SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 22, 1998
MAGNA GROUP, INC.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 1-12405 37-0996453
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(State or Other (Commission (IRS Employer
Jurisdiction File Number) Identification No.)
of Incorporation)
One Magna Place, 1401 South Brentwood Boulevard, St. Louis, Missouri 63144-1401
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(Address of Principal Executive Offices) (Zip Code)
(314) 963-2500
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
Magna Group, Inc., a corporation organized and existing under the laws of
the State of Delaware ("Magna"), and Union Planters Corporation, a corporation
organized and existing under the laws of the State of Tennessee ("UPC"), each
registered as a bank holding company under the Bank Holding Company Act of 1956,
as amended, entered into an Agreement and Plan of Reorganization on February 22,
1998 (the "Merger Agreement"), pursuant to which Magna will be merged with and
into Union Planters Holdings Corporation, a wholly-owned subsidiary of UPC
organized under the laws of the State of Tennessee (the "Merger"). The Board of
Directors of Magna and the Board of Directors of UPC approved the Merger at
their meetings held on February 22, 1998 and February 19, 1998, respectively.
In accordance with the terms of the Merger Agreement, (i) each share of
Magna common stock, par value $2.00 per share, and the associated preferred
share purchase rights under Magna's Rights Agreement, dated November 11, 1998,
between Magna and Magna Bank, N.A., as Rights Agent (together, the "Magna Common
Stock"), outstanding immediately prior to the effective time of the Merger (the
"Effective Time") will be converted into the right to receive 0.9686 of a share
of UPC common stock, par value $5.00 per share, and the associated preferred
share purchase rights under UPC's Rights Agreement, dated January 19, 1989,
between UPC and Union Planters National Bank, as Rights Agent (together, the
"UPC Common Stock"), and (ii) each share of Magna Class B Preferred Stock, par
value $20.00 per share, outstanding immediately prior to the Effective Time will
be converted into the right to receive a check from UPC in the amount of par
plus and accrued but unpaid dividends.
In addition, at the Effective Time, all rights with respect to Magna
Common Stock pursuant to stock options outstanding at the Effective Time,
whether or not then exercisable, shall be converted into and shall become rights
with respect to UPC Common Stock.
The Merger is intended to constitute a tax-free reorganization under the
Internal Revenue Code of 1986, as amended, and to be accounted for as a pooling
of interests.
Consummation of the Merger is subject to various conditions, including:
(i) approval of the Merger Agreement and the Merger by the shareholders of each
of the parties thereto; (ii) receipt of requisite regulatory approvals from the
Board of Governors of the Federal Reserve System and other federal and state
regulatory authorities as necessary; (iii) receipt by each of Magna and UPC of
an opinion of counsel in reasonably satisfactory form as to the tax treatment of
certain aspects of the Merger; (iv) the registration pursuant to the Securities
Act of 1933, as amended (the "Act"), of the shares of UPC Common Stock to be
issued in the Merger; (v) receipt by each of Magna and UPC of a letter from each
of KPMG Peat Marwick LLP, UPC's independent public accountants, and Ernst &
Young LLP, Magna's independent public accountants, to the effect that the Merger
will qualify for pooling-of-interests accounting treatment; (vi) receipt by UPC
of letters from affiliates of Magna related to the sale of UPC Common Stock and
(vii) satisfaction of certain other conditions.
The Merger Agreement and the Merger will be submitted for approval at a
meeting of the stockholders of each of the parties thereto. Prior to such
meeting, UPC will file a registration
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statement with the Securities and Exchange Commission registering under
the Act the shares of UPC Common Stock to be issued in the Merger. Such shares
of UPC Common Stock will be offered to Magna shareholders pursuant to a
prospectus that will also serve as a proxy statement for the stockholders'
meeting.
In connection with the Merger Agreement, Magna has agreed to use its
reasonable efforts to cause each person whom it reasonably believes may be
deemed an "affiliate" of Magna for purposes of Rule 145 under the Securities Act
of 1933, as amended (together with the rules and regulations thereunder, the
"1933 Act"), to deliver to UPC a signed affiliate agreement (the "Affiliate
Agreement") not to sell UPC Common Stock obtained pursuant to the Merger except
in compliance with applicable provisions of the 1933 Act and until such time as
financial results covering at least 30 days of combined operations of Magna and
UPC have been published.
Also in connection with the Merger Agreement, Magna and UPC entered into a
Stock Option Agreement, dated February 22, 1998 (the "Stock Option Agreement"),
pursuant to which Magna granted to UPC an irrevocable option to purchase, under
certain circumstances, up to 6,497,180 authorized and unissued shares of Magna
Common Stock at a price, subject to certain adjustments, equal to the first
closing price per share of Magna Common Stock following public announcement of
the execution of the Merger Agreement as reported on the NYSE-Composite
Transactions List (the "UPC Option"). The UPC Option, if exercised, would equal,
before giving effect to the exercise of the UPC Option, 19.9% of the total
number of shares of Magna Common Stock outstanding. The UPC Option was granted
by Magna as a condition and inducement to UPC's willingness to enter into the
Merger Agreement. Under certain circumstances, Magna may be required to
repurchase the UPC Option or the shares acquired pursuant to the exercise of the
UPC Option.
Each of the preceding descriptions of the Merger Agreement, the Affililate
Agreement, and the Stock Option Agreement is qualified in its entirety by
reference to the copies of the Merger Agreement, the Affiliate Agreement, and
the Stock Option Agreement included as Exhibits 2.1, 2.2 and 2.3 hereto,
respectively, and which are hereby incorporated herein by reference.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
Exhibit Description
2.1 Agreement and Plan of Reorganization, dated as of
February 22, 1998, by and between Magna Group, Inc.
and Union Planters Corporation.
2.2 Form of Affiliate Agreement, dated as of
February 22, 1998, by and between UPC and the
Affiliates of Magna.
2.3 Stock Option Agreement, dated as of February 22, 1998, by and
between Magna Group, Inc., as grantee, and Union Planters
Corporation, as issuer.
99.1 Text of joint press release, dated February 22, 1998, issued
by Magna Group, Inc. and Union Planters Corporation.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: February 27, 1998
MAGNA GROUP, INC.
By: /s/ Robert S. Kahler
Robert S. Kahler
Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit Description
2.1 Agreement and Plan of Reorganization, dated as of
February 22, 1998, by and between Magna Group, Inc.
and Union Planters Corporation.
2.2 Form of Affiliate Agreement, dated as of
February 22, 1998, by and between UPC and the
Affiliates of Magna.
2.3 Stock Option Agreement, dated as of February 22, 1998, by and
between Magna Group, Inc., as grantee, and Union Planters
Corporation, as issuer.
99.1 Text of joint press release, dated February 22, 1998, issued
by Magna Group, Inc. and Union Planters Corporation.
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EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
BY AND BETWEEN
MAGNA GROUP, INC.
AND
UNION PLANTERS CORPORATION
DATED AS OF FEBRUARY 22, 1998
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TABLE OF CONTENTS
Page
Parties................................................................. 1
Preamble............................................................... 1
ARTICLE 1 - TRANSACTIONS AND TERMS OF MERGER........................... 1
1.1 Merger......................................................... 1
1.2 Time and Place of Closing...................................... 2
1.3 Effective Time................................................. 2
1.4 Execution of Stock Option Agreement............................ 2
ARTICLE 2 - TERMS OF MERGER............................................ 2
2.1 Charter........................................................ 2
2.2 Bylaws......................................................... 2
2.3 Directors and Officers......................................... 3
ARTICLE 3 - MANNER OF CONVERTING SHARES................................ 3
3.1 Conversion of Shares........................................... 3
3.2 Anti-Dilution Provisions....................................... 3
3.3 Shares Held by Magna or UPC.................................... 4
3.4 Dissenting Stockholders........................................ 4
3.5 Fractional Shares.............................................. 4
3.6 Conversion of Stock Rights..................................... 4
ARTICLE 4 - EXCHANGE OF SHARES......................................... 6
4.1 Exchange Procedures............................................ 6
4.2 Rights of Former Magna Stockholders............................ 6
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF MAGNA.................... 7
5.1 Organization, Standing, and Power.............................. 7
5.2 Authority; No Breach by Agreement.............................. 7
5.3 Capital Stock.................................................. 8
5.4 Magna Subsidiaries............................................. 9
5.5 SEC Filings, Financial Statements.............................. 9
5.6 Absence of Undisclosed Liabilities............................. 10
5.7 Absence of Certain Changes or Events........................... 10
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5.8 Tax Matters.................................................... 10
5.9 Assets......................................................... 11
5.10 Environmental Matters.......................................... 12
5.11 Compliance with Laws........................................... 13
5.12 Labor Relations................................................ 13
5.13 Employment Benefit Plans....................................... 13
5.14 Material Contracts............................................. 16
5.15 Legal Proceedings.............................................. 16
5.16 Reports........................................................ 17
5.17 Statements True and Correct.................................... 17
5.18 Accounting, Tax, and Regulatory Matters........................ 17
5.19 State Takeover Laws............................................ 17
5.20 Charter Provisions............................................. 18
5.21 Rights Agreement............................................... 18
5.22 Derivatives.................................................... 18
5.23 Year 2000...................................................... 18
ARTICLE 6 - REPRESENTATION AND WARRANTIES OF UPC....................... 18
6.1 Organization, Standing, and Power.............................. 18
6.2 Authority; No Breach By Agreement.............................. 19
6.3 Capital Stock.................................................. 20
6.4 UPC Subsidiaries............................................... 20
6.5 SEC Filings; Financial Statements.............................. 20
6.6 Absence of Undisclosed Liabilities............................. 21
6.7 Absence of Certain Changes or Events........................... 21
6.8 Tax Matters.................................................... 21
6.9 Assets......................................................... 22
6.10 Environmental Matters.......................................... 23
6.11 Compliance with Laws........................................... 24
6.12 Labor Relations................................................ 24
6.13 Legal Proceedings.............................................. 24
6.14 Reports........................................................ 25
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6.15 Statements True and Correct.................................... 25
6.16 Accounting, Tax, and Regulatory Matters........................ 25
6.17 Employee Benefit Plans......................................... 25
6.18 Derivatives.................................................... 26
6.19 Year 2000...................................................... 26
ARTICLE 7 - CONDUCT OF BUSINESS PENDING CONSUMMATION................... 26
7.1 Affirmative Covenants of Both Parties.......................... 26
7.2 Negative Covenants of Magna.................................... 27
7.3 Adverse Changes in Condition................................... 29
7.4 Reports........................................................ 29
ARTICLE 8 - ADDITIONAL AGREEMENTS...................................... 29
8.1 Registration Statement; Joint Proxy Statement;
Stockholder Approvals.......................................... 29
8.2 Exchange Listing............................................... 30
8.3 Applications................................................... 30
8.4 Filings with State Offices..................................... 30
8.5 Agreement as to Efforts to Consummate.......................... 30
8.6 Investigation and Confidentiality.............................. 31
8.7 Press Releases................................................. 31
8.8 Certain Actions................................................ 31
8.9 Accounting and Tax Treatment................................... 32
8.10 State Takeover Laws............................................ 32
8.11 Charter Provisions............................................. 32
8.12 Rights Agreement............................................... 32
8.13 Agreement of Affiliates........................................ 33
8.14 Employee Benefits and Contracts................................ 33
8.15 Indemnification................................................ 34
8.16 Certain Modifications.......................................... 35
8.17 Pending Magna Acquisition...................................... 36
ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE.......... 36
9.1 Conditions to Obligations of Each Party........................ 36
9.2 Conditions to Obligations of UPC............................... 37
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9.3 Conditions to Obligations of Magna............................. 38
ARTICLE 10 - TERMINATION............................................... 39
10.1 Termination.................................................... 39
10.2 Effect of Termination.......................................... 40
10.3 Non-Survival of Representations and Covenants.................. 41
ARTICLE 11 - MISCELLANEOUS............................................. 41
11.1 Definitions.................................................... 41
11.2 Expenses....................................................... 50
11.3 Brokers and Finders............................................ 50
11.4 Entire Agreement............................................... 50
11.5 Amendments..................................................... 50
11.6 Waivers........................................................ 51
11.7 Assignment..................................................... 51
11.8 Notices........................................................ 51
11.9 Governing Law.................................................. 52
11.10 Counterparts................................................... 53
11.11 Captions....................................................... 53
11.12 Interpretations................................................ 53
11.13 Enforcement of Agreement....................................... 53
11.14 Severability................................................... 53
Signatures............................................................. 54
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LIST OF EXHIBITS
EXHIBIT NUMBER DESCRIPTION
1. Form of Stock Option Agreement (Section 1.4)
2. Form of Plan of Merger (Section 1.1)
3. Form of Affiliate Agreement (Sections 8.13, 9.2(d))
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made and
entered into as of February 22, 1998, by and between MAGNA GROUP, INC.
("Magna"), a corporation organized and existing under the Laws of the State of
Delaware, with its principal office located in St. Louis, Missouri, and UNION
PLANTERS CORPORATION ("UPC"), a corporation organized and existing under the
Laws of the State of Tennessee, with its principal office located in Memphis,
Tennessee.
PREAMBLE
The Board of Directors of Magna and UPC 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 Magna by UPC pursuant to the merger (the "Merger") of Magna with
and into Union Planters Holding Corporation ("UPHC"), a wholly-owned subsidiary
of UPC organized under the Laws of the State of Tennessee. At the effective time
of the Merger, the outstanding shares of the common stock of Magna shall be
converted into shares of the common stock of UPC (except as provided herein) and
the outstanding shares of preferred stock of Magna shall be converted into cash
payments. As a result, stockholders of Magna shall become stockholders of UPC,
and UPHC shall continue to conduct the business and operations of Magna as a
wholly-owned subsidiary of UPC. The transactions described in this Agreement are
subject to the approvals of the stockholders of Magna, the stockholders of UPC,
the Board of Governors of the Federal Reserve System, and certain state
regulatory authorities, and the satisfaction of certain other conditions
described in this Agreement. It is the intention of the parties to this
Agreement that the Merger (i) for federal income tax purposes shall qualify as a
"reorganization" within the meaning of Section 368(a) of the Internal Revenue
Code and (ii) for accounting purposes shall qualify for treatment as a pooling
of interests.
Immediately after the execution and delivery of this Agreement, as a
condition and inducement to UPC's willingness to enter into this Agreement,
Magna and UPC are entering into a stock option agreement (the "Stock Option
Agreement"), in substantially the form of Exhibit 1, pursuant to which Magna is
granting to UPC an option to purchase shares of Magna Common Stock.
Certain terms used in this Agreement are defined in Section 11.1 of this
Agreement.
NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants, and agreements set forth herein, the Parties agree
as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 MERGER. Subject to the terms and conditions of this Agreement, at the
Effective Time, Magna shall be merged with and into UPHC in accordance with the
provisions of Section
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252 of the DGCL and with the effect provided in Section 259 of the DGCL and in
accordance with the provisions of Section 48-21-109 of the TBCA and with the
effect provided in Section 48-21-108 of the TBCA (the "Merger"). UPHC shall be
the Surviving Corporation resulting from the Merger and shall continue to be
governed by the Laws of the State of Tennessee. The Merger shall be consummated
pursuant to the terms of this Agreement, which has been approved and adopted by
the respective Board of Directors of Magna and UPC, and the Plan of Merger, in
substantially the form of Exhibit 2, which has been approved and adopted by the
Board of Directors of Magna and will be approved and adopted by the Board of
Directors of UPHC prior to the Effective Time.
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, 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
Certificate of Merger shall become effective with the Secretary of State of the
State of Delaware and the Articles of Merger shall become effective with the
Secretary of State of the State of Tennessee (the "Effective Time"). Subject to
the terms and conditions hereof, unless otherwise mutually agreed upon in
writing by the duly authorized officers of each Party, the Parties shall use
their reasonable efforts to cause the Effective Time to occur on or before the
15th business day (as designated by UPC) following the last to occur of (i) the
effective date (including expiration of any applicable waiting period) of the
last required Consent of any Regulatory Authority having authority over and
approving or exempting the Merger and (ii) the date on which the stockholders of
UPC and Magna approve the matters relating this Agreement required to be
approved by such stockholders by applicable Law.
1.4 EXECUTION OF STOCK OPTION AGREEMENT. Immediately after the execution
of this Agreement and as a condition hereto, Magna is executing and delivering
to UPC the Stock Option Agreement.
ARTICLE 2
TERMS OF MERGER
2.1 CHARTER. The Charter of UPHC in effect immediately prior to the
Effective Time shall be the Charter of the Surviving Corporation after the
Effective Time until otherwise amended or repealed.
2.2 BYLAWS. The Bylaws of UPHC 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.
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2.3 DIRECTORS AND OFFICERS. The directors of UPHC in office immediately
prior to the Effective Time, together with such additional individuals
thereafter 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 UPHC in office immediately prior to the Effective
Time, together with such additional individuals thereafter 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 UPC or Magna, or the stockholders of either of the foregoing, the shares of
the constituent corporations shall be converted as follows:
(a) Each share of UPC 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 UPHC Common Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and
outstanding from and after the Effective Time.
(c) Each share of Magna Common Stock (including any associated
Preferred Stock Purchase Rights, but excluding shares held by any Magna
Company or any UPC Company, in each case other than in a fiduciary
capacity or as a result of debts previously contracted) issued and
outstanding at the Effective Time shall be converted into .9686 of a share
of UPC Common Stock (the "Exchange Ratio"). Pursuant to the UPC Rights
Agreement, each share of UPC Common Stock issued in connection with the
Merger upon conversion of Magna Common Stock shall be accompanied by a UPC
Right.
(d) Each share of Magna Class B Preferred Stock (excluding any
shares held by any Magna Company or any UPC Company, in each case other
than in a fiduciary capacity as a result of debts previously contracted)
issued and outstanding at the Effective Time, shall be converted into the
right to receive a check from UPC in the amount of the Preferred Stock
Cash Payment Amount.
3.2 ANTI-DILUTION PROVISIONS. In the event Magna changes the number of
shares of Magna Common Stock or Magna Class B Preferred Stock issued and
outstanding prior to the Effective Time as a result of a stock split, stock
dividend, recapitalization, or similar transaction with respect to such stock,
the Exchange Ratio and the Preferred Stock Cash Payment Amount, as the case may
be, shall be proportionately adjusted. In the event UPC changes the number of
shares of UPC Common Stock issued and outstanding prior to the Effective Time as
a result of a stock split, stock dividend, recapitalization, or similar
transaction with respect to such stock and
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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 MAGNA OR UPC. Each of the shares of Magna Capital
Stock held by any Magna Company or by any UPC Company, in each case other than
in a fiduciary capacity or as a result of debts previously contracted, shall be
canceled and retired at the Effective Time and no consideration shall be issued
in exchange therefor.
3.4 DISSENTING STOCKHOLDERS. Any holder of shares of Magna Class B
Preferred Stock who perfects such holder's dissenters' rights of appraisal in
accordance with and as contemplated by Section 262 of the DGCL shall be entitled
to receive the value of such shares in cash as determined pursuant to such
provision of Law, provided, however, that no such payment shall be made to any
dissenting stockholder unless and until such dissenting stockholder has complied
with the applicable provisions of the DGCL and surrendered to Magna the
certificate or certificates representing the shares for which payment is being
made. In the event that after the Effective Time a dissenting stockholder of
Magna fails to perfect, or effectively withdraws or loses, such holder's right
to appraisal of and payment for such holder's shares, UPC shall issue and
deliver the consideration to which such holder of shares of Magna Class B
Preferred Stock is entitled under this Article 3 (without interest) upon
surrender by such holder of the certificate or certificates representing shares
of Magna Class B Preferred Stock held by such holder. Magna will establish an
escrow account with an amount sufficient to satisfy the maximum aggregate
payment that may be required to be paid to dissenting stockholders. Upon
satisfaction of all claims of dissenting stockholders, the remaining escrowed
amount, reduced by payment of the fees and expenses of the escrow agent, will be
returned to the Surviving Corporation.
3.5 FRACTIONAL SHARES. Notwithstanding any other provision of this
Agreement, each holder of shares of Magna Common Stock exchanged pursuant to the
Merger who would otherwise have been entitled to receive a fraction of a share
of UPC Common Stock (after taking into account all certificates delivered by
such holder) shall receive, in lieu thereof, cash (without interest) in an
amount equal to such fractional part of a share of UPC Common Stock multiplied
by the market value of one share of UPC Common Stock at the Effective Time. The
market value of one share of UPC Common Stock at the Effective Time shall be the
last sale price of UPC Common Stock on the NYSE-Composite Transactions List (as
reported by The Wall Street Journal or, if not reported thereby, any other
authoritative source selected by UPC) on the last trading day preceding the
Effective Time. No such holder will be entitled to dividends, voting rights, or
any other rights as a stockholder in respect of any fractional shares.
3.6 CONVERSION OF STOCK RIGHTS.
(a) At the Effective Time, each award, option, or other right to
purchase or acquire shares of Magna Common Stock pursuant to stock options,
stock appreciation rights, or stock awards ("Magna Rights") granted by Magna
under the Magna Stock Plans, which are outstanding at the Effective Time,
whether or not exercisable, shall be converted into and become rights with
respect to UPC Common Stock, and UPC shall assume each Magna Right, in
accordance with the terms of the Magna Stock Plan and stock option agreement by
which it is evi-
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denced, except that from and after the Effective Time, (i) UPC
and its Salary and Benefits Committee shall be substituted for Magna and the
Committee of Magna's Board of Directors (including, if applicable, the entire
Board of Directors of Magna) administering such Magna Stock Plan, (ii) each
Magna Right assumed by UPC may be exercised solely for shares of UPC Common
Stock (or cash in the case of stock appreciation rights), (iii) the number of
shares of UPC Common Stock subject to such Magna Right shall be equal to the
number of shares of Magna Common Stock subject to such Magna Right immediately
prior to the Effective Time multiplied by the Exchange Ratio and rounding down
to the nearest whole share, and (iv) the per share exercise price (or similar
threshold price, in the case of stock awards) under each such Magna Right shall
be adjusted by dividing the per share exercise (or threshold) price under each
such Magna Right by the Exchange Ratio and rounding up to the nearest cent.
