<PAGE> 1
As filed with the Securities and Exchange Commission on July 10, 2000.
Registration No.
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-4
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
----------------------
Regions Financial Corporation
(Exact Name of Registrant as Specified in its Charter)
----------------------
<TABLE>
<S> <C> <C>
Delaware 6711 63-0589368
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
</TABLE>
417 North 20th Street
Birmingham, AL 35203
(205) 944-1300
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
----------------------
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)
----------------------
Copies to:
<TABLE>
<S> <C> <C>
CHARLES C. PINCKNEY FRANK M. CONNER III ANTHONY J. CORRERO, III
LANGE, SIMPSON, ROBINSON & ALSTON & BIRD LLP CORRERO FISHMAN HAYGOOD PHELPS
SOMERVILLE LLP 601 PENNSYLVANIA AVENUE, N.W. WALMSLEY & CASTEIX, L.L.P.
417 NORTH 20TH STREET, SUITE 1700 NORTH BUILDING, SUITE 1100 BANK ONE CENTER, 46TH FLOOR
BIRMINGHAM, AL 35203 WASHINGTON, D.C. 20004 201 ST. CHARLES AVENUE
(205) 250-5000 (202) 756-3303 NEW ORLEANS, LOUISIANA 70170-4600
(504) 586-5252
</TABLE>
--------------------
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. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
--------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of each Proposed maximum Proposed maximum
class of securities Amount to be offering price aggregate Amount of
to be registered registered per unit* offering price* registration fee
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 2,910,219 $7.9746567 $23,208,000 $6,126.91
===================================================================================================
</TABLE>
*Calculated in accordance with Rule 457(f), based on the total shareholders'
equity of the company being acquired at March 31, 2000.
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
PROXY STATEMENT PROSPECTUS
FIRST NATIONAL BANCSHARES REGIONS FINANCIAL CORPORATION
OF LOUISIANA, INC. UP TO 2,910,219 SHARES OF COMMON STOCK
MERGER PROPOSED -- YOUR VOTE IS VERY IMPORTANT
The boards of directors of First National Bancshares of Louisiana, Inc.
and Regions Financial Corporation have agreed on a merger of First National and
Regions. Regions will be the surviving corporation in the merger. Regions is a
regional bank holding company headquartered in Birmingham, Alabama. Regions has
banking operations in Alabama, Arkansas, Florida, Georgia, Louisiana, South
Carolina, Tennessee, and Texas.
If the merger is completed, you will receive .7045 of a share of
Regions common stock for each of your shares of First National common stock,
subject to possible adjustment if the market price of Regions common stock
averaged over a specified period is below $19.80 per share or above $24.20 per
share at the time of the special meeting. Regions stockholders will continue to
own their existing shares of Regions common stock after the merger.
We cannot complete the merger unless the stockholders of First National
approve it. First National has scheduled a special meeting for its stockholders
to vote on the merger.
YOUR VOTE IS VERY IMPORTANT. Whether or not you plan to attend the
stockholder meeting, please take the time to vote by completing and mailing the
enclosed proxy card. If you sign, date and mail your proxy card without
indicating how you want to vote, your proxy will be voted in favor of the
merger. If you do not return your card, the effect will be the same as a vote
against the merger.
Regions common stock is traded on the Nasdaq National Market under the
symbol "RGBK." Based on the closing price of Regions common stock on July
_______, 2000 of $_______, you would receive approximately $_______ worth of
Regions common stock for each of your shares of First National common stock.
The date, time, and place of the special meeting of stockholders is as
follows:
_______, 2000 _______ p.m.
Main Office, First National Bancshares of Louisiana, Inc., 625 Murray Street,
Alexandria, Louisiana 71301
This Proxy Statement-Prospectus gives you detailed information about
the proposed merger. You can also get information about Regions from documents
filed with the Securities and Exchange Commission. We encourage you to read this
entire document carefully. Your board of directors urges you to exercise your
right to vote on this important transaction.
Donald S. Kramer
President
First National Bancshares of Louisiana, Inc.
SHARES OF REGIONS COMMON STOCK 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.
<PAGE> 3
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
REGULATORS HAS APPROVED THE REGIONS COMMON STOCK TO BE ISSUED UPON COMPLETION OF
THE MERGER OR DETERMINED IF THIS PROXY STATEMENT-PROSPECTUS IS ACCURATE OR
ADEQUATE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Proxy Statement-Prospectus dated _______, 2000, and first mailed to stockholders
on _______, 2000.
<PAGE> 4
We have not authorized anyone to give any information or make any
representation about the merger or our companies that differs from, or adds to,
the information in this Proxy Statement-Prospectus or in Regions' documents that
are publicly filed with the Securities and Exchange Commission. Therefore, if
anyone does give you different or additional information, you should not rely on
it.
If you are in a jurisdiction where it is unlawful to offer to exchange
or sell, or to ask for offers to exchange or buy, the securities offered by this
Proxy Statement-Prospectus or to ask for proxies, or if you are a person to whom
it is unlawful to direct such activities, then the offer presented by this Proxy
Statement-Prospectus does not extend to you.
The information contained in this Proxy Statement-Prospectus speaks
only as of its date unless the information specifically indicates that another
date applies. There may be changes in the affairs of Regions or First National
since the date of this Proxy Statement-Prospectus which are not reflected in
this document.
Information in this Proxy Statement-Prospectus about Regions Financial
Corporation has been supplied by Regions, and information about First National
Bancshares of Louisiana, Inc. has been supplied by First National.
<PAGE> 5
FIRST NATIONAL BANCSHARES OF LOUISIANA, INC.
625 MURRAY STREET, ALEXANDRIA, LOUISIANA, 71301
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD _______, 2000
First National Bancshares of Louisiana, Inc. will hold a Special
Meeting of Stockholders at First National's main office, located at 625 Murray
Street, Alexandria, Louisiana, 71301 on _______, 2000, at _______:00 p.m., local
time. At the special meeting the following matters will be presented for
stockholder vote:
1. Merger. The Agreement and Plan of Merger, dated as of April 4,
2000, by and between First National and Regions Financial Corporation. If the
agreement is approved and the merger is completed, (1) First National will merge
with and into Regions with Regions as the surviving corporation and (2) each
share of First National common stock (excluding certain shares held by First
National, Regions, or their respective subsidiaries and excluding all shares
held by stockholders who perfect their dissenters' rights) will be converted
into .7045 of a share of Regions common stock, subject to possible adjustment,
with cash to be paid in lieu of any remaining fractional share interest, all as
described more fully in the accompanying Proxy Statement-Prospectus; and
2. Other Business. Such other business as may properly come
before the special meeting, including adjourning the special meeting to permit,
if necessary, further solicitation of proxies.
Stockholders of record at the close of business on _______, 2000, will
receive notice of and may vote at the special meeting or any adjournment or
postponement thereof.
You have a right to dissent from the merger and obtain payment of the
fair value of your First National shares in cash by complying with the
applicable provisions of Louisiana law, which are attached to the accompanying
Proxy Statement-Prospectus as Appendix C. DISSENTING STOCKHOLDERS WHO COMPLY
WITH THE PROCEDURAL REQUIREMENTS OF THE BUSINESS CORPORATION LAW OF LOUISIANA
WILL BE ENTITLED TO RECEIVE PAYMENT OF THE FAIR CASH VALUE OF THEIR SHARES IF
THE MERGER IS EFFECTED UPON APPROVAL BY LESS THAN 80% OF THE CORPORATION'S TOTAL
VOTING POWER.
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. You
may revoke your proxy by filing with the Secretary of First National 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
Glenn W. Butler
Corporate Secretary
_______, 2000
<PAGE> 6
TABLE OF CONTENTS
<TABLE>
<S> <C>
SUMMARY............................................................................................. 1
The Companies ................................................................................. 1
The Merger .................................................................................... 1
Comparative Per Share Market Price Information ................................................ 2
Reasons for the Merger ........................................................................ 2
Opinion of Financial Advisor .................................................................. 3
The Special Meeting ........................................................................... 3
Record Date; Voting Power ..................................................................... 3
Vote Required ................................................................................. 3
Conditions to Completion of the Merger ........................................................ 3
Termination of the Merger Agreement ........................................................... 4
Federal Income Tax Consequences ............................................................... 4
Accounting Treatment .......................................................................... 5
Interests of Persons in the Merger That Are Different from Yours .............................. 5
Dissenters' Appraisal Rights .................................................................. 5
Regulatory Approvals .......................................................................... 5
Comparative Per Share Data..................................................................... 6
Selected Historical Financial Data of Regions.................................................. 8
THE SPECIAL MEETING................................................................................. 11
General........................................................................................ 11
Record Date; Vote Required..................................................................... 12
THE MERGER.......................................................................................... 12
General........................................................................................ 13
Possible Adjustment of Exchange Ratio.......................................................... 13
Treatment of First National Options............................................................ 15
Background of the Merger....................................................................... 15
First National's Reasons for the Merger........................................................ 16
Regions' Reasons for the Merger................................................................ 17
Opinion of First National's Financial Advisor.................................................. 17
Effective Time of the Merger................................................................... 23
Distribution of Regions Stock Certificates and Payment For Fractional Shares................... 23
Conditions to Consummation of the Merger....................................................... 24
Regulatory Approvals........................................................................... 24
Waiver, Amendment, and Termination of the Merger Agreement..................................... 25
Conduct of Business Pending the Merger......................................................... 26
Management Following the Merger................................................................ 27
Interests of Certain Persons in the Merger..................................................... 27
Dissenting Stockholders........................................................................ 28
Federal Income Tax Consequences of the Merger.................................................. 31
Accounting Treatment........................................................................... 32
Expenses and Fees ............................................................................. 32
Resales of Regions Common Stock................................................................ 32
EFFECT OF THE MERGER ON RIGHTS OF STOCKHOLDERS...................................................... 33
Antitakeover Provisions Generally.............................................................. 33
Authorized Capital Stock....................................................................... 34
Amendment of Certificate or Articles of Incorporation and Bylaws............................... 35
Classified Board of Directors and Absence of Cumulative Voting................................. 35
Removal of Directors........................................................................... 36
Limitations on Director Liability.............................................................. 36
Indemnification ............................................................................... 37
Special Meetings of Stockholders............................................................... 37
Actions by Stockholders Without a Meeting...................................................... 38
Stockholder Nominations........................................................................ 38
</TABLE>
<PAGE> 7
<TABLE>
<S> <C>
Mergers, Consolidations, and Sales of Assets Generally......................................... 38
Business Combinations with Certain Persons..................................................... 39
Dissenters' Rights............................................................................. 40
Stockholders' Rights to Examine Books and Records.............................................. 41
Dividends ..................................................................................... 41
COMPARATIVE MARKET PRICES AND DIVIDENDS............................................................. 43
INFORMATION ABOUT FIRST NATIONAL.................................................................... 45
Competition.................................................................................... 45
Legal Proceedings ............................................................................. 45
Management .................................................................................... 45
Transactions with Management................................................................... 47
Voting Securities and Principal Stockholders................................................... 47
INFORMATION ABOUT REGIONS........................................................................... 48
General........................................................................................ 48
Recent Developments............................................................................ 48
SUPERVISION AND REGULATION.......................................................................... 50
General........................................................................................ 50
Payment of Dividends........................................................................... 51
Capital Adequacy .............................................................................. 52
Prompt Corrective Action....................................................................... 53
FDIC Insurance Assessments..................................................................... 54
DESCRIPTION OF REGIONS COMMON STOCK................................................................. 55
STOCKHOLDER PROPOSALS............................................................................... 55
FORWARD LOOKING STATEMENTS.......................................................................... 55
EXPERTS ............................................................................................ 56
OPINIONS ........................................................................................... 57
WHERE YOU CAN FIND MORE INFORMATION................................................................. 57
APPENDIX A--Agreement and Plan of Merger........................................................... A-1
APPENDIX B--Opinion of Alex Sheshunoff & Co. ...................................................... B-1
APPENDIX C--Copy of Section 131 of the Louisiana Business Corporation Law,
pertaining to dissenters' rights.............................................................. C-1
</TABLE>
<PAGE> 8
SUMMARY
This summary highlights selected information from this Proxy
Statement-Prospectus. It does not contain all of the information that is
important to you. You should carefully read this entire document and the
documents to which we have referred in order to understand fully the merger and
to obtain a more complete description of the legal terms of the merger. See
"Where You Can Find More Information" (page 56). Each item in this summary
includes a page reference that directs you to a more complete description in
this document of the topic discussed.
THE COMPANIES (PAGES 45 AND 48)
REGIONS FINANCIAL CORPORATION
417 North 20th Street
Birmingham, Alabama 35203
(205) 944-1300
Regions is incorporated in Delaware and is a regional bank holding company.
Regions provides banking and other financial services. Regions has banking
operations in Alabama, Arkansas, Florida, Georgia, Louisiana, South Carolina,
Tennessee, and Texas. As of March 31, 2000, Regions' total assets were about
$41.4 billion, deposits were about $32.0 billion, and stockholders' equity was
about $3.1 billion.
The section of this Proxy Statement-Prospectus under the caption "Where You Find
More Information" refers you to places where you can find more information about
Regions.
First National Bancshares of Louisiana, Inc.
625 Murray Street
Alexandria, Louisiana, 71301
(318) 445-4531
First National is incorporated in Louisiana and is a bank holding company. First
National owns Security First National Bank, a national bank which serves
customers primarily in Rapides and Lincoln Parishes in central and northern
Louisiana. As of March 31, 2000, First National's total assets were about $258
million, deposits were about $218 million, and stockholders' equity was about
$23 million.
THE MERGER (PAGE 12)
First National will merge with Regions Financial Corporation. Regions
will be the surviving corporation in the merger. When the merger is completed,
you will receive .7045 of a share of Regions stock for each share of First
National stock that you own. This exchange ratio is subject to possible
adjustment based on the average of the closing prices of Regions common stock
over a specified period, as explained under the caption "The Merger--Possible
Adjustment of Exchange Ratio" on page 13.
You will not receive a fraction of a share. Instead, you will receive a
cash payment for any fraction of a share to which you may become entitled.
If the merger is approved by less than 80% of the total voting power of
First National and if you elect to dissent from the merger under Louisiana law
and follow the required procedures, you will receive a cash payment for your
shares of First National common stock instead of receiving Regions common
<PAGE> 9
stock. More information about your rights to dissent from the merger, and the
procedures you must follow should you choose to do so, is included under the
heading "The Merger -- Dissenting Stockholders" at page 28.
The merger agreement provides for an adjustment of the exchange ratio
if the trading price of Regions common stock falls below $19.80 per share or
rises above $24.20 per share, averaged over a ten trading day period immediately
prior to the special meeting. This mechanism is explained in detail under the
heading "The Merger--Possible Adjustment of Exchange Ratio" at page 13. The
effect of the adjustment provision is to assure that the approximate value of
the merger consideration you will receive for each share of First National
common stock, as of the date of the special meeting, will not be less than
$13.95, and likewise it will not exceed $17.05.
We have attached the merger agreement to this Proxy
Statement-Prospectus as Appendix A. We encourage you to read the merger
agreement. It is the legal document that establishes the terms and conditions of
the merger.
COMPARATIVE PER SHARE MARKET PRICE INFORMATION (PAGE 42)
Shares of Regions are quoted on the Nasdaq National Market under the
symbol "RGBK." Shares of First National are not quoted on any established
market. On April 3, 2000, the last full trading day prior to the public
announcement of the merger, Regions stock closed at $24.50 per share. On
_______, 2000, Regions stock closed at $_______ per share and the last known
normal price of First National stock was $10.00 per share although some shares
had traded for $13.50 per share.
The market value of the consideration that you will receive in the
merger for each share of First National common stock you hold would be $17.05
based on Regions' April 3, 2000 closing price and $_______ based on Regions'
_______, 2000 closing price. Of course, the market price of Regions common stock
will fluctuate prior to and after completion of the merger, while the exchange
ratio will be fixed as of the last trading day before the special meeting.
Therefore, you should obtain current stock price quotations for Regions common
stock.
REASONS FOR THE MERGER (PAGE 16)
Before deciding to approve the merger, your board of directors
considered the financial condition and prospects of First National, information
about Regions, the financial terms of the merger, the likelihood the bank
regulators will approve the merger, the federal income tax consequences of the
merger, the advice of First National's legal and financial advisors, and other
factors. Your board of directors decided the merger is advisable and is in your
best interests as stockholders.
To review the background of and reasons for the merger in greater
detail, please see the discussion under the headings "The Merger--Background of
the Merger" and "The Merger--First National's Reasons for the Merger" at pages
16 and 17.
OPINION OF FINANCIAL ADVISOR (PAGE 18)
In deciding to approve the merger, your board of directors considered
the opinion of its financial advisor, Alex Sheshunoff & Co., that as of the date
of the opinion the exchange ratio was fair from a
2
<PAGE> 10
financial point of view to you as First National stockholders. We have attached
this opinion as Appendix B to this Proxy Statement-Prospectus. You should read
it carefully.
THE SPECIAL MEETING (PAGE 11)
The First National special meeting will be held at First National's
main office, 625 Murray Street, Alexandria, Louisiana, 71301, at _______ p.m. on
_______, 2000. At the special meeting, First National stockholders will be asked
to approve the merger agreement. You may vote either by attending the special
meeting and voting your shares or by completing the enclosed proxy card and
returning it to First National prior to the special meeting.
RECORD DATE; VOTING POWER (PAGE 12)
You can vote at the First National special meeting if you owned First
National common stock as of the close of business on _______, 2000, the record
date. On that date, 3,412,417 shares of First National common stock were
outstanding and therefore are allowed to vote at the special meeting. You will
be able to cast one vote for each share of First National common stock you owned
on _______, 2000.
Regions stockholders will not vote on the merger.
VOTE REQUIRED (PAGE 12)
To approve the merger, First National stockholders who hold at least
two-thirds of the outstanding shares of common stock present at the First
National special meeting must vote for the merger. If you do not vote, this will
have the same effect as a vote against the merger.
All together, the directors and officers of First National can cast
about 34% of the votes entitled to be cast at the First National special
meeting. Certain members of your board of directors have agreed to vote all of
their shares in favor of the merger.
CONDITIONS TO COMPLETION OF THE MERGER (PAGE 24)
The completion of the merger depends on a number of conditions being
met, including the following:
- First National stockholders approving the merger;
- Receipt of all required regulatory approvals and the expiration of any
regulatory waiting periods;
- The absence of any governmental or court order blocking completion of
the merger, or of any proceedings by a government body trying to block
it;
3
<PAGE> 11
- Receipt of an opinion of counsel that the U.S. federal income tax
treatment to you the stockholders and to First National in the merger
will generally be tax-free as we have described it to you in this Proxy
Statement-Prospectus;
In cases where the law permits, a party to the merger agreement could
elect to waive a condition that has not been satisfied and complete the merger
although it is entitled not to. We cannot be certain whether or when any of the
conditions we have listed will be satisfied (or waived, where permissible), or
that the merger will be completed.
TERMINATION OF THE MERGER AGREEMENT (PAGE 25)
We can agree at any time to terminate the merger agreement without
completing the merger, even if you, the stockholders, have already voted to
approve it.
Moreover, either of the parties can terminate the merger agreement in
the following circumstances:
- After a final decision by a governmental authority to prohibit the
merger, or after the rejection of an application for a governmental
approval required to complete the merger;
- If the merger is not completed by December 31, 2000;
- If the First National stockholders do not approve the merger; or
- If the other party violates, in a significant way, any of its
representations, warranties or obligations under the merger agreement
and the party seeking termination is not in violation of the merger
agreement.
The merger agreement may be amended by the written agreement of Regions
and First National. The parties can amend the merger agreement without
stockholder approval, even if the First National stockholders have already
approved the merger. However, First National stockholders must approve any
amendments that would modify in a material respect the type or amount of
consideration that you will receive in the merger.
FEDERAL INCOME TAX CONSEQUENCES (PAGE 31)
We have structured the merger with the intent that you will not
recognize any gain or loss for U.S. federal income tax purposes in the merger
when you exchange all of your shares of First National common stock for shares
of Regions common stock. You may, however, recognize taxable gain or loss
related to any cash you receive instead of a fractional share of Regions common
stock. We have conditioned the merger on our receipt of legal opinions that this
will be the case, but these opinions will not bind the Internal Revenue Service,
which could take a different view.
THIS TAX TREATMENT MAY NOT APPLY TO CERTAIN FIRST NATIONAL
STOCKHOLDERS, INCLUDING THE TYPES OF FIRST NATIONAL STOCKHOLDERS DISCUSSED ON
PAGE 31, AND WILL NOT APPLY TO ANY FIRST NATIONAL STOCKHOLDER WHO DISSENTS FROM
THE MERGER UNDER LOUISIANA LAW. DETERMINING THE ACTUAL TAX CONSEQUENCES OF THE
MERGER TO YOU CAN BE COMPLICATED. THEY WILL DEPEND ON YOUR SPECIFIC SITUATION
4
<PAGE> 12
AND MANY VARIABLES NOT WITHIN OUR CONTROL. YOU SHOULD CONSULT YOUR OWN TAX
ADVISOR FOR A FULL UNDERSTANDING OF THE MERGER'S TAX CONSEQUENCES.
ACCOUNTING TREATMENT (PAGE 32)
We expect the merger to qualify for purchase accounting treatment,
meaning that the assets and liabilities of First National will be recorded at
their estimated fair values and added to those of Regions.
INTERESTS OF PERSONS IN THE MERGER THAT ARE DIFFERENT FROM YOURS (PAGE 27)
Some of the officers of First National have benefit and compensation
plans that provide them with interests in the merger that are different from, or
in addition to, their interests as stockholders of First National. In
particular, they hold outstanding options under First National's existing stock
option plan, which will be converted into stock options to acquire Regions stock
after the merger, will be entitled to certain payments on completion of the
merger, and are parties to agreements with Regions that will take effect upon
completion of the merger. Also, members of First National's board of directors
and its officers are entitled to indemnification under the merger agreement.
For more information concerning these matters, please refer to the
discussion under the heading "The Merger--Interests of Certain Persons in the
Merger" on page 27.
DISSENTERS' APPRAISAL RIGHTS (PAGE 40)
If the merger is approved by less than 80% of First National's
outstanding stock, Louisiana law permits you to dissent from the merger and to
have the fair value of your stock appraised by a court and paid to you in cash.
To do this, you must follow certain procedures, including the filing of certain
notices and refraining from voting your shares in favor of the merger. If you
dissent from the merger, your shares of First National common stock will not be
exchanged for shares of Regions common stock in the merger, and your only right
will be to receive the appraised value of your shares in cash.
REGULATORY APPROVALS (PAGE 24)
The merger cannot be completed unless Regions obtains the approval of
the Board of Governors of the Federal Reserve System. The U.S. Department of
Justice has input into the Federal Reserve Board's approval process. Federal law
requires us to wait for up to 30 days before completing the merger after the
Federal Reserve Board has approved it, which the Federal Reserve Board may
shorten to 15 days.
In addition, the merger is subject to notice to the Commissioner of
Financial Institutions of the state of Louisiana.
Regions has filed all of the required notices with these regulatory
authorities. While we do not know of any reason why Regions should not obtain
the remaining regulatory approvals in a timely manner, we cannot be certain
whether or when Regions will obtain them.
5
<PAGE> 13
COMPARATIVE PER SHARE DATA
The following table shows information about our companies' income per
share, dividends per share and book value per share, and similar information
reflecting the merger of the two companies (which is referred to as "pro forma"
information). In presenting the comparative pro forma information for certain
time periods, we assumed that the two companies had been merged throughout those
periods.
In presenting the comparative pro forma information, we also assumed
that Regions will record First National assets and liabilities at their
estimated fair values and add them to the assets and liabilities of Regions for
accounting and financial reporting purposes (a method which is referred to as
the "purchase" method of accounting).
The information listed as "equivalent pro forma" was computed by
multiplying the pro forma amounts by the exchange ratio of .7045. It is intended
to reflect the fact that First National stockholders will be receiving .7045 of
a share of Regions common stock for each share of First National common stock
exchanged in the merger. This may not be the actual exchange ratio, since the
exact ratio will not be determined until shortly before the special meeting.
The pro forma information, while helpful in illustrating the financial
attributes of the combined company under one set of assumptions, does not
attempt to predict or suggest future results. Also, the information we have set
forth for the three-month period ended March 31, 2000 does not indicate what the
results will be for the full 2000 fiscal year.
The information in the following table is based on the historical
financial information of the two companies. See "Where You Can Find More
Information."
6
<PAGE> 14
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEAR ENDED
------------------ DECEMBER 31,
2000 1999 1999
------ ------ ------
(Unaudited) (Unaudited except Regions
and First National historical)
<S> <C> <C> <C>
NET INCOME PER COMMON SHARE
Regions historical.................................. $ .66 $ .58 $ 2.37
Regions historical - diluted........................ .66 .57 2.35
First National historical........................... .36 .28 1.42
First National historical - diluted................. .35 .28 1.42
Regions and First National pro forma combined(1).... .66 2.37
Regions and First National pro forma combined
- diluted(1)................................... .66 2.35
First National pro forma equivalent(2).............. .46 1.67
First National pro forma equivalent
- diluted(2)................................... .46 1.66
DIVIDENDS DECLARED PER COMMON SHARE
Regions historical.................................. .27 .25 1.00
First National historical........................... -- -- .75
First National pro forma equivalent(3).............. .19 .18 .70
BOOK VALUE PER COMMON SHARE (PERIOD END)
Regions historical.................................. 14.25 13.93 13.89
First National historical........................... 6.80 6.58 6.58
Regions and First National pro forma combined(1).... 14.32
First National pro forma equivalent(2).............. 10.09
</TABLE>
(1) Represents the combined results of Regions and First National as if the
merger were consummated on January 1, 1999 (or March 31, 2000, in the
case of Book Value Per Share Data), and were accounted for as a
purchase.
(2) Represents pro forma combined information multiplied by the exchange
ratio of .7045 of a share of Regions common stock for each share of
First National common stock.
(3) Represents historical dividends declared per share by Regions
multiplied by the exchange ratio of .7045 of a share of Regions common
stock for each share of First National common stock.
(4) The exchange ratio is subject to adjustment if the average closing
price of Regions common stock over a specified period is less than
$19.80 per share or greater than $24.20 per share. The combined and
equivalent pro forma per share data assuming illustrative exchange
ratios of .6314 (corresponding to an assumed average closing price of
$27.00 per share) and .8205 (corresponding to an assumed average
closing price of $17.00 per share) are as follows:
7
<PAGE> 15
<TABLE>
<CAPTION>
Exchange Ratio
---------------------------------------------------------------------------
.6314 .8205
----------------------------------- ------------------------------------
Three Months Year Three Months Year
Ended Ended Ended Ended
March 31, 2000 December 31, 1999 March 31, 2000 December 31, 1999
-------------- ----------------- -------------- -----------------
(Unaudited)
<S> <C> <C> <C> <C>
NET INCOME PER COMMON SHARE
Regions and First National pro forma combined .... $ .66 $ 2.38 $ .66 $ 2.37
Regions and First National pro forma combined
- diluted .................................. .66 2.35 .66 2.35
First National pro forma equivalent .............. .42 1.50 .54 1.94
DIVIDENDS DECLARED PER COMMON SHARE
First National pro forma equivalent .............. .17 .63 .22 .82
BOOK VALUE PER COMMON SHARE (PERIOD END)
Regions and First National pro forma combined .... 14.32 14.32
First National pro forma equivalent .............. 9.04 11.75
</TABLE>
SELECTED HISTORICAL FINANCIAL DATA OF REGIONS
The information in the following table is based on the historical
financial information of Regions. All of the summary financial information
provided in the following table should be read in connection with this
historical financial information which we have incorporated by reference in this
Proxy Statement-Prospectus. See "Where You Can Find More Information" on page
57. The financial information as of or for the interim periods ended March 31,
2000 and 1999 has not been audited and in the opinion of Regions' management
reflects all adjustments (consisting only of normal recurring adjustments)
necessary to a fair presentation of such data.
