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EXHIBIT 99.2
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
MORGAN KEEGAN, INC.
AND
REGIONS FINANCIAL CORPORATION
DATED AS OF DECEMBER 17, 2000
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TABLE OF CONTENTS
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Parties..............................................................
Preamble.............................................................
ARTICLE 1 -- TRANSACTIONS AND TERMS OF MERGER
1.1 Merger......................................................
1.2 Time and Place of Closing...................................
1.3 Effective Time..............................................
1.4 Execution of Support Agreements.............................
1.5 Execution of the Termination Fee Agreement..................
ARTICLE 2 -- TERMS OF MERGER
2.1 Certificate of Incorporation................................
2.2 Bylaws......................................................
2.3 Directors and Officers......................................
ARTICLE 3 -- MANNER OF CONVERTING SHARES
3.1 Conversion of Shares........................................
3.2 Anti-Dilution Provisions....................................
3.3 Shares Held by Morgan or Regions............................
3.4 Fractional Shares...........................................
3.5 Conversion of Stock Rights..................................
ARTICLE 4 -- EXCHANGE OF SHARES
4.1 Exchange Procedures.........................................
4.2 Rights of Former Morgan Stockholders........................
ARTICLE 5 -- REPRESENTATIONS AND WARRANTIES OF MORGAN
5.1 Organization, Standing, and Power...........................
5.2 Authority; No Breach of Agreement...........................
5.3 Capital Stock...............................................
5.4 Morgan Subsidiaries.........................................
5.5 SEC Filings; Financial Statements...........................
5.6 Absence of Undisclosed Liabilities..........................
5.7 Absence of Certain Changes or Events........................
5.8 Tax Matters.................................................
5.9 Assets......................................................
5.10 Environmental Matters.......................................
5.11 Permits.....................................................
5.12 Compliance with Laws........................................
5.13 Labor Relations.............................................
5.14 Employee Benefit Plans......................................
5.15 Material Contracts..........................................
5.16 Legal Proceedings...........................................
5.17 Reports.....................................................
5.18 Statements True and Correct.................................
5.19 Tax and Regulatory Matters..................................
5.20 Intellectual Property.......................................
5.21 State Takeover Laws.........................................
5.22 Charter Provisions..........................................
5.23 Derivatives.................................................
5.24 Fairness Opinion............................................
5.25 Contracts with Clients......................................
5.26 Investment Advisory Activities..............................
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ARTICLE 6 -- REPRESENTATIONS AND WARRANTIES OF REGIONS
6.1 Organization, Standing, and Power...........................
6.2 Authority; No Breach of Agreement...........................
6.3 Capital Stock...............................................
6.4 Regions Subsidiaries........................................
6.5 SEC Filings; Financial Statements...........................
6.6 Absence of Undisclosed Liabilities..........................
6.7 Absence of Certain Changes or Events........................
6.8 Compliance with Laws........................................
6.9 Tax Matters.................................................
6.10 Legal Proceedings...........................................
6.11 Reports.....................................................
6.12 Statements True and Correct.................................
6.13 Tax and Regulatory Matters..................................
6.14 Derivatives.................................................
6.15 Funds.......................................................
6.16 Ownership of Morgan Capital Stock...........................
ARTICLE 7 -- CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 Affirmative Covenants of Both Parties.......................
7.2 Negative Covenants of Morgan................................
7.3 Adverse Changes in Condition................................
7.4 Reports.....................................................
ARTICLE 8 -- ADDITIONAL AGREEMENTS
Registration Statement; Proxy Statement; Stockholder
8.1 Approval....................................................
8.2 Applications................................................
8.3 Filings with State Offices..................................
8.4 Agreement as to Efforts to Consummate.......................
8.5 Investigation and Confidentiality...........................
8.6 Press Releases..............................................
8.7 No Solicitation.............................................
8.8 Tax Treatment...............................................
8.9 Agreement of Affiliates.....................................
8.10 Employee Benefits and Contracts.............................
8.11 Indemnification.............................................
8.12 Exemption for Liability Under Section 16(b).................
8.13 Investment Companies........................................
8.14 Management Contract Consents................................
8.15 Retention Program...........................................
ARTICLE 9 -- CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 Conditions to Obligations of Each Party.....................
9.2 Conditions to Obligations of Regions........................
9.3 Conditions to Obligations of Morgan.........................
ARTICLE 10 -- TERMINATION
10.1 Termination.................................................
10.2 Effect of Termination.......................................
10.3 Non-Survival of Representations and Covenants...............
ARTICLE 11 -- MISCELLANEOUS
11.1 Definitions.................................................
11.2 Expenses....................................................
11.3 Brokers and Finders.........................................
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11.4 Entire Agreement............................................
11.5 Amendments..................................................
11.6 Waivers.....................................................
11.7 Assignment..................................................
11.8 Notices.....................................................
11.9 Governing Law...............................................
11.10 Counterparts................................................
11.11 Captions....................................................
11.12 Interpretations.............................................
11.13 Enforcement of Agreement....................................
11.14 Severability................................................
Signatures...........................................................
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LIST OF EXHIBITS
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EXHIBIT NUMBER DESCRIPTION
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1. Form of Support Agreement. (sec. 1.4).
2. Form of Termination Fee Agreement. (sec. 1.4).
3. Form of Affiliate Agreement. (sec. 8.11).
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[EXHIBITS OMITTED]
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into as of December 17, 2000, by and between MORGAN KEEGAN, INC. ("Morgan"), a
corporation organized and existing under the Laws of the State of Tennessee,
with its principal office located in Memphis, Tennessee; 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 Morgan 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 Morgan by Regions pursuant to the merger of Morgan with and into
Regions. At the effective time of the merger, the outstanding shares of the
capital stock of Morgan shall be converted into shares of the common stock of
Regions (except as provided herein). As a result, stockholders of Morgan shall
become stockholders of Regions, and each of the subsidiaries of Morgan 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 Morgan, the Board of Governors of the Federal Reserve System,
the National Association of Securities Dealers, Inc., 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 and that this Agreement shall constitute a "plan of reorganization" for
purposes of Sections 354 and 361 of the Internal Revenue Code.
As a condition and inducement to Regions' willingness to enter into this
Agreement, (i) Morgan's directors and certain executive officers are executing
and delivering to Regions an agreement (a "Support Agreement"), in substantially
the form of Exhibit 1, and (ii) Morgan and Regions are entering into a
termination fee agreement (the "Termination Fee Agreement"), in substantially
the form of Exhibit 2.
In addition, Regions and Morgan have agreed, in connection with the
transactions contemplated hereby, to establish a retention program on
substantially the terms described herein, the purpose of which is to retain the
services of certain employees of Morgan following the consummation of the
transactions contemplated hereby.
Certain terms used in this Agreement are defined in Section 11.1 of this
Agreement.
NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants, and agreements set forth herein, and intending to be
legally bound hereby, 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, Morgan shall be merged with and into Regions in accordance with
the provisions of Section 48-21-109 of the TBCA and Sections 252 and 258 of the
DGCL and with the effect provided in Section 48-21-108 of the TBCA and Section
259 of the DGCL, respectively (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 Morgan 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 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,
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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 Tennessee
Articles of Merger reflecting the Merger shall become effective with the
Secretary of State of the State of Tennessee 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 such date as may be designated by Regions within
10 days following the later to occur of (i) the effective date of the last
required Consent of any Regulatory Authority having authority over and approving
or exempting the Merger (without regard to any requisite waiting period in
respect thereof), and (ii) the date on which the stockholders of Morgan approve
the matters relating to this Agreement, such date to be designated by Regions
within two business days after the later to occur of the foregoing events.
1.4 Execution of Support Agreements. Simultaneously with the execution of
this Agreement and as a condition hereto, the directors and certain executive
officers of Morgan are executing and delivering to Regions a Support Agreement.
1.5 Execution of the Termination Fee Agreement. Simultaneously with the
execution of this Agreement and as a condition hereto, Morgan is executing and
delivering to Regions the Termination Fee 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.
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 Morgan, 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 Morgan Common Stock, excluding shares held by any
Morgan Company or any Regions Company, in each case other than in a
fiduciary capacity or as a result of debts previously contracted ("Treasury
Shares"), issued and outstanding at the Effective Time shall cease to be
outstanding and shall be converted into a multiple (rounded to three
decimal places) of a share of
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Regions Common Stock (the "Merger Shares") equal to the quotient obtained
by dividing (i) $27.00 by (ii) the Average Price (the "Exchange Ratio");
provided, subject to the election rights set forth in Section 3.1(c) of this
Agreement, each holder of Morgan Common Stock shall be provided with an
opportunity to elect to receive cash consideration for such holder's shares of
Morgan Common Stock in lieu of receiving any Merger Shares.
(c) Holders of Morgan Common Stock shall be provided with an
opportunity to elect to receive cash consideration in lieu of receiving
Merger Shares in the Merger, in accordance with the election procedures set
forth below. Holders who are to receive cash in lieu of exchanging their
shares of Morgan Common Stock for Merger Shares as specified below shall
receive an amount in cash (the "Per Share Cash Consideration") in respect
of each share of Morgan Common Stock that is so converted equal to $27.00.
The aggregate amount of cash that shall be issued in the Merger to satisfy
such elections, together with the cash amounts to be paid pursuant to
Sections 3.4 and 3.5 of this Agreement, shall not exceed 30%, unless and to
the extent Regions determines in its sole discretion to increase such
amount to a number not in excess of 45%, of the sum of (i) the aggregate
consideration paid in exchange for all shares of Morgan Common Stock in the
Merger, and (ii) the cash amounts to be paid pursuant to Section 3.5(d) of
this Agreement (as possibly increased, the "Aggregate Cash Amount").
An election form and other appropriate and customary transmittal
materials (which shall specify that delivery shall be effected, and risk of
loss and title to the certificates theretofore representing Morgan Common
Stock (the "Old Certificates") shall pass, only upon proper delivery of
such Old Certificates to an exchange agent designated by Regions (the
"Exchange Agent")) in such form as Regions and Morgan shall mutually agree
(the "Election Form") shall be mailed 25 days prior to the anticipated
Effective Time or on such other date as Morgan and Regions shall mutually
agree (the "Mailing Date") to each holder of record of Morgan Common Stock
as of five business days prior to the Mailing Date (the "Election Form
Record Date").
Each Election Form shall permit a holder (or the beneficial owner
through appropriate and customary documentation and instructions) of Morgan
Common Stock to elect to receive cash with respect to all or a portion of
such holder's Morgan Common Stock (shares as to which the election is made
being referred to as "Cash Election Shares").
Any shares of Morgan Common Stock with respect to which the holder (or
the beneficial owner, as the case may be) shall not have submitted to the
Exchange Agent an effective, properly completed Election Form on or before
5:00 p.m. on the 20th day following the Mailing Date (or such other time
and date as Regions and Morgan may mutually agree) (the "Election
Deadline") shall be converted into Merger Shares as set forth in Section
3.1(b) of this Agreement (such shares being referred to as "No Election
Shares").
Regions shall make available one or more Election Forms as may be
reasonably requested by all persons who become holders (or beneficial
owners) of Morgan Common Stock between the Election Form Record Date and
the close of business on the business day prior to the Election Deadline,
and Morgan shall provide to the Exchange Agent all information reasonably
necessary for it to perform as specified herein.
Any such election shall have been properly made only if the Exchange
Agent shall have actually received a properly completed Election Form by
the Election Deadline. An Election Form shall be deemed properly completed
only if accompanied by one or more certificates (or customary affidavits
and indemnification regarding the loss or destruction of such certificates
or the guaranteed delivery of such certificates) representing all shares of
Morgan Common Stock covered by such Election Form, together with duly
executed transmittal materials included in the Election Form. Any Election
Form may be revoked or changed by the person submitting such Election Form
at or prior to the Election Deadline. In the event an Election Form is
revoked prior to the Election Deadline, the shares of Morgan Common Stock
represented by such Election Form shall become No Election Shares and
Regions shall cause the certificates representing Morgan Common Stock to be
promptly returned without charge to the person
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submitting the Election Form upon written request to that effect from the
person who submitted the Election Form. Subject to the terms of this
Agreement and of the Election Form, the Exchange Agent shall have
reasonable discretion to determine whether any election, revocation or
change has been properly or timely made and to disregard immaterial defects
in the Election Forms, and any good faith decisions of the Exchange Agent
regarding such matters shall be binding and conclusive. Neither Regions nor
the Exchange Agent shall be under any obligation to notify any person of
any defect in an Election Form.
Within five business days after the Election Deadline, unless the
Effective Time has not yet occurred, in which case as soon thereafter as
practicable, Regions shall cause the Exchange Agent to effect the
allocation among the holders of Morgan Common Stock in accordance with the
Election Forms as follows:
(i) Cash Elections Less Than or Equal To the Aggregate Cash Amount.