Notwithstanding the provisions of clauses (iii) and (iv) of the first sentence
of this Section 3.6, each Magna Right which is an "incentive stock option" shall
be adjusted as required by Section 424 of the Internal Revenue Code, 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. UPC agrees to take all
necessary steps to effectuate the foregoing provisions of this Section 3.6.
(b) As soon as reasonably practicable after the Effective Time, UPC
shall deliver to the participants in each Magna Stock Plan an appropriate notice
setting forth such participant's rights pursuant thereto and the grants pursuant
to such Magna Stock Plan shall continue in effect on the same terms and
conditions (subject to the adjustments required by Section 3.6(a) after giving
effect to the Merger), and UPC shall comply with the terms of each Magna Stock
Plan to ensure, to the extent required by, and subject to the provisions of,
such Magna Stock Plan, the Magna 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, UPC shall
take all corporate action necessary to reserve for issuance sufficient shares of
UPC Common Stock for delivery upon exercise of Magna Rights assumed by it in
accordance with this Section 3.6. As soon as reasonably practicable after the
Effective Time, UPC 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 UPC Common Stock subject to such options and shall use its
reasonable efforts to maintain the effectiveness of such registration statements
(and maintain the current status of the prospectus or prospectuses contained
therein) for so long as such options remain outstanding. With respect to those
individuals who subsequent to the Merger will be subject to the reporting
requirements under Section 16(a) of the 1934 Act, where applicable, UPC shall
administer the Magna Stock Plan assumed pursuant to this Section 3.6 in a manner
that complies with Rule 16b-3 promulgated under the 1934 Act.
(c) All restrictions or limitations on transfer with respect to
Magna Common Stock awarded under the Magna Stock Plans or any other plan,
program, or arrangement of any Magna 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 UPC Common Stock into which
such restricted stock is converted pursuant to Section 3.1 of this Agreement.
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ARTICLE 4
EXCHANGE OF SHARES
4.1 EXCHANGE PROCEDURES. Promptly after the Effective Time, UPC and Magna
shall cause the exchange agent selected by UPC (the "Exchange Agent") to mail to
the former stockholders of Magna appropriate transmittal materials (which shall
specify that delivery shall be effected, and risk of loss and title to the
certificates theretofore representing shares of Magna Capital Stock shall pass,
only upon proper delivery of such certificates to the Exchange Agent). After the
Effective Time, each holder of shares of Magna Capital Stock (other than shares
to be canceled pursuant to Section 3.3 of this Agreement or as to which the
holder thereof has perfected dissenters' rights of appraisal as contemplated by
Section 3.4 of this Agreement) issued and outstanding at the Effective Time
shall surrender the certificate or certificates representing such shares to the
Exchange Agent and shall promptly upon surrender thereof receive in exchange
therefor the consideration provided in Section 3.1 of this Agreement, together
with all undelivered dividends or distributions in respect of such shares
(without interest thereon) pursuant to Section 4.2 of this Agreement. To the
extent required by Section 3.5 of this Agreement, each holder of shares of Magna
Capital Stock issued and outstanding at the Effective Time also shall receive,
upon surrender of the certificate or certificates representing such shares, cash
in lieu of any fractional share of UPC Common Stock to which such holder may be
otherwise entitled (without interest). UPC shall not be obligated to deliver the
consideration to which any former holder of Magna Capital Stock is entitled as a
result of the Merger until such holder surrenders such holder's certificate or
certificates representing the shares of Magna Capital Stock for exchange as
provided in this Section 4.1 The certificate or certificates of Magna Capital
Stock so surrendered shall be duly endorsed as the Exchange Agent may require.
Any other provision of this Agreement notwithstanding, neither the Surviving
Corporation nor the Exchange Agent shall be liable to a holder of Magna Capital
Stock for any amounts paid or property delivered in good faith to a public
official pursuant to any applicable abandoned property Law.
4.2 RIGHTS OF FORMER MAGNA STOCKHOLDERS. At the Effective Time, the stock
transfer books of Magna shall be closed as to holders of Magna Capital Stock
immediately prior to the Effective Time and no transfer of Magna Capital 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 Magna Capital Stock (other
than shares to be canceled pursuant to Section 3.3 of this Agreement or as to
which the holder thereof has perfected dissenters' rights of appraisal as
contemplated by Section 3.4 of this Agreement) shall from and after the
Effective Time represent for all purposes only the right to receive the
consideration provided in Sections 3.1 and 3.5 of this Agreement in exchange
therefor, 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 Magna in respect of such
shares of Magna Capital 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 Magna shall be entitled to vote after the
Effective Time at any meeting of UPC stockholders the number of whole shares of
UPC Common Stock into which their respective shares of Magna Common Stock are
converted, regardless of whether such holders have exchanged their certificates
representing Magna Common Stock for certificates representing UPC Common Stock
in accordance with the provisions of this Agreement. Whenever a
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dividend or other distribution is declared by UPC on the UPC Common Stock, the
record date for which is at or after the Effective Time, the declaration shall
include dividends or other distributions on all shares issuable pursuant to this
Agreement, but beginning 30 days after the Effective Time no dividend or other
distribution payable to the holders of record of UPC Common Stock as of any time
subsequent to the Effective Time shall be delivered to the holder of any
certificate representing shares of Magna Common Stock issued and outstanding at
the Effective Time until such holder surrenders such certificate for exchange as
provided in Section 4.1 of this Agreement. However, upon surrender of such Magna
Common Stock certificate, both the UPC Common Stock certificate (together with
all such undelivered dividends or other distributions without interest) and any
undelivered dividends and cash payments to be paid for fractional share
interests (without interest) shall be delivered and paid with respect to each
share represented by such certificate.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF MAGNA
Except as set forth in the Magna Disclosure Memorandum referencing a
specific section of this Agreement, Magna hereby represents and warrants to UPC
as follows:
5.1 ORGANIZATION, STANDING, AND POWER. Magna 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. Magna 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 Magna.
5.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) Magna has the corporate power and authority necessary to
execute, deliver, and perform its obligations under this Agreement and the Plan
of Merger and to consummate the transactions contemplated hereby and thereby.
The execution, delivery, and performance of this Agreement and the Plan of
Merger, and the consummation of the transactions contemplated herein and
therein, including the Merger, have been duly and validly authorized by all
necessary corporate action in respect thereof on the part of Magna, subject to
the approval of this Agreement and the Plan of Merger by holders of the
requisite number of shares of Magna Capital Stock, voting together as one class,
as required by Law, which is the only stockholder vote required for approval of
this Agreement and the Plan of Merger and consummation of the Merger by Magna.
Subject to such requisite stockholder approval, this Agreement and the Plan of
Merger represent legal, valid, and binding obligations of Magna, enforceable
against Magna in accordance with their respective 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 eq-
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uitable 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 and the
Plan of Merger by Magna, nor the consummation by Magna of the transactions
contemplated hereby or thereby, nor compliance by Magna with any of the
provisions hereof or thereof, will (i) conflict with or result in a breach of
any provision of Magna's Certificate of Incorporation or Bylaws or (ii)
constitute or result in a Default under, or require any Consent pursuant to, or
result in the creation of any Lien on any Asset of any Magna Company under, any
Contract or Permit of any Magna 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 Magna, 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 Magna 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 NYSE, 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 Magna, no notice to, filing with, or
Consent of, any public body or authority is necessary for the consummation by
Magna of the Merger and the other transactions contemplated in this Agreement
and the Plan of Merger.
5.3 CAPITAL STOCK.
(a) The authorized capital stock of Magna consists, as of the date
of this Agreement, of (i) 80,000,000 shares of Magna Common Stock, of which
32,649,181 shares were issued and outstanding as of February 20, 1998 and,
excluding shares of Magna Common Stock issuable in connection with the
transaction referenced in Section 8.17 of this Agreement and without taking into
account any shares of Magna Common Stock repurchased by Magna prior to the
Effective Time, not more than 35,257,887 shares will be issued and outstanding
at the Effective Time, (ii) 1,000,000 shares of Magna Preferred Stock, of which
no shares are issued and outstanding as of the date of this Agreement and no
shares will be issued and outstanding as of the Effective Time, (iii) 49,500
shares of Magna Class B Preferred Stock, of which 1,981 shares are issued and
outstanding as of the date of this Agreement and not more than 1,981 shares will
be issued and outstanding at the Effective Time, and (iv) 1,000,000 shares of
Magna Class C Preferred Stock, of which no shares are issued and outstanding as
of the date of this Agreement and no shares will be issued and outstanding at
the Effective Time. All of the issued and outstanding shares of Magna Common
Stock are duly and validly issued and outstanding and are fully paid and
nonassessable under the DGCL. None of the outstanding shares of Magna Common
Stock has been issued in violation of any preemptive rights of the current or
past stockholders of Magna.
(b) Except (i) as set forth in Section 5.3(a) of this Agreement,
(ii) with respect to shares of Magna Common Stock issuable under the Magna
Dividend Reinvestment Plan and the Magna Employee Stock Purchase Plan and
1,337,194 shares of Magna Common Stock sub-
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ject to outstanding options under the Magna Stock Plans, (iii) as provided
pursuant to the Stock Option Agreement or the Magna Rights Agreement, or (iv)
pursuant to the 7% Convertible Subordinated Capital Notes and 8-3/4% Convertible
Subordinated Debentures of Magna, there are no shares of capital stock or other
equity securities of Magna outstanding and no outstanding Rights relating to the
capital stock of Magna.
5.4 MAGNA SUBSIDIARIES. Magna has disclosed in Section 5.4 of the Magna
Disclosure Memorandum all of the Magna Subsidiaries as of the date of this
Agreement. Magna or one of its Subsidiaries owns all of the issued and
outstanding shares of capital stock of each Magna Subsidiary. No equity
securities of any Magna Subsidiary are or may become required to be issued
(other than to another Magna Company) by reason of any Rights, and there are no
Contracts by which any Magna Subsidiary is bound to issue (other than to another
Magna Company) additional shares of its capital stock or Rights or by which any
Magna Company is or may be bound to transfer any shares of the capital stock of
any Magna Subsidiary (other than to another Magna Company). There are no
Contracts relating to the rights of any Magna Company to vote or to dispose of
any shares of the capital stock of any Magna Subsidiary. All of the shares of
capital stock of each Magna Subsidiary held by a Magna Company are duly
authorized, validly issued, and fully paid and, except as provided in statutes
pursuant to which depository institution Subsidiaries are organized,
nonassessable under the applicable corporation Law of the jurisdiction in which
such Subsidiary is incorporated or organized and are owned by the Magna Company
free and clear of any Lien. Each Magna 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 Magna 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 Magna. Each Magna Subsidiary that is a depository institution is an
"insured institution" as defined in the Federal Deposit Insurance Act and
applicable regulations thereunder, and the deposits in which are insured by the
Bank Insurance Fund or Savings Association Insurance Fund.
5.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Magna has filed and made available to UPC all forms, reports,
and documents required to be filed by Magna with the SEC since December 31, 1993
(collectively, the "Magna SEC Reports"). The Magna 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
Magna SEC Reports or necessary in order to make the statements in such Magna SEC
Reports, in light of the circumstances under which they were made, not
misleading. Except for Magna Subsidiaries that are registered as a broker,
dealer, or investment advisor or filings required due to fiduciary holdings of
the
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Magna Subsidiaries, none of Magna's Subsidiaries is required to file any
forms, reports, or other documents with the SEC.
(b) Each of the Magna Financial Statements (including, in each
case, any related notes) contained in the Magna SEC Reports, including any Magna
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 prepared 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 Magna 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 Magna Company has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Magna, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of Magna as of
September 30, 1997, included in the Magna Financial Statements or reflected in
the notes thereto and except for Liabilities incurred in the ordinary course of
business subsequent to September 30, 1997. No Magna Company has incurred or paid
any Liability since September 30, 1997, 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 Magna.
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since September 30, 1997,
except as disclosed in the Magna Financial Statements, (i) there have been no
events, changes, or occurrences which have had, or are reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Magna and
(ii) the Magna Companies have conducted their respective businesses in the
ordinary and usual course (excluding the incurrence of expenses in connection
with this Agreement and the transactions contemplated hereby).
5.8 TAX MATTERS.
(a) All Tax Returns required to be filed by or on behalf of any of
the Magna 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, 1996, and, to the Knowledge of Magna, 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 Magna, except to
the extent reserved against in the Magna Financial Statements dated prior to the
date of this Agree-
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ment. All Taxes and other Liabilities due with respect to completed and settled
examinations or concluded Litigation have been paid.
(b) None of the Magna Companies has executed an extension or waiver
of any statute of limitations on the assessment or collection of any Tax due
(excluding such statutes that relate to years currently under examination by the
Internal Revenue Service or other applicable taxing authorities) that is
currently in effect.
(c) Adequate provision for any Taxes due or to become due for any
of the Magna Companies for the period or periods through and including the date
of the respective Magna Financial Statements has been made and is reflected on
such Magna Financial Statements.
(d) Each of the Magna Companies is in compliance with, and its
records contain all information and documents (including properly completed IRS
Forms W-9) necessary to comply with, all applicable information reporting and
Tax withholding requirements under federal, state, and local Tax Laws, and such
records identify with specificity all accounts subject to backup withholding
under Section 3406 of the Internal Revenue Code, except for such instances of
noncompliance and such omissions as are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Magna.
(e) None of the Magna Companies has made any payments is obligated
to make any payments, or is a party to any contract, agreement, or other
arrangement that could obligate it to make any payments that would be disallowed
as a deduction under Section 280G or 162(m) of the Internal Revenue Code.
(f) There are no Material Liens with respect to Taxes upon any of
the Assets of the Magna Companies.
(g) No Magna Company has filed any consent under Section 341(f) of
the Internal Revenue Code concerning collapsible corporations.
5.9 ASSETS. The Magna Companies have good and marketable title, free and
clear of all Liens, to all of their respective Assets, except where the failure
to have such good and marketable title is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Magna. All
tangible properties used in the businesses of the Magna Companies are in good
condition, reasonable wear and tear excepted, and are usable in the ordinary
course of business consistent with Magna's past practices. All Assets which are
Material to Magna's business on a consolidated basis, held under leases or
subleases by any of the Magna Companies, are held under valid Contracts
enforceable in accordance with their respective terms (except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
or other Laws affecting the enforcement of creditors' rights generally and
except that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceedings may be brought), and each such Contract is in full force and effect.
The Magna Companies currently maintain insurance in amounts, scope, and coverage
reasonably necessary for their operations. None of the Magna Companies has
received notice from any insurance carrier that (i) such insurance will be
canceled or that coverage thereunder will be re-
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duced or eliminated or (ii) premium costs with respect to such policies of
insurance will be substantially increased. The Assets of the Magna Companies
include all Assets required to operate the business of the Magna Companies as
presently conducted.
5.10 ENVIRONMENTAL MATTERS.
(a) To the Knowledge of Magna, each Magna Company, its
Participation Facilities, and its Loan Properties are, and have been, in
compliance with all Environmental Laws, except those violations which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Magna.
(b) There is no Litigation pending or, to the Knowledge of Magna,
threatened before any court, governmental agency, or authority, or other forum
in which any Magna Company or any of its Participation Facilities has been or,
with respect to threatened Litigation, may reasonably be expected to be named as
a defendant (i) for alleged noncompliance (including by any predecessor) with
any Environmental Law or (ii) relating to the release into the environment of
any Hazardous Material, whether or not occurring at, on, under, or involving a
site owned, leased, or operated by any Magna Company or any of its Participation
Facilities, except for such Litigation pending or threatened that is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Magna.
(c) There is no Litigation pending, or to the Knowledge of Magna,
threatened before any court, governmental agency, or board, or other forum in
which any of its Loan Properties (or Magna in respect of such Loan Property) has
been or, with respect to threatened Litigation, may reasonably be expected to be
named as a defendant or potentially responsible party (i) for alleged
noncompliance (including by any predecessor) with any Environmental Law or (ii)
relating to the release into the environment of any Hazardous Material, whether
or not occurring at, on, under, or involving a Loan Property, except for such
Litigation pending or threatened that is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Magna.
(d) To the Knowledge of Magna, 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 Magna.
(e) To the Knowledge of Magna, during the period of (i) any Magna
Company's ownership or operation of any of their respective current properties,
(ii) any Magna Company's participation in the management of any Participation
Facility, or (iii) any Magna Company's holding of a security interest in a Loan
Property, there have been no releases of Hazardous Material in, on, under, or
affecting (or potentially affecting) such properties, except such as are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Magna. To the Knowledge of Magna, prior to the period of (i) any Magna
Company's ownership or operation of any of their respective current properties,
(ii) any Magna Company's participation in the management of any Participation
Facility, or (iii) any Magna Company's holding of a security interest in a Loan
Property, to the Knowledge of Magna, there were no releases of Hazardous
Material in, on, under, or affecting any such property, Participation Facility,
or Loan Property,
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except such as are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Magna.
5.11 COMPLIANCE WITH LAWS. Magna is duly registered as a bank holding
company under the BHC Act. Each Magna 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 Magna, 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 Magna. None of
the Magna 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 Magna; 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 Magna 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 Magna, (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 Magna, or (iii) requiring any
Magna 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.
5.12 LABOR RELATIONS. No Magna Company is the subject of any Litigation
asserting that it or any other Magna 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 Magna Company to bargain with
any labor organization as to wages or conditions of employment, nor is any Magna
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 Magna Company,
pending or, to the Knowledge of Magna, threatened, or, to the Knowledge of
Magna, is there any activity involving any Magna Company's employees seeking to
certify a collective bargaining unit or engaging in any other organization
activity.
5.13 EMPLOYMENT BENEFIT PLANS.
(a) Magna has disclosed to UPC in writing prior to the execution of
the Agreement and in Section 5.13 of the Magna Disclosure Memorandum, and has
delivered or made available to UPC prior to the execution of this Agreement
correct and complete copies in each case of, all Material Magna Benefits Plans.
For purposes of this Agreement, "Magna Benefit Plans" means all pension,
retirement, profit-sharing, deferred compensation, stock option, em-
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ployee stock ownership, severance pay, vacation, bonus, or other incentive
plans, all other written employee programs or agreements, all medical, vision,
dental, or other health plans, all life insurance plans, and all other employee
benefit plans or fringe benefit plans, including, without limitation, "employee
benefit plans" as that term is defined in Section 3(3) of ERISA maintained by,
sponsored in whole or in part by, or contributed to by, any Magna Company for
the benefit of employees, retirees, dependents, spouses, director, 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 Magna Benefit Plans which is an
"employee welfare benefit plan," as that term is defined in Section 3(1) 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 "Magna ERISA Plan." Any Magna ERISA
Plan which is also a "defined benefit plan" (as defined in Section 414(j) of the
Internal Revenue Code or Section 3(35) of ERISA) is referred to herein as a
"Magna Pension Plan." Neither Magna nor any Magna 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, maintained by any Magna
Company at any time during the last six years that was intended to qualify under
Section 401(a) of the Internal Revenue Code and with respect to which any Magna
Company has any Liability, is disclosed as such in Section 5.13 of the Magna
Disclosure Memorandum.
(b) Magna has delivered or made available to UPC 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 Magna
Benefit Plans (including insurance contracts), and all amendments thereto, (ii)
with respect to any such Magna Benefit Plans or amendments thereto, all
determination letters, rulings, opinion letters, information letters, or
advisory opinions issued by the Internal Revenue Service, the United States
Department of Labor, or the Pension Benefit Guaranty Corporation after December
31, 1994, (iii) annual reports or returns, audited or unaudited financial
statements, actuarial valuations and reports, and summary annual reports
prepared for any Magna Benefit Plan with respect to the most recent plan year,
and (iv) the most recent summary plan descriptions and any modifications
thereto.
(c) All Magna Benefit Plans are in compliance with the applicable
terms of ERISA, the Internal Revenue Code, and any other applicable Laws, the
breach or violation of which is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Magna. Each Magna 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 Magna is not aware of any circumstances which could reasonably result in
revocation of any such favorable determination letter. Each trust created under
any Magna ERISA Plan has been determined to be exempt from Tax under Section
501(a) of the Internal Revenue Code and Magna is not aware of any circumstance
which could reasonably result in revocation of such exemption. With respect to
each Magna Benefit Plan, to the Knowledge of Magna, no event has occurred which
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 Magna. There is no Material pending or, to the
Knowledge of Magna, threatened Litigation (other than routine claims for
benefits) relating to any Magna ERISA Plan.
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(d) No Magna Company has engaged in a transaction with respect to
any Magna Benefit Plan that, assuming the Taxable Period of such transaction
expired as of the date of this Agreement, would subject any Magna 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 Magna. Neither
Magna nor, to the Knowledge of Magna, any administrator or fiduciary of any
Magna Benefit Plan (or any agent of any of the foregoing) has engaged in any
transaction, or acted or failed to act in any manner which could subject Magna
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 Magna. Except as disclosed under Section 5.13 of the Magna
Disclosure Memorandum, no oral or written representation or communication with
respect to any aspect of the Magna Benefit Plans has been made to employees of
any Magna Company which is not in accordance with the written or otherwise
preexisting terms and provisions of such plans, where any Liability with respect
to such representation or disclosure is reasonably likely to have a Material
Adverse Effect on Magna.
(e) No Magna 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 all benefits (whether vested or not) accrued to date by all present or former
participants in such Magna Pension Plan exceeds the plan's "benefit liabilities"
as that term is defined in Section 4001(a)(16) of ERISA. For this purpose, the
assumptions for valuing plan Assets or Liabilities shall be the assumptions set
forth in the most recent actuarial valuations and reports with respect to any
such Magna Pension Plan. Since the date of the most recent actuarial valuation,
there has been (i) no Material change in the financial position or funded status
of any Magna Pension Plan, (ii) no change in the actuarial assumptions with
respect to any Magna Pension Plan, and (iii) no increase in benefits under any
Magna Pension Plan as a result of plan amendments or changes in applicable Law,
any of which is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Magna. Neither any Magna Pension Plan nor any
"single-employer plan," within the meaning of Section 4001(a)(15) of ERISA,
currently or formerly maintained by any Magna Company, or the single-employer
plan of any entity which is considered one employer with Magna under Section
4001 of ERISA or Section 414 of the Internal Revenue Code or Section 302 of
ERISA (a "Magna ERISA Affiliate") has an "accumulated funding deficiency" within
the meaning of Section 412 of the Internal Revenue Code or Section 302 of ERISA
(whether or not waived). All contributions with respect to a Magna Pension Plan
or any single-employer plan of a Magna ERISA Affiliate have or will be timely
made and there is no lien or expected to be a lien under Internal Revenue Code
Section 412(n) or ERISA Section 302(f) or Tax under Internal Revenue Code
Section 4971. No Magna Company has provided, or is required to provide, security
to a Magna Pension Plan or to any single-employer plan of a Magna 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
Magna, except to the extent any failure would not have a Material Adverse Effect
on Magna.
