SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
Ameribanc Investors Group
(Name of Issuer)
Shares of Beneficial Interest, $1.00 par value per share
(Title of Class of Securities)
012622 10 3
(CUSIP Number)
Marion A. Cowell, Jr.
One First Union Center
Charlotte, North Carolina 28288-0013
(704) 374-6828
(Name, Address and Telephone Number
of Person Authorized to Receive
Notices and Communications)
October 11, 1994
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule
13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this
statement [X]. (A fee is not required only if the reporting
person: (1) has a previous statement on file reporting
beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent
or less of such class. See Rule 13d-7.)
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in
a prior cover page.
Page 1 of 8
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The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
CUSIP No.: 023622 10 3
1. Name of Reporting Person: First Union Corporation
S.S. or I.R.S. Identification No. of Above Person: I.R.S.
Identification No. 56-0898180
2. Check the Appropriate Box if a Member of a Group (See
Instructions):
a. [ ] b. [ ]
3. SEC Use Only
4. Source of Funds (see Instructions): WC; 00
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e): [ ]
6. Citizenship or Place of Organization: North Carolina
Number of 7. Sole Voting Power: 7,001,236*
Shares Bene-
ficially 8. Shared Voting Power:
Owned by
Each Report- 9. Sole Dispositive Power: 7,000,721*
ing Person
With 10. Shared Dispositive Power:
11. Aggregate Amount Beneficially Owned by Each Reporting
Person:
7,001,236*
12. Check Box if the Aggregate Amount in Row 11 Excludes Certain
Shares (See Instructions): [ ]
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13. Percent of Class Represented by Amount in Row 11: 19.7*
14. Type of Reporting Person (See Instructions): HC; CO
* Of the shares indicated, 7,000,000 shares are purchasable by
First Union Corporation ("FUNC") upon exercise of an option
issued to FUNC on October 11, 1994, and described in Item 4 of
this report. Prior to the exercise of the option, FUNC is not
entitled to any rights as a shareholder of Ameribanc Investors
Group ("Ameribanc") as to the shares covered by the option.
The option may only be exercised upon the happening of
certain events referred to in Item 4, none of which has
occurred as of the date hereof. The 1,236 additional shares
are held in a fiduciary capacity by one or more banking
subsidiaries of FUNC with sole voting and/or dispositive power
with respect to such shares, as indicated above. In addition
to the 1,236 shares, 25,000 shares are also held by one or
more banking subsidiaries of FUNC in a fiduciary capacity, but
such subsidiaries do not have either sole or shared voting or
dispositive power with respect to such shares. FUNC expressly
disclaims beneficial ownership of any of the shares of
Ameribanc which are purchasable by FUNC upon exercise of the
option. The percentage indicated represents the percentage of
the total outstanding shares of beneficial interest of
Ameribanc as of September 30, 1994 (excluding shares issuable
upon exercise of the option).
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Item 1. Security and Issuer.
This statement relates to the shares of beneficial interest
of Ameribanc Investors Group ("Ameribanc"), $1.00 par value per
share ("Ameribanc Shares"). Ameribanc is a Maryland real estate
investment trust whose principal executive offices are located at
7630 Little River Turnpike, Annandale, Virginia 22003.
Item 2. Identity and Background.
This statement is being filed by First Union Corporation
("FUNC"), a North Carolina corporation whose principal executive
offices are located at One First Union Center, Charlotte, North
Carolina 28288-0013. FUNC is a bank holding company registered
under the Bank Holding Company Act of 1956, as amended.
To the best of FUNC's knowledge, during the last five years
neither FUNC nor any of its directors or executive officers has
been convicted in any criminal proceedings (excluding traffic
violations or similar misdemeanors) nor has FUNC or any of its
directors or executive officers been a party to any civil
proceeding of a judicial or administrative body of competent
jurisdiction resulting in a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or
finding any violation with respect to such laws.
Attached hereto as Annex A is an appendix to Item 2 setting
forth certain additional information concerning the directors and
executive officers of FUNC.
Item 3. Source and Amount of Funds or Other Consideration.
It is presently anticipated that purchases of Ameribanc
Shares as described in Item 4 would be made with funds obtained
from FUNC's working capital and funds available for investment.
Item 4. Purpose of Transaction.
Pursuant to an Agreement and Plan of Mergers, dated as of
October 10, 1994 (the "Merger Agreement"), among Ameribanc,
Ameribanc Savings Bank, FSB ("ASB"), FUNC, First Union
Corporation of Virginia, First Union Corporation of Maryland
("FUNC-MD"), and First Union National Bank of Virginia ("FUNB-
VA"), and in consideration thereof, Ameribanc issued to FUNC an
option (the "Option") to purchase, under certain conditions, up
to 7,000,000 Option Shares (the "Option Shares") at a purchase
price per share of $2.625 (the "Purchase Price"), subject to
adjustment pursuant to anti-dilution provisions. The Purchase
Price is equal to the
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closing bid price per Ameribanc Share on October 12, 1994.
The Option was issued to FUNC pursuant to an Option
Agreement, dated as of October 11, 1994 (the "Option Agreement"),
between FUNC and Ameribanc, which formed an integral part of the
Merger Agreement. The Merger Agreement provides, among other
things, for the merger of FUNC-MD into Ameribanc (the "Merger").
Upon consummation of the Merger, which is subject to the approval
of Ameribanc Shareholders, regulatory approvals, and the
satisfaction or waiver of various other terms and conditions,
Ameribanc Shareholders would receive $3.00 for each Ameribanc
Share.
The Option Agreement generally provides that, if not in
material breach of the Option Agreement or the Merger Agreement,
FUNC may exercise the Option, in whole or in part, at any time
and from time to time following the happening of certain events
(each a "Purchase Event"), including:
(a) Ameribanc taking certain actions (each an "Acquisition
Transaction"), including authorizing, recommending or
entering into an agreement with any third party to
effect (i) a merger, consolidation or similar
transaction involving Ameribanc or ASB, (ii) the sale,
lease, exchange or other disposition of 20% or more of
the consolidated assets of Ameribanc and its
subsidiaries, or (iii) the issuance, sale or other
disposition of 20% or more of the voting securities of
Ameribanc or ASB; or
(b) any third party acquires or has the right to acquire
20% or more of the outstanding voting power of
Ameribanc or the Bank;
provided, the Option will terminate upon the earliest to occur of
certain events, including:
(a) consummation of the Merger;
(b) termination of the Merger Agreement prior to the
happening (unless the Issuer has engaged in discussions
with any third party regarding an Acquisition
Transaction) of a Purchase Event or certain events
(each a "Preliminary Purchase Event"), including:
(i) commencement by any third party of a tender or
exchange offer to purchase 20% or more of the
outstanding Ameribanc Shares;
(ii) failure of the shareholders of Ameribanc to
approve the Merger Agreement after pubic
announcement that a third party:
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(x) proposes to engage in an Acquisition
Transaction;
(y) commences a tender offer to purchase 20% or
more of the outstanding Ameribanc Shares; or
(z) files an application under certain federal
statutes relating to the regulation of banks
and other financial institutions or their
holding companies, to engage in an
Acquisition Transaction;
(iii) any third party proposes to Ameribanc or its
shareholders, publicly or in any writing that
becomes publicly disclosed, to engage in an
Acquisition Transaction;
(iv) after a proposal by a third party to Ameribanc or
its shareholders to engage in an Acquisition
Transaction, Ameribanc breaches any covenant or
obligation in the Merger Agreement which would
entitle FUNC to terminate the Merger Agreement; or
(v) any third party files an application with any
federal or state bank regulatory authority for
approval to engage in an Acquisition Transaction;
and
(c) 18 months after any other termination of the Merger
Agreement;
provided, however, if no Purchase Event or Preliminary Purchase
Event occurs before such termination of the Plan but if within
12 months after such termination a Purchase Event or Preliminary
Purchase Event occurs, the Option shall terminate 18 months after
such termination of the Plan.
Upon the occurrence of certain events set forth in the
Option Agreement, the Option must be converted into, or exchanged
for, an option, at the election of FUNC, of another corporation
or Ameribanc (the "Substitute Option"). In addition, the Option
Agreement grants certain registration rights ("Registration
Rights") to FUNC with respect to the Option Shares. The terms of
any such Substitute Option and such Registration Rights are set
forth in the Option Agreement.
A copy of the form of the Merger Agreement, including the
Option Agreement, is attached hereto as Annex B, and the
foregoing summary, as well as the other information contained in
this report, is qualified in its entirety by reference thereto.
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Item 5. Interest in Securities of the Issuer.
The 7,000,000 Option Shares which are purchasable by FUNC
upon exercise of the Option are equal to approximately 19.7% of
the outstanding Ameribanc Shares on September 30, 1994 (excluding
shares issuable upon exercise of the Option).
The 1,236 additional Ameribanc Shares are held in a
fiduciary capacity by one or more banking subsidiaries of FUNC
with sole voting and/or depositive power with respect to such
shares, as indicated above. In addition to the 1,236 Ameribanc
Shares, one or more banking subsidiaries of FUNC holds 25,000
additional Ameribanc Shares in a fiduciary capacity, but such
subsidiaries do not have sole or shared voting or depositive
power with respect to such shares.
FUNC expressly disclaims beneficial ownership of the
7,000,000 Option Shares because the Option is exercisable only in
the circumstances referred to in Item 4 above, none of which has
occurred as of this date. If the Option were exercised, FUNC
would have sole right to vote or to dispose of the Option Shares
issued as a result of such exercise.
The Option contains anti-dilution provisions which provide
that the number of Ameribanc Shares issuable upon exercise of the
Option and the Purchase Price will be adjusted upon the happening
of certain events, including the payment of a stock dividend or
other distribution in Ameribanc Shares or the subdivision or
reclassification of Ameribanc Shares, as set forth in the Option
Agreement.
Other than as set forth in this Item 5, to the best of
FUNC's knowledge (i) neither FUNC nor any subsidiary or affiliate
of FUNC
nor any of FUNC's executive officers or directors, beneficially
owns any Ameribanc Shares, and (ii) there have been no
transactions in Ameribanc Shares effected during the past 60 days
by FUNC, nor to the best of FUNC's knowledge, by any subsidiary
or affiliate of FUNC or any of FUNC's executive officers or
directors.
No other person is known by FUNC to have the right to
receive or the power to direct the receipt of dividends from, or
the proceeds from the sale of, the Ameribanc Shares obtainable by
FUNC upon exercise of the Option.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities to the Issuer.
Other than the Merger Agreement, including Exhibit A
thereto, a copy of the form of which (excluding the Schedules and
certain Exhibits referred to in the Merger Agreement) is attached
hereto as
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Annex B, to the best of FUNC's knowledge there are at present no
contracts, arrangements, understandings or relationships (legal
or
otherwise) among the persons named in Item 2 above and between
such persons and any person with respect to any securities of
Ameribanc. Exhibit A to the Merger Agreement contains the form
of the Option Agreement.
Item 7. Material to be Filed as Exhibits.
A copy of the form of the Merger Agreement, including the
Option Agreement, is attached hereto as Annex B.
Signature.
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
statement is true, complete and correct.