If the amount of cash that would be issued upon conversion in the Merger
of the Cash Election Shares, together with the cash amounts to be paid
pursuant to Sections 3.4 and 3.5 of this Agreement, is less than or
equal to the Aggregate Cash Amount, then:
(1) all Cash Election Shares shall be converted into the right
to receive the Per Share Cash Consideration, and
(2) the No Election Shares shall be converted into the right to
receive the Merger Shares.
(ii) Cash Elections More Than the Aggregate Cash Amount. If the
amount of cash that would be issued upon the conversion in the Merger of
the Cash Election Shares, together with the cash amounts to be paid
pursuant to Sections 3.4 and 3.5 of this Agreement, is greater than the
Aggregate Cash Amount, then:
(1) all No Election Shares shall be converted into the right to
receive the Merger Shares,
(2) the Exchange Agent shall select from among the holders of
Cash Election Shares, by random selection (as described below),
holders of a sufficient number of shares ("Stock Designees") such
that the amount of cash that will be issued in the Merger equals as
closely as practicable the Aggregate Cash Amount, and all shares held
by the Stock Designees shall be converted into the right to receive
the Merger Shares, and
(3) the Cash Election Shares not held by Stock Designees shall
be converted into the right to receive the Per Share Cash
Consideration.
The random selection process to be used by the Exchange Agent shall consist
of such processes as shall be mutually determined by Regions and Morgan.
3.2 Anti-Dilution Provisions. In the event Morgan changes the number of
shares of Morgan Common Stock issued and outstanding prior to the Effective Time
as a result of a stock split, reverse stock split, stock dividend, or similar
recapitalization with respect to such stock, the Exchange Ratio and the Per
Share Cash Consideration 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, reverse 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 Morgan or Regions. Each of the shares of Morgan Common
Stock held by any Morgan Company or by any Regions Company, in each case other
than in a fiduciary capacity or as a result of debts previously contracted,
shall be canceled and retired at the Effective Time and no consideration shall
be issued in exchange therefor.
3.4 Fractional Shares. Notwithstanding any other provision of this
Agreement, each holder of shares of Morgan Common Stock exchanged pursuant to
the Merger who would otherwise have been entitled to
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receive a fraction of a share of Regions Common Stock (after taking into account
all Old Certificates delivered by such holder) shall receive, in lieu thereof,
cash (without interest) in an amount equal to a 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 agreed to by Morgan and Regions) on the last trading day preceding the
Effective Time. No such holder will be entitled to dividends, voting rights, or
any other rights as a stockholder in respect of any fractional shares.
3.5 Conversion of Stock Rights. (a) At the Effective Time, each award,
option, or other right to purchase or acquire shares of Morgan Common Stock
pursuant to stock options, stock appreciation rights, or stock awards ("Morgan
Rights"), in each case granted by Morgan under the Morgan Stock Plans, which is
outstanding at the Effective Time, whether or not exercisable, shall, except as
provided in Section 3.5(d) with respect to the 2000 Non-Employee Director Stock
Option Plan (the "2000 Director Stock Option Plan"), be converted into and
become rights with respect to Regions Common Stock, and Regions shall assume
each Morgan Right, in accordance with the terms of the Morgan Stock Plan and
stock option agreement by which it is evidenced, except that from and after the
Effective Time, (i) Regions and its Compensation Committee shall be substituted
for Morgan and the Committee of Morgan's Board of Directors (including, if
applicable, the entire Board of Directors of Morgan) administering such Morgan
Stock Plan, and (ii) (A) each Morgan Right assumed by Regions may be exercised
solely for shares of Regions Common Stock, (B) the number of shares of Regions
Common Stock subject to such Morgan Right shall be equal to the number of shares
of Morgan Common Stock subject to such Morgan Right immediately prior to the
Effective Time multiplied by the Exchange Ratio, and (C) the per share exercise
price (or similar threshold price, in the case of stock awards) under each such
Morgan Right shall be adjusted by dividing the per share exercise (or threshold)
price under each such Morgan Right by the Exchange Ratio and rounding up to the
nearest cent. Notwithstanding the provisions of clause (ii)(B) of the preceding
sentence, Regions shall not be obligated to issue any fraction of a share of
Regions Common Stock upon exercise of Morgan Rights and any fraction of a share
of Regions Common Stock that otherwise would be subject to a converted Morgan
Right shall represent the right to receive a cash payment equal to the product
of such fraction and the difference between the market value of one share of
Regions Common Stock and the per share exercise price of such Right. The market
value of one share of Regions Common Stock shall be the last sale price of
Regions Common Stock on the Nasdaq NMS (as reported by The Wall Street Journal
or, if not reported thereby, any other authoritative source agreed to by Morgan
and Regions) on the last trading day preceding the date of exercise of the
Morgan Right. In addition, notwithstanding the provisions of clauses (ii)(A) and
(ii)(C) of the first sentence of this Section 3.5, each Morgan Right which is an
"incentive stock option" shall be adjusted as required by Section 424 of the
Internal Revenue Code and the regulations promulgated thereunder, so as not to
constitute a modification, extension, or renewal of the option, within the
meaning of Section 424(h) of the Internal Revenue Code. Regions agrees to take
all necessary steps to effectuate the foregoing provisions of this Section 3.5.
(b) As soon as reasonably practicable after the Effective Time, Regions
shall deliver to the participants in each Morgan Stock Plan an appropriate
notice setting forth such participant's rights pursuant thereto and the grants
pursuant to such Morgan Stock Plan shall continue in effect on the same terms
and conditions (subject to the adjustments required by Section 3.5(a) of this
Agreement after giving effect to the Merger), and Regions shall comply with the
terms of each Morgan Stock Plan to ensure, to the extent required by, and
subject to the provisions of, such Morgan Stock Plan, that Morgan Rights which
qualified as incentive stock options prior to the Effective Time continue to
qualify as incentive stock options after the Effective Time. At or prior to the
Effective Time, Regions shall take all corporate action necessary to reserve for
issuance sufficient shares of Regions Common Stock for delivery upon exercise of
Morgan Rights assumed by it in accordance with this Section 3.5. As soon as
reasonably practicable (but in no event more than 45 days) after the Effective
Time, Regions shall file a registration statement on Form S-3 or Form S-8, as
the case may be (or any successor or other appropriate forms), with respect to
the shares of Regions Common Stock subject to
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such options and shall use its reasonable efforts to maintain the effectiveness
of such registration statements (and maintain the current status of the
prospectus or prospectuses contained therein) for so long as such options remain
outstanding. With respect to those individuals who subsequent to the Merger will
be subject to the reporting requirements under Section 16(a) of the 1934 Act,
where applicable, Regions shall administer the Morgan Stock Plan assumed
pursuant to this Section 3.5 in a manner that complies with Rule 16b-3
promulgated under the 1934 Act.
(c) All restrictions or limitations on transfer with respect to Morgan
Common Stock awarded under the Morgan Stock Plans or any other plan, program, or
arrangement of any Morgan Company, to the extent that such restrictions or
limitations shall not have already lapsed, and except as otherwise expressly
provided in such plan, program, or arrangement, shall remain in full force and
effect with respect to shares of Regions Common Stock into which such restricted
stock is converted pursuant to Section 3.1 of this Agreement.
(d) At the Effective Time, each holder of a Morgan Right granted by Morgan
under the 2000 Director Stock Option Plan which is outstanding at the Effective
Time, whether or not exerciseable, shall be entitled to receive upon surrender
of such Morgan Right a check in the amount equal to the difference (if positive)
between (i) the "Change of Control Price" as defined in Section 6 of the 2000
Director Stock Option Plan, and (ii) the exercise price of such Morgan Right.
The Parties agree that the "Change of Control Price" shall equal the Per Share
Cash Consideration.
ARTICLE 4
EXCHANGE OF SHARES
4.1 Exchange Procedures. (a) At or prior to the Effective Time, Regions
shall deposit, or shall cause to be deposited, with the Exchange Agent, for the
benefit of the holders of Old Certificates, for exchange in accordance with
Article 3 of this Agreement and this Article 4, certificates representing the
Merger Shares ("New Certificates") and an estimated amount of cash (such cash
and New Certificates, together with any dividends or distributions with respect
thereto (without any interest thereon), being hereinafter referred to as the
"Exchange Fund") to be paid pursuant to Article 3 of this Agreement and this
Article 4 in exchange for outstanding shares of Morgan Common Stock.
(b) As promptly as practicable after the Effective Time, Regions shall send
or cause to be sent to each former holder of record of shares (other than Cash
Election Shares or Treasury Shares) of Morgan Common Stock immediately prior to
the Effective Time, transmittal materials for use in exchanging such
stockholder's Old Certificates for the consideration set forth in Article 3 of
this Agreement (which shall specify that delivery shall be effected, and risk of
loss and title to the certificates theretofore representing shares of Morgan
Common Stock shall pass, only upon proper delivery of such certificates to the
Exchange Agent). Regions shall cause the New Certificates or check in respect of
the Per Share Cash Consideration into which shares of a stockholder's Morgan
Common Stock are converted at the Effective Time and any fractional share
interests or dividends or distributions which such person shall be entitled to
receive to be delivered to such stockholder upon delivery to the Exchange Agent
of Old Certificates representing such shares of Morgan Common Stock. No interest
will be paid on any such cash to be paid pursuant to Article 3 and this Article
4 upon such delivery.
(c) Notwithstanding the foregoing, neither the Exchange Agent nor any Party
hereto shall be liable to any former holder of Morgan Common Stock for any
amount properly delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws.
(d) Any portion of the Exchange Fund that remains unclaimed by the
stockholders of Morgan for 12 months after the Effective Time shall be paid to
Regions. Any stockholders of Morgan who have not theretofore complied with this
Article 4 shall thereafter look only to Regions for payment of the consideration
deliverable in respect of each share of Morgan Common Stock such stockholder
holds as determined pursuant to this Agreement, in each case, without any
interest thereon.
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4.2 Rights of Former Morgan Stockholders. At the Effective Time, the stock
transfer books of Morgan shall be closed as to holders of Morgan Common Stock
immediately prior to the Effective Time and no transfer of Morgan 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 Morgan Common Stock (other
than shares to be canceled pursuant to Section 3.3 of this Agreement) shall from
and after the Effective Time represent for all purposes only the right to
receive the consideration provided in Sections 3.1 and 3.4 of this Agreement in
exchange therefor, subject, however, to the Surviving Corporation's obligation
to pay any dividends or make any other distributions with a record date prior to
the Effective Time which have been declared or made by Morgan in respect of such
shares of Morgan 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 Morgan 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 Morgan Common
Stock are converted, regardless of whether such holders have exchanged their
certificates representing Morgan Common Stock for New Certificates representing
Regions Common Stock in accordance with the provisions of this Agreement.
Whenever a dividend or other distribution is declared by Regions on the Regions
Common Stock, the record date for which is at or after the Effective Time, the
declaration shall include dividends or other distributions on all shares of
Regions Common Stock issuable pursuant to this Agreement, but beginning 30 days
after the Effective Time no dividend or other distribution payable to the
holders of record of Regions Common Stock as of any time subsequent to the
Effective Time shall be delivered to the holder of any certificate representing
shares of Morgan 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 the Old Certificate, both the New
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. In the event any Morgan
Common Stock certificate shall have been lost, stolen, or destroyed, upon the
making of an affidavit of that fact by the person claiming such certificate to
be lost, stolen, or destroyed and, if required by Regions, the posting by such
person of a bond in such amount as Regions may reasonably direct as indemnity
against any claim that may be made against it with respect to such certificate,
the Exchange Agent shall issue in exchange for such lost, stolen, or destroyed
certificate, the consideration deliverable in respect thereof pursuant to this
Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF MORGAN
Morgan hereby represents and warrants, except as specifically disclosed in
a section of the Morgan Disclosure Memorandum corresponding to the relevant
section of this Article 5, to Regions as follows:
5.1 Organization, Standing, and Power. Morgan is a corporation duly
organized, validly existing, and in good standing under the Laws of the State of
Tennessee, and has the corporate power and authority to carry on its business as
now conducted and to own, lease, and operate its material assets. Morgan 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 Morgan.
5.2 Authority; No Breach of Agreement. (a) Morgan 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 (including valid
authorization and adoption of this Agreement by Morgan's duly constituted Board
of Directors) in respect thereof on the part of Morgan, subject to the approval
of this Agreement by the holders of a majority of the shares of Morgan Common
Stock entitled to vote thereon,
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which is the only stockholder vote required for approval of this Agreement and
consummation of the Merger by Morgan. Subject to such requisite stockholder
approval and assuming due authorization, execution, and delivery of this
Agreement by Regions, this Agreement represents a legal, valid, and binding
obligation of Morgan, enforceable against Morgan 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 Morgan, nor the
consummation by Morgan of the transactions contemplated hereby, nor compliance
by Morgan with any of the provisions hereof, will (i) conflict with or result in
a breach of any provision of Morgan's Restated Charter 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 Morgan Company under, any
Contract or Permit of any Morgan 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 Morgan, 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 Morgan Company or any of their
respective material assets, which violation is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Morgan.
