent of certificates for GFB Common Stock, together with a properly completed
letter of transmittal, there will be issued and mailed to each holder of GFB
Common Stock surrendering such items a certificate or certificates representing
the number of shares of Regions Common Stock to which such holder is entitled,
if any, and a check for the amount to be paid in lieu of any fractional share
interest, without interest. After the Effective Date, to the extent permitted by
law, GFB stockholders of record as of the Effective Date will be entitled to
vote at any meeting of holders of Regions Common Stock the number of whole
shares of Regions Common Stock into which their GFB Common Stock has been
converted, regardless of whether such stockholders have surrendered their GFB
Common Stock certificates. No dividend or other distribution payable after the
Effective Date with respect to Regions Common Stock, however, will be paid to
the holder of any unsurrendered GFB certificate until the holder duly surrenders
such certificate. Upon such surrender, all undelivered dividends and other
distributions and, if applicable, a check for the amount to be paid in lieu of
any fractional share interest will be delivered to such stockholder, in each
case without interest.
The stock transfer books of GFB will be closed at the Effective Date, after
which there will be no transfers of shares of GFB Common Stock on GFB's stock
transfer books. If certificates representing shares of GFB Common Stock are
presented for transfer after the Effective Date, they will be canceled and
exchanged for the shares of Regions Common Stock and a check for the amount due
in lieu of fractional shares, if any, deliverable in respect thereof.
CONDITIONS TO CONSUMMATION OF THE MERGER
Consummation of the Merger is subject to a number of conditions, including,
but not limited to:
(a) approval from the Federal Reserve, and the expiration of all applicable
waiting periods associated with such approval, without any conditions or
restrictions that would, in the reasonable good faith judgment of Regions' Board
of Directors, so materially adversely impact the economic benefits of the
transactions contemplated by the Agreement as to render inadvisable the
consummation of the Merger;
(b) the approval by the holders of a majority of shares of GFB Common Stock
outstanding and entitled to vote at the Special Meeting;
(c) the absence of any action by any court or governmental authority of
competent jurisdiction restricting, prohibiting, or making illegal the
consummation of the Merger and the other transactions contemplated by the
Agreement;
(d) the receipt of a satisfactory opinion of counsel for Regions that (i)
the Merger qualifies for federal income tax treatment as a reorganization under
Section 368(a) of the Code and that (ii) the exchange of GFB Common Stock for
Regions Common Stock will not give rise to recognition of gain or loss to GFB
stockholders, except to the extent of any cash received; and
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(e) notification for listing on the Nasdaq National Market of the shares of
Regions Common Stock to be issued in the Merger.
Consummation of the Merger also is subject to the satisfaction or waiver of
various other conditions specified in the Agreement, including, among others:
(i) the delivery by Regions and GFB of opinions of their respective counsel and
certificates executed by their respective duly authorized officers as to the
satisfaction of certain conditions and obligations set forth in the Agreement
and (ii) as of the Effective Date, the accuracy of certain representations and
warranties and the compliance in all material respects with the agreements and
covenants of each party.
REGULATORY APPROVALS
The Merger may not proceed in the absence of receipt of the requisite
regulatory approvals. An application for the Federal Reserve approval described
below has been submitted by Regions to the Federal Reserve, which has issued
its approval of the Merger.
Regions and GFB are not aware of any material governmental approvals or
actions that are required for consummation of the Merger, except as described
below. Should any other approval or action be required, it presently is
contemplated that such approval or action would be sought.
The Merger requires the prior approval of the Federal Reserve, pursuant to
Section 4 of the BHC Act. In granting its approval under Section 4 of the BHC
Act, the Federal Reserve must take into consideration, among other factors, the
financial and managerial resources and future prospects of the institutions and
the convenience and needs of the communities to be served. The relevant statutes
prohibit the Federal Reserve from approving the Merger (i) if it would result in
a monopoly or be in furtherance of any combination or conspiracy to monopolize
or attempt to monopolize the business of banking in any part of the United
States or (ii) if its effect in any section of the country may be to
substantially lessen competition or to tend to create a monopoly, or if it would
be a restraint of trade in any other manner, unless the Federal Reserve finds
that any anticompetitive effects are outweighed clearly by the public interest
and the probable effect of the transaction in meeting the convenience and needs
of the communities to be served. Under the BHC Act, the Merger may not be
consummated until the 30th day following the date of Federal Reserve approval,
which may be shortened by the Federal Reserve to the 15th day, during which time
the United States Department of Justice may challenge the transaction on
antitrust grounds. The commencement of any antitrust action would stay the
effectiveness of the Federal Reserve's approval, unless a court specifically
orders otherwise.
WAIVER, AMENDMENT, AND TERMINATION OF THE AGREEMENT
Prior to the Effective Date, and to the extent permitted by law, any
provision of the Agreement generally may be (i) waived by the party benefitted
by the provision or (ii) amended by a written agreement between Regions and GFB
approved by their respective Boards of Directors; provided, however, that after
approval by the GFB stockholders, no amendment decreasing the consideration to
be received by GFB stockholders may be made without the further approval of such
stockholders.
The Agreement may be terminated, and the Merger abandoned, at any time
prior to the Effective Date, either before or after approval by GFB
stockholders, under certain circumstances, including:
(a) by the Board of Directors of either party upon final denial of any
required consent of any regulatory authority, or by the Board of Directors of
Regions if any required regulatory approval is conditioned or restricted in the
manner described under "--Conditions to Consummation of the Merger" above;
(b) by the Board of Directors of either party, if the holders of the
requisite number of shares of GFB Common Stock shall not have approved the
Agreement in accordance with the Georgia Act;
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(c) by mutual agreement of the Boards of Directors of Regions and GFB;
(d) by the Board of Directors of either party, in the event of a breach by
the other party of any provision of the Agreement which meets certain standards
specified in the Agreement and cannot be or has not been cured within 30 days
after the giving of written notice to the breaching party; or
(e) by the Board of Directors of either party if the Merger shall not have
been consummated by March 31, 1998, but only if the failure to consummate the
Merger by such date has not been caused by the terminating party's breach of the
Agreement.
If the Agreement is terminated, the parties will have no further
obligations, except with respect to certain provisions, including those
providing for payment of expenses and restricting disclosure of confidential
information. Further, termination generally will not relieve the parties from
the consequences of any uncured willful breach of the Agreement giving rise to
such termination.
CONDUCT OF BUSINESS PENDING THE MERGER
Each of GFB and Regions generally has agreed to (i) operate its business
only in the usual, regular, and ordinary course, (ii) preserve intact its
business organizations and assets and maintain its rights and franchises, and
(iii) take no action that would affect, adversely and materially, the ability of
either party to perform its covenants and agreements under the Agreement or to
obtain any consent or approval required for the consummation of the transactions
contemplated by the Agreement. In addition, the Agreement contains certain other
restrictions applicable to the conduct of the business of either GFB or Regions
prior to consummation of the Merger, as described below.
GFB. GFB has agreed not to take certain actions relating to the operation
of its business pending consummation of the Merger without the prior written
consent of a duly authorized officer of Regions. Those actions generally
include, without limitation: (i) amending the Articles of Incorporation or
Bylaws or other governing instrument of GFB or any subsidiary; (ii) incurring,
guaranteeing, or otherwise becoming responsible for any additional debt or other
obligation for borrowed money (other than indebtedness among GFB and its
subsidiaries) in excess of an aggregate amount outstanding at any time of
$100,000 (for GFB and its subsidiaries on a consolidated basis) except in the
ordinary course of business consistent with past practices (as described in the
Agreement); (iii) acquiring or exchanging (other than exchanges in the ordinary
course under employee benefit plans) directly or indirectly any shares, or any
securities convertible into shares, of the capital stock of GFB or any
subsidiary or declaring or paying any dividend or other distribution in respect
of its capital stock, except that GFB may, but shall not be legally obligated
to, declare and pay regular quarterly cash dividends at a rate not in excess of
$1.05 per share on an annualized basis, in accordance with past practice as
previously disclosed to Regions; (iv) issuing, selling, pledging, encumbering or
authorizing the issuance of, or contracting to issue, sell, pledge, encumber or
otherwise permit to become outstanding any additional shares of any GFB capital
stock, any rights to acquire any such stock, or any security convertible into
such stock (except upon exercise of outstanding stock options) (v) adjusting,
splitting, combining, or reclassifying any of its capital stock or the capital
stock of any subsidiary; (vi) acquiring direct or indirect control over, or
investing in the equity securities of another entity other than in the ordinary
course of business or in a fiduciary capacity, making any material investment in
or otherwise acquiring control over any other entity; (vii) granting any
increase in compensation or benefits to employees or officers of GFB or any
subsidiary (except as previously disclosed to Regions or required by law),
paying any bonus (except pursuant to any applicable existing program or plan as
previously disclosed to Regions), entering into or amending any severance
agreements with officers (except as previously disclosed to Regions), granting
any increase in fees or other increases in compensation or other benefits to the
directors of GFB or any subsidiary or voluntarily accelerating the vesting of
any stock options or employee benefits; (viii) entering into or amending any
employment contract that it does not have the unconditional right to terminate
without liability, (except as previously disclosed to Regions or unless required
by law); (ix) adopting any new employee benefit plan or program, or materially
changing any existing plan or program (except as previously disclosed to Regions
and
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except for any change required by law or a change which, in the opinion of
counsel, is necessary to maintain the tax qualified status of any such plan);
(x) making any significant change in any tax or accounting methods or systems of
internal accounting controls (except in conformity to changes in tax laws or
generally accepted accounting principles ("GAAP")); (xi) other than in
accordance with past practice, commencing any litigation or settling any
litigation for money damages in excess of $25,000 (unless previously reserved in
GFB's financial statements) or imposing restrictions upon the operations of GFB
or any of its subsidiaries; or (xii) except in the ordinary course of business,
entering into, modifying, amending, terminating or changing any material
contract.
In addition, GFB has agreed not to solicit, directly or indirectly, any
acquisition proposal from any other person or entity. GFB also has agreed not to
negotiate with respect to any such proposal, provide nonpublic information to
any party making such a proposal, or enter into any agreement with respect to
any such proposal, except in compliance with the fiduciary obligations of its
Board of Directors. In addition, GFB has agreed to use reasonable efforts to
cause its advisors and other representatives not to engage in any of the
foregoing activities.
Regions. Regions has generally agreed that Regions and each of its
subsidiaries will continue to conduct its business in a manner designed in its
reasonable judgment to enhance the long-term value of Regions Common Stock and
the business prospect of Regions and its subsidiaries. The Agreement prohibits
Regions from, without the prior written consent of a duly authorized officer of
GFB, amending its certificate of incorporation or bylaws in any manner which is
adverse to, and discriminates against, the holders of GFB Common Stock.
MANAGEMENT FOLLOWING THE MERGER
Consummation of the Merger will not alter the present officers and
directors of Regions. Information concerning the management of Regions is
included in the documents incorporated herein by reference. See "Documents
Incorporated by Reference."
INTERESTS OF CERTAIN PERSONS IN THE MERGER
The Agreement provides that Regions will indemnify each person entitled to
indemnification from GFB or its subsidiary to the full extent provided by the
Georgia Act and the Articles and Bylaws of GFB, including provisions relating to
advancement of expenses of defense, for six years from the Effective Date with
respect to matters occurring at or prior to the Effective Date.
The Agreement also provides that, after the Effective Date, Regions will
provide generally to officers and employees of GFB and its subsidiaries who, at
or after the Effective Date, become officers or employees of Regions or its
subsidiaries, employee benefits under employee benefit plans (other than stock
option or other plans involving the potential issuance of Regions Common Stock)
on terms and conditions that, taken as a whole, are substantially similar to
those currently provided by Regions and its subsidiaries to their similarly
situated officers and employees. For purposes of participation and vesting (but
not benefit accrual) under such employee benefit plans, service with GFB or its
subsidiaries prior to the Effective Date will be treated as service with Regions
or its subsidiaries. The Agreement further provides that Regions will cause GFB
to honor all employment, severance, consulting, and other compensation contracts
previously disclosed to Regions between GFB or its subsidiaries and any current
or former director, officer, or employee, and all provisions for vested amounts
earned or accrued through the Effective Date under GFB's benefit plans.
As described above under "--Treatment of GFB Options," the Agreement also
provides that all rights with respect to GFB Common Stock pursuant to stock
options or stock appreciation rights granted by GFB under its stock option and
other stock-based compensation plans which are outstanding at the Effective
Date, whether or not then exercisable, will be converted into and will become
rights with respect to Regions Common Stock, and Regions will assume each of
such options in accordance with its terms.
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As of the Record Date, directors and executive officers of GFB owned no
shares of Regions Common Stock.
DISSENTING STOCKHOLDERS
In accordance with the provisions of the Georgia Act, the holders of GFB
Common Stock are entitled to dissent from the Merger and to receive an appraised
value of such shares in cash. Pursuant to the provisions of Article 13 of the
Georgia Act, if the Merger is consummated, any holder of record of GFB Common
Stock who (i) gives to GFB, prior to the vote at the Special Meeting with
respect to the approval of the Agreement, written notice of such holder's intent
to demand payment for such holder's shares, and (ii) does not vote in favor
thereof, shall be entitled to receive, upon compliance with the statutory
requirements summarized below, the fair value of such holder's shares as of the
Effective Date. A copy of the pertinent provisions of Article 13 of the Georgia
Act is reproduced as Appendix C to this Proxy Statement/Prospectus.
A stockholder of record may assert dissenters' rights as to fewer than all
the shares registered in such holder's name only if such holder dissents with
respect to all shares beneficially owned by any one beneficial stockholder and
such holder notifies GFB in writing of the name and address of each person on
whose behalf such holder asserts dissenters' rights. The rights of such a
partial dissenter are determined as if the shares as to which such holder
dissents and such holder's other shares were registered in the names of
different stockholders.
The written objection requirement referred to above will not be satisfied
under the Georgia Act by merely voting against approval of the Agreement by
proxy or in person at the Special Meeting. Any holder of GFB Common Stock who
returns a signed proxy but fails to provide instructions as to the manner in
which such shares are to be voted will be deemed to have voted in favor of the
transaction and will not be entitled to assert dissenters' rights. In addition
to not voting in favor of the Agreement, a stockholder wishing to preserve the
right to dissent and seek appraisal must give a separate written notice of such
holder's intent to demand payment for such holder's shares if the Merger is
effected, as hereinabove provided.
Any written objection to the Agreement satisfying the requirements
discussed above should be addressed as follows: GF Bancshares, Inc., 327 West
Taylor Street, Griffin, Georgia, 30223, Attention: President.
If the Merger is authorized at the Special Meeting, GFB must deliver a
written dissenters' notice (the "Dissenters' Notice") to all holders of GFB
Common Stock who satisfied the foregoing requirements. The Dissenters' Notice
must be sent within 10 days after the Effective Date and must (i) state where
the demand for payment must be sent and where and when certificates for shares
of GFB Common Stock must be deposited, (ii) inform holders of uncertificated
shares to what extent transfer of these shares will be restricted after the
demand for payment is received, (iii) set a date by which GFB must receive the
demand for payment (which date may not be fewer than 30 nor more than 60 days
after the Dissenters' Notice is delivered), and (iv) be accompanied by a copy of
Article 13 of the Georgia Act.
A stockholder of record who receives the Dissenters' Notice must demand
payment and deposit such holder's certificates in accordance with the
Dissenters' Notice. Such stockholder will retain all other rights of a
stockholder until those rights are canceled or modified by the consummation of
the Merger. A stockholder of record who does not demand payment or deposit such
holder's shares certificates where required, each by the date set in the
Dissenters' Notice, is not entitled to payment for such holder's shares under
Article 13 of the Georgia Act.
Except as described below, the surviving corporation resulting from the
Merger must, within ten days of the later of the Effective Date or receipt of a
payment demand, offer to pay to each dissenting stockholder who complied with
the payment demand and deposit requirements described above the amount the
surviving corporation estimates to be the fair value of such holder's shares,
plus accrued interest from the Effective Date. Such offer of payment must be
accompanied by (i) certain recent GFB financial statements, (ii) the surviving
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corporation's estimate of the fair value of the shares, (iii) an explanation of
how the interest was calculated, (iv) a statement of the dissenter's right to
demand payment under Section 14-2-1327 of the Georgia Act, and (v) a copy of the
Article 13 of the Georgia Act. If the stockholder accepts the surviving
corporation's offer by written notice to the surviving corporation within 30
days after the surviving corporation's offer, payment must be made within 60
days after the later of the making of the offer or the Effective Date.
If the Merger is not effected within 60 days after the date set forth
demanding payment and depositing share certificates, GFB must return the
deposited certificates and release the transfer restrictions imposed on
uncertificated shares. If, after such return and release, the Merger is
effected, the surviving corporation must send a new Dissenter's Notice and
repeat the payment demand procedure described above.
Section 14-2-1327 of the Georgia Act provides that a dissenting stockholder
may notify the surviving corporation in writing of such holder's own estimate of
the fair value or such holder's shares and the interest due, and may demand
payment of such holder's estimate, if (i) such holder believes that the amount
offered by the surviving corporation is less than the fair value of such
holder's shares or that the interest due has been calculated incorrectly, or
(ii) GFB, having failed to effect the Merger, does not return the deposited
certificates or release the transfer restrictions imposed on uncertificated
shares within 60 days after the date set for demanding payment. A dissenting
stockholder waives such holder's right to demand payment under Section 14-2-1327
unless such holder notifies the surviving corporation of such holder's demand in
writing within 30 days after the surviving corporation makes or offers payment
for such holder's shares. If the surviving corporation does not offer payment
within 10 days of the later of the Effective Date or receipt of a payment
demand, then (i) the stockholder may demand the financial statements and other
information required to accompany the surviving corporation's payment offer, and
the surviving corporation must provide such information within 10 days after
receipt of the written demand, and (ii) the stockholder may notify the surviving
corporation of such holder's own estimate of the fair value of such holder's
shares and the amount of interest due, and may demand payment of that estimate.
If a demand for payment under Section 14-2-1327 remains unsettled, the
surviving corporation must commence a nonjury equity valuation proceeding in the
Superior Court of Spalding County, Georgia, within 60 days after receiving the
payment demand and must petition the court to determine the fair value of the
shares and accrued interest. If the surviving corporation does not commence the
proceeding within those 60 days, it is required to pay each dissenting
stockholder whose demand remains unsettled, the amount demanded. The surviving
corporation is required to make all dissenting stockholders whose demands remain
unsettled parties to the proceeding and to serve a copy of the petition upon
each dissenting stockholder. The court may appoint appraisers to receive
evidence and to recommend a decision on fair value. Each dissenting stockholder
made a party to the proceeding is entitled to judgment for the fair value of
such holder's shares plus interest to the date of judgment.
The court in an appraisal proceeding commenced under the foregoing
provision must determine the costs of the proceeding, excluding fees and
expenses of attorneys and experts for the respective parties, and must assess
those costs against the surviving corporation, except that the court may assess
the costs against all or some of the dissenting stockholders to the extent the
court finds they acted arbitrarily, vexatiously, or not in good faith in
demanding payment under Section 14-2-1327. The court also may assess the fees
and expenses of attorneys and experts for the respective parties against the
surviving corporation if the court finds the surviving corporation did not
substantially comply with the requirements of specified provisions of Article 13
of the Georgia Act, or against either the surviving corporation or a dissenting
stockholder if the court finds that such party acted arbitrarily, vexatiously,
or not in good faith with respect to the rights provided by Article 13 of the
Georgia Act.
If the court finds that the services of attorneys for any dissenting
stockholder were of substantial benefit to other dissenting stockholders
similarly situated, and that the fees for those services should not be assessed
against the surviving corporation, the court may award those attorneys
reasonable fees out of the amounts awarded the dissenting stockholders who were
benefitted. No action by any dissenting stockholder to enforce
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dissenters' rights may be brought more than three years after the Effective
Date, regardless of whether notice of the Merger and of the right to dissent was
given by GFB or the surviving corporation in compliance with the Dissenters'
Notice and payment offer requirements.
The foregoing is a summary of the material rights of a dissenting
stockholder of GFB, but is qualified in its entirety by reference to Article 13
of the Georgia Act, included in Appendix C to this Prospectus/Proxy Statement.
Any GFB stockholder who intends to dissent from approval of the Agreement should
carefully review the text of such provisions and should also consult with such
holder's attorney. No further notice of the events giving rise to dissenters'
rights or any steps associated therewith will be furnished to GFB stockholders,
except as indicated above or otherwise required by law.
Any dissenting GFB stockholder who perfects such holder's right to be paid
the value of such holder's shares will recognize taxable gain or loss upon
receipt of cash for such shares for federal income tax purposes.
See "--Certain Federal Income Tax Consequences of the Merger."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
The following is a summary of certain anticipated federal income tax
consequences of the Merger. This summary is based on the federal income tax laws
now in effect and as currently interpreted; it does not take into account
possible changes in such laws or interpretations, including amendments to
applicable statutes or regulations or changes in judicial or administrative
rulings, some of which may have retroactive effect. This summary does not
purport to address all aspects of the possible federal income tax consequences
of the Merger and is not intended as tax advice to any person. In particular,
and without limiting the foregoing, this summary does not address the federal
income tax consequences of the Merger to stockholders in light of their
particular circumstances or status (for example, as foreign persons, tax-exempt
entities, dealers in securities, insurance companies, and corporations, among
others). Nor does this summary address any consequences of the Merger under any
state, local, estate, or foreign tax laws. Stockholders, therefore, are urged to
consult their own tax advisors as to the specific tax consequences to them of
the Merger, including tax return reporting requirements, the application and
effect of federal, foreign, state, local, and other tax laws, and the
implications of any proposed changes in the tax laws.
A federal income tax ruling with respect to this transaction was not
requested from the Internal Revenue Service. Instead, consummation of the Merger
is conditioned upon receipt by Regions and GFB of an opinion from Alston &
Bird LLP, special counsel to Regions, concerning certain federal income tax
consequences of the proposed Merger under federal income tax law. Based upon
representations made by Regions and GFB, it is such firm's opinion that:
(a) Provided the Merger qualifies as a statutory merger under the Delaware
GCL and the Georgia Act and notwithstanding the Bank Merger, the Merger will be
a reorganization within the meaning of Section 368(a) of the Code. GFB and
Regions will each be "a party to a reorganization" within the meaning of
Section 368(b) of the Code.
(b) The stockholders of GFB will recognize no gain or loss upon the
exchange of their GFB Common Stock solely for shares of Regions Common Stock.
(c) The basis of the Regions Common Stock received by the GFB stockholders
in the Merger will, in each instance, be the same as the basis of the GFB Common
Stock surrendered in exchange therefor, less the basis of any fractional share
of Regions Common Stock settled by cash payment.
(d) The holding period of the Regions Common Stock received by the GFB
stockholders will, in each instance, include the period during which the GFB
Common Stock surrendered in exchange therefor was held, provided that the GFB
Common Stock was held as a capital asset on the date of the exchange.
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(e) The payment of cash to GFB stockholders in lieu of fractional share
interests of Regions Common Stock will be treated for federal income tax
purposes as if the fractional shares were distributed as part of the exchange
and then were redeemed by Regions. These cash payments will be treated as having
been received as distributions in full payment in exchange for the stock
redeemed. Generally, any gain or loss recognized upon such exchange will be
capital gain or loss, provided the fractional share would constitute a capital
asset in the hands of the exchanging stockholder.
(f) Where solely cash is received by a GFB stockholder in exchange for GFB
Common Stock pursuant to the exercise of dissenters' rights, such cash will be
treated as having been received in redemption of such holder's GFB Common Stock,
subject to the provisions and limitations of Section 302 of the Code.
The tax opinion does not address any state, local, foreign, or other tax
consequences of the Merger. GFB stockholders should consult their own tax
advisors with respect to the tax consequences of the proposed transaction to
them individually, including tax consequences under state, local, or foreign
law.
ACCOUNTING TREATMENT
It is anticipated that the Merger will be accounted for as a "purchase," as
that term is used pursuant to GAAP, for accounting and financial reporting
purposes. Under the purchase method of accounting, the assets and liabilities of
GFB as of the Effective Date will be recorded at their estimated respective fair
values and added to those of Regions. Financial statements of Regions issued
after the Effective Date will reflect such values and will not be restated
retroactively to reflect the historical financial position or results of
operations of GFB.
EXPENSES AND FEES
The Agreement provides, in general, that each of the parties will bear and
pay its own expenses in connection with the transactions contemplated by the
Agreement, including fees and expenses of its own financial or other
consultants, investment bankers, accountants, and counsel, except that Regions
will bear and pay the filing fees and printing costs in connection with this
Proxy Statement/Prospectus.
RESALES OF REGIONS COMMON STOCK
The Regions Common Stock to be issued to GFB stockholders in the Merger has
been registered under the Securities Act, but that registration does not cover
resales of those shares by persons who control, are controlled by, or are under
common control with, GFB (such persons are referred to hereinafter as
"affiliates" and generally include executive officers, directors, and 10%
stockholders) at the time of the Special Meeting. Affiliates may not sell shares
of Regions Common Stock acquired in connection with the Merger, except pursuant
to an effective registration statement under the Securities Act or in compliance
with SEC Rule 145 or another applicable exemption from the Securities Act
registration requirements or in accordance with a legal opinion satisfactory to
Regions that such sale or transfer is otherwise exempt from the Securities Act
registration requirements.
Each person who GFB reasonably believes will be an affiliate of GFB has
delivered to Regions a written agreement providing that such person generally
will not sell, pledge, transfer, or otherwise dispose of any Regions Common
Stock to be received by such person upon consummation of the Merger, except in
compliance with the Securities Act and the rules and regulations of the SEC
promulgated thereunder.
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EFFECT OF THE MERGER ON RIGHTS OF STOCKHOLDERS
As a result of the Merger, holders of GFB Common Stock will be exchanging
their shares of a Georgia corporation governed by the Georgia Act and GFB's
Articles of Incorporation, as amended (the "Articles"), and Bylaws, for shares
of Regions, a Delaware corporation governed by the Delaware GCL and Regions'
Certificate of Incorporation (the "Certificate") and Bylaws. Certain significant
differences exist between the rights of GFB stockholders and those of Regions
stockholders. The differences deemed material by GFB and Regions are summarized
below. In particular, Regions' Certificate and Bylaws contain several provisions
that may be deemed to have an antitakeover effect in that they could impede or
prevent an acquisition of Regions unless the potential acquirer has obtained the
approval of Regions' Board of Directors. The following discussion is necessarily
general; it is not intended to be a complete statement of all differences
affecting the rights of stockholders and their respective entities, and it is
qualified in its entirety by reference to the Georgia Act and the Delaware GCL
as well as to Regions' Certificate and Bylaws and GFB's Articles and Bylaws.
ANTITAKEOVER PROVISIONS GENERALLY
The provisions of Regions' Certificate and Bylaws described below under the
headings, "--Authorized Capital Stock," "--Amendment of Certificate or Articles
of Incorporation and Bylaws," "--Classified Board of Directors and Absence of
Cumulative Voting," "--Removal of Directors," "--Limitations on Director
Liability," "--Special Meetings of Stockholders," "--Actions by Stockholders
Without a Meeting," "--Stockholder Nominations," and "--Mergers, Consolidations,
and Sales of Assets Generally," and the provisions of the Delaware GCL described
under the heading "--Business Combinations With Certain Persons," are referred
to herein as the "Protective Provisions." In general, one purpose of the
Protective Provisions is to assist Regions' Board of Directors in playing a role
in connection with attempts to acquire control of Regions, so that the Board can
further and protect the interests of Regions and its stockholders as appropriate
under the circumstances, including, if the Board determines that a sale of
control is in their best interests, by enhancing the Board's ability to maximize
the value to be received by the stockholders upon such a sale.
Although Regions' management believes the Protective Provisions are,
therefore, beneficial to Regions' stockholders, the Protective Provisions also
may tend to discourage some takeover bids. As a result, Regions' stockholders
may be deprived of opportunities to sell some or all of their shares at prices
that represent a premium over prevailing market prices. On the other hand,
defeating undesirable acquisition offers can be a very expensive and
time-consuming process. To the extent that the Protective Provisions discourage
undesirable proposals, Regions may be able to avoid those expenditures of time
and money.
The Protective Provisions also may discourage open market purchases by a
potential acquirer. Such purchases may increase the market price of Regions
Common Stock temporarily, enabling stockholders to sell their shares at a price
higher than that which otherwise would prevail. In addition, the Protective
Provisions may decrease the market price of Regions Common Stock by making the
stock less attractive to persons who invest in securities in anticipation of
price increases from potential acquisition attempts. The Protective Provisions
also may make it more difficult and time consuming for a potential acquirer to
obtain control of Regions through replacing the Board of Directors and
management. Furthermore, the Protective Provisions may make it more difficult
for Regions' stockholders to replace the Board of Directors or management, even
if a majority of the stockholders believes such replacement is in the best
interests of Regions. As a result, the Protective Provisions may tend to
perpetuate the incumbent Board of Directors and management.
AUTHORIZED CAPITAL STOCK
Regions. The Certificate authorizes the issuance of up to 240,000,000
shares of Regions Common Stock, of which 136,722,982 shares were issued and
outstanding as of June 30, 1997, and 5,000,000 shares of preferred stock, none
of which are outstanding. Regions' Board of Directors may authorize the issuance
of additional shares of Regions Common Stock or preferred stock without further
action by Regions' stockholders, unless such action is required in a particular
case by applicable laws or regulations or by any stock exchange upon which
Regions' capital stock may be listed. The Certificate does not provide
preemptive rights to Regions stockholders.
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The authority to issue additional shares of Regions capital stock provides
Regions with the flexibility necessary to meet its future needs without the
delay resulting from seeking stockholder approval. The authorized but unissued
shares of Regions Common Stock will be issuable from time to time for any
corporate purpose, including, without limitation, stock splits, stock dividends,
employee benefit and compensation plans, acquisitions, and public or private
sales for cash as a means of raising capital. Such shares could be used to
dilute the stock ownership of persons seeking to obtain control of Regions. In
addition, the sale of a substantial number of shares of Regions Common Stock to
persons who have an understanding with Regions concerning the voting of such
shares, or the distribution or declaration of a dividend of shares of Regions
Common Stock (or the right to receive Regions Common Stock) to Regions
stockholders, may have the effect of discouraging or increasing the cost of
unsolicited attempts to acquire control of Regions. Regions has committed not to
issue shares of preferred stock for any anti-takeover purpose, including any
purpose to make a change in control of Regions more costly or difficult.