FIRST UNION CORPORATION
Date: October 12, 1994 /s/ Kent S. Hathaway
Senior Vice President and
Deputy General Counsel
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Annex A
Appendix to Item 2
Principal
Position with employment and
Name and residence First Union principal business
or business address* Corporation of employer
G. Alex Bernhardt Director President and Chief
Bernhardt Furniture Executive Officer,
Furniture Company Bernhardt Furniture
P.O. Box 740 Company, furniture
Lenoir, NC 28645 manufacturing
W. Waldo Bradley Director Chairman, Bradley
Bradley Plywood Corp. Plywood Corporation,
P.O. Box 1408 building materials
Savannah, GA 31402-1408
Robert J. Brown Director Chairman, President
B&C Associates, Inc. and Chief Executive
P.O. Box 2636 Officer, B&C
High Point, NC 27261-2636 Associates, Inc., a
public relations and
marketing research
firm
Edward E. Crutchfield, Executive Chairman, President
Jr. Officer and and Chief Executive
First Union Corporation Director Officer, First Union
One First Union Center Corporation
Charlotte, NC 28288
Robert D. Davis Director Chairman, DDI, Inc.,
DDI, Inc. investments
P.O. Box 2088
Jacksonville, FL 32203-2088
R. Stuart Dickson Director Chairman of
Ruddick Corporation Executive Committee,
Two First Union Center Ruddick Corporation,
Suite 2000 a diversified
Charlotte, NC 28282 holding company
B.F. Dolan Director Investor
Two First Union Center
Suite 1990
Charlotte, NC 28282
A-1
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Principal
Position with employment and
Name and residence First Union principal business
or business address* Corporation of employer
Roddey Dowd, Sr. Director Chairman, Charlotte
Charlotte Pipe & Pipe & Foundry
Foundry Company Company,
P.O. Box 35430 manufacturer of pipe
Charlotte, NC 28235 and fittings
John R. Georgius Executive President, First
First Union Corporation Officer and Union Corporation
One First Union Center Director
Charlotte, NC 28288-0003
William H. Goodwin Director Chairman, CCA
CCA Industries, Inc. Industries, Inc. a
901 East Cary Street multinational
Suite 1400 organization
Richmond, VA 23219
Brenton S. Halsey Director Chairman Emeritus,
James River Corporation James River
P.O. Box 2218 Corporation
Richmond, VA 23217
Howard H. Haworth Director President, the
The Haworth Group Haworth Group,
First Union Bank Bldg. investments
300 North Green Street
Suite 201
Morganton, NC 28655
Torrence E. Hemby, Jr. Director President, Beverly
Beverly Crest Corp. Crest Corporation,
2809 Cavan Court real estate
Charlotte, NC 28270 development
Leonard G. Herring Director President and Chief
Lowe's Companies, Inc. Executive Officer,
P.O. Box 1111 Lowe's Companies,
North Wilkesboro, NC 28656 Inc., building and
related products
Jack A. Laughery Director Investor
800 Tiffany Boulevard
Suite 305
Rocky Mount, NC 27804
A-2
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Principal
Position with employment and
Name and residence First Union principal business
or business address* Corporation of employer
Max Lennon Director President, Clemson
Clemson University University
P.O. Box 992
Clemson, SC 29633-0992
Radford D. Lovett Director Chairman, Commodores
Commodores Point Terminal Point Terminal
Corporation Corporation, marine
P.O. Box 4069 terminal operator
Jacksonville, FL 32201
Henry D. Perry Director Retired Physician
12240 N.W. 8th Street
Plantation, FL 33325
Randolph N. Reynolds Director Vice Chairman
Reynolds Metals Company Reynolds, an
6601 West Broad Street aluminum
Richmond, VA 23261 manufacturer
Ruth G. Shaw Director Vice President,
Duke Power Company Corporate
P.O. Box 1009 Communications
EC06B Duke Power Company,
Charlotte, NC 28201-1009 an investor-owned
electric utility
Lanty L. Smith Director Chairman and Chief
Precision Fabrics Executive Officer,
Group, Inc. Precision Fabrics
301 North Elm Street Group, Inc.,
Greensboro, NC 27401 textile products
Dewey L. Trogdon Director Chairman, Cone Mills
P.O. Box 1477 Corporation, textile
Banner Elk, NC 28604 manufacturing
John D. Uible Director Investor
225 Water Street
Suite 840
Jacksonville, FL 32202
B.J. Walker Executive Officer Vice Chairman,
225 Water Street and Director First Union
Jacksonville, Fl 32202 Corporation
A-3
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Principal
Position with employment and
Name and residence First Union principal business
or business address* Corporation of employer
Kenneth G. Younger Director Chairman, Carolina
Carolina Freight Corp. Freight Corporation,
P.O. Box 1000 interstate motor
Cherryville, NC 28021 carrier
Marion A. Cowell, Jr. Executive Executive Vice
First Union Corporation Officer President,
One First Union Center Secretary and
Charlotte, NC 28288 General Counsel,
First Union
Corporation
Robert T. Atwood Executive Executive Vice
First Union Corporation Officer President and
One First Union Center Chief Financial
Charlotte, NC 28288 Officer, First
Union Corporation
*All of the directors and executive officers are citizens of the
United States.
A-4
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ANNEX B
AGREEMENT AND PLAN OF MERGERS
AGREEMENT AND PLAN OF MERGERS, dated as of the 10th day of October, 1994
(this "Plan"), by and among AMERIBANC INVESTORS GROUP, an unincorporated
Maryland real estate investment trust (the "Trust"), AMERIBANC SAVINGS BANK,
FSB, a federal savings bank (the "Bank"), FIRST UNION CORPORATION, a North
Carolina corporation ("FUNC"), FIRST UNION CORPORATION OF VIRGINIA, a Virginia
Corporation ("FUNC-VA"), FIRST UNION CORPORATION OF MARYLAND, a Maryland
corporation ("FUNC-MD"), and FIRST UNION NATIONAL BANK OF VIRGINIA, a national
banking association ("FUNB-VA").
RECITALS:
(A) THE TRUST. The Trust is an unincorporated Maryland real estate
investment trust duly organized and existing in good standing under the laws of
the State of Maryland, with its principal executive offices located in
Annandale, Virginia. The Trust is a registered savings and loan holding company
under the Home Owners' Loan Act of 1933 ("HOLA"). As of the date hereof, the
Trust has unlimited authorized shares of beneficial interest, each of $1.00 par
value ("Trust Shares"), and unlimited authorized shares of 6% Cumulative
Convertible Redeemable Preferred Stock, each of $21.00 par value ("Trust
Preferred Stock") (no other class of equity securities being authorized), of
which 35,507,595 Trust Shares and 18,625 shares of Trust Preferred Stock were
issued and outstanding as of September 30, 1994. Since September 30, 1994, no
shares of Trust Preferred Stock have been issued, and no Trust Shares have been
issued except upon conversion of outstanding shares of Trust Preferred Stock
and/or upon exercise of outstanding Stock Options (as hereinafter defined) in
accordance with their respective terms.
(B) THE BANK. The Bank is a stock federal savings bank duly organized and
validly existing under the laws of the United States, with its principal
executive offices located in Annandale, Virginia. As of the date hereof, the
Bank has 500,000 authorized shares of common stock, each of $1.00 par value
("Bank Common Stock") (no other class of capital stock being authorized), of
which 500,000 shares are issued and outstanding and owned by the Trust. As of
June 30, 1994, the Bank had capital of $69,132,690, divided into common stock of
$500,000, surplus of $13,574,116, donated capital of $44,972,669, undivided
profits, including capital reserves, of $11,420,283, and net unrealized holding
gains (losses) on available-for-sale securities of ($1,334,378).
(C) FUNC. FUNC is a corporation duly organized and existing in good
standing under the laws of the State of North Carolina, with its principal
executive offices located in Charlotte, North Carolina, and a multi-bank holding
company, registered under the Bank Holding Company Act of 1956, as amended (the
"BHC Act").
(D) FUNC-VA. FUNC-VA is a corporation duly organized and existing in good
standing under the laws of the Commonwealth of Virginia, with its principal
executive offices located in Roanoke, Virginia. FUNC-VA is a subsidiary of FUNC.
(E) FUNC-MD. FUNC-MD is a corporation duly organized and existing in good
standing under the laws of the State of Maryland, with its principal executive
offices located in Baltimore, Maryland. As of the date hereof, FUNC-MD has
100,000 authorized shares of common stock, each of $1.00 par value ("FUNC-MD
Common Stock") (no other class of capital stock being authorized), of which 100
shares of FUNC-MD Common Stock are issued and outstanding and owned by FUNC-VA.
(F) FUNB-VA. FUNB-VA is a national banking association duly organized and
existing under the laws of the United States, with its principal executive
offices located in Roanoke, Virginia. As of the date hereof, FUNB-VA has
15,000,000 authorized shares of common stock, each of $10.00 par value ("FUNB-VA
Common Stock") (no other class of capital stock being authorized), of which
6,516,400 shares are issued and outstanding and owned by FUNC-VA (other than
directors' qualifying shares). As of June 30, 1994, FUNB-VA had capital of
$722,068,000, divided into common stock of $65,164,000, surplus of $403,457,000,
undivided profits, including capital reserves, of $300,373,000, and net
unrealized holding gains (losses) on available-for-sale securities of
$46,926,000.
(G) OPTION AGREEMENT. As a condition of and inducement to FUNC's entry into
this Plan, the Trust has agreed that, prior to 8:00 a.m. on October 11, 1994,
the Trust shall enter into an Option Agreement with FUNC (the "Option
Agreement") in the form attached hereto as EXHIBIT A, pursuant to which the
Trust shall grant to FUNC an option to purchase, under certain circumstances,
Trust Shares.
(H) RIGHTS, ETC. Except as Previously Disclosed (as hereinafter defined) in
SCHEDULE 4.01(C), there are no Trust Shares, or shares of Trust Preferred Stock
or Bank Common Stock authorized and reserved for issuance, neither the Trust nor
the Bank has any Rights (as defined below) issued or outstanding, and neither
the Trust nor the Bank has any commitment to authorize, issue or sell any Trust
Shares, Trust Preferred Stock, Bank Common Stock or Rights, except (i) pursuant
to this
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Plan, (ii) the Option Agreement, (iii) upon conversion of the Trust Preferred
Stock outstanding at the date hereof, or (iv) upon the exercise of Stock Options
outstanding at the date hereof. The term "Rights" means securities or
obligations convertible into or exchangeable for, or giving any person any right
to subscribe for or acquire, or any options, calls or commitments relating to,
shares of equity securities. There are no preemptive rights in respect of the
Trust Shares or the Trust Preferred Stock.
(G) APPROVALS. The Board of Trustees or the Board of Directors, as
applicable, of each of the Trust, the Bank, FUNC, FUNC-VA, FUNC-MD and FUNB-VA
has approved, at meetings of each of such Boards, this Plan and (in the case of
the Trust and FUNC) the Option Agreement, and has authorized the execution
hereof and thereof in counterparts.
In consideration of their mutual promises and obligations, the parties
hereto adopt and make this Plan and prescribe the terms and conditions thereof
and the manner and basis of carrying it into effect, which shall be as follows:
I. THE MERGERS.
1.01. THE TRUST MERGER. On the Effective Date (as hereinafter defined):
(A) THE CONTINUING TRUST. FUNC-MD shall merge into the Trust (the
"Trust Merger"), the separate existence of FUNC-MD shall cease and the
Trust (the "Continuing Trust") shall survive, and the name of the
Continuing Trust shall be "First Union of Maryland".
(B) RIGHTS, ETC. The Continuing Trust shall thereupon and thereafter
possess all of the rights, privileges, immunities and franchises, of a
public as well as of a private nature, of each of the merging entities; and
all property, real, personal and mixed, and all debts due on whatever
account, and all other choses in action, and all and every other interest,
of or belonging to or due to each of the entities so merged, shall be
deemed to be vested in the Continuing Trust without further act or deed;
and the title to any real estate or any interest therein, vested in each of
such entities, shall not revert or be in any way impaired by reason of the
Trust Merger.
(C) LIABILITIES. The Continuing Trust shall thenceforth be responsible
and liable for all the liabilities, obligations and penalties of each of
the entities so merged.
(D) DECLARATION OF TRUST; TRUSTEES' REGULATIONS; TRUSTEES; OFFICERS.
The Declaration of Trust and Trustees' Regulations of the Continuing Trust
shall be those of the Trust, as in effect immediately prior to the Trust
Merger becoming effective, except as provided in SECTION 1.01(A) above. The
directors and officers of FUNC-MD in office immediately prior to the Trust
Merger becoming effective shall be the trustees and officers of the
Continuing Trust, respectively, together with such additional trustees and
officers as may thereafter be elected, who shall hold office until such
time as their successors are elected and qualified.
1.02. THE BANK MERGER. Immediately following consummation of the Trust
Merger on the Effective Date, or as soon thereafter as FUNB-VA may deem
appropriate:
(A) THE CONTINUING BANK. The Bank shall be merged with and into
FUNB-VA (the "Bank Merger" and together with the Trust Merger, the
"Mergers"), the separate existence of the Bank shall cease and FUNB-VA (the
"Continuing Bank") shall survive, the name of the Continuing Bank shall be
"First Union National Bank of Virginia", and the Continuing Bank shall
continue to conduct the business of a national banking association at its
main office in Roanoke, Virginia and at the legally established branches of
the Bank and FUNB-VA.
(B) RIGHTS, ETC. The Continuing Bank shall thereupon and thereafter
possess all the rights, privileges, immunities and franchises, of a public
as well as of a private nature, of each of the banks so merged; and all
property, real personal and mixed, and all debts due on whatever account,
and all other choses in action, and all and every other interest, of or
belonging to or due to each of the banks so merged, shall be taken and
deemed to be transferred to and vested in the Continuing Bank without
further act or deed, including appointments, designations and nominations
and all other rights and interests in any fiduciary capacity; and the title
to any real estate or any interest therein, vested in each of such banks,
shall not revert or be in any way impaired by reason of the Bank Merger.
(C) LIABILITIES, ETC. The Continuing Bank shall thenceforth be
responsible and liable for all the liabilities, obligations and penalties
of the banks so merged (including liabilities arising out of the operation
of any trust departments). All rights of creditors and obligors and all
liens on the property of each of the Bank and FUNB-VA shall be preserved
unimpaired.
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(D) CHARTER; BY-LAWS; DIRECTORS; OFFICERS. The Charter and By-Laws of
the Continuing Bank shall be those of FUNB-VA, as in effect immediately
prior to the Bank Merger becoming effective. The directors and officers of
FUNB-VA in office immediately prior to the Bank Merger becoming effective
shall be the directors and officers of the Continuing Bank, together with
such additional directors and officers as may thereafter be elected, who
shall hold office until such time as their successors are elected and
qualified.
(E) OUTSTANDING STOCK OF THE CONTINUING BANK. The amount of the
capital stock of the Continuing Bank shall be not less than $70,164,000 and
shall consist of not less than 7,016,400 issued and outstanding shares of
common stock, each of $10.00 par value, and the issued and outstanding
shares of FUNB-VA shall remain as issued and outstanding shares of the
Continuing Bank, each of $10.00 par value, and the holders thereof shall
retain their rights therein.