8
<PAGE> 16
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31, YEAR ENDED DECEMBER 31,
------------------------ ----------------------------------------------------------------
2000 1999 1999 1998 1997 1996 1995
----------- ----------- ----------- ------------ ------------ ------------ ------------
(In thousands, except per share data and ratios)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Total interest income ...............$ 780,229 $ 666,441 $ 2,854,686 $ 2,597,786 $ 2,276,584 $ 1,954,283 $ 1,750,427
Total interest expense .............. 426,113 323,844 1,428,831 1,272,968 1,097,376 942,459 861,242
Net interest income ................. 354,116 342,597 1,425,855 1,324,818 1,179,208 1,011,824 889,185
Provision for loan losses ........... 29,177 20,738 113,658 60,505 89,663 46,026 37,493
Net interest income after
loan loss provision ............ 324,939 321,859 1,312,197 1,264,313 1,089,545 965,798 851,692
Total noninterest income before
security gains (losses) ........ 206,810 143,099 536,981 467,695 406,484 341,792 280,834
Security gains (losses) ............. (40,018) 16 160 7,002 498 3,311 (697)
Total noninterest expense ........... 271,135 262,575 1,064,312 1,103,708 901,776 837,034 720,825
Income tax expense .................. 74,591 73,019 259,640 213,590 197,222 156,008 134,529
Net income .......................... 146,005 129,380 525,386 421,712 397,529 317,859 276,475
PER SHARE DATA:
Net income ..........................$ .66 $ .58 $ 2.37 $ 1.92 $ 1.89 $ 1.64 $ 1.45
Net income - diluted ................ .66 .57 2.35 1.88 1.86 1.61 1.43
Cash dividends ...................... .27 .25 1.00 .92 .80 .70 .66
Book value .......................... 14.25 13.93 13.89 13.61 12.75 11.82 10.74
OTHER INFORMATION:
Average number of shares outstanding 221,299 222,408 221,617 220,114 209,781 194,241 190,896
Average number of shares outstanding
- diluted ....................... 222,549 225,467 223,967 223,781 213,750 197,751 193,579
STATEMENT OF CONDITION DATA
(PERIOD END):
Total assets ........................$41,418,403 $38,601,763 $42,714,395 $36,831,940 $31,414,058 $26,993,344 $24,419,249
Securities .......................... 9,131,856 8,969,824 10,913,044 7,969,137 6,315,923 5,742,375 5,618,839
Loans, net of unearned income ....... 29,081,287 25,540,236 28,144,675 24,365,587 21,881,123 18,395,552 16,156,312
Total deposits ...................... 31,954,383 29,131,051 29,989,094 28,350,066 25,011,021 22,019,412 19,982,533
Long-term debt ...................... 2,032,411 497,430 1,750,861 571,040 445,529 570,545 762,521
Stockholders' equity ................ 3,140,734 3,118,521 3,065,112 3,000,401 2,679,821 2,274,563 2,047,398
PERFORMANCE RATIOS:
Return on average assets(1) ......... 1.38%(a) 1.41% 1.33% 1.24%(b) 1.35% 1.25%(c) 1.19%
Return on average stockholders'
equity(1) ...................... 18.90(a) 17.21 17.13 14.62(b) 15.38 14.71(c) 14.30
Net interest margin(1) .............. 3.65 4.09 3.94 4.25 4.41 4.36 4.27
Efficiency (2) ...................... 47.84(a) 53.46 53.60 60.82(b) 57.78 61.84(c) 61.61
Dividend payout ..................... 40.91 43.10 42.19 47.92 42.33 42.68 45.52
ASSET QUALITY RATIOS:
Net charge-offs to average loans,
net of unearned income(1) ...... .23% .19% .37% .28% .27% .18% .15%
Problem assets to net loans and
other real estate (3) .......... .74 .68 .68 .60 .78 .63 .69
Nonperforming assets to net loans ...
and other real estate (4) ...... .96 1.15 .93 1.15 .91 .83 .81
Allowance for loan losses to loans,
net of unearned income ......... 1.21 1.29 1.20 1.29 1.39 1.38 1.43
Allowance for loan losses to
nonperforming assets (4) ...... 126.15 112.23 128.70 112.27 151.89 166.41 177.53
</TABLE>
9
<PAGE> 17
Selected Historical Financial Data - Continued
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31, YEAR ENDED DECEMBER 31,
------------------ ------------------------------------------------------
2000 1999 1999 1998 1997 1996 1995
------ ------ ------ ------ ------ ------ ------
(In thousands, except per share data and ratios)
<S> <C> <C> <C> <C> <C> <C> <C>
LIQUIDITY AND CAPITAL RATIOS:
Average stockholders' equity to
average assets ....................... 7.29% 8.17% 7.74% 8.47% 8.75% 8.50% 8.36%
Average loans to average deposits ...... 89.85 86.38 91.35 86.93 84.94 82.42 82.23
Tier 1 risk-based capital (5) .......... 9.37 10.78 9.51 10.26 10.48 10.81 11.14
Total risk-based capital (5) ........... 11.25 12.73 11.42 12.17 12.93 13.59 14.61
Tier 1 leverage (5) .................... 6.70 7.24 6.95 7.40 7.52 7.44 7.49
</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 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 combinations with First National Bancorp and First
Commercial Corporation, accounted for as poolings of interests, or any
other pooling-of-interests transactions.
(a) Ratios for 2000 excluding $44.0 million (after tax) for gain on sale of
credit card portfolio and $26.2 million (after tax) for loss on sale of
securities are as follows: Return on average assets - 1.21%, Return on
average stockholders' equity - 16.60%, and Efficiency - 54.28%.
(b) Ratios for 1998 excluding $80.7 million (after tax) for nonrecurring
merger and consolidation charges are as follows: Return on average
assets - 1.48%, Return on average stockholders' equity - 17.42%, and
Efficiency - 54.13%.
(c) Ratios for 1996 excluding $20.2 million (after-tax) charge for SAIF
assessment and merger expenses are as follows: Return on average assets
- 1.33%, Return on average stockholders' equity - 15.64%, and
Efficiency - 60.93%.
10
<PAGE> 18
THE SPECIAL MEETING
GENERAL
This Proxy Statement-Prospectus is being furnished to the stockholders
of First National Bancshares of Louisiana, Inc. in connection with the
solicitation on behalf of the First National board of directors of proxies for
use at a special meeting of stockholders, at which First National stockholders
will be asked to vote upon a proposal to approve the merger agreement dated as
of April 4, 2000, by and between First National and Regions Financial
Corporation.
The special meeting will be held at _______:00 p.m., local time, on
_______, 2000, at the main offices of First National, located at 625 Murray
Street, Alexandria, Louisiana, 71301.
First National stockholders are requested promptly to sign, date, and
return the accompanying proxy card to First National 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 merger agreement.
Any First National 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 First National a signed proxy card bearing a later date, provided
that such notice or proxy card is actually received by First National before the
special meeting or in open meeting before the taking of the stockholder vote at
the special meeting. Any notice of revocation should be sent to First National
Bancshares of Louisiana, Inc., 625 Murray Street, Alexandria, Louisiana, 71301,
Attention: Glenn W. Butler, Corporate Secretary. A proxy will not be revoked by
death of the stockholder executing the proxy, or if the stockholder becomes
incompetent after submitting a signed proxy, unless, before the vote, notice of
such death or incapacity is filed with the Secretary. The shares of First
National 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 MERGER 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 OR YOU HAVE
VOTED AGAINST THE MERGER, 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 MERGER AGREEMENT. As of the date
of this Proxy Statement-Prospectus, First National is unaware of any other
matter to be presented at the special meeting.
Directors, officers, and employees of First National will solicit
proxies by mail, and possibly by telephone, telegram or e-mail, or in person.
They 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.
First National stockholders should not forward any stock certificates
with their proxy cards.
11
<PAGE> 19
RECORD DATE; VOTE REQUIRED
First National's board of directors has established the close of
business on _______, 2000, as the record date for determining the First National
stockholders entitled to notice of and to vote at the special meeting. Only
First National stockholders of record as of the record date will be entitled to
vote at the special meeting. As of the record date, there were approximately 400
holders of 3,412,417 shares of the common stock of First National outstanding
and entitled to vote at the special meeting. Each share is entitled to one vote
at the special meeting. For information as to persons known by First National to
beneficially own more than 5.0% of the outstanding shares of First National
common stock as of the record date, see "Information About First
National--Voting Securities and Principal Stockholders."
The presence, in person or by proxy, of a majority of the outstanding
shares of First National common stock is necessary to constitute a quorum of the
stockholders. A quorum must be present before a vote on the merger agreement can
be taken at the special meeting. For these purposes, shares of First National
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 merger agreement for any reason, including
broker nonvotes. Generally, a broker who holds shares of First National common
stock in "street" name on behalf of a beneficial owner lacks authority to vote
such shares in the absence of specific voting instructions from the beneficial
owner.
Once a quorum is established, approval of the merger agreement requires
the affirmative vote of the holders of at least two-thirds of the outstanding
shares of First National common stock present and entitled to vote at the
special meeting. A failure to vote, in person or by proxy, for any reason,
including failure to return a properly executed proxy, an abstention, or a
broker nonvote, has the same effect as a vote against the merger agreement.
The directors and executive officers of First National owned, as of the
record date, 1,074,721 shares (or approximately 34% of the outstanding shares)
of First National common stock. Certain directors of First National have agreed
to vote those shares of First National common stock over which they have voting
control (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 First National common stock. As of
that date, no subsidiary of either First National or Regions held any shares of
First National common stock in a fiduciary capacity for others.
THE MERGER
The following material describes certain aspects of the merger of First
National with and into Regions. This description does not purport to be complete
and is qualified in its entirety by reference to the Appendices hereto,
including the merger 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.
12
<PAGE> 20
GENERAL
The merger agreement provides generally for the acquisition of First
National by Regions pursuant to the merger of First National with and into
Regions, with Regions as the surviving corporation resulting from the merger.
On the date and at the time that the merger becomes effective, each
share of First National common stock (excluding shares held by First National,
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
excluding all shares held by stockholders who perfect their dissenters' rights)
issued and outstanding at the effective time of the merger will be converted
into .7045 of a share of the $.625 par value common stock of Regions, subject to
possible adjustment as described below under the caption "--Possible Adjustment
of Exchange Ratio." Each share of Regions common stock outstanding immediately
prior to the effective time of the merger 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 First
National 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 trading day prior to the effective time of the
merger.
POSSIBLE ADJUSTMENT OF EXCHANGE RATIO
If we complete the merger, you will receive .7045 of a share of Regions
common stock in exchange for each of your shares of First National common stock
unless this exchange ratio is adjusted as described below.
If the average of the closing prices (the "average closing price") of
Regions common stock for the 10 consecutive full trading days ending at the
close of trading on the last trading day immediately prior to the special
meeting is less than $19.80 or more than $24.20, then the exchange ratio will be
adjusted as follows:
If the average closing price of Regions common stock over such trading
period is less than $19.80, then each share of First National common stock will
be converted into that number of Regions shares equal to the number obtained by
dividing the product of .7045 and $19.80 by the average closing price.
Similarly, if the average closing price of Regions common stock over
such trading period is greater than $24.20, then each share of First National
common stock will be converted into that number of Regions shares equal to the
number obtained by dividing the product of .7045 and $24.20 by the average
closing price.
These adjustment formulas reflect the parties' agreement that, for the
period of time between the date of the merger agreement and the date of the
special meeting, First National's stockholders will not bear the risk of any
decline in the market value of Regions common stock below $19.80 per share, and
likewise will not benefit from any increase in the value of Regions common stock
above $24.20 per share.
The chart below shows the exchange ratio and the value you will receive
for each of your shares of First National common stock as they relate to the
price of Regions common stock. Regions and First National have
13
<PAGE> 21
agreed that should any adjustment to the exchange ratio be necessary, the
calculation of the adjusted exchange ratio will be carried out to the fourth
decimal place.
<TABLE>
<CAPTION>
ASSUMED RESULTING VALUE PER SHARE
AVERAGE EXCHANGE OF FIRST NATIONAL
CLOSING PRICE RATIO COMMON STOCK
------------- --------- -----------------
<S> <C> <C>
$15.00 0.9299 $13.95
15.50 0.8999 13.95
16.00 0.8718 13.95
16.50 0.8454 13.95
17.00 0.8205 13.95
17.50 0.7971 13.95
18.00 0.7750 13.95
18.50 0.7540 13.95
19.00 0.7342 13.95
19.50 0.7153 13.95
20.00 0.7045 14.09
20.50 0.7045 14.44
21.00 0.7045 14.79
21.50 0.7045 15.15
22.00 0.7045 15.50
22.50 0.7045 15.85
23.00 0.7045 16.20
23.50 0.7045 16.56
24.00 0.7045 16.91
24.50 0.6959 17.05
25.00 0.6820 17.05
25.50 0.6686 17.05
26.00 0.6557 17.05
26.50 0.6434 17.05
27.00 0.6314 17.05
27.50 0.6200 17.05
28.00 0.6089 17.05
28.50 0.5982 17.05
29.00 0.5879 17.05
</TABLE>
THE ACTUAL MARKET VALUE OF A SHARE OF REGIONS COMMON STOCK ON THE
EFFECTIVE DATE OF THE MERGER AND AT THE TIME CERTIFICATES FOR THOSE SHARES ARE
DELIVERED FOLLOWING SURRENDER AND EXCHANGE OF CERTIFICATES FOR SHARES OF FIRST
NATIONAL COMMON STOCK MAY BE MORE OR LESS THAN THE AVERAGE CLOSING PRICE. FIRST
NATIONAL STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR REGIONS
COMMON STOCK. SEE "COMPARATIVE MARKET PRICES AND DIVIDENDS."
TREATMENT OF FIRST NATIONAL OPTIONS
The merger agreement provides that each option granted by First
National under its stock option plans that is outstanding at the effective time
of the merger, whether or not then exercisable, will become an option to
purchase Regions common stock. Regions will assume each of such options in
accordance
14
<PAGE> 22
with the terms of the plan under which it was issued and the
agreement by which it is evidenced. After the effective time of the merger,
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 it may be adjusted.
Of the 30,000 options outstanding, the executive officers or directors
of First National held in the aggregate exercisable options to purchase 750
shares of First National common stock, as of the date of this Proxy
Statement-Prospectus.
BACKGROUND OF THE MERGER
In July, 1999 the board met on two occasions with outside legal and
financial consultants concerning strategic options available to First National,
including the possibility of affiliation with a large institution with publicly
traded stock. At the conclusion of these meetings, the board voted unanimously
to engage Alex Sheshunoff & Co. ("Sheshunoff") to prepare an offering memorandum
outlining the history and potential, and a full financial overview, of First
National to be sent to potential buyers that would have an interest in financial
institutions in Rapides and Lincoln Parishes.
In September 1999 offering memorandums were mailed to various potential
buyers in the Mid-South, and expressions of interest were received in the
following months. On November 9, 1999, Sheshunoff reviewed with the board the
expressions of interest received. Included in the discussion were the following:
- Timeline
- Institutions solicited
- Initial indications
- Deal pricing
- Comparable transactions
- Exchange ratios
- Market valuation of banking companies
- Financial evaluation of banking companies
- Discounted cash flow analysis
Of the indications of interest received, the one by Regions provided
the highest proposed merger consideration, although not in an amount the board
found acceptable. After considerable discussion, the board determined that its
best strategy was to allow Regions to conduct a confidential "due diligence"
examination First National after which a higher merger consideration could be
sought.
Regions performed due diligence during December. On January 19, 2000
Sheshunoff met with the board to discuss various alternatives in negotiating
with Regions, and on February 2, 2000, Sheshunoff presented the board with the
latest proposal from Regions, which essentially were the terms embodied in the
merger agreement. President Kramer then presented the board with alternatives to
accepting Regions' proposal. These involved, among other things, an increase in
dividends, an employee stock ownership plan, the purchase of treasury stock, and
the possible sale of stock in the community. The board then authorized
management to determine on a confidential basis the attitude toward Regions'
proposal of certain large stockholders. Management subsequently reported to the
board that conversations had been held with larger stockholders of First
National, and each stockholder contacted was in favor of accepting
15
<PAGE> 23
the Regions proposal. After additional discussion, the board authorized
management to proceed in establishing the terms of definitive agreements with
Regions under the financial terms proposed.
On March 14, 2000 the board met and discussed a number of issues that
had arisen in the course of negotiations, and on March 16, 2000 the board met
with Anthony J. Correro, III, special legal counsel, and representatives of
Sheshunoff to discuss these and other issues. Counsel described the terms of the
current drafts definitive agreements and explained the fiduciary responsibility
of a board member. He then explained details of the proposed transaction,
including the cuff and collar and termination rights, as well as the support
agreement and the affiliate agreement. Sheshunoff then reviewed its financial
analysis of the transaction and advised the board that in its opinion the terms
of the merger consideration embodied in the proposed definitive agreements were
fair from a financial point of view.
On March 31, 2000 the board met to consider the final drafts of the
definitive agreements. Counsel again discussed the definitive agreements in
detail with the board, including changes made since the last board meeting.
After further questions to counsel, the board unanimously approved the
definitive agreements.
FIRST NATIONAL'S REASONS FOR THE MERGER.
In approving the merger, the directors of First National considered a
number of factors. Without assigning any relative or specific weights to the
factors, the First National board of directors considered the following material
factors:
- the share trading liquidity that would result from the merger, in that
stockholders of First National will receive shares of Regions common
stock, which is publicly traded on the Nasdaq National Market; there is
no current public market for First National common stock;
- the information presented to the directors by the management of First
National and its financial advisor concerning the business, operations,
earnings, asset quality, and financial condition of First National and
Regions;
- the financial terms of the merger, including the relationship of the
merger price to the book value and earnings per share of First National
common stock and the partial protection against a decline in the market
value of Regions common stock;
- the nonfinancial terms of the merger, including the treatment of the
merger as a tax-free exchange of First National common stock for
Regions common stock for federal and state income tax purposes;
- the likelihood of the merger being approved by applicable regulatory
authorities without undue conditions or delay;
- the opinion rendered by First National's financial advisor to the
effect that, from a financial point of view, the exchange of First
National common stock for Regions common stock on the terms and
conditions set forth in the agreement and plan of merger is fair to the
holders of First National common stock;
16
<PAGE> 24
- affiliation with a larger holding company would provide the opportunity
to realize economies of scale and increase efficiencies of operations
to the benefit of stockholders and customers. Affiliation with Regions
will also enhance the development of new products and services; and
- potential benefits and opportunities for employees of First National,
as a result of both employment in a larger enterprise and Regions'
benefit plans and policies.
The terms of the merger were the result of arms-length negotiations
between representatives of First National and representatives of Regions. Based
upon the consideration of the foregoing factors, the board of directors of First
National unanimously approved the merger as being in the best interests of First
National and its stockholders. Certain members of the board of directors of
First National have agreed to vote those shares of First National common stock
over which they have voting authority (other than in a fiduciary capacity) in
favor of the merger.
REGIONS' REASONS FOR THE MERGER.
In approving the merger agreement and the merger, the Regions board of
directors considered a number of factors concerning the benefits of the merger,
including the following:
- Information Concerning First National: The Regions board of directors
considered information concerning the business, operations, earnings,
asset quality, and financial condition of First National, and aspects
of the First National franchise, including the market position of First
National in each of the markets in which it operates and the
compatibility of the community bank orientation of the operations of
First National to that of Regions. The Regions board of directors
concluded that First National is a sound, well managed financial
institution which is well positioned in its market areas and which
presents an attractive opportunity for Regions to add to its franchise
in its Louisiana market.
- Financial Terms of the Merger: The Regions board of directors
considered various financial aspects of the merger as reported by
Regions' management including (1) the anticipated effect of the merger
on Regions' per share earnings (with the merger anticipated to have no
significant effect on Regions' earnings per share), (2) the anticipated
effect of the merger on Regions' book value per share (with the merger
anticipated not to dilute significantly Regions' book value per share),
(3) a comparison of First National to selected peer banks and a
comparison of pricing aspects of the merger to pricing characteristics
of other merger transactions involving financial institutions, and (4)
the anticipated accounting treatment of the merger as a purchase.
- Nonfinancial Terms of the Merger. The Regions board of directors
considered various nonfinancial aspects of the merger, including the
treatment of the merger as a tax-free exchange of First National common
stock for Regions common stock for federal income tax purposes and the
likelihood of the merger being approved by applicable regulatory
authorities without undue conditions or delay.
The foregoing discussion of the information and factors considered by
the Regions board of directors is not intended to be exhaustive but includes all
material factors considered by the Regions board of
17
<PAGE> 25
directors. In reaching its determination to approve the merger and the merger
agreement, the Regions board of directors did not assign any relative or
specific weights to the foregoing factors, and individual directors may have
given differing weights to different factors. After deliberating with respect to
the merger, and considering, among other things, the matters discussed above,
the Regions board of directors determined that the merger is in the best
interests of Regions and its stockholders and unanimously approved the merger
agreement.
OPINION OF FIRST NATIONAL'S FINANCIAL ADVISOR
First National retained Alex Sheshunoff & Co. Investment Banking (the
"Advisor") to provide its opinion of the fairness from a financial viewpoint, of
the merger consideration to be received by the stockholders of First National in
connection with the merger with Regions. As part of its investment banking
business, the Advisor is regularly engaged in the valuation of securities in
connection with mergers and acquisitions and valuations for estate, corporate
and other purposes. The board of directors of First National retained the
Advisor based upon its experience as a financial advisor in mergers and
acquisitions of financial institutions and its knowledge of financial
institutions.
On March 16, 2000, the Advisor rendered its oral opinion that, as of
such date, the merger consideration was fair, from a financial point of view, to
the stockholders of First National. The Advisor rendered its written fairness
opinion as of July 7, 2000.
The full text of the fairness opinion which sets forth, among other
things, assumptions made, procedures followed, matters considered, and
limitations on the review undertaken, is attached as Appendix B to this Proxy
Statement-Prospectus. The stockholders of First National are urged to read the
Advisor's fairness opinion carefully and in its entirety. The fairness opinion
is addressed to the board of directors of First National and does not constitute
a recommendation to any stockholder of First National as to how such stockholder
should vote at the special stockholder meeting of First National.
In connection with the fairness opinion, the Advisor:
1. Reviewed the merger agreement;
2. Evaluated First National's consolidated results based upon a
review of its annual financial statements for the three-year
period ending December 31, 1999 and the quarter ended March
31, 2000;
3. Reviewed Call Report information as of March 31, 2000 for
First National;
4. Conducted conversations with executive management regarding
recent and projected financial performance of First National;
5. Compared First National's recent operating results with those
of certain other banks in Arkansas, Louisiana, Mississippi,
and Texas which have recently been acquired;
6. Compared First National's recent operating results with those
of certain other banks located in the United States which have
recently been acquired;
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7. Compared the pricing multiples for First National in the
merger to those of certain other banks in Arkansas, Louisiana,
Mississippi, and Texas which have recently been acquired;
8. Compared the pricing multiples for First National in the
merger to those of certain other banks located in the United
States which have recently been acquired;
9. Analyzed the net present value of the after-tax cash flows
First National could produce through the year 2004, based on
assumptions provided by management;
10. Performed an affordability analysis based on the projections
of earnings for the combined entity subsequent to the merger;
11. Reviewed the historical stock price data and trading volume of
the Corporation common stock and the lack of any active market
for the common stock of First National; and
12. Performed such other analyses as it deemed appropriate.
In connection with its review, the Advisor relied upon and assumed the
accuracy and completeness of all of the foregoing information provided to it or
made publicly available, and the Advisor did not assume any responsibility for
independent verification of such information. The Advisor assumed that internal
confidential financial projections provided by First National were reasonably
prepared reflecting the best currently available estimates and judgments of the
future financial performance of First National and did not independently verify
the validity of such assumptions. The Advisor did not make any independent
evaluation or appraisal of the assets or liabilities of First National nor was
the Advisor furnished with any such appraisals. The Advisor did not examine any
individual loan files of First National. The Advisor is not an expert in the
evaluation of loan portfolios for the purposes of assessing the adequacy of the
allowance for losses with respect thereto and has assumed that such allowance
is, in the aggregate, adequate to cover such losses.
With respect to Regions, the Advisor did not conduct any independent
evaluation or appraisal of the assets, liabilities or business prospects of
Regions, was not furnished with any evaluations or appraisals, and did not
review any individual loan files of Regions.
The fairness opinion is necessarily based on economic, market and other
conditions as in effect on, and the information made available to the Advisor as
of July 7, 2000.
In rendering the fairness opinion, the Advisor performed a variety of
financial analyses. The preparation of an 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.
Consequently, the fairness opinion is not readily susceptible to partial
analysis of summary description. Moreover, the evaluation of fairness, from a
financial point of view, of the merger consideration is to some extent
subjective, based on the experience and judgment of the Advisor, and not merely
the result of mathematical analysis of financial data. Accordingly,
notwithstanding the separate factors summarized below, the Advisor believes that
its analyses must be considered as a whole and that selecting portions of its
analyses and of the factors considered by it, without considering all analyses
and factors, could create an incomplete view of the evaluation process
underlying its opinion. The ranges of valuations resulting
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from any particular analysis described below should not be taken to be the
Advisor's view of the actual value of First National.
In performing its analyses, the Advisor made numerous assumptions with
respect to industry performance, business, and economic conditions and other
matters, many of which are beyond the control of First National. The analyses
performed by the Advisor are not necessarily indicative of actual values or
future results, which may be significantly more or less favorable than suggested
by such analyses, nor are they appraisals. In addition, the Advisor's analyses
should not be viewed as determinative of the opinion of the board of directors
or the management of First National with respect to the value of First National.
The following is a summary of the analyses performed by the Advisor in
connection with its opinion. The following discussion contains financial
information concerning First National and Regions as of March 31, 2000 and
market information as of July 7, 2000. For the purposes of the following
analysis, the Advisor utilized a value of the merger consideration of $14.63 per
share based upon a Regions' ten day average stock price of $20.76 per share as
of July 6, 2000. The merger consideration may have a higher or lower value
depending on the Regions stock price at the time of the merger.
Analysis of Selected Transactions. The Advisor performed an analysis of
premiums paid in selected pending or recently completed acquisitions of banking
organizations in Arkansas, Louisiana, Mississippi, and Texas and in the United
States with comparable characteristics to the merger. Two sets of comparable
transactions were analyzed to ensure a thorough comparison.
The first set of comparable transactions consisted of a group of
comparable transactions based upon the geographical market area of Arkansas,
Louisiana, Mississippi, and Texas for which pricing data were available. These
comparable transactions consisted of fourteen mergers and acquisitions of banks
located in Arkansas, Louisiana, Mississippi, and Texas with assets between $200
million and $500 million which were completed between January 1, 1999 and July
6, 2000. The analysis yielded multiples of the purchase price in these
transactions relative to:
1. Book value ranging from 1.3 times to 5.6 times with an average
of 2.5 times and a median of 2.3 times (compared with the
multiples implied in the merger of 2.2 times March 31, 2000
book value for First National);
2. Last twelve months earnings ranging from 11.6 times to 41.5
times with an average of 20.2 times and a median of 19.4 times
(compared with the multiples implied in the merger of 10.0
times last twelve months earnings as of March 31, 2000 for
First National and 13.1 times last twelve months core earnings
as of March 31, 2000), Core earnings represent First
National's earnings excluding recoveries, negative loan loss
reserve provisions, and other unusual items;
3. Total assets ranging between 15.1% and 47.4% with an average
of 22.2% and a median of 19.4% (compared with the multiples
implied in the merger of 19.7% of March 31, 2000 total assets
for First National); and
4. Total deposits ranging from 16.7% to 55.0% with an average of
27.0% and a median of 21.9% (compared with the multiples
implied in the merger of 23.4% of deposits as of March 31,
2000 for First National).
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The second set of comparable transactions consisted of a group of
comparable transactions based upon the profitability, asset size and
geographical market area of First National for which pricing data were
available. These comparable transactions specifically consisted of sixty-nine
mergers and acquisitions of banks in the United States with total assets between
$200 million and $500 million which were completed between January 1, 1999 and
July 6, 2000. The analysis yielded multiples of the purchase price in these
transactions relative to:
1. Book value ranging from 1.1 times to 5.6 times with an average
of 2.6 times and a median of 2.7 times (compared with the
multiples implied in the merger of 2.2 times March 31, 2000
book value for First National);
2. Last twelve months earnings ranging from 11.5 times to 58.8
times with an average of 24.2 times and a median of 22.8 times
(compared with the multiples implied in the merger of 10.0
times last twelve months earnings as of March 31, 2000 for
First National and 13.1 times last twelve months core earnings
as of March 31, 2000). Core earnings represent First
National's earnings excluding recoveries, negative loan loss
reserve provisions, and other unusual items;
3. Total assets ranging between 10.4% and 55.0% with an average
of 28.7% and a median of 27.0% (compared with the multiples
implied in the merger of 19.7% of March 31, 2000 total assets
for First National); and
4. Total deposits ranging from 8.5% to 47.4% with an average of
23.7% and a median of 22.2% (compared with the multiples
implied in the merger of 23.4% of deposits as of March 31,
2000 for First National).
Discounted Cash Flow Analysis. Using discounted cash flow analysis, the
Advisor estimated the present value of the future after-tax cash flow streams
that First National could produce through the year 2004, under various
circumstances, assuming that it performed in accordance with the earnings/return
projections provided by management.