GFB. GFB's authorized capital stock consists of 8,000,000 shares of common
stock, of which 989,122 shares were issued and outstanding as of the Record
Date, and 2,000,000 shares of preferred stock, none of which are outstanding.
Pursuant to the Georgia Act, GFB's Board of Directors may authorize the
issuance of additional shares of GFB Common Stock without further action by
GFB's stockholders. GFB's Articles, as amended, do not provide the stockholders
of GFB with preemptive rights to purchase or subscribe to any unissued
authorized shares of GFB Common Stock or any option or warrant for the purchase
thereof.
AMENDMENT OF CERTIFICATE OR ARTICLES OF INCORPORATION AND BYLAWS
Regions. The Delaware GCL generally provides that the approval of a
corporation's board of directors and the affirmative vote of a majority of (i)
all shares entitled to vote thereon and (ii) the shares of each class of stock
entitled to vote thereon as a class is required to amend a corporation's
certificate of incorporation, unless the certificate specifies a greater voting
requirement. The Certificate states that its provisions regarding authorized
capital stock, election, classification, and removal of directors, the approval
required for certain business combinations, meetings of stockholders, and
amendment of the Certificate and Bylaws may be amended or repealed only by the
affirmative vote of the holders of at least 75% of the outstanding shares of
Regions Common Stock.
The Certificate also provides that the Board of Directors has the power to
adopt, amend, or repeal the Bylaws. Any action taken by the stockholders with
respect to adopting, amending, or repealing any Bylaws may be taken only upon
the affirmative vote of the holders of at least 75% of the outstanding shares of
Regions Common Stock.
GFB. The Georgia Act generally provides that a Georgia corporation's
articles of incorporation may be amended by the affirmative vote of a majority
of the shares entitled to vote thereon, unless the articles of incorporation
provide for a higher or lower voting requirement. GFB's Articles provide that
the affirmative vote of a majority of the outstanding voting shares is required
to amend the Articles, unless the amendment concerns capital stock, directors,
directors' liability, stockholder's meetings, indemnification, certain business
transactions, or Bylaws. As to such categories the Articles impose a voting
requirement for approval of amendment of at least 67% of the then outstanding
shares of capital stock, unless at least 67% of the Board of Directors has
approved the amendment, in which case approval of a majority of the outstanding
voting shares is sufficient.
The Articles also provide that the Board of Directors has the power to
adopt, amend, or repeal the Bylaws by a vote of at least 67% of the directors
then in office, subject to the powers of the holders of the capital stock to
alter, amend, or repeal the Bylaws. The affirmative vote of at least 67% of the
voting power of the then outstanding shares of capital stock is required for the
holders of capital stock to alter, amend, or repeal any provision of the Bylaws.
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CLASSIFIED BOARD OF DIRECTORS AND ABSENCE OF CUMULATIVE VOTING
Regions. The Certificate provides that Regions' Board of Directors is
divided into three classes, with each class to be as nearly equal in number as
possible. The directors in each class serve three-year terms of office.
The effect of Regions' having a classified Board of Directors is that only
approximately one-third of the members of the Board are elected each year;
consequently, two annual meetings are effectively required for Regions'
stockholders to change a majority of the members of the Board.
Pursuant to the Certificate, each stockholder generally is entitled to one
vote for each share of Regions stock held and is not entitled to cumulative
voting rights in the election of directors. With cumulative voting, a
stockholder has the right to cast a number of votes equal to the total number of
such holder's shares multiplied by the number of directors to be elected. The
stockholder has the right to cast all of such holder's votes in favor of one
candidate or to distribute such holder's votes in any manner among any number of
candidates. Directors are elected by a plurality of the total votes cast by all
stockholders. With cumulative voting, it may be possible for minority
stockholders to obtain representation on the Board of Directors. Without
cumulative voting, the holders of more than 50% of the shares of Regions Common
Stock generally have the ability to elect 100% of the directors. As a result,
the holders of the remaining Regions Common Stock effectively may not be able to
elect any person to the Board of Directors. The absence of cumulative voting,
therefore, could make it more difficult for a stockholder who acquires less than
a majority of the shares of Regions Common Stock to obtain representation on
Regions' Board of Directors.
GFB. GFB's Articles generally provide for a classified board of directors
with three classes, and provide that voting stock does not have cumulative
voting rights.
REMOVAL OF DIRECTORS
Regions. Under the Certificate, any director or the entire Board of
Directors may be removed only for cause and only by the affirmative vote of the
holders of at least 75% of Regions' voting stock.
GFB. Pursuant to GFB's Bylaws and Articles, a director may be removed at
any time, but only for cause, by the affirmative vote of at least 67% of the
then outstanding shares of capital stock. Only the affirmative vote of a
majority of the holders of outstanding shares of capital stock must approve the
removal if at least 67% of the Board of Directors then in office has approved
such action by resolution.
LIMITATIONS ON DIRECTOR LIABILITY
Regions. The Certificate provides that a director of Regions will have no
personal liability to Regions or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability for (i) any breach
of the director's duty of loyalty to the corporation or its stockholders, (ii)
acts or omissions not in good faith or that involve intentional misconduct or a
knowing violation of law, (iii) the payment of certain unlawful dividends and
the making of certain unlawful stock purchases or redemptions, or (iv) any
transaction from which the director derived an improper personal benefit.
Although this provision does not affect the availability of injunctive or
other equitable relief as a remedy for a breach of duty by a director, it does
limit the remedies available to a stockholder who has a valid claim that a
director acted in violation of such director's duties, if the action is among
those as to which liability is limited. This provision may reduce the likelihood
of stockholder derivative litigation against directors and may discourage or
deter stockholders or management from bringing a lawsuit against directors for
breach of their duties, even though such action, if successful, might have
benefitted Regions and its stockholders. The SEC has taken the position that
similar provisions added to other corporations' certificates of incorporation
would not protect those corporations' directors from liability for violations of
the federal securities laws.
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GFB. The Georgia Act generally permits a corporation's articles of
incorporation to relieve directors of liability for money damages for good faith
conduct. The Articles provide that a director of GFB shall not be personally
liable to GFB or its stockholders for monetary damages for breach of duty of
care or other duty as director except for liability (i) for any appropriation,
in violation of his duties, of any business opportunity of GFB; (ii) for acts or
omissions which involve intentional misconduct or a knowing violation of law;
(iii) for certain unlawful transactions; or (iv) for any transaction from which
the director derives an improper personal benefit.
INDEMNIFICATION
Regions. The Certificate provides that Regions will indemnify its officers,
directors, employees, and agents to the full extent permitted by the Delaware
GCL. Under Section 145 of the Delaware GCL as currently in effect, other than in
actions brought by or in the right of Regions, such indemnification would apply
if it were determined in the specific case that the proposed indemnitee acted in
good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of Regions and, with respect to any criminal
proceeding, if such person had no reasonable cause to believe that the conduct
was unlawful. In actions brought by or in the right of Regions, such
indemnification probably would be limited to reasonable expenses (including
attorneys' fees) and would apply if it were determined in the specific case that
the proposed indemnitee acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of Regions,
except that no indemnification may be made with respect to any matter as to
which such person is adjudged liable to Regions, unless, and only to the extent
that, the court determines upon application that, in view of all the
circumstances of the case, the proposed indemnitee is fairly and reasonably
entitled to indemnification for such expenses as the court deems proper. To the
extent that any director, officer, employee, or agent of Regions has been
successful on the merits or otherwise in defense of any action, suit, or
proceeding, as discussed herein, whether civil, criminal, administrative, or
investigative, such person must be indemnified against reasonable expenses
incurred by such person in connection therewith.
GFB. GFB's Articles provide for indemnification of its directors, officers,
and each director or officer who is serving or has served as an officer,
director, partner, joint venturer or trustee of another corporation,
partnership, joint venture, trust, or other enterprise. Such persons are
indemnified against expenses (including attorney's fees), judgments, fines and
amounts paid in settlement which are allowed to be paid or reimbursed by GFB
under the laws of the State of Georgia and which are actually and reasonably
incurred in connection with any action, suit or proceeding, pending or
threatened, whether civil, criminal, administrative or investigative in which
such person may be involved by reason of his being or having been a director or
officer of GFB or of such other enterprises. The indemnification shall be made
only in accordance with the laws of the State of Georgia.
SPECIAL MEETINGS OF STOCKHOLDERS
Regions. Regions' Certificate and Bylaws provide that special meetings of
stockholders may be called at any time, but only by the chief executive officer,
the secretary, or the Board of Directors of Regions. Regions stockholders do not
have the right to call a special meeting or to require that Regions' Board of
Directors call such a meeting. This provision, combined with other provisions of
the Certificate and the restriction on the removal of directors, would prevent a
substantial stockholder from compelling stockholder consideration of any
proposal (such as a proposal for a business combination) over the opposition of
Regions' Board of Directors by calling a special meeting of stockholders at
which such stockholder could replace the entire Board with nominees who were in
favor of such proposal.
GFB. Under the Articles, a special meeting of GFB stockholders may be
called at any time by the Chairman of the Board, by a majority of the directors
then in office, or by written request of the holders of at least 51% of the then
outstanding shares of capital stock.
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<PAGE> 38
ACTIONS BY STOCKHOLDERS WITHOUT A MEETING
Regions. The Certificate provides that any action required or permitted to
be taken by Regions stockholders must be effected at a duly called meeting of
stockholders and may not be effected by any written consent by the stockholders.
These provisions would prevent stockholders from taking action, including action
on a business combination, except at an annual meeting or special meeting called
by the Board of Directors, chief executive officer, or secretary, even if a
majority of the stockholders were in favor of such action.
GFB. Under the Articles no action requiring or permitting stockholder
approval may be approved by written consent of stockholders.
STOCKHOLDER NOMINATIONS
Regions. Regions' Certificate and Bylaws provide that any nomination by
stockholders of individuals for election to the Board of Directors must be made
by delivering written notice of such nomination (the "Nomination Notice") to the
Secretary of Regions not less than 14 days nor more than 50 days before any
meeting of the stockholders called for the election of directors; provided,
however, that if less than 21 days notice of the meeting is given to
stockholders, the Nomination Notice must be delivered to the Secretary of
Regions not later than the seventh day following the day on which notice of the
meeting was mailed to stockholders. The Nomination Notice must set forth certain
background information about the persons to be nominated, including information
concerning (i) the name, age, business, and, if known, residential address of
each nominee, (ii) the principal occupation or employment of each such nominee,
and (iii) the number of shares of Regions capital stock beneficially owned by
each such nominee. The Board of Directors is not required to nominate in the
annual proxy statement any person so proposed; however, compliance with this
procedure would permit a stockholder to nominate the individual at the
stockholders' meeting, and any stockholder may vote such holder's shares in
person or by proxy for any individual such holder desires.
GFB. GFB's Bylaws provide for nomination by stockholders of individuals for
election to the Board of Directors in substantially the same manner as is
provided by Regions' Certificate and Bylaws, but with generally shorter time
periods. The Bylaws require that the stockholder's notice set forth all
information relating to the nominated person as required to be disclosed in
solicitation of proxies for election of directors, or as otherwise required
under Regulation 14A of the Securities and Exchange Act of 1934. This
information includes the person's written consent to being named in a proxy
statement as a nominee and to serving as a director if elected. The stockholder
giving the notice should include the stockholder's name as it appears on the
books of GFB and the class and number of shares of GFB's capital stock that the
stockholder beneficially owns.
MERGERS, CONSOLIDATIONS, AND SALES OF ASSETS GENERALLY
Regions. The Certificate generally requires the affirmative vote of the
holders of at least 75% of the outstanding voting stock of Regions to effect (i)
any merger or consolidation with or into any other corporation, or (ii) any sale
or lease of any substantial part of the assets of Regions to any party that
beneficially owns 5.0% or more of the outstanding shares of Regions voting
stock, unless the transaction was approved by Regions' Board of Directors before
the other party became a 5.0% beneficial owner or is approved by 75% or more of
the Board of Directors after the party becomes such a 5.0% beneficial owner. In
addition, the Delaware GCL generally requires the approval of a majority of the
outstanding voting stock of Regions to effect (i) any merger or consolidation
with or into any other corporation, (ii) any sale, lease, or exchange of all or
substantially all of Regions property and assets, or (iii) the dissolution of
Regions. However, pursuant to the Delaware GCL, Regions may enter into a merger
transaction without stockholder approval if (i) Regions is the surviving
corporation, (ii) the agreement of merger does not amend in any respect Regions'
Certificate, (iii) each share of Regions stock outstanding immediately prior to
the effective date of the merger is to be an identical outstanding or treasury
share of Regions after the effective date of the merger, and (iv) either no
shares of Regions Common Stock and no shares, securities, or obligations
convertible into such stock are to be issued or delivered under the plan of
merger, or the authorized unissued shares or the treasury shares of Regions
Common Stock to be issued or delivered under the plan of merger plus those
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<PAGE> 39
initially issuable upon conversion of any other shares, securities, or
obligations to be issued or delivered under such plan do not exceed 20% of the
shares of Regions Common Stock outstanding immediately prior to the effective
date of the merger.
GFB. The Articles provide that certain business combination transactions
may not be consummated unless approved by the affirmative vote of 67% of the
outstanding shares of capital stock entitled to vote. Only the affirmative vote
of a majority of the outstanding shares of capital stock is required if 67% of
the Board of Directors then in office has approved any such action by
resolution. Absent such provision, the Georgia Act would require approval of a
majority of the outstanding shares of GFB Common Stock.
BUSINESS COMBINATIONS WITH CERTAIN PERSONS
Regions. Section 203 of the Delaware GCL ("Section 203") places certain
restrictions on "business combinations" (as defined in Section 203 to include,
generally, mergers, sales and leases of assets, issuances of securities, and
similar transactions) by Delaware corporations with an "interested stockholder"
(as defined in Section 203 to include, generally, the beneficial owner of 15% or
more of the corporation's outstanding voting stock). Section 203 generally
applies to Delaware corporations, such as Regions, that have a class of voting
stock listed on a national securities exchange, authorized for quotation on an
interdealer quotation system of a registered national securities association, or
held of record by more than 2,000 stockholders, unless the corporation expressly
elects in its certificate of incorporation or bylaws not to be governed by
Section 203.
Regions has not specifically elected to avoid the application of Section
203. As a result, Section 203 generally would prohibit a business combination by
Regions or a subsidiary with an interested stockholder within three years after
the person or entity becomes an interested stockholder, unless (i) prior to the
time when the person or entity becomes an interested stockholder, Regions' Board
of Directors approved either the business combination or the transaction
pursuant to which such person or entity became an interested stockholder, (ii)
upon consummation of the transaction in which the person or entity became an
interested stockholder, the interested stockholder held at least 85% of the
outstanding Regions voting stock (excluding shares held by persons who are both
officers and directors and shares held by certain employee benefit plans), or
(iii) once the person or entity becomes an interested stockholder, the business
combination is approved by Regions' Board of Directors and by the holders of at
least two-thirds of the outstanding Regions voting stock, excluding shares owned
by the interested stockholder.
GFB. Neither GFB's Articles nor Bylaws provide that GFB will be subject to
the sections of the Georgia Act that place restrictions on certain business
combinations.
DISSENTERS' RIGHTS
Regions. The rights of appraisal of dissenting stockholders of Regions are
governed by the Delaware GCL. Pursuant thereto, except as described below, any
stockholder has the right to dissent from any merger of which Regions could be a
constituent corporation. No appraisal rights are available, however, for (i) the
shares of any class or series of stock that is either listed on a national
securities exchange, quoted on the Nasdaq National Market, or held of record by
more than 2,000 stockholders or (ii) any shares of stock of the constituent
corporation surviving a merger if the merger did not require the approval of the
surviving corporation's stockholders, unless, in either case, the holders of
such stock are required by an agreement of merger or consolidation to accept for
that stock something other than: (a) shares of stock of the corporation
surviving or resulting from the merger or consolidation; (b) shares of stock of
any other corporation that will be listed at the effective date of the merger on
a national securities exchange, quoted on the Nasdaq National Market, or held of
record by more than 2,000 stockholders; (c) cash in lieu of fractional shares of
stock described in clause (a) or (b) immediately above; or (d) any combination
of the shares of stock and cash in lieu of fractional shares described in
clauses (a) through (c) immediately above. Because Regions Common Stock is
quoted on the Nasdaq National Market and is held of record by more than 2,000
stockholders, unless
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<PAGE> 40
the exception described immediately above applies, holders of Regions Common
Stock do not have dissenters' rights.
GFB. The rights of appraisal of dissenting stockholders under Georgia law
are generally similar to those afforded under the Delaware GCL. The provisions
of the Georgia Act governing the rights of dissenting stockholders is included
as Appendix C. For a summary of such provisions and the procedures to be
followed by stockholders who desire to dissent from the Merger and receive the
fair value of their shares of GFB Common Stock in cash, see "Description of the
Transaction--Dissenting Stockholders."
STOCKHOLDERS' RIGHTS TO EXAMINE BOOKS AND RECORDS
Regions. The Delaware GCL provides that a stockholder may inspect books and
records upon written demand under oath stating the purpose of the inspection, if
such purpose is reasonably related to such person's interest as a stockholder.
GFB. Pursuant to the Georgia Act, upon written notice of a demand to
inspect corporate records, a stockholder is entitled to inspect specified
corporate records, including articles of incorporation and bylaws, minutes of
stockholder meetings and certain resolutions adopted at director meetings,
stockholder list, and all stockholder communications for the preceding three
years, including financial statements. Upon demonstration of a proper purpose, a
stockholder may be entitled to inspect other corporate records.
DIVIDENDS
Regions. The Delaware GCL provides that, subject to any restrictions in the
corporation's certificate of incorporation, dividends may be declared from the
corporation's surplus, or, if there is no surplus, from its net profits for the
fiscal year in which the dividend is declared and the preceding fiscal year.
Dividends may not be declared, however, if the corporation's capital has been
diminished to an amount less than the aggregate amount of all capital
represented by the issued and outstanding stock of all classes having a
preference upon the distribution of assets. Substantially all of the funds
available for the payment of dividends by Regions are derived from its
subsidiary depository institutions. There are various statutory limitations on
the ability of Regions' subsidiary depository institutions to pay dividends to
Regions. See "Certain Regulatory Considerations--Payment of Dividends."
GFB. Pursuant to the Georgia Act, a board of directors may from time to
time make distributions to its stockholders, subject to restrictions in its
articles of incorporation, provided that no distribution may be made if, after
giving it effect, (i) the corporation would not be able to pay its debts as they
become due in the usual course of business, or (ii) the corporation's total
assets would be less than the sum of its total liabilities plus (unless the
articles of incorporation permit otherwise) the amount that would be needed, if
the corporation were to be dissolved at the time of the distribution, to satisfy
the preferential rights upon dissolution of stockholders whose preferential
rights are superior to those receiving the distribution.
COMPARATIVE MARKET PRICES AND DIVIDENDS
Market Prices. Regions Common Stock is quoted on the Nasdaq National Market
under the symbol "RGBK." GFB Common Stock is not traded in any established
market. The following table sets forth, for the indicated periods, the high and
low closing sale prices for Regions Common Stock as reported on the Nasdaq
National Market, the high and low prices for GFB Common Stock and the cash
dividends declared per share of Regions Common Stock and GFB Common Stock for
the indicated periods. The amounts indicated for Regions have been adjusted to
reflect a 2-for-1 stock split effected by Regions on June 13, 1997. The prices
indicated for GFB are based on transactions of which GFB management is aware.
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<PAGE> 41
<TABLE>
<CAPTION>
Regions GFB
Price Range Cash Dividends Price Range Cash Dividends
----------- Declared ----------- Declared
High Low Per Share High Low Per Share
---- --- --------- ------ ------ ---------
1995
<S> <C> <C> <C>
First Quarter ............... $ 18.25 $ 15.82 $ .165 $17.50 $17.50 $.15
Second Quarter................ 18.72 17.25 .165 17.50 17.50 .15
Third Quarter................. 20.63 18.50 .165 17.50 17.50 .45
Fourth Quarter................ 22.44 19.82 .165 17.50 17.50 .20
1996
First Quarter ................ 24.00 20.38 .175 17.50 16.50 .15
Second Quarter ............... 24.19 21.13 .175 17.00 16.50 .15
Third Quarter................. 24.32 21.82 .175 17.00 17.00 .55
Fourth Quarter................ 26.88 24.38 .175 17.00 17.00 .20
1997
First Quarter................. 30.94 25.69 .20 17.00 17.00 .15
Second Quarter................ 33.25 27.38 .20 17.00 17.00 .15
Third Quarter................. 39.13 32.06 .20 17.00 17.00 .55
Fourth Quarter (through
October 17, 1997)............. 39.56 37.38 -- 17.00 17.00 --
</TABLE>
On October 17, 1997, the latest practicable date prior to the mailing of
this Proxy Statement/Prospectus, the last reported sale price of Regions Common
Stock as reported on NASDAQ was $ 37.88 per share, and the price of GFB Common
Stock in the last transaction know to GFB management, which occurred on March
25, 1997, was $17.00 per share. On June 10, 1997, the last business day prior to
public announcement of the proposed Merger, the last reported sale price of
Regions Common Stock as reported on NASDAQ, was $30.63 per share, and the price
of GFB Common Stock in the last transaction known to GFB management prior to
June 10, 1997, which occurred on March 25, 1997, was $17.00 per share.
Dividends. The holders of Regions Common Stock are entitled to receive
dividends when and if declared by the Board of Directors out of funds legally
available therefor. Regions has paid regular quarterly cash dividends since
1971. Although Regions currently intends to continue to pay quarterly cash
dividends on the Regions Common Stock, there can be no assurance that Regions'
dividend policy will remain unchanged after completion of the Merger. The
declaration and payment of dividends thereafter will depend upon business
conditions, operating results, capital and reserve requirements, and the Board
of Directors' consideration of other relevant factors.
Regions is a legal entity separate and distinct from its subsidiaries and
its revenues depend in significant part on the payment of dividends from its
subsidiary financial institutions, particularly Regions Bank in Alabama.
Regions' subsidiary depository institutions are subject to certain legal
restrictions on the amount of dividends they are permitted to pay. See "Certain
Regulatory Considerations--Payment of Dividends."
The payment of cash dividends to the holders of GFB Common Stock is subject
to authorization of the Board of Directors of GFB. In addition to the cash
dividends paid by GFB shown in the above table, GFB paid stock dividends on the
basis of one share of GFB Common Stock for each 20 shares held by a stockholder
of record as of September 1, 1994, 1995 and 1996. GFB, a savings and loan
holding company, is a legal entity separate and distinct from its subsidiary
financial institution and its revenues depend on the payment of dividends from
its subsidiary financial institution which in turn is subject to certain legal
restrictions on the amount of dividends it may pay to the GFB.
Shareholders of Record. As of the record date, there were approximately
45,000 holders of record of Regions Common Stock and approximately 400 holders
of record of GFB Common Stock.
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<PAGE> 42
BUSINESS OF GFB
GFB is a savings and loan holding company organized under the laws of the
state of Georgia with its principal executive office located in Griffin,
Georgia. GFB operates principally through the Bank, which is a
federally-chartered stock savings bank and which provides a range of retail
banking services through its main office in Griffin, Georgia. At June 30, 1997,
GFB had total consolidated assets of approximately $98.4 million, total
consolidated deposits of approximately $79.4 million, and total consolidated
stockholders' equity of approximately $12.8 million. GFB's principal executive
office is located at 327 West Taylor Street, Griffin, Georgia, 30223 and its
telephone number at such address is (770) 228-2786.
Additional information with respect to GFB and its subsidiaries is included
in documents incorporated by reference in this Proxy Statement/Prospectus. A
copy of GFB's Annual Report on Form 10-KSB for the fiscal year ended June 30,
1997, accompanies this Proxy Statement/Prospectus.
VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS OF GFB
The following table sets forth certain information concerning the
beneficial owners of more than 5.0% of GFB Common Stock, as of the Record Date.
<TABLE>
<CAPTION>
Name and Address Amount and Nature Percent of
Title of Class of Beneficial Owner Beneficial Ownership Class
- -------------- ------------------- -------------------- -----
<S> <C> <C> <C>
Common Stock Jerry L. Savage 79,425 8.0 %
425 Audubon Circle
Griffin, Georgia 30223
</TABLE>
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<PAGE> 43
BUSINESS OF REGIONS
GENERAL
Regions is a regional bank holding company organized and existing under the
laws of the state of Delaware and headquartered in Birmingham, Alabama, with
approximately 441 banking offices located in Alabama, Florida, Georgia,
Louisiana, and Tennessee as of June 30, 1997. At that date, Regions had total
consolidated assets of approximately $21.2 billion, total consolidated deposits
of approximately $16.8 billion and total consolidated stockholders' equity of
approximately $1.8 billion. Regions operates banking subsidiaries in Alabama,
Florida, Georgia, Louisiana, and Tennessee and banking-related subsidiaries
engaged in mortgage banking, credit life insurance, and investment brokerage
activities with offices in various Southeastern states. Through its
subsidiaries, Regions offers a broad range of banking and banking-related
services.
The following table presents information about Regions' banking operations
in the states in which its subsidiary depository institutions are located, based
on June 30, 1997 information:
<TABLE>
<CAPTION>
Number of Total Total
Banking Offices Assets Deposits
--------------- ------ --------
(In millions)
<S> <C> <C> <C>
Alabama............ 184 $ 12,570 $ 9,487
Florida............ 50 1,685 1,475
Georgia............ 107 4,333 3,620
Louisiana.......... 75 2,526 2,145
Tennessee.......... 25 522 471
</TABLE>
Regions was organized under the laws of the state of Delaware and commenced
operations in 1971 under the name First Alabama Bancshares, Inc. In 1994, the
name of First Alabama Bancshares, Inc. was changed to Regions Financial
Corporation. Regions' principal executive offices are located at 417 North 20th
Street, Birmingham, Alabama 35203, and its telephone number at such address is
(205) 326-7100.
Regions continually evaluates business combination opportunities and
frequently conducts due diligence activities in connection with possible
business combinations. As a result, business combination discussions and, in
some cases, negotiations frequently take place, and future business combinations
involving cash, debt, or equity securities can be expected. Any future business
combination or series of business combinations that Regions might undertake may
be material, in terms of assets acquired or liabilities assumed, to Regions'
financial condition. Recent business combinations in the banking industry have
typically involved the payment of a premium over book and market values. This
practice could result in dilution of book value and net income per share for the
acquirer.
Additional information about Regions and its subsidiaries is included in
documents incorporated by reference in this Proxy Statement/Prospectus. See
"Available Information" and "Documents Incorporated by Reference."
RECENT DEVELOPMENTS
Third Quarter Operating Results. For the third quarter ended September 30,
1997, Regions reported net income of $77.0 million (or $.56 per share),
representing a 52% increase in net income (and an 37% increase on a per share
basis) over the same period of 1996. For the nine months ended September 30,
1997, Regions reported net income of $220.7 million or $1.62 per share,
representing a 22% increase on a per-share basis in net income over the same
period of 1996. Year to date annualized return on average total assets was
1.41%, and the year-to-date annualized return on average stockholders' equity
was 16.26%. At September 30, 1997, the ratio of stockholders' equity to total
assets was 8.32%. As of September 30, 1997, Regions had total consolidated
assets of approximately $22.2 billion, total consolidated deposits of
approximately $17.6 billion, and total consolidated stockholders' equity of
approximately $1.9 billion. Comparisons with the prior year are affected by
special charges in 1996 related to the recapitalization of the SAIF deposit
insurance fund and certain nonrecurring merger expenses. These charges totaled
(net of taxes) $13.1 million or $.11 per share in the quarterly period and
$18.6 million or $.15 per share year-to-date.
Recent Acquisitions. Since December 31, 1996, Regions has completed the
acquisitions of eight financial institutions, certain aspects of which
transactions are set forth in the following table:
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<PAGE> 44
<TABLE>
<CAPTION>
Consideration
-------------
Approximate
-----------
Accounting
Institution Asset Size(1) Value(1) Type Treatment
----------- ------------- -------- ---- ---------
(In millions)
<S> <C> <C> <C> <C>
Florida First Bancorp, Inc., located in Panama $ 297 $ 40 Cash Purchase
City, Florida
Allied Bankshares, Inc., located in Thomson, 569 158 Regions Pooling
Georgia Common of
Stock Interests
West Carroll Bancshares, Inc., located in 127 37 Regions Pooling
Oak Grove, Louisiana Common of
Stock Interests
Gulf South Bancshares, Inc., located in Gretna, 55 10 Regions Pooling
Louisiana Common of
Stock Interests
First Mercantile National Bank, located in Longwood, 157 18 Cash Purchase
Florida
The New Iberia Bancorp, Inc., located in New Iberia, 313 65 Regions Pooling
Louisiana Common of
Stock Interests
First Bankshares, Inc., located in Hapeville, 127 20 Regions Pooling
Georgia Common of
Stock Interests
SB&T Corporation, located in Smyrna, 148 33 Regions Pooling
Georgia Common of
Stock Interests
--------- ------
Totals $ 1,793 $ 381
========= ======
</TABLE>
- ---------------
(1) Calculated as of the date of consummation.
Other Pending Acquisitions. As of the date of this Proxy
Statement/Prospectus, Regions has pending three acquisitions in addition to the
Merger, certain aspects of which transactions (the "Other Pending Acquisitions")
are set forth below:
40
<PAGE> 45
<TABLE>
<CAPTION>
Consideration
-------------
Approximate
-----------
Accounting
Institution Asset Size Value(1) Type Treatment
----------- ---------- -------- ---- ---------
(In millions)
<S> <C> <C> <C> <C>
Greenville Financial Corporation, located in $ 134 $ 34 Regions Pooling
Greenville, South Carolina Common of
Stock Interests
PALFED, Inc. , located in Aiken, 665 145 Regions Pooling
South Carolina Common of
Stock Interests
First United Bancorporation, located in Anderson, 292 80 Regions Pooling
South Carolina ------ ---- Common of
Stock Interests
Totals $1,091 $259
- --------------- ====== ====
</TABLE>
(1) Calculated as of the date of announcement of the transaction.