(F) OUTSTANDING BANK COMMON STOCK. Each of the shares of Bank Common
Stock issued and outstanding immediately prior to the Bank Merger shall, by
virtue of the Bank Merger, automatically and without any action on the part
of the holder thereof, become and be converted into the right to receive
one share of common stock of the Continuing Bank.
1.03. EFFECTIVE DATE. Subject to the conditions to the obligations of the
parties to effect the Mergers as set forth in ARTICLE VI, the effective date
(the "Effective Date") shall be such date as FUNC shall notify the Trust in
writing not less than five days prior thereto, which date shall not be more than
30 days after such conditions have been satisfied or waived in writing. Prior to
the Effective Date, FUNC-MD and the Trust shall execute and deliver to the
Maryland State Department of Assessment and Taxation, Articles of Merger in
accordance with applicable law necessary to effectuate the Trust Merger.
II. CONSIDERATION.
2.01. TRUST MERGER CONSIDERATION. Subject to the provisions of this Plan,
on the Effective Date:
(A) OUTSTANDING FUNC-MD CAPITAL STOCK. Each of the shares of FUNC-MD
Common Stock issued and outstanding immediately prior to the Trust Merger
shall, by virtue of the Trust Merger, automatically and without any action
on the part of the holder thereof, become and be converted into the right
to receive one share of beneficial interest of the Continuing Trust.
(B) OUTSTANDING TRUST SHARES. Each Trust Share (excluding Trust Shares
("Treasury Shares") held by the Trust or any of the Trust Subsidiaries (as
hereinafter defined) or by FUNC or any of its subsidiaries, in each case
other than in a fiduciary capacity or as a result of debts previously
contracted) issued and outstanding immediately prior to the Effective Date
shall, by virtue of the Trust Merger, automatically and without any action
on the part of the holder thereof, become and be converted into the right
to receive a cash payment in the amount of $3.00 (the "Cash Consideration")
from FUNC-VA, the sole stockholder of FUNC-MD.
2.02. STOCKHOLDER RIGHTS; STOCK TRANSFERS. On the Effective Date, holders
of Trust Shares (excluding shares of beneficial interest of the Continuing Trust
issued pursuant to SECTION 2.01(A) above) shall cease to be, and shall have no
rights as, holders thereof, other than to receive the consideration provided
under this ARTICLE II. After the Effective Date, there shall be no transfers on
the books of the Trust or the Continuing Trust of the Trust Shares which were
issued and outstanding immediately prior to the Effective Date.
2.03. EXCHANGE PROCEDURES. As promptly as practicable after the Effective
Date, FUNC-VA shall send or cause to be sent to each former holder of Trust
Shares of record immediately prior to the Effective Date transmittal materials
for use in exchanging such holder's certificates for Trust Shares for the
consideration set forth in this ARTICLE II. The cash payment into which such
holder's Trust Shares are converted on the Effective Date will be delivered to
such holder only upon delivery to First Union National Bank of North Carolina
(the "Exchange Agent") of the certificates representing all of such Trust Shares
(or indemnity satisfactory to FUNC-VA and the Exchange Agent, in their judgment,
if any of such certificates are lost, stolen or destroyed). No interest will be
paid on such cash payment to which such holder shall be entitled to receive upon
such delivery.
2.04. TREASURY SHARES. Each of the Treasury Shares of the Trust shall be
cancelled and retired at the effectiveness of the Trust Merger and no
consideration shall be issued in exchange therefor.
2.05. RESERVATION OF RIGHT TO REVISE TRANSACTION. FUNC may at any time
change the method of effecting the acquisition of the Trust and the Bank
(including without limitation the provisions of this ARTICLE II) if and to the
extent it deems such change to be desirable; PROVIDED, HOWEVER, that no such
change shall (i) alter or change the amount or kind of consideration to be
issued to holders of Trust Shares as provided for in this Plan, (ii) adversely
affect the tax treatment to holders of Trust
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Shares as a result of such change, or (iii) materially impede or delay receipt
of any approval referred to in SECTION 6.02 or the consummation of the
transactions contemplated by this Plan.
2.06. TREATMENT OF STOCK OPTIONS. The Trust shall use its best efforts to
ensure that, at the Effective Date, all options (other than the Option (as
defined in the Option Agreement) granted to FUNC pursuant to the Option
Agreement) to purchase Trust Shares that are outstanding immediately prior to
the Effective Date (each, a "Stock Option"), shall be cancelled and of no force
or effect. With respect to those Stock Options with an exercise price per share
that is less than the Cash Consideration per share, each holder thereof will be
entitled to receive, in settlement thereof, solely a cash payment from the Trust
in an amount equal to the excess of the Cash Consideration per share over the
exercise price per Trust Share covered by the Stock Option, multiplied by the
total number of Trust Shares covered by the Stock Option. The number of
outstanding Stock Options as of the date hereof and the exercise prices therefor
are Previously Disclosed on SCHEDULES 4.01(C) AND 4.01(Q).
III. ACTIONS PENDING CONSUMMATION.
Without the prior written consent of FUNB-VA, each of the Trust and the
Bank shall conduct its business and that of each Trust Subsidiary in the
ordinary and usual course consistent with past practice and shall use its best
efforts to maintain and preserve its and each of such subsidiaries' business
organization, key employees and advantageous business relationships, and,
without limitation of the foregoing, each of the Trust and the Bank will not,
and will cause each of the Trust Subsidiaries not to, agree to:
3.01. EQUITY SECURITIES. Except for or as otherwise permitted in or
expressly contemplated by this Plan or the Option Agreement or with respect to
the issuance of Trust Shares upon conversion of shares of Trust Preferred Stock
outstanding on the date hereof or exercise of Stock Options outstanding on the
date hereof in accordance with their respective terms, or as Previously
Disclosed in SCHEDULE 4.01(C), issue, sell or otherwise permit to become
outstanding any additional Trust Shares, Bank Common Stock, Trust Preferred
Stock, or any other equity securities of the Trust or any of the Trust
Subsidiaries, or any Rights, or enter into any agreement with respect to the
foregoing, or permit any additional Trust Shares to become subject to grants of
employee options, stock appreciation rights or similar equity based employee
compensation rights.
3.02. DIVIDENDS, ETC. Make, declare or pay any dividend (other than
dividends payable on Trust Preferred Stock at a rate not exceeding the rate
presently set forth in the Articles Supplementary to Amended and Restated
Declaration of Trust dated August 13, 1984, which the Trust agrees to continue
to pay, and dividends from the Trust Subsidiaries to the Trust or the Bank, as
applicable) on or in respect of, or declare or make any distribution on, or,
other than as expressly contemplated by this Plan, directly or indirectly
combine, redeem, reclassify, purchase or otherwise acquire, any of its equity
securities or, other than as permitted in or expressly contemplated by this Plan
or the Option Agreement, authorize the creation or issuance of, or issue, any
additional shares of its equity securities or any Rights.
3.03. INDEBTEDNESS; LIABILITIES; ETC. Other than in the ordinary course of
business consistent with past practice, incur any indebtedness for borrowed
money, or assume, guarantee, endorse or otherwise as an accommodation become
responsible or liable for the obligations of any other individual, corporation
or other entity.
3.04. LINE OF BUSINESS; OPERATING PROCEDURES; ETC. Except as may be
directed by any Regulatory Authority (as hereinafter defined), (i) change its or
any of the Trust Subsidiaries' lending, investment, liability management or
other material policies and procedures in any material respect, except such
changes as are in accordance and in an effort to comply with SECTION 5.06, (ii)
incur or commit to incur any further capital expenditures beyond those
Previously Disclosed in SCHEDULE 3.04, other than in the ordinary course of
business and not exceeding $100,000 individually or $500,000 in the aggregate,
or (iii) commence any new line of business.
3.05. LIENS. Impose, or suffer the imposition, on any shares of stock of
any of the Trust Subsidiaries, any lien, charge or encumbrance, security
interest, equity, option, restriction (including restrictions on voting rights
or rights of disposition) and claims or third party rights of whatever nature
(collectively, "Liens"), or permit any such Lien to exist.
3.06. COMPENSATION; EMPLOYMENT AGREEMENTS; ETC. Enter into or amend any
employment, severance or similar agreement or arrangement with any of its
directors, trustees, officers or employees, or grant any salary or wage
increase, amend the terms of any Stock Option (except as may be required in
order to comply with SECTION 2.06) or increase any employee benefit (including
incentive or bonus payments), except normal individual increases in regular
compensation to employees in the ordinary course of business consistent with
past practice.
3.07. BENEFIT PLANS. Except as otherwise provided herein or as Previously
Disclosed in SCHEDULES 4.01(N) AND 4.01(Q), enter into or modify (except as may
be required by applicable law) any pension, retirement, stock option, stock
purchase,
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savings, profit sharing, deferred compensation, consulting, bonus, group
insurance or other employee benefit, incentive or welfare contract, plan or
arrangement, or any trust agreement related thereto, in respect of any of its
directors, trustees, officers or other employees, including without limitation
taking any action that accelerates the vesting or exercise of any benefits
thereunder.
3.08. CONTINUANCE OF BUSINESS. Dispose of or discontinue any portion of its
assets, business or properties, which is material to the Trust and the Trust
Subsidiaries taken as a whole, or merge or consolidate with, or acquire all or
any portion of, the business or property of any other entity which is material
to the Trust and the Trust Subsidiaries taken as a whole (except foreclosures by
the Bank in the ordinary course of business consistent with past practice).
3.09. AMENDMENTS. Amend its Declaration of Trust, Charter, Trustees'
Regulations, or By-laws.
3.10. CONTRACTS. Enter into, terminate or make any change in any material
contract, agreement or lease, except in the ordinary course of business
consistent with past practice with respect to contracts, agreements and leases
that are terminable by it without penalty on not more than 60 days prior written
notice.
3.11. CLAIMS. Settle any claim, action or proceeding involving any
liability for material money damages or restrictions upon the operations of the
Trust or any of the Trust Subsidiaries.
IV. REPRESENTATIONS AND WARRANTIES.
4.01. THE TRUST AND THE BANK REPRESENTATIONS AND WARRANTIES. Each of the
Trust and the Bank hereby represents and warrants to FUNC, FUNC-VA, FUNC-MD and
FUNB-VA as follows:
(A) RECITALS. The facts set forth in the Recitals of this Plan with
respect to it are true and correct.
(B) ORGANIZATION, STANDING AND AUTHORITY. It is duly qualified to do
business and is in good standing in the States of the United States and
foreign jurisdictions where its ownership or leasing of property or the
conduct of its business requires it to be so qualified and in which the
failure to be duly qualified, individually or in the aggregate, is
reasonably likely to have a Material Adverse Effect (as hereinafter
defined). Each of the Trust and the Trust Subsidiaries has in effect all
federal, state, local, and foreign governmental authorizations necessary
for it to own or lease its properties and assets and to carry on its
business as it is now conducted, the absence of which, individually or in
the aggregate, is reasonably likely to have a Material Adverse Effect.
(C) SHARES. The outstanding shares of it are validly issued and
outstanding, fully paid and nonassessable, and subject to no preemptive
rights. Except as Previously Disclosed in SCHEDULE 4.01(C) and except as
provided under the Option Agreement, there are no other shares of any
equity securities of the Trust or the Bank outstanding and no outstanding
Rights. There will be no change in the conversion factor of the Trust
Preferred Stock and the holders of the Trust Preferred Stock will not have
any rights to acquire any Trust Shares as a result of the transactions
contemplated hereby or by the Option Agreement. Dividends payable on the
Trust Preferred Stock are not in arrears and all of the outstanding shares
of Trust Preferred Stock have been outstanding for more than five years.
(D) TRUST SUBSIDIARIES. The Trust has Previously Disclosed in SCHEDULE
4.01(D) a list of all the direct or indirect subsidiaries of the Trust
(each, including the Bank, a "Trust Subsidiary" and, collectively,
including the Bank, the "Trust Subsidiaries"). The Bank is a savings bank
and is an "insured depository institution" as defined in the Federal
Deposit Insurance Act and applicable regulations thereunder. No equity
securities of any of the Trust Subsidiaries are or may become required to
be issued (other than to the Trust or a Trust Subsidiary) by reason of any
Rights. There are no contracts, commitments, understandings or arrangements
by which any of the Trust Subsidiaries is or may be bound to sell or
otherwise issue any shares of its capital stock, and there are no
contracts, commitments, understandings or arrangements relating to the
rights of the Trust or the Bank, as applicable, to vote or to dispose of
such shares. All of the shares of capital stock of each Trust Subsidiary
held by the Trust or a Trust Subsidiary are fully paid and nonassessable
and are owned by the Trust or a Trust Subsidiary free and clear of any
Liens. Each Trust Subsidiary is in good standing under the laws of the
jurisdiction in which it is incorporated or organized, and is duly
qualified to do business and in good standing in the jurisdictions where
its ownership or leasing of property or the conduct of its business
requires it to be so qualified and in which the failure to be duly
qualified is reasonably likely, individually or in the aggregate, to have a
Material Adverse Effect. Except as Previously Disclosed in SCHEDULE
4.01(D), the Trust does not own beneficially, directly or indirectly, any
shares of any equity securities or similar interests of any corporation,
bank, partnership, joint
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venture, business trust, association or other organization. The deposits of
the Bank are insured by the Savings Association Insurance Fund (the "SAIF")
of the Federal Deposit Insurance Corporation (the "FDIC"). The Bank is a
member in good standing with the Federal Home Loan Bank of Atlanta (the
"FHL Bank").