(f) No Liability under Title IV of ERISA has been or is expected to
be incurred by any Magna Company with respect to any defined benefit plan
currently or formerly maintained by any of them or by any Magna ERISA Affiliate
that has not been satisfied in full (other than Li-
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ability for Pension Benefit Guaranty Corporation premiums, which have been paid
when due) except to the extent any failure would not have a Material Adverse
Effect on Magna.
(g) Except as set forth in Section 5.13(g) of the Magna Disclosure
Memorandum, no Magna Company has any obligations for retiree health and retiree
life benefits under any of the Magna Benefit Plans other than with respect to
benefit coverage mandated by applicable Law.
(h) Except as set forth in Section 5.13(h) of the Magna 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
Magna Company from any Magna Company under any Magna Benefit Plan or otherwise,
(ii) increase any benefits otherwise payable under any Magna Benefit Plan, or
(iii) result in any acceleration of the time of payment or vesting of any such
benefit.
5.14 MATERIAL CONTRACTS. Except as set forth in Section 5.14 of the Magna
Disclosure Memorandum, none of the Magna Companies, nor any of their respective
Assets, businesses, or operations, is a party to, or is bound or affected by, or
receives benefits under, (i) any employment, severance, termination, consulting,
or retirement Contract providing for aggregate payments to any Person in any
calendar year in excess of $100,000, (ii) any Contract relating to the borrowing
of money by any Magna Company or the guarantee by any Magna Company of any such
obligation (other than Contracts evidencing deposit liabilities, purchases of
federal funds, fully-secured repurchase agreements, and Federal Home Loan Bank
advances of depository institution Subsidiaries, trade payables, and Contracts
relating to borrowings or guarantees made in the ordinary course of business),
and (iii) any other Contract or amendment thereto that would be required to be
filed as an exhibit to a Form 10-K filed by Magna with the SEC as of the date of
this Agreement that has not been filed as an exhibit to Magna's Form 10-K filed
for the fiscal year ended December 31, 1996, or in another SEC Document
(together with all Contracts referred to in Sections 5.9 and 5.13(a) of this
Agreement, the "Magna Contracts"). With respect to each Magna Contract: (i) the
Contract is in full force and effect; (ii) no Magna 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 Magna; (iii) no
Magna 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
Magna, in Default in any respect, other than Defaults which are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Magna, or has repudiated or waived any Material provision thereunder.
5.15 LEGAL PROCEEDINGS.
(a) There is no Litigation instituted or pending, or, to the
Knowledge of Magna, threatened (or unasserted but considered probable of
assertion and which if asserted would have at least a reasonable probability of
an unfavorable outcome to any Magna Company) against any Magna Company, or
against any Asset, employee benefit plan, interest, or right of any of them,
that is reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Magna, nor are there any Orders of any Regulatory Authorities,
other governmental authorities,
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or arbitrators outstanding against any Magna Company, that are reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on Magna.
(b) Section 5.15(b) of the Magna Disclosure Memorandum includes a
summary report of all Litigation as of the date of this Agreement to which any
Magna Company is a party and which names a Magna Company as a defendant or
cross-defendant and where the maximum exposure is estimated to be $250,000 or
more.
5.16 REPORTS. Since January 1, 1994, or the date of organization if
later, each Magna 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 Magna. As of their respective dates, each of such reports and
documents, including the financial statements, exhibits, and schedules thereto,
complied in all Material respects with all applicable Laws.
5.17 STATEMENTS TRUE AND CORRECT. None of the information supplied or to
be supplied by any Magna Company regarding Magna for inclusion in the
Registration Statement to be filed by UPC with the SEC will, when the
Registration Statement becomes effective be false or misleading with respect to
any Material fact, or contain any untrue statement of a Material fact, or omit
to state any Material fact required to be stated thereunder or necessary to make
the statements therein not misleading. None of the information supplied or to
lie supplied by any Magna Company for inclusion in the Joint Proxy Statement to
be mailed to UPC's and Magna's stockholders in connection with the Stockholders'
Meetings will, when first mailed to the stockholders of UPC and Magna, be false
or misleading with respect to any Material fact, or contain any misstatement of
Material fact, or omit to state any Material fact required to be stated
thereunder or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading or, in the case of the
Joint Proxy Statement or any amendment thereof or supplement thereto, at the
time of the Stockholders' Meetings, be false or misleading with respect to any
Material fact, or omit to state any Material fact 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' Meetings. All documents that any Magna Company is responsible for
filing with any Regulatory Authority in connection with the transactions
contemplated hereby will comply as to form in all Material respects with the
provisions of applicable Law.
5.18 ACCOUNTING, TAX, AND REGULATORY MATTERS. No Magna Company has taken
or agreed to take any action, and Magna has no Knowledge of any fact or
circumstance that is reasonably likely to (i) prevent the transactions
contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment or as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code or (ii) materially impede
or delay receipt of any Consents of Regulatory Authorities referred to in
Section 9.1(h) of this Agreement or result in the imposition of a condition or
restriction of the type referred to in the last sentence of such Section.
5.19 STATE TAKEOVER LAWS. Each Magna Company has taken all necessary
action to exempt the transactions contemplated by this Agreement and the Plan of
Merger from any appli-
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cable "moratorium," "control share," "fair price," "business combination," or
other anti-takeover laws and regulations, including Section 203 of the DGCL, of
the State of Delaware (collectively, "Takeover Laws").
5.20 CHARTER PROVISIONS. Each Magna Company has taken all action so that
the entering into of this Agreement and the Plan of Merger and the consummation
of the Merger and the other transactions contemplated by this Agreement and the
Plan of Merger do not and will not result in the grant of any rights to any
Person under the Articles of Incorporation, Bylaws, or other governing
instruments of any Magna Company or restrict or impair the ability of UPC or any
of its Subsidiaries to vote, or otherwise to exercise the rights of a
stockholder with respect to, shares of any Magna Company that may be directly or
indirectly acquired or controlled by it.
5.21 RIGHTS AGREEMENT. Magna has taken all necessary action (including,
if required, redeeming all of the outstanding Preferred Stock Purchase Rights or
amending or terminating the Magna Rights Agreement) so that the entering into of
this Agreement and the Plan of Merger, the acquisition of shares pursuant to, or
other exercise of rights under, the Stock Option Agreement and consummation of
the Merger and the other transactions contemplated hereby and thereby do not and
will not result in any Person becoming able to exercise any Preferred Stock
Purchase Rights under the Magna Rights Agreement or enabling or requiring the
Preferred Stock Purchase Rights to be separated from the shares of Magna Common
Stock to which they are attached or to be triggered or to become exercisable.
5.22 DERIVATIVES. All interest rate swaps, caps, floors, option
agreements futures and forward contracts, and other similar risk management
arrangements whether entered into for Magna's own account, or for the account of
one or more the Magna 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.
5.23 YEAR 2000. Magna has disclosed to UPC a complete and accurate copy
of Magna's plan, including an estimate of the anticipated associated costs, for
implementing modifications to Magna's hardware, software, and computer systems,
chips, and microprocessors, to ensure proper execution and accurate processing
of all date-related data, whether from years in the same century or in different
centuries. Between the date of this Agreement and the Effective Time, Magna
shall endeavor to continue its efforts to implement such plan.
ARTICLE 6
REPRESENTATION AND WARRANTIES OF UPC
UPC hereby represents and warrants to Magna as follows:
6.1 ORGANIZATION, STANDING, AND POWER. UPC 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. UPC 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
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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 UPC.
6.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) UPC 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 UPC, subject to the approval
of (i) the UPC Charter Amendment and (ii) the issuance of the shares of UPC
Common Stock pursuant to the Merger by holders of the requisite number of shares
of UPC Common Stock required by Law, which is the only stockholder vote required
for the consummation of the Merger by UPC. Subject to such requisite stockholder
approval, this Agreement represents a legal, valid, and binding obligation of
UPC, enforceable against UPC 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 UPC,
nor the consummation by UPC of the transactions contemplated hereby, nor
compliance by UPC with any of the provisions hereof, will (i) conflict with or
result in a breach of any provision of UPC's Restated Charter of Incorporation
or Bylaws (subject to the amendment of the UPC Restated Charter of Incorporation
pursuant to the UPC Charter Amendment to increase the number of authorized
shares of UPC Common Stock), (ii) constitute or result in Default under, or
require any Consent pursuant to, or result in the creation of any Lien on any
Asset of any UPC Company under, any Contract or Permit of any UPC 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
UPC, 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 UPC
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 NYSE, 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 UPC, no notice to, filing with, or
Consent of, any public body or authority is necessary for the consummation by
UPC of the Merger and the other transactions contemplated in this Agreement.
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6.3 CAPITAL STOCK. The authorized capital stock of UPC consists of (i)
100,000,000 shares of UPC Common Stock, of which 81,650,946 shares are issued
and outstanding as of December 31, 1997 and (ii) 10,000,000 shares of UPC
Preferred Stock, of which 2,188,358 shares of UPC Series E Preferred Stock are
issued and outstanding. All of the issued and outstanding shares of UPC Capital
Stock are, and (subject to the amendment of UPC's Restated Charter of
Incorporation pursuant to the UPC Charter Amendment) all of the shares of UPC
Common Stock to be issued in exchange for shares of Magna Common Stock upon
consummation of the Merger when issued in accordance with the terms of this
Agreement, will be, duly and validly issued and outstanding and fully paid and
nonassessable under the TBCA. None of the outstanding shares of UPC Capital
Stock has been, and none of the shares of UPC Common Stock to be issued in
exchange for shares of Magna Common Stock upon consummation of the Merger will
be, issued in violation of any preemptive rights of the current or past
stockholders of UPC.
6.4 UPC SUBSIDIARIES. Except with respect to Capital Factors, Inc., UPC
or one of its Subsidiaries owns all of the issued and outstanding shares of
capital stock of each UPC Subsidiary. No equity securities of any UPC Subsidiary
are or may become required to be issued (other than to another UPC Company) by
reason of any Rights, and there are no Contracts by which any UPC Subsidiary is
bound to issue (other than to another UPC Company) additional shares of its
capital stock or Rights or by which any UPC Company is or may be bound to
transfer any shares of the capital stock of any UPC Subsidiary (other than to
another UPC Company). There are no Contracts relating to the rights of any UPC
Company to vote or to dispose of any shares of the capital stock of any UPC
Subsidiary. All of the shares of capital stock of each UPC Subsidiary held by a
UPC Company are fully paid and, except as provided in statutes pursuant to which
depository institution Subsidiaries are organized, nonassessable under the
applicable corporation Law of the jurisdiction in which such Subsidiary is
incorporated or organized and are owned by the UPC Company free and clear of any
Lien. Each UPC 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 UPC 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 UPC. Each UPC Subsidiary that is
a depository institution is an "insured institution" as defined in the Federal
Deposit Insurance Act and applicable regulations thereunder, and the deposits in
which are insured by the Bank Insurance Fund or Savings Association Insurance
Fund.
6.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) UPC has filed and made available to Magna all forms, reports,
and documents required to be filed by UPC with the SEC since December 31, 1993
(collectively, the "UPC SEC Reports"). The UPC 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
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to state a Material fact required to be stated in such UPC SEC Reports or
necessary in order to make the statements in such UPC SEC Reports, in light of
the circumstances under which they were made, not misleading. Except for UPC
Subsidiaries that are registered as a broker, dealer, or investment advisor or
filings required due to fiduciary holdings of the UPC Subsidiaries, none of UPC
Subsidiaries is required to file any forms, reports, or other documents with the
SEC.
(b) Each of the UPC Financial Statements (including, in each case,
any related notes) contained in the UPC SEC Reports, including any UPC 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 UPC 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 UPC Company has any
Liabilities that are reasonably likely to have, individually or in the aggregate
a Material Adverse Effect on UPC, except Liabilities which are accrued or
reserved against in the consolidated balance sheets of UPC as of September 30,
1997 included in the UPC Financial Statements or reflected in the notes thereto
and except for Liabilities incurred in the ordinary course of business
subsequent to September 30, 1997. No UPC Company has incurred or paid any
Liability since September 30, 1997, 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 UPC.
6.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since September 30, 1997,
except as disclosed in the UPC Financial Statements delivered prior to the date
of this Agreement, (i) there have been no events, changes or occurrences which
have had, or are reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on UPC and (ii) the UPC Companies have conducted their
respective businesses in the ordinary and usual course (excluding the incurrence
of expenses in connection with this Agreement and the transactions contemplated
hereby).
6.8 TAX MATTERS.
(a) All Tax Returns required to be filed by or on behalf of any of
the UPC 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, 1996, and, to the Knowledge of UPC, 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 UPC, except to
the extent re-
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served against in the UPC Financial Statements dated prior to the date of this
Agreement. All Taxes and other Liabilities due with respect to completed and
settled examinations or concluded Litigation have been paid.
(b) None of the UPC Companies has executed an extension or waiver
of any statute of limitations on the assessment or collection of any Tax due
(excluding such statutes that relate to years currently under examination by the
Internal Revenue Service or other applicable taxing authorities) that is
currently in effect.
(c) Adequate provision for any Taxes due or to become due for any
of the UPC Companies for the period or periods through and including the date of
the respective UPC Financial Statements has been made and is reflected on such
UPC Financial Statements.
(d) Each of the UPC Companies is in compliance with, and its
records contain all information and documents (including properly completed IRS
Forms W-9) necessary to comply with, all applicable information reporting and
Tax withholding requirements under federal, state, and local Tax Laws, and such
records identify with specificity all accounts subject to backup withholding
under Section 3406 of the Internal Revenue Code, except for such instances of
noncompliance and such omissions as are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on UPC.
(e) None of the UPC Companies has made any payments, is obligated
to make any payments, or is a party to any contract, agreement, or other
arrangement that could obligate it to make any payments that would be disallowed
as a deduction under Section 280G or 162(m) of the Internal Revenue Code
(f) There are no Material Liens with respect to Taxes upon any of
the Assets of the UPC Companies.
(g) No UPC Company has filed any consent under Section 341(f) of
the Internal Revenue Code concerning collapsible corporations.
6.9 ASSETS. The UPC Companies have good and marketable title, free and
clear of all Liens, to all of their respective Assets, except where the failure
to have such good and marketable title is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on UPC. All tangible
properties used in the businesses of the UPC Companies are in good condition,
reasonable wear and tear excepted, and are usable in the ordinary course of
business consistent with UPC's past practices. All Assets which are Material to
UPC's business on a consolidated basis, held under leases or subleases by any of
the UPC Companies are held under valid Contracts enforceable in accordance with
their respective terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or other Laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceedings may be brought), and
each such Contract is in full force and effect. The UPC Companies currently
maintain insurance similar in amounts, scope, and coverage reasonably necessary
for their operations. None of the UPC Companies has received notice from any
insurance carrier
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that (i) such insurance will be canceled or that coverage thereunder will be
reduced or eliminated or (ii) premium costs with respect to such policies of
insurance will be substantially increased. The Assets of the UPC Companies
include all Assets required to operate the business of the UPC Companies as
presently conducted.
6.10 ENVIRONMENTAL MATTERS.
(a) To the Knowledge of UPC, each UPC Company, its Participation
Facilities, and its Loan Properties are, and have been, in compliance with all
Environmental Laws, except those violations which are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on UPC.
(b) There is no Litigation pending or, to the Knowledge of UPC,
threatened before any court, governmental agency, or authority, or other forum
in which any UPC Company or any of its Participation Facilities has been or,
with respect to threatened Litigation, may reasonably be expected to be named as
a defendant (i) for alleged noncompliance (including by any predecessor) with
any Environmental Law or (ii) relating to the release into the environment of
any Hazardous Material, whether or not occurring at, on, under, or involving a
site owned, leased, or operated by any UPC Company or any of its Participation
Facilities, except for such Litigation pending or threatened that is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on UPC.
(c) There is no Litigation pending or, to the Knowledge of UPC,
threatened before any court, governmental agency, or board, or other forum in
which any of its Loan Properties (or UPC in respect of such Loan Property) has
been or, with respect to threatened Litigation, may reasonably be expected to be
named as a defendant or potentially responsible party (i) for alleged
noncompliance (including by any predecessor) with any Environmental Law or (ii)
relating to the release into the environment of any Hazardous Material, whether
or not occurring at, on, under, or involving a Loan Property, except for such
Litigation pending or threatened that is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on UPC.
(d) To the Knowledge of UPC, 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 UPC.
(e) To the Knowledge of UPC, during the period of (i) any UPC
Company's ownership or operation of any of their respective current properties,
(ii) any UPC Company's participation in the management of any Participation
Facility, or (iii) any UPC Company's holding of a security interest in a Loan
Property, there have been no releases of Hazardous Material in, on, under, or
affecting (or potentially affecting) such properties, except such as are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on UPC. To the Knowledge of UPC, prior to the period of (i) any UPC
Company's ownership or operation of any of their respective current properties,
(ii) any UPC Company's participation in the management of any Participation
Facility, or (iii) any UPC Company's holding of a security interest in a Loan
Property, to the Knowledge of UPC, there were no releases of Hazardous Material
in, on, under,
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or affecting any such property, Participation Facility, or Loan Property, except
such as are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on UPC.
6.11 COMPLIANCE WITH LAWS. UPC is duly registered as a bank holding
company under the BHC Act. Each UPC 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 UPC, 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 UPC. None of the UPC 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 of have, individually or in the aggregate, a Material
Adverse Effect on UPC; 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 UPC 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 UPC, (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 UPC, or
(iii) requiring any UPC 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.
6.12 LABOR RELATIONS. No UPC Company is the subject of any Litigation
asserting that it or any other UPC 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 UPC Company to bargain with any
labor organization as to wages or conditions of employment nor is any UPC
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 UPC Company, pending
or, to the Knowledge of UPC, threatened, or to the Knowledge of UPC, is there
any activity involving any UPC Company's employees seeking to certify a
collective bargaining unit or engaging in any other organization activity.
6.13 LEGAL PROCEEDINGS. There is no Litigation instituted or pending, or,
to the Knowledge of UPC, threatened (or unasserted but considered probable of
assertion and which if asserted would have at least a reasonable probability of
an unfavorable outcome to any UPC Company) against any UPC Company, or against
any Asset, employee benefit plan, interest, or right of any of them, that is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on UPC, nor are there any Orders of any Regulatory Authorities, other
governmental authorities, or arbitrators outstanding against any UPC Company,
that are reasonably likely to have, individually or in the aggregate a Material
Adverse Effect on UPC.
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6.14 REPORTS. Since January 1, 1994, or the date of organization if
later, each UPC 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 UPC. 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.
6.15 STATEMENTS TRUE AND CORRECT. None of the information supplied or to
be supplied by any UPC Company regarding UPC for inclusion in the Registration
Statement to be filed by UPC with the SEC will, when the Registration Statement
becomes effective, be false or misleading with respect to any Material fact, or
contain any untrue statement of a Material fact, or omit to state any Material
fact required to be stated thereunder or necessary to make the statements
therein not misleading. None of the information supplied or to be supplied by
any UPC Company for inclusion in the Joint Proxy Statement to be mailed to
Magna's and UPC's stockholders in connection with the Stockholders' Meetings,
will, when first mailed to the stockholders of Magna and UPC, be false or
Misleading with respect to any Material fact, or contain any misstatement of
Material fact, or omit to state any Material fact required to be stated
thereunder or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or, in the case of the
Joint Proxy Statement or any amendment thereof or supplement thereto, at the
time of the Stockholders' Meetings, be false or misleading with respect to any
Material fact, or omit to state any Material fact 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' Meetings. All documents that any UPC Company 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.
6.16 ACCOUNTING, TAX, AND REGULATORY MATTERS. No UPC Company or any
Affiliate thereof has taken or agreed to take any action, and UPC has no
Knowledge of any fact or circumstance that is reasonably likely to (i) prevent
the transactions contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment or as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code or (ii) materially impede
or delay receipt of any Consents of Regulatory Authorities referred to in
Section 9.1(b) of this Agreement or result in the imposition of a condition or
restriction of the type referred to in the last sentence of such Section.
6.17 EMPLOYEE BENEFIT PLANS. All UPC Plans are in compliance with the
applicable terms of ERISA, the Internal Revenue Code, and any other applicable
Laws, the breach or violation of which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on UPC. For purposes
of this Agreement, the term "UPC Plan" means each bonus, incentive compensation,
severance pay, medical or other insurance program, retirement plan, or other
employee benefit plan program, agreement, or arrangement sponsored, maintained,
or contributed to by UPC or any trade or business, whether or not incorporated,
that together with UPC or any of its Subsidiaries would be deemed a "single
employer" under Section 4001 of ERISA or Section 414 of the Internal Revenue
Code (a "UPC ERISA Affiliate") or under which UPC or any UPC
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ERISA Affiliate has any Liability or obligation. No Liability under Title IV of
ERISA has been incurred by UPC or any UPC ERISA Affiliate that has not been
satisfied in full, and no condition exists that presents a Material risk to UPC
or any UPC ERISA Affiliate of incurring any such Liability. With respect to any
UPC Plan that is subject to Title IV of ERISA full payment has been made, or
will be made in accordance with Section 404(a)(6) of the Internal Revenue Code,
of all amounts that UPC or any UPC ERISA Affiliate is required to pay under
Section 412 of the Internal Revenue Code or under the terms of the UPC Plans,
and no accumulated funding deficiency (within the meaning of Section 412 of the
Internal Revenue Code or Section 302 ERISA, whether or not waived) exists with
respect to any UPC Plan. There are no Material actions, suits, or claims
pending, or, to the Knowledge of UPC, threatened or anticipated relating to any
UPC Plan. There has been no Material adverse change in the financial position or
funded status of any UPC Plan that is subject to Title IV of ERISA since the
date of the information relating to the financial position and funded status of
each such plan contained in the most recent Annual Report on Form 10-K filed by
UPC with the SEC.