If the Merger and the Other Pending Acquisitions had been consummated on
June 30, 1997, Regions' total consolidated assets would have increased by
approximately $1.2 billion to approximately $22.4 billion; its total
consolidated deposits would have increased by approximately $989 million to
approximately $17.8 billion; and its total consolidated stockholders' equity
would have increased by approximately $83 million to approximately $1.9 billion.
41
<PAGE> 46
CERTAIN REGULATORY CONSIDERATIONS
The following discussion sets forth certain of the material elements of the
regulatory framework applicable to banks and bank holding companies and provides
certain specific information related to Regions and GFB. Additional information
is available in Regions' Annual Report on Form 10-K for the fiscal year ended
December 31, 1996. See "Documents Incorporated by Reference."
GENERAL
Regions is a bank holding company registered with the Federal Reserve under
the BHC Act, and a savings and loan holding company registered with the Office
of Thrift Supervision (the "OTS"). GFB is a savings and loan holding company
registered with the OTS. As such, Regions and GFB and their non-bank
subsidiaries are subject to the supervision, examination, and reporting
requirements of the BHC Act and the regulations of the Federal Reserve or the
OTS, as the case may be.
The BHC Act requires every bank holding company to obtain the prior
approval of the Federal Reserve before: (i) it may acquire direct or indirect
ownership or control of any voting shares of any depository institution if,
after such acquisition, the bank holding company will directly or indirectly own
or control more than 5.0% of the voting shares of the depository institution;
(ii) it or any of its subsidiaries, other than a bank, may acquire all or
substantially all of the assets of any depository institution; or (iii) it may
merge or consolidate with any other bank holding company. Similar federal
statutes require savings and loan holding companies and other companies to
obtain the prior approval of the OTS before acquiring direct or indirect
ownership or control of a savings association.
The BHC Act further provides that the Federal Reserve may not approve any
transaction that would result in a monopoly or would be in furtherance of any
combination or conspiracy to monopolize or attempt to monopolize the business of
banking in any section of the United States, or the effect of which may be
substantially to lessen competition or to tend to create a monopoly in any
section of the country, or that in any other manner would be in restraint of
trade, unless the anticompetitive effects of the proposed transaction are
clearly outweighed by the public interest in meeting the convenience and needs
of the community to be served. The Federal Reserve is also required to consider
the financial and managerial resources and future prospects of the bank holding
companies and banks concerned and the convenience and needs of the community to
be served. Consideration of financial resources generally focuses on capital
adequacy, and consideration of convenience and needs issues includes the
parties' performance under the Community Reinvestment Act of 1977.
The BHC Act, as amended by the interstate banking provisions of the
Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the
"Interstate Banking Act"), which became effective in September 1995, repealed
the prior statutory restrictions on interstate acquisitions of banks by bank
holding companies, such that Regions, and any other bank holding company located
in Alabama may now acquire a bank located in any other state, and any bank
holding company located outside Alabama may lawfully acquire any Alabama-based
bank, regardless of state law to the contrary, in either case subject to certain
deposit-percentage, aging requirements, and other restrictions. The Interstate
Banking Act also generally provides that, after June 1, 1997, national and
state-chartered banks may branch interstate through acquisitions of banks in
other states. By adopting legislation prior to that date, a state had the
ability to "opt out" and prohibit interstate branching altogether. None of the
states in which the banking subsidiaries of Regions or GFB are located has
"opted out." Accordingly, Regions has the ability to consolidate all of its bank
subsidiaries into a single bank with interstate branches.
The BHC Act generally prohibits Regions and GFB from engaging in activities
other than banking or managing or controlling banks or other permissible
subsidiaries and from acquiring or retaining direct or indirect control of any
company engaged in any activities other than those activities determined by the
Federal Reserve to be so closely related to banking or managing or controlling
banks as to be a proper incident thereto.
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<PAGE> 47
In determining whether a particular activity is permissible, the Federal Reserve
must consider whether the performance of such an activity reasonably can be
expected to produce benefits to the public, such as greater convenience,
increased competition, or gains in efficiency, that outweigh possible adverse
effects, such as undue concentration of resources, decreased or unfair
competition, conflicts of interest, or unsound banking practices. For example,
factoring accounts receivable, acquiring or servicing loans, leasing personal
property, conducting discount securities brokerage activities, performing
certain data processing services, acting as agent or broker in selling credit
life insurance and certain other types of insurance in connection with credit
transactions, and performing certain insurance underwriting activities all have
been determined by the Federal Reserve to be permissible activities of bank
holding companies. The BHC Act does not place territorial limitations on
permissible nonbanking activities of bank holding companies. Despite prior
approval, the Federal Reserve has the power to order a bank holding company or
its subsidiaries to terminate any activity or to terminate its ownership or
control of any subsidiary when it has reasonable cause to believe that
continuation of such activity or such ownership or control constitutes a serious
risk to the financial safety, soundness, or stability of any bank subsidiary of
that bank holding company.
Each of the subsidiary depository institutions of Regions and GFB is a
member of the Federal Deposit Insurance Corporation (the "FDIC"), and as such,
its deposits are insured by the FDIC to the extent provided by law. Each such
subsidiary is also subject to numerous state and federal statutes and
regulations that affect its business, activities, and operations, and each is
supervised and examined by one or more state or federal bank regulatory
agencies.
The regulatory agencies having supervisory jurisdiction over the
respective subsidiary institutions of Regions and GFB (the FDIC and the
applicable state authority in the case of state-chartered nonmember banks and
the OTS in the case of federally chartered thrift institutions) regularly
examine the operations of such institutions and have authority to approve or
disapprove mergers, consolidations, the establishment of branches, and similar
corporate actions. The federal and state banking regulators also have the power
to prevent the continuance or development of unsafe or unsound banking practices
or other violations of law.
PAYMENT OF DIVIDENDS
Regions and GFB are legal entities separate and distinct from their
banking, thrift, and other subsidiaries. The principal sources of cash flow of
both Regions and GFB, including cash flow to pay dividends to their respective
stockholders, are dividends from their subsidiary depository institutions. There
are statutory and regulatory limitations on the payment of dividends by these
subsidiary depository institutions to Regions and GFB, as well as by Regions and
GFB to their stockholders.
As to the payment of dividends, the Bank and all of Regions'
state-chartered banking subsidiaries are subject to the respective laws and
regulations of the state in which the bank is located, and to the regulations of
the bank's primary federal regulator. Regions' subsidiaries that are thrift
institutions are subject to the OTS' capital distributions regulation.
If, in the opinion of the federal banking regulatory agency, a depository
institution under its jurisdiction is engaged in or is about to engage in an
unsafe or unsound practice (which, depending on the financial condition of the
depository institution, could include the payment of dividends), such agency may
require, after notice and hearing, that such institution cease and desist from
such practice. The federal banking agencies have indicated that paying dividends
that deplete a depository institution's capital base to an inadequate level
would be an unsafe and unsound banking practice. Under the Federal Deposit
Insurance Corporation Improvement Act of 1991 ("FDICIA"), an insured institution
may not pay any dividend if payment would cause it to become undercapitalized or
if it already is undercapitalized. See "--Prompt Corrective Action." Moreover,
the federal agencies have issued policy statements which provide that bank
holding companies and insured banks should generally pay dividends only out of
current operating earnings.
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<PAGE> 48
At June 30, 1997, under dividend restrictions imposed under federal and
state laws, the subsidiary depository institutions of Regions and GFB, without
obtaining governmental approvals, could declare aggregate dividends to Regions
and GFB of approximately $172 million and $6 million respectively.
The payment of dividends by Regions and GFB and their subsidiary depository
institutions may also be affected or limited by other factors, such as the
requirement to maintain adequate capital above regulatory guidelines.
CAPITAL ADEQUACY
Regions, GFB, and their respective subsidiary depository institutions are
required to comply with the capital adequacy standards established by the
Federal Reserve in the case of Regions, the OTS in the case of GFB, and the
appropriate federal banking regulator in the case of each of their subsidiary
depository institutions. There are two basic measures of capital adequacy for
bank holding companies that have been promulgated by the Federal Reserve: a
risk-based measure and a leverage measure. All applicable capital standards must
be satisfied for a bank holding company to be considered in compliance.
The risk-based capital standards are designed to make regulatory capital
requirements more sensitive to differences in risk profile among banks and bank
holding companies, to account for off-balance-sheet exposure, and to minimize
disincentives for holding liquid assets. Assets and off-balance-sheet items are
assigned to broad risk categories, each with appropriate weights. The resulting
capital ratios represent capital as a percentage of total risk-weighted assets
and off-balance-sheet items.
The minimum guideline for the ratio (the "Total Capital Ratio") of total
capital ("Total Capital") to risk- weighted assets (including certain
off-balance-sheet items, such as standby letters of credit) is 8.0%. At least
half of Total Capital must be composed of common equity, undivided profits,
minority interests in the equity accounts of consolidated subsidiaries,
noncumulative perpetual preferred stock, and a limited amount of cumulative
perpetual preferred stock, less goodwill and certain other intangible assets
("Tier 1 Capital"). The remainder may consist of subordinated debt, other
preferred stock, and a limited amount of loan loss reserves ("Tier 2 Capital").
At June 30, 1997, Regions' consolidated Total Capital Ratio and its Tier 1
Capital Ratio (i.e., the ratio of Tier 1 Capital to risk-weighted assets) were
12.44% and 9.98%, respectively.
In addition, the Federal Reserve has established minimum leverage ratio
guidelines for bank holding companies. These guidelines provide for a minimum
ratio of Tier 1 Capital to average assets, less goodwill and certain other
intangible assets (the "Leverage Ratio"), of 3.0% for bank holding companies
that meet certain specified criteria, including having the highest regulatory
rating. All other bank holding companies generally are required to maintain a
Leverage Ratio of at least 3.0%, plus an additional cushion of 100 to 200 basis
points. Regions' Leverage Ratio at June 30, 1997 was 7.58%. The guidelines also
provide that bank holding companies experiencing internal growth or making
acquisitions will be expected to maintain strong capital positions substantially
above the minimum supervisory levels without significant reliance on intangible
assets. Furthermore, the Federal Reserve has indicated that it will consider a
"tangible Tier 1 Capital leverage ratio" (deducting all intangibles) and other
indicators of capital strength in evaluating proposals for expansion or new
activities.
Each of Regions' and GFB's subsidiary depository institutions is subject to
risk-based and leverage capital requirements adopted by its federal banking
regulator, which are substantially similar to those adopted by the Federal
Reserve. Each of the subsidiary depository institutions was in compliance with
applicable minimum capital requirements as of June 30, 1997. Neither Regions,
GFB, nor any of their subsidiary depository institutions has been advised by any
federal banking agency of any specific minimum capital ratio requirement
applicable to it.
Failure to meet capital guidelines could subject a bank or thrift
institution to a variety of enforcement remedies, including issuance of a
capital directive, the termination of deposit insurance by the FDIC, a
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<PAGE> 49
prohibition on the taking of brokered deposits, and to certain other
restrictions on its business. As described below, substantial additional
restrictions can be imposed upon FDIC-insured depository institutions that fail
to meet applicable capital requirements. See "--Prompt Corrective Action."
The federal bank regulators continue to indicate their desire to raise
capital requirements applicable to banking organizations beyond their current
levels. In this regard, the Federal Reserve, the OCC, and the FDIC have,
pursuant to FDICIA, recently adopted final regulations requiring regulators to
consider interest rate risk (when the interest rate sensitivity of an
institution's assets does not match the sensitivity of its liabilities or its
off-balance-sheet position) in the evaluation of a bank's capital adequacy. The
bank regulatory agencies have concurrently proposed a methodology for evaluating
interest rate risk which would require banks with excessive interest rate risk
exposure to hold additional amounts of capital against such exposures. The OTS
has already included an interest-rate risk component in its risk-based capital
guidelines for savings associations that it regulates.
SUPPORT OF SUBSIDIARY INSTITUTIONS
Under Federal Reserve policy, Regions and GFB are expected to act as
sources of financial strength for, and to commit resources to support, each of
their respective banking subsidiaries. This support may be required at times
when, absent such Federal Reserve policy, Regions or GFB may not be inclined to
provide it. In addition, any capital loans by a bank holding company to any of
its banking subsidiaries are subordinate in right of payment to deposits and to
certain other indebtedness of such banks. In the event of a bank holding
company's bankruptcy, any commitment by the bank holding company to a federal
bank regulatory agency to maintain the capital of a banking subsidiary will be
assumed by the bankruptcy trustee and entitled to a priority of payment.
Under the Federal Deposit Insurance Act ("FDIA"), a depository institution
insured by the FDIC can be held liable for any loss incurred by, or reasonably
expected to be incurred by, the FDIC after August 9, 1989, in connection with
(i) the default of a commonly controlled FDIC-insured depository institution or
(ii) any assistance provided by the FDIC to any commonly controlled FDIC-insured
depository institution "in danger of default." "Default" is defined generally as
the appointment of a conservator or receiver, and "in danger of default" is
defined generally as the existence of certain conditions indicating that a
default is likely to occur in the absence of regulatory assistance. The FDIC's
claim for damages is superior to claims of stockholders of the insured
depository institution or its holding company, but is subordinate to claims of
depositors, secured creditors, and holders of subordinated debt (other than
affiliates) of the commonly controlled insured depository institution. The
subsidiary depository institutions of Regions are subject to these
cross-guarantee provisions. As a result, any loss suffered by the FDIC in
respect of any of these subsidiaries would likely result in assertion of the
cross-guarantee provisions, the assessment of such estimated losses against the
depository institution's banking or thrift affiliates, and a potential loss of
Regions' respective investments in such other subsidiary depository
institutions.
PROMPT CORRECTIVE ACTION
FDICIA establishes a system of prompt corrective action to resolve the
problems of undercapitalized institutions. Under this system, which became
effective in December 1992, the federal banking regulators are required to
establish five capital categories ("well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized," and "critically
undercapitalized") and to take certain mandatory supervisory actions, and are
authorized to take other discretionary actions, with respect to institutions in
the three undercapitalized categories, the severity of which will depend upon
the capital category in which the institution is placed. Generally, subject to a
narrow exception, FDICIA requires the banking regulator to appoint a receiver or
conservator for an institution that is critically undercapitalized. The federal
banking agencies have specified by regulation the relevant capital level for
each category.
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<PAGE> 50
Under the final agency rules implementing the prompt corrective action
provisions, an institution that (i) has a Total Capital Ratio of 10% or greater,
a Tier 1 Capital Ratio of 6.0% or greater, and a Leverage Ratio of 5.0% or
greater and (ii) is not subject to any written agreement, order, capital
directive, or prompt corrective action directive issued by the appropriate
federal banking agency is deemed to be "well capitalized." An institution with a
Total Capital Ratio of 8.0% or greater, a Tier 1 Capital Ratio of 4.0% or
greater, and a Leverage Ratio of 4.0% or greater is considered to be "adequately
capitalized." A depository institution that has a Total Capital Ratio of less
than 8.0%, a Tier 1 Capital Ratio of less than 4.0%, or a Leverage Ratio of less
than 4.0% is considered to be "undercapitalized." A depository institution that
has a Total Capital Ratio of less than 6.0%, a Tier 1 Capital Ratio of less than
3.0%, or a Leverage Ratio of less than 3.0% is considered to be "significantly
undercapitalized," and an institution that has a tangible equity capital to
assets ratio equal to or less than 2.0% is deemed to be "critically
undercapitalized." For purposes of the regulation, the term "tangible equity"
includes core capital elements counted as Tier 1 Capital for purposes of the
risk- based capital standards plus the amount of outstanding cumulative
perpetual preferred stock (including related surplus), minus all intangible
assets with certain exceptions. A depository institution may be deemed to be in
a capitalization category that is lower than is indicated by its actual capital
position if it receives an unsatisfactory examination rating.
An institution that is categorized as undercapitalized, significantly
undercapitalized, or critically undercapitalized is required to submit an
acceptable capital restoration plan to its appropriate federal banking agency.
Under FDICIA, a bank holding company must guarantee that a subsidiary depository
institution meet its capital restoration plan, subject to certain limitations.
The obligation of a controlling bank holding company under FDICIA to fund a
capital restoration plan is limited to the lesser of 5.0% of an undercapitalized
subsidiary's assets or the amount required to meet regulatory capital
requirements. An undercapitalized institution is also generally prohibited from
increasing its average total assets, making acquisitions, establishing any
branches, or engaging in any new line of business, except in accordance with an
accepted capital restoration plan or with the approval of the FDIC. In addition,
the appropriate federal banking agency is given authority with respect to any
undercapitalized depository institution to take any of the actions it is
required to or may take with respect to a significantly undercapitalized
institution as described below if it determines "that those actions are
necessary to carry out the purpose" of FDICIA.
At June 30, 1997, all of the subsidiary depository institutions of Regions
and GFB had the requisite capital levels to qualify as well capitalized.
FDIC INSURANCE ASSESSMENTS
Pursuant to FDICIA, the FDIC adopted a risk-based assessment system for
insured depository institutions that takes into account the risks attributable
to different categories and concentrations of assets and liabilities. The
risk-based assessment system, which went into effect on January 1, 1994, assigns
an institution to one of three capital categories: (i) well capitalized; (ii)
adequately capitalized; and (iii) undercapitalized. These three categories are
substantially similar to the prompt corrective action categories described
above, with the "undercapitalized" category including institutions that are
undercapitalized, significantly undercapitalized, and critically
undercapitalized for prompt corrective action purposes. An institution is also
assigned by the FDIC to one of three supervisory subgroups within each capital
group. The supervisory subgroup to which an institution is assigned is based on
a supervisory evaluation provided to the FDIC by the institution's primary
federal regulator and information which the FDIC determines to be relevant to
the institution's financial condition and the risk posed to the deposit
insurance funds (which may include, if applicable, information provided by the
institution's state supervisor). An institution's insurance assessment rate is
then determined based on the capital category and supervisory category to which
it is assigned. Under the final risk-based assessment system, there are nine
assessment risk classifications (i.e., combinations of capital groups and
supervisory subgroups) to which different assessment rates are applied.
Assessment rates for members of both the Bank Insurance Fund ("BIF") and the
Savings Association Insurance Fund ("SAIF") for the first half of 1995, as they
had been during 1994, ranged from 23 basis points (0.23% of deposits) for an
institution in the highest category (i.e., "well capitalized" and "healthy") to
31 basis points (0.31% of deposits) for an institution
46
<PAGE> 51
in the lowest category (i.e., "undercapitalized" and "substantial supervisory
concern"). These rates were established for both funds to achieve a designated
ratio of reserves to insured deposits (i.e., 1.25%) within a specified period of
time.
Once the designated ratio for the BIF was reached in May 1995, the FDIC
reduced the assessment rate applicable to BIF deposits in two stages, so that,
beginning in 1996, the deposit insurance premiums for 92% of all BIF members in
the highest capital and supervisory categories were set at $2,000 per year,
regardless of deposit size. The FDIC elected to retain the existing assessment
rate range of 23 to 31 basis points for SAIF members for the foreseeable future
given the undercapitalized nature of that insurance fund.
Recognizing that the disparity between the SAIF and BIF premium rates have
adverse consequences for SAIF-insured institutions and other banks with SAIF
assessed deposits, including reduced earnings and an impaired ability to raise
funds in capital markets and to attract deposits, in July 1995, the FDIC, the
Treasury Department, and the OTS released statements outlining a proposed plan
to recapitalize the SAIF, the principal feature of which was a special one-time
assessment on depository institutions holding SAIF-insured deposits, which was
intended to recapitalize the SAIF at a reserve ratio of 1.25%. This proposal
contemplated elimination of the disparity between the assessment rates on BIF
and SAIF deposits following recapitalization of the SAIF.
A variation of this proposal designated the Deposit Insurance Funds Act of
1996 (the "Funds Act") was enacted by Congress as part of the omnibus budget
legislation and signed into law on September 30, 1996. As directed by the Funds
Act, the FDIC implemented a special one-time assessment of approximately 65.7
basis points (0.657%) on a depository institution's SAIF-insured deposits held
as of March 31, 1995 (or approximately 52.6 basis points on SAIF deposits
acquired by banks in certain qualifying transactions). Regions recorded a charge
against earnings for the special assessment in the quarter ended September 30,
1996 in the pre-tax amount of approximately $21.0 million. GFB was not affected
by the special assessment.
In addition, the FDIC has implemented a revision in the SAIF assessment
rate schedule which effected, as of October 1, 1996 (i) a widening in the
assessment rate spread among institutions in the different capital and risk
assessment categories, (ii) an overall reduction of the assessment rate range
assessable on SAIF deposits of from 0 to 27 basis points, and (iii) a special
interim assessment rate range for the last quarter of 1996 of from 18 to 27
basis points on institutions subject to FICO assessments. Effective January 1,
1997, FICO assessments will be imposed on both BIF- and SAIF-insured deposits in
annual amounts presently estimated at 1.29 basis points and 6.44 basis points,
respectively. Beginning in January, 2000, BIF- and SAIF- insured institutions
will share the FICO interest costs at equal rates currently estimated 2.43 basis
points. Regions anticipates that the net effect of the decrease in the premium
assessment rate on SAIF deposits will result in a reduction in its total deposit
insurance premium assessments for the years 1997 through 1999, assuming no
further changes in announced premium assessment rates.
Under the FDIA, insurance of deposits may be terminated by the FDIC upon a
finding that the institution has engaged in unsafe and unsound practices, is in
an unsafe or unsound condition to continue operations, or has violated any
applicable law, regulation, rule, order, or condition imposed by the FDIC.
DESCRIPTION OF REGIONS COMMON STOCK
Regions is authorized to issue 240,000,000 shares of Regions Common Stock,
of which 136,722,982 shares were issued and outstanding at June 30, 1997, and
5,000,000 shares of preferred stock, none of which are outstanding. No other
class of stock is authorized.
Holders of Regions Common Stock are entitled to receive such dividends as
may be declared by the Board of Directors out of funds legally available
therefor. The ability of Regions to pay dividends is affected by the ability of
its subsidiary institutions to pay dividends, which is limited by applicable
regulatory requirements
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<PAGE> 52
and capital guidelines. At June 30, 1997, under such requirements and
guidelines, Regions' subsidiary institutions had $172 million of undivided
profits legally available for the payment of dividends. See "Certain Regulatory
Considerations--Payment of Dividends."
For a further description of Regions Common Stock, see "Effect of the
Merger on Rights of Stockholders."
STOCKHOLDER PROPOSALS
Regions expects to hold its next annual meeting of stockholders after the
Merger during May 1998. Under SEC rules, proposals of Regions stockholders
intended to be presented at that meeting must be received by Regions at its
principal executive offices no later than December 2, 1997, for consideration by
Regions for possible inclusion in such proxy materials.
EXPERTS
The consolidated financial statements of Regions, incorporated by reference
in this Registration Statement, have been audited by Ernst & Young LLP,
independent auditors, for the periods indicated in their report thereon which is
included in the Annual Report to Stockholders which is incorporated by reference
in Regions' Annual Report on Form 10-K for the year ended December 31, 1996. The
financial statements audited by Ernst & Young LLP have been incorporated herein
by reference in reliance on their report given on their authority as experts in
accounting and auditing.
The consolidated financial statements of GFB for the years ended June 30,
1997 and 1996, incorporated by reference in this Registration Statement, have
been audited by Bricker & Melton P.A., independent auditors. The financial
statements audited by Bricker & Melton P.A. have been incorporated herein by
reference in reliance on their report given on their authority as experts in
accounting and auditing.
OPINIONS
The legality of the shares of Regions Common Stock to be issued in the
Merger will be passed upon by Lange, Simpson, Robinson & Somerville, Birmingham,
Alabama. Henry E. Simpson, partner in the law firm of Lange, Simpson, Robinson &
Somerville, is a member of the Board of Directors of Regions. As of October 17,
1997, attorneys in the law firm of Lange, Simpson, Robinson & Somerville owned
an aggregate of 237,490 shares of Regions Common Stock.
Certain tax consequences of the transaction have been passed upon by Alston
& Bird, Atlanta, Georgia.
48
<PAGE> 53
FINAL
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
GF BANCSHARES, INC.
AND
REGIONS FINANCIAL CORPORATION
DATED AS OF MAY 29, 1997
A-1
<PAGE> 54
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<C> <S> <C>
Parties............................................................ A-4
Preamble........................................................... A-4
ARTICLE ONE -- TRANSACTIONS AND TERMS OF MERGER.................... A-4
1.1 Merger...................................................... A-4
1.2 Time and Place of Closing................................... A-4
1.3 Effective Time.............................................. A-4
ARTICLE TWO -- TERMS OF MERGER..................................... A-5
2.1 Certificate of Incorporation................................ A-5
2.2 Bylaws...................................................... A-5
2.3 Directors and Officers...................................... A-5
ARTICLE THREE -- MANNER OF CONVERTING SHARES....................... A-5
3.1 Conversion of Shares........................................ A-5
3.2 Anti-Dilution Provisions.................................... A-5
3.3 Shares Held by GF or Regions................................ A-5
3.4 Dissenting Stockholders..................................... A-6
3.5 Fractional Shares........................................... A-6
3.6 Conversion of Stock Options; Restricted Stock............... A-6
ARTICLE FOUR -- EXCHANGE OF SHARES................................. A-7
4.1 Exchange Procedures......................................... A-7
4.2 Rights of Former GF Stockholders............................ A-7
ARTICLE FIVE -- REPRESENTATIONS AND WARRANTIES OF GF............... A-8
5.1 Organization, Standing, and Power........................... A-8
5.2 Authority; No Breach By Agreement........................... A-8
5.3 Capital Stock............................................... A-8
5.4 GF Subsidiaries............................................. A-9
5.5 Financial Statements........................................ A-9
5.6 Absence of Undisclosed Liabilities.......................... A-9
5.7 Absence of Certain Changes or Events........................ A-9
5.8 Tax Matters................................................. A-10
5.9 Assets...................................................... A-10
5.10 Environmental Matters....................................... A-11
5.11 Compliance With Laws........................................ A-11
5.12 Labor Relations............................................. A-12
5.13 Employee Benefit Plans...................................... A-12
5.14 Material Contracts.......................................... A-13
5.15 Legal Proceedings........................................... A-13
5.16 Statements True and Correct................................. A-14
5.17 Tax, and Regulatory Matters................................. A-14
5.18 State Takeover Laws......................................... A-14
5.19 Articles of Incorporation Provisions........................ A-14
5.20 Support Agreements.......................................... A-14
5.21 Derivatives Contracts....................................... A-15
5.22 Year 2000................................................... A-15
ARTICLE SIX -- REPRESENTATIONS AND WARRANTIES OF REGIONS........... A-15
6.1 Organization, Standing, and Power........................... A-15
6.2 Authority; No Breach By Agreement........................... A-15
6.3 Capital Stock............................................... A-15
6.4 SEC Filings; Financial Statements........................... A-16
6.5 Absence of Undisclosed Liabilities.......................... A-16
6.6 Absence of Certain Changes or Events........................ A-16
</TABLE>
A-2
<PAGE> 55
<TABLE>
<CAPTION>
PAGE
-----
<C> <S> <C>
6.7 Compliance With Laws........................................ A-16
6.8 Legal Proceedings........................................... A-17
6.9 Statements True and Correct................................. A-17
6.10 Tax, and Regulatory Matters................................. A-17
ARTICLE SEVEN -- CONDUCT OF BUSINESS PENDING CONSUMMATION.......... A-18
7.1 Covenants of Both Parties................................... A-18
7.2 Covenants of GF............................................. A-18
7.3 Covenants of Regions........................................ A-19
7.4 Adverse Changes in Condition................................ A-19
7.5 Reports..................................................... A-19
ARTICLE EIGHT -- ADDITIONAL AGREEMENTS............................. A-20
Registration Statement; Proxy Statement; Stockholder
8.1 Approval.................................................... A-20
8.2 Nasdaq/NMS Listing.......................................... A-20
8.3 Applications................................................ A-20
8.4 Agreement as to Efforts to Consummate....................... A-20
8.5 Investigation and Confidentiality........................... A-20
8.6 Press Releases.............................................. A-21
8.7 Certain Actions............................................. A-21
8.8 Tax Matters................................................. A-21
8.9 Agreement of Affiliates..................................... A-21
8.10 Employee Benefits and Contracts............................. A-22
8.11 Indemnification............................................. A-22
8.12 State Takeover Laws......................................... A-22
8.13 Articles of Incorporation Provisions........................ A-22
ARTICLE NINE -- CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE.. A-23
9.1 Conditions to Obligations of Each Party..................... A-23
9.2 Conditions to Obligations of Regions........................ A-24
9.3 Conditions to Obligations of GF............................. A-24
ARTICLE TEN -- TERMINATION......................................... A-25
10.1 Termination................................................. A-25
10.2 Effect of Termination....................................... A-26
10.3 Non-Survival of Representations and Covenants............... A-26
ARTICLE ELEVEN -- MISCELLANEOUS.................................... A-26
11.1 Definitions................................................. A-26
11.2 Expenses.................................................... A-30
11.3 Brokers and Finders......................................... A-31
11.4 Entire Agreement............................................ A-31
11.5 Amendments.................................................. A-31
11.6 Waivers..................................................... A-31
11.7 Assignment.................................................. A-31
11.8 Notices..................................................... A-31
11.9 Governing Law............................................... A-32
11.10 Counterparts................................................ A-32
11.11 Captions.................................................... A-32
11.12 Severability................................................ A-32
Signatures......................................................... A-33
</TABLE>
A-3
<PAGE> 56
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into as of May 29, 1997, by and between GF BANCSHARES, INC. ("GF"), a
corporation organized and existing under the laws of the State of Georgia, with
its principal office located in Griffin, 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 GF and Regions are of the opinion that the
transactions described herein are in the best interests of the parties and their
respective stockholders. This Agreement provides for the acquisition of GF by
Regions pursuant to the merger of GF into and with Regions. At the effective
time of such merger, the outstanding shares of the capital stock of GF shall be
converted into shares of the common stock of Regions (except as provided
herein). As a result, stockholders of GF shall become stockholders of Regions
and each of the subsidiaries of GF 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 GF, the
Board of Governors of the Federal Reserve System, the Office of Thrift
Supervision, and other applicable federal and state regulatory authorities and
the satisfaction of certain other conditions described in this Agreement. It is
the intention of the parties to this Agreement that the merger (i) for federal
income tax purposes shall qualify as a "reorganization" within the meaning of
Section 368(a) of the Internal Revenue Code and (ii) for accounting purposes
shall be accounted for as a purchase.