(E) POWER. It and each of the Trust Subsidiaries has the power and
authority to carry on its business as it is now being conducted and to own
all its material properties and assets, including in the case of the Trust,
the power and authority to own the Bank.
(F) AUTHORITY. Subject to the required approvals referred to in
SECTION 6.01, each of this Plan and, as to the Trust, the Option Agreement,
has been authorized by all necessary action of it and is a valid and
binding agreement of it enforceable against it in accordance with its
terms, subject to bankruptcy, insolvency and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles.
(G) NO DEFAULTS. Subject to the required approvals referred to in
SECTIONS 6.01 AND 6.02, and the required filings under federal and state
securities laws, and except as Previously Disclosed in SCHEDULE 4.01(G),
the execution, delivery and performance of this Plan and, as to the Trust,
the Option Agreement, and the consummation by it of the transactions
contemplated hereby and thereby, does not and will not (i) constitute a
breach or violation of, or a default under, any law, rule or regulation or
any judgment, decree, order, governmental permit or license, or agreement,
indenture or instrument of it or of any of the Trust Subsidiaries or to
which it or any of the Trust Subsidiaries or its or their properties is
subject or bound, which breach, violation or default is reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect, (ii)
constitute a breach or violation of, or a default under, its Declaration of
Trust, Charter, Trustees' Regulations or By-laws, or (iii) require any
consent or approval under any such law, rule, regulation, judgment, decree,
order, governmental permit or license or the consent or approval of any
other party to any such agreement, indenture or instrument, other than any
such consent or approval, which if not obtained, would not be reasonably
likely, individually or in the aggregate, to have a Material Adverse
Effect.
(H) FINANCIAL REPORTS. Except as Previously Disclosed in SCHEDULE
4.01(H), (i) as to the Trust, its Annual Report on Form 10-K for the fiscal
year ended December 31, 1993, and all other documents filed (including any
amendments thereto, other than any amendments filed after the date of this
Plan with respect to reports or documents filed prior to the date of this
Plan) subsequent to December 31, 1993 under Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended (together with the
rules and regulations thereunder, the "Exchange Act"), in the form filed
with the Securities and Exchange Commission (the "SEC") (in each such case,
the "Trust Financial Reports"), and (ii) as to the Bank, its Thrift
Financial Report for the fiscal year ended December 31, 1993, and all other
Thrift Financial Reports filed (including any amendments thereto, other
than any amendments filed after the date of this Plan with respect to
reports filed before the date of this Plan) subsequent to December 31,
1993, in the form filed with the Office of Thrift Supervision (the "OTS")
(in each case, the "Bank Financial Reports" and together with the Trust
Financial Reports, the "Trust/Bank Financial Reports") do not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they are made, not
misleading; and each of the balance sheets in or incorporated by reference
into the Trust/Bank Financial Reports (including the related notes and
schedules thereto) fairly presents the financial position of the entity or
entities to which it relates as of its date and each of the statements of
income and changes in stockholders' equity and cash flows or equivalent
statements in the Trust/Bank Financial Reports (including any related notes
and schedules thereto) fairly presents the results of operations, changes
in shareholders' equity and cash flows, as the case may be, of the entity
or entities to which it relates for the periods set forth therein, in each
case in accordance with generally accepted accounting principles
consistently applied during the periods involved, except in each case as
may be noted therein, subject to normal and recurring year-end audit
adjustments in the case of unaudited statements.
(I) ABSENCE OF UNDISCLOSED LIABILITIES. None of the Trust or the Trust
Subsidiaries has any obligation or liability (contingent or otherwise)
that, individually or in the aggregate, is reasonably likely to have a
Material Adverse Effect, except (i) as reflected in the Trust Financial
Reports prior to the date of this Plan, and (ii) for commitments and
obligations made, or liabilities incurred, in the ordinary course of its
business consistent with past practice since December 31, 1993.
(J) NO EVENTS. Except as Previously Disclosed in the Trust Financial
Reports filed after December 31, 1993, and prior to the date of this Plan,
no events involving or affecting the Trust or any of the Trust Subsidiaries
(other than changes in general economic conditions or changes in laws or
regulations affecting financial institutions generally) have occurred
which, individually or in the aggregate, are reasonably likely to have a
Material Adverse Effect.
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(K) PROPERTIES. Except as reserved against in the Trust Financial
Reports, the Trust and the Trust Subsidiaries have good and marketable
title, free and clear of all Liens, to all of the properties and assets,
tangible and intangible, reflected in the Trust Financial Reports as being
owned by the Trust or the Trust Subsidiaries as of the dates thereof, other
than those Liens that, individually or in the aggregate, are not reasonably
likely to have a Material Adverse Effect, except those sold or otherwise
disposed of in the ordinary course of business. All buildings and all
fixtures, equipment, and other property and assets which are held under
leases or subleases by any of the Trust or the Trust Subsidiaries are held
under valid leases or subleases, other than any such exceptions to validity
that, individually or in the aggregate, are not reasonably likely to have a
Material Adverse Effect.
(L) LITIGATION; REGULATORY ACTION. Except as Previously Disclosed in
SCHEDULE 4.01(L), no litigation, proceeding or controversy before any court
or governmental agency is pending which, individually or in the aggregate,
is reasonably likely to have a Material Adverse Effect or which alleges
claims under any fair lending law or other law relating to discrimination,
including, without limitation, the Equal Credit Opportunity Act, the Fair
Housing Act, the Community Reinvestment Act and the Home Mortgage
Disclosure Act or under any consumer disclosure law or regulation, and, to
the best of its knowledge, no such litigation, proceeding or controversy
has been threatened; and except as Previously Disclosed in SCHEDULE
4.01(L), neither it nor any of the Trust Subsidiaries or any of its or
their properties or their officers, trustees, directors or controlling
persons is a party to or is subject to any order, decree, agreement,
memorandum of understanding or similar arrangement with, or a commitment
letter or similar submission to, any federal or state governmental agency
or authority charged with the supervision or regulation of depository
institutions or their holding companies or engaged in the insurance of
deposits (together with any and all agencies or departments of federal,
state or local government (including, without limitation, the OTS, the FHL
Bank, the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board"), the FDIC, the OCC and any other federal or state bank,
thrift or other financial institution, insurance and securities regulatory
authorities (including the SEC), the "Regulatory Authorities") and neither
it nor any of the Trust Subsidiaries has been advised by any of such
Regulatory Authorities that such Regulatory Authority is contemplating
issuing or requesting (or is considering the appropriateness of issuing or
requesting) any such order, decree, agreement, memorandum or understanding,
commitment letter or similar submission.
(M) COMPLIANCE WITH LAWS. Except as Previously Disclosed in SCHEDULE
4.01(M), each of the Trust and the Trust Subsidiaries:
(1) has all permits, licenses, authorizations, orders and approvals
of, and has made all filings, applications and registrations with, all
Regulatory Authorities that are required in order to permit it to own
its businesses as presently conducted and that are material to the
business of the Trust and the Trust Subsidiaries, taken as a whole; all
such permits, licenses, certificates of authority, orders and approvals
are in full force and effect and, to the best knowledge of the Trust, no
suspension or cancellation of any of them is threatened; and all such
filings, applications and registrations are current;
(2) has received no notification or communication from any
Regulatory Authority or the staff thereof (i) asserting that any of the
Trust or the Trust Subsidiaries is not in compliance with any of the
statutes, regulations or ordinances which such Regulatory Authority
enforces, which, as a result of such noncompliance in any such instance,
individually or in the aggregate, is reasonably likely to have a
Material Adverse Effect, (ii) threatening to revoke any license,
franchise, permit or governmental authorization, which revocation,
individually or in the aggregate, is reasonably likely to have a
Material Adverse Effect, or (iii) requiring any of the Trust or the
Trust Subsidiaries (or any of its officers, directors, trustees or
controlling persons) to enter into a cease and desist order, agreement
or memorandum of understanding (or requiring the board of directors or
board of trustees thereof to adopt any resolution or policy);
(3) is not required to give prior notice to any federal banking or
thrift agency of the proposed addition of an individual to its board of
directors or board of trustees or the employment of an individual as a
senior executive;
(4) is, in the case of the Bank, able to receive brokered deposits
without a waiver; and
(5) is in compliance in all material respects with all fair lending
laws or other laws relating to discrimination, including, without
limitation, the Equal Credit Opportunity Act, the Fair Housing Act, the
Community Reinvestment Act and the Home Mortgage Disclosure Act, and
consumer disclosure laws and regulations.
(N) MATERIAL CONTRACTS. Except as Previously Disclosed in SCHEDULE
4.01(N), none of the Trust or the Trust Subsidiaries, nor any of its
respective assets, businesses or operations, is a party to, or is bound or
affected by, or receives benefits under, any material contract or agreement
or amendment thereto. True and correct copies of such contracts or
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agreements or amendments thereto have been or will be supplied to FUNC upon
request. None of the Trust or the Trust Subsidiaries is in default under
any contract, agreement, commitment, arrangement, lease, insurance policy
or other instrument to which it is a party, by which its respective assets,
business or operations may be bound or affected, or under which it or any
of its respective assets, business or operations receives benefits, which
default, individually or in the aggregate, is reasonably likely to have a
Material Adverse Effect, and there has not occurred any event that, with
the lapse of time or the giving of notice or both, would constitute such a
default. Neither the Trust nor any Trust Subsidiary is subject to or bound
by any contract containing covenants which limit the ability of the Trust
or any Trust Subsidiary to compete in any line of business or with any
person or which involve any restriction of geographical area in which, or
method by which, the Trust or any Trust Subsidiary may carry on its
business (other than as may be required by law or any applicable Regulatory
Authority).
(O) REPORTS. Since January 1, 1991, each of the Trust and the Trust
Subsidiaries has filed all reports and statements, together with any
amendments required to be made with respect thereto, that it was required
to file with (i) the FDIC, (ii) the OTS, the FHL Bank and the Federal Home
Loan Bank System, and (iii) any other applicable Regulatory Authority. As
of their respective dates (including any amendments thereto, other than any
amendments filed after the date of this Plan with respect to reports and
documents filed before the date of this Plan), each of such reports and
documents, including the financial statements, exhibits and schedules
thereto, complied in all material respects with all of the statutes, rules
and regulations enforced or promulgated by the Regulatory Authority with
which they were filed and did not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements made therein, in light of the circumstances under which they
were made, not misleading.
(P) NO BROKERS. All negotiations relative to this Plan and the
transactions contemplated hereby have been carried on by it directly with
the other parties hereto and no action has been taken by it that would give
rise to any valid claim against any party hereto for a brokerage
commission, finder's fee or other like payment, excluding a fee previously
disclosed to FUNB-VA to be paid to Friedman, Billings & Ramsey & Co., Inc.
(Q) EMPLOYEE BENEFIT PLANS.
(1) SCHEDULE 4.01(Q)(1) contains a complete list of all bonus,
deferred compensation, pension, retirement, profit-sharing, thrift,
savings, employee stock ownership, stock bonus, stock purchase,
restricted stock and stock option plans, all employment or severance
contracts, all medical, dental, health and life insurance plans, all
other employee benefit plans, contracts or arrangements and any
applicable "change of control" or similar provisions in any plan,
contract or arrangement maintained or contributed to by it or any of the
Trust Subsidiaries for the benefit of employees, former employees,
trustees, former trustees, directors, former directors or their
beneficiaries (the "Compensation and Benefit Plans"). True and complete
copies of all Compensation and Benefit Plans, including, but not limited
to, any trust instruments and/or insurance contracts, if any, forming a
part thereof, and all amendments thereto have been supplied to FUNB-VA.
(2) All "employee benefit plans" within the meaning of Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), other than "multiemployer plans" within the meaning of
Section 3(37) of ERISA ("Multiemployer Plans"), covering employees or
former employees of it and the Trust Subsidiaries (the "ERISA Plans"),
to the extent subject to ERISA, are in substantial compliance with
ERISA. Except as Previously Disclosed in SCHEDULE 4.01(Q)(2) each ERISA
Plan which is an "employee pension benefit plan" within the meaning of
Section 3(2) of ERISA ("Pension Plan") and which is intended to be
qualified under Section 401(a) of the Internal Revenue Code of 1986 (as
amended, the "Code") has received a favorable determination letter from
the Internal Revenue Service, and it is not aware of any circumstances
reasonably likely to result in the revocation or denial of any such
favorable determination letter or the inability to receive such a
favorable determination letter. There is no material pending or, to its
knowledge, threatened litigation relating to the ERISA Plans. Neither it
nor any of the Trust Subsidiaries has engaged in a transaction with
respect to any ERISA Plan that could subject it or any of the Trust
Subsidiaries to a tax or penalty imposed by either Section 4975 of the
Code or Section 502(i) of ERISA in an amount which would be material.