6.18 DERIVATIVES. All interest rate swaps, caps, floors, option
agreement, futures and forward contracts, and other similar risk management
arrangements, whether entered into for UPC's own account, or for the account of
one or more the UPC 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.
6.19 YEAR 2000. UPC has disclosed to Magna a complete and accurate copy
of UPC's plan, including an estimate of the anticipated associated costs, for
implementing modifications to UPC's hardware, software, and computer systems,
chips, and microprocessors, to ensure proper execution and accurate processing
of all date-related data, whether from years in the same century or in different
centuries. Between the date of this Agreement and the Effective Time, UPC shall
endeavor to continue its efforts to implement such plan.
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 AFFIRMATIVE COVENANTS OF BOTH PARTIES. From the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement, unless the prior written consent of the other Party shall have been
obtained, and except as otherwise expressly contemplated herein, each Party
shall and shall cause each of its Subsidiaries to (i) operate its business only
in the usual, regular, and ordinary course, (ii) preserve intact its business
organization and Assets and maintain its rights and franchises, (iii) use its
reasonable efforts to maintain its current employee relationships, and (iv) take
no action which would (a) adversely affect the ability of any Party to obtain
any Consents required for the transactions contemplated hereby without
imposition of a condition or restriction of the type referred to in the last
sentence of Section 9.1(b) of this Agreement, or (b) adversely affect the
ability of any Party to perform its covenants and agreements under this
Agreement; provided that in the case of UPC, the provisions of this Section 7.1
(other than the provisions of clause (iv) above) shall not be deemed to preclude
UPC from continuing to implement its program of acquiring unaffiliated
depository and nondepository institutions.
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7.2 NEGATIVE COVENANTS OF MAGNA. From the date of this Agreement until
the earlier of the Effective Time or the termination of this Agreement, Magna
covenants and agrees that it will not do or agree or commit to do, or permit any
of its Subsidiaries to do or agree or commit to do, any of the following without
the prior written consent of the chief executive officer or chief financial
officer of UPC, which consent shall not be unreasonably withheld:
(a) amend the Articles of Incorporation, Bylaws, or other governing
instruments of any Magna Company or, except as expressly contemplated by
this Agreement, the Magna Rights Agreement; or
(b) incur, guarantee, or otherwise become responsible for, any
additional debt obligation or other obligation for borrowed money (other
than indebtedness of a Magna Company to another Magna Company) in excess
of an aggregate of $1,000,000 (for the Magna Companies on a consolidated
basis), except in the ordinary course of the business consistent with past
practices (which shall include, for Magna Subsidiaries are depository
institutions, creation of deposit liabilities, purchases of federal funds,
advances from the Federal Reserve Bank or Federal Home Loan Bank, and
entry into repurchase agreements fully secured by U.S. government or
agency securities), or impose, or suffer the imposition, on any Asset of
any Magna Company of any Lien or permit any such Lien to exist (other than
in connection with deposits, repurchase agreements, bankers acceptances,
"treasury tax and loan" accounts established in the ordinary course of
business, the satisfaction of legal requirements in the exercise of trust
powers, and Liens in effect as of the date hereof that are disclosed in
the Magna Disclosure Memorandum); or
(c) repurchase, redeem, or otherwise acquire or exchange (other
than exchanges in the ordinary course under employee benefit plans),
directly or indirectly, any shares, or any securities convertible into any
shares, of the capital stock of any Magna Company, or declare or pay any
dividend or make any other distribution in respect of Magna's capital
stock, provided that Magna may (to the extent legally and contractually
permitted to do so), but shall not be obligated to, declare and pay
regular quarterly cash dividends on the shares of (i) Magna Common Stock
at a rate of $0.28 per share and (ii) Magna Class B Preferred Stock at a
rate of $0.375 per share, in each case with usual and regular record and
payment dates in accordance with past practice as disclosed in Section
7.2(c) of the Magna Disclosure Memorandum and such dates may not be
changed without the prior written consent of UPC; 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 Magna Common Stock do not receive both a dividend in
respect of their Magna Common Stock and a dividend in respect of UPC
Common Stock or fail to receive any dividend; or
(d) except for this Agreement, or pursuant to the Stock Option
Agreement or pursuant to the exercise of Rights outstanding as of the date
of this Agreement and pursuant to the terms thereof in existence on the
date of this Agreement, issue, sell, pledge, encumber, authorize the
issuance of, enter into any Contract to issue, sell, pledge, encumber, or
authorize the issuance of, or otherwise permit to become outstanding, any
additional shares of Magna Common Stock or any other capital stock of any
Magna Company, or
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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
Magna Company or issue or authorize the issuance of any other securities
in respect of or in substitution for shares of Magna Common Stock, or
sell, lease, mortgage, or otherwise dispose of or otherwise encumber (i)
any shares of capital stock of any Magna Subsidiary (unless any such
shares of stock are sold or otherwise transferred to another Magna
Company) or (ii) any Asset having a book value in excess of $250,000 other
than in the ordinary course of business for reasonable and adequate
consideration; or
(f) except for purchases of investment securities acquired in the
ordinary course of business consistent with past practice, purchase any
securities or make any Material investment, either by purchase of stock or
securities, contributions to capital, Asset transfers, or purchase of any
Assets, in any Person other than a wholly-owned Magna Subsidiary, or
otherwise acquire direct or indirect control over any Person, other than
in connection with (i) foreclosures in the ordinary course of business,
(ii) acquisitions of control by a depository institution Subsidiary in its
fiduciary capacity, (iii) the creation of new wholly-owned Subsidiaries
organized to conduct or continue activities otherwise permitted by this
Agreement, or (iv), subject to the provisions of Section 8.l7 of this
Agreement, that certain Agreement and Plan of Merger, dated as of November
19, 1997, as amended December 4, 1997, by and between Magna and Charter
Financial, Inc. ("Charter") (the "Charter Agreement"); or
(g) grant any increase in compensation or benefits to the employees
or officers of any Magna Company, except in accordance with the ordinary
course of business consistent with past practice or as required by Law;
pay any severance or termination pay or any bonus other than pursuant to
written policies or written Contracts in effect on the date of this
Agreement; enter into or amend any severance agreements with officers of
any Magna Company; grant any Material increase in fees or other increases
in compensation or other benefits to directors of any Magna Company except
in accordance with the ordinary course of business consistent with past
practice, or voluntarily accelerate the vesting of any stock options or
other stock-based compensation or employee benefits; or
(h) enter into or amend any employment Contract between any Magna
Company and any Person (unless such amendment is required by Law or a
pre-existing contractual obligation) that the Magna Company does not have
the unconditional right to terminate without Liability (other than
Liability for services already rendered), at any time on or after the
Effective Time; or
(i) adopt any new employee benefit plan of any Magna Company or
make any Material change in or to any existing employee benefit plans of
any Magna Company other than any such change that is required by Law or
that, in the opinion of counsel, is necessary or advisable to maintain the
tax qualified status of any such plan; or
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(j) make any significant change in any Tax or accounting methods or
systems of internal accounting controls, except as may be appropriate to
conform to changes in Tax Laws or regulatory accounting requirements or
GAAP; or
(k) commence any Litigation other than as necessary for the prudent
operation of its business or settle any Litigation involving any Liability
of any Magna Company for Material money damages or restrictions upon the
operations of any Magna Company; or
(l) except in the ordinary course of business, modify, amend, or
terminate any Material Contract or waive, release, compromise, or assign
any Material rights or claims.
7.3 ADVERSE CHANGES IN CONDITION. Each Party agrees to give written
notice promptly to the other Party upon becoming aware of the occurrence or
impending occurrence of any event or circumstance relating to it or any of its
Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on it or (ii) would cause or constitute a
Material breach of any of its representations, warranties, or covenants
contained herein, and to use its reasonable efforts to prevent or promptly to
remedy the same.
7.4 REPORTS. Each Party and its Subsidiaries shall file all reports
required to be filed by it with Regulatory Authorities between the date of this
Agreement and the Effective Time and shall deliver to the other Party copies of
all such reports promptly after the same are filed. If financial statements are
contained in any such reports filed with the SEC, such financial statements will
fairly present the consolidated financial position of the entity filing such
statements as of the dates indicated and the consolidated results of operations,
changes in stockholders' equity, and cash flows for the periods then ended in
accordance with GAAP (subject in the case of interim financial statements to
normal recurring year-end adjustments that are not Material). As of their
respective dates, such reports filed with the SEC will comply in all Material
respects with the Securities Laws and will not contain any untrue statement of a
Material fact or omit to state a Material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Any financial statements contained
in any other reports to another Regulatory Authority shall be prepared in
accordance with Laws applicable to such reports.
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 REGISTRATION STATEMENT; JOINT PROXY STATEMENT; STOCKHOLDER APPROVALS.
As soon as reasonably practicable after execution of this Agreement, UPC 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 UPC Common
Stock upon consummation of the Merger. Magna shall furnish all information
concerning it and the holders of its capital stock, as UPC may reasonably
request in connection with such action. Magna 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
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approval of (i) this Agreement and the Plan of Merger and (ii) such other
related matters as it deems appropriate. UPC shall call a Stockholders' Meeting,
to he held as soon as reasonably practicable after the Registration Statement is
declared effective by the SEC, for the purpose of voting upon approval of (i)
the UPC Charter Amendment (to the extent such amendment is not previously
approved at the 1998 annual meeting of stockholders of UPC), (ii) the issuance
of shares of UPC Common Stock pursuant to the Merger, and (iii) such other
related matters as it deems appropriate. In connection with the Stockholders'
Meetings, (i) UPC and Magna shall prepare and file with the SEC a Joint Proxy
Statement and mail such Joint Proxy Statement to their respective stockholders,
(ii) the Parties shall furnish to each other all information concerning them
that they may reasonably request in connection with such Joint Proxy Statement,
(iii) the Boards of Directors of UPC and Magna shall recommend to their
respective stockholders the approval of the matters submitted for approval, and
(iv) the Boards of Directors and officers of UPC and Magna shall use their
reasonable efforts to obtain such stockholders' approvals, provided that each of
UPC and Magna may withdraw, modify, or change in an adverse manner to the other
Party its recommendations if the Board of Directors of such Party, 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 constitute a breach of the fiduciary duties of such Party'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 either Party
of information that is required to be disclosed in the Registration Statement or
the Joint 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 NYSE.
8.2 EXCHANGE LISTING. UPC shall use its reasonable efforts to list, prior
to the Effective Time, on the NYSE, subject to official notice of issuance, the
shares of UPC Common Stock to be issued to the holders of Magna Capital Stock
pursuant to the Merger.
8.3 APPLICATIONS. UPC shall promptly prepare and file, and Magna shall
cooperate in the preparation and, where appropriate, filing of, applications
with all Regulatory Authorities having jurisdiction over the transactions
contemplated by this Agreement seeking the requisite Consents necessary to
consummate the transactions contemplated by this Agreement.
8.4 FILINGS WITH STATE OFFICES. Upon the terms and subject to the
conditions of this Agreement, UPC shall cause UPHC to execute and file the
Certificate of Merger with the Secretary of State of the State of Delaware and
the Articles of Merger with the Secretary of State of the State of Tennessee.
8.5 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the terms and
conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
reasonably practicable after the date of this Agreement, the transactions
contemplated by this Agreement, including, without limitation, using its
reasonable efforts to lift or rescind any Order adversely affecting its ability
to consummate the transactions contemplated herein and to cause to be satisfied
the conditions referred to in Article 9 of this Agreement; provided, that
nothing herein
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shall preclude either Party from exercising its rights under this Agreement.
Each Party shall use, and shall cause each of its Subsidiaries to use, its
reasonable efforts to obtain all Consents necessary or desirable for the
consummation of the transactions contemplated by this Agreement.
8.6 INVESTIGATION AND CONFIDENTIALITY.
(a) Prior to the Effective Time, each Party shall keep the other
Party advised of all Material developments relevant to its business and to
consummation of the Merger and shall permit the other Party to make or cause to
be made such investigation of the business and properties of it and its
Subsidiaries and of their respective financial and legal conditions as the other
Party reasonably requests, provided that such investigation shall be reasonably
related to the transactions contemplated hereby and shall not interfere
unnecessarily with normal operations. No investigation by a Party shall affect
the representations and warranties of the other Party.
(b) Each Party shall, and shall cause its advisers and agents to,
maintain the confidentiality of all confidential information furnished to it by
the other Party concerning its and its Subsidiaries' businesses, operations, and
financial positions 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.
(d) Neither Party nor any of their respective Subsidiaries shall be
required to provide access to or to disclose information where such access or
disclosure would violate or prejudice the rights of its customers, jeopardize
the attorney-client or similar privilege with respect to such information or
contravene any Law, rule, regulation, Order, judgment, decree, fiduciary duty,
or agreement entered into prior to the date of this Agreement. The Parties will
use their reasonable efforts to make appropriate substitute disclosure
arrangements, to the extent practicable, in circumstances in which the
restrictions of the preceding sentence apply.
8.7 PRESS RELEASES. Prior to the Effective Time, UPC and Magna shall
consult with each other as to the form and substance of any press release or
other public disclosure materially related to this Agreement or any other
transaction contemplated hereby; provided, that nothing in this Section 8.7
shall be deemed to prohibit any Party from making any disclosure which its
counsel deems necessary or advisable in order to satisfy such Party's disclosure
obligations imposed by Law.
8.8 CERTAIN ACTIONS. Except with respect to this Agreement and the Plan
of Merger and the transactions contemplated hereby and thereby, no Magna Company
nor any Affiliate
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thereof nor any Representatives thereof retained by any Magna Company shall
directly or indirectly solicit or engage in negotiations concerning any
Acquisition Proposal, or provide any confidential information or assistance to,
or have any discussions with, any Person with respect to an Acquisition
Proposal. Notwithstanding the foregoing, Magna may, and may authorize and permit
its Representatives to, provide Persons with confidential information, have
discussions or negotiations with, or otherwise facilitate an effort or attempt
by such Person to make or implement an Acquisition Proposal not solicited in
violation of this Agreement if Magna's Board of Directors, after having
consulted with, and based upon the advice of, outside counsel, determines in
good faith that the failure to take such actions could constitute a breach of
the fiduciary duties of Magna's Board of Directors under applicable Law;
provided, that Magna shall promptly advise UPC following the receipt of any
Acquisition Proposal and the Material details thereof; and, provided further,
that prior to delivery of confidential information relating to Magna or access
to Magna's books, records, or properties in connection therewith, the other
Person shall have entered into a confidentiality agreement substantially similar
to the Confidentiality Agreement previously entered into between Magna and UPC.
Nothing contained in this Section 8.8 shall prohibit the Board of Directors of
Magna from complying with Rule 14e-2, promulgated under the 1934 Act. Magna
shall (i) immediately cease and cause to be terminated any existing activities,
discussions, or negotiations with any Persons conducted heretofore with respect
to any of the foregoing and (ii) direct and use its reasonable efforts to cause
of all its Representatives not to engage in any of the foregoing.
8.9 ACCOUNTING AND TAX TREATMENT. Each of the Parties undertakes and
agrees to use its reasonable efforts to cause the Merger, and to take no action
which would cause the Merger not, to qualify for treatment as a pooling of
interests for accounting purposes or as a "reorganization" within the meaning of
Section 368(a) of the Internal Revenue Code for federal income tax purposes.
8.10 STATE TAKEOVER LAWS. Each Magna Company shall take all necessary
steps to exempt the transactions contemplated by this Agreement and the Plan of
Merger from, or if necessary challenge the validity or applicability of, any
applicable Takeover Laws.
8.11 CHARTER PROVISIONS. Each Magna Company shall take all necessary
action to ensure that the entering into of this Agreement and the Plan of Merger
and the consummation of the Merger and the other transactions contemplated
hereby and thereby do not and will not result in the grant of any rights to any
Person under the Articles of Incorporation, Bylaws, or other governing
instruments of any Magna Company or restrict or impair the ability of UPC or any
of its Subsidiaries to vote, or otherwise to exercise the rights of a
stockholder with respect to, shares of any Magna Company that may be directly or
indirectly acquired or controlled by it.
8.12 RIGHTS AGREEMENT. Magna shall take all necessary action (including,
if required, redeeming all of the outstanding Preferred Stock Purchase Rights or
amending or terminating the Magna Rights Agreement) so that the entering into of
this Agreement, the acquisition of shares pursuant to the Stock Option
Agreement, and consummation of the Merger and the other transactions
contemplated hereby do not and will not result in any Person becoming able to
exercise any Preferred Stock Purchase Rights under the Magna Rights Agreement or
enabling or requiring
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the Preferred Stock Purchase Rights to be separated from the shares of Magna
Common Stock to which they are attached or to be triggered or to become
exercisable.
8.13 AGREEMENT OF AFFILIATES. Magna has disclosed in Section 8.l3 of the
Magna Disclosure Memorandum each Person whom it reasonably behaves may be deemed
an "affiliate" of Magna for purposes of Rule 145 under the 1933 Act. Magna shall
use its reasonable efforts to cause each such Person to deliver to UPC not later
than 30 days prior to the Effective Time, a written agreement, in substantially
the form of Exhibit 3, providing that such Person will not sell, pledge,
transfer, or otherwise dispose of the shares of Magna 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 UPC Common
Stock to be received by such Person upon consummation of the Merger except in
compliance with applicable provisions of the 1933 Act and the rules and
regulations thereunder and until such time as financial results covering at
least 30 days of combined operations of UPC and Magna have been published within
the meaning of Section 201.01 of the SEC's Codification of Financial Reporting
policies. Shares of UPC Common Stock issued to such affiliates of Magna in
exchange for shares of Magna Common Stock shall not be transferable until such
time as financial results covering at least 30 days of combined operations of
UPC and Magna have been published within the meaning of Section 201.01 of the
SEC's Codification of Financial Reporting Policies, regardless of whether each
such affiliate has provided the written agreement referred to in this Section
8.13 (and UPC shall be entitled to place restrictive legends upon certificates
for shares of UPC Common Stock issued to affiliates of Magna pursuant to this
Agreement to enforce the provisions of this Section 8.13). UPC shall not be
required to maintain the effectiveness of the Registration Statement under the
1933 Act for the purposes of resale of UPC Common Stock by such affiliates.
8.14 EMPLOYEE BENEFITS AND CONTRACTS. Following the Effective Time, but
in no event earlier than the consolidation of Magna's depository institution
Subsidiaries with UPC's depository institution Subsidiaries, UPC shall provide
to officers and employees of the Magna Companies (the "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 UPC Companies to their similarly situated officers and employees. For
purposes of participation, vesting, and benefit accruals (but not accrual of
benefits under UPC's tax qualified retirement plans) under such employee benefit
plans, (i) service under any qualified defined benefit or contribution plans of
Magna shall be treated as service under UPC's qualified defined benefit or
contribution plans and (ii) service under any other employee benefit plans of
Magna shall be treated as service under any similar employee benefit plans
maintained by UPC. UPC shall cause the UPC welfare benefit plans that cover the
Continuing Employees after the Effective Time to (i) waive any waiting period
and restrictions and limitations for preexisting conditions or insurability and
(ii) cause any deductible, co-insurance, or maximum out-of-pocket payments made
by the Continuing Employees under Magna's welfare benefit plans to be credited
to such Continuing Employees under the UPC 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 UPC welfare benefit
plans. Prior to the commencement of the Continuing Employee's participation in
the UPC employee benefit plans and programs, the benefit coverage of, and
participation in benefit plans by, the Continuing Employees shall continue under
the Magna Benefit Plans, as in effect immediately prior to the Effective Time.
During such transition period, the
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coverage under and participation in the Magna Benefit Plans shall be deemed to
provide the Continuing Employees with benefits that are no less favorable than
those offered to other employees of UPC and its Subsidiaries. Except as
expressly provided in the Supplemental Letter, UPC also shall cause Magna and
its Subsidiaries to honor all employment severance consulting, and other
compensation Contracts disclosed in Section 8.14 of the Magna Disclosure
Memorandum to UPC between any Magna Company and any current or former director,
officer, independent contractor, or employee thereof, and all provisions of the
Magna Benefit Plans.
8.15 INDEMNIFICATION.
(a) After the Effective Time, UPC shall indemnify, defend and hold
harmless the present and former directors, officers, employees, and agents of
Magna or any of Magna's Subsidiaries (each, a "Indemnified Party") (including
any person who becomes a director, officer, employee, or agent prior to the
Effective Time) against all Liabilities (including reasonable attorneys' fees,
and expenses, judgments, fines and amounts paid in settlement) arising out of
actions or omissions occurring at or prior to the Effective Time (including the
transactions contemplated by this Agreement and the Stock Option Agreement) to
the full extent permitted under Delaware Law and by Magna's Certificate of
Incorporation and Bylaws, as in effect on the date hereof and any indemnity
agreements entered into prior to the date of this Agreement by any of the Magna
Companies and any director, officer, employee, or agent or any of the Magna
Companies, including, without limitation, provisions relating to advances of
expenses incurred in the defense of any Litigation. Without limiting the
foregoing, in any case in which approval by UPC is required to effectuate any
indemnification, UPC 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 UPC and the Indemnified Party.
(b) UPC and the Surviving Corporation shall use their reasonable
efforts (and Magna shall cooperate prior to the Effective Time in these efforts)
to maintain in effect for a period of three years after the Effective Time,
Magna's existing directors' and officers' liability insurance policy (provided
that UPC and the Surviving Corporation may substitute therefor (i) policies of
at least the same coverage and amounts containing terms and conditions which are
substantially no less advantageous or (ii) with the consent of Magna given prior
to the Effective Time, any other policy) with respect to claims arising from
facts or events which occurred prior to the Effective Time and covering persons
who are currently covered by such insurance, provided, that the Surviving
Corporation shall not be obligated to make aggregate annual premium payments for
such three-year period in respect of such policy (or coverage replacing such
policy) which exceed, for the portion related to Magna's directors and officers,
150% of the annual premium payments on Magna's current policy in effect as of
the date of this Agreement (the "Maximum Amount"). If the amount of the premiums
necessary to maintain or procure such insurance coverage exceeds the Maximum
Amount, UPC shall use its reasonable efforts to maintain the most advantageous
policies of directors' and officers' liability insurance obtainable for a
premium equal to the Maximum Amount.