The Advisor estimated the terminal value for First National at the end
of 2004 by capitalizing the final period projected earnings by the quotient of
(i) the assumed annual growth rate of the earnings of First National plus one
and (ii) the difference between a range of required rates of return and the
assumed annual growth rate of earnings in (i) above. The Advisor discounted the
annual cash flow streams (defined as all earnings in excess of that required to
maintain a tangible equity to asset ratio of 8.0%) and the terminal values using
discount rates ranging from 13% to 15%. The discount range was chosen to reflect
different assumptions regarding the required rates of return of First National
and the inherent risk surrounding the underlying projections. This discounted
cash flow analysis indicated a range of values per share of $10.10 to $12.40,
compared to the value per share of the merger consideration to First National
stockholders of $14.63 as of July 7, 2000.
Comparable Company Analysis. The Advisor compared selected stock market
results of Regions to the publicly available corresponding data of other
composites which the Advisor deemed to be relevant, including SNL Securities,
L.P.'s (i) index of all publicly traded banks and (ii) the SNL index of banks in
the Southeastern Region and the S&P 500. It is the Advisor's opinion that
although Regions' common stock price has exhibited some recent weakness relative
to the selected indices, this weakness in itself is
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not material to the fairness from a financial point of view of the merger
consideration to be received by stockholders of First National as of the date of
the fairness opinion.
No company or transaction used in the comparable company and comparable
transaction analyses is identical to First National, Regions, or the merger.
Accordingly, an analysis of the results of the foregoing necessarily involves
complex considerations and judgments concerning differences in financial and
operating characteristics of First National and Regions and other factors that
could affect the public trading value of the companies to which they are being
compared. Mathematical analysis (such as determining the average or median) is
not in itself a meaningful method of using comparable transaction data or
comparable company data.
Pursuant to an engagement letter dated August 19, 1999, between First
National, and the Advisor, First National agreed to pay the Advisor a
transaction fee calculated as follows:
<TABLE>
<CAPTION>
CONSIDERATION AMOUNT TRANSACTION FEE
-------------------- ---------------
<S> <C>
Less than $70 million 0.55% of Total Consideration up to $70 million
Greater than or equal to $70 million 5.0% of Consideration in excess of $70 million
</TABLE>
First National also agreed to indemnify and hold harmless the Advisor
and its officers and employees against certain liabilities in connection with
its services under the engagement letters, except for liabilities resulting from
the negligence, violation of law or regulation or bad faith of the Advisor or
any matter for which the Advisor may have strict liability.
The fairness opinion is directed only to the question of whether the
merger consideration is fair from a financial perspective and does not
constitute a recommendation to any First National stockholder to vote in favor
of the merger. No limitations were imposed on the Advisor regarding the scope of
its investigation or otherwise by First National.
Based on the results of the various analyses described above, the
Advisor concluded that the merger consideration to be received by First National
stockholders pursuant to the merger is fair from a financial point of view.
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EFFECTIVE TIME OF THE MERGER
After all conditions to the merger are satisfied or waived, the merger
will become effective when Regions files certain certificates with the
Secretaries of State of Delaware and Louisiana. The effective time of the merger
will occur on the date and at the time that the such certificates are filed and
declared effective. Unless otherwise agreed upon by Regions and First National,
and subject to the satisfaction or waiver of the conditions to the obligations
of the parties to effect the merger, the parties will use their reasonable
efforts to cause the effective time of the merger to occur not later than the
last business day of the month after the last of the following events occur: (1)
the effective date (including the expiration of any applicable waiting period)
of the last federal or state regulatory approval required for the merger and (2)
the date on which the merger agreement is approved by the requisite vote of
First National stockholders; or such later date within 30 days thereof as may be
specified by Regions (but only to the extent that any delay within such
additional 30 day period does not deprive the stockholders of First National of
the right to receive a dividend on the shares of Regions common to be exchanged
for their shares of First National common stock.)
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 First National anticipate that all
conditions to consummation of the merger will be satisfied so that the merger
can be consummated during the third quarter of 2000. However, delays in the
consummation of the merger could occur.
The board of directors of either Regions or First National generally
may terminate the merger agreement if the merger is not consummated by December
31, 2000, unless the failure to consummate by that date is the result of a
breach of the merger 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 time of the merger, Regions will cause an
exchange agent selected by Regions to mail to the former stockholders of First
National a form letter of transmittal, together with instructions for the
exchange of such stockholders' certificates representing shares of First
National common stock for certificates representing shares of Regions common
stock.
FIRST NATIONAL STOCKHOLDERS SHOULD NOT SEND IN THEIR CERTIFICATES UNTIL
THEY RECEIVE THE FORM LETTER OF TRANSMITTAL AND INSTRUCTIONS. After you
surrender to the exchange agent certificates for First National common stock
with a properly completed letter of transmittal, the exchange agent will mail
you a certificate or certificates representing the number of shares of Regions
common stock to which you are entitled and a check for the amount to be paid
instead of any fractional share, without interest. Regions will not be obligated
to deliver the consideration to you, as a former First National stockholder,
until you have surrendered your First National common stock certificates. After
the effective time of the merger, to the extent permitted by law, First National
stockholders of record as of the effective time 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 First National common stock has been converted,
regardless of whether such stockholders have surrendered their First National
common stock certificates. No dividend or other distribution
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payable after the effective time of the merger with respect to Regions common
stock, however, will be paid to the holder of any unsurrendered First National
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.
After the effective time of the merger, a First National stockholder
will be unable to transfer shares of First National common stock. If
certificates representing shares of First National common stock are presented
for transfer after the effective time of the merger, 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:
- approval from the Board of Governors of the Federal Reserve System and
the expiration of all applicable waiting periods associated with such
approval, without any conditions or restrictions (excluding
requirements relating to the raising of additional capital or the
disposition of assets or deposits) that would, in the reasonable
judgment of Regions' board of directors, so materially adversely impact
the economic benefits of the transactions contemplated by the agreement
and plan of merger as to render inadvisable the consummation of the
merger;
- the approval by the holders of the requisite number of shares of First
National common stock;
- the absence of any action by any court or governmental authority
restricting, prohibiting, or making illegal the consummation of the
merger and the other transactions contemplated by the merger agreement;
and
- the receipt of a satisfactory opinion of counsel that the merger
qualifies for federal income tax treatment as a reorganization under
Section 368(a) of the Code, with the effects described under "--
Federal Income Tax Consequences of the Merger," including, among
others, that the exchange of First National common stock for Regions
common stock will not give rise to recognition of gain or loss to First
National stockholders, except to the extent of any cash received.
Consummation of the merger also is subject to the satisfaction or
waiver of various other conditions specified in the merger agreement which are
customary in transactions of this nature, including, among others: (1) obtaining
necessary consents and permits, (2) the delivery by Regions and First National
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 merger agreement and (3) as of the effective
time of the merger, the accuracy of certain representations and warranties and
the compliance in all material respects with the agreements and covenants of
each party.
REGULATORY APPROVALS
Regions must receive certain regulatory approvals before the merger can
be completed. There can be no assurance that such regulatory approvals will be
obtained or as to the timing of such approvals. It is
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also possible that any such approval may be accompanied by a conditional
requirement which causes such approvals to fail to satisfy the conditions set
forth in the merger agreement. Applications for the approvals described below
have been submitted to the appropriate regulatory agencies.
Regions and First National 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 Board,
pursuant to Section 3 of the Bank Holding Company Act of 1956. In granting its
approval under Section 3 of the Bank Holding Company Act, the Federal Reserve
Board 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 Board from approving the merger (1) 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 (2) 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 Board
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 Bank Holding Company Act,
the merger may not be consummated until the 30th day following the date of
Federal Reserve Board approval, which may be shortened by the Federal Reserve
Board 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 Board's
approval, unless a court specifically orders otherwise.
The merger also is subject to review of the Louisiana Commissioner of
Financial Institutions.
WAIVER, AMENDMENT, AND TERMINATION OF THE MERGER AGREEMENT
Prior to the effective time of the merger, and to the extent permitted
by law, any provision of the merger agreement generally may be (1) waived by the
party benefitted by the provision or (2) amended by a written agreement between
Regions and First National approved by their respective boards of directors;
provided, however, that after approval by the First National stockholders, no
amendment that pursuant to the Louisiana Business Corporation Law requires
further approval of the First National stockholders, including decreasing the
consideration to be received by First National stockholders, may be made without
the further approval of such stockholders.
The merger agreement may be terminated, and the merger abandoned, at
any time prior to the effective time of the merger, either before or after
approval by First National stockholders, under certain circumstances, including:
- by the board of directors of either party upon final denial of any
required consent of any regulatory authority, if such denial is
nonappealable or was not appealed within the time limit for appeal;
- by the board of directors of either party, if the holders of the
requisite number of shares of First National common stock shall not
have approved the merger agreement;
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- by mutual consent of the boards of directors of Regions and First
National;
- by the board of directors of either party (provided the terminating
party is not in material breach of any representation, warranty,
covenant, or agreement included in the merger agreement), in the event
of any inaccuracy in any representation or warranty by the other party
which meets certain standards specified in the agreement and plan of
merger and cannot be or has not been cured within 30 days after the
giving of written notice to the breaching party;
- by the board of directors of either party (provided the terminating
party is not in material breach of any representation, or warranty
included in the merger agreement), in the event of a breach by the
other party of any covenant or agreement included in the agreement and
plan of merger that cannot be cured within 30 days after giving notice
to the breaching party; and
- by the board of directors of either party if the merger shall not have
been consummated by December 31, 2000, but only if the failure to
consummate the merger by such date has not been caused by the
terminating party's breach of the merger agreement.
If the merger 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 merger agreement giving
rise to such termination.
CONDUCT OF BUSINESS PENDING THE MERGER
First National and Regions have each generally agreed to operate its
business only in the usual, regular, and ordinary course, and to preserve intact
its business organizations and assets and maintain its rights and franchises.
Each has also agreed to take no action which would materially adversely affect
the ability of either party to obtain any consents required for the merger or to
perform its covenants and agreements under the merger agreement and to
consummate the merger. The foregoing shall not prevent Regions or any subsidiary
of Regions from discontinuing or disposing of any of its assets or business. Nor
is Regions prevented from acquiring or agreeing to acquire any other entity 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. In addition, the
merger agreement includes certain other restrictions applicable to the conduct
of the business of First National prior to consummation of the merger, as
described below.
First National. First National 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 Regions, which Regions has agreed shall not
be unreasonably withheld. The actions First National has agreed not to take,
subject to certain exceptions as specified in the merger agreement, are in the
general categories of:
- amending its articles of incorporation, bylaws, or other governing
instruments;
- incurring indebtedness;
- acquiring any of its outstanding shares or making distributions,
including payment of dividends, in respect to its outstanding shares;
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- issuing additional securities;
- reclassifying capital stock or selling or encumbering assets;
- acquiring or investing in other entities;
- increasing employees' salaries and benefits or accelerating the vesting
of any stock-based compensation or employee benefits;
- entering into or amending employment contracts;
- adopting employee benefit plans or amending existing plans;
- changing accounting methods or practices;
- commencing or settling litigation; or
- entering into or terminating material contracts.
The specific agreements not to take certain actions of such character, including
the exceptions and contractually permitted actions, are set forth in the merger
agreement, which is attached as Appendix A. See Article 7 of the merger
agreement.
In addition, First National has agreed not to solicit, directly or
indirectly, any acquisition proposal from any other person or entity. First
National 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, First National has
agreed to use reasonable efforts to cause its advisors and other representatives
not to engage in any of the foregoing activities.
MANAGEMENT FOLLOWING THE MERGER
Upon consummation of the merger, the present officers and directors of
Regions will retain their respective positions with Regions. Information
pertaining to the directors and executive officers of Regions, executive
compensation, certain relationships and related transactions, and other related
matters is included in Regions' Annual Report on Form 10-K for the year ended
December 31, 1999, incorporated herein by reference. See "Where You Can Find
More Information."
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Regions has agreed to indemnify for a period of ten years after the
completion of the merger the present and former directors, officers, employees,
and agents of First National and its subsidiaries against certain liabilities
arising out of actions or omissions occurring at or prior to the time the merger
becomes effective (including the merger) to the full extent permitted under
Louisiana law, and First National's articles of incorporation and bylaws.
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The merger agreement also provides that, after the effective time of
the merger, Regions will provide generally to officers and employees of First
National and its subsidiaries who, at or after the effective time, 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 First National or its subsidiaries prior to
the effective time of the merger will be treated as service with Regions or its
subsidiaries. The merger agreement further provides that Regions will cause
First National to honor all employment, severance, consulting, and other
compensation contracts previously disclosed to Regions between First National or
its subsidiaries and any current or former director, officer, or employee, and
all provisions for vested amounts earned or accrued through the effective time
of the merger under First National's benefit plans.
Regions has entered into agreements with Thomas D. Fowler, Chief
Executive Officer of Security First National Bank, and Donald S. Kramer,
President of First National and Security First National Bank, under which each
executive has agreed to remain employed by Security First National Bank
following the merger. Also, upon completion of the merger, Regions has agreed to
issue to each of these executives restricted stock under Regions' 1999 long term
incentive plan having a value of $65,000, with restrictions that will lapse on
the earlier of one year after the date of the merger or upon the executive's
death. If the executive's employment is terminated after the merger by Regions
without cause or by the executive for good reason, both as defined in the
agreement, then Regions must pay to the executive $65,000 cash in a lump sum, in
place of the restricted stock.
Upon completion of the merger, Mr. Fowler and Mr. Kramer will become
entitled to lump sum payments in settlement of First National's obligations
under existing benefit agreements, in the amounts of $_______ for Mr. Fowler and
$_______ for Mr. Kramer. Such payments will satisfy in full the parties' rights
and obligations under the existing benefit agreements.
As described above under " --Treatment of First National Options," the
merger agreement also provides that all rights with respect to First National
common stock pursuant to stock options or stock appreciation rights granted by
First National under its stock option and other stock-based compensation plans
which are outstanding at the effective time of the merger, 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.
As of the record date, directors and executive officers of First
National owned an immaterial number of shares of Regions common stock.
DISSENTING STOCKHOLDERS
If the merger is approved by less than 80% of First National's common
stock, each First National stockholder who objects to the merger shall be
entitled to the rights and remedies of dissenting stockholders provided in
Section 131 of the Louisiana Business Corporation Law.
The following is a summary of the steps to be taken by a First National
stockholder who is interested in perfecting such holder's dissenters' rights and
should be read in conjunction with the full text of Section
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131 of the Louisiana Business Corporation Law. Each of the steps enumerated
below must be taken in strict compliance with the applicable provisions of the
statute in order for holders of First National common stock to perfect their
dissenters' rights. If the merger is approved by 80% or more of the total voting
power of First National, then dissenters' rights, in accordance with the
Louisiana Business Corporation Law, will not be available.
Any written objection, demand, or notice required by the Louisiana
Business Corporation Law in connection with the exercise of dissenters' rights
should be sent to First National or, following the merger, to Regions, in either
case to 625 Murray Street, Alexandria, Louisiana, 71301, Attention: Corporate
Secretary. It is recommended that all required documents to be delivered by mail
be sent by registered or certified mail with return receipt requested.
Any holder of First National common stock who wishes to receive in cash
the "fair value" of such shares (determined as of the day before the merger
agreement is approved by the stockholders) may elect to do so by taking all of
the following steps:
- Such stockholder must file with First National, prior to or at the
Special Meeting, a written objection to the proposed merger.
- Such stockholder MUST ALSO vote such holder's shares of First National
common stock against the merger. If the merger is approved by the
required vote, but by less than 80% of the total voting power, and the
merger authorized thereby is effected, the corporation (referring in
the remainder of this section to First National or, if after the
effective date of the merger, Regions, as the then successor to First
National) promptly thereafter shall give written notice thereof, by
registered mail, to each stockholder who both filed such written
objection to, and voted such holder's shares against, the merger, at
such stockholder's last address on First National' records.
- Each such stockholder, within 20 days after the mailing of such notice
to such holder, but not thereafter, must file with the corporation a
demand in writing for the fair cash value of such holder's shares of
First National common stock as of the day before such vote was taken,
and such holder must state in such demand the value demanded and a post
office address to which the reply of the corporation may be sent.
- At the same time, such stockholder must deposit in escrow in a
chartered bank or trust company located in Rapides Parish, Louisiana
the certificates representing such holder's shares of First National
common stock, duly endorsed and transferred to the corporation upon the
sole condition that such certificates shall be delivered to the
corporation upon payment of the value of the shares determined in
accordance with the provisions of Section 131 of the Louisiana Business
Corporation Law.
- With the demand, the stockholder must deliver to the corporation the
written acknowledgment of such bank or trust company that it so holds
such holder's certificates of First National common stock.
Any stockholder who fails to take each of the required actions outlined
above in a timely manner will not be entitled to exercise the rights of a
dissenting stockholder.
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Unless the objection, demand, and acknowledgment are made and delivered
by the stockholder within the required time period, such holder conclusively
shall be presumed to have acquiesced in the merger. If the corporation does not
agree to the value so stated and demanded, or does not agree that a payment is
due, within 20 days after receipt of such demand and acknowledgment, it shall
notify the stockholder in writing, at the designated post office address, of its
disagreement and shall state in such notice the value it will agree to pay if
any payment should be held to be due; otherwise it shall be liable for, and
shall pay to the dissatisfied stockholder, the value demanded.
In case of disagreement as to such fair cash value, or as to whether
any payment is due, after compliance by the parties with the provisions
described above, the dissatisfied stockholder, within 60 days after receipt of
notice in writing of the corporation's disagreement, but not thereafter, may
file suit against the corporation, in the district court of Rapides Parish,
Louisiana praying the court to fix and decree the fair cash value of the
dissatisfied stockholder's shares of First National common stock as of the day
before the stockholder vote on the merger agreement was taken, and the court, on
such evidence as may be adduced in relation thereto, shall determine summarily
whether any payment is due and, if so, shall determine such cash value and
render judgment accordingly. Any stockholder entitled to file such suit, within
such 60-day period, but not thereafter, may intervene as a plaintiff in such
suit filed by another stockholder and recover therein judgment against the
corporation for the fair cash value of such holder's shares of First National
common stock. Failure of the stockholder to bring suit, or to intervene in such
a suit, within 60 days after receipt of notice of disagreement by the
corporation conclusively shall bind the stockholder (i) to acquiesce in, and not
contest, the corporation's statement that no payment is due or (ii) if the
corporation does not contend that no payment is due, to accept the value of such
holder's shares of First National common stock as fixed by the corporation in
its notice of disagreement.
A stockholder, upon filing a demand for the value of such holder's
shares, shall cease to have any of the rights of a stockholder, except the
rights accorded by Section 131 of the Louisiana Business Corporation Law. Such a
demand may be withdrawn by the stockholder at any time before the corporation
gives notice of disagreement, as provided by the Louisiana Business Corporation
Law. After such notice of disagreement is given, withdrawal of the demand shall
require the consent of the corporation. If a demand is withdrawn, or the merger
is abandoned or rescinded, or a court shall determine that the stockholder is
not entitled to receive payment for such holder's shares of First National
common stock, or the stockholder shall otherwise lose such holder's dissenters'
rights, such holder shall not have the right to receive a cash payment for such
holder's shares of First National common stock, such holder's share certificates
shall be returned (and, on such holder's request, new certificates shall be
issued in exchange for the old ones endorsed to the corporation), and such
holder shall be reinstated to all rights as a stockholder as of the filing of
such holder's demand for value, including the right to payment of any
intervening dividend or other distribution, or if any such rights have expired
or any such dividend or distribution other than in cash has been completed, in
lieu thereof, at the election of the corporation, the fair value thereof in cash
as determined by the corporation's board of directors as of the time of such
expiration or completion, but without prejudice otherwise to any corporate
proceedings that may have been taken in the interim.
Any dissenting First National 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 "--Federal Income Tax Consequences of the Merger."
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FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
THE FOLLOWING IS A DISCUSSION OF THE MATERIAL FEDERAL INCOME TAX
CONSEQUENCES OF THE MERGER TO HOLDERS OF FIRST NATIONAL COMMON STOCK. THIS
DISCUSSION MAY NOT APPLY TO SPECIAL SITUATIONS, SUCH AS FIRST NATIONAL
STOCKHOLDERS, IF ANY, WHO HOLD FIRST NATIONAL COMMON STOCK OTHER THAN AS A
CAPITAL ASSET, WHO RECEIVED FIRST NATIONAL COMMON STOCK UPON THE EXERCISE OF
EMPLOYEE STOCK OPTIONS OR OTHERWISE AS COMPENSATION, WHO HOLD FIRST NATIONAL
COMMON STOCK AS PART OF A "STRADDLE" OR "CONVERSION TRANSACTION," OR WHO ARE
INSURANCE COMPANIES, SECURITIES DEALERS, FINANCIAL INSTITUTIONS OR FOREIGN
PERSONS, AND DOES NOT DISCUSS ANY ASPECTS OF STATE, LOCAL, OR FOREIGN TAXATION.
THIS DISCUSSION IS BASED UPON LAWS, REGULATIONS, RULINGS AND DECISIONS NOW IN
EFFECT AND ON PROPOSED REGULATIONS, ALL OF WHICH ARE SUBJECT TO CHANGE (POSSIBLY
WITH RETROACTIVE EFFECT) BY LEGISLATION, ADMINISTRATIVE ACTION, OR JUDICIAL
DECISION. NO RULING HAS BEEN OR WILL BE REQUESTED FROM THE INTERNAL REVENUE
SERVICE ON ANY MATTER RELATING TO THE TAX CONSEQUENCES OF THE MERGER.
Consummation of the merger is conditioned upon receipt by Regions and
First National of an opinion from Alston & Bird LLP, special counsel to Regions,
concerning the material federal income tax consequences of the merger. Based
upon the assumption that the merger is consummated in accordance with the merger
agreement and upon factual statements and factual representations made by
Regions and First National, it is such firm's opinion that:
1. The merger will constitute a reorganization within the meaning
of Section 368(a) of the Code, and First National and Regions will each be "a
party to a reorganization" within the meaning of Section 368(b) of the Internal
Revenue Code.
2. No gain or loss will be recognized by holders of First
National common stock upon the exchange in the merger of all of their First
National common stock solely for shares of Regions common stock (except with
respect to any cash received in lieu of fractional share interests in Regions
common stock).
3. The aggregate tax basis of the Regions common stock received
by the First National stockholders who exchange all of their First National
common stock solely for Regions common stock in the merger will be the same as
the tax basis of the First National 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
First National stockholders who exchange all of their First National common
stock solely for Regions common stock in the merger will include the holding
period of the First National common stock surrendered in exchange therefor,
provided that such First National common stock is held as a capital asset at the
effective time of the merger.
5. The payment of cash to First National 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
Regions common stock redeemed, as provided in Section 302(a) of the Internal
Revenue Code.
6. Where solely cash is received by a First National stockholder
in exchange for First National common stock pursuant to the exercise of
dissenters' rights, such cash will be treated as having been
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received in redemption of such holder's First National common stock, subject to
the provisions and limitations of Section 302 of the Internal Revenue Code.
THE TAX OPINION DOES NOT ADDRESS ANY STATE, LOCAL, FOREIGN, OR OTHER
TAX CONSEQUENCES OF THE MERGER. FIRST NATIONAL STOCKHOLDERS SHOULD CONSULT THEIR
OWN TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES OF THE PROPOSED
TRANSACTION TO THEM INDIVIDUALLY, INCLUDING TAX REPORTING REQUIREMENTS AND TAX
CONSEQUENCES UNDER STATE, LOCAL, AND FOREIGN LAW.
ACCOUNTING TREATMENT
It is anticipated that the merger will be accounted for as a
"purchase," as that term is used pursuant to generally accepted accounting
principles, for accounting and financial reporting purposes. Under the purchase
method of accounting, the assets and liabilities of First National as of the
effective time of the merger will be recorded at their estimated respective fair
values and added to those of Regions. Financial statements of Regions issued
after the effective time will reflect such values and will not be restated
retroactively to reflect the historical financial position or results of
operations of First National.
EXPENSES AND FEES
The merger agreement provides, in general, that each of the parties
will bear and pay its own expenses in connection with the transactions
contemplated by the merger 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 First National stockholders in
the merger has been registered under the Securities Act of 1933. All shares of
Regions common stock received by stockholders of First National in the merger
will be freely transferable after the merger by those stockholders of First
National who are not considered to be "affiliates" of First National.
"Affiliates" generally are defined as persons or entities who control, are
controlled by, or are under common control with First National at the time of
the special meeting (generally, executive officers, directors, and 10% or
greater stockholders). 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 Rule 145
promulgated under the Securities Act or in accordance with a legal opinion
satisfactory to Regions that such sale or transfer is otherwise exempt from the
Securities Act registration requirements.
Rule 145 promulgated under the Securities Act restricts the sale of
Regions common stock received in the merger by affiliates and certain of their
family members and related interests. Under the rule, during the one-year period
following the effective time of the merger, affiliates of First National may
resell publicly the Regions common stock received by them in the merger subject
to certain limitations as to the amount of Regions common stock sold in any
three-month period and as to the manner of sale, and subject to the timeliness
of Regions' periodic reporting obligations with the Securities and Exchange
Commission. After the one-year period and within two years following the
effective time of the merger, affiliates of First National who are not
affiliates of Regions may effect such resales subject only to the
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timeliness of Regions' periodic reporting requirements. After two years, such
affiliates of First National who are not affiliates of Regions may resell their
shares without restriction. Persons who are affiliates of Regions after the
effective time of the merger may publicly resell the Regions common stock
received by them in the merger subject to similar limitations and subject to
certain filing requirements specified in SEC Rule 144. Affiliates will receive
additional information regarding the effect of Rule 145 on their ability to
resell Regions common stock received in the merger. Affiliates also would be
permitted to resell Regions common stock received in the merger pursuant to an
effective registration statement under the Securities Act or an available
exemption from the Securities Act registration requirements. This Proxy
Statement-Prospectus does not cover any resales of Regions common stock received
by persons who may be deemed to be affiliates of First National or Regions.
Each person who First National reasonably believes will be an affiliate
of First National 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 promulgated thereunder.
EFFECT OF THE MERGER ON RIGHTS OF STOCKHOLDERS
As a result of the merger, holders of First National common stock will
be exchanging their shares of a Louisiana corporation governed by the Louisiana
Business Corporation Law and First National's articles of incorporation, as
amended, and bylaws, for shares of Regions, a Delaware corporation governed by
the Delaware General Corporation Law and Regions' certificate of incorporation
and bylaws. Certain significant differences exist between the rights of First
National stockholders and those of Regions stockholders. The material
differences are summarized below. In particular, Regions' certificate of
incorporation and bylaws contain several provisions that under certain
circumstances may 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 Louisiana Business Corporation Law
and the Delaware General Corporation Law as well as to Regions' certificate of
incorporation and bylaws and First National's articles of incorporation and
bylaws.
ANTITAKEOVER PROVISIONS GENERALLY
The provisions of Regions' certificate of incorporation 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 General Corporation Law 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 of directors can further and
protect the interests of Regions and its stockholders as appropriate under the
circumstances, including, if
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the board of directors determines that a sale of control is in their best
interests, by enhancing the board of directors' ability to maximize the value to
be received by the stockholders upon such a sale.
Although Regions' management believes the protective provisions are
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 of incorporation authorizes the issuance of up
to 500,000,000 shares of Regions common stock and 5,000,000 shares of preferred
stock. At March 31, 2000, 222,171,783 shares of Regions common stock were
issued, including 1,750,000 treasury shares, and 220,421,783 shares were
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 of incorporation does not
provide preemptive rights to Regions stockholders.
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.
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First National. First National's authorized capital stock consists of
10,000,000 shares of First National common stock, which is the only class of
capital stock authorized and of which 3,412,417 shares were issued and
outstanding and 177,150 were held in treasury as of the record date.
Pursuant to the Louisiana Business Corporation Law, First National's
board of directors may authorize the issuance of additional shares of First
National common stock without further action by First National's stockholders.
First National's articles of incorporation, as amended, provide the stockholders
of First National with preemptive rights to purchase or subscribe to any
unissued authorized shares of First National common stock subject to certain
exceptions.
AMENDMENT OF CERTIFICATE OR ARTICLES OF INCORPORATION AND BYLAWS
Regions. The Delaware General Corporation Law generally provides that
the approval of a corporation's board of directors and the affirmative vote of a
majority of (1) all shares entitled to vote thereon and (2) 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 of incorporation 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 of incorporation 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 of incorporation 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.
First National. The Louisiana Business Corporation Law generally
provides that a Louisiana corporation's articles of incorporation may be amended
by the affirmative vote of two-thirds of the voting power present at a meeting,
unless the articles of incorporation provide for a higher or lower voting
requirement.
The Louisiana Business Corporation Law provides that the board of
directors has the power to amend or alter the bylaws, provided shareholders may
repeal any bylaws so made.