(3) No liability under Subtitle C or D of Title IV of ERISA has
been or is expected to be incurred by it or any of the Trust
Subsidiaries with respect to any ongoing, frozen or terminated
"single-employer plan", within the meaning of Section 4001(a)(15) of
ERISA, currently or formerly maintained by any of them, or the single-
employer plan of any entity which is considered one employer with it
under Section 4001(a)(15) of ERISA or Section 414 of the Code (an "ERISA
Affiliate"). Neither it nor any of the Trust Subsidiaries presently
contributes to a Multiemployer Plan, nor have they contributed to such a
plan within the past five calendar years. No notice of
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a "reportable event", within the meaning of Section 4043 of ERISA for
which the 30-day reporting requirement has not been waived, has been
required to be filed for any Pension Plan or by any ERISA Affiliate
within the past 12-month period.
(4) All contributions required to be made under the terms of any
ERISA Plan have been timely made. Neither any Pension Plan nor any
single-employer plan of an ERISA Affiliate has an "accumulated funding
deficiency" (whether or not waived) within the meaning of Section 412 of
the Code or Section 302 of ERISA. Neither it nor any of the Trust
Subsidiaries has provided, or is required to provide, security to any
Pension Plan or to any single-employer plan of an ERISA Affiliate
pursuant to Section 401(a)(29) of the Code.
(5) Under each Pension Plan which is a single-employer plan, as of
the last day of the most recent plan year, the actuarially determined
present value of all "benefit liabilities", within the meaning of
Section 4001(a)(16) of ERISA (as determined on the basis of the
actuarial assumptions contained in the plan's most recent actuarial
valuation) did not exceed the then current value of the assets of such
plan, and there has been no material change in the financial condition
of such plan since the last day of the most recent plan year.
(6) Neither it nor any of the Trust Subsidiaries has any
obligations for retiree health and life benefits under any plan, except
as set forth in SCHEDULE 4.01(Q)(6). There are no restrictions on the
rights of it or any of the Trust Subsidiaries to amend or terminate any
such plan without incurring any liability thereunder.
(7) Except as Previously Disclosed in SCHEDULE 4.01(Q)(7), neither
the execution and delivery of this Plan or the Option Agreement nor the
consummation of the transactions contemplated hereby or thereby will (i)
result in any payment (including, without limitation, severance,
unemployment compensation, golden parachute or otherwise) becoming due
to any director or any employee of it or any of the Trust Subsidiaries
under any Compensation and Benefit Plan or otherwise from it or any of
the Trust Subsidiaries, (ii) increase any benefits otherwise payable
under any Compensation and Benefit Plan, or (iii) result in any
acceleration of the time of payment or vesting of any such benefit.
(R) NO KNOWLEDGE. It knows of no reason (including those relating to
fair lending laws or other laws relating to discrimination, including,
without limitation, the Equal Credit Opportunity Act, the Fair Housing Act,
the Community Reinvestment Act and the Home Mortgage Disclosure Act, and
consumer disclosure laws and regulations) why the regulatory approvals
referred to in SECTION 6.02 should not be obtained, without the imposition
of any condition of the type referred to in the proviso following such
SECTION 6.02.
(S) LABOR AGREEMENTS. Neither it nor any of the Trust Subsidiaries is
a party to, or is bound by any collective bargaining agreement, contract or
other agreement or understanding with a labor union or labor organization,
nor is it or any of the Trust Subsidiaries the subject of a proceeding
asserting that it or any such subsidiary has committed an unfair labor
practice (within the meaning of the National Labor Relations Act) or
seeking to compel it or such subsidiary to bargain with any labor
organization as to wages and conditions of employment, nor is there any
strike or other labor dispute involving it or any of the Trust
Subsidiaries, pending or, to the best of its knowledge, threatened, nor is
it aware of any activity involving its or any of the Trust Subsidiaries'
employees seeking to certify a collective bargaining unit or engaging in
any other organization activity.
(T) ASSET CLASSIFICATION. It has Previously Disclosed in SCHEDULE
4.01(T) a list, accurate and complete in all material respects, of the
aggregate amounts of loans, extensions of credit or other assets of the
Trust and the Trust Subsidiaries that have been classified by it as of
August 31, 1994, separated by category of criticism or classification (the
"Asset Classification"); and no amounts of loans, extensions of credit or
other assets that have been classified as of August 31, 1994, by any
regulatory examiner as "Other Loans Specially Mentioned", "Substandard",
"Doubtful", "Loss", or words of similar import are excluded from the
amounts disclosed in the Asset Classification, other than amounts of loans,
extensions of credit or other assets that were charged off by the Trust or
Trust Subsidiary prior to August 31, 1994.
(U) ALLOWANCE FOR POSSIBLE LOAN LOSSES. The allowance for possible
loan losses shown on the consolidated balance sheets of the Trust included
in the June 30, 1994 Trust Financial Reports was, and the allowance for
possible loan losses to be shown on subsequent Trust Financial Reports,
will be, adequate, determined in accordance with generally accepted
accounting principles, including the requisite use of estimates and
judgments thereunder, to provide for possible losses, net of recoveries
relating to loans previously charged off, on loans outstanding (including
accrued interest receivable) as of the date thereof.
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(V) INSURANCE. Each of the Trust and the Trust Subsidiaries has taken
all requisite action (including without limitation the making of claims and
the giving of notices) pursuant to its directors' and officers' liability
insurance policy or policies in order to preserve all rights thereunder
with respect to all matters (other than matters arising in connection with
this Plan and the transactions contemplated hereby) that are known to the
Trust, except for such matters which, individually or in the aggregate, are
not reasonably likely to have a Material Adverse Effect. Previously
Disclosed in SCHEDULE 4.01(V) is a list of all insurance policies
maintained by or for the benefit of the Trust or the Trust Subsidiaries or
their directors, trustees, officers, employees or agents.
(W) STATE TAKEOVER LAWS; DECLARATION OF TRUST. The Trust or its Board
of Trustees has taken all necessary action to exempt this Plan and the
Option Agreement, and the transactions contemplated hereby and thereby
from, and this Plan, the Option Agreement and the transactions contemplated
hereby and thereby are exempt from, (i) any applicable takeover laws of the
State of Maryland, including without limitation the provisions of Section
3-602 and Title 3, Subtitle 7, of the Maryland General Corporation Law,
(ii) any applicable takeover provisions in the Trust's Declaration of
Trust, and (iii) any takeover provisions set forth in any agreement to
which the Trust or the Bank is a party or may be bound.
(X) NO FURTHER ACTION. It has taken all action so that the entering
into of this Plan and, as to the Trust, the Option Agreement, and the
consummation of the transactions contemplated hereby and thereby (including
without limitation the Mergers and the exercise of the Option) or any other
action or combination of actions, or any other transactions, contemplated
hereby or thereby do not and will not (i) require a vote of shareholders
(other than the affirmative vote of the holders of at least two-thirds of
all Trust Shares entitled to be cast on the matter), or (ii) result in the
grant of any rights to any person under the Declaration of Trust, Charter,
Trustees' Regulations or By-laws of the Trust or any Trust Subsidiary or
under any agreement to which the Trust or any of the Trust Subsidiaries is
a party, or (iii) restrict or impair in any way the ability of FUNC,
FUNC-VA, FUNC-MD or FUNB-VA to exercise any of the rights granted hereunder
or, as to FUNC, under the Option Agreement.
(Y) ENVIRONMENTAL MATTERS.
(1) To its knowledge, it and each of the Trust Subsidiaries, the
Participation Facilities and the Loan/Fiduciary Properties (each as
defined below) are, and have been, in compliance with all Environmental
Laws (as defined below), except for instances of noncompliance which are
not reasonably likely, individually or in the aggregate, to have a
Material Adverse Effect.
(2) There is no proceeding pending or, to its knowledge, threatened
before any court, governmental agency or board or other forum in which
it or any of the Trust Subsidiaries or any Participation Facility has
been, or with respect to threatened proceedings, reasonably would 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 or threatened release
into the environment of any Hazardous Material (as defined below),
whether or not occurring at or on a site owned, leased or operated by it
or any of the Trust Subsidiaries or any Participation Facility, except
for such proceedings pending or threatened that are not reasonably
likely, individually or in the aggregate, to have a Material Adverse
Effect or have been Previously Disclosed in SCHEDULE 4.01(Y).
(3) There is no proceeding pending or, to its knowledge, threatened
before any court, governmental agency or board or other forum in which
any Loan/Fiduciary Property (or it or any of the Trust Subsidiaries in
respect of any Loan/Fiduciary Property) has been, or with respect to
threatened proceedings, reasonably would 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 or threatened release into the environment of
any Hazardous Material, whether or not occurring at or on a Loan/
Fiduciary Property, except for such proceedings pending or threatened
that are not reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect or have been Previously Disclosed in
SCHEDULE 4.01(Y).
(4) To its knowledge, there is no reasonable basis for any
proceeding of a type described in subparagraphs (2) or (3) above, except
as has been Previously Disclosed in SCHEDULE 4.01(Y).
(5) To its knowledge, during the period of (i) its or any of the
Trust Subsidiaries' ownership or operation of any of their respective
current properties, (ii) its or any of the Trust Subsidiaries'
participation in the management of any Participation Facility, or (iii)
its or any of the Trust Subsidiaries' holding of a security or other
interest in a Loan/Fiduciary Property, there have been no releases of
Hazardous Material in, on, under or affecting any such property,
Participation Facility or Loan/Fiduciary Property, except for such
releases that are not reasonably likely,
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individually or in the aggregate, to have a Material Adverse Effect or
have been Previously Disclosed in SCHEDULE 4.01(Y).
(6) To its knowledge, prior to the period of (i) its or any of the
Trust Subsidiaries' ownership or operation of any of their respective
current properties, (ii) its or any of the Trust Subsidiaries'
participation in the management of any Participation Facility, or (iii)
its or any of the Trust Subsidiaries' holding of a security or other
interest in a Loan/Fiduciary Property, there were no releases or
threatened releases of Hazardous Material in, on, under or affecting any
such property, Participation Facility or Loan/Fiduciary Property, except
for such releases or threatened releases that are not reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect or
have been Previously Disclosed in SCHEDULE 4.01(Y).
(7) The following definitions apply for purposes of this SECTION
4.01(Y): "Loan/Fiduciary Property" means any property owned or
controlled by it or any of the Trust Subsidiaries or in which it or any
of the Trust Subsidiaries holds a security or other interest, and, where
required by the context, includes any such property where the Trust or
any of the Trust Subsidiaries constitutes the owner or operator of such
property, but only with respect to such property; "Participation
Facility" means any facility in which it or any of the Trust
Subsidiaries participates in the management and, where required by the
context, includes the owner or operator or such property, but only with
respect to such property; "Environmental Law" means (i) any applicable
federal, state and local law, statute, ordinance, rule, regulation,
code, license, permit, order, judgment, decree, injunction or agreement
with any governmental entity, relating to (a) the protection,
preservation or restoration of the environment, (including, without
limitation, air, water vapor, surface water, groundwater, drinking water
supply, surface land, subsurface land, plant and animal life or any
other natural resource), or to human health or safety, or (b) the
exposure to, or the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or
disposal of Hazardous Material, in each case as amended and as now in
effect and includes, without limitation, the federal Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, the
Superfund Amendments and Reauthorization Act, the Federal Water
Pollution Control Act of 1972, the federal Clean Air Act, the federal
Clean Water Act, the federal Resource Conservation and Recovery Act of
1976 (including the Hazardous and Solid Waste Amendments thereto), the
federal Solid Waste Disposal and the federal Toxic Substances Control
Act, and the Federal Insecticide, Fungicide and Rodenticide Act, the
Federal Occupational Safety and Health Act of 1970, each as amended and
as now in effect, and (ii) any common law or equitable doctrine
(including, without limitation, injunctive relief and tort doctrines
such as negligence, nuisance, trespass and strict liability) that may
impose liability or obligations for injuries or damages due to, or
threatened as a result of, the presence of or exposure to any Hazardous
Material; "Hazardous Material" means any substance presently listed,
defined, designated or classified as hazardous, toxic, radioactive or
dangerous, or otherwise regulated, under any Environmental Law, whether
by type or quantity, and includes, without limitation, any oil or other
petroleum product, toxic waste, pollutant, contaminant, hazardous
substance, toxic substance, hazardous waste, special waste or petroleum
or any derivative or by-product thereof, radon, radioactive material,
asbestos, asbestos containing material, urea formaldehyde foam
insulation, lead and polychlorinated biphenyl.
(Z) OPTION SHARES. As to the Trust, the Option Shares (as defined in
the Option Agreement), when issued upon exercise of the Option in
accordance with the terms thereof, will be validly issued, fully paid and
nonassessable and subject to no preemptive rights and will not be subject
to the provisions of Subtitle 7 of Title 3 of the Maryland General
Corporation Law.