(c) Any Indemnified Party wishing to claim indemnification under
paragraph (a) of this Section 8.15, upon learning of any such Liability or
Litigation, shall promptly notify UPC thereof, provided that the failure so to
notify shall not affect the obligations of UPC under this
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Section 8.15 unless and to the extent such failure materially increases UPC's
Liability under this Section 8.15. In the event of any such Litigation (whether
arising before or after the Effective Time), (i) UPC or the Surviving
Corporation shall have the right to assume the defense thereof and UPC shall not
be liable to such Indemnified Parties for any legal expenses of other counsel or
any other expenses subsequently incurred by such Indemnified Parties in
connection with the defense thereof, except that if UPC or the Surviving
Corporation elects not to assume such defense or counsel for the Indemnified
Parties advises that there are substantive issues which raise conflicts of
interest between UPC or the Surviving Corporation and the Indemnified Parties,
the Indemnified Parties may retain counsel satisfactory to them, and UPC or the
Surviving Corporation shall pay all reasonable fees and expenses of such counsel
for the Indemnified Parties promptly as statements therefor are received;
provided, that UPC shall be obligated pursuant to this paragraph (c) to pay for
only one firm of counsel for all Indemnified Parties in any jurisdiction, (ii)
the Indemnified Parties will cooperate in the defense of any such Litigation,
and (iii) UPC shall not be liable for any settlement effected without its prior
written consent; and provided further that the Surviving Corporation shall not
have any obligation hereunder to any Indemnified Party when and if a court of
competent jurisdiction shall determine, and such determination shall have become
final, that the indemnification of such Indemnified Party in the manner
contemplated hereby is prohibited by applicable Law.
(d) The Surviving Corporation shall not be liable for any
settlement effected without its prior written consent which shall not be
unreasonably withheld.
(e) If either UPC or the Surviving Corporation or any of their
respective 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 either UPC or the Surviving Corporation shall assume
the obligations set forth in this Section 8.15.
(f) UPC shall pay all reasonable costs, including attorneys' fees,
that may be incurred by any Indemnified Party in enforcing the indemnity and
other obligations provided for in this Section 8.15.
(g) The provisions of this Section 8.15 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party and his or her
heirs or representatives
8.16 CERTAIN MODIFICATIONS. UPC and Magna shall consult with respect to
their loan, litigation, and real estate valuation policies and practices
(including loan classifications and levels of reserves) and Magna shall make
such modifications or changes to its policies and practices, if any, prior to
the Effective Time, as may be mutually agreed upon. UPC and Magna also shall
consult with respect to the character, amount, and timing of restructuring and
Merger-related expense charges to be taken by each of the Parties in connection
with the transactions contemplated by this Agreement and shall take such charges
in accordance with GAAP as may be mutually agreed upon by the Parties. Neither
Party's representations, warranties, and covenants contained in this Agreement
shall be deemed to be inaccurate or breached in any respect as a consequence of
any modifications or charges undertaken solely on account of this Section 8.16.
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8.17 PENDING MAGNA ACQUISITION. Each of UPC and Magna shall use its
reasonable efforts to modify or amend (or cause to be modified or amended) this
Agreement or the Charter Agreement as necessary or appropriate to ensure that
each of the acquisition of Magna by UPC and the acquisition of Charter by Magna
shall qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code. Any such amendments or modifications shall be made as
soon as reasonably practicable after the date of this Agreement.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective obligations
of each Party to perform this Agreement and the Plan of Merger and to consummate
the Merger and the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by both Parties pursuant
to Section 11.6 of this Agreement:
(a) STOCKHOLDER APPROVALS. The stockholders of Magna shall have
approved this Agreement and the Plan of Merger and the consummation of the
transactions contemplated hereby and thereby, including the Merger, as and
to the extent required by Law, by the provisions of any governing
instruments, and by the rules of the NYSE. The stockholders of UPC shall
have approved the UPC Charter Amendment and the issuance of shares of UPC
Common Stock pursuant to the Merger, as and to the extent required by Law,
by the provisions of any governing instruments, and by the rules of the
NYSE.
(b) REGULATORY APPROVALS. All Consents of, filings and
registrations with, and notifications to, all Regulatory Authorities
required for consummation of the Merger shall have been obtained or made
and shall be in full force and effect and all waiting periods required by
Law shall have expired. No Consent obtained from any Regulatory Authority
which is necessary to consummate the transactions contemplated hereby
shall be conditioned or restricted in a manner (excluding requirements
relating to the raising of additional capital or the disposition of Assets
or deposits) which in the reasonable good faith judgment of the Board of
Directors of UPC would so materially adversely impact the economic or
business benefits of the transactions contemplated by this Agreement so as
to render inadvisable the consummation of the Merger.
(c) CONSENTS AND APPROVALS. Each Party shall have obtained any and
all Consents required for consummation of the Merger (other than those
referred to in Section 9.1(b) of this Agreement) or for the preventing of
any Default under any Contract or Permit of such party which, if not
obtained or made, is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on such party.
(d) LEGAL PROCEEDINGS. No court or governmental or Regulatory
Authority of competent jurisdiction shall have enacted, issued,
promulgated, enforced, or entered any Law or Order (whether temporary,
preliminary, or permanent) or taken any other action which prohibits,
restricts, or makes illegal consummation of the transactions contemplated
by this Agreement.
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(e) REGISTRATION STATEMENT. The Registration Statement shall be
effective under the 1933 Act, no stop orders suspending the effectiveness
of the Registration Statement shall have been issued, no action, suit,
proceeding, or investigation by the SEC to suspend the effectiveness
thereof shall have been initiated and be continuing, and all necessary
approvals under state securities Laws or the 1933 Act or 1934 Act relating
to the issuance or trading of the shares of UPC Common Stock issuable
pursuant to the Merger shall have been received.
(f) EXCHANGE LISTING. The shares of UPC Common Stock issuable
pursuant to the Merger shall have been approved for listing on the NYSE,
subject to official notice of issuance.
(g) TAX MATTERS. Magna shall have received a written opinion from
Wachtell, Lipton, Rosen & Katz and UPC shall have received a written
opinion from Alston & Bird LLP, in each case in a form reasonably
satisfactory to such Party (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 Magna Common Stock who exchange all of their Magna Common Stock solely
for UPC Common Stock pursuant to the Merger (except with respect to any
cash received in lieu of a fractional share interest in UPC Common Stock),
(iii) the tax basis of the UPC Common Stock received by holders of Magna
Common Stock who exchange all of their Magna Common Stock solely for UPC
Common Stock in the Merger will be the same as the tax basis of the Magna
Common Stock surrendered in exchange for the UPC Common Stock (reduced by
an amount allocable to a fractional share interest in UPC Common Stock for
which cash is received), and (iv) the holding period of the UPC Common
Stock received by holders who exchange all of their Magna Common Stock
solely for UPC Common Stock in the Merger will be the same as the holding
period of the Magna Common Stock surrendered in exchange therefor,
provided that such Magna 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 Magna and UPC
reasonably satisfactory in form and substance to such counsel.
(h) POOLING LETTERS. Each party shall have received a letter, dated
as of the Effective Time, in a form reasonably acceptable to such Party,
from Price Waterhouse LLP to the effect that the Merger will qualify for
pooling-of-interests accounting treatment. Each Parry shall have received
a letter, dated as of the Effective Time, in a form reasonably acceptable
to such Party, from Ernst & Young LLP to the effect that such firm is not
aware of any matters relating to Magna and its Subsidiaries which would
preclude the Merger from qualifying for pooling-of-interests accounting
treatment.
9.2 CONDITIONS TO OBLIGATIONS OF UPC. The obligations of UPC 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 UPC pursuant to Section 11.6(a) of this Agreement:
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(a) REPRESENTATIONS AND WARRANTIES. For purposes of this Section
9.2 (a), the accuracy of the representations and warranties of Magna set
forth in this Agreement shall be assessed as of the date of this Agreement
and as of the Effective Time with the same effect as though all such
representations and warranties had been made on and as of the Effective
Time (provided that representations and warranties which are confined to a
specified date shall speak only as of such date). The representations and
warranties of Magna set forth in Section 5.3 of this Agreement shall be
true and correct (except for inaccuracies which are de minimis in amount).
The representations and warranties of Magna set forth in Sections 5.18,
5.19, 5.20, and 5.21 of this Agreement shall be true and correct in all
Material respects. There shall not exist inaccuracies in the
representations and warranties of Magna set forth in this Agreement
(including the representations and warranties set forth in Sections 5.3,
5.18, 5.19, 5.20, and 5.21) such that the aggregate effect of such
inaccuracies has, or is reasonably like to have, a Material Adverse Effect
on Magna; provided that, for purposes of this sentence only, those
representations and warranties which are qualified by references to
"material," "Material," "Material Adverse Effect," or variations thereof,
or to the "Knowledge" of Magna or to a matter being "known" by Magna shall
be deemed not to include such qualifications.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of the
agreements and covenants of Magna 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. Magna shall have delivered to UPC (i) a
certificate, dated as of the Effective Time and signed on its behalf by
its duly authorized officers, to the effect that the conditions of its
obligations set forth in Section 9.2(a) and 9.2(b) of this Agreement have
been satisfied and (ii) certified copies of resolutions duly adopted by
Magna's Board of Directors and stockholders evidencing the taking of all
corporate action necessary to authorize the execution, delivery, and
performance of this Agreement and the Plan of Merger, and the consummation
of the transactions contemplated hereby and thereby, all in such
reasonable detail as UPC and its counsel shall request.
(d) AFFILIATE AGREEMENTS. UPC shall have received from each
affiliate of Magna the affiliates agreement referred to in Section 8.12 of
this Agreement, to the extent necessary to assure in the reasonable
judgment of UPC that the transactions contemplated hereby will qualify for
pooling-of-interests accounting treatment.
(e) RIGHTS AGREEMENT. None of the events described in Sections 3,
7, or 11 of the Magna Rights Agreement shall have occurred, and the
Preferred Stock Purchase Rights shall not have become non-redeemable or
exercisable for capital stock of UPC upon consummation of the Merger.
9.3 CONDITIONS TO OBLIGATIONS OF MAGNA. The obligations of Magna to
perform this Agreement and the Plan of Merger and consummate the Merger and the
other transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by Magna pursuant to Section 11.6(b) of this
Agreement:
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(a) REPRESENTATIONS AND WARRANTIES. For purposes of this Section
9.3(a), the accuracy of the representations and warranties of UPC set
forth in this Agreement shall be assessed as of the date of this Agreement
and as of the Effective Time with the same effect as though all such
representations and warranties had been made on and as of the Effective
Time (provided that representations and warranties which are confined to a
specified date shall speak only as of such date). The representations and
warranties of UPC set forth in Section 6.3 of this Agreement shall be true
and correct (except for inaccuracies which are de minimis in amount). The
representations and warranties of UPC set forth in Section 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 UPC set
forth in this Agreement (including the representations and warranties set
forth in Sections 6.3 and 6.16) such that the aggregate effect of such
inaccuracies has, or is reasonably likely to have, a Material Adverse
Effect on UPC; provided that, for purposes of this sentence only, those
representations and warranties which are qualified by references to
"material," "Material," "Material Adverse Effect," or variations thereof,
or to the "Knowledge" of UPC or to a matter being "known" by UPC shall be
deemed not to include such qualifications.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of the
agreements and covenants of UPC 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. UPC shall have delivered to Magna (i) a
Certificate, dated as of the Effective Time and signed on its behalf by
its duly authorized officers, to the effect that the conditions of its
obligations set forth in Section 9.3(a) and 9.3(b) of this Agreement have
been satisfied and (ii) certified copies of resolutions duly adopted by
UPC's Board of Directors and stockholders evidencing the taking of all
corporate action necessary to authorize the execution, delivery, and
performance of this Agreement, and the consummation of the transactions
contemplated hereby, all in such reasonable detail as Magna and its
counsel shall request.
ARTICLE 10
TERMINATION
10.1 TERMINATION. Notwithstanding any other provision of this Agreement
and the Plan of Merger, and notwithstanding the approval of this Agreement by
the stockholders of Magna or UPC, 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 UPC and the
Board of Directors of Magna; 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
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Magna and Section 9.3(a) of this Agreement in the case of UPC 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 Magna and Section 9.3(a) of this Agreement in the case of UPC; 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 Magna and Section 9.3(a)
in the case of UPC) in the event of a Material breach by the other Party
of any covenant or agreement contained in this Agreement which cannot be
or has not been cured within 30 days after the giving of written notice to
the breaching Party of such breach; or
(d) By the Board of Directors of either Party in the event (i) any
Consent of any Regulatory Authority required for consummation of the
Merger and the other transactions contemplated hereby shall have been
denied by final nonappealable action of such authority or if any action
taken by such authority is not appealed within the time limit for appeal
or (ii) the stockholders of UPC or Magna fail to vote their approval of
the matters submitted for the approval by such stockholders at the
Stockholders' Meetings where the transactions were presented to such
stockholders for approval and voted upon; or
(e) By the Board of Directors or either Party in the event that the
Merger shall not have been consummated by December 31, 1998, if the
failure to consummate the transactions contemplated hereby on or before
such date is not caused by any breach of this Agreement by the Party
electing to terminate pursuant to this Section 10.1(e); or
(f) By the Board of Directors of either Party (provided that the
terminating Party is not then in breach of any representation or warranty
contained in this Agreement under the applicable standard set forth in
Section 9.2(a) of this Agreement in the case of Magna and Section 9.3(a)
of this Agreement in the case of UPC or in Material breach of any covenant
or other agreement contained in this Agreement) in the event that any of
the conditions precedent to the obligations of such Party to consummate
the Merger cannot be satisfied or fulfilled by the date specified in
Section 10.1(e) of this Agreement.
10.2 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to Section 10.1 of this Agreement, this
Agreement, the Plan of Merger, and the Supplemental Letter shall become void and
have no effect, except that (i) the provisions of this Section 10.2 and Article
11 and Section 8.6(b) of this Agreement shall survive any such termination and
abandonment and (ii) a termination pursuant to Sections 10.1(b), 10.1(c), or
10.1(f) of this Agreement shall not relieve the breaching Party from Liability
for an uncured willful breach of a representation, warranty, covenant, or
agreement giving rise to such termination. The Stock Option Agreement shall be
governed by its own terms.
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10.3 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS. The respective
representations, warranties, obligations, covenants, and agreements of the
Parties shall not survive the Effective Time except this Section 10.3 and
Articles 2, 3, 4, and 11 and Sections 8.13 and 8.15 of this Agreement and the
Supplemental Letter.
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
Reorganization, including the Exhibits hereto (except the Stock
Option Agreement) delivered pursuant hereto and incorporated herein
by reference.
"ARTICLES OF MERGER" shall mean the Articles of Merger to be
executed by UPHC 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.
"ASSETS" of a Person shall mean all of the assets, properties,
businesses, and rights of such Person of every kind, nature,
character, and description, whether real, personal, or mixed,
tangible or intangible, accrued or contingent, or otherwise relating
to or utilized in such Person's business, directly or indirectly, in
whole or in part, whether or not carried on the books and records of
such Person, and whether or not owned in the name of such Person or
any Affiliate of such Person and wherever located.
"BHC ACT" shall mean the federal Bank Holding Company Act of
1956, as amended.
"CERTIFICATE OF MERGER" shall mean the certificate of merger
to be executed by UPHC 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.
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"CONFIDENTIALITY AGREEMENTS" shall mean those certain
Confidentiality Agreements, entered into prior to the date of this
Agreement, between Magna and UPC.
"CONSENT" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person
pursuant to any Contract, Law, Order, or Permit.
"CONTRACT" shall mean any written or oral agreement,
arrangement authorization, commitment, contract, indenture,
instrument, lease, obligation, plan, practice, restriction,
understanding, or undertaking of any kind or character, or other
document to which any Person is a party or that is binding on any
Person or its capital stock, Assets, or business.
"DEFAULT" shall mean (i) any breach or violation of or default
under any Contract, Order, or Permit, (ii) any occurrence of any
event that with the passage of time or the giving of notice or both
would constitute a breach or violation of or default under any
Contract, Order, or Permit, or (iii) any occurrence of any event
that with or without the passage of time or the giving of notice
would give rise to a right to terminate or revoke, change the
current terms of, or renegotiate, or to accelerate, increase, or
impose any Liability under, any Contract, Order, or Permit, where,
in any such event, such Default is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on a
Party.
"DGCL" shall mean the Delaware General Corporation Law.
"ENVIRONMENTAL LAWS" shall mean all Laws relating to pollution
or protection of human health or the environment (including ambient
air, surface water, ground water, land surface, or subsurface
strata) and which are administered, interpreted, or enforced by the
United States Environmental Protection Agency and state and local
agencies with jurisdiction over, and including common law in respect
of, pollution or protection of the environment, including the
Comprehensive Environmental Response Compensation and Liability Act,
as amended, 42 U.S.C. 9601 et seq. ("CERCLA"), the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. 6901 et seq.
("RCRA"), and other Laws relating to emissions, discharges,
releases, or threatened releases of any Hazardous Material, or
otherwise relating to the manufacture, processing distribution, use,
treatment, storage, disposal, transport, or handling of any
Hazardous Material.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"EXHIBITS" 1 through 3, inclusive, shall mean the Exhibits so
marked, copies of which are attached to this Agreement. Such
Exhibits are hereby incorporated by reference herein and made a part
hereof, and may be referred to in this
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Agreement and any other related instrument or document without being
attached hereto.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"HAZARDOUS MATERIAL" shall mean (i) any hazardous substance,
hazardous material, hazardous waste, regulated substance, or toxic
substance (as those terms are defined by any applicable
Environmental Laws) and (ii) any chemicals, pollutants,
contaminants, petroleum, petroleum products, or oil (and
specifically shall include asbestos requiring abatement, removal, or
encapsulation pursuant to the requirements of governmental
authorities and any polychlorinated biphenyls).
"HSR ACT" shall mean Section 7A of the Clayton Act, as added
by Title II of the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated
thereunder.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code
of 1986, as amended.
"JOINT PROXY STATEMENT" shall mean the joint proxy statement
used by UPC and Magna to solicit the approval of their respective
stockholders of the transactions contemplated by this Agreement,
which shall include the prospectus of UPC relating to the issuance
of the UPC Common Stock to holders of Magna Common Stock.
"KNOWLEDGE" as used with respect to a Person (including
references to such Person being aware of a particular matter) shall
mean the personal knowledge of the chairman, president, chief
financial officer, chief accounting officer, chief credit officer,
general counsel, or any executive vice president of such Person.
"LAW" shall mean any code, law, ordinance, regulation,
reporting or licensing requirement, rule, or statute applicable to a
Person or its Assets, Liabilities, or business, including those
promulgated, interpreted, or enforced by any Regulatory Authority.
"LIABILITY" shall mean any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost, or
expense (including costs of investigation, collection, and defense),
claim, deficiency guaranty, or endorsement of or by any Person
(other than endorsements of notes, bills, checks, and drafts
presented for collection or deposit in the ordinary course of
business) of any type, whether accrued, absolute or contingent,
liquidated or unliquidated, matured or unmatured, or otherwise.
"LIEN" shall mean any conditional sale agreement, default of
title, easement, encroachment, encumbrance, hypothecation,
infringement, lien, mortgage,
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pledge, reservation, restriction, security interest, title
retention, or other security arrangement, or any adverse right or
interest, charge, or claim of any nature whatsoever of, on, or with
respect to any property or property interest, other than (i) Liens
for property Taxes not yet due and payable and (ii) for depository
institution Subsidiaries of a Party, pledges to secure deposits, and
other Liens 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,
administrative or other proceeding, or notice (written or oral) by
any Person alleging potential Liability or requesting information
relating to or affecting a Party, its business, its Assets
(including Contracts related to it), or the transactions
contemplated by this Agreement, but shall not include regular,
periodic examinations of depository institutions and their
Affiliates by Regulatory Authorities.
"LOAN PROPERTY" shall mean any property owned, leased, or
operated by the Party in question or by any of its Subsidiaries or
in which such Party or Subsidiary holds a security or other interest
(including an interest in a fiduciary capacity), and, where required
by the context, include the owner or operator of such property, but
only with respect to such property.
"MAGNA CAPITAL STOCK" shall mean, collectively, Magna
Common Stock, Magna Class B Preferred Stock, and Magna Class C
Preferred Stock.
"MAGNA CLASS B PREFERRED STOCK" shall mean the $20.00 par
value Class B Voting Preferred Stock of Magna.
"MAGNA CLASS C PREFERRED STOCK" shall mean the $.10 par value
Class C Non-Voting Preferred Stock of Magna.
"MAGNA COMMON STOCK" shall mean the $2.00 par value common
stock of Magna.
"MAGNA COMPANIES" shall mean, collectively, Magna and all
Magna Subsidiaries.
"MAGNA DISCLOSURE MEMORANDUM" shall mean the written
information entitled "Magna Disclosure Memorandum" delivered prior
to the execution of this Agreement to UPC 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.
"MAGNA FINANCIAL STATEMENTS" shall mean (i) the consolidated
statements of condition (including related notes and schedules, if
any) of Magna as of
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September 30, 1997, and as of December 31, 1996 and 1995, 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, 1997, and for each of the three
years ended December 31, 1996, 1995, and 1994, as filed by Magna in
SEC Documents and (ii) the consolidated statements of condition of
Magna (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, 1997.
"MAGNA RIGHTS AGREEMENT" shall mean that certain Rights
Agreement, dated November 11, 1988, between Magna and Magna Trust
Company, as Rights Agent.
"MAGNA STOCK PLANS" shall mean the existing stock option and
other stock-based compensation plans of Magna.
"MAGNA SUBSIDIARIES" shall mean the Subsidiaries of Magna,
which shall include the Magna Subsidiaries described in Section 5.4
of this Agreement and any corporation, bank, savings association, or
other organization acquired as a Subsidiary of Magna in the future
and owned by Magna at the Effective Time.