As a condition and inducement to Regions' willingness to consummate the
transactions contemplated by this Agreement, prior to the execution of this
Agreement, each of GF's directors will execute and deliver to Regions an
agreement (a "Support Agreement"), in substantially the form of Exhibit 1 to
this Agreement.
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, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, 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, GF shall be merged into and with Regions in accordance with the
provisions of Sections 14-2-1103 and 14-2-1107 of the GBCC and with the effect
provided in Section 14-2-1106 of the GBCC and of Section 258 of the DGCL and
with the effect provided in Section 259 of the DGCL (the "Merger"). Regions
shall be the Surviving Corporation of 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 Boards of Directors of GF 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 the offices of Regions, or such other place 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
A-4
<PAGE> 57
to occur on the last day of the month in which occurs 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 GF approve this Agreement to the extent such approval is required by
applicable Law.
ARTICLE 2
TERMS OF MERGER
2.1 Certificate of Incorporation. The Certificate of Incorporation of
Regions in effect immediately prior to the Effective Time shall be the
Certificate of Incorporation of the Surviving Corporation after the Effective
Time 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 after the
Effective Time 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 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 the holders thereof, 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 GF Common Stock (excluding shares held by GF or any
of its Subsidiaries or by Regions or any of its Subsidiaries, in each case
other than in a fiduciary capacity or as a result of debts previously
contracted) issued and outstanding at the Effective Time shall be converted
into that multiple of a share of Regions Common Stock (the "Exchange
Ratio") obtained by dividing (i) $18.00 (ii) by the Average Closing Price
(defined to mean the average of the daily last sale prices for the shares
of Regions Common Stock for the ten (10) consecutive trading days on which
such shares are quoted on the Nasdaq/NMS (as reported by The Wall Street
Journal or, if not reported thereby, any other authoritative source
selected by Regions ending at the close of trading on the last trading day
immediately preceding the date of the Stockholders' Meeting).
3.2 Anti-Dilution Provisions. In the event GF changes the number of shares
of GF 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, the Exchange Ratio shall be proportionately adjusted. 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 subsequent to the first day of the ten-day
trading period utilized to calculate the Average Closing Price but prior to the
Effective Time, the Exchange Ratio shall be proportionately adjusted.
3.3 Shares Held by GF or Regions. Each of the shares of GF Common Stock
held by any GF Company or by any Regions Company, in each case other than in a
fiduciary capacity or as a result of debts previously
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contracted, shall be canceled and retired at the Effective Time and no
consideration shall be issued in exchange therefor.
3.4 Dissenting Stockholders. Any holder of shares of GF Common Stock who
perfects such holder's dissenters' rights of appraisal in accordance with and as
contemplated by Sections 14-2-1301 et seq. of the GBCC shall be entitled to
receive the value of such shares in cash as determined pursuant to such
provision of Law; provided, however, 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 GF 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 GF 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 GF Common Stock is entitled
under this Article Three (without interest) upon surrender by such holder of the
certificate or certificates representing shares of GF Common Stock held by such
holder. GF will establish an escrow account with an amount sufficient to satisfy
the maximum aggregate payment that may be required to be paid to dissenting
stockholders. Upon satisfaction of all claims of dissenting stockholders, the
remaining escrowed amount, reduced by payment of the fees and expenses of the
escrow agent, will be returned to GF.
3.5 Fractional Shares. Notwithstanding any other provision of this
Agreement, each holder of shares of GF Common Stock exchanged pursuant to the
Merger, or of options to purchase shares of GF Common Stock, 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, in the case of
shares exchanged pursuant to the Merger, or the date of exercise, in the case of
options. The market value of one share of Regions Common Stock at the Effective
Time or the date of exercise, as the case may be, shall be the last sale price
of such common stock on the Nasdaq/NMS (as reported by The Wall Street Journal
or, if not reported thereby, any other authoritative source) on the last trading
day preceding the Effective Time, in the case of shares exchanged pursuant to
the Merger, and the date of exercise, in the case of options. No such holder
will be entitled to dividends, voting rights, or any other rights as a
stockholder in respect of any fractional shares.
3.6 Conversion of Stock Options; Restricted Stock. (a) At the Effective
Time, all rights with respect to GF Common Stock pursuant to stock options or
stock appreciation rights ("GF Options") granted by GF under the GF Stock Plans,
which are outstanding at the Effective Time, whether or not exercisable, shall
be converted into and become rights with respect to Regions Common Stock, and
Regions shall assume each GF Option, in accordance with the terms of the GF
Stock Plan and stock option agreement by which it is evidenced. From and after
the Effective Time, (i) each GF Option assumed by Regions may be exercised
solely for shares of Regions Common Stock (or cash in the case of stock
appreciation rights), (ii) the number of shares of Regions Common Stock subject
to such GF Option shall be equal to the number of shares of GF Common Stock
subject to such GF Option immediately prior to the Effective Time multiplied by
the Exchange Ratio, and (iii) the per share exercise price under each such GF
Option shall be adjusted by dividing the per share exercise price under each
such GF Option by the Exchange Ratio and rounding down to the nearest cent. It
is intended that the foregoing assumption shall be undertaken in a manner that
will not constitute a "modification" as defined in Section 424 of the Internal
Revenue Code, as to any stock option which is an "incentive stock option." GF
agrees to take all necessary steps to effectuate the foregoing provisions of
this Section 3.6.
(b) All restrictions or limitations on transfer with respect to GF Common
Stock awarded under the GF Stock Plans or any other plan, program, or
arrangement of any GF Company, to the extent that such restrictions or
limitations shall not have already lapsed, and except as otherwise expressly
provided in such plan, program, or arrangement, shall remain in full force and
effect with respect to shares of Regions Common Stock into which such restricted
stock is converted pursuant to Section 3.1 of this Agreement.
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ARTICLE 4
EXCHANGE OF SHARES
4.1 Exchange Procedures. Promptly after the Effective Time, Regions shall
cause the exchange agent selected by Regions (the "Exchange Agent") to mail to
the former stockholders of GF appropriate transmittal materials (which shall
specify that delivery shall be effected, and risk of loss and title to the
certificates theretofore representing shares of GF Common Stock shall pass, only
upon proper delivery of such certificates to the Exchange Agent). After the
Effective Time, each holder of shares of GF Common Stock (other than shares to
be canceled pursuant to Section 3.3 of this Agreement) issued and outstanding at
the Effective Time shall surrender the certificate or certificates representing
such shares to the Exchange Agent and shall promptly upon surrender thereof
receive in exchange therefor the consideration provided in Section 3.1 of this
Agreement, together with all undelivered dividends or distributions in respect
of such shares (without interest thereon) pursuant to Section 4.2 of this
Agreement. To the extent required by Section 3.5 of this Agreement, each holder
of shares of GF 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 GF
Common Stock is entitled as a result of the Merger until such holder surrenders
such holder's certificate or certificates representing the shares of GF Common
Stock for exchange as provided in this Section 4.1. The certificate or
certificates of GF Common Stock so surrendered shall be duly endorsed as the
Exchange Agent may require. Any other provision of this Agreement
notwithstanding, neither Regions, GF, nor the Exchange Agent shall be liable to
a holder of GF 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 GF Stockholders. At the Effective Time, the stock
transfer books of GF shall be closed as to holders of GF Common Stock
immediately prior to the Effective Time, and no transfer of GF 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 GF Common Stock (other than
shares to be canceled pursuant to Section 3.3 of this Agreement or as to which
the holder thereof has perfected dissenters' rights of appraisal as contemplated
by Section 3.4 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 3.5 of this Agreement in exchange therefor. To the extent
permitted by Law, former stockholders of record of GF 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 GF
Common Stock are converted, regardless of whether such holders have exchanged
their certificates representing GF 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 of
Regions Common Stock 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 GF 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 GF
Common Stock certificate, both the Regions Common Stock certificate (together
with all such undelivered dividends or other distributions without interest) and
any undelivered 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.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF GF
GF hereby represents and warrants to Regions as follows:
5.1 Organization, Standing, and Power. GF 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. GF 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 GF.
5.2 Authority; No Breach by Agreement. (a) GF has the corporate power and
authority necessary to execute, deliver, and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby, subject to the
approval of this Agreement by the holders of a majority of the outstanding
shares of GF Common Stock. The execution, delivery, and performance of this
Agreement and the consummation of the transactions contemplated herein,
including the Merger, have been or will be duly and validly authorized by all
necessary corporate action in respect thereof on the part of GF, subject to the
approval of this Agreement by the holders of a majority of the outstanding
shares of GF Common Stock. Subject to such requisite stockholder approval, this
Agreement represents a legal, valid, and binding obligation of GF, enforceable
against GF in accordance with its terms (except in all cases as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, conservatorship, moratorium, or similar Laws
affecting the enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding may
be brought).
(b) Neither the execution and delivery of this Agreement by GF, nor the
consummation by GF of the transactions contemplated hereby, nor compliance by GF
with any of the provisions hereof, will (i) conflict with or result in a breach
of any provision of GF'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 GF Company under, any Contract or
Permit of any GF Company which is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on GF, or (iii) subject to receipt of
the requisite approvals referred to in Section 9.1(b) of this Agreement, violate
any Law or Order applicable to any GF Company or any of their respective 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 GF, no notice to, filing with, or
Consent of, any public body or authority is necessary for the consummation by GF
of the Merger and the other transactions contemplated in this Agreement.
5.3 Capital Stock. (a) The authorized capital stock of GF consists of
8,000,000 shares of GF Common Stock, of which 948,316 shares are issued and
outstanding as of the date of this Agreement and not more than 1,037,919 shares
will be issued and outstanding at the Effective Time, assuming the exercise of
outstanding options. All of the issued and outstanding shares of GF Common Stock
are duly and validly issued and outstanding and are fully paid and
nonassessable. None of the outstanding shares of GF Common Stock has been issued
in violation of any preemptive rights of the current or past stockholders of GF.
GF has reserved 89,603 shares of GF Common Stock for issuance under the GF Stock
Plans, pursuant to which options to purchase not more than 89,603 shares of GF
Common Stock are outstanding.
(b) Except as set forth in Section 5.3(a) of this Agreement, there are no
shares of capital stock or other equity securities of GF outstanding and no
outstanding options, warrants, scrip, rights to subscribe to, calls, or
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commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of the capital stock of GF or
contracts, commitments, understandings, or arrangements by which GF is or may be
bound to issue additional shares of GF capital stock or options, warrants, or
rights to purchase or acquire any additional shares of its capital stock.
5.4 GF Subsidiaries. GF has disclosed in Section 5.4 of the GF Disclosure
Memorandum all of the GF Subsidiaries as of the date of this Agreement. GF or
one of its Subsidiaries owns all of the issued and outstanding shares of capital
stock of each GF Subsidiary. No equity securities of any GF Subsidiary are or
may become required to be issued (other than to a GF Company) by reason of any
options, warrants, scrip, rights to subscribe to, calls, or commitments of any
character whatsoever relating to, or securities or rights convertible into or
exchangeable for, shares of the capital stock of any such Subsidiary, and there
are no Contracts by which any GF Subsidiary is bound to issue (other than to a
GF Company) additional shares of its capital stock or options, warrants, or
rights to purchase or acquire any additional shares of its capital stock or by
which any GF Company is or may be bound to transfer any shares of the capital
stock of any GF Subsidiary (other than to a GF Company). There are no Contracts
relating to the rights of any GF Company to vote or to dispose of any shares of
the capital stock of any GF Subsidiary. All of the shares of capital stock of
each GF Subsidiary held by a GF Company are duly authorized, validly issued, and
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 GF Company free and clear of any Lien. Each GF Subsidiary is either a
bank, a savings association or a corporation, and is duly organized, validly
existing, and in good standing under the Laws of the jurisdiction in which it is
chartered or 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 GF 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 GF. The only GF Subsidiary that is a depository
institution is Griffin Federal. Griffin Federal is an "insured institution" as
defined in the Federal Deposit Insurance Act and applicable regulations
thereunder, and the deposits in which are insured by or the Savings Association
Insurance Fund.
5.5 Financial Statements. GF has disclosed in Section 5.5 of the GF
Disclosure Memorandum, and has delivered to Regions copies of, all GF Financial
Statements prepared for periods ended prior to the date hereof and will deliver
to Regions copies of all GF Financial Statements prepared subsequent to the date
hereof. The GF Financial Statements (as of the dates thereof and for the periods
covered thereby) (i) are or, if dated after the date of this Agreement, will be
in accordance with the books and records of the GF Companies, which are or will
be, as the case may be, complete and correct and which have been or will have
been, as the case may be, maintained in accordance with good business practices,
and (ii) present or will present, as the case may be, fairly the consolidated
financial position of the GF Companies as of the dates indicated and the
consolidated results of operations, changes in stockholders' equity, and cash
flows of the GF Companies for the periods indicated, in accordance with GAAP
(subject to any exceptions as to consistency specified therein or as may be
indicated in the notes thereto or, in the case of interim financial statements,
to normal recurring year-end adjustments which were not or are not expected to
be Material in amount or effect.).
5.6 Absence of Undisclosed Liabilities. No GF Company has any Material
Liabilities except Liabilities which are accrued or reserved against in the
consolidated balance sheets of GF as of December 31, 1996 included in the GF
Financial Statements or reflected in the notes thereto. No GF Company has
incurred or paid any Liability since December 31, 1996, except for such
Liabilities incurred or paid in the ordinary course of business consistent with
past business practice.
5.7 Absence of Certain Changes or Events. Since December 31, 1996, except
as disclosed in the GF Financial Statements or in Section 5.7 of the GF
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 GF, and (ii) the GF 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,
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would represent or result in a Material breach or violation of any of the
covenants and agreements of GF provided in Article Seven of this Agreement.
5.8 Tax Matters. (a) All Tax returns required to be filed by or on behalf
of any of the GF 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, to the Knowledge of GF, and
all returns filed are complete and accurate. All Taxes shown on filed 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 GF, except to the extent reserved against in the GF Financial
Statements dated prior to the date of this Agreement. All Taxes and other
Liabilities due with respect to completed and settled examinations or concluded
Litigation have been paid.
(b) None of the GF Companies has executed an extension or waiver of any
statute of limitations on the assessment or collection of any Tax due (excluding
such statutes that relate to years currently under examination by the Internal
Revenue Service or other applicable Taxing authorities) that is currently in
effect.
(c) Adequate provision for any Taxes due or to become due for any of the GF
Companies for the period or periods through and including the date of the
respective GF Financial Statements has been made and is reflected on such GF
Financial Statements.
(d) Each of the GF 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.
(e) None of the GF Companies has made any payments, is obligated to make
any payments, or is a party to any contract, agreement, or other arrangement
that could obligate it to make any payments that would be disallowed as a
deduction under Section 280G or 162(m) of the Internal Revenue Code.
(f) There are no Liens with respect to Taxes upon any of the assets of the
GF Companies.
(g) There has not been an ownership change, as defined in Internal Revenue
Code Section 382(g), of the GF Companies that occurred during or after any
Taxable Period in which the GF Companies incurred a net operating loss that
carries over to any Taxable Period ending after December 31, 1994.
(h) No GF Company has filed any consent under Section 341(f) of the
Internal Revenue Code concerning collapsible corporations.
(i) All Material elections with respect to Taxes affecting the GF Companies
as of the date of this Agreement have been or will be timely made as set forth
in Section 5.8 of the GF 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.
(j) No GF 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. Except as disclosed or reserved against in the GF Financial
Statements or as disclosed in Section 5.9 of the GF Disclosure Memorandum, the
GF Companies have good and marketable title, free and clear of all Liens, to all
of their respective Assets that are material to the business of the GF
Companies. All Material tangible properties used in the businesses of the GF
Companies are in good condition, reasonable wear and tear excepted, and are
usable in the ordinary course of business consistent with GF's past practices.
All Assets which are material to the business of the GF Companies, which are
held under leases or subleases by any of the GF 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
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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.
5.10 Environmental Matters. (a) To the Knowledge of GF, each GF Company,
its Participation Facilities, and its Loan Properties are, and have been, in
compliance in all Material respects with all Environmental Laws, except those
violations which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on GF.
(b) There is no Litigation pending or to the Knowledge of GF threatened
before any court, governmental agency, or authority, or other forum in which any
GF Company or any of its Participation Facilities has been or, with respect to
threatened Litigation, may be named as a defendant (i) for alleged noncompliance
(including by any predecessor) with any Environmental Law or (ii) relating to
the release into the environment of any Hazardous Material (as defined below) or
oil, whether or not occurring at, on, under, or involving a site owned, leased,
or operated by any GF Company or any of its Participation Facilities, except for
such Litigation pending or threatened that is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on GF.
(c) There is no Litigation pending or to the Knowledge of GF threatened
before any court, governmental agency, or board, or other forum in which any of
its Loan Properties (or GF in respect of such Loan Property) 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 or oil, whether or not occurring at, on, under, or
involving a Loan Property.
(d) To the Knowledge of GF, there is no reasonable basis for any Litigation
of a type described in subsections (b) or (c), except such as is not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
GF.
(e) To the Knowledge of GF, during the period of (i) any GF Company's
ownership or operation of any of their respective current properties, (ii) any
GF Company's participation in the management of any Participation Facility, or,
(iii) any GF Company's holding of a security interest in a Loan Property, there
have been no releases of Hazardous Material or oil in, on, under, adjacent to,
or affecting (or potentially affecting) such properties, except such as are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on GF. Prior to the period of (i) any GF Company's ownership or operation
of any of their respective current properties, (ii) any GF Company's
participation in the management of any Participation Facility, or (iii) any GF
Company's holding of a security interest in a Loan Property, to the Knowledge of
GF, there were no releases of Hazardous Material or oil in, on, under, or
affecting any such property, Participation Facility, or Loan Property, except
such as are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on GF.
5.11 Compliance With Laws. GF is duly registered as a savings and loan
holding company under the HOLA. Each GF 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, and there has occurred no Default under any such
Permit. Except as disclosed in Section 5.11 of the GF Disclosure Memorandum,
none of the GF Companies:
(a) is in violation of any Material 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 GF; 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 GF Company is not in
compliance with any of the Material Laws or Material 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 GF; (ii) threatening to revoke any
Material Permits, the revocation of which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on GF; or (iii)
requiring any GF Company (x) to enter into or consent to the issuance of a
cease and desist order, formal agreement, directive, commitment, or
memorandum of understanding, or
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(y) to adopt any Board resolution or similar undertaking which restricts
materially the conduct of its business, or in any manner relates to its
capital adequacy, its credit or reserve policies, its management, or the
payment of dividends.
5.12 Labor Relations. No GF Company is the subject of any Litigation
asserting that it or any other GF 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 GF Company to bargain with any labor
organization as to wages or conditions of employment, nor is any GF Company a
party to or bound by any collective bargaining agreement, contract, or other
agreement or understanding with a labor union or labor organization, nor is
there any strike or other labor dispute involving any GF Company, pending or
threatened, or to its Knowledge, is there any activity involving any GF
Company's employees seeking to certify a collective bargaining unit or engaging
in any other organization activity.
5.13 Employee Benefit Plans. (a) GF has disclosed in Section 5.13 of the
GF Disclosure Memorandum, and has delivered or made available to Regions prior
to the execution of this Agreement correct and complete 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 or agreements, all medical, vision,
dental, or other health plans, all life insurance plans, and all other employee
benefit plans or fringe benefit plans, including, without limitation, "employee
benefit plans" as that term is defined in Section 3(3) of ERISA maintained by,
sponsored in whole or in part by, or contributed to by any GF Company for the
benefit of employees, retirees, dependents, spouses, directors, independent
contractors, or other beneficiaries and under which employees, retirees,
dependents, spouses, directors, independent contractors, or other beneficiaries
are eligible to participate (collectively, the "GF Benefit Plans"). Any of the
GF Benefit Plans which is an "employee welfare benefit plan," as that term is
defined in Section 3(l) of ERISA, or an "employee pension benefit plan," as that
term is defined in Section 3(2) of ERISA, is referred to herein as a "GF ERISA
Plan." Any GF ERISA Plan which is also a "defined benefit plan" (as defined in
Section 414(j) of the Internal Revenue Code or Section 3(35) of ERISA) is
referred to herein as a "GF Pension Plan." On or after September 26, 1980,
neither GF nor any GF Company has had an "obligation to contribute" (as defined
in ERISA Section 4212) to a "multiemployer plan" (as defined in ERISA Sections
4001(a)(3) and 3(37)(A)).
(b) GF has delivered or made available to Regions prior to the execution of
this Agreement correct and complete copies of the following documents: (i) all
trust agreements or other funding arrangements for such GF Benefit Plans
(including insurance contracts), and all amendments thereto, (ii) with respect
to any such GF Benefit Plans or amendments, all determination letters, rulings,
opinion letters, information letters, or advisory opinions issued by the
Internal Revenue Service, the United States Department of Labor, or the Pension
Benefit Guaranty Corporation after December 31, 1974, (iii) annual reports or
returns, audited or unaudited financial statements, actuarial valuations and
reports, and summary annual reports prepared for any GF Benefit Plan with
respect to the most recent three plan years, and (iv) the most recent summary
plan descriptions and any Material modifications thereto.
(c) Except as disclosed in Section 5.13 of the GF Disclosure Memorandum,
all GF Benefit Plans are in compliance in all Material respects with the
applicable terms of ERISA, the Internal Revenue Code, and any other applicable
Laws, the breach or violation of which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on GF. Each GF 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 GF is not aware of any circumstances which will or could
result in revocation of any such favorable determination letter. Each trust
created under any GF ERISA Plan has been determined to be exempt from Tax under
Section 501(a) of the Internal Revenue Code and GF is not aware of any
circumstance which will or could result in revocation of such exemption. Except
as disclosed in Section 5.13 of the GF Disclosure Memorandum, with respect to
each GF Benefit Plan to the Knowledge of GF, no event has occurred which will or
could give rise to a loss of any intended Tax consequences under the Internal
Revenue Code or to any Tax under Section 511 of the Internal Revenue Code. There
is no Material pending or, to the knowledge of GF, threatened Litigation
relating to any GF ERISA Plan. No GF Company has engaged in a transaction with
respect to any GF Benefit Plan that, assuming the taxable period of such
transaction expired
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as of the date hereof, would subject any GF Company to a Material tax or penalty
imposed by either Section 4975 of the Internal Revenue Code or Section 502(i) of
ERISA.
(d) No GF 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 GF Pension Plan, (ii) no change in the actuarial assumptions with respect to
any GF Pension Plan, and (iii) no Material increase in benefits under any GF
Pension Plan as a result of plan amendments or changes in applicable Law or
materially adversely affect the funding status of any such plan. Neither any GF
Pension Plan nor any "single-employer plan," within the meaning of Section
4001(a)(15) of ERISA, currently or formerly maintained by any GF Company, or the
single-employer plan of any entity which is considered one employer with GF
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. No GF Company has provided, or is
required to provide, security to a GF Pension Plan or to any single-employer
plan of an ERISA Affiliate pursuant to Section 401(a)(29) of the Code.
(e) No liability under Title IV of ERISA has been or is expected to be
incurred by any GF Company with respect to any defined benefit plan currently or
formerly maintained by any of them or by any ERISA Affiliate).
(f) Except as set forth in Section 5.13(f) of the Disclosure Memorandum, no
GF Company has any obligations for retiree health and retiree life benefits
under any of the GF Benefit Plans.
(g) Except as set forth in Section 5.13(g) of the Disclosure Memorandum,
neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment (including,
without limitation, severance, unemployment compensation, golden parachute, or
otherwise) becoming due to any director or any employee of any GF Company from
any GF Company under any GF Benefit Plan or otherwise, (ii) increase any
benefits otherwise payable under any GF Benefit Plan, or (iii) result in any
acceleration of the time of payment or vesting of any such benefit.
(h) No oral or written representation or communication with respect to any
aspect of the GF Benefit Plans has been made to employees of any of the GF
Companies prior to the date hereof which is not in accordance with the written
or otherwise preexisting terms and provisions of such plans. All GF Benefit Plan
documents and annual reports or returns, audited or unaudited financial
statements, actuarial valuations, summary annual reports, and summary plan
descriptions issued with respect to the GF Benefit Plans are correct and
complete and there have been no changes in the information set forth therein.
5.14 Material Contracts. Except as disclosed in Section 5.14 of the GF
Disclosure Memorandum, none of the GF 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 $50,000, (ii) any Contract relating to the borrowing
of money by any GF Company or the guarantee by any GF 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, trade payables, and Contracts relating to borrowings or guarantees
made in the ordinary course of business), (iii) any Contracts between or among
GF Companies; and (iv) any other Contract or amendment thereto that would be
required to be filed as an exhibit to a Form 10-K filed by GF with the
Securities and Exchange Commission (the "SEC") as of the date of this Agreement
if GF were required to file a Form 10-K with the SEC (together with all
Contracts referred to in Sections 5.9 and 5.13(a) of this Agreement, the "GF
Contracts"). None of the GF Companies is in Default under any GF Contract.
5.15 Legal Proceedings. Except to the extent specifically reserved against
in the GF Financial Statements dated prior to the date of this Agreement, there
is no Litigation instituted or pending, or, to the
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Knowledge of GF, 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 GF 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 GF, nor are there any Orders of any
Regulatory Authorities, other governmental authorities, or arbitrators
outstanding against any GF Company, that are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on GF. Section 5.15
of the GF Disclosure Memorandum provides a list of all Litigation in which a GF
company is a named defendant.
5.16 Statements True and Correct. No statement, certificate, instrument,
or other writing furnished or to be furnished by any GF Company or any Affiliate
thereof to Regions pursuant to this Agreement or any other document, agreement,
or instrument referred to herein contains or will contain any untrue statement
of Material fact or will omit to state a Material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. None of the information supplied or to be supplied by any GF
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 contain
any untrue statement of a Material fact, or omit to state any Material fact
required to be stated thereunder or necessary to make the statements therein not
misleading. None of the information supplied or to be supplied by any GF Company
or any Affiliate thereof for inclusion in the Proxy Statement to be mailed to
GF's stockholders in connection with the Stockholders' Meeting, and any other
documents to be filed by a GF 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 GF, be false or
misleading with respect to any Material fact, or contain any misstatement of
Material fact, or omit to state any Material fact required to be stated
thereunder or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or, in the case of the
Proxy Statement or any amendment thereof or supplement thereto, at the time of
the Stockholders' Meeting, be false or misleading with respect to any Material
fact, or omit to state any Material fact required to be stated thereunder or
necessary to correct any Material statement in any earlier communication with
respect to the solicitation of any proxy for the Stockholders' Meeting. All
documents that any GF 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.
5.17 Tax, and Regulatory Matters. No GF Company or any Affiliate thereof
has taken any action, 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 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. To the Knowledge of
GF, there exists no fact, circumstance, or reason why the requisite Consents
referred to in Section 9.1(b) of this Agreement cannot be received in a timely
manner without imposition of any condition of the type described in the second
sentence of such Section 9.1(b).
5.18 State Takeover Laws. Each GF 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.
5.19 Articles of Incorporation Provisions. Each GF 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 (other than a Regions
Company) under the Articles of Incorporation, Bylaws, or other governing
instruments of any GF Company or restrict or impair the ability of Regions to
vote, or otherwise to exercise the rights of a stockholder with respect to,
shares of any GF Company that may be acquired or controlled by it.
5.20 Support Agreements. Each of the directors of GF has executed and
delivered to Regions an agreement in substantially the form of Exhibit 1 to this
Agreement.
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5.21 Derivatives Contracts. Neither GF 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).
5.22 Year 2000. GF represents and warrants that all computer software
necessary for the conduct of its business (the "Software") is designed to be
used prior to the calendar year 2000. To its Knowledge, GF believes that the
Software will be modified or replaced by its vendors to operate during and after
the calendar year 2000, without error relating to date data, specifically
including any error relating to, or the product of, date data which represents
or references different centuries or more than one century.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF REGIONS
Regions hereby represents and warrants to GF 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, receivership, conservatorship,
moratorium, or similar Laws affecting the enforcement of creditors' rights
generally and except that the availability of the equitable remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement 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, which is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Regions, or (iii) subject to receipt of the requisite approvals
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 Assets.
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and rules of
the NASD, and other than Consents required from Regulatory Authorities, and
other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee benefit plans,
or under the HSR Act and other than Consents, filings, or notifications which,
if not obtained or made, are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Regions, no notice to, filing with,
or Consent of, any public body or authority is necessary for the consummation by
Regions of the Merger and the other transactions contemplated in this Agreement.
6.3 Capital Stock. The authorized capital stock of Regions consists as of
the date of this Agreement, of 120,000,000 shares of Regions Common Stock, of
which 62,654,750 shares were issued and outstanding as of
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December 31, 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 GF 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 GF 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 SEC Filings; Financial Statements. (a) Regions has filed all forms,
reports, and documents required to be filed by Regions with the SEC since
December 31, 1993, 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 or will comply as to form in all Material respects with the applicable
published rules and regulations of the SEC with respect thereto, was or will be
prepared in accordance with GAAP 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 or will fairly present 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 or effect.
6.5 Absence of Undisclosed Liabilities. No Regions Company has any
Material Liabilities, except Liabilities which are accrued or reserved against
in the consolidated balance sheets of Regions as of December 31, 1996 included
in the Regions Financial Statements or reflected in the notes thereto. No
Regions Company has incurred or paid any Liability since December 31, 1996,
except for such Liabilities incurred or paid in the ordinary course of business
consistent with past business practice.
6.6 Absence of Certain Changes or Events. Since December 31, 1996, except
as disclosed in the Regions Financial Statements filed with the SEC after such
date and prior to the date of this Agreement, 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.
6.7 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 HOLA.
Each Regions Company has in effect all Permits necessary for it to own, lease,
or operate its Assets and to carry on its business as now conducted, except for
those Permits the absence of which is 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. None of the Regions Companies:
(a) is in violation of any Material 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 Material Laws or Material Orders which
such governmental authority or Regulatory Authority enforces, where such
noncompliance is reasonably likely
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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 (x) to
enter into or consent to the issuance of a cease and desist order, formal
agreement, directive, commitment, or memorandum of understanding, or (y) to
adopt any Board resolution or similar undertaking which restricts
materially the conduct of its business, or in any manner relates to its
capital adequacy, its credit or reserve policies, its management, or the
payment of dividends.
6.8 Legal Proceedings. Except to the extent specifically reserved against
in the Regions Financial Statements dated prior to the date of this Agreement,
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, 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.