(AA) TAX REPORTS. Except as Previously Disclosed in SCHEDULE 4.01(AA),
(i) all reports and returns with respect to Taxes (as defined below) and
tax related information reporting requirements that are required to be
filed by or with respect to the Trust or by or with respect to the Trust
Subsidiaries, including without limitation consolidated federal income tax
returns of the Trust and the Trust Subsidiaries (collectively, the "Trust
Tax Returns"), have been duly filed, or requests for extensions have been
timely filed and have not expired, except to the extent all such failures
to file, taken together, are not reasonably likely to have a Material
Adverse Effect, and such Trust Tax Returns were true, complete and accurate
in all material respects, (ii) all taxes (which shall mean federal, state,
local or foreign income, gross receipts, windfall profits, severance,
property, production, sales, use, license, excise, franchise, employment,
premium, recording, documentary, transfer, back-up withholding or similar
taxes, together with any interest, additions, or penalties with respect
thereto and any interest in respect of such additions or penalties,
collectively the "Taxes") shown to be due on the Trust Tax Returns or
otherwise imposed on the income, properties or operations of the Trust or
Trust Subsidiaries have been paid in full, (iii) the Trust Tax Returns have
not been examined by the Internal Revenue Service or the appropriate state,
local or foreign taxing authority, (iv) all Taxes due with respect to
completed and settled examinations
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have been paid in full, (v) no issues have been raised by the relevant
taxing authority in connection with the examination of any of the Trust Tax
Returns which are reasonably likely, individually or in the aggregate, to
result in a determination that would have a Material Adverse Effect, except
to the extent reserved against in the Trust Financial Reports filed prior
to the date of this Plan, and (vi) no waivers of statutes of limitations
(excluding such statutes that relate to years under examination by the
Internal Revenue Service) with respect to any Taxes of the Trust or the
Trust Subsidiaries.
(BB) ACCURACY OF INFORMATION. The statements with respect to the Trust
and the Trust Subsidiaries contained in this Plan, the Option Agreement,
the Schedules and any other written documents executed and delivered by or
on behalf of the Trust or the Bank pursuant to the terms of this Plan are
true and correct in all material respects, and such statements and
documents do not omit any material fact necessary to make the statements
contained therein, in light of the circumstances under which they were
made, not misleading.
(CC) DERIVATIVES CONTRACTS. None of the Trust or the Trust
Subsidiaries is a party to or has agreed to enter into an exchanged-traded
or over-the-counter swap, forward, future, option, cap, floor or collar
financial contract or any other contract not included on the balance sheet
which is a derivative contract (including various combinations thereof)
(each a "Derivatives Contract") except for those Derivatives Contracts
Previously Disclosed in SCHEDULE 4.01(CC), including a list, as applicable,
of any Trust or Trust Subsidiary assets pledged as security for each such
Derivatives Contract.
(DD) NO DISSENTERS' RIGHTS. The holders of Trust Shares have no
dissenters' or appraisal rights in connection with the execution of this
Plan, the Option Agreement or the consummation of any of the transactions
contemplated hereby or thereby.
(EE) ACCOUNTING CONTROLS. Each of the Trust and the Trust Subsidiaries
has devised and maintained systems of internal accounting controls
sufficient to provide reasonable assurances that (i) all material
transactions are executed in accordance with management's general or
specific authorization; (ii) all material transactions are recorded as
necessary to permit the preparation of financial statements in conformity
with generally accepted accounting principles consistently applied with
respect to thrifts or any other criteria applicable to such statements, and
to maintain proper accountability for items; (iii) access to the material
property and assets of the Trust and the Trust Subsidiaries is permitted
only in accordance with management's general or specific authorization; and
(iv) the recorded accountability for items is compared with the actual
levels at reasonable intervals and appropriate action is taken with respect
to any differences.
(FF) COMMITMENTS AND CONTRACTS. Neither the Trust nor any Trust
Subsidiary is a party or subject to any of the following (whether written
or oral, express or implied):
(1) except as Previously Disclosed in SCHEDULE 4.01(FF), any
employment contract or understanding (including any understandings or
obligations with respect to severance or termination pay liabilities or
fringe benefits) with any present or former officer, trustee, director
or employee (other than those which are terminable at will by the Trust
or such Trust Subsidiary without any obligation on the part of the Trust
or such Trust Subsidiary to make any payment in connection with such
termination);
(2) except as Previously Disclosed in SCHEDULE 4.01(FF), any real
property lease with annual rental payments aggregating $50,000 more; or
(3) except as Previously Disclosed in SCHEDULE 4.01(FF), any
material contract with any affiliate.
4.02. FUNC, FUNC-VA, FUNC-MD and FUNB-VA Representations and Warranties.
Each of FUNC, FUNC-VA, FUNC-MD and FUNB-VA hereby represents and warrants to the
Trust and the Bank, as follows:
(A) RECITALS. The facts set forth in the Recitals of this Plan with
respect to it are true and correct.
(B) CORPORATE AUTHORITY. Subject to the required regulatory approvals
referred to in SECTION 6.02 and the execution of this Plan by a majority of
the directors of FUNB-VA, each of this Plan and, in the case of FUNC, the
Option Agreement, has been authorized by all necessary corporate action of
it and is a valid and binding agreement of it enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency and other laws
of general applicability relating to or affecting creditors' rights and to
general equity principles.
(C) NO DEFAULTS. Subject to the required regulatory approvals referred
to in SECTION 6.02 herein, in the case of FUNC, SECTION 3 of the Option
Agreement, and the required filings under federal and state securities'
laws, the execution, delivery and performance of this Plan and (in the case
of FUNC) the Option Agreement, and the consummation of the transactions
contemplated hereby and thereby by it, do not and will not (i) constitute a
breach or violation of, or a default under, any law, rule or regulation or
any judgment, decree, order, governmental permit or license, or agreement,
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indenture or instrument of it or of any of its subsidiaries or to which it
or any of its subsidiaries or properties is subject or bound, which breach,
violation or default is reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect, (ii) constitute a breach or
violation of, or a default under, its Articles of Incorporation, Charter or
Bylaws, or (iii) require any consent or approval under any such law, rule,
regulation, judgment, decree, order, governmental permit or license, or the
consent or approval of any other party to any such agreement, indenture or
instrument, other than any such consent or approval, which if not obtained,
would not be reasonably likely, individually or in the aggregate, to have a
Material Adverse Effect.
(E) NO BROKERS. All negotiations relative to this Plan and the
transactions contemplated hereby have been carried on by it directly with
the other parties hereto and no action has been taken by it that would give
rise to any valid claim against any party hereto for a brokerage
commission, finder's fee or other like payment.
(F) NO KNOWLEDGE. It knows of no reason (including those relating to
fair lending laws or other laws relating to discrimination, including,
without limitation, the Equal Credit Opportunity Act, the Fair Housing Act,
the Community Reinvestment Act and the Home Mortgage Disclosure Act, and
consumer disclosure laws and regulations) why the regulatory approvals
referred to in SECTION 6.02 should not be obtained, without the imposition
of any condition of the type referred to in the proviso following such
SECTION 6.02.
(G) ACCURACY OF INFORMATION. The statements with respect to FUNC,
FUNC-VA, FUNC-MD and FUNB-VA contained in this Plan, the Option Agreement,
the Schedules and any other written documents executed and delivered by or
on behalf of FUNC, FUNC-VA, FUNC-MD or FUNB-VA pursuant to the terms of
this Plan are true and correct in all material respects, and such
statements and documents do not omit any material fact necessary to make
the statements contained therein, in light of the circumstances under which
they were made, not misleading.
V. COVENANTS.
Each of the Trust and the Bank hereby covenants to FUNC, FUNC-VA, FUNC-MD
and FUNB-VA, and each of FUNC, FUNC-VA, FUNC-MD and FUNB-VA hereby covenants to
the Trust and the Bank, that:
5.01. BEST EFFORTS. Subject to the terms and conditions of this Plan and to
the exercise by its Board of Directors or Board of Trustees, as applicable, of
such Board's fiduciary duties established under applicable law, it shall use its
best efforts in good faith to take, or cause to be taken, all actions, and to
do, or cause to be done, all things necessary, proper or desirable, or advisable
under applicable laws, so as to permit consummation of the Mergers on the
Effective Date and to otherwise enable consummation of the transactions
contemplated hereby and (in the case of the Trust and FUNC) by the Option
Agreement and shall cooperate fully with the other parties hereto to that end.
5.02. TRUST PROXY. In the case of the Trust, it shall promptly prepare a
proxy statement (the "Proxy Statement") to be mailed to the holders of Trust
Shares in connection with the transactions contemplated hereby, which shall
conform to all applicable legal requirements and it shall call a special meeting
(the "Meeting") of the holders of Trust Shares to be held as soon as practicable
for purposes of voting upon the transactions contemplated hereby and the Trust
shall use its best efforts to solicit and obtain votes of the holders of the
Trust Shares in favor of the transactions contemplated hereby and, subject to
the exercise of its fiduciary duties, the Board of Trustees of the Trust shall
recommend approval of such transactions by such holders. When the Proxy
Statement is mailed to the holders of Trust Shares, and at all times subsequent
to such mailing, up to and including the date of the Meeting, such Proxy
Statement and all supplements thereto, with respect to all information set forth
therein furnished or to be furnished by the Trust relating to the Trust or the
Trust Subsidiaries and by FUNC relating to FUNC or its subsidiaries, (i) will
comply in all material respects with the provisions of the Exchange Act and any
other applicable statutory or regulatory requirements, and (ii) will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements contained
therein not misleading; PROVIDED, HOWEVER, in no event shall any party hereto be
liable for any untrue statement of a material fact or omission to state a
material fact in the Proxy Statement made in reliance upon, and in conformity
with, written information concerning another unaffiliated party furnished by
such other party specifically for use in the Proxy Statement.
5.03. PRESS RELEASES. The Trust and the Bank will not, without the prior
approval of FUNC (which approval shall not be unreasonably withheld or delayed),
and FUNC, FUNC-VA, FUNC-MD and FUNB-VA will not, without the prior approval of
the Trust (which approval shall not be unreasonably withheld or delayed), issue
any press release or written statement for general circulation relating to the
transactions contemplated hereby or by the Option Agreement, except as otherwise
required by law.
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5.04. ACCESS; INFORMATION. (1) Upon reasonable notice, the Trust and the
Bank shall afford FUNB-VA and its officers, employees, counsel, accountants and
other authorized representatives, access, during normal business hours
throughout the period prior to the Effective Date, to all of its and the Trust
Subsidiaries' properties, books, contracts, commitments and records and, during
such period, the Trust and the Bank shall furnish promptly to FUNB-VA (i) a copy
of each material report, schedule and other document filed by the Trust and the
Trust Subsidiaries with any Regulatory Authority, and (ii) all other information
concerning the business, properties and personnel of the Trust and the Trust
Subsidiaries as FUNB-VA may reasonably request, provided that no investigation
pursuant to this SECTION 5.04 shall affect or be deemed to modify or waive any
representation or warranty made by the Trust or the Bank or the conditions to
the obligations of the Trust and the Bank to consummate the transactions
contemplated by this Plan; and (2) FUNB-VA will not use any information obtained
pursuant to this SECTION 5.04 for any purpose unrelated to the consummation of
the transactions contemplated by this Plan and, if this Plan is terminated, will
hold all information and documents obtained pursuant to this paragraph in
confidence (as provided in SECTION 8.06) unless and until such time as such
information or documents become publicly available other than by reason of any
action or failure to act by FUNB-VA or as it is advised by counsel that any such
information or document is required by law or applicable stock exchange rule to
be disclosed, and in the event of the termination of this Plan, FUNB-VA will,
upon request by the Trust, deliver to the Trust all documents so obtained by
FUNB-VA or destroy such documents and, in the case of destruction, will certify
such fact to the Trust.
5.05. ACQUISITION PROPOSALS. In the case of the Trust, without the prior
written consent of FUNC, it shall not, and it shall cause the Trust Subsidiaries
not to, solicit or encourage inquiries or proposals with respect to, or, except
as required by the fiduciary duties of the Board of Trustees of the Trust
established under applicable law (as advised in writing by its outside counsel),
furnish any nonpublic information relating to or participate in any negotiations
or discussions concerning, any acquisition or purchase of all or a substantial
portion of the assets or deposits of, or a substantial equity interest in, the
Trust or any of the Trust Subsidiaries or any merger or other business
combination with the Trust or any of the Trust Subsidiaries other than as
contemplated by this Plan; it shall instruct its and the Trust Subsidiaries'
officers, directors, trustees, agents, advisors and affiliates to refrain from
doing any of the foregoing; and it shall notify FUNC immediately if any such
inquiries or proposals are received by, or any such negotiations or discussions
are sought to be initiated with, the Trust or any of the Trust Subsidiaries.
5.06. CERTAIN POLICIES OF THE TRUST AND THE BANK. In the case of each of
the Trust and the Bank, it shall use its best efforts to (i) modify and change
its loan, litigation and other reserve and real estate valuation policies and
practices (including loan classifications and levels of reserves), and (ii)
generally conform its operating, lending and compliance policies and procedures,
prior to the Effective Date, so as to be consistent on a mutually satisfactory
basis with those of FUNB-VA and generally accepted accounting principles and
applicable law; PROVIDED, HOWEVER, the Trust and the Bank shall not be required
to take any action set forth in (i) above until the regulatory approvals set
forth in SECTION 6.02 have been received and the Trust and the Bank are
reasonably satisfied that the Mergers will be consummated on the Effective Date
as provided herein. The Trust's and the Bank's representations, warranties and
covenants contained in this Plan shall not be deemed to be untrue or breached in
any respect for any purpose as a consequence of any modifications or changes
undertaken solely on account of this SECTION 5.06.