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, 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 Morgan, no notice to, filing with, or Consent of, any
public body or authority is necessary for the consummation by Morgan of the
Merger and the other transactions contemplated in this Agreement.
5.3 Capital Stock. (a) The authorized capital stock of Morgan consists, as
of the date of this Agreement, of 100,000,000 shares of Morgan Common Stock, of
which, as of the date of this Agreement, (i) 28,562,566 shares were issued and
outstanding, including 2,009,935 shares of restricted Morgan Common Stock, and
(ii) 666,625 shares of Morgan Common Stock were issuable pursuant to outstanding
awards under Morgan's Stock Plans, and not more than 29,229,191 shares of Morgan
Common Stock (excluding shares issued pursuant to Permitted Issuances) will be
issued and outstanding at the Effective Time. All of the issued and outstanding
shares of Morgan Common Stock are duly and validly issued and outstanding and
are fully paid and, except as expressly provided otherwise under applicable Law,
nonassessable under the TBCA. None of the outstanding shares of Morgan Common
Stock has been issued in violation of any preemptive rights of the current or
past stockholders of Morgan.
(b) Except as set forth in Section 5.3(a) of this Agreement or Section
5.3(b) of the Morgan Disclosure Memorandum, there are no shares of capital stock
or other equity securities of Morgan outstanding and no outstanding Rights
relating to the capital stock of Morgan.
5.4 Morgan Subsidiaries. Morgan has disclosed in Section 5.4 of the Morgan
Disclosure Memorandum all of the Morgan Subsidiaries as of the date of this
Agreement. Except as set forth in Section 5.4 of the Morgan Disclosure
Memorandum, Morgan or one of its Subsidiaries owns all of the issued and
outstanding shares of capital stock of each Morgan Subsidiary. No equity
securities of any Morgan Subsidiary are or may become required to be issued
(other than to another Morgan Company) by reason of any Rights, and there are no
Contracts by which any Morgan Subsidiary is bound to issue (other than to
another Morgan Company) additional shares of its capital stock or Rights or by
which any Morgan Company is or may be bound to transfer any shares of the
capital stock of any Morgan Subsidiary (other than to another Morgan Company).
There are no Contracts relating to the rights of any Morgan Company to vote or
to dispose of any shares of the capital stock of any Morgan Subsidiary. All of
the shares of capital stock of each Morgan Subsidiary held by a Morgan Company
are fully paid and, except as expressly provided otherwise under applicable Law,
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nonassessable under the applicable corporate or banking Law of the jurisdiction
in which such Subsidiary is incorporated or organized and are owned by the
Morgan Company free and clear of any Lien. Each Morgan Subsidiary is either a
savings and loan association 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 Morgan 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 Morgan. Each Morgan 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 to the fullest extent permitted by Law. The
minute book and other organizational documents (and all amendments thereto) for
Morgan and each Morgan Subsidiary that is a "Significant Subsidiary" (as such
term is defined in Regulation S-X promulgated under the 1934 Act) have been or
will be made available to Regions for its review, and are true and complete as
in effect as of November 30, 2000. No material actions have been taken by
Morgan's Board of Directors since such date, other than such actions taken in
contemplation of the execution of this Agreement and the consummation of the
transactions contemplated herein, and actions related to matters described in
the Morgan Disclosure Memorandum. Except for (i) interests in the Morgan
Subsidiaries, (ii) trading account securities, securities held available for
sale, client margin agreements, securities acquired pursuant to underwriting
agreements in which Morgan participated as an underwriter or dealer and
securities acquired as a result of debts owing to Morgan or the Morgan
Subsidiaries by their customers, securities acquired in arbitrage, hedging,
options or forward or futures contracts, or transactions or arrangements or
securities clearance and settlement activities, or (iii) as set forth in Section
5.4 of the Morgan Disclosure Memorandum, Morgan does not own, directly or
indirectly (through any Morgan Subsidiary or otherwise), any capital stock,
membership interest, partnership interest, joint venture interest or other
equity interest in any Person.
5.5 SEC Filings; Financial Statements. (a) Morgan and each Morgan
Subsidiary has filed and made available to Regions all forms, reports, and
documents required to be filed by Morgan or such Morgan Subsidiary with the SEC
since December 31, 1995 (collectively, the "Morgan SEC Reports"). The Morgan SEC
Reports (i) at the time filed, complied in all material respects with the
applicable requirements of the Securities Laws, 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
Morgan SEC Reports or necessary in order to make the statements in such Morgan
SEC Reports, in light of the circumstances under which they were made, not
misleading.
(b) Each of the Morgan Financial Statements (including, in each case, any
related notes) contained in the Morgan SEC Reports, including any Morgan 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
requirements of the Securities Laws with respect thereto, was prepared or will
be prepared in accordance with GAAP 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 Morgan
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.
5.6 Absence of Undisclosed Liabilities. No Morgan Company has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Morgan, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of Morgan as of
October 31, 2000, included in the Morgan Financial Statements or reflected in
the notes thereto, Liabilities incurred in the ordinary course of business
subsequent to October 31, 2000, and Liabilities to be incurred in connection
with the
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transactions contemplated by this Agreement. No Morgan Company has incurred or
paid any Liability since October 31, 2000, except for such Liabilities incurred
or paid in the ordinary course of business consistent with past business
practices and which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Morgan.
5.7 Absence of Certain Changes or Events. Since October 31, 2000, except
as disclosed in the Morgan Financial Statements delivered prior to the date of
this Agreement or as otherwise disclosed in the Morgan Disclosure Memorandum,
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 Morgan.
5.8 Tax Matters. Except as set forth in Section 5.8 of the Morgan
Disclosure Memorandum:
(a) Since December 31, 1994, all material Tax Returns required to be
filed by or on behalf of any of the Morgan 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, 1999, and all Tax
Returns filed are 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 Morgan, except to the extent
reserved against in the Morgan Financial Statements dated prior to the date
of this Agreement. All material Taxes due with respect to completed and
settled examinations or concluded Litigation with respect to Taxes have
been paid.
(b) None of the Morgan 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 material Taxes due for any of the
Morgan Companies for the period or periods through and including the date
of the respective Morgan Financial Statements has been made in accordance
with GAAP and is reflected on such Morgan Financial Statements.
(d) Each of the Morgan Companies is in material 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 Morgan 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 of the Internal Revenue Code.
(f) There are no Material Liens with respect to Taxes upon any of the
assets of the Morgan Companies.
(g) No Morgan Company has filed any consent under Section 341(f) of
the Internal Revenue Code concerning collapsible corporations.
5.9 Assets. The Morgan 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
Morgan. All tangible properties used in the businesses of the Morgan Companies
are in good condition, reasonable wear and tear excepted, and are usable in the
ordinary course of business consistent with Morgan's past practices, except as
would not be reasonably likely to have a Material Adverse Effect on Morgan. All
assets which are material to Morgan's business on a consolidated basis, held
under leases or subleases by any of the Morgan 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
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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 Morgan Companies currently maintain insurance in amounts, scope and coverage
reasonably necessary for their operations. Except as set forth in Section 5.9 of
the Morgan Disclosure Memorandum, none of the Morgan Companies has received
notice from any insurance carrier that (i) such insurance will be canceled or
that coverage thereunder will be materially reduced or eliminated, or (ii)
premium costs with respect to such policies of insurance will be substantially
increased. The assets of the Morgan Companies include all material assets
required to operate the business of the Morgan Companies as presently conducted.
5.10 Environmental Matters. (a) Each Morgan Company is and has 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 Morgan.
(b) There is no Litigation pending or, to the Knowledge of Morgan,
threatened before any court, governmental agency, or authority, or other forum
in which any Morgan Company or site owned, leased, or operated by any Morgan
Company (the "Morgan Properties") 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 Morgan 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 Morgan.
(c) There is no Litigation pending, or to the Knowledge of Morgan,
threatened before any court, governmental agency, or board, or other forum in
which any of the Morgan Properties 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 Morgan 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 Morgan.
(d) To the Knowledge of Morgan, 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 Morgan.
(e) To the Knowledge of Morgan, during the period of any Morgan Company's
ownership or operation of any of the Morgan Properties, 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 Morgan. Prior to
the period of any Morgan Company's ownership or operation of any of the Morgan
Properties, to the Knowledge of Morgan, there were no releases of Hazardous
Material in, on, under, or affecting any such property, except such as are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Morgan.
5.11 Permits. (a) Each Morgan 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 Morgan, 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 Morgan.
(b) All officers, directors, and employees of Morgan and the Morgan
Subsidiaries that are required, as a result of their positions with Morgan
and/or the Morgan Subsidiaries, to be registered or licensed with the SEC, the
NASD, or the NYSE are currently registered or licensed in the appropriate
capacity with the SEC, the NASD, or the NYSE and all such registrations and
licenses are in full force and effect and no suspension or cancellation of any
of them is pending or, to the Knowledge of Morgan, threatened. Morgan has
delivered or made available to Regions a true and complete copy of each Form ADV
or BD of Morgan and each Morgan Subsidiary as most recently filed or amended
prior to the date of this Agreement (the "Current Forms") with the SEC, all
other state and federal registration forms filed with the SEC, the NASD, or the
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NYSE, all reports and all material correspondence filed by Morgan or any Morgan
Subsidiary with the SEC, the NASD, or the NYSE under the Investment Company Act
or the Investment Advisers Act and the rules promulgated thereunder and under
similar state and federal statutes since January 1, 1998, and Morgan will
deliver or make available to Regions such forms and reports as are filed from
and after the date hereof and prior to the Effective Time. The information
contained in such forms and reports was (or will be, in the case of any forms
and reports filed after the date of this Agreement) complete and accurate in all
material respects as of the time of filing thereof.
(c) Section 5.11 of the Morgan Disclosure Memorandum sets forth all Permits
held by Morgan or a Morgan Subsidiary that are issued or granted by (i) the
AMEX, the CBOE, the CSE, the NASD, the NYFE, the NYSE, the PHLX, the SEC, the
SIA, or the SIPC, (ii) any state securities or blue sky authority, or (iii) any
other Regulatory Authority, and which, in any case, the absence of which is
reasonably likely to have a Material Adverse Effect on Morgan.
(d) Morgan has made available to Regions true and correct copies of (i)
each Form G-37/G-38 filed with the MSRB since January 1, 1998, and (ii) all
records required to be kept by Morgan and the Morgan Subsidiaries under Rule
G-8(a)(xvi) of the MSRB. Since January 1, 1998, there have been no contributions
or payments, and there is no other information, that would be required to be
disclosed by Morgan or any of the Morgan Subsidiaries on any such Form G-37/G-38
or recorded by Morgan or any such Morgan Subsidiary pursuant to such rule.
5.12 Compliance with Laws. (a) None of the Morgan Companies 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 Morgan.
(b) None of the Morgan Companies 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 Morgan 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 Morgan, (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 Morgan, or (iii) requiring any Morgan
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.
(c) Neither Morgan nor any of the Morgan Subsidiaries, nor, to Morgan's
Knowledge, any of their respective officers, directors, or employees, has been
the subject of any disciplinary proceeding or order of any Regulatory Authority
which would be required to be disclosed on SEC Forms ADV or BD except as
disclosed therein, and no such disciplinary proceeding or order is pending or,
to the Knowledge of Morgan, threatened; and, except as disclosed on the Current
Forms, neither Morgan nor any of the Morgan Subsidiaries, nor any of their
respective officers, directors or employees, has been permanently enjoined by
any Regulatory Authority from engaging in or continuing any conduct or practice
in connection with any activity required to be disclosed in the Current Forms or
in connection with the purchase or sale of any security. Except as disclosed on
the Current Forms, neither Morgan nor any of the Morgan Subsidiaries, nor any of
their respective officers, directors or employees, is or has been ineligible to
serve as, or subject to any disqualification which would result in any denial,
suspension or revocation of the registration of, or any limitation on the
activities of Morgan or any of the Morgan Subsidiaries as, an investment adviser
under the provisions of the Investment Advisers Act, or as a broker-dealer under
the 1934 Act, or ineligible to serve in, or subject to any disqualification
which would be the basis for any limitation on serving in, any of the capacities
specified in Section 9(a) or 9(b) of the Investment Company Act.