6.9 Statements True and Correct. No statement, certificate, instrument, or
other writing furnished or to be furnished by any Regions Company or any
Affiliate thereof to GF pursuant to this Agreement or any other document,
agreement, or instrument referred to herein contains or will contain any untrue
statement of Material fact or will omit to state a Material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. 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 contain any untrue statement of a Material fact, or omit to state any
Material fact required to be stated thereunder or necessary to make the
statements therein not misleading. None of the information supplied or to be
supplied by any Regions Company or any Affiliate thereof for inclusion in the
Proxy Statement to be mailed to GF'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 GF, be false or misleading with respect to
any Material fact, or contain any misstatement of Material fact, or omit to
state any Material fact required to be stated thereunder or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, or, in the case of the Proxy Statement or any amendment
thereof or supplement thereto, at the time of the Stockholders' Meeting, be
false or misleading with respect to any Material fact, or omit to state any
Material fact required to be stated thereunder or necessary to correct any
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.
6.10 Tax, and Regulatory Matters. No Regions Company or any Affiliate
thereof has taken any action, 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
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. To the Knowledge of Regions, there exists no fact, circumstance, or
reason why the requisite Consents referred to in Section 9.1(b) of this
Agreement cannot be received in a timely manner without imposition of any
condition of the type described in the second sentence of such Section 9.1(b).
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ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 Covenants of Both Parties. Unless the prior written consent of the
other Party shall have been obtained, and except as otherwise expressly
contemplated herein, each Party shall and shall cause each of its Subsidiaries
to (i) operate its business only in the usual, regular, and ordinary course,
(ii) preserve intact its business organizations and Assets and maintain its
rights and franchises, and (iii) take no action which would materially adversely
affect the ability of any Party to (a) obtain any Consents required for the
transactions contemplated hereby, or (b) perform its covenants and agreements
under this Agreement in all Material respects and to consummate the Merger;
provided, that the foregoing shall not prevent any Regions Company from
discontinuing or disposing of any of its Assets or business, or from acquiring
or agreeing to acquire any other Person or any Assets thereof, if such action
is, in the judgment of Regions, desirable in the conduct of the business of
Regions and its Subsidiaries.
7.2 Covenants of GF. Except as specifically contemplated or permitted by
this Agreement, from the date of this Agreement until the earlier of the
Effective Time or the termination of this Agreement, GF 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 a duly authorized officer of Regions:
(a) amend the Articles of Incorporation, Bylaws, or other governing
instruments of any GF Company; or
(b) incur, guarantee, or otherwise become responsible for, any
additional debt obligation or other obligation for borrowed money (other
than indebtedness of a GF Company to another GF Company) in excess of an
aggregate of $100,000 (for the GF Companies on a consolidated basis) except
in the ordinary course of the business of GF Companies consistent with past
practices (which shall include, for GF, creation of deposit liabilities,
purchases of federal funds, advances from the Federal Home Loan Bank or the
Federal Reserve Bank, and entry into repurchase agreements fully secured by
U.S. government or agency securities), or impose, or suffer the imposition,
on any share of stock held by any GF Company of any Lien or permit any such
Lien to exist; 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 GF Company, or declare or pay any dividend or make
any other distribution in respect of any GF Common Stock; provided that GF
may (to the extent legally able to do so), but shall not be obligated to,
declare and pay regular cash dividends on the GF Common Stock at a rate not
in excess of $1.05 on an annualized basis, and in accordance with GF's most
recent past practices for cash dividends as disclosed in Section 7.2(c) of
the GF Disclosure Memorandum; or
(d) except pursuant to the exercise of stock options outstanding as of
the date hereof and pursuant to the terms thereof in existence on the date
hereof, issue, sell, pledge, encumber, authorize the issuance of, enter
into any Contract to issue, sell, pledge, encumber, or authorize the
issuance of, or otherwise permit to become outstanding, any additional
shares of GF Common Stock or any other capital stock of any GF 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 GF
Company or issue or authorize the issuance of any other securities in
respect of or in substitution for shares of GF Common Stock or sell, lease,
mortgage, or otherwise dispose of or otherwise encumber any shares of
capital stock of any GF Subsidiary (unless any such shares of stock are
sold or otherwise transferred to another GF Company) or any Assets having
in the aggregate a book value in excess of $100,000 other than in the
ordinary course of business for reasonable and adequate consideration; or
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(f) acquire direct or indirect control over, or invest in equity
securities of, any Person, other than in connection with (i) foreclosures
in the ordinary course of business, or (ii) acquisitions of control by GF
in its fiduciary capacity; or
(g) grant any increase in compensation or benefits to the employees or
officers of any GF Company except as disclosed in Section 7.2(g) of the GF
Disclosure Memorandum or as required by Law; pay any bonus except pursuant
to the provisions of any applicable program or plan adopted by its Board of
Directors prior to the date of this Agreement and disclosed in Section
7.2(g) of the GF Disclosure Memorandum; enter into or amend any severance
agreements with officers of any GF Company except as disclosed in Section
7.2(g) of the GF Disclosure Memorandum; grant any increase in fees or other
increases in compensation or other benefits to directors of any GF Company;
or
(h) voluntarily accelerate the vesting of any stock options or other
stock-based compensation or employee benefits; or
(i) except as disclosed in Section 7.2 of the GF Disclosure
Memorandum, enter into or amend any employment Contract between any GF
Company and any Person (unless such amendment is required by Law) that the
GF 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
(j) except as disclosed in Section 7.2 of the GF Disclosure
Memorandum, adopt any new employee benefit plan or program of any GF
Company or make any Material change in or to any existing employee benefit
plans or programs of any GF 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
(k) make any significant change in any accounting methods, principles,
or practices or systems of internal accounting controls, except as may be
necessary to conform to changes in regulatory accounting requirements or
GAAP; or
(l) commence or settle any Litigation other than in accordance with
past practice; provided that, except to the extent specifically reserved
against in the GF Financial Statements dated prior to the date of this
Agreement, no GF Company shall settle any Litigation involving any
Liability of any GF Company for money damages in excess of $25,000 or
restrictions upon the operations of any GF Company; or
(m) except in the ordinary course of business, enter into or terminate
any Material Contract or make any change in any Material lease or Contract.
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: (i) it will not, without the prior written consent of
a duly authorized officer of GF amend the Certificate of Incorporation or Bylaws
of Regions, in each case, in any manner which is adverse to, and discriminates
against, the holders of GF Common Stock; and (ii) it will 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 to Regions.
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 is reasonably likely to 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 each Party shall deliver to the other Party
copies of all such reports filed by such Party promptly after the same are
filed. If financial statements are contained in any such reports filed with
appropriate Regulatory Authorities, 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
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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 a
Regulatory Authority shall be prepared in accordance with Laws applicable to
such reports.
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 Registration Statement; Proxy Statement; Stockholder Approval. As soon
as reasonably practicable after the execution of this Agreement, Regions shall
file the Registration Statement with the SEC, provided GF has provided, on a
reasonably timely basis, all information concerning GF necessary for inclusion
in the Registration Statement, and shall use its reasonable efforts to cause the
Registration Statement to become effective under the 1933 Act as soon as
reasonably practicable after the filing thereof and take any action required to
be taken under other applicable securities Laws in connection with the issuance
of the shares of Regions Common Stock upon consummation of the Merger. GF shall
promptly furnish all information concerning it and the holders of its capital
stock as Regions may reasonably request in connection with such action. GF shall
call a Stockholders' Meeting, to be held within forty-five (45) days after the
Registration Statement is declared effective by the SEC, for the purpose of
voting upon approval of (i) this Agreement and (ii) such other related matters
as it deems appropriate. In connection with the Stockholders' Meeting, (i) GF
shall mail the Proxy Statement to all of 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 GF shall recommend (subject to compliance with their fiduciary
duties as advised in writing by counsel to such Board) to its stockholders the
approval of this Agreement, and (iv) the Board of Directors and officers of GF
shall use their reasonable efforts to obtain such stockholders' approval
(subject to compliance with their fiduciary duties as advised in writing by
counsel to such Board).
8.2 Nasdaq/NMS Listing. Regions shall file with the NASD a notification
for the listing on the Nasdaq/NMS relating to the proposed issuance of the
shares of Regions Common Stock to be issued to the holders of GF Common Stock
pursuant to the Merger.
8.3 Applications. As soon as reasonably practicable after execution of
this Agreement, Regions shall prepare and file, and GF 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. Regions shall use all reasonable
efforts to obtain the requisite Consents of all Regulatory Authorities as soon
as reasonably practicable after the filing of the appropriate applications.
8.4 Agreement as to Efforts to Consummate. Subject to the terms and
conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
practicable after the date of this Agreement, the transactions contemplated by
this Agreement, including, without limitation, using its reasonable efforts to
lift or rescind any Order adversely affecting its ability to consummate the
transactions contemplated herein and to cause to be satisfied the conditions
applicable to such Party referred to in Article Nine of this Agreement. Each
Party shall use, and shall cause each of its Subsidiaries to use, its reasonable
efforts to obtain all Consents necessary or desirable for the consummation of
the transactions contemplated by this Agreement.
8.5 Investigation and Confidentiality. (a) Prior to the Effective Time,
each Party will 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
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requests, provided that such investigation shall be reasonably related to the
transactions contemplated hereby and shall not interfere unreasonably with
normal operations. No investigation by a Party shall affect the representations
and warranties of the other Party.
(b) Each Party shall, and shall cause its advisers and agents to, maintain
the confidentiality of all confidential information furnished to it by the other
Party concerning its and its Subsidiaries' businesses, operations, and financial
positions and shall not use such information for any purpose except in
furtherance of the transactions contemplated by this Agreement. If this
Agreement is terminated prior to the Effective Time, each Party shall promptly
return all documents and copies thereof, and all work papers containing
confidential information received from the other Party.
(c) GF shall use its reasonable efforts to exercise its rights under
confidentiality agreements entered into with Persons which were considering an
acquisition transaction with GF to preserve the confidentiality of the
information relating to GF provided to such parties.
8.6 Press Releases. Prior to the Effective Time, GF and Regions 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, however, that nothing in this Section
8.6 shall be deemed to prohibit any Party from making any disclosure which its
counsel advises as necessary or advisable in order to satisfy such Party's
disclosure obligations imposed by Law.
8.7 Certain Actions. Except with respect to this Agreement and the
transactions contemplated hereby, no GF Company nor any Affiliate thereof nor
any investment banker, attorney, accountant, or other representative
(collectively, "Representatives") retained by any GF Company shall directly or
indirectly solicit any Acquisition Proposal by any Person. Except to the extent
necessary to comply with the fiduciary duties of GF's Board of Directors as
advised in writing by counsel to such Board of Directors, no GF 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, and shall direct
and use its reasonable efforts to cause all of its Representatives not to engage
in any of the foregoing, but GF 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. GF shall
promptly notify Regions orally and in writing in the event that it receives any
inquiry or proposal relating to any such transaction. GF shall immediately cease
and cause to be terminated as of the date of this Agreement any existing
activities, discussions, or negotiations with any Persons conducted heretofore
with respect to any of the foregoing.
8.8 Tax Matters. The Parties agree to use their reasonable efforts to
obtain written opinions of Alston & Bird LLP to the effect that (i) the Merger
will constitute a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code, (ii) the exchange in the Merger of GF Common Stock for
Regions Common Stock will not give rise to gain or loss to the stockholders of
GF with respect to such exchange (except to the extent of any cash received),
and (iii) each of GF and Regions will be a party to that reorganization within
the meaning of Section 368(b) of the Internal Revenue Code ("Tax Opinions"). In
rendering such Tax Opinions, counsel shall be entitled to rely upon
representations of officers of GF and Regions reasonably satisfactory in form
and substance to such counsel. 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 "reorganization" within the
meaning of Section 368(a) of the Internal Revenue Code for Federal income tax
purposes.
8.9 Agreement of Affiliates. GF has disclosed in Section 8.9 of the GF
Disclosure Memorandum each Person whom it reasonably believes is an "affiliate"
of GF for purposes of Rule 145 under the 1933 Act. Except as disclosed in
Section 8.9 of the GF Disclosure Memorandum, GF 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, substantially in the form of Exhibit 2,
providing that such Person will not sell, pledge, transfer, or otherwise dispose
of the shares of GF Common Stock held by such Person except as contemplated by
such agreement or by this Agreement and will not sell, pledge, transfer, or
otherwise dispose of the shares of Regions Common Stock to be received by such
Person upon consummation of the Merger except in
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compliance with applicable provisions of the 1933 Act and the rules and
regulations thereunder. 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.
8.10 Employee Benefits and Contracts. Following the Effective Time,
Regions shall provide generally to officers and employees of the GF 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 8.10), 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 GF
should be treated as service under Regions' qualified defined benefit plans,
(ii) service under any qualified defined contribution plans of GF shall be
treated as service under Regions' qualified defined contribution plans, and
(iii) service under any other employee benefit plans of GF shall be treated as
service under any similar employee benefit plans maintained by Regions. Regions
also shall cause GF and its Subsidiaries to honor all employment, severance,
consulting, and other compensation Contracts disclosed in Section 8.10 of the GF
Disclosure Memorandum to Regions between any GF 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 GF Benefit Plans.
8.11 Indemnification. (a) Subject to the conditions set forth in paragraph
(b) below, for a period of six (6) years after the Effective Time, Regions shall
indemnify, defend, and hold harmless each person entitled to indemnification
from a GF Company (each, an "Indemnified Party") against all Liabilities arising
out of actions or omissions occurring at or prior to the Effective Time
(including, without limitation, the transactions contemplated by this Agreement)
to the full extent permitted by Georgia Law and GF's Articles of Incorporation
and Bylaws, in each case as in effect on the date hereof, including provisions
relating to advances of expenses incurred in the defense of any Litigation.
Without limiting the foregoing, in any case in which approval by GF is required
to effectuate any indemnification, Regions shall cause GF to direct, at the
election of the Indemnified Party, that the determination of any such approval
shall be made by independent counsel mutually agreed upon between Regions and
the Indemnified Party.
(b) Any Indemnified Party wishing to claim indemnification under paragraph
(a) above, upon learning of any such Liability or Litigation, shall promptly
notify Regions thereof. In the event of any such Litigation (whether arising
before or after the Effective Time), (i) Regions or GF shall have the right to
assume the defense thereof and Regions shall not be liable to such Indemnified
Parties for any legal expenses of other counsel or any other expenses
subsequently incurred by such Indemnified Parties in connection with the defense
thereof, except that if Regions or GF elects not to assume such defense or
counsel for the Indemnified Parties advises that there are substantive issues
which raise conflicts of interest between Regions or GF and the Indemnified
Parties, the Indemnified Parties may retain counsel satisfactory to them, and
Regions or GF shall pay all reasonable fees and expenses of such counsel for the
Indemnified Parties promptly as statements therefor are received; provided,
however, that Regions shall be obligated pursuant to this paragraph (b) to pay
for only one firm of counsel for all Indemnified Parties in any jurisdiction,
(ii) the Indemnified Parties will cooperate in the defense of any such
Litigation, and (iii) Regions shall not be liable for any settlement effected
without its prior written consent; and provided further that GF shall not have
any obligation hereunder to any Indemnified Party when and if a court of
competent jurisdiction shall determine, and such determination shall have become
final, that the indemnification of such Indemnified Party in the manner
contemplated hereby is prohibited by applicable Law.
8.12 State Takeover Laws. Each GF 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.
8.13 Articles of Incorporation Provisions. Each GF 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
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Incorporation, Bylaws, or other governing instruments of any GF 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
GF Company that may be directly or indirectly acquired or controlled by it.
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 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 GF shall have approved
this Agreement and the consummation of the transactions contemplated
hereby, including the Merger, as and to the extent required by Law or by
the provisions of any governing instruments.
(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 so obtained which is necessary to consummate the
transactions as contemplated hereby shall be conditioned or restricted in a
manner which in the reasonable good faith judgment of the Board of
Directors of Regions would so materially adversely impact the economic
benefits of the transaction as contemplated by this Agreement so as to
render inadvisable the consummation of the Merger.
(c) Consents and Approvals. Each Party shall have obtained any and
all other 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 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) Nasdaq/NMS Listing. The shares of Regions Common Stock issuable
pursuant to the Merger shall have been approved for listing on the
Nasdaq/NMS.
(g) Tax Matters. Each Party shall have received a copy of the Tax
Opinions referred to in Section 8.8 of this Agreement. Each Party shall
have delivered to the other a Certificate, dated as of the date of the Tax
Opinion, signed by its duly authorized officers, to the effect that, to the
best knowledge and belief of such officers, the statement of facts and
representations made on behalf of the management of such Party, presented
to the legal counsel delivering the Tax Opinions were at the date of such
presentation, true, correct, and complete, and are on the date of such
Certificate, to the extent contemplated by the presentation, true, correct,
and complete, as though such presentation had been made on the date of such
Certificate.
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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 GF 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 GF 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 GF set forth in Sections 5.17, 5.18, and
5.19 of this Agreement shall be true and correct in all material respects.
There shall not exist inaccuracies in the representations and warranties of
GF set forth in this Agreement (including the representations and
warranties set forth in Sections 5.3, 5.17, 5.18, and 5.19) such that the
aggregate effect of such inaccuracies has, or is reasonably likely to have,
a Material Adverse Effect on GF; provided that, for purposes of this
sentence only, those representations and warranties which are qualified by
references to "material" or "Material Adverse Effect" shall be deemed not
to include such qualifications.
(b) Performance of Agreements and Covenants. Each and all of the
agreements and covenants of GF 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.
(c) Certificates. GF 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
GF'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) Claims Letters. Each of the directors and officers of GF shall
have executed and delivered to Regions letters in substantially the form of
Exhibit 3 to this Agreement.
(e) Legal Opinion. Regions shall have received a written opinion,
dated as of the Effective Time, of counsel to GF, in substantially the form
of Exhibit 4 to this Agreement.
(f) Affiliate Agreements. Regions shall have received from each
affiliate of GF the affiliates agreement referred to in Section 8.9 of this
Agreement.
9.3 Conditions to Obligations of GF. The obligations of GF 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 GF 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 6.10 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 6.10) 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" shall be deemed not
to include such qualifications.
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(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 GF (i) a
certificate, dated as of the Effective Time and signed on its behalf by its
duly authorized officers, to the effect that, to the best knowledge of such
officers, after due inquiry, 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
and stockholders evidencing the taking of all corporate action necessary to
authorize the execution, delivery, and performance of this Agreement, as
appropriate, and the consummation of the transactions contemplated hereby,
all in such reasonable detail as GF and its counsel shall request.
(d) Legal Opinion. GF shall have received a written opinion, dated as
of the Effective Time, of counsel to Regions, in substantially the form of
Exhibit 5 to this Agreement.
ARTICLE 10
TERMINATION
10.1 Termination. Notwithstanding any other provision of this Agreement,
and notwithstanding the approval of this Agreement by the stockholders of GF,
this Agreement may be terminated and the Merger abandoned at any time prior to
the Effective Time:
(a) By mutual consent of the Board of Directors of Regions and the
Board of Directors of GF; 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 GF and Section 9.3(a) 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 thirty (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 GF and Section 9.3(a) of this
Agreement in the case of Regions; or
(c) By the Board of Directors of either Party (provided that the
terminating Party is not then in breach of any representation or warranty
contained in this Agreement under the applicable standard set forth in
Section 9.2(a) of this Agreement in the case of GF and Section 9.3(a) in
the case of Regions or in Material breach of any covenant or other
agreement contained in this Agreement) 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 thirty (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 GF fail to vote their approval of this Agreement and the
transactions contemplated hereby as required by the Laws of the State of
Georgia at the GF Stockholders' Meeting where the transactions were
presented to such stockholders for approval and voted upon; or
(e) By the Board of Directors of GF or by the Board of Directors of
Regions in the event that the Merger shall not have been consummated by
March 31, 1998, in each case only 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
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(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 GF and Section 9.3(a) 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 (other than as contemplated by Section 10.1(d) of this Agreement)
cannot be satisfied or fulfilled by the date specified in Section 10.1(e)
of this Agreement as the date after which such Party may terminate this
Agreement.
10.2 Effect of Termination. In the event of the termination 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 Eleven and Section 8.5(b) of this Agreement shall survive any
such termination, and (ii) a termination pursuant to Sections 10.1(b), 10.1(c),
or 10.1(f) of this Agreement shall not relieve the breaching Party from
Liability for an uncured willful breach of a representation, warranty, covenant,
or agreement giving rise to such termination. Each of the Support Agreements
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 Two, Three, Four, and Eleven and Sections 8.9, and 8.11 of this
Agreement.
ARTICLE 11
MISCELLANEOUS
11.1 Definitions. Except as otherwise provided herein, the capitalized
terms set forth below (in their singular and plural forms as applicable) 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 ten
percent (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
each of the Support Agreements and the other Exhibits delivered pursuant
hereto and incorporated herein by reference.
"Assets" of a Person shall mean all of the assets, properties,
businesses, and rights of such Person of every kind, nature, character, and
description, whether real, personal, or mixed, tangible or intangible,
accrued or contingent, or otherwise relating to or utilized in such
Person's business, directly or indirectly, in whole or in part, whether or
not carried on the books and records of such Person, and whether or not
owned in the name of such Person or any Affiliate of such Person and
wherever located.
"BHC Act" shall mean the federal Bank Holding Company Act of 1956, as
amended.
"business combination" shall mean an acquisition of, merger or
combination with, share exchange involving any class of voting stock of,
sale of more than fifty percent (50%) of the consolidated assets by, or
other business combination involving, or tender offer for or sale or
issuance of any equity securities involving an acquisition by a third-party
of more than fifty percent (50%) of the voting stock of, GF, other than the
formation of a newly organized holding company for GF in which the shares
of GF Common Stock are exchanged for shares of the holding company on a
basis that does not cause the respective beneficial interests of each
stockholder to change or transactions with a Regions Company.
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"Closing" shall mean the closing of the transactions contemplated
hereby, as described in Section 1.2 of this Agreement.
"Consent" shall mean any consent, approval, authorization, clearance,
exemption, waiver, or similar affirmation by any Person pursuant to any
Contract, Law, Order, or Permit.
"Contract" shall mean any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease,
obligation, plan, practice, restriction, understanding, or undertaking of
any kind or character, or other document to which any Person is a party or
that is binding on any Person or its capital stock, Assets, or business.
"Default" shall mean (i) any breach or violation of or default under
any Contract, Order, or Permit, (ii) any occurrence of any event that with
the passage of time or the giving of notice or both would constitute a
breach or violation of or default under any Contract, Order, or Permit, or
(iii) any occurrence of any event that with or without the passage of time
or the giving of notice would give rise to a right to terminate or revoke,
change the current terms of, or renegotiate, or to accelerate, increase, or
impose any Liability under, any Contract, Order, or Permit.
"DGCL" shall mean the Delaware General Corporation Law.
"Effective Time" shall mean the date and time at which the Merger
becomes effective as defined in Section 1.3 of this Agreement.
"Environmental Laws" shall mean all Laws which are administered,
interpreted, or enforced by the United States Environmental Protection
Agency and state and local agencies with jurisdiction over pollution or
protection of the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Plan" shall have the meaning provided in Section 5.12 of this
Agreement.
"Exchange Agent" shall have the meaning provided in Section 4.1 of
this Agreement.
"Exchange Ratio" shall have the meaning provided in Section 3.1(c) of
this Agreement.
"Exhibits" 1 through 5, 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.
"FDIC" shall mean the Federal Deposit Insurance Corporation.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"GBCC" shall mean the Georgia Business Corporation Code.
"GF Benefit Plans" shall have the meaning set forth in Section 5.13 of
this Agreement.
"GF Common Stock" shall mean the $1.00 par value common stock of GF.
"GF Companies" shall mean, collectively, GF and all GF Subsidiaries.
"GF Disclosure Memorandum" shall mean the written information entitled
"GF Disclosure Memorandum" delivered prior to 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 of this Agreement under which such disclosure is being made.
Information disclosed with respect to one Section shall not be deemed to be
disclosed for purposes of any other Section not specifically referenced
with respect thereto.
"GF Financial Statements" shall mean (i) the consolidated balance
sheets (including related notes and schedules, if any) of GF as of March
31, 1997 and as of June 30, 1996 and 1995, and the related
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statements of income, changes in stockholders' equity, and cash flows
(including related notes and schedules, if any) for the nine months ended
March 31, 1997, and for each of the three fiscal years ended June 30, 1996,
1995, and 1994, included in the GF Disclosure Memorandum; (ii) the Thrift
Financial Reports filed by the Griffin Federal, with its principal
Regulatory Authority as of, and for the nine months ended, March 31, 1997
and as of, and for the year ended, June 30, 1996; and (iii) the Thrift
Financial Reports filed by Griffin Federal, with its principal Regulatory
Authority with respect to periods ended subsequent to March 31, 1997.
"GF Subsidiaries" shall mean the Subsidiaries of GF, which shall
include the GF Subsidiaries described in Section 5.4 of this Agreement and
any corporation, bank, savings association, or other organization acquired
as a Subsidiary of GF in the future and owned by GF at the Effective Time.
"Griffin Federal" shall mean Griffin Federal Savings Bank, a federal
stock savings bank and wholly-owned subsidiary of GF.
"Hazardous Material" shall mean any pollutant, contaminant, or
hazardous substance within the meaning of the Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. sec. 9601 et seq., or
any similar federal, state, or local Law.
"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 shall mean the knowledge
after due inquiry of the chairman, president, chief financial officer,
chief accounting officer, chief credit officer, general counsel (not
including outside counsel), any assistant or deputy general counsel, or any
senior or executive vice president of such Person.
"Law" shall mean any code, law, ordinance, regulation, reporting, or
licensing requirement, rule, or statute applicable to a Person or its
Assets, Liabilities, or business, including, without limitation, those
promulgated, interpreted, or enforced by any of the Regulatory Authorities.
"Liability" shall mean any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost, or expense (including,
without limitation, 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, (ii) for depository institutions, pledges to
secure deposits and other Liens incurred in the ordinary course of the
banking business, and (iii) Liens which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on a Party.
"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, but shall not include regular, periodic examinations
of depository institutions and their Affiliates by Regulatory Authorities.
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"Loan Property" shall mean any property owned by the Party in question
or by any of its Subsidiaries or in which such Party or Subsidiary holds a
security interest, 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, is likely to have a Material adverse impact on (i) the
financial position, business, results of operations or prospects 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, or (d) the
Merger and compliance with the provisions of this Agreement on the
operating performance of the Parties.
"Merger" shall mean the merger of GF with and into Regions referred to
in Section 1.1 of this Agreement.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Nasdaq/NMS" shall mean the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotations System.
"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 in which the Party in
question or any of its Subsidiaries participates in the management and,
where required by the context, includes the owner or operator or such
property, but only with respect to such property.
"Party" shall mean either GF or Regions and "Parties" shall mean both
GF 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 GF to solicit
the approval of its stockholders of the transactions contemplated by this
Agreement and shall include the prospectus of Regions relating to the
shares of Regions Common Stock to be issued to the stockholders of GF.
"Regions Common Stock" shall mean the $.625 par value common stock of
Regions.
"Regions Companies" shall mean, collectively, Regions and all Regions
Subsidiaries.
"Regions Financial Statements" shall mean (i) the consolidated
statements of condition (including related notes and schedules, if any) of
Regions as of December 31, 1996, and the related restated
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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, 1996, 1995, and 1994, as filed by Regions in SEC
Documents and (ii) the consolidated statements of condition of Regions
(including related notes and schedules, if any) and related statements of
income, changes in stockholders' equity, and cash flows (including related
notes and schedules, if any) included in SEC Documents filed with respect
to periods ended subsequent to December 31, 1996.
"Regions Subsidiaries" shall mean the Subsidiaries of Regions.
"Registration Statement" shall mean the Registration Statement on Form
S-4, or other appropriate form, filed with the SEC by Regions under the
1933 Act 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 Thrift Supervision,
the Office of the Comptroller of the Currency, the FDIC, all state
regulatory agencies having jurisdiction over the Parties and their
respective Subsidiaries, the NASD, and the SEC.
"SEC" shall mean the United States Securities and Exchange Commission.
"SEC Documents" shall mean all reports and registration statements
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.
"Stockholders' Meeting" shall mean the meeting of the stockholders of
GF to be held pursuant to Section 8.1 of this Agreement, including any
adjournment or adjournments thereof.
"Subsidiary" or collectively "Subsidiaries" shall mean all those
corporations, banks, associations, or other entities of which the entity in
question owns or controls fifty percent (50%) or more of the outstanding
equity securities either directly or through an unbroken chain of entities
as to each of which fifty percent (50%) or more of the outstanding equity
securities is owned directly or indirectly by its parent; provided,
however, 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.
"Support Agreements" shall mean the various Support Agreements, each
in substantially the form of Exhibit 1 to this Agreement.
"Surviving Corporation" shall mean Regions as the surviving
corporation resulting from the Merger.
"Tax" or "Taxes" shall mean any federal, state, county, local or
foreign income, profits, franchise, gross receipts, payroll, sales,
employment, use, property, withholding, excise, occupancy, and other taxes,
assessments, charges, fares, or impositions, of any nature whatsoever,
including interest, penalties, and additions imposed thereon or with
respect thereto.
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 Regions shall bear and pay the filing fees
payable in connection with the Registration Statement and the Proxy Statement
and 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.
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11.3 Brokers and Finders. 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 or its
representing or being retained by or allegedly representing or being retained by
GF or Regions, each of GF 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. Nothing in this Agreement,
expressed or implied, is intended to, or shall, 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 8.9 and 8.11 of this Agreement.
11.5 Amendments. To the extent permitted by Law, this Agreement may be
amended by a subsequent writing signed by each of the Parties upon the approval
of the Boards of Directors of each of the Parties; provided, however, that after
any such approval by the holders of GF Common Stock, there shall be made no
amendment decreasing the consideration to be received by GF stockholders without
the further approval of such stockholders.
11.6 Waivers. (a) Prior to or at the Effective Time, Regions, acting
through its Board of Directors, chief executive officer, vice chairman, or other
authorized officer, shall have the right to waive any Default in the performance
of any term of this Agreement by GF, to waive or extend the time for the
compliance or fulfillment by GF 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, GF, acting through its Board of
Directors, chief executive 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 their obligations under this Agreement, and to waive
any or all of the conditions precedent to the obligations of GF 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 GF.