5.07. STATE TAKEOVER LAW. In the case of the Trust, the Trust shall not
take any action that would cause the transactions contemplated by this Plan or
the Option Agreement to be subject to any applicable state takeover statute and
the Trust shall take all necessary steps to exempt (or ensure the continued
exemption of) the transactions contemplated by this Plan and the Option
Agreement from, or, if necessary, challenge the validity or applicability of,
any applicable state takeover law, as now or hereafter in effect, including
without limitation the provisions of Section 3-602 and Title 3, Subtitle 7, of
the Maryland General Corporation Law.
5.08. NO RIGHTS TRIGGERED. In the case of the Trust, the Trust shall take
all necessary steps to ensure that the entering into of this Plan and the Option
Agreement and the consummation of the transactions contemplated hereby and
thereby (including without limitation the Mergers and the exercise of the
Option) and any other action or combination of actions, or any other
transactions contemplated hereby or thereby do not and will not (i) result in
the grant of any rights to any person under the Declaration of Trust or
Trustees' Regulations of the Trust or under any agreement to which the Trust or
any of the Trust Subsidiaries is a party, or (ii) restrict or impair in any way
the ability of FUNC, FUNC-VA, FUNC-MD or FUNB-VA to exercise any of the rights
granted hereunder or, as to FUNC, under the Option Agreement.
5.09. REGULATORY APPLICATIONS. In the case of FUNC, FUNC-VA, FUNC-MD and
FUNB-VA, (i) it shall promptly prepare and submit applications to the
appropriate Regulatory Authorities for approval of the Mergers (after having
submitted drafts of such applications to counsel for the Trust and the Bank),
and (ii) promptly make all other appropriate filings to
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secure all other approvals, consents and rulings which are necessary for the
consummation of the Mergers by FUNC, FUNC-VA, FUNC-MD and FUNB-VA.
5.10. REGULATORY CONDITIONS. In the case of the Trust, to the extent
required by any Regulatory Authority as a condition to approval of the
transactions contemplated by this Plan, the Trust shall take such reasonable
action and shall cause the Trust Subsidiaries to take such reasonable action as
may reasonably be required in order to comply with any such requirements.
5.11. CURRENT INFORMATION.
(A) During the period from the date of this Plan to the Effective
Date, each of the Trust, the Bank and FUNB-VA shall, and shall cause its
representatives to, confer on a regular and frequent basis with
representatives of the other.
(B) The Trust and the Bank shall promptly notify FUNB-VA of (i) any
material change in the business or operations of the Trust or any Trust
Subsidiary, (ii) any material complaints, investigations or hearings (or
communications indicating that the same may be contemplated) of any
Regulatory Authority relating to the Trust or any Trust Subsidiary, (iii)
the institution or the threat of material litigation involving or relating
to the Trust or any Trust Subsidiary, or (iv) any event or condition that
might be reasonably expected to cause any of the Trust's or the Bank's
representations or warranties set forth herein not to be true and correct
in all material respects as of the Effective Date or prevent the Trust or
the Bank from fulfilling its obligations hereunder; and in each case shall
keep FUNB-VA informed with respect thereto.
(C) FUNC shall (i) promptly notify the Trust of any event or condition
that might reasonably be expected to cause any of FUNC's, FUNC-VA's,
FUNC-MD's or FUNB-VA's representations or warranties set forth herein not
to be true and correct in all material respects as of the Effective Date,
and (ii) notify the Trust immediately of any denial of any application
filed by FUNC, FUNC-VA, FUNC-MD or FUNB-VA with any Regulatory Authority
with respect to this Plan.
5.12. REDEMPTION OF TRUST PREFERRED STOCK; FUNC FINANCINGS. In the case of
the Trust, if requested by FUNC, the Trust shall take all such action as may be
required under applicable law and the provisions of the Trust Preferred Stock,
to redeem all of the outstanding shares of Trust Preferred Stock as promptly as
practicable after receipt of such request. In the case of FUNC, if the Trust
does not have sufficient funds to effect such redemption, FUNC agrees to loan to
the Trust an amount up to the redemption price of the Trust Preferred Stock on
an arm's length basis. In addition, in the case of FUNC, if the Trust does not
have sufficient funds to make the payments required to be made pursuant to
SECTION 2.06 on or immediately prior to the Effective Date, FUNC also agrees to
loan to the Trust an amount up to the amount required to make such payments on
an arm's length basis.
5.13. PAYMENT OF CONSIDERATION. FUNC agrees to cause FUNC-VA to have
sufficient funds on the Effective Date in order to pay the Cash Consideration
for the Trust Shares as provided in SECTION 2.01(B).
5.14. INDEMNIFICATION. Without limitation with respect to any
indemnification required other than pursuant to this Plan:
(A) For six years after the Effective Date, FUNC shall indemnify,
defend and hold harmless the directors, trustees, officers and employees of
the Trust and the Trust Subsidiaries (each, an "Indemnified Party") against
all liabilities arising out of actions or omissions occurring at or prior
to the Effective Date (including, without limitation, the transactions
contemplated by this Plan and the Option Agreement) to the extent such
persons are indemnified under applicable federal or state law as in effect
on the date hereof, including provisions relating to advances of expenses
incurred in the defense of any litigation.
(B) Any Indemnified Party wishing to claim indemnification under
paragraph (A) of this Section 5.14, upon learning of such claim, action,
suit, proceeding or investigation, shall promptly notify FUNC thereof;
provided, that the failure so to notify shall not affect the obligations of
FUNC under paragraph (A) of this Section 5.14 (unless such failure
materially and adversely increases FUNC's liability under such paragraph
(A)). In the event of any such claim, action, suit, proceeding or
investigation (whether arising before or after the Effective Date), (i)
FUNC shall have the right to assume the defense thereof, (ii) the
Indemnified Parties will cooperate in the defense of any such matter, and
(iii) FUNC shall not be liable for any settlement effected without its
prior written consent.
5.15 MEMORANDUM OF UNDERSTANDING. In the case of FUNC, immediately
following consummation of the Mergers on the Effective Date, FUNC agrees to pay
or cause to be paid to the Ameribanc Investors Group Voting Trust (the "Voting
Trust"), the $1,655,000 payment (the "MOU Payment") which is due and payable to
the Voting Trust pursuant to the Amended and
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Restated Memorandum of Understanding, dated as of March 28, 1990 (as amended),
between the Trust and the Voting Trust (the "MOU"), subject to satisfaction of
the conditions set forth in SECTION 6.10.
VI. CONDITIONS TO CONSUMMATION OF THE MERGERS.
Consummation of the Mergers is conditioned upon:
6.01. SHAREHOLDER VOTE. Approval of the transactions contemplated hereby
and by the Option Agreement by the requisite vote of the holders of Trust
Shares, as may be required;
6.02. REGULATORY APPROVALS. Procurement by FUNC, FUNC-VA, FUNC-MD and
FUNB-VA of regulatory consents and approvals by the appropriate Regulatory
Authorities and the expiration of the statutory waiting period relating thereto;
PROVIDED, HOWEVER, that no such approval or consent shall have imposed any
condition or requirement which, in the reasonable opinion of FUNB-VA, would so
materially adversely impact the economic or business benefits to FUNB-VA of the
transactions contemplated by this Plan so as to render inadvisable the
consummation of the Mergers;
6.03. NO INJUNCTION. There shall not be in effect any order, decree or
injunction of any court or agency of competent jurisdiction that enjoins or
prohibits consummation of any of the transactions contemplated hereby or by the
Option Agreement;
6.04. ARTHUR ANDERSEN LLP LETTERS. FUNC shall have received from Arthur
Andersen LLP, letters, dated the date of or shortly prior to (i) the mailing of
the Proxy Statement, and (ii) the Effective Date, in form and substance
satisfactory to FUNC, with respect to the Trust's consolidated financial
position and results of operations, which shall be based upon "agreed upon
procedures" undertaken by such firm;
6.05. LEGAL OPINION. The Trust and the Bank shall have received an opinion,
dated the Effective Date, of Marion A. Cowell, Jr., counsel for FUNC, FUNC-VA,
FUNC-MD and FUNB-VA, in form reasonably satisfactory to the Trust, which shall
cover the matters contained in EXHIBIT B hereto;
6.06. LEGAL OPINION. FUNC, FUNC-VA, FUNC-MD and FUNB-VA shall have received
an opinion, dated the Effective Date, of Hogan & Hartson L.L.P., counsel for the
Trust and the Bank, in form reasonably satisfactory to FUNC, which shall cover
the matters contained in EXHIBIT C hereto;
6.07. OFFICER'S CERTIFICATE. (i) Each of the representations and warranties
contained herein of FUNC, FUNC-VA, FUNC-MD and FUNB-VA shall be true and correct
as of the date of this Plan and upon the Effective Date with the same effect as
though all such representations and warranties had been made on the Effective
Date, except for any such representations and warranties made as of a specified
date, which shall be true and correct as of such date, and (ii) each and all of
the agreements and covenants of FUNC, FUNC-VA, FUNC-MD and FUNB-VA to be
performed and complied with pursuant to this Plan on or prior to the Effective
Date shall have been duly performed and complied with in all material respects,
and the Trust and the Bank shall have received a certificate signed by an
executive officer of each of FUNC, FUNC-VA, FUNC-MD and FUNB-VA dated the
Effective Date, to such effect;
6.08. OFFICERS' CERTIFICATE. (i) Each of the representations and warranties
contained herein of the Trust and the Bank shall be true and correct as of the
date of this Plan and upon the Effective Date with the same effect as though all
such representations and warranties had been made on the Effective Date, except
for any such representations and warranties made as of a specified date, which
shall be true and correct as of such date and except as otherwise provided in
SECTION 5.04, and (ii) each and all of the agreements and covenants of the Trust
and the Bank to be performed and complied with pursuant to this Plan on or prior
to the Effective Date shall have been duly performed and complied with in all
material respects, and FUNC, FUNC-VA, FUNC-MD and FUNB-VA shall have received a
certificate signed by the Chief Executive Officers and the Chief Financial
Officers of the Trust and the Bank dated the Effective Date, to such effect;
6.09. STOCK OPTIONS. All Stock Options shall have been cancelled on or
prior to the Effective Date and evidence thereof satisfactory to FUNC shall be
delivered by the Trust to FUNC on or prior to the Effective Date; and
6.10 MOU. Upon payment of the MOU Payment, the MOU, to the extent it has
any force of effect as of the Effective Date, shall be cancelled and of no
further force or effect and FUNC shall have received a written agreement to such
affect signed by the Trust and the Voting Trust in form and substance
satisfactory to FUNC;
PROVIDED, HOWEVER, that a failure to satisfy any of the conditions set forth in
the proviso following SECTION 6.02 or in SECTION 6.04, 6.06 OR, 6.08, 6.09 OR
6.10 shall only constitute conditions if asserted by FUNC, and a failure to
satisfy any of the conditions set forth in SECTION 6.05 OR 6.07 shall only
constitute conditions if asserted by the Trust.
16
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VII. TERMINATION.
This Plan may be terminated prior to the Effective Date, either before or
after receipt of required stockholder approvals:
7.01. MUTUAL CONSENT. By the mutual consent of FUNC and the Trust.
7.02. BREACH. By FUNC or the Trust, in the event of (i) a breach by the
other party (including any of its affiliates) of any representation or warranty
contained herein, which breach cannot be or has not been cured within 30 days
after the giving of written notice to the breaching party of such breach, or
(ii) a breach by such other party of any of the covenants or agreements
contained herein, which breach cannot be or has not been cured within 30 days
after the giving of written notice to the breaching party of such breach.
7.03. DELAY. By FUNC or the Trust, if its Board of Trustees or Board of
Directors, as applicable, so determines by a vote of a majority of the members
of its entire Board, in the event that the Trust Merger is not consummated by
September 30, 1995, as a direct result of the actions of the other party
(including any of its affiliates).
7.04. NO SHAREHOLDER APPROVAL. By the Trust or FUNC, in the event that any
shareholder approval contemplated by SECTION 6.01 is not obtained at the
Meeting, including any adjournment or adjournments thereof.
7.05 OTHER CIRCUMSTANCES. By FUNC in the event that (a) as provided in
SECTION 5.02, the Board of Trustees of the Trust withdraws its recommendation of
this Plan, fails to make such recommendation or modifies or qualifies its
recommendation in a manner adverse to FUNC or (b) as provided in SECTION 5.05,
the Board of Trustees participates (or authorizes participation in) any
negotiations or discussions of the type described in SECTION 5.05.