CLASSIFIED BOARD OF DIRECTORS AND ABSENCE OF CUMULATIVE VOTING
Regions. The certificate of incorporation 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 of directors are
elected each year; consequently, two annual meetings are effectively required
for Regions' stockholders to change a majority of the members of the board of
directors. The purpose of dividing Regions' board of directors into classes is
to facilitate continuity and stability of leadership of Regions by ensuring that
experienced personnel familiar with Regions will be represented on Regions'
board of directors at all times, and to permit Regions' management to plan for
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the future for a reasonable time. However, by potentially delaying the time
within which an acquirer could obtain working control of the board of directors,
this provision may discourage some potential mergers, tender offers, or takeover
attempts.
Pursuant to the certificate of incorporation, 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.
First National. First National's articles of incorporation do not
provide for a classified board of directors. Holders of First National common
stock are not afforded cumulative voting rights.
REMOVAL OF DIRECTORS
Regions. Under the certificate of incorporation, 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.
First National. The Louisiana Business Corporation Law permits
stockholders to remove any director, with or without cause, by vote of a
majority of the total voting power at any special meeting called for that
purpose.
LIMITATIONS ON DIRECTOR LIABILITY
Regions. The certificate of incorporation 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 (1) any breach of the director's duty of loyalty to the
corporation or its stockholders, (2) acts or omissions not in good faith or that
involve intentional misconduct or a knowing violation of law, (3) the payment of
certain unlawful dividends and the making of certain unlawful stock purchases or
redemptions, or (4) 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
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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.
First National. First National's articles of incorporation do not
include a similar provision.
INDEMNIFICATION
Regions. The certificate of incorporation provides that Regions will
indemnify its officers, directors, employees, and agents to the full extent
permitted by the Delaware General Corporation Law. Under Section 145 of the
Delaware General Corporation Law 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.
First National. First National's articles of incorporation provide for
mandatory indemnification of its directors and officers with substantially the
same effect as in the case of Regions. The Louisiana Business Corporation Law
permits, but does not require, indemnification of employees and agents who meet
specified standards of conduct except that indemnification of directors,
officers, employees, and agents is mandatory, as is the case and to the same
extent as under the Delaware General Corporation Law described above, whenever
any such person has been successful in the defense of a claim.
SPECIAL MEETINGS OF STOCKHOLDERS
Regions. Regions' certificate of incorporation 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 of incorporation 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 of directors with nominees who were in favor of such
proposal.
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First National. Under the Louisiana Business Corporation Law, a special
meeting of stockholders may be called by stockholders holding at least 20% of a
corporation's voting power.
ACTIONS BY STOCKHOLDERS WITHOUT A MEETING
Regions. The certificate of incorporation 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.
First National. Under the Louisiana Business Corporation Law, action
requiring or permitting stockholder approval may be approved by written consent
of all stockholders entitled to vote at a meeting of stockholders. In that it
would be impractical to obtain the consent of all stockholders, the inability of
stockholders to effect action without a meeting is substantially the same as for
Regions.
STOCKHOLDER NOMINATIONS
Regions. Regions' certificate of incorporation 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 (1) the name, age, business, and, if known, residential
address of each nominee, (2) the principal occupation or employment of each such
nominee, and (3) 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.
First National. First National's articles of incorporation and bylaws
do not provide for special nominating procedures for election of directors.
MERGERS, CONSOLIDATIONS, AND SALES OF ASSETS GENERALLY
Regions. The certificate of incorporation generally requires the
affirmative vote of the holders of at least 75% of the outstanding voting stock
of Regions to effect (1) any merger or consolidation with or into any other
corporation, or (2) 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 General Corporation Law
generally requires the approval of a majority of the outstanding voting stock of
Regions to effect (1) any merger or consolidation with or into
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any other corporation, (2) any sale, lease, or exchange of all or substantially
all of Regions property and assets, or (3) the dissolution of Regions. However,
pursuant to the Delaware General Corporation Law, Regions may enter into a
merger transaction without stockholder approval if (1) Regions is the surviving
corporation, (2) the agreement of merger does not amend in any respect Regions'
certificate of incorporation, (3) 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 (4) 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 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.
First National. The Louisiana Business Corporation Law generally
requires the affirmative vote of at least two-thirds of the voting power
present, or by such larger or smaller vote, but not less than a majority of the
voting power present or of the total voting power, as the articles of
incorporation may prescribe, to effect (1) any merger, consolidation, or share
exchange with or into any other corporation, or (2) any sale or lease of all or
substantially all of the assets of the corporation if the corporation is not
insolvent. First National's articles of incorporation do not provide for any
larger or smaller vote.
BUSINESS COMBINATIONS WITH CERTAIN PERSONS
Regions. Section 203 of the Delaware General Corporation Law ("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
(1) 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, (2) 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 (3) 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.
First National. Section 133 of the Louisiana Business Corporation Law
("Section 133") places similar restrictions on "business combinations" (as
defined in Section 132(4) of the Louisiana Business Corporation Law, generally
including mergers, consolidations, share exchanges, sales and leases of
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<PAGE> 47
assets, issuances of securities, and similar transactions) by Louisiana
corporations with an "interested stockholder" (as defined in Section 132(9) of
the Louisiana Business Corporation Law, generally the beneficial owner of 10% or
more of the voting power of the then outstanding voting stock). Section 133
generally applies to business combinations of Louisiana corporations having
greater than 100 beneficial owners of its stock or which did not have an
interested stockholder on January 1, 1985, unless the articles of incorporation
expressly provide otherwise. Section 133 generally does not apply if specified
conditions are met, including a condition that the stockholders receive in the
business combination consideration for their shares of stock in the corporation
that is no less than the highest of several different standards provided for by
Section 134B, one of which is that the price must be no less than the highest
price as the interested stockholder paid for shares of stock in the corporation
acquired by such interested stockholder within two years of such business
combination.
As First National has not generally elected to avoid the application of
Section 133, Section 133 generally would prohibit a business combination by
First National with an interested stockholder unless the consideration to be
received meets the standard described in the preceding sentence or unless the
business combination is recommended by First National's board of directors and
approved by the affirmative vote of at least each of the following: (1) 80% of
the votes entitled to be cast by outstanding shares of First National voting
stock voting together as a single voting group and (2) two-thirds of the votes
entitled to be cast by holders of First National voting stock, other than voting
stock held by the interested stockholder who is a party to the business
combination with First National, voting together as a single voting group. As
Regions is not an "interested stockholder" with respect to First National,
Section 133 does not apply to the merger.
Under Sections 135 through 140.2 of the Louisiana Business Corporation
Law (the "Control Share Law"), a person who acquires shares in certain Louisiana
corporations (including First National) and as a result increases such person's
voting power in the corporation to or above any of three threshold levels (i.e.,
20%, 33 1/3%, and 50%), acquires the voting rights with respect to such shares
only to the extent granted by a majority in voting interest of the pre-existing,
disinterested stockholders of the corporation. Certain acquisitions of shares
are exempted from the provisions of the Control Share Law, including
acquisitions pursuant to a merger, consolidation, or share exchange agreement to
which the corporation is a party. Since Regions' acquisition of First National
common stock is to be made pursuant to a merger and First National and Regions
are parties to the merger agreement with respect thereto, the Control Share Law
does not apply to the merger.
DISSENTERS' RIGHTS
Regions. The rights of dissenting stockholders of Regions are governed
by the Delaware General Corporation Law. 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 (1) 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 (2) 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)
40
<PAGE> 48
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 the exception
described immediately above applies, holders of Regions common stock do not have
dissenters' rights.
First National. A summary of the pertinent provisions of the Louisiana
Business Corporation Law pertaining to dissenters' rights is set forth under the
caption "The Merger--Dissenting Stockholders," and such provisions are included
as Appendix C. If the merger is consummated, stockholders of First National will
have dissenters' rights as there described unless the merger receives the
favorable vote of at least 80% of the total outstanding shares.
STOCKHOLDERS' RIGHTS TO EXAMINE BOOKS AND RECORDS
Regions. The Delaware General Corporation Law 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.
First National. Pursuant to the Louisiana Banking Law, upon written
notice of a demand to inspect corporate records, one or more stockholders who
have owned at least 2% of the outstanding stock (25% in the case of a business
competitor) for at least six months are entitled to inspect specified corporate
records.
DIVIDENDS
Regions. The Delaware General Corporation Law 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 "Supervision and Regulation--Payment of Dividends" and
"Comparative Market Prices and Dividends."
First National. Pursuant to the Louisiana Business Corporation Law, a
board of directors may from time to time make distributions out of surplus, as
defined in the Louisiana Business Corporation Law, to its stockholders, subject
to restrictions in its articles of incorporation, except (1) when the
corporation is insolvent, or (2) at a time when the corporation's assets are
exceeded by its liabilities, or when the net assets are less than the aggregate
amount payable on liquidation to any shares of First National common stock which
have preferential rights in the event of liquidation. Substantially all of the
funds available for the payment of dividends by First National are derived from
Security First National Bank, which is subject to federal and state statutory
limitations on its ability to pay dividends.
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<PAGE> 49
COMPARATIVE MARKET PRICES AND DIVIDENDS
Regions common stock is quoted on the Nasdaq National Market under the
symbol "RGBK." First National 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 of First National common stock based on
the transactions known to First National management, and the cash dividends
declared per share of Regions and First National common stock. For the indicated
period there has been only a very limited number of transactions in First
National common stock and all such transactions have involved limited numbers of
shares.
<TABLE>
<CAPTION>
REGIONS FIRST NATIONAL
PRICE RANGE CASH DIVIDENDS CASH DIVIDENDS
---------------------- DECLARED DECLARED
HIGH LOW PER SHARE HIGH LOW PER SHARE
-------- -------- -------------- -------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
1998
First Quarter ........... $ 43.50 $ 37.94 $ .23 $ 10.00 $ 10.00 $ --
Second Quarter .......... 45.25 38.66 .23 10.00 10.00 .65
Third Quarter ........... 42.69 33.81 .23 10.00 10.00 --
Fourth Quarter .......... 40.69 30.25 .23 10.00 10.00 .10
1999
First Quarter ........... 41.44 34.63 .25 10.00 10.00 --
Second Quarter .......... 39.13 34.72 .25 10.00 10.00 .10
Third Quarter ........... 38.94 29.81 .25 10.00 10.00 .55
Fourth Quarter .......... 31.25 23.38 .25 10.00 10.00 .10
2000
First Quarter ........... 24.31 18.44 .27 13.50 10.00 --
Second Quarter .......... 24.50 19.19 .27 10.00 10.00 .63
Third Quarter (through
_______, 2000) ........
</TABLE>
On _______, 2000, the last reported sale price of Regions common stock
as reported on the Nasdaq National Market, was $ _______. On April 3, 2000, the
last business day prior to public announcement of the proposed merger, the last
reported sale price of Regions common stock as reported on the Nasdaq National
Market, was $24.50. First National Common Stock has generally traded for $10.00
per share, except that in March, 2000, approximately 49,300 shares were
purchased from a former director for a total price of $13.50 per share.
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.
42
<PAGE> 50
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. Regions' subsidiary depository institutions
are subject to certain legal restrictions on the amount of dividends they are
permitted to pay. See "Supervision and Regulation--Payment of Dividends."
43
<PAGE> 51
INFORMATION ABOUT FIRST NATIONAL
First National is a bank holding company organized under the laws of
the state of Louisiana with its principal executive office located in
Alexandria, Louisiana. First National operates principally through Security
First National Bank, which is a national bank and which provides a range of
consumer and commercial banking services through seven offices in Rapides and
Lincoln Parishes in central and northern Louisiana. At March 31, 2000, First
National had total consolidated assets of approximately $258 million, total
consolidated deposits of approximately $218 million, and total consolidated
stockholders' equity of approximately $23 million. First National's principal
executive office is located at 625 Murray Street, Alexandria, Louisiana, 71301
and its telephone number at such address is (318) 445-4531.
All of First National's facilities are owned by it except one, which is
held under a long term lease.
COMPETITION
First National encounters vigorous competition in its market areas for
the provision of depository institution financial services from a number of
sources, including bank holding companies and commercial banks, savings and loan
associations and other thrift institutions, credit unions, other financial
institutions, and financial intermediaries that operate in First National's
market area. Regional interstate banking laws and other recent federal and state
laws have resulted in increased competition from both conventional banking
institutions and other businesses offering financial services and products.
Security First National Bank also competes for interest bearing funds with a
number of other financial intermediaries and nontraditional consumer investment
alternatives, including brokerage firms, consumer finance companies, commercial
finance companies, credit unions, money market funds, and federal, state, and
municipal issuers of short term obligations. Many of these competitors have
greater financial resources than Security First National Bank. At March 31,
2000, there were approximately 14 commercial banks, 1 savings bank, and 19
credit unions competing with Security First National Bank in the Bank's market
area.
LEGAL PROCEEDINGS
First National and Security First National Bank are not parties to any
material legal proceedings other than ordinary routine litigation incidental to
their business.
MANAGEMENT
The following table presents information about the directors and
executive officers of First National and Security First National Bank. Unless
otherwise indicated, each person has sole voting and investment powers over the
indicated shares.
44
<PAGE> 52
<TABLE>
<CAPTION>
PRESENT OCCUPATION POSITION AND DIRECTOR OR NUMBER OF SHARES
AND PRINCIPAL OFFICES HELD EXECUTIVE OWNED AT THE
OCCUPATION FOR WITH FIRST NATIONAL OFFICER RECORD DATE AND
NAME LAST FIVE YEARS AND BANK SINCE PERCENT OF CLASS
---- ------------------ ------------------- ----------- --------------------
<S> <C> <C> <C> <C> <C>
Michael A. Bindursky President-Alexandria 1996 4,258 .1%
Iron & Supply
Henry E. Blake Vice Chairman/Trust Officer- Vice Chairman- 1971 240,996 7.1
Security First National Security First National
Bank Bank
Scott O. Brame Retired Chairman-Security 1976 41,000 1.2
First National Bank
Jack T. Cappel Physician 1962 76,500 2.2
Retired 1999
Deborah N. Eddlemon Financial Manager 1993 25,000 .7
Utilitech Solutions, LLC
(a subsidiary of Cleco
Corp)(1 yr)
Controller-Rankin
Automotive (4 yrs)
Thomas D. Fowler CEO-Security First CEO-Security First 1992 103,249 3.0
National Bank National Bank
Quintin H. Hartt President-Red 1986 32,745 1.0
River Rarities
Michael L. Jenkins President-Jenkins 1993 92,658 2.7
Financial Services
Donald S. Kramer President-Security President-Security 1981 56,636 1.7
First National Bank First National Bank
& First National & First National
Alfred A. Mansour Physician 1996 4,339 .1
C.E. Provine President-Provine 1982 195,047 5.7
Studios
Jimmy L. Terrill Chairman-Louisiana 1982 41,050 1.2
Energy (2 yrs)
Chairman/CEO-Gulf
State Gas Pipeline
Corp (3 yrs)
E.S.Voelker President-Alexandria 1966 10,616 .3
Bonded Warehouse
Foster Walker, III President-Walker 1978 103,178 3.0
Oldsmobile, Inc.
James W. Welch, Jr Physician 1979 130,886 3.8
</TABLE>
45
<PAGE> 53
<TABLE>
<S> <C> <C> <C> <C> <C>
Glenn W. Butler Executive Vice Pres. Executive Vice Pres. 1991 17,500 .5
Security First National Security First National
Bank Bank
Secretary-Security
First National Bank
Secretary-First
National Bancshares
Jennifer Cicardo VP Comptroller VP Comptroller 1998 61 *
Security First Security First
National Bank National Bank
Treasurer Treasurer
First National First National
</TABLE>
* less than .1%.
TRANSACTIONS WITH MANAGEMENT
In the ordinary course of business, Security First National Bank has
loans, deposits and other transactions with its executive officers, directors,
and organizations with which such persons are associated. Such transactions are
on substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with others. The
aggregate amount of loans to the aforementioned persons and company(s) in which
they have a 10% or more ownership interest as of March 31, 2000, was
approximately $9,543,000.
VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS
The following table sets forth certain information concerning the
beneficial owners of more than 5.0% of First National common stock, as of the
record date.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT OF PERCENT OF
TITLE OF CLASS OF BENEFICIAL OWNER OWNERSHIP CLASS
-------------- ------------------- --------- ----------
<S> <C> <C> <C>
Common Stock Henry Blake 240,996 7.1%
Common Stock C. E. Provine 195,047 5.7
</TABLE>
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<PAGE> 54
INFORMATION ABOUT 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 740 banking offices located in Alabama, Arkansas, Florida,
Georgia, Louisiana, South Carolina, Tennessee, and Texas as of March 31, 2000.
At that date, Regions had total consolidated assets of approximately $41.4
billion, total consolidated deposits of approximately $32.0 billion, and total
consolidated stockholders' equity of approximately $3.1 billion. Regions has
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.
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) 944-1300.
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
"Where You Can Find More Information."
RECENT DEVELOPMENTS
Since December 31, 1999, and as of the date of this Proxy
Statement-Prospectus, Regions has completed the acquisitions of one financial
institution and has entered into definitive agreements to acquire two financial
institutions in addition to the merger. Certain aspects of the completed and
other pending acquisitions are presented in the following table:
<TABLE>
<CAPTION>
CONSIDERATION
--------------------------------------------------------
APPROXIMATE
--------------------------
ACCOUNTING
INSTITUTION ASSET SIZE(1) VALUE(1) TYPE TREATMENT
----------- ------------- -------- ---- ----------
(In millions)
<S> <C> <C> <C> <C>
Recently Completed Acquisition
------------------------------
LCB Corporation, located in Fayetteville, Tennessee $ 173 $ 28 Regions Purchase
Common
Stock
</TABLE>
47
<PAGE> 55
<TABLE>
<S> <C> <C> <C> <C>
Other Pending Acquisitions
--------------------------
East Coast Bank Corporation, located in Ormond Beach, $ 108 $ 11 Regions Purchase
Florida Common
Stock
Heritage Bancorp, Inc., located in Hutto, Texas 97 17 Regions Purchase
Common
Stock
</TABLE>
---------------
(1) Calculated as of the date of consummation in the case of the completed
acquisitions and as of the date of announcement of the transaction in
the case of pending acquisitions.
Consummation of the other pending acquisitions is subject to the
approval of certain regulatory agencies and approval of the stockholders of the
institutions to be acquired. Moreover, the closing of each transaction is
subject to various contractual conditions precedent. No assurance can be given
that the conditions precedent to consummating the transactions will be satisfied
in a manner that will result in their consummation.
If the other pending acquisitions and the merger had been consummated
on March 31, 2000, as of that date Regions' total consolidated assets would have
been increased by approximately $473 million to approximately $41.9 billion; its
total consolidated deposits would have increased by approximately $412 million
to approximately $32.4 billion; and its total consolidated stockholders' equity
would have increased by approximately $40 million to approximately $3.2 billion.
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<PAGE> 56
SUPERVISION AND REGULATION
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 First National.
Additional information is available in Regions' Annual Report on Form 10-K for
the fiscal year ended December 31, 1999. See "Where You Can Find More
Information."
GENERAL
Regions and First National are both bank holding companies registered
with the Board of Governors of the Federal Reserve System under the Bank Holding
Company Act. As such, Regions and First National and their non-bank subsidiaries
are subject to the supervision, examination, and reporting requirements of the
Bank Holding Company Act and the regulations of the Federal Reserve Board.
The Bank Holding Company Act requires every bank holding company to
obtain the prior approval of the Federal Reserve Board before: (1) it may
acquire direct or indirect ownership or control of any voting shares of any bank
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 bank; (2) it or any of
its subsidiaries, other than a bank, may acquire all or substantially all of the
assets of any bank; or (3) it may merge or consolidate with any other bank
holding company.
The Bank Holding Company Act further provides that the Federal Reserve
Board 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 Board
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.
The Bank Holding Company Act generally prohibits Regions and First
National 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 Board to be so
closely related to banking or managing or controlling banks as to be a proper
incident thereto. In determining whether a particular activity is permissible,
the Federal Reserve Board 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.
In November, 1999, the President signed the Gramm-Leach-Bliley Act,
which significantly relaxes previously existing restrictions on the activities
of banks and bank holding companies. Effective in March 2000, an eligible bank
holding company may elect to be a "financial holding company" and thereafter may
engage in a range of activities that are financial in nature and that were not
previously permissible
49
<PAGE> 57
for banks and bank holding companies. For a bank holding company to be eligible
for financial holding company status, all of its subsidiary financial
institutions must be well-capitalized and well managed. It effects financial
holding company status by filing a declaration with the Federal Reserve Board
that it elects to be a financial holding company. A financial holding company
may engage directly or through a subsidiary in the statutorily authorized
activities of securities dealing, underwriting, and market making, insurance
underwriting and agency activities, merchant banking, and insurance company
portfolio investments, and in any activity that the Federal Reserve Board
determines by rule or order to be financial in nature or incidental to such
financial activity. The Federal Reserve Board must deny expanded authority to
any bank holding company that received less than a satisfactory rating on its
most recent Community Reinvestment Act review as of the time it submits its
declaration. Although Regions currently meets the prerequisites for financial
holding company status, it has not filed an election with the Federal Reserve
Board.
The Gramm-Leach-Bliley Act also permits securities brokerage firms and
insurance companies to own banks and bank holding companies. The Act also seeks
to streamline and coordinate regulation of integrated financial holding
companies, providing generally for "umbrella" regulation of financial holding
companies by the Federal Reserve Board, and for functional regulation of banking
activities by bank regulators, securities activities by securities regulators,
and insurance activities by insurance regulators.
Each of the subsidiary banks of Regions and First National 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 bank 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.
Regions' subsidiary banks are state-chartered banks and are subject to
supervision and examination by the FDIC and the state banking authorities of the
states in which they are located. Security First National Bank is subject to
regulation, supervision, and examination by the OCC and the FDIC. The applicable
federal banking regulator, as well as the appropriate state banking authority
for Regions' state-chartered subsidiary banks, regularly examines the operations
of the subsidiary banks and is given 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 First National are legal entities separate and distinct
from their banking and other subsidiaries. The principal sources of cash flow of
both Regions and First National, including cash flow to pay dividends to their
respective stockholders, are dividends from their subsidiary banks. There are
statutory and regulatory limitations on the payment of dividends by these
subsidiary banks to Regions and First National, as well as by Regions and First
National to their stockholders.
As to the payment of dividends, 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 FDIC, and Security
First National Bank is subject to the National Bank Act and the regulations of
the OCC.
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<PAGE> 58
If, in the opinion of a federal banking regulatory agency, an
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 an institution's capital base to an inadequate level would be an
unsafe and unsound banking practice. Under current federal law, 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 Reserve Board and the FDIC have issued policy
statements which provide that bank holding companies and insured banks should
generally pay dividends only out of current operating earnings.
At March 31, 2000, under dividend restrictions imposed under federal
and state laws, the respective subsidiary banks of Regions and First National,
without obtaining governmental approvals, could declare aggregate dividends to
Regions of approximately $394 million and to First National of approximately
$5.4 million.
The payment of dividends by Regions and First National and their
subsidiary banks may also be affected or limited by other factors, such as the
requirement to maintain adequate capital above regulatory guidelines.
CAPITAL ADEQUACY
Regions, First National, and their respective subsidiary banks are
required to comply with the capital adequacy standards established by the
Federal Reserve Board in the case of Regions and First National the FDIC or the
OCC in the case of each of their subsidiary banks. There are two basic measures
of capital adequacy for bank holding companies that have been promulgated by the
Federal Reserve Board: 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 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 the Total Capital must be
composed of common equity, undivided profits, minority interests in the equity
accounts of consolidated subsidiaries, qualifying 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 certain subordinated debt, other preferred stock, and a
limited amount of loan loss reserves. The minimum guideline for Tier 1 Capital
is 4.0%. At March 31, 2000, Regions' consolidated Total Capital Ratio was 11.25%
and its Tier 1 Capital Ratio (i.e., the ratio of Tier 1 Capital to risk-weighted
assets) was 9.37%, and First National's consolidated Total Capital Ratio was
20.3% and its Tier 1 Capital Ratio was 19.0%.
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<PAGE> 59
In addition, the Federal Reserve Board 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 above the stated minimums. 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 Board 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. At March 31, 2000 Regions' Leverage Ratio was 6.70% and First
National's Leverage Ratio was 9.59%.
Each of Regions' and First National's subsidiary banks is subject to
risk-based and leverage capital requirements adopted by the FDIC or the OCC,
which are substantially similar to those adopted by the Federal Reserve Board.
Each of the subsidiary banks was in compliance with applicable minimum capital
requirements as of March 31, 2000. Neither Regions, First National, nor any of
their subsidiary banks 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 to a variety of
enforcement remedies, including issuance of a capital directive, the termination
of deposit insurance by the FDIC, a 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 Reserve Board, the Office of the Comptroller of the
Currency, and the FDIC also have 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' methodology for evaluating interest rate risk requires
banks with excessive interest rate risk exposure to hold additional amounts of
capital against such exposures.
PROMPT CORRECTIVE ACTION
Current federal law establishes a system of prompt corrective action to
resolve the problems of undercapitalized institutions. Under this system the
federal banking regulators have established five capital categories ("well
capitalized," "adequately capitalized," "undercapitalized," "significantly
undercapitalized," and "critically undercapitalized") and must 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, current federal
law 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.
Under the final agency rule implementing the prompt corrective action
provisions, an institution that (1) has a Total Capital ratio of 10% or greater,
a Tier 1 Capital ratio of 6.0% or greater, and a Leverage
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Ratio of 5.0% or greater and (2) 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. 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 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 the law.
At March 31, 2000, all of the subsidiary banks of Regions and First
National had the requisite capital levels to qualify as well capitalized.
FDIC INSURANCE ASSESSMENTS
The FDIC currently uses 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: (1) well capitalized; (2)
adequately capitalized; and (3) 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
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classifications (i.e., combinations of capital groups and supervisory subgroups)
to which different assessment rates are applied.
The FDIC may terminate an institution's insurance of deposits 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 500,000,000 shares of Regions common
stock and 5,000,000 shares of preferred stock. At March 31, 2000, 222,171,783
shares of Regions common stock were issued, including 1,750,000 treasury shares,
and 220,421,783 shares were outstanding. At that date no preferred stock was
issued. 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 and capital guidelines. At March 31, 2000, under such
requirements and guidelines, Regions' subsidiary institutions had $394 million
of undivided profits legally available for the payment of dividends. See
"Supervision and Regulation--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 2001. Under SEC rules, proposals of Regions stockholders
intended to be presented at that meeting must be received by Regions at its
principal executive offices by December 18, 2000, for consideration by Regions
for possible inclusion in such proxy statement.
FORWARD LOOKING STATEMENTS
This Proxy Statement-Prospectus and documents incorporated in it may
include forward looking statements which reflect Regions' current views with
respect to future events and financial performance. Such forward looking
statements are based on general assumptions and are subject to various risks,
uncertainties, and other factors that may cause actual results to differ
materially from the views, beliefs, and projections expressed in such
statements. Some factors are specific to Regions, including:
- The cost and other effects of material contingencies, including
litigation contingencies and other contingencies related to acquired
operations.
- Regions' ability to expand into new markets and to maintain profit
margins in the face of pricing pressures.
- The ability of Regions to achieve the earnings expectations related to
the acquired operations of
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<PAGE> 62
recently-completed and pending acquisitions, which in turn depends on a
variety of factors, including
- the ability of Regions to achieve the anticipated cost savings
and revenue enhancements with respect to the acquired
operations.
- the assimilation of the acquired operations to Regions'
corporate culture, including the ability to instill Regions'
credit practices and efficient approach to the acquired
operations.
- the continued growth of the acquired entities' markets
consistent with recent historical experience.
Other factors which may affect Regions apply to the financial services industry
more generally, including:
- Possible changes in economic and business conditions that may affect
the prevailing interest rates, the prevailing rates of inflation, or
the amount of growth, stagnation, or recession in the global, U.S., and
southeastern U.S. economies, the value of investments, collectibility
of loans, and the profitability of business entities.
- Possible changes in monetary and fiscal policies, laws, and
regulations, and other activities of governments, agencies, and similar
organizations.
- The effects of easing of restrictions on participants in the financial
services industry, such as banks, securities brokers and dealers,
investment companies, and finance companies, and attendant changes in
patterns and effects of competition in the financial services industry.
The words "believe", "expect", "anticipate", "project", and similar
expressions signify forward looking statements. Readers are cautioned not to
place undue reliance on any forward looking statements made by or on behalf of
Regions. Any such statement speaks only as of the date the statement was made.
Regions undertakes no obligation to update or revise any forward looking
statements.
EXPERTS
The consolidated financial statements of Regions at December 31, 1999
and 1998, and for each of the three years in the period ended December 31, 1999,
incorporated by reference in this Registration Statement, have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
which is included in Regions' Annual Report on Form 10-K for the year ended
December 31, 1999. 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.