"MATERIAL" for purposes of this Agreement shall be determined
in light of the facts and circumstances of the matter in question;
provided that any specific monetary amount stated in this Agreement
shall determine materiality in that instance.
"MATERIAL ADVERSE EFFECT" on a Party shall mean an event,
change, or occurrence which, individually or together with any other
event, change, or occurrence, has a Material adverse impact on (i)
the financial condition, results of operations or business of such
Party and its Subsidiaries, taken as a whole or (ii) the ability of
such Party to perform its obligations under this Agreement or to
consummate the Merger or the other transactions contemplated by this
Agreement, provided that "Material Adverse Effect" shall not be
deemed to include the impact of (a) changes in banking and similar
Laws of general applicability or interpretations thereof by courts
or governmental authorities, (b) changes in GAAP or regulatory
accounting principles generally applicable to banks and their
holding companies, (c) actions and omissions of a Party (or any of
its Subsidiaries) taken with the prior informed consent of the other
Party in contemplation of the transactions contemplated hereby, and
(d) the Merger and compliance with the provisions of this Agreement
(including the expense associated with the vesting of benefits under
the various employee benefit plans of Magna as a result of the
Merger constituting a change of control) on the operating
performance of the Parties.
"NYSE" shall mean the New York Stock Exchange, Inc.
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"1933 ACT" shall mean the Securities Act of 1933, as
amended.
"1934 ACT" shall mean the Securities Exchange Act of 1934,
as amended.
"ORDER" shall mean any administrative decision or award,
decree, injunction, judgment, order, quasi-judicial decision or
award, ruling, or writ of any federal, state, local, or foreign or
other court, arbitrator, mediator, tribunal, administrative agency,
or Regulatory Authority.
"PARTICIPATION FACILITY" shall mean any facility or property
in which the Party in question or any of its Subsidiaries
participates in the management (including, but not limited to,
participating in a fiduciary capacity) and, where required by the
context, said term means the owner or operator of such facility or
property, but only with respect to such facility or property.
"PARTY" shall mean either Magna or UPC, and "PARTIES" shall
mean both Magna and UPC.
"PERMIT" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit, or right to which any Person is
a party or that is or may be binding upon or inure to the benefit of
any Person or its securities, Assets, or business.
"PERSON" shall mean a natural person or any legal, commercial,
or governmental entity, such as, but not limited to, a corporation,
general partnership, joint venture, limited partnership, limited
liability company, trust, business association, group acting in
concert, or any person acting in a representative capacity.
"PLAN OF MERGER" shall mean the plan of merger providing for
the Merger, in substantially the form of Exhibit 2.
"PREFERRED STOCK CASH PAYMENT AMOUNT" shall mean an amount in
cash equal to $20.00, plus any accrued but unpaid dividends at the
Effective Time.
"PREFERRED STOCK PURCHASE RIGHTS" shall mean the preferred
stock purchase rights issued pursuant to the Magna Rights Agreement.
"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 UPC under the 1933 Act with respect to the shares of UPC
Common Stock to be issued to the stockholders of Magna 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
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<PAGE>
Federal Deposit Insurance Corporation, the Office of Thrift
Supervision, all state regulatory agencies having jurisdiction over
the Parties and their respective Subsidiaries, the NASD, and the
SEC.
"REPRESENTATIVE" shall mean any investment banker, financial
advisor, attorney, accountant, consultant, or other representative
of a Person.
"RIGHTS" shall mean all arrangements, calls, commitments,
Contracts, options, rights to subscribe to, scrip, understandings,
warrants, or other binding obligations of any character whatsoever
relating to, or securities or rights convertible into or
exchangeable for, shares of the capital stock of a Person or by
which a Person is or may be bound to issue additional shares of its
capital stock or other Rights.
"SEC" shall mean the United States Securities and Exchange
Commission.
"SEC DOCUMENTS" shall mean all forms, proxy statements,
registration statements, reports, schedules, and other documents
filed, or required to be filed, by a Party or any of its
Subsidiaries with any Regulatory Authority pursuant to the
Securities Laws.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors
Act of 1940, as amended, the Trust Indenture Act of 1939, as
amended, and the rules and regulations of any Regulatory Authority
promulgated thereunder.
"STOCK OPTION AGREEMENT" shall mean the stock option agreement
by and between Magna and UPC, in substantially the form of Exhibit
1.
"STOCKHOLDERS' MEETINGS" shall mean the respective meetings of
the stockholders of UPC and Magna to be held pursuant to Section 8.1
of this Agreement, including any adjournment or adjournments
thereof.
"SUBSIDIARIES" shall mean all those corporations, banks,
associations, or other entities of which the entity in question
owns, or controls 50% or more of the outstanding equity securities
either directly or through an unbroken chain of entities as to each
of which 50% or more of the outstanding equity securities is owned
directly or indirectly by its parent; provided, there shall not be
included any such entity acquired through foreclosure or any such
entity the equity securities of which are owned or controlled in a
fiduciary capacity.
"SUPPLEMENTAL LETTER" shall mean the supplemental letter of
even date herewith between the Parties relating to certain
understandings and agreements in addition to those included in this
Agreement.
"SURVIVING CORPORATION" shall mean UPHC as the surviving
corporation resulting from the Merger.
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<PAGE>
"TAX" or "TAXES" shall mean all federal, state, local, and
foreign taxes, charges, fees, levies, imposts, duties, or other
assessments, including income, gross receipts, excise, employment,
sales, use, transfer, license, payroll, franchise, severance, stamp,
occupation, windfall profits, environmental, federal highway use,
commercial rent, customs duties, capital stock, paid-up capital,
profits, withholding, Social Security, single business and
unemployment, disability, real property, personal property,
registration, ad valorem, value added, alternative or add-on
minimum, estimated, or other tax 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
interest, penalties, or additions thereto.
"TAXABLE PERIOD" shall mean any period prescribed by any
governmental authority, including the United States or any state,
local, or foreign government or subdivision or agency thereof for
which a Tax Return is required to be filed or Tax is required to be
paid.
"TAX RETURN" shall mean any report, return, information
return, or other information required to be supplied to a taxing
authority in connection with Taxes, including any return of an
affiliated or combined or unitary group that includes a Party or its
Subsidiaries.
"TBCA" shall mean the Tennessee Business Corporation Act.
"UPC CAPITAL STOCK" shall mean, collectively, the UPC Common
Stock, the UPC Preferred Stock and any other class or series of
capital stock of UPC.
"UPC CHARTER AMENDMENT" shall mean the proposal to amend UPC's
Restated Charter of Incorporation to increase the number of
authorized shares of UPC Common Stock by not less than 100,000,000,
which may be submitted to the stockholders of UPC for consideration
and approval at the UPC Stockholders' Meeting or the 1998 annual
meeting of stockholders of UPC.
"UPC COMMON STOCK" shall mean the $5.00 par value common stock
of UPC.
"UPC FINANCIAL STATEMENTS" shall mean (i) the consolidated
balance sheets (including related notes and schedules, if any) of
UPC as of September 30, 1997, and as of December 31, 1996 and 1995,
and the related statements of earnings, changes in stockholders'
equity, and cash flows (including related notes and schedules, if
any) for the nine months ended September 30, 1997 and for each of
the three years ended December 31, 1996, 1995 and 1994, as filed by
UPC in SEC Documents and (ii) the consolidated balance sheets of UPC
(including related notes and schedules, if any) and related
statements of earnings, 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, 1997.
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<PAGE>
"UPC PREFERRED STOCK" shall mean the no par value preferred
stock of UPC and shall include the (i) Series A Preferred Stock and
(ii) Series E 8% Cumulative, Convertible Preferred Stock, of UPC
("UPC Series E Preferred Stock").
"UPC RIGHTS" shall mean the preferred stock purchase rights
issued pursuant to the UPC Rights Agreement.
"UPC RIGHTS AGREEMENT" shall mean that certain Rights
Agreement, dated January 19, 1989, between UPC and Union Planters
Bank, National Association, as Rights Agent.
"UPC SUBSIDIARIES" shall mean the Subsidiaries of UPC and any
corporation, bank, or other organization acquired as a Subsidiary of
UPC in the future and owned by UPC at the Effective Time.
"UPHC" shall mean the wholly-owned subsidiary of UPC organized
under the Laws of the State of Tennessee.
"UPHC COMMON STOCK" shall mean the $1.00 par value common
stock of UPHC.
(b) The terms set forth below shall have the meanings ascribed
thereto in the referenced sections:
Charter Section 7.2(f)
Charter Agreement Section 7.2(f)
Closing Section 1.2
Effective Time Section 1.3
Exchange Agent Section 4.1
Exchange Ratio Section 3.1(c)
Indemnified Party Section 8.15
Magna Benefit Plans Section 5.13(a)
Magna Contracts Section 5.14
Magna ERISA Affiliate Section 5.13(e)
Magna ERISA Plan Section 5.13(a)
Magna Rights Section 3.6(a)
Magna Pension Plan Section 5.13(a)
Magna SEC Reports Section 5.5(a)
Merger Section 1.1
Takeover Laws Section 5.19
Tax Opinion Section 9.1(g)
UPC ERISA Affiliate Section 6.17
UPC SEC Reports Section 6.5(a)
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<PAGE>
(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 limitations."
11.2 EXPENSES.
(a) Except as otherwise provided in this Section 11.2, each of the
Parties shall bear and pay all direct costs and expenses incurred by it or on
its behalf in connection with the transactions contemplated hereunder, including
filing, registration, and application fees, printing fees, and fees and expenses
of its own financial or other consultants, investment bankers, accountants, and
counsel, except that each of the Parties shall bear and pay one-half of the
printing costs incurred in connection with the printing of the Registration
Statement and the Joint Proxy Statement.
(b) Nothing contained in this Section 11.2 shall constitute or
shall be deemed to constitute liquidated damages for the willful breach by a
Party of the terms of this Agreement or otherwise limit the rights of the
nonbreaching Party.
11.3 BROKERS AND FINDERS. Except for Donaldson, Lufkin & Jenrette as to
Magna and except for Stifel Nicolaus & Co. as to UPC, 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 Magna or UPC, each of Magna and UPC,
as the case may be, agrees to indemnify and hold the other Party harmless of and
from any Liability in respect of any such claim.
11.4 ENTIRE AGREEMENT. Except as otherwise expressly provided herein this
Agreement (including the documents and instruments referred to herein)
constitutes the entire agreement between the Parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral (including any provision of
the Confidentiality Agreements which would act to preclude UPC (or any Holder as
defined in the Stock Option Agreement from exercising its rights under the Stock
Option Agreement) to the extent that the Stock Option Agreement is in force and
effect, but excluding the Supplemental Letter). Nothing in this Agreement,
expressed or implied, is intended to confer upon any Person, other than the
Parties or their respective successors, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, other than as provided in
Sections 8.13 and 8.15 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 Board 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
Magna Common Stock will be exchanged for UPC Common Stock shall not be amended
after the Stockholders' Meetings without the requisite approval of the holders
of the
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<PAGE>
issued and outstanding shares of UPC Common Stock and Magna Common Stock, as the
case may be, entitled to vote thereon.
11.6 WAIVERS.
(a) Prior to or at the Effective Time, UPC, 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 Magna, to waive or extend the time for the
compliance or fulfillment by Magna of any and all of its obligations under this
Agreement, and to waive any or all of the conditions precedent to the
obligations of UPC 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 UPC.
(b) Prior to or at the Effective Time, Magna, 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 UPC, to waive or extend the time for the
compliance or fulfillment by UPC of any and all of its obligations under this
Agreement, and to waive any or all of the conditions precedent to the
obligations of Magna 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 Magna.
(c) The failure of any Party at any time or times to require
performance of any provision hereof shall in no manner affect the right of such
Party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained in
this Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.
11.7 ASSIGNMENT. Except as expressly contemplated hereby, neither this
Agreement nor any of the rights, interests, or obligations hereunder shall be
assigned by any Party hereto (whether by operation of Law or otherwise) without
the prior written consent of the other Party. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of, and be enforceable
by the Parties and their respective successors and assigns.
11.8 NOTICES. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered by hand, by
facsimile transmission, by registered or certified mail, postage pre-paid or by
courier or overnight carrier, to the persons at the addresses set forth below
(or at such other address as may be provided hereunder), and shall be deemed to
have been delivered as of the date so delivered:
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<PAGE>
Magna: Magna Group, Inc.
One Magna Place
1401 South Brentwood Boulevard
St. Louis, Missouri 63144-1401
Telecopy Number: (314) 963-2581
Attention: G. Thomas Andes
Chairman, President, and
Chief Executive Officer
Copy to Counsel: WACHTELL LIPTON ROSEN & KATZ
51 West 52nd Street
New York, New York 10019
Telecopy Number: (212) 403-2000
Attention: Edward D. Herlihy
UPC: UNION PLANTERS CORPORATION
7130 Goodlett Farms Parkway
Memphis, Tennessee 38018
Telecopy Number: (901) 580-2939
Attention: Jackson W. Moore
President and Chief Operating
Officer
Copy to Counsel: UNION PLANTERS CORPORATION
7130 Goodlett Farms Parkway
Memphis, Tennessee 38018
Telecopy Number: (901) 580-2939
Attention: E. James House, Jr.
ALSTON & BIRD LLP
601 Pennsylvania Avenue, N.W.
North Building, Suite 250
Washington, DC 20004
Telecopy Number: (202) 508-3333
Attention: Frank M. Conner III
11.9 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the Laws of the State of Tennessee, without regard to any
applicable conflicts of Laws, except to the extent that the Laws of the State of
Delaware relate to the consummation of the Merger.
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<PAGE>
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.
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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf and its corporate seal to be hereunto affixed and
attested by officers thereunto as of the day and year first above written.
ATTEST: MAGNA GROUP, INC.
By: By:/s/ G. Thomas Andes
/s/ Carolyn B. Ryseff G. Thomas Andes
Carolyn B. Ryseff Chairman, President, and
Secretary Chief Executive Officer
[CORPORATE SEAL]
ATTEST: UNION PLANTERS CORPORATION
By: By:/s/ Benjamin W. Rawlins, Jr.
/s/ E. James House, Jr. Benjamin W. Rawlins, Jr.
E. James House, Jr. Chairman and Chief Executive Officer
Secretary
[CORPORATE SEAL]
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EXHIBIT 2.2
AFFILIATE AGREEMENT
Union Planters Corporation
7130 Goodlett Farms Parkway
Memphis, Tennessee 38018
Attention: E. James House, Jr.
General Counsel and Secretary
Ladies and Gentlemen:
The undersigned is a stockholder of _______________ ("Target"), a
corporation organized and existing under the laws of the State of Delaware and
located in ____________, ____________, and will become a stockholder of Union
Planters Corporation ("UPC") pursuant to the transactions described in the
Agreement and Plan of Reorganization, dated as of February 22, 1998, by and
between UPC and Target (the "Agreement"). Under the terms of the Agreement,
Target will merge with and into a wholly-owned subsidiary of UPC organized under
the laws of the State of Tennessee (the "Merger"), and the shares of the $2.00
par value common stock of Target ("Target Common Stock") will be converted into
shares of the $5.00 par value common stock of UPC ("UPC Common Stock"). This
Affiliate Agreement represents an agreement between the undersigned and UPC
regarding certain rights and obligations of the undersigned in connection with
the shares of UPC Common Stock to be received by the undersigned as a result of
the Merger.
In consideration of the Merger and the mutual covenants contained
herein, the undersigned and UPC hereby agree as follows:
1. Affiliate Status. The undersigned understands and agrees that as
to Target the undersigned may be deemed to be an "affiliate" under rule 145(c),
as defined in Rule 405, of the Rules and Regulations of the Securities and
Exchange Commission ("SEC") under the Securities Act of 1933, as amended ("1933
Act"), and the undersigned understands that the undersigned may be deemed to be
an "affiliate" at the time of the Merger; provided, that execution of this
Affiliate Agreement should not be construed as an admission by the undersigned
that the undersigned is an "affiliate" of Target as described in this Affiliate
Agreement or as a waiver of any rights the undersigned may have to object to any
claim that the undersigned is such an affiliate on or after the date of this
Affiliate Agreement.
2. Initial Restriction on Disposition. The undersigned agrees that
the undersigned will not, except for transfers to members of the undersigned's
family who agree to be bound by the terms of this Affiliate Agreement, by
operation of law, by will or under the laws of descent and distribution, sell,
transfer, or otherwise dispose of the undersigned's interests in, or reduce the
undersigned's risk relative to, any of the shares of UPC Common Stock into which
the undersigned's shares of Target Common stock are converted upon consummation
of the Merger until such time as UPC notifies the undersigned that the
requirements of SEC Accounting Series Release Nos. 130 and 135 ("ASR 130 and
135") have been met. The undersigned understands
<PAGE>
that ASR 130 and 135 relate to publication of financial results of post-Merger
combined operations of UPC and Target. UPC agrees that it will publish such
results within 45 days after the end of the first fiscal quarter of
UPC containing the required period of post-Merger combined operations and that
it will notify the undersigned promptly following such publication.
3. Covenants and Warranties of Undersigned. The undersigned
represents, warrants, and agrees that:
(a) During the 30 days immediately preceding the effective
time of the Merger, the undersigned will not, except for transfers to
members of the undersigned's family who agree to be bound by the terms of
this Affiliate Agreement, by operation of law, by will, under the laws of
descent and distribution, sell, transfer, or otherwise dispose of the
undersigned's interests in, or reduce the undersigned's risk relative to,
any of the shares of Target Common Stock beneficially owned by the
undersigned as of the date of the stockholders' meeting of Target held to
approve the Merger.
(b) The UPC Common Stock received by the undersigned as a
result of the Merger will be taken for the undersigned's own account and
not for others, directly or indirectly, in whole or in part.
(c) UPC has informed the undersigned that any distribution by
the undersigned of UPC Common Stock has not been registered under the 1933
Act and that shares of UPC Common Stock received pursuant to the Merger
can only be sold by the undersigned (1) following registration under the
1933 Act, or (2) in conformity with the volume and other requirements of
Rule 145(d) promulgated by the SEC as the same now exist or may hereafter
be amended, or (3) to the extent some other exemption from registration
under the 1933 Act might be available. The undersigned understands that
UPC is under no obligation to file a registration statement with the SEC
covering the disposition of the undersigned's shares of UPC Common Stock
or to take any other action necessary to make compliance with an exemption
from such registration available.
4. Restrictions on Transfer. The undersigned understands and agrees
that stop transfer instructions with respect to the shares of UPC Common Stock
received by the undersigned pursuant to the Merger will be given to UPC's
Transfer Agent and that there will be placed on the certificates for such
shares, or shares issued in substitution thereof, a legend stating in substance;
The shares represented by this certificate were issued
pursuant to a business combination which is accounted for as a
"pooling of interests" and may not be sold, nor may the owner
thereof reduce his risks relative thereto in any way, until
such time as Union Planters Corporation ("UPC") has published
the financial results covering at least 30 days of combined
operations after the effective date of the merger through
which the business combination was effected. In addition, the
shares represented by this certificate may not be sold,
transferred, or otherwise disposed of except or unless
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<PAGE>
(1) covered by an effective registration statement under the
Securities Act of 1933, as amended, (2) in accordance with (i)
Rule 145(d) (in the case of shares issued to an individual who
is not an affiliate of UPC) or (ii) Rule 144 (in the case of
shares issued to an individual who is an affiliate of UPC) of
the Rules and Regulations of such act, or (3) in accordance
with a legal opinion satisfactory to counsel for UPC that such
sale or transfer is otherwise exempt from the registration
requirements of such Act.
Such legend will also be placed on any certificate representing UPC securities
issued subsequent to the original issuance of the UPC Common Stock pursuant to
the Merger as a result of any transfer of such shares or any stock dividend,
stock split or other recapitalization as long as the UPC Common Stock issued to
the undersigned pursuant to the Merger has not been transferred in such a manner
as to justify the removal of the legend therefrom. If the provisions of Rules
144 and 145 are amended to eliminate restrictions applicable to the UPC Common
Stock received by the undersigned pursuant to the Merger, or at the expiration
of the restrictive period set forth in Rule 145(d), UPC, upon the request of the
undersigned, will cause the certificates representing the shares of UPC Common
Stock issued to the undersigned in connection with the Merger to be reissued
free of any legend relating to the restrictions set forth in Rules 144 and
145(d).
5. Understanding of Restrictions on Dispositions. The undersigned
has carefully read the Agreement and this Affiliate Agreement and discussed
their requirements and impact upon the undersigned's ability to sell, transfer,
or otherwise dispose of the shares of UPC Common Stock received by the
undersigned, to the extent the undersigned believes necessary, with the
undersigned's counsel or counsel for Target.
6. Filing of Reports by UPC. UPC agrees, for a period of two years
after the effective date of the Merger, to file on a timely basis all reports
required to be filed by it pursuant to Section 13 of the Securities Exchange Act
of 1934, as amended (the "1934 Act"), so that the public information provisions
of Rule 145(d) promulgated by the SEC, as the same may be amended from time to
time, will be satisfied in the event the undersigned desires to transfer any
shares of UPC Common Stock issued to the undersigned pursuant to the Merger.
7. Transfer Under Rule 145(d). If the undersigned desires to sell
or otherwise transfer the shares of UPC Common Stock received by the undersigned
in connection with the Merger at any time during the restrictive period set
forth in Rule 145(d), the undersigned will provide the necessary representation
letter to the transfer agent for UPC Common Stock together with such additional
information as the transfer agent may reasonably request. If such proposed sale
or transfer complies with the requirements of Rule 145(d), UPC shall cause its
General Counsel to provide such opinions as may be necessary to UPC's Transfer
Agent so that the undersigned may complete the proposed sale or transfer.