(d) Neither Morgan nor any of the Morgan Subsidiaries, nor any "associated
person" (as defined in the 1934 Act) thereof, is subject to a "statutory
disqualification" as defined in Section 3(a)(39) of the 1934 Act or otherwise
ineligible to serve as a broker-dealer or as an associated person to a
registered broker-dealer.
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5.13 Labor Relations. No Morgan Company is the subject of any Litigation
asserting that it or any other Morgan 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 Morgan Company to bargain with
any labor organization as to wages or conditions of employment, nor is any
Morgan 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
Morgan Company, pending or, to the Knowledge of Morgan, threatened, or to the
Knowledge of Morgan, is there any activity involving any Morgan Company's
employees seeking to certify a collective bargaining unit or engaging in any
other organization activity.
5.14 Employee Benefit Plans. (a) Morgan has disclosed in Section 5.14 of
the Morgan 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 Morgan Benefit Plans. For purposes of this Agreement, "Morgan
Benefit Plans" means all material written pension, retirement, profit-sharing,
deferred compensation, stock option, employee stock ownership, severance pay,
vacation, bonus, or other incentive plan, all other material written employee
programs or agreements, all medical, vision, dental, or other written health
plans, all life insurance plans, and all other material 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 Morgan 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 Morgan 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 "Morgan ERISA Plan." Any Morgan ERISA Plan which is also
subject to Section 412 of the Internal Revenue Code or Section 302 of ERISA, is
referred to herein as a "Morgan Pension Plan." Neither Morgan nor any Morgan
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 Morgan Company, that was intended to qualify under Section
401(a) of the Internal Revenue Code is disclosed as such in Section 5.14 of the
Morgan Disclosure Memorandum.
(b) Morgan 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
Morgan Benefit Plans (including insurance contracts), and all amendments
thereto, (ii) with respect to any such Morgan Benefit Plans or amendments, the
most recent determination letters, and all 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 Morgan
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 Morgan Benefit Plans are in compliance with the applicable terms of
ERISA, the Internal Revenue Code, and any other applicable Laws, other than
instances of noncompliance which are not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on Morgan. Each Morgan 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 to the Knowledge of Morgan, there are no circumstances likely to
result in revocation of any such favorable determination letter. Each trust
created under any Morgan ERISA Plan has been determined to be exempt from Tax
under Section 501(a) of the Internal Revenue Code and Morgan is not aware of any
circumstance which will or could reasonably result in revocation of such
exemption. With respect to each Morgan Benefit Plan to the Knowledge of Morgan,
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 Morgan.
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There is no material pending or, to the Knowledge of Morgan, threatened
Litigation relating to any Morgan ERISA Plan.
(d) No Morgan Company has engaged in a transaction with respect to any
Morgan Benefit Plan that, assuming the Taxable Period of such transaction
expired as of the date of this Agreement, would subject any Morgan 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 Morgan. Neither
Morgan nor, any administrator or fiduciary of any Morgan Benefit Plan (or any
agent of any of the foregoing) has engaged in any transaction, or acted or
failed to act in any manner with respect to any Morgan Benefit Plan which could
subject Morgan 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 Morgan. No oral or written representation or
communication with respect to any aspect of the Morgan Benefit Plans has been
made to employees of any Morgan Company which is not in conformity with the
written or otherwise preexisting terms and provisions of such plans, where any
Liability resulting from such non-conformity is reasonably likely to have a
Material Adverse Effect on Morgan.
(e) No Morgan 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 is equal to or exceeds the actuarial present value
of all accrued benefits under such plans (whether vested or not), based upon the
actuarial assumptions used to prepare the most recent actuarial reports for such
pans and to the Knowledge of Morgan, since the date of the most recent actuarial
valuation, no event has occurred which would be reasonably expected to change
any such funded status in a way that is reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on Morgan. Neither any Morgan
Pension Plan nor any "single-employer plan," within the meaning of Section
4001(a)(15) of ERISA, currently maintained by any Morgan Company, or the
single-employer plan of any entity which is considered one employer with Morgan
under Section 4001 of ERISA or Section 414 of the Internal Revenue Code or
Section 302 of ERISA (whether or not waived) (a "Morgan ERISA Affiliate") has an
"accumulated funding deficiency" within the meaning of Section 412 of the
Internal Revenue Code or Section 302 of ERISA. All required contributions with
respect to an Morgan Pension Plan or any single-employer plan of an Morgan ERISA
Affiliate have been 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 Morgan Company has provided, or is
required to provide, security to an Morgan Pension Plan or to any
single-employer plan of an Morgan 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 Morgan, except to the extent any failure
to timely pay would not have a Material Adverse Effect on Morgan.
(f) No Liability under Title IV of ERISA has been or is expected to be
incurred by any Morgan Company with respect to any defined benefit plan
currently or formerly maintained by any of them or by any Morgan 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 for
Liabilities that, individually or in the aggregate, would not have a Material
Adverse Effect on Morgan).
(g) No Morgan Company has any obligations for retiree health and retiree
life benefits under any of the Morgan Benefit Plans other than with respect to
benefit coverage mandated by applicable Law.
(h) Except as set forth in Section 5.14 of the Morgan Disclosure
Memorandum, 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, golden
parachute, or otherwise) becoming due to any director or any employee of any
Morgan Company from any Morgan Company under any Morgan Benefit Plan or
otherwise, other than by operation of Law, (ii) increase any benefits otherwise
payable under any Morgan Benefit Plan, or (iii) result in any acceleration of
the time of payment or vesting of any such benefit.
5.15 Material Contracts. (a) Except as set forth in the Morgan Disclosure
Memorandum and except for Contracts filed as exhibits to Morgan's Form 10-K for
the fiscal year ended July 31, 2000, as of the date of
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this Agreement, none of the Morgan 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 $150,000, (ii) any Contract relating to the borrowing
of money by any Morgan Company or the guarantee by any Morgan Company of any
such obligation (other than Contracts pertaining to fully-secured repurchase
agreements, and trade payables, and Contracts relating to borrowings or
guarantees made in the ordinary course of business), and (iii) any other
Contract or amendment thereto that would be required to be filed as an exhibit
to a Form 10-K filed by Morgan with the SEC that has not been filed as an
exhibit to Morgan's Form 10-K filed for the fiscal year ended July 31, 2000 or
on another SEC Document and identified to Regions (together with all Contracts
referred to in Sections 5.9 and 5.14 (a) of this Agreement, the "Morgan
Contracts"). With respect to each Morgan Contract: (i) the Contract is in full
force and effect; (ii) no Morgan 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 Morgan; (iii) no Morgan 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 Morgan, in Default in
any material respect, other than Defaults which are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Morgan.
Except as set forth in Section 5.15 of the Morgan Disclosure Memorandum, all of
the indebtedness of any Morgan Company for money borrowed is prepayable at any
time by such Morgan Company without penalty or premium.
5.16 Legal Proceedings. (a) There is no Litigation instituted or pending,
or, to the Knowledge of Morgan, threatened against any Morgan Company, or
against any asset, interest, or right of any of them, that is reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on Morgan,
nor are there any Orders of any Regulatory Authorities, other governmental
authorities, or arbitrators outstanding against any Morgan Company, that are
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Morgan.
(b) Section 5.16(b) of the Morgan Disclosure Memorandum includes a summary
report of all Litigation as of the date of this Agreement to which any Morgan
Company is a party and which names a Morgan Company as a defendant or
cross-defendant.
5.17 Reports. Since December 31, 1995, or the date of organization if
later, each Morgan 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 Morgan.
5.18 Statements True and Correct. None of the information supplied or to
be supplied by any Morgan Company or any Affiliate thereof regarding Morgan or
such Affiliate for inclusion in the Registration Statement to be filed by
Regions with the SEC will, when the Registration Statement becomes effective,
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 Morgan
Company or any Affiliate thereof for inclusion in the Proxy Statement to be
mailed to Morgan's stockholders in connection with the Stockholders' Meeting
will, when first mailed to the stockholders of Morgan, 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, 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 Morgan 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.
5.19 Tax and Regulatory Matters. No Morgan Company or any Affiliate
thereof has taken or agreed to take any action, and Morgan has no Knowledge of
any fact or circumstance that is reasonably likely to
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(i) prevent 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 Morgan 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.
5.20 Intellectual Property. All of the Intellectual Property rights of
Morgan and the Morgan Subsidiaries are in full force and effect and, if
applicable, constitute legal, valid, and binding obligations of the respective
parties thereto, and there have not been, and, to the Knowledge of Morgan, there
currently are not, any Defaults thereunder by Morgan or a Morgan Subsidiary.
Morgan or a Morgan Subsidiary owns or is the valid licensee of all such
Intellectual Property rights free and clear of all Liens or claims of
infringement, except for such Liens or claims of infringement which would not
reasonably be expected to have a Material Adverse Effect on Morgan. Neither
Morgan nor any of the Morgan Subsidiaries nor, to the Knowledge of Morgan, their
respective predecessors has infringed the Intellectual Property rights of others
and, to the Knowledge of Morgan, none of the Intellectual Property rights as
used in the business conducted by Morgan or the Morgan Subsidiaries infringes
upon or otherwise violates the rights of any Person, nor has any Person asserted
a claim of such infringement, in each case, except as would not reasonably be
expected to have a Material Adverse Effect on Morgan. Except as disclosed in
Section 5.20 of the Morgan Disclosure Memorandum, neither Morgan nor any of the
Morgan Subsidiaries is obligated to pay any royalties to any Person with respect
to any such Intellectual Property other than in the ordinary course of business.
Morgan or a Morgan Subsidiary owns or has the valid right to use all of the
Intellectual Property rights which it is presently using, or in connection with
performance of any material Contract to which it is a party. No officer,
director, or employee of Morgan or the Morgan Subsidiaries is party to any
Contract which requires such officer, director, or employee to assign any
interest in any Intellectual Property or keep confidential any trade secrets,
proprietary data, customer information, or other business information or, except
as disclosed in Section 5.20 of the Morgan Disclosure Memorandum, which
restricts or prohibits such officer, director, or employee from engaging in
activities competitive with any Person, in each case, other than with Morgan or
any of the Morgan Subsidiaries.
5.21 State Takeover Laws. Subject to Morgan's right to alter its
recommendation in accordance with the proviso set forth in the fourth sentence
of Section 8.1 of this Agreement, each Morgan Company has taken all necessary
action to exempt the transactions contemplated by this Agreement from any
applicable "moratorium," "control share," "fair price," "business combination,"
or other anti-takeover laws and regulations of the State of Tennessee
(collectively, "Takeover Laws") including the relevant provisions of Chapter 48
of the TBCA.
5.22 Charter Provisions. Each Morgan 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 or
Bylaws or, subject to Morgan's right to alter its recommendation in accordance
with the proviso set forth in the fourth sentence of Section 8.1 of this
Agreement, restrict or impair the ability of Regions to vote, or otherwise to
exercise the rights of a stockholder with respect to, shares of any Morgan
Company that may be directly or indirectly acquired or controlled by it.
5.23 Derivatives. All interest rate swaps, caps, floors, option
agreements, futures and forward contracts, and other similar risk management
arrangements, whether entered into for Morgan's own account, or for the account
of one or more the Morgan 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; and each of them is
enforceable in accordance with its terms (except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws of general applicability relating to or
affecting creditors' rights or by general equity principles), and are in full
force and effect. Neither Morgan nor a Morgan Subsidiary, nor to Morgan's
Knowledge, any other party thereto, is in breach of any of its obligations under
any such agreement or arrangement. The Morgan Financial Statements disclose the
value of such agreements and arrangements on a mark-to-market basis in
accordance
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with GAAP and, since October 31, 2000, there has not been a change in such value
that, individually or in the aggregate, has resulted in a Material Adverse
Effect on Morgan.
5.24 Fairness Opinion. Morgan has received an opinion of Lazard Freres &
Co. LLC to the effect that, in the opinion of such firm, the Exchange Ratio is
fair, from a financial point of view, to the stockholders of Morgan.
5.25 Contracts with Clients. (a) Each of Morgan and the Morgan
Subsidiaries is in compliance with the terms of each Contract with any customer
to whom Morgan or any Morgan Subsidiary provides services under any Contract (a
"Client"), and each such Contract is in full force and effect with respect to
the applicable Client.
(b) Each extension of credit by Morgan or any of the Morgan Subsidiaries to
any Client (i) is in full compliance with Regulation T of the Federal Reserve
Board or any substantially similar regulation of any Regulatory Authority, (ii)
is fully secured, and (iii) Morgan or a Morgan Subsidiary, as the case may be,
has a first priority perfected security interest in the collateral securing such
extension.