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 prepaid, 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 received:
<TABLE>
<S> <C>
GF: GF BANCSHARES, INC.
327 West Taylor Street
Griffin, Georgia 30223
Telecopy Number: (770) 229-3886
Attention: Ron J. Franklin
Vice Chairman, President and
Chief Executive Officer
</TABLE>
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Copy to Counsel: WOMBLE CARLYLE SANDRIDGE & RICE PLLC
Suite 700
1275 Peachtree Street, NE
Atlanta, Georgia 30309
Telecopy Number: (404) 888-7490
Attention: Steven S. Dunlevie
Regions: REGIONS FINANCIAL CORPORATION
417 North 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 North 20th Street
Birmingham, Alabama 35203
Telecopy Number: (205) 326-7099
Attention: Samuel E. Upchurch, Jr.
General Counsel and Corporate Secretary
11.9 Governing Law. Except to the extent the laws of the State of Georgia
apply to the Merger, 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.
11.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
11.11 Captions. The captions contained in this Agreement are for reference
purposes only and are not part of this Agreement.
11.12 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.
<TABLE>
<S> <C>
ATTEST: GF BANCSHARES, INC.
By: /s/ ROBERT H. CROSSFIELD By: /s/ RON J. FRANKLIN
- -------------------------------------------- --------------------------------------------
Robert H. Crossfield Ron J. Franklin
Secretary Vice Chairman, President
and Chief Executive Officer
[CORPORATE SEAL]
ATTEST: REGIONS FINANCIAL CORPORATION
By: /s/ SAMUEL E. UPCHURCH, JR. By: /s/ WILLIAM E. JORDAN
- -------------------------------------------- --------------------------------------------
Samuel E. Upchurch, Jr. William E. Jordan
Corporate Secretary Regional President
[CORPORATE SEAL]
</TABLE>
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LIST OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S> <C>
1. Form of Support Agreement. (sec. 11.1).
2. Form of agreement of affiliates of GF. (sec. 8.9).
3. Form of Claims Letter. (sec. 9.2).
4. Form of Opinion Letter of GF's Counsel. (sec. 9.2).
5. Form of Opinion Letter of Regions' Counsel. (sec. 9.3).
</TABLE>
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<PAGE> 87
APPENDIX B
[THE ROBINSON-HUMPHREY COMPANY, INC. LETTERHEAD]
October 20, 1997
Board of Directors
GF Bancshares, Inc.
327 West Taylor Street
Griffin, Georgia
Gentlemen:
In connection with the proposed acquisition of GF Bancshares, Inc.
("Griffin") by Regions Financial Corporation ("Regions"), you have asked us to
render an opinion as to whether the financial terms of the Merger, as provided
in the Agreement and Plan of Merger (the "Merger"), dated as of May 28, 1997, as
amended, among such parties (the "Merger Agreement"), are fair, from a financial
point of view, to the stockholders of Griffin. Under the terms of the Merger,
holders of all outstanding shares of Griffin stock will receive consideration
equal to $18.00 of Regions Common Stock shares for each Griffin share held. The
exchange ratio will be obtained by dividing $18.00 by the Average Closing Price,
which is the average of the daily last sale prices for the shares of Regions
Common Stock, as quoted on NASDAQ, for the ten (10) consecutive trading days
ending at the close of trading on the last trading day immediately preceding the
date of the Griffin Stockholders' Meeting.
Our firm, as part of its investment banking business, is frequently
involved in the valuation of securities as related to public underwritings,
private placements, mergers, acquisitions, recapitalizations and other purposes.
In connection with our study for rendering this opinion, we have reviewed
the Merger Agreement, Griffin's financial results for fiscal years 1992 through
1996 and certain documents and information we deem relevant to our analysis. We
have also held discussions with senior management of Griffin for the purpose of
reviewing the historical and current operations of, and outlook for Griffin,
industry trends, the terms of the proposed Merger, and related matters.
We have also studied published financial data concerning certain other
publicly traded thrifts which we deem comparable to Griffin as well as certain
financial data relating to acquisitions of other thrifts that we deem relevant
or comparable. In addition, we have reviewed other published information,
performed certain financial analyses and considered other factors and
information which we deem relevant.
We have reviewed similar information and data relating to Regions including
its historical financial statements for fiscal years 1992 through 1996.
In rendering this opinion, we have relied upon the accuracy of the Merger
Agreement, the financial information listed above, and other information
furnished to us by Regions and Griffin. We have not separately verified this
information nor have we made an independent evaluation of any of the assets or
liabilities of Regions or Griffin.
Based upon the foregoing and upon current market and economic conditions,
we are of the opinion that, from a financial point of view, the consideration as
provided in the Merger Agreement is fair to the stockholders of Griffin.
Very truly yours,
THE ROBINSON-HUMPHREY COMPANY, INC.
<PAGE> 88
APPENDIX C
CODE OF GEORGIA
TITLE 14. CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS
CHAPTER 2. BUSINESS CORPORATIONS
ARTICLE 13. DISSENTERS' RIGHTS
PART 1. RIGHT TO DISSENT AND OBTAIN PAYMENT FOR SHARES
14-2-1301 Definitions.
As used in this article, the term:
(1) "Beneficial shareholder" means the person who is a beneficial
owner of shares held in a voting trust or by a nominee as the record
shareholder.
(2) "Corporate action" means the transaction or other action by the
corporation that creates dissenters' rights under Code Section 14-2-1302.
(3) "Corporation" means the issuer of shares held by a dissenter
before the corporate action, or the surviving or acquiring corporation by
merger or share exchange of that issuer.
(4) "Dissenter" means a shareholder who is entitled to dissent from
corporate action under Code Section 14-2-1302 and who exercises that right
when and in the manner required by Code Sections 14-2-1320 through
14-2-1327.
(5) "Fair value," with respect to a dissenter's shares, means the
value of the shares immediately before the effectuation of the corporate
action to which the dissenter objects, excluding any appreciation or
depreciation in anticipation of the corporate action.
(6) "Interest" means interest from the effective date of the corporate
action until the date of payment, at a rate that is fair and equitable
under all the circumstances.
(7) "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of
shares to the extent of the rights granted by a nominee certificate on file
with a corporation.
(8) "Shareholder" means the record shareholder or the beneficial
shareholder.
14-2-1302 Right to dissent.
(a) A record shareholder of the corporation is entitled to dissent from,
and obtain payment of the fair value of his shares in the event of, any of the
following corporate actions:
(1) Consummation of a plan of merger to which the corporation is a
party:
(A) If approval of the shareholders of the corporation is required
for the merger by Code Section 14-2-1103 or the articles of
incorporation and the shareholder is entitled to vote on the merger; or
(B) If the corporation is a subsidiary that is merged with its
parent under Code Section 14-2-1104;
(2) Consummation of a plan of share exchange to which the corporation
is a party as the corporation whose shares will be acquired, if the
shareholder is entitled to vote on the plan;
(3) Consummation of a sale or exchange of all or substantially all of
the property of the corporation if a shareholder vote is required on the
sale or exchange pursuant to Code Section 14-2-1202, but not including a
sale pursuant to court order or a sale for cash pursuant to a plan by which
all or substantially all of the net proceeds of the sale will be
distributed to the shareholders within one year after the date of sale;
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(4) An amendment of the articles of incorporation that materially and
adversely affects rights in respect of a dissenter's shares because it:
(A) Alters or abolishes a preferential right of the shares;
(B) Creates, alters, or abolishes a right in respect of redemption,
including a provision respecting a sinking fund for the redemption
or repurchase, of the shares;
(C) Alters or abolishes a preemptive right of the holder of the
shares to acquire shares or other securities;
(D) Excludes or limits the right of the shares to vote on any
matter, or to cumulate votes, other than a limitation by dilution
through issuance of shares or other securities with similar voting
rights;
(E) Reduces the number of shares owned by the shareholder to a
fraction of a share if the fractional share so created is to be acquired
for cash under Code Section 14-2-604; or
(F) Cancels, redeems, or repurchases all or part of the shares of
the class; or
(5) Any corporate action taken pursuant to a shareholder vote to the
extent that Article 9 of this chapter, the articles of incorporation,
bylaws, or a resolution of the board of directors provides that voting or
nonvoting shareholders are entitled to dissent and obtain payment for their
shares.
(b) A shareholder entitled to dissent and obtain payment for his shares
under this article may not challenge the corporate action creating his
entitlement unless the corporate action fails to comply with procedural
requirements of this chapter or the articles of incorporation or bylaws of the
corporation or the vote required to obtain approval of the corporate action was
obtained by fraudulent and deceptive means, regardless of whether the
shareholder has exercised dissenter's rights.
(c) Notwithstanding any other provision of this article, there shall be no
right of dissent in favor of the holder of shares of any class or series which,
at the record date fixed to determine the shareholders entitled to receive
notice of and to vote at a meeting at which a plan of merger or share exchange
or a sale or exchange of property or an amendment of the articles of
incorporation is to be acted on, were either listed on a national securities
exchange or held of record by more than 2,000 shareholders, unless:
(1) In the case of a plan of merger or share exchange, the holders of
shares of the class or series are required under the plan of merger or
share exchange to accept for their shares anything except shares of the
surviving corporation or another publicly held corporation which at the
effective date of the merger or share exchange are either listed on a
national securities exchange or held of record by more than 2,000
shareholders, except for scrip or cash payments in lieu of fractional
shares; or
(2) The articles of incorporation or a resolution of the board of
directors approving the transaction provides otherwise.
14-2-1303 Dissent by nominees and beneficial owners.
A record shareholder may assert dissenters' rights as to fewer than all the
shares registered in his name only if he dissents with respect to all shares
beneficially owned by any one beneficial shareholder and notifies the
corporation in writing of the name and address of each person on whose behalf he
asserts dissenters' rights. The rights of a partial dissenter under this Code
section are determined as if the shares as to which he dissents and his other
shares were registered in the names of different shareholders.
14-2-1320 Notice of dissenters' rights.
(a) If proposed corporate action creating dissenters' rights under Code
Section 14-2-1302 is submitted to a vote at a shareholders' meeting, the meeting
notice must state that shareholders are or may be entitled to assert dissenters'
rights under this article and be accompanied by a copy of this article.
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(b) If corporate action creating dissenters' rights under Code Section
14-2-1302 is taken without a vote of shareholders, the corporation shall notify
in writing all shareholders entitled to assert dissenters' rights that the
action was taken and send them the dissenters' notice described in Code Section
14-2-1322 no later than ten days after the corporate action was taken.
14-2-1321 Notice of intent to demand payment.
(a) If proposed corporate action creating dissenters' rights under Code
Section 14-2-1302 is submitted to a vote at a shareholders' meeting, a record
shareholder who wishes to assert dissenters' rights:
(1) Must deliver to the corporation before the vote is taken written
notice of his intent to demand payment for his shares if the proposed
action is effectuated; and
(2) Must not vote his shares in favor of the proposed action.
(b) A record shareholder who does not satisfy the requirements of
subsection (a) of this Code section is not entitled to payment for his shares
under this article.
14-2-1322 Dissenters' notice.
(a) If proposed corporate action creating dissenters' rights under Code
Section 14-2-1302 is authorized at a shareholders' meeting, the corporation
shall deliver a written dissenters' notice to all shareholders who satisfied the
requirements of Code Section 14-2-1321.
(b) The dissenters' notice must be sent no later than ten days after the
corporate action was taken and must:
(1) State where the payment demand must be sent and where and when
certificates for certificated shares must be deposited;
(2) Inform holders of uncertificated shares to what extent transfer of
the shares will be restricted after the payment demand is received;
(3) Set a date by which the corporation must receive the payment
demand, which date may not be fewer than 30 nor more than 60 days after the
date the notice required in subsection (a) of this Code section is
delivered; and
(4) Be accompanied by a copy of this article.
14-2-1323 Duty to demand payment.
(a) A record shareholder sent a dissenters' notice described in Code
Section 14-2-1322 must demand payment and deposit his certificates in accordance
with the terms of the notice.
(b) A record shareholder who demands payment and deposits his shares under
subsection (a) of this Code section retains all other rights of a shareholder
until these rights are canceled or modified by the taking of the proposed
corporate action.
(c) A record shareholder who does not demand payment or deposit his share
certificates where required, each by the date set in the dissenters' notice, is
not entitled to payment for his shares under this article.
14-2-1324 Share restrictions.
(a) The corporation may restrict the transfer of uncertificated shares from
the date the demand for their payment is received until the proposed corporate
action is taken or the restrictions released under Code Section 14-2-1326.
(b) The person for whom dissenters' rights are asserted as to
uncertificated shares retains all other rights of a shareholder until these
rights are canceled or modified by the taking of the proposed corporate action.
C-3
<PAGE> 91
14-2-1325 Offer of payment.
(a) Except as provided in Code Section 14-2-1327, within ten days of the
later of the date the proposed corporate action is taken or receipt of a payment
demand, the corporation shall by notice to each dissenter who complied with Code
Section 14-2-1323 offer to pay to such dissenter the amount the corporation
estimates to be the fair value of his or her shares, plus accrued interest.
(b) The offer of payment must be accompanied by:
(1) The corporation's balance sheet as of the end of a fiscal year
ending not more than 16 months before the date of payment, an income
statement for that year, a statement of changes in shareholders' equity for
that year, and the latest available interim financial statements, if any;
(2) A statement of the corporation's estimate of the fair value of the
shares;
(3) An explanation of how the interest was calculated;
(4) A statement of the dissenter's right to demand payment under Code
Section 14-2-1327; and
(5) A copy of this article.
(c) If the shareholder accepts the corporation's offer by written notice to
the corporation within 30 days after the corporation's offer or is deemed to
have accepted such offer by failure to respond within said 30 days, payment for
his or her shares shall be made within 60 days after the making of the offer or
the taking of the proposed corporate action, whichever is later.
14-2-1326 Failure to take action.
(a) If the corporation does not take the proposed action within 60 days
after the date set for demanding payment and depositing share certificates, the
corporation shall return the deposited certificates and release the transfer
restrictions imposed on uncertificated shares.
(b) If, after returning deposited certificates and releasing transfer
restrictions, the corporation takes the proposed action, it must send a new
dissenters' notice under Code Section 14-2-1322 and repeat the payment demand
procedure.
14-2-1327 Procedure if shareholder dissatisfied with payment or offer.
(a) A dissenter may notify the corporation in writing of his own estimate
of the fair value of his shares and amount of interest due, and demand payment
of his estimate of the fair value of his shares and interest due, if:
(1) The dissenter believes that the amount offered under Code Section
14-2-1325 is less than the fair value of his shares or that the interest
due is incorrectly calculated; or
(2) The corporation, having failed to take the proposed action, does
not return the deposited certificates or release the transfer restrictions
imposed on uncertificated shares within 60 days after the date set for
demanding payment.
(b) A dissenter waives his or her right to demand payment under this Code
section and is deemed to have accepted the corporation's offer unless he or she
notifies the corporation of his or her demand in writing under subsection (a) of
this Code section within 30 days after the corporation offered payment for his
or her shares, as provided in Code Section 14-2-1325.
(c) If the corporation does not offer payment within the time set forth in
subsection (a) of Code Section 14-2-1325:
(1) The shareholder may demand the information required under
subsection (b) of Code Section 14-2-1325, and the corporation shall provide
the information to the shareholder within ten days after receipt of a
written demand for the information; and
(2) The shareholder may at any time, subject to the limitations period
of Code Section 14-2-1332, notify the corporation of his own estimate of
the fair value of his shares and the amount of interest due and demand
payment of his estimate of the fair value of his shares and interest due.
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14-2-1330 Court action.
(a) If a demand for payment under Code Section 14-2-1327 remains unsettled,
the corporation shall commence a proceeding within 60 days after receiving the
payment demand and petition the court to determine the fair value of the shares
and accrued interest. If the corporation does not commence the proceeding within
the 60 day period, it shall pay each dissenter whose demand remains unsettled
the amount demanded.
(b) The corporation shall commence the proceeding, which shall be a nonjury
equitable valuation proceeding, in the superior court of the county where a
corporation's registered office is located. If the surviving corporation is a
foreign corporation without a registered office in this state, it shall commence
the proceeding in the county in this state where the registered office of the
domestic corporation merged with or whose shares were acquired by the foreign
corporation was located.
(c) The corporation shall make all dissenters, whether or not residents of
this state, whose demands remain unsettled parties to the proceeding, which
shall have the effect of an action quasi in rem against their shares. The
corporation shall serve a copy of the petition in the proceeding upon each
dissenting shareholder who is a resident of this state in the manner provided by
law for the service of a summons and complaint, and upon each nonresident
dissenting shareholder either by registered or certified mail or by publication,
or in any other manner permitted by law.
(d) The jurisdiction of the court in which the proceeding is commenced
under subsection (b) of this Code section is plenary and exclusive. The court
may appoint one or more persons as appraisers to receive evidence and recommend
decision on the question of fair value. The appraisers have the powers described
in the order appointing them or in any amendment to it. Except as otherwise
provided in this chapter, Chapter 11 of Title 9, known as the "Georgia Civil
Practice Act," applies to any proceeding with respect to dissenters' rights
under this chapter.
(e) Each dissenter made a party to the proceeding is entitled to judgment
for the amount which the court finds to be the fair value of his shares, plus
interest to the date of judgment.
14-2-1331 Court costs and counsel fees.
(a) The court in an appraisal proceeding commenced under Code Section
14-2-1330 shall determine all costs of the proceeding, including the reasonable
compensation and expenses of appraisers appointed by the court, but not
including fees and expenses of attorneys and experts for the respective parties.
The court shall assess the costs against the corporation, except that the court
may assess the costs against all or some of the dissenters, in amounts the court
finds equitable, to the extent the court finds the dissenters acted arbitrarily,
vexatiously, or not in good faith in demanding payment under Code Section
14-2-1327.
(b) The court may also assess the fees and expenses of attorneys and
experts for the respective parties, in amounts the court finds equitable:
(1) Against the corporation and in favor of any or all dissenters if
the court finds the corporation did not substantially comply with the
requirements of Code Sections 14-2-1320 through 14-2-1327; or
(2) Against either the corporation or a dissenter, in favor of any
other party, if the court finds that the party against whom the fees and
expenses are assessed acted arbitrarily, vexatiously, or not in good faith
with respect to the rights provided by this article.
(c) If the court finds that the services of attorneys for any dissenter
were of substantial benefit to other dissenters similarly situated, and that the
fees for those services should not be assessed against the corporation, the
court may award to these attorneys reasonable fees to be paid out of the amounts
awarded the dissenters who were benefited.
14-2-1332 Limitation of actions.
No action by any dissenter to enforce dissenters' rights shall be brought
more than three years after the corporate action was taken, regardless of
whether notice of the corporate action and of the right to dissent was given by
the corporation in compliance with the provisions of Code Section 14-2-1320 and
Code Section 14-2-1322.
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<PAGE> 93
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article Tenth of the Certificate of Incorporation of the Registrant
provides:
"(a) The corporation shall indemnify its officers, directors,
employees, and agents to the full extent permitted by the General
Corporation Law of Delaware. (b) No director of the corporation shall be
personally liable to the corporation or its stockholders for monetary
damages, for breach of fiduciary duty as a director, except for liability
(i) for any breach of the director's duty of loyalty to the corporation or
its stockholders; (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law; (iii) under
Section 174 of the Delaware General Corporation Law; or (iv) for any
transaction from which the director derived an improper personal benefit."
Section 145 of the Delaware General Corporation law empowers the Company
to indemnify its officers and directors under certain circumstances. The
pertinent provisions of that statute read as follows:
"(a) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation)
by reason of the fact that he is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
"(b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment
in its favor by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as
to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
"(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of
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<PAGE> 94
any action, suit or proceeding referred to in subsections (a) and (b) of
this section, or in defense of any claim, issue or matter therein, he shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
"(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification
of the director, officer, employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in
subsections (a) and (b) of this section. Such determination shall be made
(1) by a majority vote of the directors who are not parties to such action,
suit or proceeding, even though less than a quorum, or (2) if there are no
such directors, or if such directors so direct, by independent legal
counsel in a written opinion, or (3) by the stockholders.
"(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the corporation as authorized in this section. Such expenses
(including attorneys' fees) incurred by other employees and agents may be
so paid upon such terms and conditions, if any, as the board of directors
deems appropriate.
"(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be
deemed exclusive of any other rights to which those seeking indemnification
or advancement of expenses may be entitled under any bylaw, agreement, vote
of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding
such office.
"(g) A corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability
under this section.
"(h) For purposes of this section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers,
and employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is or was
serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall stand in the same position under
this section with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.
"(i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include
any excise taxes assessed on a person with respect to any employee benefit
plan; and references to "serving at the request of the corporation" shall
include any service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by, such
director, officer, employee or agent with respect to an employee benefit
plan, its participants or beneficiaries; and a person who acted in good
faith and in a manner he reasonably believed to be in the
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<PAGE> 95
interest of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best
interests of the corporation" as referred to in this section.
"(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
"(k) The Court of Chancery is hereby vested with exclusive jurisdiction
to hear and determine all actions for advancement of expenses or
indemnification brought under this section or under any bylaw, agreement,
vote of stockholders or disinterested directors, or otherwise. The Court of
Chancery may summarily determine a corporation's obligation to advance
expenses (including attorneys' fees)."
The Company has purchased a directors' and officers' liability insurance
contract which provides, within stated limits, reimbursement either to a
director or officer whose actions in his capacity result in liability, or to the
Registrant, in the event it has indemnified the director or officer. Major
exclusions from coverage include libel, slander, personal profit based on inside
information, illegal payments, dishonesty, accounting of securities profits in
violation of Section 16(b) of the Securities Exchange Act of 1934 and acts
within the scope of the Pension Reform Act of 1974.
ITEM 21. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ --------------------------------------------------------------------------------------------------------
<S> <C> <C>
2.1 -- Agreement and Plan of Merger, dated as of May 29, 1997, by and between GF Bancshares, Inc. and
Regions Financial Corporation -- included as Appendix A to the Proxy Statement/Prospectus.
4.1 -- Certificate of Incorporation of Regions Financial Corporation.
4.2 -- By-laws of Regions Financial Corporation
5. -- Opinion re: legality--previously filed.
8. -- Opinion re: tax matters--previously filed.
23.1 -- Consent of Ernst & Young LLP--previously filed.
23.2 -- Consent of Bricker & Melton, P.A.--previously filed.
23.3 -- Consent of Lange, Simpson, Robinson & Somerville -- included in Exhibit 5.
23.4 -- Consent of Alston & Bird -- included in Exhibit 8.
23.5 -- Consent of The Robinson-Humphrey Company, Inc.
24. -- Power of Attorney -- the manually signed power of attorney is set forth in the signature page of the
original registration statement.
99. -- Form of proxy.
</TABLE>
ITEM 22. UNDERTAKINGS.
A. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934, (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 96
B. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
C.(1) The undersigned Registrant hereby undertakes as follows: that prior
to any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
(2) The Registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (1) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
D. The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
E. The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
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<PAGE> 97
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this amendment to the registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Birmingham, State of Alabama on this the 20th day of October, 1997.
REGISTRANT:
REGIONS FINANCIAL CORPORATION
/s/ J. Stanley Mackin
BY: --------------------------------
J. Stanley Mackin
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the registration statement has been signed below by the following persons in
the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- -------------------------- ------------------------------ ----------------
/s/ J. Stanley Mackin
- -------------------------- Chairman of the Board and October 20, 1997
J. Stanley Mackin Chief Executive Officer and
Director
* Richard D. Horsley
- -------------------------- Vice Chairman of the Board and October 20, 1997
Richard D. Horsley Executive Financial Officer
and Director
* Robert P. Houston
- -------------------------- Executive Vice President and October 20, 1997
Robert P. Houston Comptroller
* Sheila S. Blair
- -------------------------- Director October 20, 1997
Sheila S. Blair
- -------------------------- Director
William B. Boles, Sr.
* James B. Boone, Jr.
- -------------------------- Director October 20, 1997
James B. Boone, Jr.
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<PAGE> 98
* Albert P. Brewer
- ---------------------- Director October 20, 1997
Albert P. Brewer
* James S.M. French
- ---------------------- Director October 20, 1997
James S.M. French
* Carl E. Jones, Jr.
- ---------------------- President and Chief Operating October 20, 1997
Carl E. Jones, Jr. Officer and Director
* Olin B. King
- ---------------------- Director October 20, 1997
Olin B. King
* Henry E. Simpson
- ---------------------- Director October 20, 1997
Henry E. Simpson
- ---------------------- Director
Lee J. Styslinger, Jr.
* Robert J. Williams
- -------------------------- Director October 20, 1997
Robert J. Williams
* By /s/ Samuel E. Upchurch, Jr.
---------------------------------
as attorney-in-fact pursuant to a
power of attorney.
II-6
<PAGE> 99
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------- -------------------------------------------------------------------- --------
<S> <C> <C>
2.1 -- Agreement and Plan of Merger, dated as of May 29, 1997, by and
between GF Bancshares, Inc.and Regions Financial Corporation --
included as Appendix A to the Proxy Statement/Prospectus.
4.1 -- Certificate of Incorporation of Regions Financial Corporation.
4.2 -- By-laws of Regions Financial Corporation.
5. -- Opinion re: legality -- previously filed.
8. -- Opinion re: tax matters -- previously filed.
23.1 -- Consent of Ernst & Young LLP -- previously filed.
23.2 -- Consent of Bricker & Melton, P.A. -- previously filed.
23.3 -- Consent of Lange, Simpson, Robinson & Somerville -- included in
Exhibit 5.
23.4 -- Consent of Alston & Bird -- included in Exhibit 8.
23.5 -- Consent of The Robinson-Humphrey Company, Inc.
24. -- Power of Attorney -- the manually signed power of attorney is set
forth in the signature page of the
original registration statement.
99. -- Form of proxy.
</TABLE>
<PAGE> 1
EXHIBIT 4.1
CERTIFICATE OF INCORPORATION
OF
REGIONS FINANCIAL CORPORATION
FIRST. The name of the corporation is Regions Financial Corporation.
SECOND. The address of its registered office in the State of Delaware is
No. 100 West Tenth Street, in the City of Wilmington, County of New Castle. The
name of its registered agent at such address is The Corporation Trust Company.
The principal office of the corporation shall be in the State of Alabama and
shall be located in the City of Birmingham, County of Jefferson. Directors'
meetings (unless from time to time specifically otherwise ordered by the Board
of Directors) and appropriate corporate functions shall be held in Birmingham.
The chief executive officer may, for his convenience, in discharging his duties,
locate at whatever place he deems desirable the necessary secretariat and
personal assistants for the efficient operation of his office. The corporation
may have such other offices, either within or without the State of Alabama, as
the Board of Directors may designate or as the business of the corporation may
require from time to time. Specialized personnel, such as auditors, examiners,
public relation officers, etc., shall be located in such cities as the Directors
may from time to time order.
THIRD. The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware. Without limiting in any manner the scope and generality of the
foregoing, the corporation shall have the following purposes and powers:
(1) To engage generally in the business of owning stock in other
corporations which are engaged in the business of banking in all its branches
and to transact and do all matters and things incidental thereto or which may at
any time hereafter or at any place where the company shall carry on the
business, be usual in connection with the business of banking or dealing in
money or securities.
(2) To acquire by purchase, subscription or otherwise, and to
receive, hold, own guarantee, sell, assign, exchange, transfer, mortgage,
pledge, or otherwise dispose of or deal in and with any and all securities, as
such term is hereinafter defined, issued or created by any corporation, firm
organization, association or other entity, public or private, whether formed
under the laws of the United States of America or of any state, commonwealth,
territory, dependency or possession thereof, or of any foreign country or of any
political subdivision, territory, dependency, possession or municipality
<PAGE> 2
thereof, or issued or created by the United States of America or any state or
commonwealth thereof or any foreign country, or by any agency, subdivision,
territory, dependency, possession or municipality of any of the foregoing, and
as owner thereof to possess and exercise all the rights, powers and privileges
of ownership, including the right to execute consents and vote thereon.
The term "securities" as used in this Certificate of Incorporation
shall mean any and all notes, stocks, treasury stocks, bonds, debentures,
evidences of indebtedness, certificates of interest of participation in any
profit-sharing agreement, collateral- trust certificates, pre-organization
certificates or subscriptions, transferable shares, investment contracts, voting
trust certificates, certificates of deposit for a security, fractional undivided
interests in oil, gas or other mineral rights, or, in general, any interests or
instruments commonly known as "securities," or any and all certificates of
interest or participation in, temporary or interim certificates for, receipts
for, guaranties of, or warrants or rights to subscribe to or purchase, any of
the foregoing.
(3) To make, establish and maintain investments in securities, and to
supervise and manage such investments.
(4) To cause to be organized under the laws of the United States of
America or of any state, commonwealth, territory, dependency or possession
thereof, or of any foreign country or of any political subdivision, territory,
dependency, possession or municipality thereof, one or more corporations, firms,
organizations, associations or other entities and to cause the same to be
dissolved, wound up, liquidated, merges or consolidated.
(5) To acquire by purchase or exchange, or by transfer to or by
merger or consolidation with the corporation or any corporation, firm,
organization, association or other entity owned or controlled, directly or
indirectly, by the corporation, or to otherwise acquire, the whole or any part
of the business, good will, rights, or other assets of any corporation, firm,
organization, association or other entity, and to undertake or assume in
connection therewith the whole or any part of the liabilities and obligations
thereof, to effect any such acquisition in whole or in part by delivery of cash
or other property, including securities issued by the corporation, or by any
other lawful means.
(6) To make loans and give other forms of credit, with or without
security, and to negotiate and made contracts and agreements in connection
therewith.
(7) To aid by loan, subsidy, guaranty or in any
2
<PAGE> 3
other lawful manner any corporation, firm, organization, association or other
entity of which any securities are in any manner directly or indirectly held by
the corporation or in which the corporation or any such corporation, firm,
organization, association or entity may be or become otherwise interested; to
guarantee the payment of dividends on any stock issued by any such corporation,
firm, organization, association or entity; to guarantee or, with or without
recourse against any such corporation, firm, organization, association or
entity, to assume the payment of the principal of, or the interest on, any
obligations issues or incurred by such corporation, firm, organization,
association or entity; to do any and all other acts and things for the
enhancement, protection or preservation of any securities which are in any
manner, directly or indirectly, held, guaranteed or assumed by the corporation,
and to do any and all acts and things designed to accomplish any such purpose.