8. Acknowledgments. The undersigned recognizes and agrees that the
foregoing provisions also apply to all shares of the capital stock of Target and
UPC that are deemed to be beneficially owned by the undersigned pursuant to
applicable federal securities laws, which the undersigned agrees may include,
without limitation, shares owned or held in the name
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<PAGE>
of (i) the undersigned's spouse, (ii) any relative of the undersigned or of the
undersigned's spouse who has the same home as the undersigned, (iii) any trust
or estate in which the undersigned, the undersigned's spouse, and any such
relative collectively own at least a 10% beneficial interest or of which any of
the foregoing serves as trustee, executor, or in any similar capacity, and (iv)
any corporation or other organization in which the undersigned, the
undersigned's spouse, and any such relative collectively own at least 10% of
any class of equity securities or of the equity interest. The undersigned
further recognizes that, in the event that the undersigned is a director or
officer of UPC or becomes a director or officer of UPC upon consummation of the
Merger, among other things, any sale of UPC Common Stock by the undersigned
within a period of less than six months following the effective time of the
Merger may subject the undersigned to liability pursuant to Section 16(b) of
the 1934 Act.
9. Miscellaneous. This Affiliate Agreement is the complete
agreement between UPC and the undersigned concerning the subject matter hereof.
Any notice required to be sent to any party hereunder shall be sent by
registered or certified mail, return receipt requested, using the addresses set
forth herein or such other address as shall be furnished in writing by the
parties. This Affiliate Agreement shall be governed by the laws of the State of
Tennessee.
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This Affiliate Agreement is executed as of the _______ day of
________, 1998.
Very truly yours,
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Signature
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Print Name
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Address
AGREED TO AND ACCEPTED as of
____________, 1998
UNION PLANTERS CORPORATION
By: ____________________________
E. James House, Jr.
General Counsel and Secretary
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Exhibit 2.3
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is made and entered into as
of February 22, 1998, by and between Magna Group, Inc., a Delaware corporation
("Issuer"), and Union Planters Corporation, a Tennessee corporation ("Grantee").
WHEREAS, Grantee and Issuer have entered into that certain Agreement and
Plan of Reorganization, dated as of February 22, 1998 (the "Merger Agreement"),
providing for, among other things, the merger of Issuer with and into Union
Planters Holding Corporation ("UPHC"), a wholly-owned subsidiary of Grantee
organized under the Laws of the State of Tennessee, with UPHC as the surviving
entity; and
WHEREAS, as a condition and inducement to Grantee's execution of the
Merger Agreement, Grantee has required that Issuer agree, and Issuer has agreed,
to grant Grantee the Option (as defined below);
NOW, THEREFORE, in consideration of the respective representations,
warranties, covenants and agreements set forth herein and in the Merger
Agreement, and intending to be legally bound hereby, Issuer and Grantee agree as
follows:
1. Defined Terms. Capitalized terms which are used but not defined
herein shall have the meanings ascribed to such terms in the Merger Agreement.
2. Grant of Opinion. Subject to the terms and conditions set forth
herein, Issuer hereby grants to Grantee an irrevocable option (the "Option") to
purchase up to 6,497,180 shares (as adjusted as set forth herein, the "Option
Shares," which shall include the Option Shares before and after any transfer of
such Option Shares) of common stock, $2.00 par value per share ("Issuer Common
Stock"), of Issuer at a purchase price per Option Share (subject to adjustment
as set forth herein, the "Purchase Price") equal to the first closing price per
share of Issuer Common Stock following public announcement of the execution of
the Merger Agreement as reported on the NYSE-Composite Transactions List;
provided, however, that in no event shall the number of shares of Issuer Common
Stock for which this Option is exercisable exceed the lesser of (i) 19.9% of the
Issuer's issued and outstanding shares of Issuer Common Stock without giving
effect to any shares subject to or issued pursuant to the Option and (ii) that
minimum number of shares of Issuer Common Stock which when aggregated with any
other shares of Issuer Common Stock beneficially owned by Grantee or any
Affiliate thereof would cause the provisions of any Takeover Laws of the DGCL to
be applicable to the Merger. Each Option Share to be issued upon exercise of the
Option shall be accompanied by and be deemed to represent a Preferred Stock
Purchase Right.
<PAGE>
3. Exercise of Option.
(a) Provided that (i) Grantee or Holder (as hereinafter defined), as
applicable, shall not be in material breach of its agreements or covenants
contained in this Agreement or the Merger Agreement, and (ii) no preliminary or
permanent injunction or other order against the delivery of shares covered by
the Option issued by any court of competent jurisdiction in the United States
shall be in effect, Holder may exercise the Option, in whole or in part, at any
time and from time to time following the occurrence of a Purchase Event and
prior to the termination of the Option. The Option shall terminate and be of no
further force and effect upon the earliest to occur of (A) the Effective Time,
(B) termination of the Merger Agreement in accordance with the terms thereof
prior to the occurrence of a Purchase Event or a Preliminary Purchase Event
(other than a termination of the Merger Agreement by Grantee pursuant to (i)
Section 10.1(b) thereof (but only if such termination was a result of a willful
breach by issuer) or (ii) Section 10.1(c) thereof (each a "Default
Termination")), (C) 18 months after a Default Termination, and (D) 18 months
after any termination of the Merger Agreement following the occurrence of a
Purchase Event or a Preliminary Purchase Event. Any purchase of shares upon
exercise of the Option shall be subject to compliance with applicable law,
including, without limitation, the Bank Holding Company Act of 1956, as amended
(the "BHC Act"). The term "Holder" shall mean the holder or holders of the
Option from time to time, and which initially is the Grantee. The rights set
forth in Section 8 shall terminate when the right to exercise the Option
terminates (other than as a result of a complete exercise of the Option) as set
forth herein.
(b) As used herein, a "Purchase Event" means any of the following
events subsequent to the date of this Agreement:
(i) without Grantee's prior written consent, Issuer shall have
authorized, recommended, publicly proposed or publicly announced an
intention to authorize, recommend or propose, or entered into an agreement
with any person (other than Grantee or any Subsidiary of Grantee) to
effect an Acquisition Transaction (as defined below). As used herein, the
term Acquisition Transaction shall mean (A) a merger, consolidation or
similar transaction involving Issuer or any of its Subsidiaries (other
than transactions solely between Issuer's Subsidiaries and transactions
involving Issuer or any Subsidiary in which the voting securities of
Issuer outstanding immediately prior thereto continue to represent (by
either remaining outstanding or being converted into securities of the
surviving entity or the parent thereof) at least 75% of the combined
voting power of the voting securities of the Issuer or the surviving
entity or the parent thereof outstanding immediately after the
consummation of the transaction), (B) the disposition, by sale, lease,
exchange or otherwise, of Assets of Issuer or any of its Subsidiaries
representing in either case 20% or more of the consolidated assets of
Issuer and its Subsidiaries, or (C) the issuance, sale or other
disposition of (including by way of merger, consolidation, share exchange
or any similar transaction) securities representing 20% or more of the
voting power of Issuer or any of its Subsidiaries (any of the foregoing,
an "Acquisition Transaction"); or
(ii) any person (other than Grantee or any Subsidiary of
Grantee) shall have acquired beneficial ownership (as such term is defined
in Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), of or the
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<PAGE>
right to acquire beneficial ownership of, or any "group" (as such
term is defined under the Exchange Act), other than a group of which
Grantee or any of its Subsidiaries is a member, shall have been formed
which beneficially owns or has the right to acquire beneficial ownership
of, 20% or more of the then-outstanding shares of Issuer Common Stock.
(c) As used herein, a "Preliminary Purchase Event" means any of the
following events:
(i) any person (other than Grantee or any Subsidiary of
Grantee) shall have commenced (as such term is defined in Rule 14d-2 under
the Exchange Act), or shall have filed a registration statement under the
Securities Act of 1933, as amended (the "Securities Act") with respect to,
a tender offer or exchange offer to purchase any shares of Issuer Common
Stock such that, upon consummation of such offer, such person would own or
control 15% or more of the then-outstanding shares of Issuer Common Stock
(such an offer being referred to herein as a "Tender Offer" or an
"Exchange Offer," respectively); or
(ii) the holders of Issuer Common Stock shall not have approved
the Merger Agreement at the meeting of such stockholders held for the
purpose of voting on the Merger Agreement, such meeting shall not have
been held or shall have been canceled prior to termination of the Merger
Agreement, or Issuer's Board of Directors shall have withdrawn or modified
in a manner adverse to Grantee the recommendation of Issuer's Board of
Directors with respect to the Merger Agreement, in each case after it
shall have been publicly announced that any person (other than Grantee or
any Subsidiary of Grantee) shall have (A) made a proposal to engage in an
Acquisition Transaction, (B) commenced a Tender Offer or filed a
registration statement under the Securities Act with respect to an
Exchange Offer, or (C) filed an application (or given a notice), whether
in draft or final form, under any federal or state statute or regulation
(including a notice filed under the HSR Act and an application or notice
filed under the BHC Act, the Bank Merger Act, or the Change in Bank
Control Act of 1978) seeking the Consent to an Acquisition Transaction
from any federal or state governmental or regulatory authority or agency.
As used in this Agreement, "person" shall have the meaning specified in Sections
3(a)(9) and 13(d)(3) of the Exchange Act.
(d) In the event Holder wishes to exercise the Option, it shall send
to Issuer a written notice (the date of which being herein referred to as the
"Notice Date") specifying (i) the total number of Option Shares it intends to
purchase pursuant to such exercise and (ii) a place and date not earlier than
three business days nor later than 30 business days from the Notice Date for the
closing (the "Closing") of such purchase (the "Closing Date"). If prior Consent
of any governmental or regulatory agency or authority is required in connection
with such purchase, Issuer shall cooperate with Holder in the filing of the
required notice or application for such Consent and the obtaining of such
Consent and the Closing shall occur immediately following receipt of such
Consents (and expiration of any mandatory waiting periods).
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4. Payment and Delivery of Certificates.
(a) On each Closing Date, Holder shall (i) pay to Issuer, in
immediately available funds by wire transfer to a bank account designated by
Issuer, an amount equal to the Purchase Price multiplied by the number of Option
Shares to be purchased on such Closing Date, and (ii) present and surrender this
Agreement to the Issuer at the address of the Issuer specified in Section 13(f)
hereof
(b) At each closing, simultaneously with the delivery of immediately
available funds and surrender of this Agreement as provided in Section 4(a), (i)
Issuer shall deliver to Holder (A) a certificate or certificates representing
the Option Shares to be purchased at such Closing, which Option Shares shall be
free and clear of all liens, claims, charges and encumbrances of any kind
whatsoever and subject to no pre-emptive rights, and (B) if the Option is
exercised in part only, an executed new agreement with the same terms as this
agreement evidencing the right to purchase the balance of the shares of Issuer
Common Stock purchasable hereunder and (ii) Holder shall deliver to Issuer a
letter agreeing that Holder shall not offer to sell or otherwise dispose of such
Option Shares in violation of applicable federal and state law or of the
provisions of this Agreement.
(c) In addition to any other legend that is required by applicable
law, certificates for the Option Shares delivered at each Closing shall be
endorsed with a restrictive legend which shall read substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
PURSUANT TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF FEBRUARY 22,
1998. A COPY OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF
WITHOUT CHARGE UPON RECEIPT BY THE ISSUER OF A WRITTEN REQUEST THEREFOR.
It is understood and agreed that: (i) the references in the above legend to
resale restrictions of the Securities Act shall be removed by delivery of
substitute certificate(s) without such reference if Holder shall have delivered
to Issuer a copy of a letter from the staff of the SEC, or an opinion of counsel
in form and substance reasonably satisfactory to Issuer and its counsel, to the
effect that such legend is not required for purposes of the Securities Act; (ii)
the references in the above legend to the provisions of this Agreement shall be
removed by delivery of substitute certificate(s) without such reference if the
shares have been sold or transferred in compliance with the provisions of this
Agreement and under circumstances that do not require the retention of such
reference; and (iii) the legend shall be removed in its entirety if the
conditions in the preceding clauses (i) and (ii) are both satisfied.
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<PAGE>
5. Representations and Warranties of Issuer. Issuer hereby represents and
warrants to Grantee as follows:
(a) Issuer has all requisite corporate power and authority to enter
into this Agreement and, subject to any approvals referred to herein, to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of Issuer.
This Agreement has been duly executed and delivered by Issuer.
(b) Issuer has taken all necessary corporate action to authorize and
reserve and to permit it to issue, and, at all times from the date hereof until
the obligation to deliver Issuer Common Stock upon the exercise of the Option
terminates, will have reserved for issuance, upon exercise of the Option, the
number of shares of Issuer Common Stock necessary for Holder to exercise the
Option, and Issuer win take all necessary corporate action to authorize and
reserve for issuance all additional shares of Issuer Common Stock or other
securities which may be issued pursuant to Section 7 upon exercise of the
Option. The shares of Issuer Common Stock to be issued upon due exercise of the
Option, including all additional shares of Issuer Common Stock or other
securities which may be issuable pursuant to Section 7, upon issuance pursuant
hereto, shall be duly and validly issued, fully paid, and nonassessable, and
shall be delivered free and clear of all liens, claims, charges, and
encumbrances of any kind or nature whatsoever, including any preemptive rights
of any stockholder of Issuer.
6. Representations and Warranties of Grantee. Grantee hereby represents
and warrants to Issuer that:
(a) Grantee has all requisite corporate power and authority to enter
into this Agreement and, subject to any approvals or consents referred to
herein, to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary Corporate action on the part
of Grantee. This Agreement has been duly executed and delivered by Grantee.
(b) This Option is not being, and any Option Shares or other
securities acquired by Grantee upon exercise of the Option will not be, acquired
with a view to the public distribution thereof and will not be transferred or
otherwise disposed of except in a transaction registered or exempt from
registration under the Securities Laws.
7. Adjustment upon Changes in Capitalization, etc.
(a) In the event of any change in Issuer Common Stock by reason of a
stock dividend, stock split, split-up, recapitalization, combination, exchange
of shares or similar transaction, the type and number of shares or securities
subject to the Option, and the Purchase Price therefor, shall be adjusted
appropriately, and proper provision shall be made in the agreements governing
such transaction, if any, so that Holder shall receive, upon exercise of the
Option, the number and class of shares or other Securities or property that
Holder would have received in respect of Issuer Common Stock if the Option had
been exercised immediately prior to such event, or the record date therefor, as
applicable. If any additional shares of Issuer Common Stock are issued after
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<PAGE>
the date of this Agreement (other than pursuant to an event described
in the first sentence of this Section 7(a) or pursuant to this Option), the
number of shares of Issuer Common Stock subject to the Option shall be adjusted
so that, after such issuance, it, together with any shares of Issuer Common
Stock previously issued pursuant hereto shall not exceed the lesser of (i) 19.9%
of the number of shares of Issuer Common Stock then issued and outstanding
without giving effect to any shares subject to or issued pursuant to the Option
and (ii) that minimum number of shares of Issuer Common Stock which when
aggregated with any other shares of Issuer Common Stock beneficially owned by
Grantee or any Affiliate thereof would cause the provisions of any Takeover Laws
of the DGCL to be applicable to the Merger.
(b) In the event that Issuer shall enter in an agreement: (i) to
consolidate with or merge into any person, other than Grantee of one of its
Subsidiaries, and shall not be the continuing or surviving corporation of such
consolidation or merger; (ii) to permit any person, other than Grantee or one of
its Subsidiaries, to merge into Issuer and Issuer shall be the continuing or
surviving corporation, but, in connection with such merger, the then outstanding
shares of Issuer Common Stock shall be changed into or exchanged for stock or
other securities of Issuer or any other person or cash or any other property or
the outstanding shares of Issuer Common Stock immediately prior to such merger
shall after such merger represent less than 50% of the outstanding shares and
share equivalents of the merged company; or (iii) to sell or otherwise transfer
all or substantially all of its Assets to any person, other than Grantee or one
of its Subsidiaries, then, and in each such case, the agreement governing such
transaction shall make proper provisions so that the Option shall, upon the
consummation of any such transaction and upon the terms and conditions set forth
herein, be converted into, or exchanged for, an option (the "Substitute
Option"), at the election of Grantee, of either (x) the Acquiring Corporation
(as defined below) or (y) any person that controls the Acquiring Corporation (in
each case, such person being referred to as the "Substitute Option Issuer").
(c) The Substitute Option shall have the same terms as the Option,
provided that, if the terms of the Substitute Option cannot, for legal reasons,
be the same as the Option, such terms shall be as similar as possible and in no
event less advantageous to Grantee. The Substitute Option Issuer shall also
enter into an agreement with the then-holder or holders of the Substitute Option
in substantially the same form as this Agreement, which shall be applicable to
the Substitute Option.
(d) The Substitute Option shall be exercisable for such number of
shares of the Substitute Common Stock (as hereinafter defined) as is equal to
the Assigned Value (as hereinafter defined) multiplied by the number of shares
of the Issuer Common Stock for which the Option was theretofore exercisable,
divided by the Average Price (as hereinafter defined). The exercise price of the
Substitute Option per share of the Substitute Common Stock (the "Substitute
Purchase Price") shall then be equal to the Purchase Price multiplied by a
fraction in which the numerator is the number of shares of the Issuer Common
Stock for which the Option was theretofore exercisable and the denominator is
the number of shares for which the Substitute Option is exercisable.
(e) The following terms have the meanings indicated:
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(i) "Acquiring Corporation" shall mean (x) the continuing or
surviving corporation of a consolidation or merger with Issuer (if other
than Issuer), (y) Issuer in a merger in which Issuer is the continuing or
surviving person, and (z) the transferee of all or any substantial part of
the Issuer's assets (or the assets of its Subsidiaries).
(ii) "Substitute Common Stock" shall mean the common stock
issued by the Substitute Option Issuer upon exercise of the Substitute
Option.
(iii) "Assigned Value" shall mean the highest of (x) the price
per share of the Issuer Common Stock at which a Tender Offer or Exchange
Offer therefor has been made by any person (other than Grantee), (y) the
price per share of the Issuer Common Stock to be paid by any person (other
than the Grantee) pursuant to an agreement with Issuer, and (z) the
highest last sale price per share of Issuer Common Stock quoted on the
NYSE (or if Issuer Common Stock is not quoted on the NYSE, the highest bid
price per share on any day as quoted on the principal trading market or
securities exchange on which such shares are traded as reported by a
recognized source chosen by Grantee) within the six-month period
immediately preceding the agreement; provided, that in the event of a sale
of less than all of Issuer's assets, the Assigned Value shall be the sum
of the price paid in such sale for such assets and the current market
value of the remaining assets of Issuer as determined by a nationally
recognized investment banking firm selected by Grantee (or by a majority
in interest of the Grantees if there shall be more than one Grantee (a
"Grantee Majority")) and reasonably acceptable to Issuer, divided by the
number of shares of the Issuer Common Stock outstanding at the time of
such sale. In the event that an exchange offer is made for the Issuer
Common Stock or an agreement is entered into for a merger or consolidation
involving consideration other than cash, the value of the securities or
other property issuable or deliverable in exchange for the Issuer Common
Stock shall be determined by a nationally recognized investment banking
firm) selected by Grantee and reasonably acceptable to Issuer (or if
applicable, Acquiring Corporation). If there shall be more than one
Grantee, any such selection shall be made by a Grantee Majority)
(iv) "Average Price" shall mean the average closing price of a
share of the Substitute Common Stock for the one year immediately
preceding the consolidation, merger or sale in question, but in no event
higher than the last sale price of the shares of the Substitute Common
Stock on the day preceding such consolidation, merger or sale; provided
that if Issuer is the issuer of the Substitute Option, the Average Price
shall be computed with respect to a share of common stock issued by
Issuer, the person merging into Issuer or by any company which controls or
is controlled by such merger person, as Grantee may elect.
(f) In no event pursuant to any of the foregoing paragraphs shall the
Substitute Option be exercisable for more than 19.9% of the aggregate of the
shares of the Substitute Common Stock outstanding prior to exercise of the
Substitute Option. In the event that the Substitute Option would be exercisable
for more than 19.9% of the aggregate of the shares of Substitute Common Stock
but for this clause (f), the Substitute Option Issuer shall make a cash payment
to Grantee equal to the excess of (i) the value of the Substitute Option without
giving effect to the
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<PAGE>
limitation in this clause (f) over (ii) the value of the Substitute
Option after giving effect to the limitation in this clause (f). This difference
in value shall be determined by a nationally recognized investment banking firm
selected by Grantee (or a Grantee Majority) and reasonably acceptable to the
Acquiring Corporation.
(g) Issuer shall not enter into any transaction described in
subsection (b) of this Section 7 unless the Acquiring Corporation and any person
that controls the Acquiring Corporation assume in writing all the obligations of
Issuer hereunder and take all other actions that may be necessary so that the
provisions of this Section 7 are given full force and effect (including, without
limitation, any action that may be necessary so that the shares of Substitute
Common Stock are in no way distinguishable from or have lesser economic value
than other shares of common stock issued by the Substitute Option Issuer).
(h) The provisions of Sections 8, 9, 10, and 11 shall apply, with
appropriate adjustments, to any securities for which the Option becomes
exercisable pursuant to this Section 7 and, as applicable, references in such
sections to "Issuer," "Option," "Purchase Price" and "Issuer Common Stock" shall
be deemed to be references to "Substitute Option Issuer," "Substitute Option,"
"Substitute Purchase Price" and "Substitute Common Stock," respectively.
8. Repurchase at the Option of Holder.
(a) Subject to the last sentence of Section 3(a), at the request of
Holder at any time commencing upon the first occurrence of a Repurchase Event
(as defined in Section 8(d)) and ending 18 months immediately thereafter, Issuer
shall repurchase from Holder the Option and all shares of Issuer Common Stock
purchased by Holder pursuant hereto with respect to which Holder then has
beneficial ownership The date on which Holder exercises its rights under this
Section 8 is referred to as the "Request Date." Such repurchase shall be at an
aggregate price (the "Section 8 Repurchase Consideration") equal to the sum of:
(i) the aggregate Purchase Price paid by Holder for any shares
of Issuer Common Stock acquired by Holder pursuant to the Option with
respect to which Holder then has beneficial ownership;
(ii) the excess, if any, of (x) the Applicable Price (as
defined below) for each share of Issuer Common Stock over (y) the Purchase
Price (subject to adjustment pursuant to Section 7), multiplied by the
number of shares of Issuer Common Stock with respect to which the Option
has not been exercised; and
(iii) the excess, if any, of the Applicable Price over the
Purchase Price (subject to adjustment pursuant to Section 7) paid (or, in
the case of Option Shares with respect to which the Option has been
exercised but the Closing Date has not occurred, payable) by Holder for
each share of Issuer Common Stock with respect to which the Option has
been exercised and with respect to which Holder then has beneficial
ownership, multiplied by the number of such shares.