5.26 Investment Advisory Activities. (a) Morgan or certain of the Morgan
Subsidiaries have sponsored or organized or provide investment management,
investment advisory, sub-advisory, administration, distribution or certain other
services to Investment Companies. All such Investment Companies are disclosed in
Section 5.26 of the Morgan Disclosure Memorandum (each such Investment Company,
a "Morgan Investment Company"). Each of the Morgan Investment Companies (or the
trust of which it is a series) is duly organized and existing in good standing
under the laws of the jurisdiction under which it is organized as previously
disclosed. Each of the Morgan Investment Companies is governed by a Fund Board
consisting of at least 40% of trustees or directors who are not "interested
persons" (as defined in the Investment Company Act) of the Morgan Investment
Companies or Morgan. The Fund Boards operate in all material respects in
conformity with the requirements and restrictions of Sections 10 and 16 of the
Investment Company Act.
(b) Each of the Morgan Investment Companies is in compliance in all
material respects with all applicable Securities Laws and the Laws of any
Regulatory Authorities, having jurisdiction over such entity and the Laws of any
state in which such Morgan Investment Company is registered, qualified, or sold.
Morgan has provided or made available to Regions true and complete copies of all
the constituent documents and related advisory agreements of all of the Morgan
Investment Companies.
(c) Except as disclosed in Section 5.26 of the Morgan Disclosure
Memorandum, neither Morgan nor any Morgan Subsidiary is or has been during the
past five years an "investment adviser" within the meaning of the Investment
Advisers Act, required to be registered, licensed or qualified as an investment
adviser under the Investment Advisers Act or subject to any material Liability
or disability by reason of any failure to be so registered, licensed or
qualified, except for any such failure to be so registered, licensed, or
qualified that would not reasonably likely have, individually or in the
aggregate, a Material Adverse Effect on Morgan.
(d) Each Morgan Investment Company has been operated in compliance with its
respective objectives, policies, and restrictions, including without limitation,
those set forth in the applicable registration statement for that Morgan
Investment Company or governing instruments for a Client, except where lack of
compliance would not reasonably likely have, individually or in the aggregate, a
Material Adverse Effect on Morgan.
(e) Each Morgan Investment Company has duly adopted procedures pursuant to
Rules 17a-7, 17e-1, and 10f-3 under the Investment Company Act, to the extent
applicable.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF REGIONS
Regions hereby represents and warrants to Morgan 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
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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 Regions.
6.2 Authority; No Breach of Agreement. (a) Regions has the corporate power
and authority necessary to execute, deliver, and perform its obligations under
this Agreement and to consummate the transactions contemplated hereby. The
execution, delivery, and performance of this Agreement and the consummation of
the transactions contemplated herein, including the Merger, have been duly and
validly authorized by all necessary corporate action in respect thereof on the
part of Regions. This Agreement represents a legal, valid, and binding
obligation of Regions, enforceable against Regions in accordance with its terms
(except in all cases as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, receivership, conservatorship,
moratorium, or similar Laws affecting the enforcement of creditors' rights
generally and except that the availability of the equitable remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by Regions, nor
the consummation by Regions of the transactions contemplated hereby, nor
compliance by Regions with any of the provisions hereof, will (i) conflict with
or result in a breach of any provision of Regions' Certificate of Incorporation
or Bylaws, (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 222,445,291 shares were issued and outstanding as of September 30, 2000.
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 Morgan
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, except as expressly provided otherwise under applicable Law,
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 Morgan 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
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depository institution Subsidiaries are organized, except as expressly provided
otherwise under applicable Law, nonassessable under the applicable corporate 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 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 to the fullest extent permitted by Law. The
minute book and other organizational documents (and all amendments thereto) for
Regions and each Regions Subsidiary that is a "Significant Subsidiary" (as such
term is defined in Regulation S-X promulgated under the 1934 Act) have been or
will be made available to Morgan for its review, and are true and complete as in
effect as of November 30, 2000. No material actions have been taken by Regions'
Board of Directors since such date, other than such actions taken in
contemplation of the execution of this Agreement and the consummation of the
transactions contemplated herein.
6.5 SEC Filings; Financial Statements. (a) Regions has filed and made
available to Morgan all forms, reports, and documents required to be filed by
Regions with the SEC since January 1 of the second complete 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 adviser 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, 2000, included in the Regions Financial Statements or reflected in
the notes thereto, Liabilities incurred in the ordinary course of business
subsequent to September 30, 2000, and Liabilities to be incurred in connection
with the transactions contemplated by the Agreement. No Regions Company has
incurred or paid any Liability since September 30, 2000, 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, 2000, except
as disclosed in the Regions Financial Statements delivered prior to the date of
this Agreement, there have been no events, changes or occurrences which have
had, or are reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Regions.
6.8 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 Tax Matters. (a) Since December 31, 1994, all material Tax Returns
required to be filed by or on behalf of each Regions Company 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, 1999, and all Tax Returns
filed are 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
Regions, except to the extent reserved against in the Regions Financial
Statements dated prior to the date of this Agreement. All material Taxes and
other material Liabilities due with respect to completed and settled
examinations or concluded Litigation have been paid.
(b) Adequate provision for any material Taxes due or to become due for each
Regions Company for the periods or periods through and including the date of the
respective Regions Financial Statements has been made and is reflected on such
Regions Financial Statements.
(c) Each of the Regions Companies is in material 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.
(d) There are no material Liens with respect to Taxes upon any of the
assets of any Regions Companies.
(e) No Regions Company has filed any consent under Section 341(f) of the
Internal Revenue Code concerning collapsible corporations.
6.10 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
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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.
6.11 Reports. Since December 31, 1995, 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.
6.12 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,
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 Morgan's stockholders in connection with the
Stockholders' Meeting, will, when first mailed to the stockholders of Morgan,
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, 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.
6.13 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 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 Regions there exists no fact, circumstance, or
reason why the requisite Consents referred to in Section 9.1(b) of this
Agreement cannot be received in a timely manner.
6.14 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; and each of
them is enforceable in accordance with its terms (except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws of general applicability relating to or
affecting creditors' rights or by general equity principles), and are in full
force and effect. Neither Regions nor a Regions Subsidiary, nor to Regions'
Knowledge, any other party thereto, is in breach of any of its obligations under
any such agreement or arrangement. The Regions Financial Statements disclose the
value of such agreements and arrangements on a mark-to-market basis in
accordance with GAAP and, since September 30, 2000, there has not been a change
in such value that, individually or in the aggregate, has resulted in a Material
Adverse Effect on Regions.
6.15 Funds. At the Effective Time, Regions will have the funds necessary
to consummate the Merger and pay the Aggregate Cash Amount in accordance with
the terms of this Agreement.
6.16 Ownership of Morgan Capital Stock. Neither Regions nor any of its
Subsidiaries, Affiliates, or "Associates" (as defined in Section 48-103-203 or
Section 48-103-302 of the TBCA) beneficially owns, directly or indirectly, any
capital stock of Morgan or is a party to any agreement, arrangement, or
understanding for the purpose of acquiring, holding, voting, or disposing of any
capital stock of Morgan that in
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the aggregate equals or exceeds 5.0% of the outstanding shares of Morgan Common
Stock, other than as contemplated by this Agreement.
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 or set forth in Section 7.1 or Section 7.2 of the
Morgan Disclosure Memorandum, each Party shall and shall cause each of its
Subsidiaries to (i) operate its business only in the usual, regular, and
ordinary course, (ii) use its reasonable efforts to 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, 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 reasonable good faith judgment of Regions, desirable in
the conduct of the business of Regions and its Subsidiaries and such action
would not jeopardize the receipt of Consents required to consummate the
transaction contemplated hereby or delay the Effective Time beyond the date set
forth in Section 10.1(e) of this Agreement. Morgan shall use all reasonable
efforts to purchase all shares of Morgan Common Stock to be issued prior to the
Effective Time pursuant to Permitted Issuances, to the extent practicable and
permitted by the Morgan Stock Plans, in the open market, subject to all
applicable requirements of the Securities Laws.
7.2 Negative Covenants of Morgan. From the date of this Agreement until
the earlier of the Effective Time or the termination of this Agreement, except
as specifically contemplated by this Agreement or as set forth in Section 7.2 of
the Morgan Disclosure Memorandum, Morgan 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 Morgan 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 Morgan Company to another Morgan Company) in excess
of an aggregate of $5,000,000 (for the Morgan Companies on a consolidated
basis), except in the ordinary course of business consistent with past
practices (which shall include entry into repurchase agreements or other
fully secured securities), or impose, or suffer the imposition, on any
asset of any Morgan Company of any material Lien, except in the ordinary
course of business consistent with past practices; or
(c) except as contemplated by Section 7.1 of this Agreement,
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 Morgan Company, or declare or pay any dividend or
make any other distribution in respect of Morgan's capital stock; provided
that Morgan may (to the extent legally able to do so), but shall not be
obligated to declare and pay regular quarterly cash dividends on the Morgan
Common Stock in an amount per share and with the usual and regular record
and payment dates as disclosed in Section 7.2(c) of the Morgan Disclosure
Memorandum, and provided, that, notwithstanding the provisions of Section
1.3 of this Agreement, the Parties shall cooperate in selecting the
Effective Time to ensure that, with respect to the quarterly period in
which the Effective Time occurs, the holders of Morgan Common Stock do not
become entitled to receive both a dividend in respect of their Morgan
Common Stock and a dividend in respect of their Regions Common Stock or
fail to be entitled to receive any dividends; or
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(d) except (i) for this Agreement, (ii) for Permitted Issuances, or
(iii) 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, (1) issue, sell, pledge, encumber, authorize the issuance
of, (2) enter into any Contract to issue, sell, pledge, encumber, or
authorize the issuance of, or (3) otherwise permit to become outstanding,
any additional shares of Morgan Common Stock or any capital stock of any
Morgan 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
Morgan Company or issue or authorize the issuance of any other securities
in respect of or in substitution for shares of Morgan Common Stock (other
than upon the exercise of existing Rights), or sell, lease, mortgage, or
otherwise dispose of or otherwise encumber (i) any shares of capital stock
of any Morgan Subsidiary (unless any such shares of stock are sold or
otherwise transferred to another Morgan Company), or (ii) any asset other
than in the ordinary course of business for reasonable and adequate
consideration and other than dispositions in the ordinary course of
business consistent with past practice; or
(f) purchase any securities or make any material investment in any
Person, except for (i) investments in trading account securities, venture
capital, or other funds, (ii) securities held available for sale, (iii)
client margin agreements, (iv) securities acquired pursuant to underwriting
agreements in which Morgan participated as an underwriter or dealer, (v)
securities acquired as a result of debts owing to Morgan or the Morgan
Subsidiaries by their customers, (vi) securities lending, or borrowing
arrangements, (vii) securities acquired in arbitrage, hedging, forward, or
futures transactions, and (viii) acquisitions of money managers, in each
case, in the ordinary course of business and consistent with past practice,
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 Morgan Subsidiary, or otherwise acquire direct or indirect
control over any Person, other than in connection with (1) acquisitions of
control by a depository institution Subsidiary in its fiduciary capacity,
or (2) the creation of new Subsidiaries or funds organized to conduct or
continue activities in the ordinary course of business; or
(g) (i) grant any increase in compensation or benefits to the
employees, officers, or directors of any Morgan Company, except as required
by Law, (ii) 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, or (iii) enter into or amend any severance agreements with
officers of any Morgan Company; or
(h) enter into or amend any employment Contract between any Morgan
Company and any Person (unless such amendment is required by Law) that the
Morgan Company does not have the unconditional right to terminate without
Liability (other than Liability for services already rendered and in
accordance with the Morgan Benefit Plans), at any time on or after the
Effective Time; or
(i) adopt any new employee benefit plan of any Morgan Company or make
any material change in or to any existing employee benefit plans of any
Morgan 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,
material elections, or systems of internal accounting controls, except as
may be appropriate to conform to changes in Tax Laws or regulatory
accounting requirements or GAAP; or
(k) except as Morgan may deem necessary to enforce its rights under
this Agreement, commence any Litigation other than as deemed necessary or
advisable in the good faith judgment of management for the prudent
operation of its business or settle any Litigation involving any Liability
of any Morgan Company for material money damages or restrictions upon the
operations of any Morgan 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; or
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(m) except as and to the extent required, based upon the written
advice of counsel, in the exercise of the fiduciary obligations of Morgan
or a Morgan Subsidiary to any Morgan Investment Company, request that any
action be taken by any Fund Board, other than routine actions that would
not reasonably likely have, individually or in the aggregate, a Material
Adverse Effect on Morgan or any Morgan Investment Company; or
(n) (i) enter into any new line of business, or (ii) except in the
ordinary course of business, materially restructure or materially change
(1) its investment securities portfolio (except as a result of maturities,
redemptions, calls, or similar events affecting the securities held,
provided that any such restructuring change does not result in a material
change to the credit or risk concentrations of Morgan and the Morgan
Subsidiaries), (2) its hedging strategy, or (3) its gap position (except as
a result of maturities, redemptions, calls, or other similar events
affecting the securities held, provided that any such restructuring or
change does not result in a material change to the credit or risk
concentrations of Morgan and the Morgan Subsidiaries as of the date of such
restructuring or change), through purchases, sales, or otherwise.