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 LLP,
Birmingham, Alabama. Henry E. Simpson, partner in the law firm of Lange,
Simpson, Robinson & Somerville LLP, is a member of the board of directors of
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<PAGE> 63
Regions. As of _______, 2000, attorneys in the law firm of Lange, Simpson,
Robinson & Somerville LLP owned an aggregate of _______ shares of Regions common
stock.
Certain tax consequences of the transaction have been passed upon by
Alston & Bird LLP, Washington, D.C.
WHERE YOU CAN FIND MORE INFORMATION
Regions files annual, quarterly and special reports, proxy statements
and other information with the SEC. You may read and copy any reports,
statements or other information that Regions files with the SEC at the SEC's
public reference rooms in Washington, D.C., New York, New York and Chicago,
Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. These filings are also available at the Internet world
wide web site maintained by the SEC at "http://www.sec.gov."
Regions filed a Registration Statement on Form S-4 (the "Registration
Statement") to register with the SEC the Regions common stock to be issued to
First National stockholders in the merger. This Proxy Statement-Prospectus is a
part of that Registration Statement and constitutes a prospectus of Regions. As
allowed by SEC rules, this Proxy Statement-Prospectus does not contain all the
information you can find in Regions' Registration Statement or the exhibits to
that Registration Statement.
SEC regulations allow Regions to "incorporate by reference" information
into this Proxy Statement-Prospectus, which means that Regions can disclose
important information to you by referring you to another document filed
separately with the SEC. The information incorporated by reference is considered
part of this Proxy Statement-Prospectus, except for any information superseded
by information contained directly in this Proxy Statement-Prospectus or in later
filed documents incorporated by reference in this Proxy Statement-Prospectus.
This Proxy Statement-Prospectus incorporates by reference the documents
set forth below that Regions has previously filed with the SEC. These documents
contain important information about Regions and its finances.
<TABLE>
<CAPTION>
REGIONS SEC FILINGS (FILE NO. 0-6159) PERIOD/AS OF DATE
<S> <C>
Annual Report on Form 10-K Year ended December 31, 1999
Quarterly Reports on Form 10-Q Quarter ended March 31, 2000
</TABLE>
Regions also incorporates by reference additional documents that may be
filed with the SEC between the date of this Proxy Statement-Prospectus and the
consummation of the merger or the termination of the merger agreement. These
include periodic reports, such as Annual Reports on Form 10-K, Quarterly Reports
on Form 10-Q and Current Reports on Form 8-K, as well as proxy statements.
Regions has supplied all information contained or incorporated by
reference in this Proxy Statement-Prospectus relating to Regions, and First
National has supplied all such information relating to First National.
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<PAGE> 64
If you are a stockholder, we may have sent you some of the documents
incorporated by reference, but you can obtain any of them through Regions, the
SEC or the SEC's Internet web site as described above.
Documents incorporated by reference are available from Regions without
charge, excluding all exhibits, except that if Regions has specifically
incorporated by reference an exhibit in this Proxy Statement-Prospectus, the
exhibit will also be available without charge. Stockholders may obtain documents
incorporated by reference in this Proxy Statement-Prospectus by requesting them
in writing or by telephone from Regions at the following address:
Regions Financial Corporation
417 North 20th Street
Birmingham, AL 35203
Attention: Shareholder relations
Telephone: (205) 326-7090
You should rely only on the information contained or incorporated by
reference in this Proxy Statement-Prospectus. We have not authorized anyone to
provide you with information that is different from what is contained in this
Proxy Statement-Prospectus. This Proxy Statement-Prospectus is dated _______
2000. You should not assume that the information contained in this Proxy
Statement-Prospectus is accurate as of any date other than that date. Neither
the mailing of this Proxy Statement-Prospectus to stockholders nor the issuance
of Regions common stock in the merger creates any implication to the contrary.
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APPENDIX A
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
FIRST NATIONAL BANCSHARES OF LOUISIANA, INC.
AND
REGIONS FINANCIAL CORPORATION
DATED AS OF APRIL 4, 2000
A-1
<PAGE> 66
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
Agreement and Plan of Merger......................................... A-6
Preamble............................................................. A-6
ARTICLE 1 -- TRANSACTIONS AND TERMS OF MERGER........................ A-6
1.1 Merger...................................................... A-6
1.2 Time and Place of Closing................................... A-6
1.3 Effective Time.............................................. A-7
1.4 Execution of Support Agreements............................. A-7
ARTICLE 2 -- TERMS OF MERGER......................................... A-7
2.1 Certificate of Incorporation................................ A-7
2.2 Bylaws...................................................... A-7
2.3 Directors and Officers...................................... A-7
ARTICLE 3 -- MANNER OF CONVERTING SHARES............................. A-8
3.1 Conversion of Shares........................................ A-8
3.2 Anti-Dilution Provisions.................................... A-8
3.3 Shares Held by FNBL or Regions.............................. A-8
3.4 Dissenting Stockholders..................................... A-9
3.5 Fractional Shares........................................... A-9
3.6 Conversion of Stock Options................................. A-9
ARTICLE 4 -- EXCHANGE OF SHARES...................................... A-9
4.1 Exchange Procedures......................................... A-9
4.2 Rights of Former FNBL Stockholders.......................... A-10
ARTICLE 5 -- REPRESENTATIONS AND WARRANTIES OF FNBL.................. A-11
5.1 Organization, Standing, and Power........................... A-11
5.2 Authority; No Breach By Agreement........................... A-11
5.3 Capital Stock............................................... A-12
5.4 FNBL Subsidiaries........................................... A-12
5.5 Financial Statements........................................ A-13
5.6 Absence of Undisclosed Liabilities.......................... A-13
5.7 Absence of Certain Changes or Events........................ A-13
5.8 Tax Matters................................................. A-13
5.9 Assets...................................................... A-15
5.10 Environmental Matters....................................... A-15
5.11 Compliance with Laws........................................ A-16
5.12 Labor Relations............................................. A-16
5.13 Employee Benefit Plans...................................... A-17
5.14 Material Contracts.......................................... A-19
5.15 Legal Proceedings........................................... A-19
5.16 Reports..................................................... A-20
5.17 Statements True and Correct................................. A-20
5.18 Tax and Regulatory Matters.................................. A-20
5.19 State Takeover Laws......................................... A-20
5.20 Charter Provisions.......................................... A-21
5.21 Support Agreements.......................................... A-21
5.22 Derivatives................................................. A-21
</TABLE>
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<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
ARTICLE 6 -- REPRESENTATIONS AND WARRANTIES OF REGIONS............... A-21
6.1 Organization, Standing, and Power........................... A-21
6.2 Authority; No Breach By Agreement........................... A-21
6.3 Capital Stock............................................... A-22
6.4 Regions Subsidiaries........................................ A-22
6.5 SEC Filings; Financial Statements........................... A-23
6.6 Absence of Undisclosed Liabilities.......................... A-23
6.7 Absence of Certain Changes or Events........................ A-24
6.8 Compliance with Laws........................................ A-24
6.9 Legal Proceedings........................................... A-24
6.10 Reports..................................................... A-24
6.11 Statements True and Correct................................. A-25
6.12 Tax and Regulatory Matters.................................. A-25
6.13 Derivatives................................................. A-25
ARTICLE 7 -- CONDUCT OF BUSINESS PENDING CONSUMMATION................ A-25
7.1 Affirmative Covenants of Both Parties....................... A-25
7.2 Negative Covenants of FNBL.................................. A-26
7.3 Adverse Changes in Condition................................ A-28
7.4 Reports..................................................... A-28
ARTICLE 8 -- ADDITIONAL AGREEMENTS................................... A-28
8.1 Registration Statement; Proxy Statement; Stockholder A-28
Approval....................................................
8.2 Exchange Listing............................................ A-29
8.3 Applications................................................ A-29
8.4 Filings with State Offices.................................. A-29
8.5 Agreement as to Efforts to Consummate....................... A-29
8.6 Investigation and Confidentiality........................... A-29
8.7 Press Releases.............................................. A-30
8.8 Certain Actions............................................. A-30
8.9 Tax Treatment............................................... A-31
8.10 State Takeover Laws......................................... A-31
8.11 Charter Provisions.......................................... A-31
8.12 Agreement of Affiliates..................................... A-31
8.13 Employee Benefits and Contracts............................. A-32
8.14 Indemnification............................................. A-32
8.15 Certain Modifications....................................... A-33
ARTICLE 9 -- CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE.......
A-34
9.1 Conditions to Obligations of Each Party..................... A-34
9.2 Conditions to Obligations of Regions........................ A-35
9.3 Conditions to Obligations of FNBL........................... A-36
ARTICLE 10 -- TERMINATION............................................ A-37
10.1 Termination................................................. A-37
10.2 Effect of Termination....................................... A-38
10.3 Non-Survival of Representations and Covenants............... A-38
</TABLE>
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<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
ARTICLE 11 -- MISCELLANEOUS.......................................... A-38
11.1 Definitions................................................. A-38
11.2 Expenses.................................................... A-45
11.3 Brokers and Finders......................................... A-45
11.4 Entire Agreement............................................ A-46
11.5 Amendments.................................................. A-46
11.6 Waivers..................................................... A-46
11.7 Assignment.................................................. A-47
11.8 Notices..................................................... A-47
11.9 Governing Law............................................... A-47
11.10 Counterparts................................................ A-47
11.11 Captions.................................................... A-48
11.12 Interpretations............................................. A-48
11.13 Enforcement of Agreement.................................... A-48
11.14 Severability................................................ A-48
Signatures........................................................... A-48
Appendix B........................................................... B-1
Appendix C........................................................... C-1
</TABLE>
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<PAGE> 69
LIST OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <C> <S>
1 -- Form of Support Agreement. (sec. 1.4).
2 -- Form of Affiliate Agreement. (sec.sec. 8.12, 9.2(d)).
3 -- Form of Claims Letter. (sec. 9.2(e)).
4 -- Opinion of FNBL Counsel (sec. 9.2(f)).
5 -- Opinion of Regions Counsel (sec. 9.3(d)).
</TABLE>
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<PAGE> 70
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into as of April 4, 2000, by and between FIRST NATIONAL BANCSHARES OF LOUISIANA,
INC. ("FNBL"), a corporation organized and existing under the Laws of the State
of Louisiana, with its principal office located in Alexandria, Louisiana; 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 FNBL and Regions are of the opinion that the
transactions described herein are in the best interests of the parties to this
Agreement and their respective stockholders. This Agreement provides for the
acquisition of FNBL by Regions pursuant to the merger of FNBL with and into
Regions. At the effective time of the Merger, the outstanding shares of the
capital stock of FNBL shall be converted into shares of the common stock of
Regions (except as provided herein). As a result, stockholders of FNBL shall
become stockholders of Regions, and each of the subsidiaries of FNBL shall
continue to conduct its business and operations as a subsidiary of Regions. The
transactions described in this Agreement are subject to the approvals of the
stockholders of FNBL, the Board of Governors of the Federal Reserve System, and
certain 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 for federal income tax purposes shall qualify as
a "reorganization" within the meaning of Section 368(a) of the Internal Revenue
Code.
As a condition and inducement to Regions' willingness to enter into this
Agreement, each of FNBL's directors is executing and delivering to Regions an
agreement (a "Support Agreement"), in substantially the form of Exhibit 1.
Certain terms used in this Agreement are defined in Section 11.1 of this
Agreement.
NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants, and agreements set forth herein, the Parties agree
as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 Merger. Subject to the terms and conditions of this Agreement, at the
Effective Time, FNBL shall be merged with and into Regions in accordance with
the provisions of Section 12:112 of the LBCL and Sections 252 and 258 of the
DGCL and with the effect provided in Section 12:115 of the LBCL and Section 259
of the DGCL (the "Merger"). Regions shall be the Surviving Corporation resulting
from the Merger and shall continue to be governed by the Laws of the State of
Delaware. The Merger shall be consummated pursuant to the terms of this
Agreement, which has been approved and adopted by the respective Boards of
Directors of FNBL and Regions.
1.2 Time and Place of Closing. The consummation of the Merger (the
"Closing") shall take place at 9:00 A.M. on the date that the Effective Time
occurs (or the
A-6
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immediately preceding day if the Effective Time is earlier than 9:00 A.M.), or
at such other time as the Parties, acting through their duly authorized
officers, may mutually agree. The place of Closing shall be at such location as
may be mutually agreed upon by the Parties.
1.3 Effective Time. The Merger and the other transactions contemplated by
this Agreement shall become effective on the date and at the time the Louisiana
Certificate of Merger reflecting the Merger shall become effective with the
Secretary of State of the State of Louisiana 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 by the duly authorized
officers of each Party, the Parties shall use their reasonable efforts to cause
the Effective Time to occur on the last business day of the month in which the
last of the following occurs: (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 FNBL approve the matters relating to this
Agreement required to be approved by such stockholders by applicable Law; or
such later day within 30 days thereof as may be specified by Regions, but only
to the extent that any such delay within such 30-day period does not have the
effect of depriving the former FNBL stockholders of receiving a dividend on the
shares of Regions Common Stock to be received in exchange for their shares of
FNBL Common Stock.
1.4 Execution of Support Agreements. Immediately prior to the execution of
this Agreement and as a condition hereto, each of the directors of FNBL is
executing and delivering to Regions a Support Agreement.
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.
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<PAGE> 72
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 Conversion of Shares. Subject to the provisions of this Article 3, at
the Effective Time, by virtue of the Merger and without any action on the part
of Regions or FNBL, or the stockholders of either of the foregoing, the shares
of the constituent corporations shall be converted as follows:
(a) Each share of Regions Common Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding
from and after the Effective Time.
(b) Each share of FNBL Common Stock (excluding shares held by any FNBL
Company or any Regions Company, in each case other than in a fiduciary
capacity or as a result of debts previously contracted) issued and
outstanding at the Effective Time shall be converted into .7045 of a share
of Regions Common Stock (subject to adjustment as provided in the following
proviso, the "Exchange Ratio"); provided that (i) in the event the Average
Closing Price is greater than $24.20, the Exchange Ratio shall be equal to
the quotient obtained by dividing (A) the product of $24.20 and the
Exchange Ratio (as then in effect) by (B) the Average Closing Price and
(ii) in the event the Average Closing Price is less than $19.80, the
Exchange Ratio shall be equal to the quotient obtained by dividing (A) the
product of $19.80 and the Exchange Ratio (as then in effect) by (B) the
Average Closing Price.
3.2 Anti-Dilution Provisions. In the event FNBL changes the number of
shares of FNBL 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 prior to the Effective Time, the Exchange
Ratio shall be proportionately adjusted.
3.3 Shares Held by FNBL or Regions. Each of the shares of FNBL Common
Stock held by any FNBL Company or by any Regions Company, in each case other
than in a fiduciary capacity or as a result of debts previously contracted,
shall be canceled and retired at the Effective Time and no consideration shall
be issued in exchange therefor.
3.4 Dissenting Stockholders. Any holder of shares of FNBL Common Stock who
perfects such holder's dissenters' rights of appraisal in accordance with and as
contemplated by Part XIII of the LBCL shall be entitled to receive the value of
such shares in cash as determined pursuant to such provision of Law; provided,
that no such payment shall be made to any dissenting stockholder unless and
until such dissenting stockholder has complied with the applicable provisions of
the LBCL, including the provisions of Section 131 thereof relating to the
deposit in escrow, endorsement, and transfer of the certificate or certificates
representing the shares for which payment is being made. In the event that a
dissenting stockholder of FNBL fails to perfect, or effectively withdraws or
loses, his right to appraisal and of payment for his shares, such Person shall
not have the right to receive payment in cash for his shares and, instead, as of
the Effective Time the shares of FNBL Common Stock held by such Person shall be
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converted into and exchanged for that number of shares of Regions Common Stock
determined under Section 3.1 of this Agreement and the delivery of certificates
representing such Regions Common Stock and any dividends or other distributions
in respect thereof to which such holder may be entitled shall be governed by
Section 4.1 of this Agreement.
3.5 Fractional Shares. Notwithstanding any other provision of this
Agreement, each holder of shares of FNBL Common Stock exchanged pursuant to the
Merger who would otherwise have been entitled to receive a fraction of a share
of Regions Common Stock (after taking into account all certificates delivered by
such holder) shall receive, in lieu thereof, cash (without interest) in an
amount equal to such fractional part of a share of Regions Common Stock
multiplied by the market value of one share of Regions Common Stock at the
Effective Time. The market value of one share of Regions Common Stock at the
Effective Time shall be the last sale price of Regions Common Stock at the close
of regular trading on the Nasdaq NMS (as reported by The Wall Street Journal or,
if not reported thereby, any other authoritative source selected by Regions) on
the last trading day preceding the Effective Time. No such holder will be
entitled to dividends, voting rights, or any other rights as a stockholder in
respect of any fractional shares.
3.6 Conversion of Stock Options. (a) At the Effective Time, all rights
with respect to FNBL Common Stock pursuant to stock options or stock
appreciation rights ("FNBL Options") granted by FNBL under the FNBL 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 FNBL Option, in accordance with the terms of the FNBL
Stock Plan and stock option agreement by which it is evidenced. From and after
the Effective Time, (i) each FNBL 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 FNBL Option shall be equal to the number of shares of FNBL Common Stock
subject to such FNBL Option immediately prior to the Effective Time multiplied
by the Exchange Ratio, and (iii) the per share exercise price under each such
FNBL Option shall be adjusted by dividing the per share exercise price under
each such FNBL 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." FNBL and Regions agree to take all necessary steps to effectuate the
foregoing provisions of this Section 3.6.
(b) As soon as reasonably practicable after the Effective Time, Regions
shall file a registration statement on Form S-3 or S-8, as the case may be (or
any successor or other appropriate forms), with respect to the shares of Regions
Common Stock subject to such options and shall use its reasonable efforts to
maintain the effectiveness of such registration statement (and maintain the
current status of the prospectus or prospectuses therein) for so long as such
options remain outstanding.
ARTICLE 4
EXCHANGE OF SHARES
4.1 Exchange Procedures. Promptly after the Effective Time, Regions and
FNBL shall cause the exchange agent selected by Regions (the "Exchange Agent")
to mail to
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the former stockholders of FNBL appropriate transmittal materials (which shall
specify that delivery shall be effected, and risk of loss and title to the
certificates theretofore representing shares of FNBL Common Stock shall pass,
only upon proper delivery of such certificates to the Exchange Agent). After the
Effective Time, each holder of shares of FNBL Common Stock (other than shares to
be canceled pursuant to Section 3.3 of this Agreement or as to which dissenters'
rights of appraisal have been perfected and not withdrawn or forfeited under
Section 131 of the LBCL) issued and outstanding at the Effective Time promptly
upon surrender the certificate or certificates representing such shares to the
Exchange Agent, shall receive in exchange therefor the consideration provided in
Section 3.1 of this Agreement, together with all undelivered dividends and other
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 FNBL 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). Until so surrendered, each outstanding certificate of FNBL Common
Stock shall be deemed for all purposes, other than as provided below with
respect to the payment of dividends or other distributions payable to the
holders of shares of Regions Common Stock, to represent the consideration into
which the number of shares of FNBL Common Stock represented thereby prior to the
Effective Time shall have been converted. Regions shall not be obligated to
deliver the consideration to which any former holder of FNBL Common Stock is
entitled as a result of the Merger until such holder surrenders such holder's
certificate or certificates representing the shares of FNBL Common Stock for
exchange as provided in this Section 4.1. The certificate or certificates of
FNBL Common Stock so surrendered shall be duly endorsed as the Exchange Agent
may require. Any other provision of this Agreement notwithstanding, neither the
Surviving Corporation, FNBL, nor the Exchange Agent shall be liable to a holder
of FNBL 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 FNBL Stockholders. At the Effective Time, the stock
transfer books of FNBL shall be closed as to holders of FNBL Common Stock
immediately prior to the Effective Time and no transfer of FNBL 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 FNBL Common Stock (other
than shares to be canceled pursuant to Sections 3.3 and 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, subject, however, to the Surviving Corporation's
obligation to pay any dividends or make any other distributions with a record
date prior to the Effective Time which have been declared or made by FNBL in
respect of such shares of FNBL Common Stock in accordance with the terms of this
Agreement and which remain unpaid at the Effective Time. To the extent permitted
by Law, former stockholders of record of FNBL 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 FNBL Common
Stock are converted, regardless of whether such holders have exchanged their
certificates representing FNBL 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
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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 FNBL 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 FNBL
Common Stock certificate, both the Regions Common Stock certificate (together
with all such undelivered dividends or other distributions without interest) and
any undelivered dividends and cash payments to be paid for fractional share
interests (without interest) shall be delivered and paid with respect to each
share represented by such certificate.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF FNBL
FNBL hereby represents and warrants to Regions as follows:
5.1 Organization, Standing, and Power. FNBL is a corporation duly
organized, validly existing, and in good standing under the Laws of the State of
Louisiana, and has the corporate power and authority to carry on its business as
now conducted and to own, lease, and operate its Material Assets. FNBL 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 FNBL.
5.2 Authority; No Breach By Agreement. (a) FNBL 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 FNBL, subject to the approval of this Agreement by the holders of
two-thirds of the shares of FNBL Common Stock present at the Stockholders
Meeting, which is the only stockholder vote required for approval of this
Agreement and consummation of the Merger by FNBL. Subject to such requisite
stockholder approval, this Agreement represents a legal, valid, and binding
obligation of FNBL, enforceable against FNBL 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 FNBL, nor the
consummation by FNBL of the transactions contemplated hereby, nor compliance by
FNBL with any of the provisions hereof, will (i) conflict with or result in a
breach of any provision of FNBL'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 FNBL Company under, any
Contract or Permit of any FNBL Company, where such Default or Lien, or any
failure to obtain such Consent, is reasonably likely to
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have, individually or in the aggregate, a Material Adverse Effect on FNBL, or
(iii) subject to receipt of the requisite Consents referred to in Section 9.1(b)
of this Agreement, violate any Law or Order applicable to any FNBL Company or
any of their respective Material Assets.
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and rules of
the NASD, and other than Consents required from Regulatory Authorities, and
other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation or both 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 FNBL, no notice
to, filing with, or Consent of, any public body or authority is necessary for
the consummation by FNBL of the Merger and the other transactions contemplated
in this Agreement.
5.3 Capital Stock. (a) The authorized capital stock of FNBL consists, as
of the date of this Agreement, of 10,000,000 shares of FNBL Common Stock, of
which 3,412,417 shares are issued and outstanding as of the date of this
Agreement and not more than 3,442,417 shares will be issued and outstanding at
the Effective Time. All of the issued and outstanding shares of FNBL Common
Stock are duly and validly issued and outstanding and are fully paid and
nonassessable under the LBCL. None of the outstanding shares of FNBL Common
Stock has been issued in violation of any preemptive rights of the current or
past stockholders of FNBL. FNBL has reserved 100,000 shares of FNBL Common Stock
for issuance under the FNBL Stock Plans, pursuant to which options to purchase
not more than 30,000 shares of FNBL Common Stock are outstanding, as set forth
in Section 5.3(a) of the FNBL Disclosure Memorandum.
(b) Except as set forth in Section 5.3(a) of this Agreement or
Section 5.3(b) of the FNBL Disclosure Memorandum, there are no shares of capital
stock or other equity securities of FNBL outstanding and no outstanding Rights
relating to the capital stock of FNBL.
5.4 FNBL Subsidiaries. FNBL has disclosed in Section 5.4 of the FNBL
Disclosure Memorandum all of the FNBL Subsidiaries as of the date of this
Agreement. FNBL or one of its Subsidiaries owns all of the issued and
outstanding shares of capital stock of each FNBL Subsidiary. No equity
securities of any FNBL Subsidiary are or may become required to be issued (other
than to another FNBL Company) by reason of any Rights, and there are no
Contracts by which any FNBL Subsidiary is bound to issue (other than to another
FNBL Company) additional shares of its capital stock or Rights or by which any
FNBL Company is or may be bound to transfer any shares of the capital stock of
any FNBL Subsidiary (other than to another FNBL Company). There are no Contracts
relating to the rights of any FNBL Company to vote or to dispose of any shares
of the capital stock of any FNBL Subsidiary. Except as provided in Section 6:262
of the LBL, all of the shares of capital stock of each FNBL Subsidiary held by a
FNBL Company are fully paid and nonassessable under the applicable corporation
or banking Law of the jurisdiction in which such Subsidiary is incorporated or
organized and are owned by the FNBL Company free and clear of any Lien. Each
FNBL Subsidiary is either a bank or a corporation, and is duly organized,
validly existing, and (as to corporations) in good standing under the Laws of
the jurisdiction in which it is incorporated or organized, and has the corporate
power and authority necessary for it to own, lease, and operate its Assets and
to carry on its business as now conducted. Each FNBL Subsidiary is duly
qualified or
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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 FNBL. Each FNBL Subsidiary that is a
depository institution is an "insured depository institution" as defined in the
Federal Deposit Insurance Act and applicable regulations thereunder, and the
deposits in which are insured by the Bank Insurance Fund or Savings Association
Insurance Fund.
5.5 Financial Statements. FNBL has disclosed in Section 5.5 of the FNBL
Disclosure Memorandum, and has delivered to Regions copies of, all FNBL
Financial Statements prepared for periods ended prior to the date hereof and
will deliver to Regions copies of all FNBL Financial Statements prepared
subsequent to the date hereof. The FNBL 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 FNBL
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 past business practices, and (ii) present or will present, as the case may
be, fairly the consolidated financial position of the FNBL Companies as of the
dates indicated and the consolidated results of operations, changes in
stockholders' equity, and cash flows of the FNBL 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 FNBL Company has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on FNBL, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of FNBL, included
in the FNBL Financial Statements or reflected in the notes thereto and except
for Liabilities incurred in the ordinary course of business subsequent to
September 30, 1999. No FNBL Company has incurred or paid any Liability since
September 30, 1999, except for such Liabilities incurred or paid in the ordinary
course of business consistent with past business practice and which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on FNBL, and except for the fees and expenses relating to the Merger as
described in Article 11 hereof.
5.7 Absence of Certain Changes or Events. Since September 30, 1999, except
as disclosed in the FNBL Financial Statements delivered prior to the date of the
Agreement or as otherwise disclosed in the FNBL 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
FNBL, and (ii) the FNBL Companies have not taken any action, or failed to take
any action, prior to the date of this Agreement, which action or failure, if
taken after the date of this Agreement, would represent or result in a Material
breach or violation of any of the covenants and agreements of FNBL provided in
Article 7 of this Agreement, other than conducting the process that has led up
to the execution and consummation of this Agreement.
5.8 Tax Matters. (a) Since December 31, 1992, all Tax Returns required to
be filed by or on behalf of any of the FNBL 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, 1998, and, to the Knowledge of FNBL,
all Tax Returns filed are
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complete and accurate in all Material respects. All Tax Returns for periods
ending on or before the date of the most recent fiscal year end immediately
preceding the Effective Time will be timely filed or requests for extensions
will be timely filed. All Taxes shown on filed Tax Returns have been paid. There
is no audit examination, deficiency, or refund Litigation with respect to any
Taxes, that is reasonably likely to result in a determination that would have,
individually or in the aggregate, a Material Adverse Effect on FNBL, except to
the extent reserved against in the FNBL 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 FNBL 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
FNBL Companies for the period or periods through and including the date of the
respective FNBL Financial Statements has been made and is reflected on such FNBL
Financial Statements.
(d) Each of the FNBL Companies is in compliance with, and its records
contain the information and documents (including properly completed IRS Forms
W-9) necessary to comply with, in all material respects, 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 FNBL 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, except as
set forth in Section 5.8(e) of the FNBL Disclosure Memorandum; provided that
none of the contracts disclosed therein contains any "gross up" provision.
(f) There are no Material Liens with respect to Taxes upon any of the
Assets of the FNBL Companies.
(g) There has not been an ownership change, as defined in Internal Revenue
Code Section 382(g), of the FNBL Companies that occurred during or after any
Taxable Period in which the FNBL Companies incurred a net operating loss that
carries over to any Taxable Period ending after December 31, 1998.
(h) No FNBL Company has filed any consent under Section 341(f) of the
Internal Revenue Code concerning collapsible corporations.
(i) After the date of this Agreement, no Material election with respect to
Taxes will be made without the prior consent of Regions, which consent will not
be unreasonably withheld.
(j) No FNBL 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.
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5.9 Assets. The FNBL Companies have good and marketable title, free and
clear of all Liens, to all of their respective Assets, other than such defects
and liens which are not reasonably likely to have a Material Adverse Effect on
the FNBL Companies. All tangible properties used in the businesses of the FNBL
Companies are in good condition, reasonable wear and tear excepted, and are
usable in the ordinary course of business consistent with FNBL's past practices.