(8) To borrow money for any business, object or purpose of the
corporation from time to time, without limit as to amount; to issue any kind of
indebtedness, whether or not in connection with borrowing money, including
evidences of indebtedness convertible into stock of the corporation, to secure
the payment of any evidence of indebtedness by the creation of any interest in
any of the property or rights of the corporation, whether at that time owned or
thereafter acquired.
(9) To render service, assistance, counsel and advice to, and to act
as representative or agent in any capacity (whether managing, operating,
financial, purchasing, selling, advertising or otherwise) of, any corporation,
firm, organization, association or other entity.
The purposes and powers specified in the foregoing paragraphs shall,
except where otherwise expressed, be in no wise limited or restricted by
reference to, or inference from the terms of any other paragraph in this
Certificate of Incorporation, but the purposes and powers specified in each of
the foregoing paragraphs of this Article shall be regarded as independent
purposes and powers.
The corporation shall possess and may exercise all powers and
privileges necessary or convenient to effect any or all of the foregoing
purposes, or to further any or all of the foregoing powers, and the enumeration
herein of any specific purposes or powers shall not be held to limit or restrict
in any manner exercise by the corporation of the general powers now or hereafter
conferred by the laws of the State of Delaware upon corporations formed under
the General Corporation Law of Delaware.
FOURTH. The total number of shares of all classes of stock which the
Corporation shall have the authority to issue is Two
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Hundred Forty Five million (245,000,000) of which Two Hundred Forty Million
(240,000,000) shares are to be common stock (hereinafter called the "Common
Stock"), of a par value of sixty- two and one half cents ($.625) each, and Five
Million (5,000,000) shares are to be Preferred Stock (hereinafter called the
"Preferred Stock") of the par value of one dollar ($1) each.
1. Authority is hereby expressly granted to the Board of
Directors from time to time to issue the Preferred Stock, for such
consideration and on such terms as it may determine, as Preferred Stock of
one or more series and in connection with the creation of any such series
to fix by the resolution or resolutions providing for the issue of shares
thereof the designation, powers and relative participating, optional, or
other special rights of such series, and the qualifications, limitations,
or restrictions thereof. Such authority of the Board of Directors with
respect to each such series shall include, but not be limited to, the
determination of the following:
(a) the distinctive designation of, and the number of shares
comprising, such series, which number may be increased (except where
otherwise provided by the Board of Directors in creating such series)
or decreased (but not below the number of shares thereof then
outstanding) from time to time by like action of the Board of
Directors;
(b) the dividend rate or amount for such series, the conditions
and dates upon which such dividends shall be payable, the relation
which such dividends shall bear to the dividends payable on any other
class or classes or any other series of any class or classes of stock,
and whether such dividends shall be cumulative, and if so, from which
date or dates for such series;
(c) whether or not the shares of such series shall be subject to
redemption by the Corporation and the time, prices, and other terms
and conditions of such redemption;
(d) whether or not the shares of such series shall be subject to
the operation of a sinking fund or purchase fund to be applied to the
redemption or purchase of such shares and if such a fund be
established, the amount thereof and the terms and provisions relative
to the application thereof;
(e) whether or not the shares of such series shall be
convertible into or exchangeable for shares of any other class or
classes, or of any other series of
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any class or classes, of stock of the Corporation and if provision be
made for conversion or exchange, the times, prices, rates,
adjustments, and other terms and conditions of such conversion or
exchange;
(f) whether or not the shares of such series shall have voting
rights, in addition to the voting rights provided by law, and if they
are to have such additional voting rights, the extent thereof,
provided that the holders of shares of the Preferred Stock will not be
entitled to more than the lesser of: (i) one vote per $100 liquidation
value or (ii) one vote per share, when voting as a class with the
holders of the shares of Common Stock, and will not be entitled to
vote separately as a class except where the Preferred Stock is
adversely affected or for the election of directors after default in
the payment of dividends on Preferred Stock;
(g) the rights of the shares of such series in the event of any
liquidation, dissolution, or winding up of the Corporation or upon any
distribution of its assets; and
(h) any other powers, preferences, and relative, participating,
optional, or other special rights of the shares of such series, and
the qualifications, limitations or restrictions thereof, to the full
extent now or hereafter permitted by law and not inconsistent with the
provisions hereof.
2. Authority is hereby expressly granted to the Board of Directors
from time to time to issue any authorized but unissued shares of Common
Stock for such consideration and on such terms as it may determine.
3. All shares of any one series of Preferred Stock shall be
identical in all respects except as to the dates from which dividends
thereon may be cumulative. All series of the Preferred Stock shall rank
equally and be identical in all respects except as otherwise provided in
the resolution or resolutions providing for the issue of any series of
Preferred Stock.
4. Whenever dividends upon the Preferred Stock at the time
outstanding, to the extent of the preference to which such stock is
entitled, shall have been paid in full or declared and set apart for
payment for all past dividend periods, and after the provisions for any
sinking or purchase fund or funds for any series of Preferred Stock shall
have been complied with, the Board of Directors may declare and pay
dividends on the Common Stock, payable in
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cash, stock or otherwise, and the holders of shares of Preferred Stock
shall not be entitled to share therein, subject to the provisions of the
resolution or resolutions creating any series of Preferred Stock.
5. In the event of any liquidation, dissolution, or winding up of
the Corporation or upon the distribution of the assets of the Corporation
or upon the distribution of the assets of the Corporation remaining, after
the payment to the holders of the Preferred Stock of the full preferential
amounts to which they shall be entitled as provided in the resolution or
resolutions creating any series thereof, the remaining assets of the
Corporation shall be divided and distributed among the holders of the
Common Stock ratably, except as may otherwise be provided in any such
resolution or resolutions. Neither the merger or consolidation of the
Corporation with another corporation nor the sale or lease of all or
substantially all the assets of the Corporation shall be deemed to be a
liquidation, dissolution, or winding up of the Corporation or a
distribution of its assets.
6. Except as otherwise required by law or provided by a resolution
or resolutions of the Board of Directors creating any series of Preferred
Stock, the holders of Common Stock shall have the exclusive power to vote
and shall have one vote in respect of each share of such stock held by them
and the holders of Preferred Stock shall have no voting power whatsoever.
Except as otherwise provided in such a resolution or resolutions, the
number of authorized shares of the Preferred Stock may be increased or
decreased by the affirmative vote of the holders of a majority of the
outstanding shares of capital stock of the Corporation entitled to vote.
7. No holder of Preferred Stock or Common Stock of the Corporation
shall have any preemptive right as such holder (other than such right, if
any, as the Board of Directors in its discretion may by resolution,
determine pursuant to this Article Fourth) to purchase, subscribe for or
otherwise acquire any shares of stock of the Corporation of any class now
or hereafter authorized, or any securities convertible into or exchangeable
for any such shares, or any warrants or any instruments evidencing rights
or options to subscribe for, purchase or otherwise acquire any such shares,
whether such shares, securities, warrants or other instruments are now, or
shall hereafter be, authorized, unissued or issued and thereafter acquired
by the Corporation.
FIFTH. The name and mailing address of each incorporator is as follows:
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NAME MAILING ADDRESS
---- ---------------
Sibyl A. Garrett P.O. Box 668, Montgomery,
Alabama
----------------
- ---------------------------------
Linda V. Neill P.O. Box 668, Montgomery,
Alabama
--------------
- ---------------------------------
Mary E. Lee P.O. Box 668, Montgomery,
Alabama
-----------
- ---------------------------------
SIXTH. The corporation is to have perpetual existence.
SEVENTH. In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized.
(1) To make, alter or repeal the by-laws of the corporation.
(2) To authorize and cause to be executed mortgages and liens upon
the real and personal property of the corporation.
(3) To declare such awful dividends, either in cash or stock of the
corporation, as in its discretion it may deem advisable.
(4) To set apart out of any of the funds of the corporation available
for dividends a reserve or reserves for any proper purposes and to abolish any
such reserve in the manner in which it was created.
(5) To fix the number of Directors which shall constitute the whole
Board, subject to the following:
(a) The number of Directors constituting the entire Board shall
be fixed from time to time by vote of a majority of the entire Board, provided,
however, that the number of Directors shall not be reduced so as to shorten the
term of an Director at the time in office, and provided further, that the
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number of Directors constituting the entire Board shall be 21 until otherwise
fixed by a majority of the entire Board, and shall not be less than three. Each
Director shall be the record owner of one or more shares of common stock of the
corporation.
(b) The Board of Directors shall be divided into three classes,
as nearly equal in numbers as the then total number of Directors constituting
the entire Board permits with the term of office of one class expiring each
year. At the annual meeting of stockholders in 1982, Directors of the first
class shall be elected to hold office for a term expiring at the next succeeding
annual meeting, Directors of the second class shall be elected to hold office
for a term expiring at the second succeeding annual meeting and Directors of the
third class shall be elected to hold office for a term expiring at the third
succeeding annual meeting. Any vacancies in the Board of Directors for any
reason, and any created directorships resulting from any increase in the number
of Directors may be filled by the Board of Directors, acting by a majority of
the Directors then in office, although less than a quorum, and any directors so
chosen shall hold office until the next election of the class for which such
Directors shall have been chosen and until their successors shall be elected and
qualified. No decrease in the number of Directors shall shorten the term of any
incumbent Director. Subject to the foregoing, at each annual meeting of
stockholders the successors to the class of Directors whose term shall then
expire shall be elected to hold office for a term expiring at the third
succeeding annual meeting.
(c) Notwithstanding any other provisions of this certificate of
incorporation or the by-laws of the corporation (and notwithstanding the fact
that some lesser percentage may be specified by law, this certificate of
incorporation or the by-laws of the corporation), any Director or the entire
Board of Directors of the corporation may be removed at any time, but only for
cause and only by the affirmative vote of the holders of 75% or more of the
outstanding shares of capital stock of the corporation entitled to vote
generally in the election of directors (considered for this purpose as one
class) cast at a meeting of the stockholders called for that purpose.
(d) Nominations for the election of Directors may be made by the
Board of Directors or by any stockholder entitled to vote for the election of
Directors. Such nominations shall be made by notice in writing, delivered or
mailed by first class United States Mail, postage prepaid, to the Secretary of
the corporation not less than 14 days nor more than 50 days prior to any meeting
of the stockholders called for the election of Directors; provided, however,
that if less than 21 days' notice of the meeting is given to stockholders, such
written notice shall be delivered or mailed, as prescribed, to the Secretary of
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the corporation not later than the close of the seventh day following the day on
which notice of the meeting was mailed to stockholders. Notice of nominations
which are proposed by the Board of Directors shall be given by the Chairman on
behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the
name, age, business address and, if known, residence address of each nominee
proposed in such notice, (ii) the principal occupation or employment of each
such nominee and (iii) the number of shares of stock of the corporation
beneficially owned by each such nominee.
(f) The Chairman of the meeting may, if the facts warrant,
determine and declare to the meeting that a nomination was not made in
accordance with the foregoing procedure, and if he should so determine, he shall
so declare to the meeting and the defective nomination shall be disregarded.
(6) By a majority of the whole Board, to designate one or more
committees, each committee to consist of two or more of the Directors of the
corporation. The Board may designate one or more Directors as alternate members
of any committee, who may replace any absent or disqualified member or any
meeting of the committee. Any such committee, to the extent provided in the
resolution or in the by-laws of the corporation, shall have and may exercise the
powers of the Board of Directors in the management of the business and affairs
of the corporation, and may authorize the seal of the corporation to be affixed
to all papers which may require it; provided, however, the by-laws may provide
that in the absence or disqualification of any member of such committee or
committees, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member.
(7) (a) Except as set forth in Clause (d) of this paragraph (7) of
Article Seventh the affirmative vote of the holders of at lease 75% of the
outstanding shares of the corporation entitled to vote in election of Directors
shall be required to effect or validate:
(1) any merger or consolidation with or into any other
corporation, or
(2) any sale or lease of all or a substantial part of the
assets of the corporation to any other corporation, person or other entity, if
as of the record date for determination of stockholders entitled to notice
thereof and to vote thereon, such other corporation, person or entity which is
party to such a transaction is the beneficial owner, directly or
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indirectly, of 5% or more of the outstanding shares of the corporation entitled
to vote in elections of directors. Such affirmative vote shall be in addition to
any vote of the holders of the shares of the corporation otherwise required by
law, this certificate of incorporation or any agreement between the corporation
and any national securities exchange.
(b) For purpose of this paragraph (7) any corporation, person or
other entity shall be deemed to be the beneficial owner of any shares of the
corporation:
(1) which it owns directly, whether not of record, or
(2) which it has the right to acquire pursuant to any
agreement or understanding or upon exercise of conversion rights, warrants or
options or otherwise, or
(3) which are beneficially owned, directly or indirectly
(including shares deemed to be owned through application of clause (2) above),
by an "affiliate" or "associate" as those terms are defined in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934 as in
effect on May 1, 1977, or
(4) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of clause (2) above), by any
other corporation, person or entity with which it or its "affiliate" or
"associate" has any agreement or arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of shares of the corporation. For the
purpose of determining whether a corporation, person or entity is the beneficial
owner of one or more of the outstanding shares of the corporation, the
outstanding shares of the corporation shall include shares not in fact
outstanding but deemed owned through the application of clauses (b)(2), (3) and
(4) above, but shall not include any other shares which may be issuable pursuant
to any agreement or upon exercise of conversion rights, warrants or options or
otherwise.
(c) The Board of Directors shall have the power and duty to
determine for the purposes of this paragraph (7), on the basis of information
known to the corporation whether:
(1) such other corporation or other entity beneficially
owns more than 5% of the outstanding shares of the corporation entitled to vote
in elections of Directors;
(2) a corporation, person, or entity is an "affiliate" or
"associate" (as defined in paragraph (b) above) of another;
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(3) the memorandum of understanding referred to in clause
(d) below is substantially consistent with the transaction covered thereby.
Any such determination shall be conclusive and binding for
all purposes of this paragraph (7).
(d) The provisions of this paragraph (7) shall not apply to:
(1) any merger or similar transaction with any corporation
if the Board of Directors of the corporations has approved a memorandum of
understanding with such other corporation with respect to such transaction prior
to the time that such other corporation shall have become the beneficial owner
of more than 5% of the outstanding shares of the corporation entitled to vote in
elections of Directors; or after such acquisition of 5% of the outstanding
shares, if 75% or more of the entire Board of Directors approve such transaction
prior to its consummation; or
(2) any merger or consolidation of the corporation with, or
any sale or lease to the corporation or any subsidiary thereof of any assets of,
or any sale or lease by the corporation or any subsidiary thereof of any of its
assets to, any corporation of which a majority of the outstanding shares of all
classes of stock entitled to vote in election of Directors is owned of record or
beneficially by the corporation and its subsidiaries.
EIGHTH. Directors of Corporation and its Subsidiaries. Directors of the
corporation shall retire as such upon reaching age seventy-two (72) or after
serving three (3) years as a member of the Board, whichever event occurs later.
The nomination and election of Directors of each corporation which is or
may in the future be a subsidiary of the corporation shall be conducted in the
manner prescribed in the charter or by-laws of said subsidiary corporation.
NINTH. No action required to be taken or which may be taken at any annual
or special meeting of stockholders of the corporation may be taken without a
meeting, and the power of stockholders to consent in writing, without a meeting,
to the taking of any action is specifically denied.
TENTH. (a) The corporation shall indemnify its officers directors,
employees and agents to the full extent permitted by the General Corporation Law
of Delaware. (b) No director of the corporation shall be personally liable to
the corporation or its stockholders for monetary damages, for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
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director's duty of loyalty to the corporation or its stockholders; (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) under Section 174 of the Delaware General
Corporation Law; or (iv) for any transaction from which the director derived an
improper personal benefit.
ELEVENTH. Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on this application in a summary
way of this corporation or of any creditor or stockholder thereof, or on the
application of any receiver or receivers appointed for this corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this corporation under the provisions of Section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said application has
been made, be binding on all the creditors or class or creditors, and/or on all
the stockholders or class of stockholders, of this corporation, as the case may
be, and also on this corporation.
TWELFTH. Meetings of stockholders may be held within or without the State
of Delaware, as the by-laws may provide. The books of the corporation may be
kept (subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the by-laws of the corporation. Special meetings of the
stockholders may be called at any time by the Chief Executive Officer, Secretary
or Board of Directors of the corporation.
THIRTEENTH. The corporation reserves the right to amend, alter, change or
repeal any provision contained in this certificate of incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
As provided in Article Seventh, paragraph (1), the Board of Directors is
expressly authorized to make, alter or repeal by-laws of the corporation by a
vote of a majority of the entire Board; and the stockholders may make, alter or
repeal any
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by-laws whether or not adopted by them, provided however, that any such
additional by-laws, alterations or repeal may be adopted only by the affirmative
vote of the holders of 75% or more of the outstanding shares of capital stock of
the corporation entitled to vote generally in the election of Directors
(considered for this purpose as one class) at a meeting of stockholders called
for such purpose.
Notwithstanding any other provision of this certificate of incorporation
or the by-laws of the corporation (and in addition to any other vote that may be
required by law, this certificate of incorporation or the by-laws), the
affirmative vote of the holders of at least 75% of the outstanding shares of the
capital stock of the corporation entitled to vote generally in the election of
Directors (considered for this purpose as one class) shall be required to amend,
alter or repeal any provision of Article Fourth; Article Seventh paragraph (5);
Article Seventh paragraph (7); Article Ninth; Article Twelfth; or Article
Thirteenth of the certificate of incorporation.
WE, THE UNDERSIGNED, being each of the incorporators hereinbefore named,
for the purpose of forming a corporation pursuant to the General Corporation Law
of the State of Delaware, do make this certificate, hereby declaring and
certifying that this is our act and deed and the facts herein stated are true,
and accordingly have hereunto set our hands this 24th day of June, 1970.
/s/ Sibyl A. Garrett
/s/ Linda V. Neill
/s/ Mary E. Lee
As amended through June 25, 1997.
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EXHIBIT 4.2
BYLAWS
OF
REGIONS FINANCIAL CORPORATION
(as amended 1/17/73, 1/8/75, 4/20/77,
4/21/82, 1/19/83, 9/18/85, 3/22/89,
1/24/90, 4/28/93 and 5/18/94)
A DELAWARE CORPORATION
ARTICLE I
Offices
The address of its registered office in the State of Delaware is No. 100
West Tenth Street, in the City of Wilmington, County of New Castle. The name of
its registered agent at such address is The Corporation Trust Company. The
principal office of the corporation shall be in the State of Alabama and shall
be located in the City of Birmingham, County of Jefferson. Directors' meetings
(unless from time to time specifically otherwise ordered by the Board of
Directors) and appropriate corporate functions shall be held in Birmingham. The
Chief Executive Officer may, for his convenience, in discharging his duties,
locate at whatever place he deems desirable the necessary secretary and personal
assistants for the efficient operation of his office. The corporation may have
such other offices, either within or without the State of Alabama, as the Board
of Directors may designate or as the business of the corporation may require
from time to time. Specialized personnel, such as auditors, examiners, public
relations officers, etc., shall be located in such cities as the Directors may
from time to time order.
<PAGE> 2
ARTICLE II
Meeting of Shareholders
1. Place of Meetings. The first annual meeting of the stockholders shall be
held in Birmingham, Alabama. Thereafter, the Board of Directors may designate
any place, either within or without the State of Alabama, as the place of
meeting for any annual meeting or for any special meeting of the shareholders
called by the Board of Directors.
2. Annual Meetings. The Annual Meeting of stockholders shall be held on the
third Wednesday of April of each year, if not a legal holiday, but if a legal
holiday, then on the next day following not a legal holiday, for the purpose of
electing Directors of the Corporation and for the transaction of such business
as may be properly brought before the meeting.
3. Substitute Annual Meetings. If the annual meeting shall not be held on
the day designated by these bylaws, a substitute annual meeting may be called in
accordance with the provisions of Section 4 of this Article. A meeting so called
shall be designated and treated for all purposes as the annual meeting.
4. Special Meetings. Special meetings of the shareholders may be called at
any time by the Chief Executive Officer, Secretary or Board of Directors of the
corporation.
5. Notice of Meetings. Written or printed notice stating the time and place
of the meeting shall be delivered not less than 10 nor more than 50 days before
the date thereof, either personally or
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by mail, by or at the direction of the Chief Executive Officer, the Secretary or
the Board of Directors, to each shareholder of record entitled to vote at such
meeting. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail addressed to the shareholder at his address as it
appears on the record of shareholders of the corporation, with postage thereon
prepaid.
In the case of an annual or substitute annual meeting, the notice of the
meeting need not specifically state the business to be transacted thereat. In
the case of a special meeting, the notice of meeting shall specifically state
the purpose or purposes for which the meeting is called.
When a meeting is adjourned for thirty days or more notice of the adjourned
meeting shall be given as in the case of an original meeting. When a meeting is
adjourned for less than thirty days in any one adjournment, it is not necessary
to give any notice of the adjourned meeting other than by announcement at the
meeting at which the adjournment is taken.
6. Quorum. The holders of a majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at meetings of
shareholders. If there is no quorum at the opening of a meeting of shareholders,
such meeting may be adjourned from time to time by a vote of a majority of the
shares voting on the motion to adjourn; and, at any adjourned meeting at which a
quorum is present, any business may be transacted which might have been
transacted at the original meeting.
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The shareholders at a meeting at which a quorum is present may continue to
do business until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum.
7. Voting of Shares. Each outstanding share having voting rights shall be
entitled to one vote on each matter submitted to a vote at a meeting of the
shareholders.
The vote of a majority of the shares voted on any matter at a meeting of
shareholders at which a quorum is present shall be the act of the shareholders
on that matter, except as otherwise required by law or by the certificate of
incorporation or the bylaws of this corporation.
As more specifically provided in Article VII, paragraph 7 of the
certificate of incorporation of this corporation, (1) any merger or
consolidation with or into any other corporation, or (2) any sale or lease of
all or a substantial part of the assets of the corporation to any other
corporation, person or entity, must be approved by the affirmative vote of the
holders of at least 75% of the outstanding shares of the corporation entitled to
vote, provided, however, that approval by 75% of the outstanding shares shall
not be required if any proposed merger, consolidation, or similar transaction
shall have been previously approved by the affirmative vote of at least 75% of
the entire Board of Directors; or if any proposed merger, consolidation or sale
or lease of the assets of the corporation is with a corporation, the majority of
the outstanding stock of which is owned by this corporation.
Voting on all matters shall be by voice vote or by a show of
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hands unless the holders of one-tenth of the shares represented at the meeting
shall, prior to the voting on any matter, demand a ballot vote on that
particular matter.
8. No Shareholder Action by Consent. No action required to be taken at a
meeting of shareholders may be taken without a meeting. The stockholders shall
not have the power to consent in writing, without a meeting, to the taking of
any such action.
9. Qualification of Speakers at Shareholders' Meeting. Any person in
attendance at the meeting of shareholders shall, at the time of gaining
recognition from the chair, state the name of the speaker, the number of shares
owned by the speaker, and, if appearing in a representative capacity, produce
satisfactory written evidence of the right of representation signed by a
shareholder of record. Upon a failure to comply with this requirement, the
chairman shall ignore such speaker and, if deemed necessary, request the
sergeant at arms to remove the proposed speaker from the meeting.
ARTICLE III
Directors
1. General Powers. The business and affairs of the corporation shall be
managed by the Board of Directors or by such Executive Committee as the Board
may establish pursuant to these bylaws.
2. Number, Classification, Term, Qualifications and Vacancies. The number
of Directors which shall constitute the whole Board shall be fixed, from time to
time, by resolutions
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adopted by the Board, but shall not be less than three persons, and, until
otherwise provided, shall be two inside or full-time employee directors and ten
outside directors who are not full-time employees of the Corporation. The
Directors shall be of three classes, so that approximately one-third in number
of the Directors shall be elected at each annual meeting of stockholders and,
except as hereinafter provided, each Director shall hold office for three years,
or until his successor is elected and qualified, or until his earlier
retirement, death, resignation or removal. Directors need not be residents of
the state of Delaware.
Any vacancy in the office of Director, for any reason, or resulting from an
increase in the authorized number of Directors, may be filled by the affirmative
vote of a majority of the Directors then in office, although less than a quorum,
or by a sole remaining Director. Any Director so chosen shall hold office until
the next election of the class for which such Director shall have been chosen
and until his successor shall be elected and qualified. No decrease in the
number of Directors shall shorten the term of any incumbent Director.
3. Nominations and Election of Directors. Nominations for the election of
Directors may be made by the Board of Directors or by any stockholder entitled
to vote for the election of Directors. Such nominations shall be made by notice
in writing, delivered or mailed by first class United States mail, postage
prepaid, to the secretary of the corporation not less than 14 days nor more than
50 days prior to any meeting of the stockholders called for the
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election of Directors; provided, however, that if less than 21 days' notice of
the meeting is given stockholders, such written notice of nominations shall be
delivered or mailed to the secretary of the corporation not later than the close
of business on the seventh day following the day on which notice of the meeting
was mailed to stockholders. Notice of nominations which are proposed by the
Board of Directors shall be given by the chairman on behalf of the Board.
Notice of nominations shall set forth (1) the name, age, business address,
and, if known, residence address of each nominee; (2) the principal occupation
or employment of each nominee; and (3) the number of shares of stock of the
corporation beneficially owned by said nominee.
The chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with the
foregoing procedure, and if he should so determine, he shall so declare to the
meeting and the defective nomination shall be disregarded.
For the election of Directors, those nominees who receive the highest
number of votes shall be deemed to have been elected.
To achieve the classification of Directors described in Section 2 of the
Article, the Board of Directors shall be divided into three classes of seven
Directors each, or as nearly equal in number as the then total number of
Directors constituting the entire Board permits with the term of office of one
class expiring each year. At the Annual Meeting of stockholders in l982,
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Directors of the first class shall be elected to hold office for a one-year term
expiring at the l983 annual meeting, Directors of the second class shall be
elected at the l982 annual meeting of stockholders to hold office for a two year
term expiring at the l984 annual meeting, and the Directors of the third class
shall be elected at the l982 annual meeting to hold office for a three-year term
expiring at the l985 annual meeting. After the initial election of each class of
Directors, each class should be elected for a three-year term, so that the term
of office of one class expires each year.
4. Chairman. There may be a Chairman of the Board of Directors elected by
the Directors from their number at any meeting of the board. The Chairman shall
preside at all meetings of the Board of Directors and perform such other duties
as may be directed by the Board.
5. Vice-Chairman. There may be a Vice-Chairman of the Board of Directors
elected by the Directors from their number at any meeting of the Board. In the
absence of the Chairman, the Vice- Chairman in order of seniority shall preside
at all meetings of the Board and perform such other duties as may be directed by
the Board.
6. Compensation. The Board of Directors may compensate Directors for their
services as such and may provide for the payment of all expenses incurred by
Directors in attending regular and special meetings of the Board.
7. Retirement. Directors of the corporation shall retire as
8
<PAGE> 9
such immediately prior to the next Annual Meeting of stockholders after reaching
age seventy (70). Provided, however, directors currently holding office shall
retire after reaching age seventy-two (72).
8. Removal. Notwithstanding any provision of the certificate of
incorporation, these bylaws, or law, any Director or the entire Board of
Directors of the corporation may be removed at any time, but only for cause and
only by the affirmative vote of the holders of 75% or more of the outstanding
shares of capital stock of the corporation entitled to vote generally in the
election of Directors cast in a meeting of stockholders called for that purpose.
ARTICLE IV
Meeting of Directors
1. Regular Meetings. A regular meeting of the Board of Directors shall be
held immediately before or after the annual meeting of shareholders. In
addition, the Board of Directors may provide, by resolution, the time and place,
either within or without the State of Alabama, for the holding of additional
regular meetings.
2. Special Meetings. Special Meetings of the Board of Directors may be
called by or at the request of the Chief Executive Officer or by a majority of
the members of the Board or upon waiver of notice by all of the Directors. Such
meetings may be held either within or without the State of Alabama.
3. Notice of Meetings. Regular meetings of the Board of Directors may be
held without notice.
9
<PAGE> 10
The person or persons calling a special meeting of the Board of Directors
shall, at least two days before the meeting, give notice thereof by any usual
means of communication. Such notice need not specify the purpose for which the
meeting is called.
Attendance by a Director at a meeting shall constitute a waiver of notice
of such meeting, except where a Director attends a meeting for the purpose of
objecting to the transaction of any business because the meeting is not lawfully
called.
4. Quorum. A majority of the Directors fixed by these bylaws, shall
constitute a quorum for the transaction of business at any meeting of the Board
of Directors.
5. Manner of Acting. Except as otherwise provided in these bylaws, an act
of the majority of the Directors present at the meeting at which a quorum is
present shall be the act of the Board of Directors.
The vote of a majority of the number of Directors fixed by these bylaws
shall be required to adopt a resolution constituting an Executive Committee.
Vacancies in the Board of Directors may be filled as provided in Article III,
Section 2 of these bylaws.
6. Informal Action by Directors. Action taken by a majority of the
Directors without a meeting is nevertheless Board action if written consent to
the action in question is signed by all the Directors and filed with the minutes
of the proceeding of the Board, whether done before or after the action so
taken.
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<PAGE> 11
ARTICLE V
Officers
1. Number. The officers of the corporation shall consist of a President, a
Chairman, Vice-Chairmen, a Secretary, a Comptroller, and such Vice-Presidents,
Assistant Secretaries, Assistant Comptroller and other officers as the Board of
Directors may from time to time elect. Any two or more offices may be held by
the same person, except the offices of chief executive and secretary. It shall
not be necessary for any officer to be a shareholder of the corporation.
2. Election and Term. The officers of the corporation shall be elected by
the Board of Directors, such election may be held at any regular or special
meeting of the board. Each officer shall hold office until his death,
resignation, retirement, removal, disqualification or until his successor is
elected and qualified.
3. Compensation. The compensation of all officers of the corporation shall
be fixed by the Board of Directors.
4. Chairman. The Chairman shall have general executive powers and shall be
the chief executive officer of the corporation and, subject to the control of
the Board of Directors, shall supervise and control the management of the
corporation according to these bylaws.