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.
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. Morgan shall furnish all information
concerning it and the holders of its capital stock as Regions may reasonably
request for inclusion in the Registration Statement. Morgan 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) Morgan
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 reasonably request in connection with
such Proxy Statement, (iii) the Board of Directors of Morgan shall recommend to
its stockholders the approval of the matters submitted for approval, and (iv)
the Board of Directors of Morgan shall use its reasonable efforts to obtain such
stockholders' approval, provided that Morgan may withdraw, modify, or change in
an adverse manner to Regions its recommendations if the Board of Directors of
Morgan, 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 Morgan'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 Morgan 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.
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8.2 Applications. Regions shall promptly prepare and file, and Morgan
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 Morgan 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.
Each of Regions and Morgan agrees that it will consult with the other Party
thereto with respect to the obtaining of all material Consents necessary or
advisable to consummate the transactions contemplated by this Agreement and each
Party will keep the other Party apprised of the status of material matters
relating to completion of the transactions contemplated hereby.
8.3 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 Tennessee Articles of Merger with the Secretary of State of the State of
Tennessee in connection with the Closing.
8.4 Agreement as to Efforts to Consummate. Subject to the terms and
conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
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 as promptly as practicable all Consents
necessary or desirable for the consummation of the transactions contemplated by
this Agreement.
8.5 Investigation and Confidentiality. (a) Prior to the Effective Time,
each Party shall keep the other Party advised of all material developments
relevant to its business and to consummation of the Merger and shall permit the
other Party to make or cause to be made such investigation of the business and
properties of it and its Subsidiaries and of their respective financial and
legal conditions as the other Party reasonably requests, provided that such
investigation shall be reasonably related to the transactions contemplated
hereby and shall not interfere unnecessarily with normal operations. No
investigation by a Party shall affect the representations and warranties of the
other Party.
(b) Each Party shall, and shall cause its advisers and agents to, maintain
the confidentiality of all confidential information furnished to it by the other
Party concerning its and its Subsidiaries' businesses, operations, and financial
positions to the extent required by, and in accordance with confidentiality
agreements between the Parties, 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
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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.
8.6 Press Releases. Prior to the Effective Time, Regions and Morgan shall
consult with each other as to the form and substance of any press release
materially related to this Agreement or any other transaction contemplated
hereby; provided, that nothing in this Section 8.6 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.
8.7 No Solicitation. Except with respect to this Agreement and the
transactions contemplated hereby, Morgan agrees that it shall not, and shall use
its reasonable efforts to cause its officers, directors, agents, Affiliates, and
Representatives not to, directly or indirectly, initiate, solicit, encourage or
knowingly facilitate (including by way of furnishing confidential information)
any inquiries or the making of any Acquisition Proposal. Notwithstanding
anything herein to the contrary, Morgan 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) Morgan's Board of
Directors concludes in good faith and consistent with its fiduciary duties to
Morgan'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, Morgan's Board of Directors receives from such Person an
executed confidentiality agreement containing terms at least as stringent as
those contained in the Morgan Confidentiality Agreement, and (c) prior to
providing any information or data to any Person or entering into discussions or
negotiations with any Person, Morgan'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. Morgan 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. Morgan
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. Morgan 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 8.7. Nothing in this Section 8.7 shall (i) permit
Morgan to terminate this Agreement (except as specifically provided in Article
10 of this Agreement) or (ii) affect any other obligation of Regions or Morgan
under this Agreement.
8.8 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.
8.9 Agreement of Affiliates. Morgan has disclosed in Section 8.9 of the
Morgan Disclosure Memorandum each Person whom it reasonably believes may be
deemed an "affiliate" of Morgan for purposes of Rule 145 under the 1933 Act.
Morgan shall use its reasonable efforts to cause each such Person to deliver to
Regions not later than the Effective Time, a written agreement, in substantially
the form of Exhibit 3, providing that such Person will not sell, pledge,
transfer, or otherwise dispose of the shares of Morgan 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 Morgan in exchange for shares of Morgan Common Stock shall not be
transferable, regardless of whether each such affiliate has provided the written
agreement referred to in this Section 8.9 (and Regions shall be entitled to
place restrictive legends upon certificates for shares of Regions Common Stock
issued to affiliates of Morgan pursuant to this Agreement to enforce the
provisions of this Section 8.9), except as provided
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herein. Regions shall not be required to maintain the effectiveness of the
Registration Statement under the 1933 Act for the purposes of resale of Regions
Common Stock by such affiliates.
8.10 Employee Benefits and Contracts. (a) Following the Effective Time,
Regions at its election shall either (i) provide generally to officers and
employees of the Morgan Companies, who at or after the Effective Time become
employees of a Regions Company ("Continuing Employees"), employee benefits under
employee benefit plans, 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, or (ii) maintain for the
benefit of the Continuing Employees, the employee benefits plans maintained by
Morgan and/or any Morgan Subsidiary immediately prior to the Effective Time,
provided that after the Effective Time there is no material reduction
(determined on an overall basis) in the benefits provided under the Morgan
employee benefit plans.
(b) In the case of Regions' election to provide employee benefits under
Section 8.10(a)(i) of this Agreement, for purposes of participation and vesting
(but not accrual of benefits) under Regions' employee benefit plans, (i) service
under any qualified defined benefit plans of any Morgan Company or any of its
predecessors shall be treated as service under Regions' qualified defined
benefit plans, (ii) service under any qualified defined contribution plans of
any Morgan Company or any of its predecessors shall be treated as service under
Regions' qualified defined contribution plans, and (iii) service under any other
employee benefit plans of any Morgan Company or any of its predecessors 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
(except for pre-existing conditions that were excluded under Morgan's welfare
benefit plans), and (ii) cause any deductible, co-insurance, or maximum out-of-
pocket payments made by the Continuing Employees under Morgan'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 Morgan and/or any
Morgan Subsidiary immediately prior to the Effective Time during a transition
period continuing for a reasonable period of time after the Effective Time 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 Morgan
employee benefit plans.
(c) Regions shall and shall cause Morgan and its Subsidiaries to honor all
employment, severance, consulting, and other compensation Contracts disclosed in
Sections 7.2 or 8.10 of the Morgan Disclosure Memorandum to Regions between any
Morgan 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 Morgan Benefit Plans. Regions shall be
responsible for the fees related to the termination of the Morgan Benefit Plans.
8.11 Indemnification. (a) From and after the Effective Time, in the event
of any threatened or actual claim, action, suit, proceeding, or investigation,
whether civil, criminal, or administrative, including, without limitation, any
such claim, action, suit, proceeding or investigation in which any person who is
now, or has been at any time prior to the date of this Agreement, or who becomes
prior to the Effective Time, a director or officer of Morgan or any Morgan
Subsidiary (the "Indemnified Parties") is, or is threatened to be, made a party
based in whole or in part on, or arising in whole or in part out of, or
pertaining to (i) the fact that he is or was a director, officer, or employee of
Morgan, any of the Morgan Subsidiaries, or any of their respective predecessors,
or (ii) this Agreement or any of the transactions contemplated hereby, whether
in any case asserted or arising before or after the Effective Time, Regions
shall indemnify and hold harmless, as and to the fullest extent permitted by
Law, each such Indemnified Party against any Liability (including reasonable
attorneys' fees and expenses in advance of the final disposition of any claim,
suit, proceeding, or investigation to each Indemnified Party to the fullest
extent permitted by Law upon receipt of any undertaking required by applicable
Law), judgments, fines, and amounts paid in settlement in connection with any
such threatened or actual claim, action, suit, proceeding, or investigation, and
in the event of any such threatened or actual claim,
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action, suit, proceeding, or investigation (whether asserted or arising before
or after the Effective Time), the Indemnified Parties may retain counsel
reasonably satisfactory to them; provided, however, that (a) Regions shall have
the right to assume the defense thereof and upon such assumption Regions shall
not be liable to any Indemnified Party for any legal expenses of other counsel
or any other expenses subsequently incurred by any Indemnified Party in
connection with the defense thereof, except that if Regions elects not to assume
such defense or counsel for the Indemnified Parties reasonably advises the
Indemnified Parties that there are issues which raise conflicts of interest
between Regions and the Indemnified Parties, the Indemnified Parties may retain
counsel reasonably satisfactory to them, and Regions shall pay the reasonable
fees and expenses of such counsel for the Indemnified Parties, (b) Regions shall
not be liable for any settlement effected without its prior written consent
(which consent shall not be unreasonably withheld), and (c) Regions shall have
no obligation hereunder to any Indemnified Party when and if a court of
competent jurisdiction shall ultimately determine, and such determination shall
have become final and nonappealable, that indemnification of such Indemnified
Party in the manner contemplated hereby is prohibited by applicable Law.
Regions' obligations under this Section 8.11(a) continue in full force and
effect for a period of six years after the Effective Time; provided, however,
that all rights to indemnification in respect of any claim (a "Claim") asserted
or made within such period shall continue until the final disposition of such
Claim.
(b) Regions agrees that all rights to indemnification and all limitations
on Liability existing in favor of the directors, officers, and employees of
Morgan and its Subsidiaries (the "Covered Parties") as provided in their
respective Articles of Incorporation, Bylaws, or similar governing instruments
as in effect as of the date of this Agreement with respect to matters occurring
prior to the Effective Time shall survive the Merger and shall continue in full
force and effect, and shall be honored by such entities or their respective
successors as if they were the indemnifying party thereunder, without any
amendment thereto, for a period of six years after the Effective Time; provided,
however, that all rights to indemnification in respect of any Claim asserted or
made within such period shall continue until the final disposition of such
Claim; provided, further, however, that nothing contained in this Section
8.11(b) shall be deemed to preclude the liquidation, consolidation, or merger of
Morgan or any Morgan Subsidiary, in which case all of such rights to
indemnification and limitations on Liability shall be deemed to so survive and
continue notwithstanding any such liquidation, consolidation, or merger. Without
limiting the foregoing, in any case in which approval by Regions is required to
effectuate any indemnification, Regions shall direct, at the election of the
Indemnified Party, that the determination of any such approval shall be made by
independent counsel mutually agreed upon between Regions and the Indemnified
Party.
(c) Regions, from and after the Effective Time, will directly or indirectly
cause the persons who served as directors or officers of Morgan at or before the
Effective Time to be covered by Morgan's existing directors' and officers'
liability insurance policy (provided that Regions may substitute therefor
policies of at least the same coverage and amounts containing terms and
conditions which are not less advantageous than such policy). Such insurance
coverage, shall commence at the Effective Time and will be provided for a period
of no less than three years after the Effective Time.
(d) 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 8.11.
(e) The provisions of this Section 8.11 are intended to be for the benefit
of and shall be enforceable by, each Indemnified Party, his or her heirs and
representatives.
8.12 Exemption from Liability Under Section 16(b). If Morgan delivers to
Regions in a timely fashion prior to the Effective Time accurate information
regarding those officers and directors of Morgan subject to the reporting
requirements of Section 16(a) of the 1934 Act (the "Morgan Insiders"), the
number of shares of Morgan Common Stock held or to be held by each such Morgan
Insider expected to be exchanged for the Regions Common Stock in the Merger, and
the number and description of the options to purchase shares of Morgan Common
Stock held by each such Morgan Insider and expected to be converted into options
to purchase the Regions Common Stock in the Merger, the Board of Directors of
Regions, or a committee of
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non-employee directors thereof (as such term is defined for purposes of Rule
16b-3(d) under the 1934 Act), shall reasonably promptly thereafter, and in any
event prior to the Effective Time, adopt a resolution providing that the receipt
by the Morgan Insiders of the Regions Common Stock in exchange for shares of
Morgan Common Stock, and of options to purchase shares of the Regions
Corporation Common Stock upon conversion of options to purchase Morgan Common
Stock, in each case pursuant to the transactions contemplated by this Agreement
and to the extent such securities are listed in the information provided by
Morgan, are approved by such Board of Directors or by such committee thereof,
and are intended to be exempt from Liability pursuant to Section 16(b) of the
1934 Act, such that any such receipt shall be so exempt. Morgan shall take all
such steps as may be required to cause the transactions contemplated by Section
3.5 of this Agreement and any other dispositions of Morgan equity securities
(including derivative securities) in connection with this Agreement by each
individual who is a director or officer of Morgan to be exempt under Rule 16b-3
promulgated under the 1934 Act.