All Assets which are Material to FNBL's business on a consolidated basis, held
under leases or subleases by any of the FNBL Companies, are held under valid
Contracts enforceable in accordance with their respective terms (except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceedings may be brought), and each such
Contract is in full force and effect. The FNBL Companies currently maintain
insurance in amounts, scope, and coverage reasonably necessary for their
operations. None of the FNBL Companies has received notice from any insurance
carrier that (i) such insurance will be canceled or that coverage thereunder
will be reduced or eliminated, or (ii) premium costs with respect to such
policies of insurance will be substantially increased. There are presently no
claims pending under such policies of insurance and no notices have been given
by any FNBL Company under such policies. The Assets of the FNBL Companies
include all Material Assets required to operate the business of the FNBL
Companies as presently conducted.
5.10 Environmental Matters. (a) Each FNBL Company, its Participation
Facilities, and its Loan Properties are, and have been, in compliance with all
Environmental Laws, except those instances of non-compliance which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on FNBL.
(b) There is no Litigation pending or, to the Knowledge of FNBL, threatened
before any court, governmental agency, or authority, or other forum in which any
FNBL Company or any of its Participation Facilities has been or, with respect to
threatened Litigation, may reasonably be expected to 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, whether or not occurring at, on, under, or involving a site owned,
leased, or operated by any FNBL 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 FNBL.
(c) There is no Litigation pending, or to the Knowledge of FNBL, threatened
before any court, governmental agency, or board, or other forum in which any of
its Loan Properties (or FNBL in respect of such Loan Property) has been or, with
respect to threatened Litigation, may reasonably be expected to be named as a
defendant or potentially responsible party (i) for alleged noncompliance
(including by any predecessor) with any Environmental Law or (ii) relating to
the release into the environment of any Hazardous Material, whether or not
occurring at, on, under, or involving a Loan Property, except for such
Litigation pending or threatened that is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on FNBL.
(d) To the Knowledge of FNBL, 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 FNBL.
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(e) To the Knowledge of FNBL, during the period of (i) any FNBL Company's
ownership or operation of any of their respective current properties, (ii) any
FNBL Company's participation in the management of any Participation Facility, or
(iii) any FNBL Company's holding of a security interest in a Loan Property,
there have been no releases of Hazardous Material in, on, under, 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
FNBL. Prior to the period of (i) any FNBL Company's ownership or operation of
any of their respective current properties, (ii) any FNBL Company's
participation in the management of any Participation Facility, or (iii) any FNBL
Company's holding of a security interest in a Loan Property, to the Knowledge of
FNBL, there were no releases of Hazardous Material 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 FNBL.
5.11 Compliance with Laws. FNBL is duly registered as a bank holding
company under the BHC Act. Each FNBL Company has in effect all Permits necessary
for it to own, lease, or operate its Material Assets and to carry on its
business as now conducted, except for those Permits the absence of which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on FNBL, 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 FNBL. None of the FNBL Companies:
(a) is in violation of any Laws, Orders, or Permits applicable to its
business or employees conducting its business, except for violations which
are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on FNBL; 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 FNBL Company is not
in compliance with any of the Laws or Orders which such governmental
authority or Regulatory Authority enforces, where such noncompliance is
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on FNBL, (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 FNBL, or (iii) requiring any FNBL
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 material
manner relates to its capital adequacy, its credit or reserve policies, its
management, or the payment of dividends.
5.12 Labor Relations. No FNBL Company is the subject of any Litigation
asserting that it or any other FNBL 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 FNBL Company to bargain with any
labor organization as to wages or conditions of employment, nor is any FNBL
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 FNBL Company, pending
or, to the Knowledge of FNBL, threatened, or to the
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Knowledge of FNBL, is there any activity involving any FNBL Company's employees
seeking to certify a collective bargaining unit or engaging in any other
organization activity.
5.13 Employee Benefit Plans. (a) FNBL has disclosed to Regions in writing
prior to the execution of the Agreement and in Section 5.13 of the FNBL
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
Material FNBL Benefit Plans. For purposes of this Agreement, "FNBL Benefit
Plans" means all written 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 written health plans, all life
insurance plans, and all other written employee benefit plans or fringe benefit
plans, including written "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 FNBL 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. Any of the FNBL
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 "FNBL ERISA
Plan." Any FNBL 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 "FNBL Pension Plan." Neither FNBL nor any FNBL Company
has 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)).
Each "employee pension benefit plan," as defined in Section 3(2) of ERISA, ever
maintained by any FNBL Company that was intended to qualify under Section 401(a)
of the Internal Revenue Code, is disclosed as such in Section 5.13 of the FNBL
Disclosure Memorandum.
(b) FNBL 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 FNBL Benefit Plans
(including insurance contracts), and all amendments thereto, (ii) with respect
to any such FNBL Benefit Plans or amendments, all determination letters,
Material rulings, Material opinion letters, Material information letters, or
Material advisory opinions issued by the Internal Revenue Service, the United
States Department of Labor, or the Pension Benefit Guaranty Corporation after
December 31, 1994, (iii) annual reports or returns, audited or unaudited
financial statements, actuarial valuations and reports, and summary annual
reports prepared for any FNBL Benefit Plan with respect to the most recent plan
year, and (iv) the most recent summary plan descriptions and any Material
modifications thereto.
(c) All FNBL Benefit Plans are in compliance with the applicable terms of
ERISA, the Internal Revenue Code, and any other applicable Laws, the breach or
violation of which is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on FNBL. Each FNBL 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
FNBL is not aware of any circumstances likely to result in revocation of any
such favorable determination letter. Each trust created under any FNBL ERISA
Plan has been determined to be exempt from Tax under Section 501(a) of the
Internal Revenue Code and FNBL is not aware of any circumstance which will or
could reasonably result in revocation of such exemption. With respect to
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each FNBL Benefit Plan to the Knowledge of FNBL, no event has occurred which
will or could reasonably 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 that is reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect on FNBL. There is no Material pending or, to the
Knowledge of FNBL, threatened Litigation relating to any FNBL ERISA Plan.
(d) No FNBL Company has engaged in a transaction with respect to any FNBL
Benefit Plan that, assuming the Taxable Period of such transaction expired as of
the date of this Agreement, would subject any FNBL Company to a Material tax or
penalty imposed by either Section 4975 of the Internal Revenue Code or Section
502(i) of ERISA in amounts which are reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on FNBL. Neither FNBL nor any
administrator or fiduciary of any FNBL Benefit Plan (or any agent of any of the
foregoing) has engaged in any transaction, or acted or failed to act in any
manner which could subject FNBL to any direct or indirect Liability (by
indemnity or otherwise) for breach of any fiduciary, co-fiduciary, or other duty
under ERISA, where such Liability, individually or in the aggregate, is
reasonably likely to have a Material Adverse Effect on FNBL. No oral or written
representation or communication with respect to any aspect of the FNBL Benefit
Plans has been made to employees of any FNBL Company which is not in accordance
with the written or otherwise preexisting terms and provisions of such plans,
where any Liability with respect to such representation or disclosure is
reasonably likely to have a Material Adverse Effect on FNBL.
(e) No FNBL 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 or
funded status of any FNBL Pension Plan, (ii) no change in the actuarial
assumptions with respect to any FNBL Pension Plan, and (iii) no increase in
benefits under any FNBL Pension Plan as a result of plan amendments or changes
in applicable Law, any of which is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on FNBL. Neither any FNBL Pension Plan
nor any "single-employer plan," within the meaning of Section 4001(a)(15) of
ERISA, currently or formerly maintained by any FNBL Company, or the
single-employer plan of any entity which is considered one employer with FNBL
under Section 4001 of ERISA or Section 414 of the Internal Revenue Code or
Section 302 of ERISA (whether or not waived) (a "FNBL ERISA Affiliate") has an
"accumulated funding deficiency" within the meaning of Section 412 of the
Internal Revenue Code or Section 302 of ERISA. All contributions with respect to
a FNBL Pension Plan or any single-employer plan of a FNBL ERISA Affiliate have
or will be timely made and there is no lien or expected to be a lien under
Internal Revenue Code Section 412(n) or ERISA Section 302(f) or Tax under
Internal Revenue Code Section 4971. No FNBL Company has provided, or is required
to provide, security to a FNBL Pension Plan or to any single-employer plan of a
FNBL ERISA Affiliate pursuant to Section 401(a)(29) of the Internal Revenue
Code. All premiums required to be paid under ERISA Section 4006 have been timely
paid by FNBL, except to the extent any failure would not have a Material Adverse
Effect on FNBL.
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(f) No Liability under Title IV of ERISA has been or is expected to be
incurred by any FNBL Company with respect to any defined benefit plan currently
or formerly maintained by any of them or by any FNBL ERISA Affiliate that has
not been satisfied in full (other than Liability for Pension Benefit Guaranty
Corporation premiums, which have been paid when due, except to the extent any
failure would not have a Material Adverse Effect on FNBL).
(g) No FNBL Company has any obligations for retiree health and retiree life
benefits under any of the FNBL Benefit Plans other than with respect to benefit
coverage mandated by applicable Law, except as set forth in Section 5.13(g) of
the FNBL Disclosure Memorandum.
(h) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will, by themselves, (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 FNBL Company from any FNBL Company under any FNBL Benefit
Plan or otherwise, (ii) increase any benefits otherwise payable under any FNBL
Benefit Plan, or (iii) result in any acceleration of the time of payment or
vesting of any such benefit, except as set forth in Section 5.13(h) of the FNBL
Disclosure Memorandum.
5.14 Material Contracts. Except as set forth in Section 5.14 of the FNBL
Disclosure Memorandum, none of the FNBL 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 FNBL Company or the guarantee by any FNBL Company of any such
obligation (other than Contracts evidencing deposit liabilities, purchases of
federal funds, fully-secured repurchase agreements, and Federal Home Loan Bank
advances of depository institution Subsidiaries, trade payables, and Contracts
relating to borrowings or guarantees made in the ordinary course of business),
and (iii) any other Contract or amendment thereto that would be required to be
filed as an exhibit to a Form 10-KSB filed by FNBL with the SEC as of the date
of this Agreement, if FNBL were so required to file a Form 10-KSB (together with
all Contracts referred to in Sections 5.9 and 5.13(a) of this Agreement, the
"FNBL Contracts"). With respect to each FNBL Contract: (i) the Contract is in
full force and effect; (ii) no FNBL Company is in Default thereunder, other than
Defaults which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on FNBL; (iii) no FNBL Company has
repudiated or waived any Material provision of any such Contract; and (iv) no
other party to any such Contract is, to the Knowledge of FNBL, in Default in any
respect, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on FNBL, or has
repudiated or waived any Material provision thereunder. Except for Federal Home
Loan Bank advances, all of the indebtedness of any FNBL Company for money
borrowed is prepayable at any time by such FNBL Company without penalty or
premium.
5.15 Legal Proceedings. (a) There is no Litigation instituted or pending,
or, to the Knowledge of FNBL, threatened against any FNBL Company, or against
any Asset, employee benefit plan, interest, or right of any of them, that is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on FNBL, nor are there any Orders of any Regulatory Authorities, other
governmental authorities, or arbitrators
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outstanding against any FNBL Company, that are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on FNBL.
(b) Section 5.15(b) of the FNBL Disclosure Memorandum includes a summary
report of all Litigation as of the date of this Agreement to which any FNBL
Company is a party and which names a FNBL Company as a defendant or
cross-defendant.
5.16 Reports. Since December 31, 1996, or the date of organization if
later, each FNBL Company has timely filed all reports and statements, together
with any amendments required to be made with respect thereto, that it was
required to file with any Regulatory Authorities, except failures to file which
are not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on FNBL. As of their respective dates, each of such reports and
documents, including the financial statements, exhibits, and schedules thereto,
complied in all Material respects with all applicable Laws.
5.17 Statements True and Correct. None of the information supplied or to
be supplied by any FNBL Company or any Affiliate thereof regarding FNBL or such
Affiliate 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, in light of the
circumstances under which they were made, not misleading. None of the
information supplied or to be supplied by any FNBL Company or any Affiliate
thereof for inclusion in the Proxy Statement to be mailed to FNBL's stockholders
in connection with the Stockholders' Meeting will, when first mailed to the
stockholders of FNBL, 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 FNBL Company or any Affiliate
thereof is responsible for filing with any Regulatory Authority in connection
with the transactions contemplated hereby will comply as to form in all Material
respects with the provisions of applicable Law.
5.18 Tax and Regulatory Matters. Except as specifically contemplated by
this Agreement, no FNBL Company or any Affiliate thereof has taken or agreed to
take any action, and FNBL has no Knowledge of any fact or circumstance that is
reasonably likely to (i) prevent the transactions contemplated hereby, including
the Merger, from qualifying 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 FNBL 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 last sentence of such Section 9.1(b).
5.19 State Takeover Laws. Each FNBL 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
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and regulations of the State of Louisiana (collectively, "Takeover Laws")
including those Laws contained within Section 12:130 et seq. of the LBCL.
5.20 Charter Provisions. Each FNBL Company has taken all action so that
the entering into of this Agreement and the consummation of the Merger and the
other transactions contemplated by this Agreement do not and will not result in
the grant of any rights to any Person under the Articles of Incorporation,
Bylaws, or other governing instruments of any FNBL 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 FNBL Company
that may be directly or indirectly acquired or controlled by it.
5.21 Support Agreements. Each of the directors of FNBL has executed and
delivered to Regions a Support Agreement in substantially the form as Exhibit 1
to this Agreement.
5.22 Derivatives. All interest rate swaps, caps, floors, option
agreements, futures and forward contracts, and other similar risk management
arrangements, whether entered into for FNBL's own account, or for the account of
one or more the FNBL Subsidiaries or their customers, were entered into (i) in
accordance with prudent business practices and all applicable Laws, and (ii)
with counterparties believed to be financially responsible.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF REGIONS
Regions hereby represents and warrants to FNBL 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).
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(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, (ii) constitute or result in a Default under, or require any Consent
pursuant to, or result in the creation of any Lien on any Asset of any Regions
Company under, any Contract or Permit of any Regions Company, where such Default
or Lien, or any failure to obtain such Consent, is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Regions, or (iii)
subject to receipt of the requisite Consents referred to in Section 9.1(b) of
this Agreement, violate any Law or Order applicable to any Regions Company or
any of their respective Material Assets.
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and rules of
the NASD, and other than Consents required from Regulatory Authorities, and
other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee benefit plans,
or under the HSR Act, and other than Consents, filings, or notifications which,
if not obtained or made, are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Regions, no notice to, filing with,
or Consent of, any public body or authority is necessary for the consummation by
Regions of the Merger and the other transactions contemplated in this Agreement.
6.3 Capital Stock. The authorized capital stock of Regions consists, as of
the date of this Agreement, of 500,000,000 shares of Regions Common Stock, of
which 220,635,661 shares were issued and outstanding as of December 31, 1999.
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 FNBL
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 FNBL Common Stock upon consummation of the
Merger will be, issued in violation of any preemptive rights of the current or
past stockholders of Regions.
6.4 Regions Subsidiaries. Regions or one of its Subsidiaries owns all of
the issued and outstanding shares of capital stock of each Regions Subsidiary.
No equity securities of any Regions Subsidiary are or may become required to be
issued (other than to another Regions Company) by reason of any Rights, and
there are no Contracts by which any Regions Subsidiary is bound to issue (other
than to another Regions Company) additional shares of its capital stock or
Rights or by which any Regions Company is or may be bound to transfer any shares
of the capital stock of any Regions Subsidiary (other than to another Regions
Company). There are no Contracts relating to the rights of any Regions Company
to vote or to dispose of any shares of the capital stock of any Regions
Subsidiary. All of the shares of capital stock of each Regions Subsidiary held
by a Regions Company are fully paid and, except as provided in statutes pursuant
to which depository institution Subsidiaries are organized, nonassessable under
the applicable corporation or banking Law of the jurisdiction in which such
Subsidiary is incorporated or organized and are owned by the Regions Company
free and clear of any Lien. Each Regions Subsidiary is either a bank or a
corporation, and is duly organized, validly existing, and (as to corporations)
in good standing under the Laws of the jurisdiction in which it is incorporated
or organized, and has the corporate power and authority necessary for it to own,
lease, and operate its
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Assets and to carry on its business as now conducted. Each Regions Subsidiary is
duly qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Regions. Each Regions Subsidiary
that is a depository institution is an "insured depository institution" as
defined in the Federal Deposit Insurance Act and applicable regulations
thereunder, and the deposits in which are insured by the Bank Insurance Fund or
Savings Association Insurance Fund.
6.5 SEC Filings; Financial Statements. (a) Regions has filed and made
available to FNBL all forms, reports, and documents required to be filed by
Regions with the SEC since January 1 of the second fiscal year preceding the
date of this Agreement (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 1933 Act and the 1934 Act, as the case may be,
and (ii) did not at the time they were filed (or if amended or superseded by a
filing prior to the 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. Except for Regions Subsidiaries that are
registered as a broker, dealer, or investment advisor or filings required due to
fiduciary holdings of the Regions Subsidiaries, none of Regions Subsidiaries is
required to file any forms, reports, or other documents with the SEC.
(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.
6.6 Absence of Undisclosed Liabilities. No Regions Company has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Regions, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of Regions as of
September 30, 1999, included in the Regions Financial Statements or reflected in
the notes thereto and except for Liabilities incurred in the ordinary course of
business subsequent to September 30, 1999. No Regions Company has incurred or
paid any Liability since September 30, 1999, except for such Liabilities
incurred or paid in the ordinary course of business consistent with past
business practice and which are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Regions.
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6.7 Absence of Certain Changes or Events. Since September 30, 1999, except
as disclosed in the Regions Financial Statements delivered prior to the date of
this Agreement, (i) there have been no events, changes or occurrences which have
had, or are reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Regions, and (ii) the Regions Companies have
conducted their respective businesses in the ordinary and usual course
(excluding the incurrence of expenses in connection with this Agreement and the
transactions contemplated hereby).
6.8 Compliance with Laws. Regions is duly registered as a bank holding
company under the BHC Act. Each Regions Company has in effect all Permits
necessary for it to own, lease, or operate its Material Assets and to carry on
its business as now conducted, except for those Permits the absence of which are
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Regions, and there has occurred no Default under any such
Permit, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Regions. None of
the Regions Companies:
(a) is in violation of any Laws, Orders, or Permits applicable to its
business or employees conducting its business, except for violations which
are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Regions; and
(b) has received any notification or communication from any agency or
department of federal, state, or local government or any Regulatory
Authority or the staff thereof (i) asserting that any Regions Company is
not in compliance with any of the Laws or Orders which such governmental
authority or Regulatory Authority enforces, where such noncompliance is
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Regions, (ii) threatening to revoke any Permits, the
revocation of which is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Regions, or (iii) requiring any
Regions Company (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.
6.9 Legal Proceedings. There is no Litigation instituted or pending, or,
to the Knowledge of Regions, threatened against any Regions Company, or against
any Asset, employee benefit plan, interest, or right of any of them, that is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Regions, nor are there any Orders of any Regulatory Authorities, other
governmental authorities, or arbitrators outstanding against any Regions
Company, that are reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Regions.
6.10 Reports. Since December 31, 1996, or the date of organization if
later, each Regions Company has timely filed all reports and statements,
together with any amendments required to be made with respect thereto, that it
was required to file with any Regulatory Authorities, except failures to file
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Regions. As of their respective dates, each of such
reports and documents, including the financial statements, exhibits, and
schedules thereto, complied in all Material respects with all applicable Laws.
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6.11 Statements True and Correct. None of the information supplied or to
be supplied by any Regions Company or any Affiliate thereof regarding Regions or
such Affiliate 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 FNBL's
stockholders in connection with the Stockholders' Meeting, will, when first
mailed to the stockholders of FNBL, 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 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.
6.12 Tax and Regulatory Matters. No Regions Company or any Affiliate
thereof has taken or agreed to take any action, and Regions has no Knowledge of
any fact or circumstance that is reasonably likely to (i) prevent the
transactions contemplated hereby, including the Merger, from qualifying as a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code, or (ii) materially impede or delay receipt of any Consents of Regulatory
Authorities referred to in Section 9.1(b) of this Agreement or result in the
imposition of a condition or restriction of the type referred to in the last
sentence of such Section or otherwise prevent consummation of the transactions
contemplated hereby or delay the Effective Time beyond the date set forth in
Section 10.1(e) of this Agreement.
6.13 Derivatives. All interest rate swaps, caps, floors, option
agreements, futures and forward contracts, and other similar risk management
arrangements, whether entered into for Regions' own account, or for the account
of one or more the Regions Subsidiaries or their customers, were entered into
(i) in accordance with prudent business practices and all applicable Laws, and
(ii) with counterparties believed to be financially responsible.
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 Affirmative 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 organization and Assets and
maintain its rights and franchises, (iii) use its reasonable efforts to maintain
its current employee relationships, and (iv) take no action which would (a)
adversely affect the ability of any Party to obtain any Consents required for
the transactions contemplated hereby without imposition of a condition or
restriction of the
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type referred to in the last sentence of Section 9.1(b) of this Agreement, or
(b) adversely affect the ability of any Party to perform its covenants and
agreements under this Agreement; 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 Negative Covenants of FNBL. From the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement, FNBL
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 Regions, which consent shall not be unreasonably
withheld:
(a) amend the Articles of Incorporation, Bylaws, or other governing
instruments of any FNBL 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 FNBL Company to another FNBL Company) in excess of
an aggregate of $100,000 (for the FNBL Companies on a consolidated basis),
except in the ordinary course of the business consistent with past
practices (which shall include, for FNBL Subsidiaries that are depository
institutions, creation of deposit liabilities, purchases of federal funds,
advances from the Federal Reserve Bank or Federal Home Loan Bank, and entry
into repurchase agreements fully secured by U.S. government or agency
securities), or impose, or suffer the imposition, on any Asset of any FNBL
Company of any Lien or permit any such Lien to exist (other than in
connection with deposits, repurchase agreements, bankers acceptances,
"treasury tax and loan" accounts established in the ordinary course of
business, the satisfaction of legal requirements in the exercise of trust
powers, and Liens in effect as of the date hereof that are disclosed in the
FNBL Disclosure Memorandum); or
(c) repurchase, redeem, or otherwise acquire or exchange (other than
exchanges in the ordinary course under employee benefit plans), directly or
indirectly, any shares, or any securities convertible into any shares, of
the capital stock of any FNBL Company, or declare or pay any dividend or
make any other distribution in respect of FNBL's capital stock, provided
that FNBL may (to the extent legally and contractually permitted to do so),
but shall not be obligated to, declare and pay (i) one dividend on the
shares of FNBL Common Stock at a rate of $.10 per share and (ii) a second
dividend on the shares of FNBL Common Stock at a rate of $.55 per share; or
(d) except for this Agreement or pursuant to the exercise of Rights
outstanding as of the date of this Agreement and pursuant to the terms
thereof in existence on the date of this Agreement, issue, sell, pledge,
encumber, authorize the issuance of, enter into any Contract to issue,
sell, pledge, encumber, or authorize the issuance of, or otherwise permit
to become outstanding, any additional shares of FNBL Common Stock or any
other capital stock of any FNBL 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
FNBL Company or issue or authorize the issuance of any other securities in
respect of or in
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substitution for shares of FNBL Common Stock, or sell, lease, mortgage, or
otherwise dispose of or otherwise encumber (i) any shares of capital stock
of any FNBL Subsidiary (unless any such shares of stock are sold or
otherwise transferred to another FNBL Company) or (ii) any Asset (with a
book value in excess of $25,000) other than in the ordinary course of
business for reasonable and adequate consideration and other than
dispositions in the ordinary course of business of (i) investment
securities, (ii) loans, including dispositions thereof through loan
participation agreements, and (iii) other real estate owned by any FNBL
Company; or
(f) except for purchases of U.S. Treasury securities or U.S.
Government agency securities, which in either case have maturities of five
years or less, purchase any securities or make any Material investment,
either by purchase of stock or securities, contributions to capital, Asset
transfers, or purchase of any Assets, in any Person other than a
wholly-owned FNBL Subsidiary, or otherwise acquire direct or indirect
control over any Person, other than in connection with (i) foreclosures in
the ordinary course of business, (ii) acquisitions of control by a
depository institution Subsidiary in its fiduciary capacity, or (iii) the
creation of new wholly-owned Subsidiaries organized to conduct or continue
activities otherwise permitted by this Agreement; or
(g) grant any increase in compensation or benefits to the employees or
officers of any FNBL Company, except as required by Law or Contract; pay
any severance or termination pay or any bonus other than pursuant to
written policies or written Contracts in effect on the date of this
Agreement; except as disclosed in Section 7.2(g) of the FNBL Disclosure
Memorandum, enter into or amend any severance agreements with officers of
any FNBL Company; grant any increase in fees or other increases in
compensation or other benefits to directors of any FNBL Company; or
voluntarily accelerate the vesting of any stock options or other stock-
based compensation or employee benefits; provided that any FNBL Company (i)
shall not be precluded from doing, or committing or agreeing to do, any of
the foregoing if done in the ordinary course of business consistent with
past practices and (ii) may pay bonuses, pay base director and committee
fees, make adjustments to fees or compensation and make contributions to
any FNBL Benefit Plans during 2000 which are comparable to such payments,
adjustments and contributions during 1999; or
(h) enter into or amend any employment Contract between any FNBL
Company and any Person (unless such amendment is required by Law) that the
FNBL Company does not have the unconditional right to terminate without
Liability (other than Liability for services already rendered and in
accordance with the FNBL Benefit Plans), at any time on or after the
Effective Time; or
(i) except as disclosed in Section 7.2(i) of FNBL Disclosure
Memorandum, adopt any new employee benefit plan of any FNBL Company or make
any Material change in or to any existing employee benefit plans of any
FNBL Company other than any such change that is required by Law or that, in
the opinion of counsel, is necessary or advisable to maintain the tax
qualified status of any such plan; or
(j) make any significant change in any Tax or accounting methods or
systems of internal accounting controls, except as may be appropriate to
conform to changes in Tax Laws or regulatory accounting requirements or
GAAP; or
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(k) commence any Litigation other than as necessary for the prudent
operation of its business or settle any Litigation involving any Liability
of any FNBL Company for Material money damages or restrictions upon the
operations of any FNBL Company; or
(l) except in the ordinary course of business, modify, amend, or
terminate any Material Contract or waive, release, compromise, or assign
any Material rights or claims.
7.3 Adverse Changes in Condition. Each Party agrees to give written notice
promptly to the other Party upon becoming aware of the occurrence or impending
occurrence of any event or circumstance relating to it or any of its
Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on it or (ii) would cause or constitute a
Material breach of any of its representations, warranties, or covenants
contained herein, and to use its reasonable efforts to prevent or promptly to
remedy the same.
7.4 Reports. Each Party and its Subsidiaries shall file all reports
required to be filed by it with Regulatory Authorities between the date of this
Agreement and the Effective Time and shall deliver to the other Party copies of
all such reports promptly after the same are filed. If financial statements are
contained in any such reports filed with the SEC, such financial statements will
fairly present the consolidated financial position of the entity filing such
statements as of the dates indicated and the consolidated results of operations,
changes in stockholders' equity, and cash flows for the periods then ended in
accordance with GAAP (subject in the case of interim financial statements to
normal recurring year-end adjustments that are not Material). As of their
respective dates, such reports filed with the SEC will comply in all Material
respects with the Securities Laws and will not contain any untrue statement of a
Material fact or omit to state a Material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Any financial statements contained
in any other reports to another Regulatory Authority shall be prepared in
accordance with Laws applicable to such reports.
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 Registration Statement; Proxy Statement; Stockholder Approval. As soon
as reasonably practicable after execution of this Agreement, Regions shall file
the Registration Statement with the SEC, and shall use its reasonable efforts to
cause the Registration Statement to become effective under the 1933 Act and take
any action required to be taken under the applicable state Blue Sky or
securities Laws in connection with the issuance of the shares of Regions Common
Stock upon consummation of the Merger. FNBL shall furnish all information
concerning it and the holders of its capital stock as Regions may reasonably
request for inclusion in the Registration Statement. FNBL shall call a
Stockholders' Meeting, to be held as soon as reasonably practicable after the
Registration Statement is declared effective by the SEC, for the purpose of
voting upon approval of this Agreement and such other related matters as it
deems appropriate. In connection with the Stockholders' Meeting, (i) FNBL shall
prepare and file with the SEC a Proxy Statement and mail such Proxy Statement to
its stockholders, (ii) the Parties shall furnish to each other all information
concerning them that they may
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reasonably request in connection with such Proxy Statement, (iii) the Board of
Directors of FNBL shall recommend to its stockholders the approval of the
matters submitted for approval, and (iv) the Board of Directors and officers of
FNBL shall use their reasonable efforts to obtain such stockholders' approval,
provided that FNBL may withdraw, modify, or change in an adverse manner to
Regions its recommendations if the Board of Directors of FNBL, after having
consulted with and based upon the advice of outside counsel, determines in good
faith that the failure to so withdraw, modify, or change its recommendation
could reasonably constitute a breach of the fiduciary duties of FNBL's Board of
Directors under applicable Law. In addition, nothing in this Section 8.1 or
elsewhere in this Agreement shall prohibit accurate disclosure by FNBL of
information that is required to be disclosed in the Registration Statement or
the Proxy Statement or in any other document required to be filed with the SEC
(including, without limitation, a Solicitation/Recommendation Statement on
Schedule 14D-9) or otherwise required to be publicly disclosed by applicable Law
or regulations or rules of the NASD.