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<PAGE>
(b) If Holder exercises its rights under this Section 8, Issuer
shall, within ten business days after the Request Date, pay the Section 8
Repurchase Consideration to Holder in immediately available funds, and
contemporaneously with such payment Holder shall surrender to Issuer the Option
and the certificates evidencing the shares of Issuer Common Stock purchased
thereunder with respect to which Holder then has beneficial ownership, and
Holder shall warrant that it has sole record and beneficial ownership of such
shares and that the same are then free and clear of all liens, claims, charges
and encumbrances of any kind whatsoever. Notwithstanding the foregoing, to the
extent that prior notification to or consent of any governmental or regulatory
agency or authority is required in connection with the payment of all or any
portion of the Section 8 Repurchase Consideration, Holder shall have the ongoing
option to revoke its request for repurchase pursuant to Section 8, in whole or
in part, or to require that Issuer deliver from time to time that portion of the
Section 8 Repurchase Consideration that it is not then so prohibited from paying
and promptly file the required notice or application for Consent and
expeditiously process the same (and each party shall cooperate with the other in
the filing of any such notice or application and the obtaining of any such
Consent). If any governmental or regulatory agency or authority disapproves of
any part of Issuer's proposed repurchase pursuant to this Section 8, Issuer
shall promptly give notice of such fact to Holder. If any governmental or
regulatory agency or authority prohibits the repurchase in part but not in
whole, then Holder shall have the right (i) to revoke the repurchase request or
(ii) to the extent permitted by such agency or authority, determine whether the
repurchase should apply to the Option and/or Option Shares and to what extent to
each, and Holder shall thereupon have the right to exercise the Option as to the
number of Option Shares for which the Option was exercisable at the Request Date
less the sum of the number of shares covered by the Option in respect of which
payment has been made pursuant to Section 8(a)(ii) and the number of shares
covered by the portion of the Option (if any) that has been repurchased. Holder
shall notify Issuer of its determination under the preceding sentence within
five business days of receipt of notice of disapproval of the repurchase.
Notwithstanding anything herein to the contrary, all of Holder's rights
under this Section 8 shall terminate on the date of termination of this Option
pursuant to Section 3(a).
(c) For purposes of this Agreement, the "Applicable Price" means the
highest of (i) the highest price per share of Issuer Common Stock paid for any
such share by the person or groups described in Section 8(d)(i), (ii) the price
per share of Issuer Common Stock received by holders of Issuer Common Stock in
connection with any merger or other business combination transaction described
in Section 7(b)(i), 7(b)(ii) or 7(b)(iii), or (iii) the highest last sale price
per share of Issuer Common Stock quoted on the NYSE (or if Issuer Common Stock
is not quoted on the NYSE, the highest bid price per share as quoted on the
principal trading market or securities exchange on which such shares are traded
as reported by a recognized source chosen by Holder) during the 60 business days
preceding the Request Date; provided, however, that in the event of a sale of
less than all of Issuer's Assets, the Applicable Price shall be the sum of the
price paid in such sale for such assets and the current market value of the
remaining assets of Issuer as determined by an independent nationally recognized
investment banking firm selected by Holder and reasonably acceptable to Issuer
(which determination shall be conclusive for all purposes of this Agreement),
divided by the number of shares of the Issuer Common Stock outstanding at the
time of such sale. If the consideration to be offered, paid or received pursuant
to either of the foregoing clauses (i) or (ii) shall be other than in cash, the
value of such consideration shall be
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determined in good faith by an independent nationally recognized
investment banking firm selected by Holder and reasonably acceptable to Issuer,
which determination shall be conclusive for all purposes of this Agreement.
(d) As used herein, a "Repurchase Event" shall occur if (i) any
person (other than Grantee or any subsidiary of Grantee shall have acquired
beneficial ownership (as such term is defined in Rule 13d-3 promulgated under
the Exchange Act), or the right to acquire beneficial ownership, or any "group"
(as such term is defined under the Exchange Act) shall have been formed which
beneficially owns or has the right to acquire beneficial ownership of 50% or
more of the then-outstanding shares of Issuer Common Stock, or (ii) any of the
transactions described in Section 7(b)(i), 7(b)(ii), or 7(iii) shall be
consummated.
9. Registration Rights.
(a) Issuer shall, subject to the conditions of subparagraph (c)
below, if requested by any Holder, including Grantee and any permitted
transferee ("Selling Holder"), as expeditiously as possible prepare and file a
registration statement under the Securities Laws if necessary in order to permit
the sale or other disposition of any or all shares of Issuer Common Stock or
other securities that have been acquired by or are issuable to Selling Holder
upon exercise of the Option in accordance with the intended method of sale or
other disposition stated by Holder in such request (it being understood and
agreed that any such sale or other disposition shall be effected on a widely
distributed basis so that, upon consummation thereof, no purchaser or transferee
shall beneficially own more than 5% of the shares of Issuer Common Stock then
outstanding), including, without limitation, a "shelf" registration statement
under Rule 415 under the Securities Act or any successor provision, and Issuer
shall use its best efforts to qualify such shares or other securities for sale
under any applicable state securities laws. Each such Holder shall provide all
information reasonably requested by Issuer for inclusion in any registration
statement to be filed hereunder.
(b) If Issuer at any time after the exercise of the Option, but prior
to the termination of the Option, proposes to register any shares of Issuer
Common Stock under the Securities Laws in connection with an underwritten public
offering of such Issuer Common Stock, Issuer will promptly give written notice
to Holder of its intention to do so and, upon the written request of Holder
given within 30 days after receipt of any such notice (which request shall
specify the number of shares of Issuer Common Stock intended to be included in
such underwritten public offering by Selling Holder), Issuer will use all
reasonable efforts to cause all such shares, the holders of which shall have
requested participation in such registration, to be so registered and included
in such underwritten public offering; provided, that Issuer may elect to not
cause any such shares to be so registered (i) if the underwriters in good faith
determine that the inclusion of such shares would interfere with the successful
marketing of the shares of Issuer Common Stock for the account of Issuer, or
(ii) in the case of a registration solely to implement a dividend reinvestment
or similar plan, an employee benefit plan or a registration filed on Form S-4 or
any successor form, or a registration filed on a form which does not permit
registrations of resales; provided further, that such election pursuant to
clause (i) may only be made once. If some but not all the shares of Issuer
Common Stock, with respect to which Issuer shall have received requests for
registration pursuant to this subparagraph (b), shall be excluded from such
registration, Issuer
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<PAGE>
shall make appropriate allocation of shares to be registered among
Selling Holders and any other person (other than Issuer or any person exercising
demand registration rights in connection with such registration) who or which is
permitted to register their shares of Issuer Common Stock in connection with
such registration pro rata in the proportion that the number of shares requested
to be registered by each Selling Holder bears to the total number of shares
requested to be registered by all persons then desiring to have Issuer Common
Stock registered for sale (other than Issuer or any person exercising demand
registration rights in connection with such registration).
(c) Issuer shall use all reasonable efforts to cause the registration
statement referred to in subparagraph (a) above to become effective and to
obtain all consents or waivers of other parties which are required therefor and
to keep such registration statement effective, provided, that Issuer may delay
any registration of Option Shares required pursuant to subparagraph (a) above
for a period not exceeding 90 days, provided Issuer shall in good faith
determine that any such registration would adversely affect an offering or
contemplated offering of other securities by Issuer. Notwithstanding anything to
the contrary contained herein, Issuer shall not be required to register Option
Shares under the Securities Laws pursuant to subparagraph (a) above:
(i) prior to the occurrence of a Purchase Event and
following the termination of the Option;
(ii) more than twice;
(iii) within 90 days after the effective date of a registration
referred to in subparagraph (b) above pursuant to which the Selling
Holders concerned were afforded the opportunity to register such shares
under the Securities Laws and such shares were registered as requested;
and
(iv) unless a request therefor is made to Issuer by Selling
Holders holding at least 15% or more of the aggregate number of Option
Shares then outstanding or the right to acquire at least 15% of the Option
Shares.
In addition to the foregoing, Issuer shall not be required to maintain the
effectiveness of any registration statement after the expiration of 120 days
from the effective date of such registration statement. Issuer shall use all
reasonable efforts to make any filings, and take all steps, under all applicable
state securities laws to the extent necessary to permit the sale or other
disposition of the Option Shares so registered in accordance with the intended
method of distribution for such shares, provided, that Issuer shall not be
required to consent to general jurisdiction or qualify to do business in any
state where it is not otherwise required to so consent to such jurisdiction or
to so qualify to do business.
(d) Except where applicable state law prohibits such payments, Issuer
will pay all expenses (including without limitation registration fees,
qualification fees, blue sky fees and expenses (including the fees and expenses
of Issuer's counsel), accounting expenses, printing expenses, expenses of
underwriters, excluding discounts and commissions but including liability
insurance if Issuer so desires or the underwriters so require, and the
reasonable fees and expenses of any necessary special experts) in connection
with each registration pursuant to subparagraph (a)
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<PAGE>
or (b) above (including the related offerings and sales by Selling
Holders) and all other qualifications, notifications or exemptions pursuant to
subparagraph (a) or (b) above. Underwriting discounts and commissions relating
to Option Shares and any other expenses incurred by such Selling Holders in
connection with any such registration (including expenses of Selling Holders'
counsel) shall be borne by such Selling Holders.
(e) In connection with any registration under subparagraph (a) or (b)
above Issuer hereby agrees to indemnify the Selling Holders, and each
underwriter thereof, including each person, if any, who controls such holder or
underwriter within the meaning of Section 15 of the Securities Act, against all
expenses, losses, claims, damages and liabilities caused by any untrue statement
of a material fact contained in any registration statement or prospectus
(including any amendments or supplements thereto) or any preliminary prospectus,
or caused by any omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except insofar as such
expenses, losses, claims, damages or liabilities of such indemnified party are
caused by any untrue statement or alleged untrue statement or any omission or
alleged omission made in reliance upon and in conformity with, information
furnished in writing to Issuer by such indemnified party expressly for use
therein, and Issuer and each officer, director and controlling person of Issuer
shall be indemnified by such Selling Holder, or by such underwriter, as the case
may be, for all such expenses, losses, claims, damages and liabilities caused by
any untrue, or alleged untrue, statement or omission made in reliance upon, and
in conformity with, information furnished in writing to Issuer by such holder or
such underwriter, as the case may be, expressly for such use.
Promptly upon receipt by a party indemnified under this subparagraph (e)
of notice of the commencement of any action against such indemnified party in
respect of which indemnity or reimbursement may be sought against any
indemnifying party under this subparagraph (e), such indemnified party shall
notify the indemnifying party in writing of the commencement of such action, but
the failure so to notify the indemnifying party shall not relieve it of any
liability which it may otherwise have to any indemnified party under this
subparagraph (e), except to the extent such failure to notify materially
prejudices the indemnifying party. In case notice of commencement of any such
action shall be given to the indemnifying party as above provided, the
indemnifying party shall be entitled to participate in and, to the extent it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense of such action at its own expense, with counsel chosen by it and
reasonably satisfactory to such indemnified party. The indemnified party shall
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel (other than
reasonable costs of investigation) shall be paid by the indemnified party unless
(i) the indemnifying party either agrees to pay the same, (ii) the indemnifying
party fails to assume the defense of such action with counsel satisfactory to
the indemnified party, or (iii) the indemnified party has been advised by
counsel that one or more legal defenses may be available to the indemnifying
party that may be contrary to the interest of the indemnified party, in which
case the indemnifying party shall be entitled to assume the defense of such
action notwithstanding its obligation to bear fees and expenses of such counsel;
provided, however, that the indemnifying party shall not be liable for the
expenses of more than one firm of counsel for all indemnified parties in any
jurisdiction. No indemnifying party shall be liable for any settlement entered
into without its consent, which consent may not be unreasonably withheld.
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<PAGE>
If the indemnification provided for in this subparagraph (e) is
unavailable to a party otherwise entitled to be indemnified in respect of any
expenses, losses, claims, damages or liabilities referred to herein, then the
indemnifying party, in lieu of indemnifying such party otherwise entitled to be
indemnified, shall contribute to the amount paid or payable by such party to be
indemnified as a result of such expenses, losses, claims, damages or liabilities
in such proportion as is appropriate to reflect the relative benefits received
by Issuer, all Selling Holders and the underwriters from the offering of the
securities and also the relative fault of Issuer, all Selling Holders and the
underwriters in connection with the statements or omissions which resulted in
such expenses, losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The amount paid or payable by a party as a
result of the expenses, losses, claims, damages and liabilities referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim; provided, that in no case shall any Selling Holder be responsible, in
the aggregate, for any amount in excess of the net offering proceeds
attributable to its Option Shares included in the offering. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. Any obligation by any holder to
indemnify shall be several and not joint with other holders.
In connection with any registration pursuant to subparagraph (a) or (b)
above, Issuer and each Selling Holder (other than Grantee) shall enter into an
agreement containing the indemnification provisions of this subparagraph (e).
(f) Issuer shall use its best efforts to comply with all reporting
requirements and will do all such other things as may be necessary to permit the
expeditious sale at any time of any Option Shares by Holder in accordance with
and to the extent permitted by any rule or regulation promulgated by the SEC
from time to time, including, without limitation, Rules 144 and 144A.
(g) Issuer will pay all stamp taxes in connection with the issuance
and the sale of the Option Shares and in connection with the exercise of the
Option, and will save Holder harmless, without limitation as to time, against
any and all liabilities, with respect to all such taxes.
10. Quotation; Listing. If Issuer Common Stock or any other securities to
be acquired upon exercise of the Option are then authorized for quotation or
trading or listing on the NYSE or any other securities exchange or any automated
quotations system maintained by a self-regulatory organization, Issuer, upon the
request of Holder, will promptly file an application, if required, to authorize
for quotation or trading or listing the shares of issuer Common Stock or other
securities to be acquired upon exercise of the Option on the NYSE or any other
securities exchange or any automated quotations system maintained by a
self-regulatory organization and will use its best efforts to obtain approval,
if required, of such quotation or listing as soon as practicable.
11. Division of Option. This Agreement (the Option granted hereby) are
exchangeable, without expense, at the option of Holder, upon presentation and
surrender of this Agreement at the principal office of Issuer for other
Agreements providing for Options of different denominations entitling the holder
thereof to purchase in the aggregate the same number of shares of issuer
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<PAGE>
Common Stock purchasable hereunder. The terms "Agreement" and "Option" as
used herein include any other Agreements and related Options for which this
Agreement (and the Option granted hereby) may be exchanged. Upon receipt by
Issuer of evidence reasonably satisfactory to it of the loss, theft, destruction
or mutilation of this Agreement, and (in the case of loss, theft or destruction)
of reasonably satisfactory indemnification, and upon surrender and cancellation
of this Agreement, if mutilated, Issuer will execute and deliver a new Agreement
of like tenor and date. Any such new Agreement executed and delivered shall
constitute an additional contractual obligation on the part of Issuer, whether
or not the Agreement so lost, stolen, destroyed or mutilated shall at any time
be enforceable by anyone.
12. Miscellaneous.
(a) Expenses. Except as otherwise provided in Section 9, each of the
parties hereto shall bear and pay all costs and expenses incurred by it or on
its behalf in connection with the transactions contemplated hereunder, including
fees and expenses of its own financial consultants, investment bankers,
accountants and counsel.
(b) Waiver and Amendment. Any provision of this Agreement may be
waived at any time by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by the
parties hereto.
(c) Entire Agreement; No Third-Party Beneficiary; Severability. This
Agreement, together with the Merger Agreement and the other documents and
instruments referred to herein and therein, between Grantee and Issuer (a)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof and (b) is not intended to confer upon any person other
than the parties hereto (other than any transferees of the Option Shares or any
permitted transferee of this Agreement pursuant to Section 12(h) and other than
as provided in the Merger Agreement) any rights or remedies hereunder. If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction or a federal or state governmental or regulatory agency
or authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, coven ants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated. If
for any reason such court or regulatory agency determines that the Option does
not permit Holder to acquire, or does not require Issuer to repurchase, the full
number of shares of Issuer Common Stock as provided in Sections 3 and 8 (as
adjusted pursuant to Section 7), it is the express intention of Issuer to allow
Holder to acquire or to require Issuer to repurchase such lesser number of
shares as may be permissible without any amendment or modification hereof.
(d) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Tennessee without regard to any
applicable conflicts of law rules.
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<PAGE>
(e) Descriptive Headings. The descriptive headings contained herein
are for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
(f) Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, telecopied (with
confirmation) or mailed by registered or certified mail (return receipt
requested) to the parties at the addresses set forth in the Merger Agreement (or
at such other address for a party as shall be specified by like notice).
(g) Counterparts. This Agreement and any amendments hereto may be
executed in two counterparts, each of which shall be considered one and the same
agreement and shall become effective when both counterparts have been signed, it
being understood that both parties need not sign the same counterpart.
(h) Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder or under the Option shall be assigned by any
of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other party, except that Grantee may assign this
Agreement to a wholly owned Subsidiary of Grantee and Grantee may assign its
rights hereunder in whole or in part after the occurrence of a Purchase Event.
Subject to the preceding sentence, this Agreement shall be binding upon, inure
to the benefit of and be enforceable by the parties and their respective
successors and assigns.
(i) Further Assurances. In the event of any exercise of the Option by
Holder, Issuer and Holder shall execute and deliver all other documents and
instruments and take all other action that may be reasonably necessary in order
to consummate the transactions provided for by such exercise.
(j) Specific Performance. The parties hereto agree that this
Agreement may be enforced by either party through specific performance,
injunctive relief and other equitable relief. Both parties further agree to
waive any requirement for the securing or posting of any bond in connection with
the obtaining of any such equitable relief and that this provision is without
prejudice to any other rights that the parties hereto may have for any failure
to perform this Agreement.
(k) Confidentiality Agreements. The parties hereto agree that this
Agreement supersedes any provision of the Confidentiality Agreements that could
be interpreted to preclude the exercise of any rights or the fulfillment of any
obligations under this Agreement, and that none of the provisions included in
the Confidentiality Agreements will act to preclude Holder from exercising the
Option or exercising any other rights under this Agreement or act to preclude
Issuer from fulfilling any of its obligations under this Agreement.
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<PAGE>
IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock Option
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the day and year first written above.
ATTEST: MAGNA GROUP, INC.
By:/s/ Carolyn B. Ryseff By:/s/ G. Thomas Andes
Carolyn B. Ryseff G. Thomas Andes
Secretary Chairman, President, and
Chief Executive Officer
[CORPORATE SEAL]
ATTEST: UNION PLANTERS CORPORATION
By:/s/ E. James House, Jr. By:/s/ Benjamin W. Rawlins, Jr.
E. James House, Jr. Benjamin W. Rawlins, Jr.
Secretary Chairman and Chief Executive
Officer
[CORPORATE SEAL]
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EXHIBIT 99.1
News [LOGO] MAGNA GROUP, INC.
One Magna Place
1401 South Brentwood Boulevard
St. Louis, Missouri 63144-1401
==============================================================================
MAGNA GROUP ANNOUNCES MERGER WITH UNION PLANTERS
ST. LOUIS, MISSOURI; February 22, 1998 Magna Group (NYSE:MGR) and Union Planters
Corporation (NYSE:UPC) announced the signing of a definitive agreement under
which Magna will be merged into Union Planters. The agreement has been approved
by the boards of directors of both companies. The merger is subject to the
approval of shareholders and appropriate regulatory agencies, and is expected to
close in the second or third quarter.
The transaction will be accounted for as a pooling of interests and provides for
a tax free exchange of 0.9686 shares of UPC common stock for each common share
of Magna Group. Based on the UPC closing price on February 20 of $63 7/16, the
value of the transaction is approximately $2.3 billion or $61.45 per Magna
common share. In connection with the execution of the merger agreement, Magna
Group granted Union Planters the option to purchase, under certain
circumstances, up to 19.9% of Magna Group's outstanding common stock.
Magna Group, the third largest bank holding company headquartered in Missouri,
serves over 60 communities with 139 banking locations in Missouri, Illinois and
Iowa and reported total assets at year end of $7 billion. Sixty percent of
Magna's deposits are located in the St. Louis metropolitan market. Central and
southern Illinois represent 21% of Magna's deposit base with Iowa making up the
remaining 19%. Union Planters has existing banking operations in the St. Louis
metropolitan area and the Columbia, Cape Girardeau and Springfield, Missouri
markets. The combined organizations will have the third largest deposit market
share in the St. Louis metropolitan area.
On a pro-forma basis, including other pending acquisitions, Union Planters will
have approximately $28.5 billion in assets, $19.4 billion in loans, $21.5
billion in deposits, and $3 billion in shareholder equity.
Benjamin W. Rawlins, Jr., Chief Executive Officer of Union Planters stated, "I
am very pleased to be able to announce this merger with Magna Group. Our two
companies have similar philosophies in many areas and have developed a number of
complementary strategies. While the merger will permit the consolidation of some
overlapping facilities, the primary benefit will be the ability to leverage our
delivery systems, product development and technology efforts in a meaningful
way."
Thomas Andes, Chairman and CEO of Magna Group, will serve as Vice Chairman of
Union Planters Corporation and will focus on the smooth integration of Magna
into Union Planters. Andes stated, "This combination makes sense for our
shareholders, our customers and the entire
<PAGE>
Magna family. The Union Planters philosophy of community banking gives us the
opportunity to continue a tradition of providing quality service to
the markets we serve."
Union Planters, headquartered in Memphis, Tennessee was founded in 1869 and is
an $18 billion bank holding company with banking offices in Tennessee, Missouri,
Florida, Mississippi, Arkansas, Alabama, Louisiana and Kentucky. Union Planters
has eight other pending acquisitions totalling approximately $3 billion, the
largest of which is Peoples First based in Panducah, KY.
-END-
For More Information:
Media: Bill Andrews
Senior Vice President
Union Planters Corporation
901.580.2892
Financial: Jack Parker
Executive Vice President & CFO
Union Planters Corporation
901.580.6781
At Magna: Bradford W. Koeneman
Executive Vice President
Investor Relations/Marketing
314.963.3009
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