He shall, when present, preside at all meetings of the shareholders or name
another to preside. He shall sign, with any other proper officer, certificates
for shares of the corporation, and any deeds, mortgages, bonds, contracts or
other instruments
11
<PAGE> 12
which may lawfully be executed on behalf of the corporation, except where
required or permitted by law to be otherwise signed and executed and except
where the signing and execution thereof shall be delegated by the Board of
Directors to some other officer or agent; and, in general, he shall perform all
duties incident to the office of Chairman and such other duties as may be
prescribed by the Board of Directors from time to time.
5. President. The President shall have general executive powers and shall
also have and may exercise such further powers and duties as from time to time
may be conferred upon or assigned to him by the Board or by the Chairman. In the
absence or disability of the Chairman, he shall perform such duties and have
such powers as the Board may have assigned the Chairman.
6. Vice-Chairman. The Vice-Chairman shall have general executive powers and
shall also have and may exercise such further powers and duties as from time to
time may be conferred upon or assigned to him or them by the Board. In the
absence or disability of the President and the Chairman, he or they shall
perform such duties and have such powers as the Board may have assigned the
President and the Chairman.
7. Vice Presidents. The Vice Presidents in the order of their election,
unless otherwise determined by the Board of Directors, shall in the absence or
disability of the President, Chairman and Vice-Chairman perform the duties and
exercise the powers that the Board may have assigned the President, Chairman and
Vice-Chairman. In addition, they shall perform such other duties
12
<PAGE> 13
and shall have such other powers as the Board of Directors shall prescribe.
8. Secretary. The secretary shall keep accurate records of the acts and
proceedings of all meetings of shareholders and Directors. He shall give all
notices required by law an by these bylaws. He shall have general charge of the
corporate books and records and of the corporate seal, and he shall affix the
corporate seal to any lawfully executed instruments requiring it. He shall have
general charge of the stock transfer books of the corporation. He shall sign
such instruments as may require his signature, and, in general, shall perform
all duties incident to the office of Secretary and such other duties as may be
assigned to him from time to time by the President or by the Board of Directors.
9. Comptroller. The Comptroller shall have custody of all funds and
securities belonging to the corporation and shall receive, deposit or disburse
the same under the direction of the Board of Directors. He shall keep full and
accurate accounts of the finances of the corporation in books especially
provided for that purpose. The Comptroller shall, in general, perform all duties
incident to his office and such other duties as may be assigned to him from time
to time by the President or by the Board of Directors.
10. Assistant Secretaries and Comptrollers. The Assistant Secretaries and
Assistant Comptrollers shall, in the absence or disability of the Secretary or
the Comptroller, respectively, perform the duties and exercise the powers of
those offices and
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<PAGE> 14
shall, in general, perform such other duties as shall be assigned to them by the
Secretary of the Comptroller, respectively, or by the President or the Board of
Directors.
11. Bonds. The Board of Directors may by resolution require that any or all
officers, agents and employees of the corporation give bond to the corporation,
with sufficient sureties, conditioned on the faithful performance of the duties
of their respective offices or positions, and to comply with such other
conditions as may from time to time be required by the Board of Directors.
12. Retirement. It shall be mandatory for all officers of the corporation
to retire at age seventy (70), provided, however, that if the Board of Directors
concludes that it is for the best interest of the corporation, it may waive the
provisions hereof by affirmative vote recorded in the minutes in electing the
Chief Executive Officer, the Chairman, the President or Executive Vice
President.
ARTICLE VI
Contracts, Checks and Deposits
1. Contracts. The Board of Directors may authorize any officer or officers,
agent or agents, to enter into any contract or execute and deliver any
instrument on behalf of the corporation, and such authority may be general or
confined to specific instances.
2. Checks and drafts. All checks, drafts or other orders for payment of
money issued in the name of the corporation shall be signed by such officer or
officers, agent or agents of the
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<PAGE> 15
corporation and in such manner as shall from time to time be determined by
resolution of the Board of Directors.
3. Deposits. All funds of the corporation not otherwise employed shall be
deposited from time to time to the credit of the corporation in such
depositories as the Board of Directors shall direct.
4. Loans. No loans shall be contracted on behalf of the corporation and no
evidences of indebtedness shall be issued in its name unless authorized by a
resolution of the Board of Directors. Such authority may be general or confined
to specific instances.
ARTICLE VII
Certificates for Shares and Transfer Thereof
1. Certificates for shares. Certificates representing shares of the
corporation shall be issued, in such form as the Board of Directors shall
determine, to every shareholder for the fully paid shares owned by him. These
certificates shall be signed by the Chairman or President, and the Secretary,
Assistant Secretary, Treasurer or Assistant Treasurer. The Board of Directors
may authorize the use of facsimile signatures. All certificates shall be
consecutively numbered or otherwise identified; and the name and address of the
persons to whom they are issued, with the number of shares and date of issue,
shall be entered on the stock transfer books of the corporation.
2. Transfer of shares. Transfer of shares shall be made on the stock
transfer books of the corporation only upon surrender of the certificates for
the shares sought to be transferred by the
15
<PAGE> 16
record holder thereof or by his duly authorized agent, transferee or legal
representative. All certificates surrendered for transfer shall be cancelled
before new certificates for the transferred shares shall be issued.
3. Closing transfer books and fixing record date. For the purpose of
determining shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, or entitled to receive payment of any
dividend, or in order to make a determination of shareholders for any other
proper purpose, the Board of Directors may provide that the stock transfer books
shall be closed for a stated period but not to exceed, in any case, fifty days.
If the stock transfer books shall be closed for the purpose of determining
shareholders entitled to notice of or to vote at a meeting of shareholders, such
books shall be closed for at least ten days immediately preceding such meeting.
In lieu of closing the stock transfer books, the Board of Directors may fix
in advance a date as the record date for such determination of shareholders,
such record date in any case to be not more than fifty days and, in case of the
meeting of shareholders, not less than ten days immediately preceding the date
on which the particular action, requiring such determination of shareholders, is
to be taken.
If the stock transfer books are not closed and no record date is fixed for
the determination of shareholders entitled to notice of or to vote at a meeting
of shareholders, or shareholders entitled to receive payment of a dividend, the
date on which notice
16
<PAGE> 17
of the meeting is mailed or the date on which the resolution of the Board of
Directors declaring such dividend is adopted, as the case may be, shall be the
record date for such determination of shareholders.
4. Voting lists. The officer or agent having charge of the stock transfer
books for shares of the corporation shall make, at least ten (10) days before
each meeting of shareholders, a complete list of the shareholders entitled to
vote at such meeting, or any adjournment thereof, arranged in alphabetical
order, with the address of and the number of shares held by each, which list,
for a period of ten (10) days prior to such meeting, shall be kept on file at
the principal office of the corporation and shall be subject to inspection by
any shareholder at any time during usual business hours. Such list shall also be
produced and kept open at the time and place of the meeting and shall be subject
to the inspection of any shareholder during the whole of the meeting. The
original stock transfer book shall be prima facie evidence as to who are the
shareholders entitled to examine such list or transfer books or to vote at any
meeting of shareholders.
5. Lost certificates. The Board of Directors may authorize the issuance of
a new certificate in place of a certificate claimed to have been lost or
destroyed, upon receipt of an affidavit of such fact from the person claiming
the loss or destruction. When authorizing such issuance of a new certificate,
the Board may require the claimant to give the corporation a bond in such sum as
it may direct to indemnify the corporation against loss from any
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<PAGE> 18
claim with respect to the certificate claimed to have been lost or destroyed; or
the Board may, by resolution reciting that the circumstances justify such
action, authorize the issuance of a new certificate without requiring such a
bond.
ARTICLE VIII
General Provisions
1. Dividends. The Board of Directors may from time to time declare, and the
corporation may pay, dividends in cash, stock or property on its outstanding
shares in the manner and upon the terms and conditions provided by law and by
its charter.
2. Waiver of notice. Whenever any notice is required to be given to any
shareholder or Director under the provisions of the laws of Delaware or under
the provisions of the charter or bylaws of this corporation, a waiver thereof in
writing signed by the person or persons entitled to such notice, whether before
or after the time stated therein, shall be equivalent to the giving of such
notice.
3. Fiscal year. The fiscal year of the corporation shall be as fixed by the
Board of Directors. If no fiscal year is fixed, then a calendar year will be
used.
4. Amendments. Except as otherwise provided herein or in the certificate of
incorporation of the corporation, these bylaws may be amended or repealed by the
affirmative vote of a majority of the Directors then holding office at any
regular or special meeting of the Board of Directors, and the stockholders may
make, alter or
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<PAGE> 19
repeal any bylaws, whether or not adopted by them, provided, however, that any
such additional bylaw, alteration or repeal may be adopted only by the
affirmative vote of the holders of 75% or more of the outstanding shares of
capital stock of the corporation entitled to vote generally in election of
Directors at a meeting of stockholders called for such purpose, and provided
further, however, that Article III, Section 2 and 3 hereof may be amended or
repealed only by the affirmative vote of 75% of the Directors then in office.
These Bylaws were adopted as the Bylaws of First Alabama Bancshares, Inc.
by the Interim Directors thereof on the 20th day of August, l970.
The name First Alabama Bancshares, Inc. was changed to Regions Financial
Corporation on May 2, 1994.
19
<PAGE> 1
EXHIBIT 5
[Letterhead of Lange, Simpson, Robinson & Somerville]
October 6, 1997
Regions Financial Corporation
417 North 20th Street
Birmingham, Alabama 35203
Re: Regions Financial Corporation
S-4 Registration Statement
Combination with GF Bancshares, Inc.
Ladies and Gentlemen:
We have acted as counsel for Regions Financial Corporation, a Delaware
corporation ("Regions") in connection with the merger of GF Bancshares, Inc.
("GFB") with and into Regions (the "Merger") and in connection with the
registration of shares of common stock of Regions, par value $.625 per share
("Regions Common Stock"), on Form S-4 under the Securities Act of 1933. The
Merger provides for issuance of shares of common stock of Regions, par value
$.625 per share, to the stockholders of GFB upon consummation of the Merger. The
maximum number of shares of Regions to be issued in the Merger is estimated to
be 667,234.
We have examined and are familiar with the registration statement on Form
S-4 filed with the Securities and Exchange Commission, as such registration
statement has been amended to date. We have examined and are familiar with the
records relating to the organization of Regions and the documents and records as
we have deemed relevant for purposes of rendering this opinion.
<PAGE> 2
Based on the foregoing it is our opinion that upon satisfaction of the
conditions precedent to consummation of the Merger, or waiver of such conditions
capable of being waived, and upon consummation of the Merger, the shares of
Regions Common Stock issued pursuant to the Merger will be duly authorized,
validly issued and outstanding, fully paid and non-assessable, with no personal
liability attaching to the ownership thereof.
We hereby consent to the filing of this opinion as an exhibit to the
registration statement and to the reference to Lange, Simpson, Robinson &
Somerville under the caption "Opinions" in the proxy statement/prospectus
forming a part of the registration statement.
Very truly yours,
/s/ Lange, Simpson, Robinson & Somerville
<PAGE> 1
[ALSTON & BIRD LLP LETTERHEAD]
October 7, 1997
Regions Financial Corporation
417 N. 20th Street
Birmingham, Alabama 35203
GF Bancshares, Inc.
327 West Taylor Street
Griffin, Georgia 30223
Re: Proposed Merger of GF Bancshares, Inc. with and into Regions
Financial Corporation
Ladies and Gentlemen:
We have acted as special tax counsel to Regions Financial Corporation
("Regions"), a corporation organized and existing under the laws of the State of
Delaware, in connection with the proposed merger of GF Bancshares, Inc. ("GF"),
a corporation organized and existing under the laws of the State of Georgia,
with and into Regions (the "Merger"). The Merger will be effected pursuant to
the Agreement and Plan of Merger, dated as of May 29, 1997, by and between GF
and Regions (the "Agreement"). Following the Merger, Griffin Federal Savings
Bank, a wholly-owned, first-tier subsidiary of GF, may be merged (the "Bank
Merger") with and into a wholly-owned, first-tier banking subsidiary of Regions.
In our capacity as counsel to Regions, our opinion has been requested with
respect to certain of the federal income tax consequences of the proposed
Merger.
In rendering this opinion, we have examined (i) the Internal Revenue
Code of 1986, as amended (the "Code") and Treasury Regulations, (ii) the
legislative history of applicable sections of the Code, and (iii) appropriate
Internal Revenue Service and court decisional authority. In addition, we have
relied upon certain information made known to us as more fully described below.
All capitalized terms used herein without definition shall have the respective
meanings specified in the Agreement, and unless otherwise specified, all section
references herein are to the Code.
<PAGE> 2
Regions Financial Corporation
GF Bancshares, Inc.
October 7, 1997
Page 2
INFORMATION RELIED UPON
In rendering the opinions expressed herein, we have examined such
documents as we have deemed appropriate, including:
(1) the Agreement;
(2) the Registration Statement on Form S-4 filed by Regions with
the Securities and Exchange Commission under the Securities
Act of 1933, on October 7, 1997, including the Proxy
Statement/Prospectus for the Special Meeting of the
stockholders of GF Bancshares, Inc.; and
(3) such additional documents as we have considered relevant.
In our examination of such documents, we have assumed, with your
consent, that all documents submitted to us as photocopies faithfully reproduce
the originals thereof, that such originals are authentic, that all such
documents have been or will be duly executed to the extent required, and that
all statements set forth in such documents are accurate.
We have also obtained such additional information and representations
as we have deemed relevant and necessary through consultation with various
officers and representatives of Regions and GF and through certificates provided
by the management of Regions and the management of GF.
You have advised us that the proposed transaction will enable the
combined organization to realize certain economies of scale, provide a wider
array of banking and banking related services to consumers and businesses, and
provide for a stronger market position and for greater financial resources to
meet competitive challenges within the greater metropolitan Atlanta, Georgia
market area.
To achieve these goals, the following will occur pursuant to the
Agreement:
(1) Subject to the terms and conditions of the Agreement, at the
Effective Time, GF shall be merged into and with Regions in accordance with the
provisions of Sections 14-2-1103 and 14-2-1107 of the GBCC and with the effect
provided in Section 14-2-1106 of the GBCC and of Section 258 of the DGCL and
with the effect provided in Section 259 of the DGCL. Regions shall be the
Surviving Corporation of 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 Boards of
Directors of GF and Regions.
(2) Subject to the provisions of Article 3 of the Agreement, at the
Effective Time, by virtue of the Merger and without any action on the part of
the holders thereof, the shares of the constituent corporations shall be
converted as follows:
<PAGE> 3
Regions Financial Corporation
GF Bancshares, Inc.
October 7, 1997
Page 3
(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 GF Common Stock (excluding shares held by GF or
any of its Subsidiaries or by Regions or any of its
Subsidiaries, in each case other than in a fiduciary capacity
or as a result of debts previously contracted) issued and
outstanding at the Effective Time shall be converted into that
multiple of a share of Regions Common Stock (the "Exchange
Ratio") obtained by dividing (i) $18.00 by (ii) the Average
Closing Price (defined to mean the average of the daily last
sale prices for the shares of Regions Common Stock for the ten
(10) consecutive trading days on which such shares are quoted
on the Nasdaq/NMS (as reported by The Wall Street Journal or,
if not reported thereby, any other authoritative source
selected by Regions ending at the close of trading on the last
trading day immediately preceding the date of the
Stockholders' Meeting).
(3) In the event GF changes the number of shares of GF 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, the
Exchange Ratio shall be proportionately adjusted. 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 subsequent to the first day of the ten-day trading period utilized to
calculate the Average Closing Price but prior to the Effective Time, the
Exchange Ratio shall be proportionately adjusted.
(4) Each of the shares of GF Common Stock held by any GF 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.
(5) Any holder of shares of GF Common Stock who perfects such holder's
dissenters' rights of appraisal in accordance with and as contemplated by
Sections 14-2-1301 et seq. of the GBCC shall be entitled to receive the value of
such shares in cash as determined pursuant to such provision of Law; provided,
however, 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 GF 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 GF fails to perfect, or
<PAGE> 4
Regions Financial Corporation
GF Bancshares, Inc.
October 7, 1997
Page 4
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 GF Common Stock is entitled under Article Three
of the Agreement (without interest) upon surrender by such holder of the
certificate or certificates representing shares of GF Common Stock held by such
holder. GF will establish an escrow account with an amount sufficient to satisfy
the maximum aggregate payment that may be required to be paid to dissenting
stockholders. Upon satisfaction of all claims of dissenting stockholders, the
remaining escrowed amount, reduced by payment of the fees and expenses of the
escrow agent, will be returned to GF.
(6) Notwithstanding any other provision of the Agreement, each holder
of shares of GF Common Stock exchanged pursuant to the Merger, or of options to
purchase shares of GF Common Stock, 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, in the case of shares exchanged pursuant to
the Merger, or the date of exercise, in the case of options. The market value of
one share of Regions Common Stock at the Effective Time or the date of exercise,
as the case may be, shall be the last sale price of such common stock on the
Nasdaq/NMS (as reported by The Wall Street Journal or, if not reported thereby,
any other authoritative source) on the last trading day preceding the Effective
Time, in the case of shares exchanged pursuant to the Merger, and the date of
exercise, in the case of options. No such holder will be entitled to dividends,
voting rights, or any other rights as a stockholder in respect of any fractional
shares.
(7) At the Effective Time, all rights with respect to GF Common Stock
pursuant to stock options or stock appreciation rights ("GF Options") granted by
GF under the GF Stock Plans, which are outstanding at the Effective Time,
whether or not exercisable, shall be converted into and become rights with
respect to Regions Common Stock, and Regions shall assume each GF Option, on
substantially the same terms and conditions as the terms of the GF Stock Plan
and stock option agreement by which it is evidenced.
With your consent, we have also assumed that the following statements
are true on the date hereof and will be true on the date the proposed
transaction is consummated:
(1) The fair market value of the Regions Common Stock and other
consideration received in the aggregate by the stockholders of GF will be
approximately equal to the fair market value of the GF Common Stock surrendered
in exchange therefor.
(2) There is no plan or intention on the part of the stockholders of GF
who own one percent (1%) or more of GF Common Stock, and to the best of the
knowledge of the management of GF, there is no plan or intention on the part of
the remaining
<PAGE> 5
Regions Financial Corporation
GF Bancshares, Inc.
October 7, 1997
Page 5
stockholders of GF to sell, exchange, or otherwise dispose of a number of shares
of Regions Common Stock to be received in the proposed transaction that would
reduce their holdings in Regions Common Stock received to a number of shares
having, in the aggregate, a value as of the Effective Time of less than fifty
percent (50%) of the total value of all shares of GF Common Stock outstanding
immediately prior to the Effective Time. For purposes of this assumption, shares
of GF Common Stock exchanged for cash or other property, surrendered by
dissenters or exchanged for cash in lieu of fractional shares of Regions Common
Stock will be treated as outstanding GF Common Stock as of the Effective Time.
Moreover, shares of GF Common Stock and shares of Regions Common Stock held by
GF stockholders and otherwise sold, redeemed, or disposed of prior or subsequent
to the transaction will be considered in making this assumption.
(3) Regions has no plan or intention to redeem or otherwise reacquire
any shares of Regions Common Stock issued in the Merger, except for purchases of
stock in the open market in the normal course of business executed through an
independent broker in which Regions is not aware of the identity of any seller
or in private placement transactions in which the sellers are not former GF
stockholders.
(4) Regions has no plan or intention to dispose of any of the assets of
GF acquired in the transaction, except for the Bank Merger or dispositions made
in the ordinary course of business or transfers described in Section
368(a)(2)(C) of the Code.
(5) The liabilities of GF assumed by Regions and the liabilities to
which the transferred assets of GF are subject were incurred by GF in the
ordinary course of its business.
(6) Following the transaction, Regions will continue the historic
business of GF or use a significant portion of GF's historic business assets in
a business.
(7) Regions, GF, and the stockholders of GF will pay their respective
expenses, if any, incurred in connection with the transaction, except that
Regions shall bear and pay the filing fees payable in connection with the
Registration Statement and the Proxy Statement and printing costs incurred in
connection with the printing of the Registration Statement and the Proxy
Statement.
(8) There is no intercorporate indebtedness existing between GF and
Regions that was issued, acquired, or will be settled at a discount.
(9) GF is not under the jurisdiction of a court in a case under Title
11 of the United States Code or a receivership, foreclosure, or similar
proceeding in a federal or state court.
(10) Both the fair market value and the total adjusted basis of the
assets of GF transferred to Regions will equal or exceed the sum of the
liabilities assumed by Regions plus the amount of the liabilities, if any, to
which the transferred assets are subject.
<PAGE> 6
Regions Financial Corporation
GF Bancshares, Inc.
October 7, 1997
Page 6
(11) The payment of cash to GF stockholders in lieu of fractional
shares of Regions Common Stock is solely for the purpose of avoiding the expense
and inconvenience to Regions of issuing fractional shares and does not represent
separately bargained for consideration. The total cash consideration that will
be paid in the transaction to the GF stockholders instead of issuing fractional
shares of Regions Common Stock will not exceed one percent (1%) of the total
consideration that will be issued in the transaction to the GF stockholders in
exchange for their shares of GF Common Stock. The fractional share interests of
each GF stockholder will be aggregated, and no GF stockholder will receive cash
in an amount equal to or greater than the value of one full share of Regions
Common Stock.
(12) None of the compensation received by any stockholder-employees of
GF will be separate consideration for, or allocable to, any of their shares of
GF Common Stock; none of the shares of Regions Common Stock received by any
stockholder-employees will be separate consideration for, or allocable to, any
employment agreement; and the compensation paid to any stockholder-employees
will be for services actually rendered and will be commensurate with amounts
paid to third parties bargaining at arm's length for similar services.
(13) At all times during the five-year period ending on the Effective
Date of the Merger, the fair market value of all of GF's United States real
property interests was and will have been less than fifty percent (50%) of the
fair market value of the total of (a) its United States real property interests,
(b) its interests in real property located outside the United States, and (c)
its other assets used or held for use in a trade or business. For purposes of
the preceding sentence, (i) United States real property interests include all
interests (other than an interest solely as a creditor) in real property and
associated personal property (such as movable walls and furnishings) located in
the United States or the Virgin Islands and interests in any corporation (other
than a controlled corporation) owning any United States real property interest,
(ii) GF is treated as owning its proportionate share (based on the relative fair
market value of its ownership interest to all ownership interests) of the assets
owned by any controlled corporation or any partnership, trust, or estate in
which GF is a partner or beneficiary, and (iii) any such entity in turn is
treated as owning its proportionate share of the assets owned by any controlled
corporation or any partnership, trust, or estate in which the entity is a
partner or beneficiary. As used in this paragraph, "controlled corporation"
means any corporation at least fifty percent (50%) of the fair market value of
the stock of which is owned by GF, in the case of a first-tier subsidiary of GF
or by a controlled corporation, in the case of a lower-tier subsidiary.
(14) Neither Regions nor GF is an investment company. For purposes of
the foregoing, an "investment company" is a corporation that is a regulated
investment company, a real estate investment trust, or a corporation fifty
percent (50%) or more of
<PAGE> 7
Regions Financial Corporation
GF Bancshares, Inc.
October 7, 1997
Page 7
the value of whose total assets are stock and securities and eighty percent
(80%) or more of the value of whose total assets are assets held for investment.
In making the fifty percent (50%) and eighty percent (80%) determinations under
the preceding sentence, stock and securities in any subsidiary corporation shall
be disregarded and the parent corporation shall be deemed to own its ratable
share of the subsidiary's assets, and a corporation shall be considered a
subsidiary if the parent owns fifty percent (50%) or more of the combined voting
power of all classes of stock entitled to vote, or fifty percent (50%) or more
of the total value of shares of all classes of stock outstanding.
(15) The Agreement represents the entire understanding of GF and
Regions with respect to the Merger.
OPINIONS
Based solely on the information submitted and the representations set
forth above and assuming that the Merger will take place as described in the
Agreement and that the representations made by Regions and GF (including the
representation that GF stockholders will maintain sufficient equity ownership
interests in Regions after the Merger) are true and correct at the time of the
consummation of the Merger, we are of the opinion that:
(1) Provided the Merger qualifies as a statutory merger under the DGCL
and the GBCC and notwithstanding the Bank Merger, the Merger will be a
reorganization within the meaning of Section 368(a) of the Code. GF and Regions
will each be "a party to a reorganization" within the meaning of Section 368(b)
of the Code.
(2) The stockholders of GF will recognize no gain or loss upon the
exchange of their GF Common Stock solely for shares of Regions Common Stock.
(3) The basis of the Regions Common Stock received by the GF
stockholders in the proposed transaction will, in each instance, be the same as
the basis of the GF Common Stock surrendered in exchange therefor, less the
basis of any fractional share of Regions Common Stock settled by cash payment.
(4) The holding period of the Regions Common Stock received by the GF
stockholders will, in each instance, include the period during which the GF
Common Stock surrendered in exchange therefor was held, provided that the GF
Common Stock was held as a capital asset on the date of the exchange.
(5) The payment of cash to GF stockholders in lieu of fractional share
interests of Regions Common Stock will be treated for federal income tax
purposes as if the fractional shares were distributed as part of the exchange
and then were redeemed by Regions. These cash payments will be treated under
Section 302(a) of the Code as having been received as distributions in full
payment in exchange for the shares redeemed. Generally any gain or loss
recognized upon such exchange will be capital gain or loss,
<PAGE> 8
Regions Financial Corporation
GF Bancshares, Inc.
October 7, 1997
Page 8
provided the fractional share would constitute a capital asset in the hands of
the exchanging stockholder.
(6) Where solely cash is received by a GF stockholder in exchange for
GF Common Stock pursuant to the exercise of dissenters' rights, such cash will
be treated as having been received in redemption of such holder's GF Common
Stock, subject to the provisions and limitations of Section 302 of the Code.
The opinions expressed herein are based upon existing statutory,
regulatory, and judicial authority, any of which may be changed at any time with
retroactive effect. In addition, our opinions are based solely on the documents
that we have examined, the additional information that we have obtained, and the
statements set out herein, which we have assumed and you have confirmed to be
true on the date hereof and will be true on the date on which the proposed
transaction is consummated. Our opinions cannot be relied upon if any of the
facts contained in such documents or if such additional information is, or later
becomes, inaccurate, or if any of the statements set out herein is, or later
becomes, inaccurate. Finally, our opinions are limited to the tax matters
specifically covered thereby, and we have not been asked to address, nor have we
addressed, any other tax consequences of the proposed transaction, including for
example any issues related to intercompany transactions, accounting methods, bad
debt reserves, or changes in accounting methods resulting from the Merger.
This opinion is being provided solely for the benefit of Regions, GF
and its stockholders. No other person or party shall be entitled to rely on this
opinion.
We consent to the use of this opinion and to the references made to the
firm under the caption "Description of the Transaction--Certain Federal Income
Tax Consequences of the Merger" in the Proxy Statement/Prospectus constituting
part of the Registration Statement on Form S-4 of Regions.
Very truly yours,
ALSTON & BIRD LLP
By: /s/ Philip C. Cook
-------------------------------------
Philip C. Cook
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-4) and related Prospectus of Regions Financial
Corporation for the registration of up to 667,234 shares of its common stock and
to the incorporation by reference therein of our report dated February 4, 1997
(except for the last two paragraphs of Note Q as to which the date is March 13,
1997), with respect to the consolidated financial statements of Regions
Financial Corporation incorporated by reference in its Annual Report (Form 10-K)
for the year ended December 31, 1996, filed with the Securities and Exchange
Commmission.
/s/ Ernst & Young LLP
Birmingham, Alabama
October 1, 1997
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
We hereby consent to the incorporation by reference of our report dated August
13, 1997, relating to the consolidated financial statements of G F Bancshares,
Inc. and Subsidiary, in the Registration Statement on Form S-4 and Proxy
Statement/Prospectus, and to the reference to our firm therein under the
caption "Experts."
/s/ Bricker & Melton, P.A.
Duluth, Georgia
October 6, 1997
<PAGE> 1
CONSENT OF THE ROBINSON-HUMPHREY COMPANY
We consent to the inclusion in this Registration Statement on Form S-4
of our opinion, dated October 20, 1997, as set forth as Appendix B to the Proxy
Statement/Prospectus and to the summarization thereof in the Proxy
Statement/Prospectus under the captions "Summary-Opinion of GFB's Financial
Advisor" and "Description of the Transaction-Opinion of GFB's Financial
Advisor." In giving such consent, we do not thereby admit that we come
within the category of persons whose consent is required under Section 7 of the
Securities Act of 1933 or the Rules and Regulations of the Securities and
Exchange Commission thereunder.
/s/ THE ROBINSON-HUMPHREY COMPANY
Atlanta, Georgia
October 20, 1997
<PAGE> 1
GF BANCSHARES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder hereby appoints Ron J. Franklin and Robert H.
Crossfield, and each of them, with full power of substitution, as Proxies to
represent and to vote as designated below, all the shares of common stock of GF
Bancshares, Inc. (the "Company") held of record by the undersigned on October
16, 1997, at the Special Meeting of Stockholders (the "Special Meeting") to be
held on November 25, 1997, or any adjournments or postponements thereof.
1. Proposal to approve the Agreement and Plan of Merger, dated as of May 29,
1997 (the "Agreement"), by and between the Company and Regions Financial
Corporation ("Regions") pursuant to which the Company will merge with and
into Regions and each share of the Company's common stock (except for
certain shares held by the Company or Regions) will be converted into that
fraction of share of Regions Common Stock determined by dividing $18.00 by
the average of the daily last sale prices of Regions Common Stock on the
Nasdaq National Market for the 10 consecutive trading days on which such
shares are quoted on the Nasdaq National Market ending on the last trading
day immediately preceding the Special Meeting, and under such other terms
and conditions as are set forth in the Agreement:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. To transact such other business as may properly come before the meeting or
any adjournment thereof.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder, and in the discretion of the persons
named as Proxies on all other matters which may properly come before the Special
Meeting or any adjournment or postponement thereof. If no direction is made,
this proxy will be voted in favor
- --------------------------------------------------------------------------------
of Proposal 1.
This Proxy revokes all prior proxies with respect to the Special Meeting and
may be revoked prior to its exercise.
Please date and sign exactly as name appears on your stock certificate. When
shares are held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such. If
a corporation, please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
Dated:
, 1997
--------------------------------
(Print Name of Stockholder)
--------------------------------
(Signature of Stockholder)
--------------------------------
(Print Name of Stockholder)
--------------------------------
(Signature of Stockholder)
PLEASE MARK, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE
ENCLOSED POSTAGE-PREPAID ENVELOPE