8.2 Exchange Listing. Regions shall use its reasonable efforts to list,
prior to the Effective Time, on the Nasdaq NMS, subject to official notice of
issuance, the shares of Regions Common Stock to be issued to the holders of FNBL
Common Stock pursuant to the Merger.
8.3 Applications. Regions shall promptly prepare and file, and FNBL 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 will
promptly furnish to FNBL copies of applications filed with all Regulatory
Authorities and copies of written communications received by Regions from any
Regulatory Authorities with respect to the transactions contemplated hereby.
8.4 Filings with State Offices. Upon the terms and subject to the
conditions of this Agreement, Regions shall execute and file the Delaware
Certificate of Merger with the Secretary of State of the State of Delaware and
the Louisiana Certificate of Merger with the Secretary of State of the State of
Louisiana in connection with the Closing.
8.5 Agreement as to Efforts to Consummate. Subject to the terms and
conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
reasonably practicable after the date of this Agreement, the transactions
contemplated by this Agreement, including, 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 referred to in Article 9 of this Agreement; provided, that
nothing herein shall preclude either Party from exercising its rights under this
Agreement. Each Party shall use, and shall cause each of its Subsidiaries to
use, its reasonable efforts to obtain all Consents necessary or desirable for
the consummation of the transactions contemplated by this Agreement.
8.6 Investigation and Confidentiality. (a) Prior to the Effective Time,
each Party shall keep the other Party advised of all Material developments
relevant to its business and to consummation of the Merger and shall permit the
other Party to make or cause to be made such investigation of the business and
properties of it and its Subsidiaries and of their respective financial and
legal conditions as the other Party reasonably requests, provided that such
investigation shall be reasonably related to the transactions contem-
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plated hereby and shall not interfere unnecessarily with normal operations. No
investigation by a Party shall affect the representations and warranties of the
other Party.
(b) Each Party shall, and shall cause its advisers and agents to, maintain
the confidentiality of all confidential information furnished to it by the other
Party concerning its and its Subsidiaries' businesses, operations, and financial
positions and shall not use such information for any purpose except in
furtherance of the transactions contemplated by this Agreement. If this
Agreement is terminated prior to the Effective Time, each Party shall promptly
return or certify the destruction of all documents and copies thereof, and all
work papers containing confidential information received from the other Party.
(c) Each Party agrees to give the other Party notice as soon as practicable
after any determination by it of any fact or occurrence relating to the other
Party which it has discovered through the course of its investigation and which
represents, or is reasonably likely to represent, either a Material breach of
any representation, warranty, covenant, or agreement of the other Party or which
has had or is reasonably likely to have a Material Adverse Effect on the other
Party; provided, however, that the giving of such notice shall not be
dispositive of the occurrence of such breach or a Material Adverse Effect.
(d) Neither Party nor any of their respective Subsidiaries shall be
required to provide access to or to disclose information where such access or
disclosure would violate or prejudice the rights of its customers, jeopardize
the attorney-client or similar privilege with respect to such information or
contravene any Law, rule, regulation, Order, judgment, decree, fiduciary duty,
or agreement entered into prior to the date of this Agreement. The Parties will
use their reasonable efforts to make appropriate substitute disclosure
arrangements, to the extent practicable, in circumstances in which the
restrictions of the preceding sentence apply.
8.7 Press Releases. Prior to the Effective Time, Regions and FNBL shall
consult with each other as to the form and substance of any press release or
other public disclosure materially related to this Agreement or any other
transaction contemplated hereby; provided, that nothing in this Section 8.7
shall be deemed to prohibit any Party from making any disclosure which its
counsel deems necessary or advisable in order to satisfy such Party's disclosure
obligations imposed by Law.
8.8 Certain Actions. Except with respect to this Agreement and the
transactions contemplated hereby, no FNBL Company nor any Affiliate thereof nor
any Representative thereof retained by any FNBL Company shall, directly or
indirectly, initiate, solicit, encourage or knowingly facilitate (including by
way of furnishing information) any inquiries or the making of any Acquisition
Proposal. Notwithstanding anything herein to the contrary, FNBL and its Board of
Directors shall be permitted (i) to the extent applicable, to comply with Rule
14d-9 and Rule 14e-2 promulgated under the 1934 Act with regard to an
Acquisition Proposal, (ii) to engage in any discussions or negotiations with, or
provide any information to, any Person in response to an unsolicited bona fide
written Acquisition Proposal by any such Person, if and only to the extent that
(a) FNBL's Board of Directors concludes in good faith and consistent with its
fiduciary duties to FNBL's stockholders under applicable Law that such
Acquisition Proposal could reasonably be expected to result in a Superior
Proposal, (b) prior to providing any information or data to any Person in
connection with an Acquisition Proposal by any such Person, FNBL's Board of
Directors receives from such Person an executed confidentiality agreement
containing confidentiality terms at least as stringent as those contained in the
Confidentiality Agreement, and (c) prior to providing any information or data to
any
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Person or entering into discussions or negotiations with any Person, FNBL's
Board of Directors notifies Regions promptly of such inquiries, proposals, or
offers received by, any such information requested from, or any such discussions
or negotiations sought to be initiated or continued with, any of its
Representatives indicating, in connection with such notice, the name of such
Person and the material terms and conditions of any inquiries, proposals or
offers. FNBL agrees that it will promptly keep Regions informed of the status
and terms of any such proposals or offers and the status and terms of any such
discussions or negotiations. FNBL agrees that it will, and will cause its
officers, directors and Representatives to, immediately cease and cause to be
terminated any activities, discussions, or negotiations existing as of the date
of this Agreement with any parties conducted heretofore with respect to any
Acquisition Proposal. FNBL agrees that it will use reasonable best efforts to
promptly inform its directors, officers, key employees, agents, and
Representatives of the obligations undertaken in this Section 8.8. Nothing in
this Section 8.8 shall (i) permit FNBL to terminate this Agreement (except as
specifically provided in Article 10) or (ii) affect any other obligation of
Regions or FNBL under this Agreement.
8.9 Tax Treatment. Each of the Parties undertakes and agrees to use its
reasonable efforts to cause the Merger, and to take no action which would cause
the Merger not, to qualify for treatment as a "reorganization" within the
meaning of Section 368(a) of the Internal Revenue Code for federal income tax
purposes.
8.10 State Takeover Laws. Each FNBL 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.
8.11 Charter Provisions. Each FNBL Company shall take all necessary action
to ensure that the entering into of this Agreement and the consummation of the
Merger and the other transactions contemplated hereby do not and will not result
in the grant of any rights to any Person under the Articles of Incorporation,
Bylaws, or other governing instruments of any FNBL 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 FNBL Company
that may be directly or indirectly acquired or controlled by it.
8.12 Agreement of Affiliates. FNBL has disclosed in Section 8.12 of the
FNBL Disclosure Memorandum each Person whom it reasonably believes may be deemed
an "affiliate" of FNBL for purposes of Rule 145 under the 1933 Act. FNBL shall
use its reasonable efforts to cause each such Person to deliver to Regions not
later than 30 days prior to the Effective Time, a written agreement, in
substantially the form of Exhibit 2, providing that such Person will not sell,
pledge, transfer, or otherwise dispose of the shares of FNBL Common Stock held
by such Person except as contemplated by such agreement or by this Agreement and
will not sell, pledge, transfer, or otherwise dispose of the shares of Regions
Common Stock to be received by such Person upon consummation of the Merger
except in compliance with applicable provisions of the 1933 Act and the rules
and regulations thereunder. Shares of Regions Common Stock issued to such
affiliates of FNBL in exchange for shares of FNBL Common Stock shall not be
transferable, regardless of whether each such affiliate has provided the written
agreement referred to in this Section 8.12 (and Regions shall be entitled to
place restrictive legends upon certificates for shares of Regions Common Stock
issued to affiliates of FNBL pursuant to this Agreement to enforce the
provisions of this Section 8.12), except as provided herein.
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Regions shall not be required to maintain the effectiveness of the Registration
Statement under the 1933 Act for the purposes of resale of Regions Common Stock
by such affiliates.
8.13 Employee Benefits and Contracts. Following the Effective Time,
Regions shall provide generally to officers and employees of the FNBL Companies,
who at or after the Effective Time become employees of a Regions Company
("Continuing Employees"), employee benefits under employee benefit plans (other
than stock option or other plans involving the potential issuance of Regions
Common Stock except as set forth in this Section 8.13), on terms and conditions
which when taken as a whole are substantially similar to those currently
provided by the Regions Companies to their similarly situated officers and
employees. For purposes of participation and vesting (but not accrual of
benefits) under such employee benefit plans, (i) service under any qualified
defined benefit plans of FNBL shall be treated as service under Regions'
qualified defined benefit plans, (ii) service under any qualified defined
contribution plans of FNBL shall be treated as service under Regions' qualified
defined contribution plans, and (iii) service under any other employee benefit
plans of FNBL shall be treated as service under any similar employee benefit
plans maintained by Regions. Regions shall cause the Regions welfare benefit
plans that cover the Continuing Employees after the Effective Time to (i) waive
any waiting period and restrictions and limitations for preexisting conditions
or insurability, and (ii) cause any deductible, co-insurance, or maximum
out-of-pocket payments made by the Continuing Employees under FNBL's welfare
benefit plans to be credited to such Continuing Employees under the Regions
welfare benefit plans, so as to reduce the amount of any deductible,
co-insurance, or maximum out-of-pocket payments payable by the Continuing
Employees under the Regions welfare benefit plans. The continued coverage of the
Continuing Employees under the employee benefits plans maintained by FNBL and/or
any FNBL Subsidiary immediately prior to the Effective Time during a transition
period shall be deemed to provide the Continuing Employees with benefits that
are no less favorable than those offered to other employees of Regions and its
Subsidiaries, provided that after the Effective Time there is no Material
reduction (determined on an overall basis) in the benefits provided under the
FNBL employee benefit plans. Regions also shall cause FNBL and its Subsidiaries
to honor all employment, severance, consulting, and other compensation Contracts
disclosed in Section 8.13 of the FNBL Disclosure Memorandum to Regions between
any FNBL 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 FNBL Benefit Plans. Regions
shall be responsible for the fees related to the termination of the FNBL Benefit
Plans.
8.14 Indemnification. (a) Subject to the conditions set forth in paragraph
(b) below, for a period of ten (10) years after the Effective Time, Regions
shall indemnify, defend, and hold harmless each Person entitled to
indemnification from a FNBL 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 Louisiana Law, in each case as
in effect on the date hereof, including provisions relating to advances of
expenses incurred in the defense of any Litigation; provided, however, that all
rights to indemnification in respect of any claim asserted or made against an
Indemnified Party within such six- (6) year period shall continue until the
final disposition of such claim. Without limiting the foregoing, in any case in
which approval by FNBL is required to effectuate any indemnification, Regions
shall cause FNBL to direct, at the election of the Indemnified Party, that the
determination of any such approval shall
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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 FNBL 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 (employing counsel reasonably satisfactory to the Indemnified Parties),
except that if Regions or FNBL elects not to assume such defense or counsel for
the Indemnified Parties advises in writing that there are Material substantive
issues which raise conflicts of interest between Regions or FNBL and the
Indemnified Parties, the Indemnified Parties may retain counsel satisfactory to
them, and Regions or FNBL shall pay all reasonable fees and expenses of such
counsel for the Indemnified Parties promptly as statements therefor are
received; provided, however, that (i) Regions shall be obligated pursuant to
this paragraph (b) to pay for only one firm of counsel for all Indemnified
Parties in any jurisdiction, unless counsel for any Indemnified Party advises in
writing that there are Material substantive issues which raise conflicts of
interest between the Indemnified Parties, (ii) the Indemnified Parties will
cooperate (to the extent reasonably appropriate under the circumstances) 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
Regions 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.
(c) If Regions or any of its successors or assigns shall consolidate with
or merge into any other Person and shall not be the continuing or surviving
Person of such consolidation or merger or shall transfer all or substantially
all of its Assets to any Person, then and in each case, proper provision shall
be made so that the successors and assigns of Regions shall assume the
obligations set forth in this Section 8.14.
(d) The provisions of this Section 8.14 are intended to be for the benefit
of and shall be enforceable by, each Indemnified Party, his or her heirs and
representatives.
8.15 Certain Modifications. Regions and FNBL shall consult with respect to
their loan, litigation, and real estate valuation policies and practices
(including loan classifications and levels of reserves) and FNBL shall make such
modifications or changes to its policies and practices, if any, prior to the
Effective Time, as may be mutually agreed upon. Regions and FNBL also shall
consult with respect to the character, amount, and timing of restructuring and
Merger-related expense charges to be taken by each of the Parties in connection
with the transactions contemplated by this Agreement and shall take such charges
in accordance with GAAP as may be mutually agreed upon by the Parties. Neither
Party's representations, warranties, and covenants contained in this Agreement
shall be deemed to be inaccurate or breached in any respect or deemed to have a
Material Adverse Effect on FNBL as a consequence of any modifications or charges
undertaken solely on account of this Section 8.15.
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ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 Conditions to Obligations of Each Party. The respective obligations of
each Party to perform this Agreement and to consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by both Parties pursuant to Section 11.6 of
this Agreement:
(a) Stockholder Approval. The stockholders of FNBL shall have
approved this Agreement, and the consummation of the transactions
contemplated hereby, including the Merger, as and to the extent required by
Law and 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 obtained from any Regulatory Authority which is
necessary to consummate the transactions contemplated hereby shall be
conditioned or restricted in a manner (excluding requirements relating to
the raising of additional capital or the disposition of Assets or deposits)
which in the reasonable good faith 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.
(c) Consents and Approvals. Each Party shall have obtained any and
all Consents required for consummation of the Merger (other than those
referred to in Section 9.1(b) of this Agreement) or for the preventing of
any Default under any Contract or Permit of such Party which, if not
obtained or made, is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on such Party. No Consent obtained
which is necessary to consummate the transactions 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 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.
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(f) Exchange Listing. The shares of Regions Common Stock issuable
pursuant to the Merger shall have been approved for listing on the Nasdaq
NMS, subject to official notice of issuance.
(g) Tax Matters. Each Party shall have received a written opinion
from Alston & Bird LLP, in a form reasonably satisfactory to such Party
(the "Tax Opinion"), dated the date of the Effective Time, substantially to
the effect that (i) the Merger will constitute a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code, (ii) no gain or
loss will be recognized by holders of FNBL Common Stock who exchange all of
their FNBL Common Stock solely for Regions Common Stock pursuant to the
Merger (except with respect to any cash received in lieu of a fractional
share interest in Regions Common Stock), (iii) the tax basis of the Regions
Common Stock received by holders of FNBL Common Stock who exchange all of
their FNBL Common Stock solely for Regions Common Stock in the Merger will
be the same as the tax basis of the FNBL Common Stock surrendered in
exchange for the Regions Common Stock (reduced by an amount allocable to a
fractional share interest in Regions Common Stock for which cash is
received), and (iv) the holding period of the Regions Common Stock received
by holders who exchange all of their FNBL Common Stock solely for Regions
Common Stock in the Merger will be the same as the holding period of the
FNBL Common Stock surrendered in exchange therefor, provided that such FNBL
Common Stock is held as a capital asset at the Effective Time. In rendering
such Tax Opinion, such counsel shall be entitled to rely upon
representations of officers of FNBL and Regions reasonably satisfactory in
form and substance to such counsel.
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 FNBL 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 FNBL set forth in Section 5.3 of this Agreement shall be true
and correct (except for inaccuracies which are de minimis in amount). The
representations and warranties of FNBL set forth in Sections 5.18, 5.19,
and 5.20 of this Agreement shall be true and correct in all Material
respects. There shall not exist inaccuracies in the representations and
warranties of FNBL set forth in this Agreement (including the
representations and warranties set forth in Sections 5.3, 5.18, 5.19, and
5.20) such that the aggregate effect of such inaccuracies has, or is
reasonably likely to have, a Material Adverse Effect on FNBL; provided
that, for purposes of this sentence only, those representations and
warranties which are qualified by references to "material, "Material,"
"Material Adverse Effect," or variations thereof, or to the "Knowledge" of
FNBL or to a matter being "known" by FNBL shall be deemed not to include
such qualifications.
(b) Performance of Agreements and Covenants. Each and all of the
agreements and covenants of FNBL to be performed and complied with pursuant
to this
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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. FNBL 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 Section 9.2(a) and 9.2(b) of this Agreement have
been satisfied, and (ii) certified copies of resolutions duly adopted by
FNBL's Board of Directors and stockholders evidencing the taking of all
corporate action necessary to authorize the execution, delivery, and
performance of this Agreement, and the consummation of the transactions
contemplated hereby, all in such reasonable detail as Regions and its
counsel shall request.
(d) Affiliate Agreements. Regions shall have received from each
affiliate of FNBL the affiliates agreement referred to in Section 8.12 of
this Agreement.
(e) Claims Letters. Each of the directors and executive officers of
FNBL shall have executed and delivered to Regions, letters in substantially
the form of Exhibit 3.
(f) Legal Opinion. Regions shall have received a written opinion,
dated as of the Effective Time, of counsel to FNBL, in substantially the
form of Exhibit 4.
9.3 Conditions to Obligations of FNBL. The obligations of FNBL 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 FNBL 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 minimis in amount).
The representations and warranties of Regions set forth in Section 6.12 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 6.12) 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," "Material," "Material Adverse Effect," or
variations thereof, or to the "Knowledge" of Regions or to a matter being
"known" by Regions shall be deemed not to include such qualifications.
(b) Performance of Agreements and Covenants. Each and all of the
agreements and covenants of Regions to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby
prior to the Effective Time shall have been duly performed and complied
with in all Material respects.
(c) Certificates. Regions shall have delivered to FNBL (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 Section 9.3(a) and 9.3(b) of
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this Agreement have been satisfied, and (ii) certified copies of
resolutions duly adopted by Regions' Board of Directors evidencing the
taking of all corporate action necessary to authorize the execution,
delivery, and performance of this Agreement, and the consummation of the
transactions contemplated hereby, all in such reasonable detail as FNBL and
its counsel shall request.
(d) Legal Opinion. FNBL shall have received a written opinion, dated
as of the Effective Time, of counsel to Regions, in substantially the form
of Exhibit 5.
ARTICLE 10
TERMINATION
10.1 Termination. Notwithstanding any other provision of this Agreement,
and notwithstanding the approval of this Agreement by the stockholders of FNBL,
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 FNBL; or
(b) By the Board of Directors of either Party (provided that the
terminating Party is not then in Material breach of any covenant or other
agreement contained in this Agreement) in the event of an inaccuracy of any
representation or warranty of the other Party contained in this Agreement
which cannot be or has not been cured within 30 days after the giving of
written notice to the breaching Party of such inaccuracy and which
inaccuracy would provide the terminating Party the ability to refuse to
consummate the Merger under the applicable standard set forth in Section
9.2(a) of this Agreement in the case of FNBL 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 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 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 FNBL fail to vote their approval of the matters submitted
for the approval by such stockholders at the Stockholders' Meeting where
the transactions were presented to such stockholders for approval and voted
upon; or
(e) By the Board of Directors of either Party in the event that the
Merger shall not have been consummated by December 31, 2000, 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 FNBL and Section 9.3(a) of
this Agreement in the case of Regions or in Material breach of any covenant
or other agreement contained in this Agreement) in the event that any of
the conditions precedent to the obligations of such Party to consummate the
Merger cannot be satisfied or fulfilled by the date specified in Section
10.1(e) of this Agreement.
10.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 10.1 of this Agreement, this
Agreement shall become void and have no effect, except that (i) the provisions
of this Section 10.2 and Article 11 and Section 8.6(b) of this Agreement shall
survive any such termination and abandonment, and (ii) a termination 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.
10.3 Non-Survival of Representations and Covenants. The respective
representations, warranties, obligations, covenants, and agreements of the
Parties shall not survive the Effective Time except this Section 10.3 and
Articles 2, 3, 4, and 11 and Sections 8.12, 8.13 and 8.14 of this Agreement.
ARTICLE 11
MISCELLANEOUS
11.1 Definitions. (a) Except as otherwise provided herein, the capitalized
terms set forth below shall have the following meanings:
"Acquisition Proposal" with respect to a Party shall mean any tender
offer or exchange offer or any proposal for a merger, acquisition of all of
the stock or Assets of, or other business combination involving such Party
or any of its Subsidiaries or the acquisition of a 10% or more equity
interest in, or 10% or more of the Assets of, such Party or any of its
Subsidiaries.
"Affiliate" of a Person shall mean: (i) any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by
or under common control with such Person; (ii) any officer, director,
partner, employer, or direct or indirect beneficial owner of any 10% or
greater equity or voting interest of such Person; or (iii) any other Person
for which a Person described in clause (ii) acts in any such capacity.
"Agreement" shall mean this Agreement and Plan of Merger, including
the Exhibits 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.
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"Average Closing Price" shall mean the average of the daily last sales
prices of Regions Common Stock at the close of regular trading as reported
on the Nasdaq NMS (as reported by The Wall Street Journal or, if not
reported thereby, another authoritative source as chosen by Regions) for
the ten consecutive full trading days in which such shares are traded on
the Nasdaq NMS ending at the close of trading on the trading day
immediately preceding the date of the FNBL Stockholders' Meeting.
"BHC Act" shall mean the federal Bank Holding Company Act of 1956, as
amended.
"Confidentiality Agreement" shall mean that certain Confidentiality
Agreement, entered into prior to the date of this Agreement, between FNBL
and Regions.
"Consent" shall mean any consent, approval, authorization, clearance,
exemption, waiver, or similar affirmation by any Person pursuant to any
Contract, Law, Order, or Permit.
"Contract" shall mean any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease,
obligation, plan, practice, restriction, understanding, or undertaking of
any kind or character, or other document to which any Person is a party or
that is binding on any Person or its capital stock, Assets, or business.
"Default" shall mean (i) any breach or violation of or default under
any Contract, Order, or Permit, (ii) any occurrence of any event that with
the passage of time or the giving of notice or both would constitute a
breach or violation of or default under any Contract, Order, or Permit, or
(iii) any occurrence of any event that with or without the passage of time
or the giving of notice would give rise to a right to terminate or revoke,
change the current terms of, or renegotiate, or to accelerate, increase, or
impose any Liability under, any Contract, Order, or Permit, where, in any
such event, such Default is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on a Party.
"Delaware Certificate of Merger" shall mean the certificate of merger
to be executed by Regions and filed with the Secretary of State of the
State of Delaware, relating to the Merger as contemplated by Section 1.1 of
this Agreement.
"DGCL" shall mean the Delaware General Corporation Law.
"Environmental Laws" shall mean all Laws relating to pollution or
protection of human health or the environment (including ambient air,
surface water, ground water, land surface, or subsurface strata) and which
are administered, interpreted, or enforced by the United States
Environmental Protection Agency and state and local agencies with
jurisdiction over, and including common law in respect of, pollution or
protection of the environment, including the Comprehensive Environmental
Response Compensation and Liability Act, as amended, 42 U.S.C. 9601 et seq.
("CERCLA"), the Resource Conservation and Recovery Act, as amended, 42
U.S.C. 6901 et seq. ("RCRA"), and other Laws relating to emissions,
discharges, releases, or threatened releases of any Hazardous Material, or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of any Hazardous
Material.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
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"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.
"FNBL Common Stock" shall mean the $1.00 par value common stock of
FNBL.
"FNBL Companies" shall mean, collectively, FNBL and all FNBL
Subsidiaries.
"FNBL Disclosure Memorandum" shall mean the written information
entitled "FNBL 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 or subsection of this Agreement under which such
disclosure is being made. Information disclosed with respect to one Section
or subsection shall not be deemed to be disclosed for any other purpose
hereunder. The inclusion of any matter in this document shall not be deemed
an admission or otherwise to imply that any such matter is Material for
purposes of this Agreement.
"FNBL Financial Statements" shall mean (i) the consolidated statements
of condition (including related notes and schedules, if any) of FNBL as of
September 30, 1999 and as of December 31, 1998 and 1997, and the related
statements of income, changes in stockholders' equity, and cash flows
(including related notes and schedules, if any) for the nine months ended
September 30, 1999 and for each of the three years ended December 31, 1998,
1997, and 1996, as filed by FNBL in SEC Documents, and (ii) the
consolidated statements of condition of FNBL (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 September 30, 1999.
"FNBL Stock Plans" shall mean the existing stock option and other
stock-based compensation plans of FNBL.
"FNBL Subsidiaries" shall mean the Subsidiaries of FNBL, which shall
include the FNBL Subsidiaries described in Section 5.4 of this Agreement
and any corporation, bank, savings association, or other organization
acquired as a Subsidiary of FNBL in the future and owned by FNBL at the
Effective Time.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"Hazardous Material" shall mean (i) any hazardous substance, hazardous
material, hazardous waste, regulated substance, or toxic substance (as
those terms are defined by any applicable Environmental Laws) and (ii) any
chemicals, pollutants, contaminants, petroleum, petroleum products, or oil
(and specifically shall include asbestos requiring abatement, removal, or
encapsulation pursuant to the requirements of governmental authorities and
any polychlorinated biphenyls).
"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.
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"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
as amended, and the rules and regulations promulgated thereunder.
"Knowledge" as used with respect to a Person (including references to
such Person being aware of a particular matter) shall mean the personal
knowledge of the chairman, president, or chief financial officer 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 those promulgated, interpreted,
or enforced by any Regulatory Authority.
"LBCL" shall mean the Louisiana Business Corporation Law as amended.
"LBL" shall mean the Louisiana Banking Law as amended.
"Liability" shall mean any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost, or expense (including
costs of investigation, collection, and defense), claim, deficiency,
guaranty, or endorsement of or by any Person (other than endorsements of
notes, bills, checks, and drafts presented for collection or deposit in the
ordinary course of business) of any type, whether accrued, absolute or
contingent, threatened, 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 property Taxes not
yet due and payable, and (ii) for depository institution Subsidiaries of a
Party, pledges to secure deposits, and other Liens that are not Material or
are incurred in the ordinary course of the banking business.
"Litigation" shall mean any action, arbitration, cause of action,
claim, complaint, criminal prosecution, demand letter, governmental or
other examination or investigation, hearing, inquiry, administrative or
other proceeding, or notice (written or oral) by any Person alleging
potential Liability or requesting information relating to or affecting a
Party, its business, its Assets (including Contracts related to it), or the
transactions contemplated by this Agreement, but shall not include regular,
periodic examinations of depository institutions and their Affiliates by
Regulatory Authorities.
"Loan Property" shall mean any property owned, leased, or operated by
the Party in question or by any of its Subsidiaries or in which such Party
or Subsidiary holds a security or other interest (including an interest in
a fiduciary capacity), and, where required by the context, includes the
owner or operator of such property, but only with respect to such property.
"Louisiana Certificate of Merger" shall mean the Certificate of Merger
to be executed by Regions and filed with the Secretary of State of the
State of Louisiana relating to the Merger as contemplated by Section 1.1 of
this Agreement.
"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.
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"Material Adverse Effect" on a Party shall mean an event, change, or
occurrence which, individually or together with any other event, change, or
occurrence, has a Material adverse impact on (i) the financial condition,
results of operations, or business of such Party and its Subsidiaries,
taken as a whole, or (ii) the ability of such Party to perform its
obligations under this Agreement or to consummate the Merger or the other
transactions contemplated by this Agreement, provided that "Material
Adverse Effect" shall not be deemed to include the impact of (a) changes in
banking and similar Laws of general applicability or interpretations
thereof by courts or governmental authorities, (b) changes in GAAP or
regulatory accounting principles generally applicable to banks and their
holding companies, (c) actions and omissions of a Party (or any of its
Subsidiaries) taken with the prior informed consent of the other Party in
contemplation of the transactions contemplated hereby, (d) any other matter
affecting federally insured depository institutions generally, including,
without limitation, changes in general economic conditions and changes in
prevailing interest or deposit rates and (e) the Merger and compliance with
the provisions of this Agreement (including, without limitation, the fees
and expenses described in this Article 11) on the operating performance of
the Parties.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Nasdaq NMS" shall mean the National Market System of The Nasdaq Stock
Market.
"1933 Act" shall mean the Securities Act of 1933, as amended.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended.