8.13 Investment Companies. If the Merger and the transactions contemplated
hereby constitute a deemed "assignment" (as defined in the Investment Company
Act and the investment Advisers Act) of the advisory agreement with any Morgan
Investment Company:
(a) Morgan shall, and shall use all reasonable efforts to cause the
Morgan Subsidiaries to, use all reasonable efforts to obtain approval of
each Fund Board, pursuant to and in conformity with, Section 15(a)(4) of
the Investment Company Act and SEC Rule 15a-4 promulgated under the
Investment Company Act of an interim investment advisory agreement for such
Investment Company with a Regions Subsidiary serving as adviser or
subadviser, having the same advisory fees in effect as of the date hereof
and becoming effective prior to the Effective Time, and which agreement
will be in a form satisfying the requirements of Rule
15a-4(b)(2)(iv) - (vi).
(b) In addition to taking the actions specified in Section 8.13(a),
Morgan shall, and shall use all reasonable efforts to cause the Morgan
Subsidiaries to cooperate with Regions and use all reasonable efforts to
obtain, at the sole expense of Regions, and to cause each Morgan Investment
Company to obtain, as promptly as practicable but in no case later than 150
days after the execution of the interim investment advisory agreement, the
approval of such Fund Board and its stockholders, pursuant to and in
conformity with the provisions of Section 15 of the Investment Company Act
and SEC rules thereunder applicable thereto, of a new Investment Company
advisory agreement for such Morgan Investment Company with a Regions
Subsidiary serving as adviser or subadviser, such agreement having the
terms that are in the aggregate no less favorable to Regions than the
existing agreement.
(c) Morgan and the Morgan Subsidiaries shall cooperate with Regions
and (i) use all reasonable efforts to cause to be obtained all consents and
approvals necessary to be obtained by Morgan, any Morgan Subsidiary or each
Morgan Investment Company in order for the Parties to consummate the
transactions contemplated by this Section 8.13, (ii) use all reasonable
efforts to cause each Morgan Investment Company and its stockholders to
give or obtain any such consents or approvals relating to such Morgan
Investment Company and to use all reasonable efforts to cause each Morgan
Investment Company to prepare, file with and obtain clearance from the SEC
and all other Regulatory Authorities having jurisdiction, as promptly as
practicable after the date hereof, all proxy solicitation material required
to be filed with the SEC and all other Regulatory Authorities and
distributed to the stockholders of such Morgan Investment Company with
respect to the actions to be approved by the stockholders of such Morgan
Investment Company in connection with this Agreement, and (iii) use all
reasonable efforts to cause such Morgan Investment Company to mail such
proxy solicitation materials to such stockholders promptly after clearance
thereof by the SEC and to convene a meeting of the stockholders of such
Morgan Investment Company as soon as reasonably practicable after the
mailing of the proposal as described in subsection (ii) hereof, all such
consents and proxy solicitation materials to be in form reasonably
satisfactory to Regions, which shall reimburse, as incurred, all expenses
of Morgan and the Morgan Subsidiaries in connection with such matters. The
Parties shall use all reasonable efforts to assure the satisfaction of the
conditions set forth in Section 15(f) of the Investment Company Act with
respect to each Morgan Investment Company.
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8.14 Management Contract Consents. As soon as reasonably practicable after
the date hereof, Morgan shall, and shall cause any Morgan Subsidiary that is a
registered investment adviser (each an "Adviser") to inform its investment
advisory clients of the transactions contemplated by this Agreement and request
each such client's written consent to the deemed assignment of its management
contract resulting from the change in ownership of Morgan and the relevant
Adviser resulting from the transactions contemplated by this Agreement and use
all reasonable efforts to obtain such consent on or before the Effective Time.
While Morgan shall request affirmative written consents from each Adviser's
clients to such deemed assignment, a negative consent will constitute valid
consent to the extent permitted by applicable Law and the applicable management
contract if (i) a negative consent is not expressly prohibited by the management
contract (for purposes of this Agreement, it is assumed that, unless an
agreement expressly requires written consent to an "assignment" as defined under
the Investment Advisers Act, then such "negative consent" or "silence" is
permissible hereunder and thereunder), (ii) a notice describing the change in
control and the negative consent substantially in form reasonably acceptable to
Regions and Morgan is sent to each client, and (iii) 60 days elapse from the
date that notice is received at the client's office during which period the
client continues to have its account managed by the applicable Adviser.
8.15 Retention Program. At the Effective Time, Regions will establish a
retention pool to be used to retain key employees of Morgan as set forth in
Section 8.15 of the Morgan Disclosure Memorandum.
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 Morgan shall have
approved this Agreement 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 (including the effectiveness of the declaration
of election of financial holding company status by Regions), 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 which
would be reasonably expected to have a Material Adverse Effect on the
Surviving Corporation after the Effective Time.
(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 after the Effective
Time.
(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) which is then in effect which prohibits,
restrains, 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.
(f) Tax Opinion. Regions and Morgan shall have received a written
opinion from Alston & Bird LLP and Wachtell, Lipton, Rosen & Katz,
respectively, in a form reasonably satisfactory to such Party
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(the "Tax Opinions"), 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 Morgan Common Stock who exchange all
of their Morgan 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 (including fractional shares deemed
received and redeemed) by holders of Morgan Common Stock who exchange all
of their Morgan Common Stock solely for Regions Common Stock in the Merger
will be the same as the tax basis of the Morgan Common Stock surrendered in
exchange for the Regions Common Stock, and (iv) the holding period of the
Regions Common Stock received (including fractional shares deemed received
and redeemed) by holders who exchange all of their Morgan Common Stock
solely for Regions Common Stock in the Merger will be the same as the
holding period of the Morgan Common Stock surrendered in exchange therefor,
provided that such Morgan Common Stock is held as a capital asset at the
Effective Time. In rendering such Tax Opinions, such counsel shall be
entitled to rely upon representations of officers of Morgan 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 Morgan 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 speak as of the
date of this Agreement or some other date shall speak only as of such
date). The representations and warranties of Morgan set forth in Sections
5.2(a) and 5.3 of this Agreement shall be true and correct (except for
inaccuracies which are de minimis in amount). The representations and
warranties of Morgan set forth in Sections 5.19, 5.21, and 5.22 of this
Agreement shall be true and correct in all material respects. There shall
not exist inaccuracies in the representations and warranties of Morgan set
forth in this Agreement (including the representations and warranties set
forth in Sections 5.2(a), 5.3, 5.19, 5.21, and 5.22 of this Agreement) such
that the aggregate effect of such inaccuracies has, or is reasonably likely
to have, a Material Adverse Effect on Morgan; provided that, for purposes
of this sentence only, those representations and warranties which are
qualified by references to "material," "Material Adverse Effect," or
variations thereof, or to the "Knowledge" of Morgan or to a matter being
"known" by Morgan shall be deemed not to include such qualifications.
(b) Performance of Agreements and Covenants. Each and all of the
agreements and covenants of Morgan 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. Morgan shall have delivered to Regions (i) a
certificate, dated as of the Effective Time and signed on Morgan's behalf
by its duly authorized officers, to the effect that the conditions set
forth in Sections 9.2(a) and 9.2(b) of this Agreement have been satisfied,
and (ii) certified copies of resolutions duly adopted by (1) Morgan's 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, and (2) Morgan's
stockholders evidencing the approval of this Agreement, all in such
reasonable detail as Regions and its counsel shall request.
9.3 Conditions to Obligations of Morgan. The obligations of Morgan 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 Morgan 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
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warranties had been made on and as of the Effective Time (provided that
representations and warranties which speak as of the date of this Agreement
or some other date shall speak only as of such date). The representations
and warranties of Regions set forth in Sections 6.2(a) and 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 Sections 6.13, 6.15, and 6.16 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 6.2(a),
6.3, 6.13, 6.15, and 6.16 of this Agreement) 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 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 Morgan (i) a
certificate, dated as of the Effective Time and signed on Regions' behalf
by its duly authorized officers, to the effect that the conditions set
forth in Sections 9.3(a) and 9.3(b) of this Agreement have been satisfied,
and (ii) certified copies of resolutions duly adopted by Regions' Board of
Directors evidencing the taking of all corporate action necessary to
authorize the execution, delivery, and performance of this Agreement, and
the consummation of the transactions contemplated hereby, all in such
reasonable detail as Morgan and its counsel shall request.
ARTICLE 10
TERMINATION
10.1 Termination. Notwithstanding any other provision of this Agreement,
and notwithstanding the approval of this Agreement by the stockholders of
Morgan, 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 Morgan; or
(b) By the Board of Directors of either Party (provided that the
terminating Party is not then in breach of any representation or warranty
contained in this Agreement under the applicable standard set forth in
Section 9.2(a) of this Agreement in the case of Morgan and Section 9.3(a)
of this Agreement in the case of Regions or in material breach of any
covenant or other agreement contained in this Agreement) in the event of an
inaccuracy of any representation or warranty of the other Party contained
in this Agreement which cannot be or has not been cured within 30 days
after the giving of written notice to the breaching Party of such
inaccuracy and which inaccuracy would provide the terminating Party the
ability to refuse to consummate the Merger under the applicable standard
set forth in Section 9.2(a) of this Agreement in the case of Morgan and
Section 9.3(a) of this Agreement in the case of Regions; or
(c) By the Board of Directors of either Party (provided that the
terminating Party is not then in breach of any representation or warranty
contained in this Agreement under the applicable standard set forth in
Section 9.2(a) of this Agreement in the case of Morgan and Section 9.3(a)
in the case of Regions or in material breach of any covenant or other
agreement contained in this Agreement) in the event of a material breach by
the other Party of any covenant or agreement contained in this Agreement
which cannot be or has not been cured within 30 days after the giving of
written notice to the breaching Party of such breach; or
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(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 (ii) the stockholders of
Morgan fail to vote their approval of this Agreement at the Stockholders'
Meeting where this Agreement was 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 August 31, 2001, 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).
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, and none of Regions, Morgan, any
of their respective Subsidiaries, or any of the officers or directors of any of
them, shall have any Liability of any nature whatsoever hereunder or in
conjunction with the transactions contemplated hereby, except that (i) the
provisions of Section 8.5(b) of this Agreement, this Section 10.2, Section 10.3,
and Article 11 of this Agreement shall survive any such termination and
abandonment, and (ii) a termination of this Agreement shall not relieve the
breaching Party from Liability for an uncured willful breach of a
representation, warranty, covenant, or agreement of such Party contained in this
Agreement. The Termination Fee Agreement shall be governed by its terms as to
its termination.
10.3 Non-Survival of Representations and Covenants. The respective
representations, warranties, obligations, covenants, and agreements of the
Parties shall not survive the Effective Time, except for those covenants and
agreements which by their terms apply in whole or in part after the Effective
Time.
ARTICLE 11
MISCELLANEOUS
11.1 Definitions. (a) Except as otherwise provided herein, the capitalized
terms set forth below shall have the following meanings:
"Acquisition Proposal" with respect to a Party shall mean any tender
offer or exchange offer or any proposal for a merger, acquisition of all of
the stock or assets of, or other business combination involving such Party
or any of its Subsidiaries or the acquisition of a substantial equity
interest in, or a substantial portion of the assets of, such Party or any
of its Subsidiaries.
"Affiliate" of a Person shall mean any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by
or under common control with such Person.
"Agreement" shall mean this Agreement and Plan of Merger, including
the Exhibits delivered pursuant hereto and incorporated herein by
reference.
"AMEX" shall mean this American Stock Exchange.
"Average Price" shall mean the average of the daily volume weighted
averages of the trading prices of Regions Common Stock as reported on the
Nasdaq NMS (as reported by The Wall Street Journal or, if not reported
thereby, another authoritative source agreed to by Morgan and 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 second full trading
day immediately preceding the Effective Time. If the price of Regions
Common Stock is adjusted at any time following the first day of such period
and prior to the Effective Time by reason of any action by Regions of the
nature described in the second sentence of Section 3.2 of this Agreement,
then all prices preceding such adjustment shall themselves be adjusted so
as to be comparable with those following such adjustment.
"BHC Act" shall mean the federal Bank Holding Company Act of 1956, as
amended.
"CBOE" shall mean the Chicago Board Options Exchange.
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"CFTC" shall mean the Commodities Futures Trading Commission.
"Confidentiality Agreement" shall mean that certain Confidentiality
Agreement, dated November 22, 2000, by and between Morgan 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,
commitment, contract, indenture, instrument, lease, understanding, or
undertaking of any kind or character to which any Person is a party or that
is binding on any Person or its capital stock, assets, or business.
"CSE" shall mean the Chicago Stock Exchange.
"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., and other Laws relating to emissions, discharges,
releases, or threatened releases of any Hazardous Material, or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of any Hazardous Material.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Exhibits" 1 through 3, inclusive, shall mean the Exhibits so marked,
copies of which are attached to this Agreement. Such Exhibits are hereby
incorporated by reference herein and made a part hereof, and may be
referred to in this Agreement and any other related instrument or document
without being attached hereto.