"Order" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling, or
writ of any federal, state, local, or foreign or other court, arbitrator,
mediator, tribunal, administrative agency, or Regulatory Authority.
"Participation Facility" shall mean any facility or property in which
the Party in question or any of its Subsidiaries participates in the
management, as such term is defined in CERCLA (including, but not limited
to, participating in a fiduciary capacity), and, where required by the
context, said term means the owner or operator of such facility or
property, but only with respect to such facility or property.
"Party" shall mean either FNBL or Regions, and "Parties" shall mean
both FNBL 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 FNBL to
solicit the approval of its stockholders of the transactions contemplated
by this Agreement,
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which shall include the prospectus of Regions relating to the issuance of
the Regions Common Stock to holders of FNBL Common Stock.
"Regions Common Stock" shall mean the $.625 par value common stock of
Regions.
"Regions Companies" shall mean, collectively, Regions and all Regions
Subsidiaries.
"Regions Financial Statements" shall mean (i) the consolidated
statements of condition (including related notes and schedules, if any) of
Regions as of September 30, 1999 and as of December 31, 1998 and 1997, and
the related statements of income, changes in stockholders' equity, and cash
flows (including related notes and schedules, if any) for the nine months
ended September 30, 1999 and for each of the three years ended December 31,
1998, 1997, and 1996, 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 September 30, 1999.
"Regions Subsidiaries" shall mean the Subsidiaries of Regions and any
corporation, bank, savings association, or other organization acquired as a
Subsidiary of Regions in the future and owned by Regions at the Effective
Time.
"Registration Statement" shall mean the Registration Statement on Form
S-4, or other appropriate form, including any pre-effective or
post-effective amendments or supplements thereto, filed with the SEC by
Regions under the 1933 Act with respect to the shares of Regions Common
Stock to be issued to the stockholders of FNBL in connection with the
transactions contemplated by this Agreement.
"Regulatory Authorities" shall mean, collectively, the Federal Trade
Commission, the United States Department of Justice, the Board of the
Governors of the Federal Reserve System, the Office of the Comptroller of
the Currency, the Federal Deposit Insurance Corporation, the Office of
Thrift Supervision, all state regulatory agencies having jurisdiction over
the Parties and their respective Subsidiaries, the NASD, and the SEC.
"Representative" shall mean any investment banker, financial advisor,
attorney, accountant, consultant, or other representative of a Person.
"Rights" shall mean all arrangements, calls, commitments, Contracts,
options, rights to subscribe to, scrip, understandings, warrants, or other
binding obligations of any character whatsoever relating to, or securities
or rights convertible into or exchangeable for, shares of the capital stock
of a Person or by which a Person is or may be bound to issue additional
shares of its capital stock or other Rights.
"SEC" shall mean the United States Securities and Exchange Commission.
"SEC Documents" shall mean all forms, proxy statements, registration
statements, reports, schedules, and other documents filed, or required to
be filed, by a Party or any of its Subsidiaries with any Regulatory
Authority pursuant to the Securities Laws.
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"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
FNBL to be held pursuant to Section 8.1 of this Agreement, including any
adjournment or adjournments thereof.
"Subsidiaries" shall mean all those corporations, banks, associations,
or other entities of which the entity in question owns or controls 50% or
more of the outstanding equity securities either directly or through an
unbroken chain of entities as to each of which 50% or more of the
outstanding equity securities is owned directly or indirectly by its
parent; provided, there shall not be included any such entity acquired
through foreclosure or any such entity the equity securities of which are
owned or controlled in a fiduciary capacity.
"Superior Proposal" means, with respect to FNBL, any written
Acquisition Proposal made by a Person other than Regions which is for
(i)(a) a merger, reorganization, consolidation, share exchange, business
combination, recapitalization, liquidation, dissolution, or similar
transaction involving FNBL as a result of which either (1) FNBL's
stockholders prior to such transaction (by virtue of their ownership of
FNBL's shares) in the aggregate cease to own at least 50% of the voting
securities of the entity surviving or resulting from such transaction (or
the ultimate parent entity thereof) or (2) the individuals comprising the
Board of Directors of FNBL prior to such transaction do not constitute a
majority of the board of directors of such ultimate parent entity, (b) a
sale, lease, exchange, transfer, or other disposition of at least 50% of
the assets of FNBL and its Subsidiaries, taken as a whole, in a single
transaction or a series of related transactions, or (c) the acquisition,
directly or indirectly, by a Person of beneficial ownership of 25% or more
of the common stock of FNBL whether by merger, consolidation, share
exchange, business combination, tender, or exchange offer or otherwise, and
(ii) which is otherwise on terms which the Board of Directors of FNBL in
good faith concludes (after consultation with its financial advisors and
outside counsel), taking into account, among other things, all legal,
financial, regulatory, and other aspects of the proposal and the Person
making the proposal, (a) would, if consummated, result in a transaction
that is more favorable to its stockholders (in their capacities as
stockholders), from a financial point of view, than the transactions
contemplated by this Agreement, and (b) is reasonably capable of being
completed.
"Surviving Corporation" shall mean Regions as the surviving
corporation resulting from the Merger.
"Tax" or "Taxes" shall mean all federal, state, local, and foreign
taxes, charges, fees, levies, imposts, duties, or other assessments,
including income, gross receipts, excise, employment, sales, use, transfer,
license, payroll, franchise, severance, stamp, occupation, windfall
profits, environmental, federal highway use, commercial rent, customs
duties, capital stock, paid-up capital, profits, withholding, Social
Security, single business and unemployment, disability, real property,
personal property, registration, ad valorem, value added, alternative or
add-on minimum, estimated, or other tax or governmental fee of any kind
whatsoever, imposed or required to be
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withheld by the United States or any state, local, or foreign government or
subdivision or agency thereof, including any interest, penalties, or
additions thereto.
"Taxable Period" shall mean any period prescribed by any governmental
authority, including the United States or any state, local, or foreign
government or subdivision or agency thereof for which a Tax Return is
required to be filed or Tax is required to be paid.
"Tax Return" shall mean any report, return, information return, or
other information required to be supplied to a taxing authority in
connection with Taxes, including any return of an affiliated or combined or
unitary group that includes a Party or its Subsidiaries.
(b) The terms set forth below shall have the meanings ascribed thereto in
the referenced sections:
<TABLE>
<S> <C>
Closing..................................................... Section 1.2
Continuing Employee......................................... Section 8.13
Effective Time.............................................. Section 1.3
Exchange Agent.............................................. Section 4.1
Exchange Ratio.............................................. Section 3.1(b)
FNBL Benefit Plans.......................................... Section 5.13(a)
FNBL Contracts.............................................. Section 5.14
FNBL ERISA Affiliate........................................ Section 5.13(e)
FNBL ERISA Plan............................................. Section 5.13(a)
FNBL Pension Plan........................................... Section 5.13(a)
Indemnified Party........................................... Section 8.14
Merger...................................................... Section 1.1
Regions SEC Reports......................................... Section 6.5(a)
Takeover Laws............................................... Section 5.19
Tax Opinion................................................. Section 9.1(g)
</TABLE>
(c) Any singular term in this Agreement shall be deemed to include the
plural, and any plural term the singular. Whenever the words "include,"
"includes," or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation."
11.2 Expenses. (a) Except as otherwise provided in this Section 11.2, each
of the Parties shall bear and pay all direct costs and expenses incurred by it
or on its behalf in connection with the transactions contemplated hereunder,
including filing, registration, and application fees, printing fees, and fees
and expenses of its own financial or other consultants, investment bankers,
accountants, and counsel, except that Regions shall bear and pay the filing fees
payable in connection with the Registration Statement and the Proxy Statement
and one-half of the printing costs incurred in connection with the printing of
the Registration Statement and the Proxy Statement.
(b) Nothing contained in this Section 11.2 shall constitute or shall be
deemed to constitute liquidated damages for the willful breach by a Party of the
terms of this Agreement or otherwise limit the rights of the nonbreaching Party.
11.3 Brokers and Finders. Except for Alex Sheshunoff & Co. as to FNBL,
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'
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fees in connection with this Agreement or the transactions contemplated hereby.
In the event of a claim by any broker or finder based upon his, her, or its
representing or being retained by or allegedly representing or being retained by
FNBL or Regions, each of FNBL 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, other than the
Confidentiality Agreement, which shall remain in effect. Nothing in this
Agreement expressed or implied, is intended to confer upon any Person, other
than the Parties or their respective successors, any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, other than as
provided in Sections 8.12 and 8.14 of this Agreement.
11.5 Amendments. To the extent permitted by Law, this Agreement may be
amended by a subsequent writing signed by each of the Parties upon the approval
of the Boards of Directors of each of the Parties, whether before or after
stockholder approval of this Agreement has been obtained; provided, that the
provisions of this Agreement relating to the manner or basis in which shares of
FNBL Common Stock will be exchanged for Regions Common Stock shall not be
amended (except in accordance with Section 3.1(b) of this Agreement) after the
Stockholders' Meeting without the requisite approval of the holders of the
issued and outstanding shares of FNBL Common Stock entitled to vote thereon.
11.6 Waivers. (a) Prior to or at the Effective Time, Regions, acting
through its Board of Directors, chief executive officer, chief financial
officer, or other authorized officer, shall have the right to waive any Default
in the performance of any term of this Agreement by FNBL, to waive or extend the
time for the compliance or fulfillment by FNBL 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
except that any unfulfilled conditions shall be deemed to have been waived at
the Effective Time.
(b) Prior to or at the Effective Time, FNBL, acting through its Board of
Directors shall have the right to waive any Default in the performance of any
term of this Agreement by Regions, to waive or extend the time for the
compliance or fulfillment by Regions of any and all of its obligations under
this Agreement, and to waive any or all of the conditions precedent to the
obligations of FNBL 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 FNBL except
that any unfulfilled conditions shall be deemed to have been waived at the
Effective Time.
(c) The failure of any Party at any time or times to require performance of
any provision hereof shall in no manner affect the right of such Party at a
later time to enforce the same or any other provision of this Agreement. No
waiver of any condition or of the breach of any term contained in this Agreement
in one or more instances shall be deemed to be or construed as a further or
continuing waiver of such condition or breach or a waiver of any other condition
or of the breach of any other term of this Agreement.
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11.7 Assignment. Except as expressly contemplated hereby, neither this
Agreement nor any of the rights, interests, or obligations hereunder shall be
assigned by any Party hereto (whether by operation of Law or otherwise) without
the prior written consent of the other Party. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of, and be enforceable
by the Parties and their respective successors and assigns.
11.8 Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered by hand, by
facsimile transmission, by registered or certified mail, postage pre-paid, or by
courier or overnight carrier, to the persons at the addresses set forth below
(or at such other address as may be provided hereunder), and shall be deemed to
have been delivered as of the date so delivered:
<TABLE>
<S> <C>
FNBL: First National Bancshares of Louisiana, Inc.
625 Murray Street
Alexandria, Louisiana 71301
Telecopy Number: (318) 445-0684
Attention: Thomas D. Fowler
Chief Executive Officer
and
Donald S. Kramer
President
Copy to Counsel: Correro Fishman Haygood Phelps
Walmsley & Casteix, L.L.P.
Bank One Center, 46th Floor
201 St. Charles Avenue
New Orleans, Louisiana 70170-4600
Telecopy Number: (504) 586-5250
Attention: Anthony J. Correro III
Regions: Regions Financial Corporation
417 N. 20th Street
Birmingham, Alabama 35203
Telecopy Number: (205) 326-7571
Attention: Richard D. Horsley
Vice Chairman and Executive Financial
Officer
Copy to Counsel: Regions Financial Corporation
417 N. 20th Street
Birmingham, Alabama 35203
Telecopy Number: (205) 326-7751
Attention: Samuel E. Upchurch, Jr.
General Counsel
</TABLE>
11.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the Laws of the State of Delaware, without regard to any
applicable conflicts of Laws, except to the extent that the Laws of the State of
Louisiana relate to the consummation of the Merger.
11.10 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
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11.11 Captions. The captions contained in this Agreement are for reference
purposes only and are not part of this Agreement.
11.12 Interpretations. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against any Party, whether under
any rule of construction or otherwise. No Party to this Agreement shall be
considered the draftsman. The Parties acknowledge and agree that this Agreement
has been reviewed, negotiated, and accepted by all Parties and their attorneys
and shall be construed and interpreted according to the ordinary meaning of the
words used so as fairly to accomplish the purposes and intentions of the
Parties.
11.13 Enforcement of Agreement. The Parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement was
not performed in accordance with its specific terms or was otherwise breached.
It is accordingly agreed that the Parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.
11.14 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
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: FIRST NATIONAL BANCSHARES OF
LOUISIANA, INC.
By: By:
-------------------------------------- --------------------------------------
Glenn W. Butler Donald S. Kramer
Secretary President
[CORPORATE SEAL]
ATTEST: REGIONS FINANCIAL CORPORATION
By: By:
-------------------------------------- --------------------------------------
Samuel E. Upchurch, Jr. Richard D. Horsley
Corporate Secretary Vice Chairman
[CORPORATE SEAL]
</TABLE>
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APPENDIX B
July 7, 2000
Board of Directors
First National Bancshares of Louisiana, Inc.
625 Murray Street
Alexandria, Louisiana 71301-8058
Members of the Board:
You requested that we update our oral opinion given to you on March ,
2000 as to the fairness, from a financial point of view, to the holders of the
outstanding shares of common stock of First National Bancshares of Louisiana,
Inc. ("First National") of the merger consideration, as defined below, in the
proposed merger between First National and Regions Financial Corp., Birmingham,
Alabama, (the "Corporation"). Pursuant to an Agreement and Plan of Merger dated
April 4, 2000 (the "Merger Agreement"), the Corporation has agreed to exchange
.7045 shares of its common stock (the "Merger Consideration") for each
outstanding share of First National common stock, subject to possible adjustment
as determined by a formula contained in the Merger Agreement. Pursuant to the
Merger Agreement, First National will be merged with and into the Corporation
(the "Merger").
Alex Sheshunoff & Co. Investment Banking LP ("Sheshunoff") is regularly
engaged in the valuation of securities in connection with mergers and
acquisitions, private placements, and valuations for estate, corporate and other
purposes.
In connection with our opinion, we, among other things:
1. Reviewed the Merger Agreement;
2. Evaluated First National's consolidated results based upon a review
of its annual financial statements for the three-year period ending
December 31, 1999 and the quarter ended March 31, 2000;
3. Reviewed Call Report information as of March 31, 2000 for First
National;
4. Conducted conversations with executive management regarding recent
and projected financial performance of First National;
5. Compared First National's recent operating results with those of
certain other banks in Arkansas, Louisiana, Mississippi and Texas which
have recently been acquired;
6. Compared First National's recent operating results with those of
certain other banks located in the United States which have recently been
acquired;
7. Compared the pricing multiples for First National in the Merger to
those of certain other banks in Arkansas, Louisiana, Mississippi, and Texas
which have recently been acquired;
8. Compared the pricing multiples for First National in the Merger to
those of certain other banks located in the United States which have
recently been acquired;
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9. Analyzed the net present value of the after-tax cash flows First
National could produce through the year 2004, based on assumptions provided
by management;
10. Performed an affordability analysis based on the projections of
earnings for the combined entity subsequent to the Merger;
11. Reviewed the historical stock price data and trading volume of the
Corporation common stock and the lack of any active market for the common
stock of First National; and
12. Performed such other analyses as we deemed appropriate.
We assumed and relied upon, without independent verification, the accuracy
and completeness of the information provided to us by First National for the
purposes of this opinion. In addition, where appropriate, we relied upon
publicly available information that we believe to be reliable, accurate, and
complete; however, we cannot guarantee the reliability, accuracy, or
completeness of any such publicly available information.
We did not make an independent evaluation of the assets or liabilities of
First National or the Corporation, nor were we furnished with any such
appraisals. We are not experts in the evaluation of loan portfolios for the
purposes of assessing the adequacy of the allowance for loan and lease losses
and assumed that such allowances for each of the companies are, in the
aggregate, adequate to cover such losses.
We assumed that all required regulatory approvals will be received in a
timely fashion and without any conditions or requirements that could adversely
affect the Merger or the Corporation's operations following the Merger.
Our opinion is necessarily based on economic, market, and other conditions
as in effect on, and the information made available to us as of, the date
hereof. Events occurring after the date hereof could materially affect the
assumptions used in preparing this opinion.
Our opinion is limited to the fairness of the Merger Consideration, from a
financial point of view, to the holders of First National common stock.
Moreover, this letter and the opinion expressed herein do not constitute a
recommendation to any stockholder as to any approval of the Merger or the Merger
Agreement. It is understood that this letter is for the information of the Board
of Directors of First National and may not be used for any other purpose without
our prior written consent.
Based on the foregoing and such other matters we have deemed relevant, it
is our opinion, as of the date hereof, that the Merger Consideration to be
received by the First National stockholders pursuant to the Merger is fair, from
a financial point of view.
Very truly yours,
ALEX SHESHUNOFF & CO.
INVESTMENT BANKING, LP
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APPENDIX C
LOUISIANA STATUTES ANNOTATED-REVISED STATUTES 12:131
SEC. 131. RIGHTS OF A SHAREHOLDER DISSENTING FROM CERTAIN CORPORATE ACTIONS
A. Except as provided in subsection B of this section, if a corporation
has, by vote of its shareholders, authorized a sale, lease or exchange of all of
its assets, or has, by vote of its shareholders, become a party to a merger or
consolidation, then, unless such authorization or action shall have been given
or approved by at least eighty per cent of the total voting power, a shareholder
who voted against such corporate action shall have the right to dissent. If a
corporation has become a party to a merger pursuant to R.S. 12:112(H), the
shareholders of any subsidiaries party to the merger shall have the right to
dissent without regard to the proportion of the voting power which approved the
merger and despite the fact that the merger was not approved by vote of the
shareholders of any of the corporations involved.
B. The right to dissent provided by this Section shall not exist in the
case of:
(1) A sale pursuant to an order of a court having jurisdiction in the
premises.
(2) A sale for cash on terms requiring distribution of all or
substantially all of the net proceeds to the shareholders in accordance
with their respective interests within one year after the date of the sale.
(3) Shareholders holding shares of any class of stock which, at the
record date fixed to determine shareholders entitled to receive notice of
and to vote at the meeting of shareholders at which a merger or
consolidation was acted on, were listed on a national securities exchange
or were designated as a national market system security on an inter-dealer
quotation system by the National Association of Securities Dealers, unless
the articles of the corporation issuing such stock provide otherwise or,
except in the case of shareholders of a corporation surviving the merger or
consolidation in which each share of such corporation outstanding
immediately prior to the effective date of the merger or consolidation is
an identical outstanding or treasury share of such corporation after the
effective date of the merger or consolidation, the shares of such
shareholders were not converted by the merger or consolidation solely into
shares of the surviving or new corporation.
C. Except as provided in the last sentence of this subsection, any
shareholder electing to exercise such right of dissent shall file with the
corporation, prior to or at the meeting of shareholders at which such proposed
corporate action is submitted to a vote, a written objection to such proposed
corporate action, and shall vote his shares against such action. If such
proposed corporate action be taken by the required vote, but by less than eighty
per cent of the total voting power, and the merger, consolidation or sale, lease
or exchange of assets authorized thereby be effected, the corporation shall
promptly thereafter give written notice to each shareholder who filed such
written objection to, and voted his shares against, such action, at such
shareholder's last address on the corporation's records. An affidavit of the
secretary or assistant secretary or of the transfer agent of the corporation
that such notice has been given shall, in the absence of fraud, be prima facia
evidence of the facts stated therein. Each such shareholder may, within twenty
days after the mailing of such notice to him, but not thereafter, file with the
corporation a demand in writing for the fair cash value of his shares as of the
day before such vote was taken; provided that he state in such demand the value
demanded, and a post office address to which the reply of the corporation may be
sent, and at the same time deposit in escrow in a chartered bank
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or trust company located in the parish of the registered office of the
corporation, the certificates representing his shares, duly endorsed and
transferred to the corporation upon the sole condition that said certificates
shall be delivered to the corporation upon payment of the value of the shares
determined in accordance with the provisions of this section. With his demand
the shareholder shall deliver to the corporation, the written acknowledgment of
such bank or trust company that it so holds his certificates of stock. Unless
the objection, demand and acknowledgment aforesaid be made and delivered by the
shareholder within the period above limited, he shall conclusively be presumed
to have acquiesced in the corporate action proposed or taken. In the case of a
merger pursuant to R.S. 12:112(H), the dissenting shareholder need not file an
objection with the corporation nor vote against the merger, but need only file
with the corporation, within twenty days after a copy of the merger certificate
was mailed to him, a demand in writing for the cash value of his shares as of
the day before the certificate was filed with the secretary of state, state in
such demand the value demanded and a post office address to which the
corporation's reply may be sent, deposit the certificates representing his
shares in escrow as hereinabove provided, and deliver to the corporation with
his demand the acknowledgment of the escrow bank or trust company as hereinabove
prescribed.
D. If the corporation does not agree to the value so stated and demanded,
or does not agree that a payment is due, it shall, within twenty days after
receipt of such demand and acknowledgment, notify in writing the shareholder, at
the designated post office address, of its disagreement, and shall state in such
notice the value it will agree to pay if any payment should be held to be due;
otherwise it shall be liable for, and shall pay to the dissatisfied shareholder,
the value demanded by him for his shares.
E. In case of disagreement as to such fair cash value, or as to whether any
payment is due, after compliance by the parties with the provisions of
subsections C and D of this section, the dissatisfied shareholder, within sixty
days after receipt of notice in writing of the corporation's disagreement, but
not thereafter, may file suit against the corporation, or the merged or
consolidated corporation, as the case may be, in the district court of the
parish in which the corporation or the merged or consolidated corporation, as
the case may be, has its registered office, praying the court to fix and decree
the fair cash value of the dissatisfied shareholder's shares as of the day
before such corporate action complained of was taken, and the court shall, on
such evidence as may be adduced in relation thereto, determine summarily whether
any payment is due, and, if so, such cash value, and render judgment
accordingly. Any shareholder entitled to file such suit may, within such
sixty-day period but not thereafter, intervene as a plaintiff in such suit filed
by another shareholder, and recover therein judgment against the corporation for
the fair cash value of his shares. No order or decree shall be made by the court
staying the proposed corporate action, and any such corporate action may be
carried to completion notwithstanding any such suit. Failure of the shareholder
to bring suit, or to intervene in such a suit, within sixty days after receipt
of notice of disagreement by the corporation shall conclusively bind the
shareholder (1) by the corporation's statement that no payment is due, or (2) if
the corporation does not contend that no payment is due, to accept the value of
his shares as fixed by the corporation in its notice of disagreement.
F. When the fair value of the shares has been agreed upon between the
shareholder and the corporation, or when the corporation has become liable for
the value demanded by the shareholder because of failure to give notice of
disagreement and of the value it will pay, or when the shareholder has become
bound to accept the value the corporation agrees is due because of his failure
to bring suit within sixty days after receipt of notice of the
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corporation's disagreement, the action of the shareholder to recover such value
must be brought within five years from the date the value was agreed upon, or
the liability of the corporation became fixed.
G. If the corporation or the merged or consolidated corporation, as the
case may be, shall, in its notice of disagreement, have offered to pay to the
dissatisfied shareholder on demand an amount in cash deemed by it to be the fair
cash value of his shares, and if, on the institution of a suit by the
dissatisfied shareholder claiming an amount in excess of the amount so offered,
the corporation, or the merged or consolidated corporation, as the case may be,
shall deposit in the registry of the court, there to remain until the final
determination of the cause, the amount so offered, then, if the amount finally
awarded such shareholder, exclusive of interest and costs, be more than the
amount offered and deposited as aforesaid, the costs of the proceeding shall be
taxed against the corporation, or the merged or consolidated corporation, as the
case may be; otherwise the costs of the proceeding shall be taxed against such
shareholder.
H. Upon filing a demand for the value of his shares, the shareholder shall
cease to have any of the rights of a shareholder except the rights accorded by
this section. Such a demand may be withdrawn by the shareholder at any time
before the corporation gives notice of disagreement, as provided in subsection D
of this section. After such notice of disagreement is given, withdrawal of a
notice of election shall require the written consent of the corporation. If a
notice of election is withdrawn, or the proposed corporate action is abandoned
or rescinded, or a court shall determine that the shareholder is not entitled to
receive payment for his shares, or the shareholder shall otherwise lose his
dissenter's rights, he shall not have the right to receive payment for his
shares, his share certificates shall be returned to him (and, on his request,
new certificates shall be issued to him in exchange for the old ones endorsed to
the corporation), and he shall be reinstated to all his rights as a shareholder
as of the filing of his demand for value, including any intervening preemptive
rights, and the right to payment of any intervening dividend or other
distribution, or, if any such rights have expired or any such dividend or
distribution other than in cash has been completed, in lieu thereof, at the
election of the corporation, the fair value thereof in cash as determined by the
board as of the time of such expiration or completion, but without prejudice
otherwise to any corporate proceedings that may have been taken in the interim.
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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
Registrant 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
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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 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.
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"(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 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 Registrant has purchased a directors' and officers' liability
insurance contract which provides, within stated limits, reimbursement either to
a
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<PAGE> 121
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>
2.1 -- Agreement and Plan of Merger, dated as of April 4, 2000, by and between First National
Bancshares of Louisiana, Inc. and Regions Financial Corporation -- included as
Appendix A to the Proxy Statement/Prospectus.
4.1 -- Certificate of Incorporation of Regions Financial Corporation -- incorporated by reference from S-4
Registration Statement of Regions Financial Corporation, file no. 333-86975.
4.2 -- By-laws of Regions Financial Corporation -- incorporated by reference from S-4 Registration Statement of
Regions Financial Corporation, file no. 333-86975.
5. -- Form of opinion re: legality.
8. -- Form of opinion re: tax matters.
23.1 -- Consent of Ernst & Young LLP.
23.2. -- Consent of Lange, Simpson, Robinson & Somerville LLP - to be included in Exhibit 5.
23.3 -- Consent of Alston & Bird LLP-to be included in Exhibit 8.
23.4 -- Consent of Alex Sheshunoff & Co.
24.1 -- Power of Attorney
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.
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
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<PAGE> 122
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> 123
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this 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 10th day of July, 2000.
REGISTRANT:
REGIONS FINANCIAL CORPORATION
BY: /s/ Richard D. Horsley
------------------------------
Richard D. Horsley
Vice Chairman of the Board and
Executive Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
*
--------------------------- President and Chief Executive July 10, 2000
Carl E. Jones, Jr. Officer and Director
(principal executive officer)
/s/ Richard D. Horsley
--------------------------- Vice Chairman of the Board and July 10, 2000
Richard D. Horsley Executive Financial Officer
and Director
(principal financial officer)
*
--------------------------- Executive Vice President and July 10, 2000
Robert P. Houston Comptroller
(principal accounting officer)
<PAGE> 124
*
--------------------------- Director July 10, 2000
Sheila S. Blair
*
--------------------------- Director July 10, 2000
James B. Boone, Jr.
*
--------------------------- Director July 10, 2000
James S.M. French
*
--------------------------- Director July 10, 2000
Olin B. King
*
--------------------------- Chairman of the Board July 10, 2000
J. Stanley Mackin and Director
*
--------------------------- Director July 10, 2000
Michael W. Murphy
*
--------------------------- Director July 10, 2000
Henry E. Simpson
*
--------------------------- Director July 10, 2000
Lee J. Styslinger, Jr.
*
--------------------------- Director July 10, 2000
W. Woodrow Stewart
*
--------------------------- Director July 10, 2000
John H. Watson
*
--------------------------- Director July 10, 2000
C. Kemmons Wilson, Jr.
* By /s/ Richard D. Horsley as attorney-in-fact July 10, 2000
pursuant to a power of attorney.
<PAGE> 125
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------- ----------- ------------
<S> <C> <C>
2.1 -- Agreement and Plan of Merger, dated as of April 4, 2000, by and between First National
Bancshares of Louisiana, Inc. and Regions Financial Corporation -- included as
Appendix A to the Proxy Statement/Prospectus.
4.1 -- Certificate of Incorporation of Regions Financial Corporation -- incorporated by reference
from S-4 Registration Statement of Regions Financial Corporation, file no. 333-86975.
4.2 -- By-laws of Regions Financial Corporation -- incorporated by reference from S-4 Registration
Statement of Regions Financial Corporation, file no. 333-86975.
5. -- Form of opinion re: legality.
8. -- Form of opinion re: tax matters.
23.1 -- Consent of Ernst & Young LLP.
23.2. -- Consent of Lange, Simpson, Robinson & Somerville LLP - to be included in Exhibit 5.
23.3 -- Consent of Alston & Bird LLP-to be included in Exhibit 8.
23.4 -- Consent of Alex Sheshunoff & Co.
24.1 -- Power of Attorney
99. -- Form of proxy.
</TABLE>