"Fund Board" shall mean board of trustees or directors of each Morgan
Investment Company.
"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 that are
or become regulated under any applicable local, state, or federal Law (and
specifically shall include asbestos requiring abatement, removal, or
encapsulation pursuant to the requirements of governmental authorities and
any polychlorinated biphenyls).
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"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.
"Intellectual Property" shall mean copyrights, patents, trademarks,
service marks, service names, trade names, applications therefor,
technology rights and licenses, computer software (including any source or
object codes therefor or documentation relating thereto), trade secrets,
franchises, know-how, inventions and other intellectual property rights.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
as amended, and the rules and regulations promulgated thereunder.
"Investment Advisers Act" shall mean the Investment Advisers Act of
1940, as amended, and the rules and regulations promulgated thereunder.
"Investment Company" shall have the meaning set forth in the
Investment Company Act.
"Investment Company Act" shall mean the Investment Company Act of
1940, 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, rule, or
statute applicable to a Person or its assets, Liabilities, or business,
including those promulgated, interpreted, or enforced by any Regulatory
Authority.
"Liability" shall mean any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost, or expense (including
costs of investigation, collection, and defense), claim, deficiency, or
guaranty of any type, whether accrued, absolute or contingent, liquidated
or unliquidated, matured or unmatured, or otherwise.
"Lien" shall mean any mortgage, pledge, reservation, restriction
(other than a restriction on transfers arising under the Securities Laws),
security interest, or claim, lien, or encumbrance 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 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, but shall not include regular, periodic examinations
of depository institutions and their Affiliates by Regulatory Authorities.
"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, investment
banks, broker-dealers, 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) general economic or market conditions or the
securities industry in general, and (e) this Agreement or the announcement
thereof.
"Morgan Common Stock" shall mean the $.625 par value common stock of
Morgan.
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"Morgan Companies" shall mean, collectively, Morgan and all Morgan
Subsidiaries.
"Morgan Disclosure Memorandum" shall mean the written information
entitled "Morgan Disclosure Memorandum" delivered prior to the execution 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
Section or subsection of this Agreement. 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.
"Morgan Financial Statements" shall mean (i) the consolidated
statements of condition (including related notes and schedules, if any) of
Morgan as of October 31, 2000, and as of July 31, 2000, and 1999, and the
related statements of income, changes in stockholders' equity, and cash
flows (including related notes and schedules, if any) for the three months
ended October 31, 2000 and for each of the three years ended July 31, 2000,
1999, and 1998, as filed by Morgan in SEC Documents, and (ii) the
consolidated statements of condition of Morgan (including related notes and
schedules, if any) and related statement of income, change 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
October 31, 2000.
"Morgan Stock Plans" shall mean the existing stock option and other
stock-based compensation plans of Morgan, including, without limitation,
the stock option plans and programs of any Persons acquired by Morgan or a
Morgan Subsidiary.
"Morgan Subsidiaries" shall mean the Subsidiaries of Morgan, which
shall include the Morgan Subsidiaries described in Section 5.4 of this
Agreement and any corporation, bank, savings association, or other
organization acquired as a Subsidiary of Morgan in the future and owned by
Morgan at the Effective Time.
"MSRB" shall mean the Municipal Securities Rulemaking Board.
"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, and the
rules and regulations promulgated thereunder.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"NYFE" shall mean the New York Futures Exchange, Inc.
"NYSE" shall mean the New York Stock Exchange, Inc.
"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.
"Party" shall mean either Morgan or Regions, and "Parties" shall mean
both Morgan and Regions.
"Permit" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, or permit from governmental authorities that are
required for the operation of a Party's respective businesses.
"Permitted Issuances" shall mean issuances of Morgan Common Stock
pursuant to and in accordance with (i) the Morgan Deferred Compensation
Plan, (ii) the Morgan 2000 Employee Stock Purchase Plan, (iii) the Morgan
2000 Equity Compensation Plan which, in the aggregate for the plans
described in clauses (ii) and (iii), are currently estimated to be 640,000
shares of Morgan Common
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Stock prior to the Effective Time, or (iv) issuances of Rights or of Morgan
Common Stock otherwise permitted by Regions.
"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.
"PHLX" shall mean the Philadelphia Stock Exchange, Inc.
"Proxy Statement" shall mean the proxy statement used by Morgan to
solicit the approval of its stockholders of the transactions contemplated
by this Agreement, which shall include the prospectus of Regions relating
to the issuance of the Regions Common Stock to holders of Morgan Common
Stock.
"reasonable efforts" shall mean the reasonable best efforts of a
Party, but shall not require any Party to take any commercially
unreasonable action.
"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, 2000 and as of December 31, 1999 and 1998, 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, 2000 and for each of the three years ended December 31,
1999, 1998, and 1997, 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, 2000.
"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 Morgan 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, the Internal Revenue Service, all state regulatory
agencies having jurisdiction over the Parties and their respective
Subsidiaries, the NASD, the NYSE, and the SEC.
"Representative" shall mean any investment banker, financial advisor,
attorney, accountant, consultant, or other representative of a Person.
"Rights" shall mean, with respect to any Person, securities, or
obligations convertible into or exercisable for, or giving any Person any
right to subscribe for or acquire, or any options, calls, or commitments
relating to, or any stock appreciation right or other instrument the value
of which is determined in whole or in part by reference to the market price
or value of, shares of capital stock of such Person.
"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 the SEC.
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"Securities Laws" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act, the Investment Advisers Act, the Trust Indenture
Act of 1939, as amended, and the rules and regulations of any Regulatory
Authority promulgated thereunder.
"SIA" shall mean the Securities Industry Association.
"SIPC" shall mean the Securities Investor Protection Corporation.
"Stockholders' Meeting" shall mean the meeting of the stockholders of
Morgan to be held pursuant to Section 8.1 of this Agreement, including any
adjournment or adjournments thereof.
"Subsidiaries" shall have the meaning assigned in Rule 1-02(x) of
Regulation S-X of the SEC; 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 Morgan, 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 Morgan as a result of which either (1) Morgan's
stockholders prior to such transaction (by virtue of their ownership of
Morgan'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 Morgan 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 Morgan 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 Morgan 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 Morgan 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 (including the
impact of the Termination Fee Agreement) 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.
"Support Agreement" shall mean the various support agreements, each in
substantially the form of Exhibit 1.
"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, levies, imposts, duties, or other like 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 of any kind whatsoever, imposed or
required to be withheld by the United States or any state, local, or
foreign government or subdivision or agency thereof, including any related
interest and penalties, or additions thereto.
"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.
"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.
"TBCA" shall mean the Tennessee Business Corporation Act.
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"Tennessee Articles of Merger" shall mean the Articles of Merger
executed by Regions and filed with the Secretary of State of the State of
Tennessee relating to the Merger as contemplated by Section 1.1 of this
Agreement.
"Termination Fee Agreement" shall mean that certain termination fee
agreement by and between Morgan and Regions substantially in the form of
Exhibit 2.
(b) The terms set forth below shall have the meanings ascribed thereto in
the referenced sections:
<TABLE>
<S> <C>
Adviser..................................................... Section 8.14
Aggregate Cash Amount....................................... Section 3.1(c)
Cash Election Shares........................................ Section 3.1(c)
Claim....................................................... Section 8.11(a)
Client...................................................... Section 5.25(a)
Closing..................................................... Section 1.2
Continuing Employees........................................ Section 8.10
Covered Parties............................................. Section 8.11(b)
Current Forms............................................... Section 5.11(c)
Effective Time.............................................. Section 1.3
Election Deadline........................................... Section 3.1(c)
Election Form............................................... Section 3.1(c)
Election Form Record Date................................... Section 3.1(c)
Exchange Agent.............................................. Section 3.1(b)
Exchange Fund............................................... Section 4.1(a)
Exchange Ratio.............................................. Section 3.1(b)
Indemnified Parties......................................... Section 8.11(a)
Mailing Date................................................ Section 3.1(c)
Merger...................................................... Section 1.1
Merger Shares............................................... Section 3.1(b)
Morgan Benefit Plans........................................ Section 5.14(a)
Morgan Contracts............................................ Section 5.15(a)
Morgan ERISA Affiliate...................................... Section 5.14(e)
Morgan ERISA Plan........................................... Section 5.14(a)
Morgan Insiders............................................. Section 8.12
Morgan Investment Company................................... Section 5.26(a)
Morgan Pension Plan......................................... Section 5.14(a)
Morgan Property............................................. Section 5.10(b)
Morgan Rights............................................... Section 3.5(a)
Morgan SEC Reports.......................................... Section 5.5(a)
New Certificates............................................ Section 4.1(a)
No Election Shares.......................................... Section 3.1(c)
Old Certificates............................................ Section 3.1(c)
Per Share Cash Consideration................................ Section 3.1(c)
Regions SEC Reports......................................... Section 6.5(a)
Stock Designees............................................. Section 3.1(c)
</TABLE>
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<TABLE>
<S> <C>
Takeover Laws............................................... Section 5.21
Tax Opinions................................................ Section 9.1(f)
Treasury Shares............................................. Section 3.1(b)
</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 Lazard Freres & Co. LLC as to Morgan
and Salomon Smith Barney as to Regions, each of the Parties represents and
warrants that neither it nor any of its officers, directors, employees, or
Affiliates has employed any broker or finder or incurred any Liability for any
financial advisory fees, investment bankers' fees, brokerage fees, commissions,
or finders' fees in connection with this Agreement or the transactions
contemplated hereby. In the event of a claim by any broker or finder based upon
his, her, or its representing or being retained by or allegedly representing or
being retained by Morgan or Regions, each of Morgan 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 Morgan Disclosure Memorandum) 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 Section 8.13 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
Morgan Common Stock will be exchanged for Regions Common Stock or cash shall not
be amended after the Stockholders' Meeting without the requisite approval of the
holders of the issued and outstanding shares of Morgan 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 Morgan, to waive or extend
the time for the compliance or fulfillment by Morgan 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.
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(b) Prior to or at the Effective Time, Morgan, acting through its Board of
Directors, chief executive officer, chief financial officer, or other authorized
officer, shall have the right to waive any Default in the performance of any
term of this Agreement by Regions, to waive or extend the time for the
compliance or fulfillment by Regions of any and all of its obligations under
this Agreement, and to waive any or all of the conditions precedent to the
obligations of Morgan 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 Morgan 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.
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>
Morgan: Morgan Keegan, Inc.
Fifty North Front Street
Memphis, Tennessee 38103
Telecopy Number: (901) 529-5344
Attention: Allen B. Morgan, Jr.
Chairman and Chief Executive Officer
Copy to Counsel: Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019-6150
Telecopy Number: (212) 403-2000
Attention: Edward D. Herlihy, Esq.
Regions: Regions Financial Corporation
417 North 20th Street
Birmingham, Alabama 35203
Telecopy Number: (205) 326-7571
Attention: Richard D. Horsley
Vice Chairman and Executive
Financial Officer
Copy to Counsel: Regions Financial Corporation
417 North 20th Street
Birmingham, Alabama 35203
Telecopy Number: (205) 326-7751
Attention: Samuel E. Upchurch, Jr.
General Counsel
</TABLE>
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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 principles of conflicts of Laws, except to the extent that the Laws
of the State of Tennessee relate to the consummation of the Merger.
11.10 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
11.11 Captions. The captions contained in this Agreement are for reference
purposes only and are not part of this Agreement.
11.12 Interpretations. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against any Party, whether under
any rule of construction or otherwise. No Party to this Agreement shall be
considered the draftsman. The Parties acknowledge and agree that this Agreement
has been reviewed, negotiated, and accepted by all Parties and their attorneys
and shall be construed and interpreted according to the ordinary meaning of the
words used so as fairly to accomplish the purposes and intentions of the
Parties.
11.13 Enforcement of Agreement. The Parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement was
not performed in accordance with its specific terms or was otherwise breached.
It is accordingly agreed that the Parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.
11.14 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
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: MORGAN KEEGAN, INC.
By: /s/ JOSEPH C. WELLER By: /s/ ALLEN B. MORGAN, JR.
----------------------------------------------------
---------------------------------------------------- Allen B. Morgan, Jr.
Joseph C. Weller Chairman and Chief Executive Officer
Secretary
[CORPORATE SEAL]
ATTEST: REGIONS FINANCIAL CORPORATION
By: /s/ SAMUEL E. UPCHURCH, JR. By: /s/ CARL E. JONES, JR.
----------------------------------------------------
---------------------------------------------------- Carl E. Jones, Jr.
Samuel E. Upchurch, Jr. Executive Officer
Corporate Secretary President and Chief
[CORPORATE SEAL]
</TABLE>
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