VIII. OTHER MATTERS.
8.01. SURVIVAL. Except with respect to SECTIONS 2.03, 5.14, 8.01, 8.04,
8.09 AND 8.11, if the Effective Date occurs, all representations, warranties,
agreements and covenants contained in this Plan shall not survive the Effective
Date. If this Plan is terminated prior to the Effective Date, the agreements and
representations of the parties in SECTIONS 4.01(P), 4.01(W), 4.01(Z), 4.02(E),
5.04(2), 5.07, 5.08, 8.01, 8.02, 8.03, 8.04, 8.05, 8.06, 8.07, 8.09 AND 8.11
shall survive such termination.
8.02. WAIVER; AMENDMENT. Prior to the Effective Date, any provision of this
Plan may be (i) waived in writing by the party benefitted by the provision, or
(ii) amended or modified at any time (including the structure of the
transactions contemplated hereby) only by an agreement in writing among the
parties hereto and executed in the same manner as this Plan.
8.03. COUNTERPARTS. This Plan may be executed in one or more counterparts,
each of which shall be deemed to constitute an original. This Plan shall become
effective when one counterpart has been signed by each party hereto.
8.04. GOVERNING LAW. This Plan shall be governed by, and interpreted in
accordance with, the laws of the State of Maryland, except as federal law may be
applicable.
8.05. EXPENSES. Without limiting the obligations of FUNC pursuant to
SECTION 5.14, each party hereto will bear all expenses incurred by it in
connection with this Plan and the transactions contemplated hereby.
8.06. CONFIDENTIALITY. Except as otherwise provided in SECTION 5.04(2),
each of the parties hereto and their respective agents, attorneys and
accountants will maintain the confidentiality of all information provided in
connection herewith which has not been publicly disclosed.
8.07. NOTICES. All notices, requests and other communications hereunder to
a party shall be in writing and shall be deemed to have been duly given when
delivered by hand, telegram or telex (confirmed in writing) to such party at its
address set forth below or such other address as such party may specify by
notice to the parties hereto.
17
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<TABLE>
<S> <C>
If to FUNC, FUNC-VA, First Union Corporation
FUNC-MD or One First Union Center
FUNB-VA, to: Charlotte, NC 28288-0013
Attn: Chief Executive Officer
with a copy to: Marion A. Cowell, Jr., Esq.
First Union Corporation
One First Union Center
Charlotte, NC 28288-0013
If to the Trust or Ameribanc Investors Group
the Bank, to: 7630 Little River Turnpike
Suite 610
Annandale, VA 22003
Attn: Chief Executive Officer
with a copy to: David B. H. Martin, Jr., Esq.
Hogan & Hartson, L.L.P.
555 13th Street, NW
Washington, D.C. 20004
</TABLE>
8.08. DEFINITIONS. Any term defined anywhere in this Plan shall have the
meaning ascribed to it for all purposes of this Plan (unless expressly noted to
the contrary). In addition:
(A) the term "Material Adverse Effect", shall mean any event,
occurrence or circumstance which (a) has or could reasonably be likely to
have a material adverse effect on the financial condition, results of
operations, business or prospects of the Trust and the Trust Subsidiaries,
taken as a whole, or FUNC and its subsidiaries, taken as a whole, as
applicable, or (b) would materially impair such party's ability to perform
its obligations under this Plan or the Option Agreement or the consummation
of any of the transactions contemplated hereby or thereby;
(B) the term "Previously Disclosed" by a party shall mean information
set forth in a Schedule that is delivered by that party to an unaffiliated
party contemporaneously with the execution of this Plan and specifically
designated as information "Previously Disclosed" pursuant to this Plan, and
(C) for purposes of Article IV, the phrase "individually or in the
aggregate" includes all events, occurrences, circumstances or conditions
described in any paragraph of SECTION 4.01 OR 4.02, as the case may be, and
is not limited to a specific paragraph.
8.09. ENTIRE UNDERSTANDING; NO THIRD PARTY BENEFICIARIES. This Plan and the
Option Agreement together represent the entire understanding of the parties
hereto with reference to the transactions contemplated hereby and thereby and
supersede any and all other oral or written agreements heretofore made. Without
limiting the obligations of FUNC pursuant to SECTION 5.14, nothing in this Plan
or the Option Agreement, expressed or implied, is intended to confer upon any
person, other than the parties hereto or their respective successors, any
rights, remedies, obligations or liabilities under or by reason of this Plan or
the Option Agreement.
8.10. BENEFIT PLANS. Upon consummation of the Trust Merger, except as
Previously Disclosed in SCHEDULE 8.10, as soon as administratively practicable,
employees of the Trust and the Trust Subsidiaries shall be generally entitled to
participate in the pension, benefit and similar plans on substantially the same
terms and conditions as employees of FUNB-VA. For the purpose of determining
eligibility to participate in such plans and the vesting of benefits under such
plans (but not for the accrual of benefits under such plans), FUNB-VA shall give
effect to years of service with the Trust or the Trust Subsidiaries, as the case
may be, as if such service were with FUNB-VA.
8.11. HEADINGS. The headings contained in this Plan are for reference
purposes only and are not part of this Plan.
18
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed in counterparts by their duly authorized officers, all as of the day
and year first above written.
FIRST UNION CORPORATION
By: /s/ KENNETH R. STANCLIFF
NAME: KENNETH R. STANCLIFF
TITLE: SENIOR VICE PRESIDENT
FIRST UNION CORPORATION OF VIRGINIA
By: /s/ KENNETH R. STANCLIFF
NAME: KENNETH R. STANCLIFF
TITLE: SENIOR VICE PRESIDENT
FIRST UNION CORPORATION OF MARYLAND
By: /s/ KEITH D. LEMBO
NAME: KEITH D. LEMBO
TITLE: VICE PRESIDENT
FIRST UNION NATIONAL BANK OF VIRGINIA
By: /s/ KENNETH R. STANCLIFF
NAME: KENNETH R. STANCLIFF
TITLE: SENIOR VICE PRESIDENT
AMERIBANC INVESTORS GROUP
By: /s/ JOHN J. HOUSEMAN
NAME: JOHN J. HOUSEMAN
TITLE: PRESIDENT AND CHIEF EXECUTIVE
OFFICER
AMERIBANC SAVINGS BANK FSB
By: /s/ DAVID W. CAMPBELL
NAME: DAVID W. CAMPBELL
TITLE: PRESIDENT AND CHIEF EXECUTIVE
OFFICER
19
<PAGE>
BOARD OF DIRECTORS
AMERIBANC SAVINGS BANK, FSB
/s/ JOHN J. HOUSEMAN
JOHN J. HOUSEMAN
/s/ ROY S. MITCHELL, ESQ.
ROY S. MITCHELL, ESQ.
/s/ JOSEPH L. CAMARDA
JOSEPH L. CAMARDA
/s/ DAVID W. CAMPBELL
DAVID W. CAMPBELL
/s/ D. MURRAY MALBON
D. MURRAY MALBON
/s/ FRANK J. QUIRK
FRANK J. QUIRK
/s/ ARTHUR C. WEID
ARTHUR C. WEID
20
<PAGE>
BOARD OF TRUSTEES
AMERIBANC INVESTORS GROUP
/s/ JOHN J. HOUSEMAN
JOHN J. HOUSEMAN
/s/ JULIEN G. REDELE
JULIEN G. REDELE
/s/ DAVID W. CAMPBELL
DAVID W. CAMPBELL
/s/ COR CASTRICUM
COR CASTRICUM
/s/ STEPHEN HARTWELL
STEPHEN HARTWELL
/s/ JAMES C. MILLER III
JAMES C. MILLER III
/s/ ROY S. MITCHELL, ESQ.
ROY S. MITCHELL, ESQ.
/s/ LUC VAN GASTEL
LUC VAN GASTEL
/s/ GIJSBERT VERHEUL
GIJSBERT VERHEUL
/s/ ARTHUR C. WEID
ARTHUR C. WEID
/s/ WILLEM WERNER
WILLEM WERNER
/s/ PETER S. ZWART
PETER S. ZWART
21
<PAGE>
BOARD OF DIRECTORS
FIRST UNION NATIONAL BANK OF VIRGINIA*
* To be signed at Board of Directors meeting in October.
22
<PAGE>
EXHIBIT A
OPTION AGREEMENT
OPTION AGREEMENT, dated as of October 11, 1994 (this "Agreement"), by and
between Ameribanc Investors Group, an unincorporated Maryland real estate
investment trust ("Issuer"), and First Union Corporation, a North Carolina
corporation ("Grantee").
WHEREAS, Grantee and Issuer have entered into an Agreement and Plan of
Mergers dated as of October 10, 1994 (the "Plan"), providing for, among other
things, the merger of Issuer and a subsidiary of Grantee, with Issuer as the
surviving corporation; and
WHEREAS, as a condition and inducement to Grantee's execution of the Plan,
Grantee has required that Issuer agree, and Issuer has agreed, to grant Grantee
the Option (as defined below);
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Plan, 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 Plan.
2. GRANT OF OPTION. Subject to the terms and conditions set forth herein,
Issuer hereby grants to Grantee an irrevocable option (the "Option") to purchase
up to 7,000,000 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 beneficial interest, par value $1.00 per share ("Issuer Trust
Shares"), of Issuer at a purchase price per Option Share (the "Purchase Price")
equal to the closing bid price per Issuer Trust Share as reported on the Nasdaq
National Market (or published in THE WALL STREET JOURNAL or other authoritative
source) on October 12, 1994; PROVIDED, HOWEVER, that in no event shall the
number of shares for which the Option is exercisable exceed 19.9% of the Issuer
Trust Shares issued and outstanding at the time of exercise, without giving
effect to the shares issued or issuable under the Option.
3. EXERCISE OF OPTION.
(a) Provided that (i) Grantee, or any of its subsidiaries who is a party to
the Plan, or Holder (as defined below), as applicable, shall not be in material
breach of the agreements or covenants contained in this Agreement or in breach
of any agreements or covenants in the Plan that would permit Issuer to terminate
the Plan under SECTION 7.02, 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, the
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; PROVIDED that the Option
shall terminate and be of no further force and effect upon the earliest to occur
of (A) the Effective Date, (B) termination of the Plan in accordance with the
terms thereof prior to the occurrence of a Purchase Event or a Preliminary
Purchase Event unless the Issuer has, after the date hereof but prior to such
termination, engaged in discussions with any third party regarding an
Acquisition Transaction (as hereinafter defined), and (C) 18 months after any
other termination of the Plan in accordance with the terms thereof (PROVIDED,
HOWEVER, that if no Purchase Event or Preliminary Purchase Event occurs before
such termination but if within 12 months after such termination a Purchase Event
or Preliminary Purchase Event shall occur, then notwithstanding anything to the
contrary contained herein, the Option shall terminate 18 months after such
termination of the Plan); PROVIDED, HOWEVER, that any purchase of shares upon
exercise of the Option shall be subject to compliance with applicable law,
including, without limitation, the BHC Act and the HOLA. The term "Holder" shall
mean the holder or holders of the Option from time to time, and which initially
is Grantee.
(b) As used herein, a "Purchase Event" means any of the following events:
(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 affiliate of Grantee) to effect
(A) a merger, consolidation or similar transaction involving Issuer or the
Bank, (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 the Bank (each,
an "Acquisition Transaction"); or
A-1
<PAGE>
(ii) without Grantee's prior written consent, any person (other than
Grantee or any affiliate of Grantee) shall have acquired beneficial
ownership (as such term is defined in Rule 13d-3 promulgated under the
Exchange Act) of, or the right to acquire beneficial ownership of, or any
"group" (as such term is defined under the Exchange Act) shall have been
formed which beneficially owns or has the right to acquire beneficial
ownership of, 20% or more of the voting power of Issuer or the Bank.
(c) As used herein, a "Preliminary Purchase Event" means any of the
following events:
(i) any person (other than Grantee or any affiliate of Grantee) shall
have commenced (as such term is defined in Rule 14d-2 under the Exchange
Act) or shall have filed a registration statement under the Securities Act,
with respect to, a tender offer or exchange offer to purchase any Issuer
Trust Shares such that, upon consummation of such offer, such person would
own or control 20% or more of the then outstanding Issuer Trust Shares
(such an offer being referred to herein as a "Tender Offer" or an "Exchange
Offer," respectively); or
(ii) the shareholders of the Issuer shall not have approved the Plan
at the Meeting, the Meeting shall not have been held or shall have been
canceled prior to termination of the Plan, or Issuer's Board of Trustees
shall have withdrawn or modified in a manner adverse to Grantee the
recommendation of Issuer's Board of Trustees with respect to the Plan, in
each case after it shall have been publicly announced that any person
(other than Grantee or any affiliate of Grantee) shall have (A) made, or
disclosed an intention to make, a proposal to engage in an Acquisition
Transaction, (B) commenced a Tender Offer or filed a registration statement
under the Securities Act with respect to an Exchange Offer or (C) filed any
application (or given any notice), under the BHC Act, the HOLA, the Bank
Merger Act or the Change in Bank Control Act of 1978, for approval to
engage in an Acquisition Transaction; or
(iii) any person (other than Grantee or any affiliate of Grantee)
shall have made a bona fide proposal to Issuer or the holders of Issuer
Trust Shares by public announcement or written communication that is or
becomes the subject of public disclosure to engage in an Acquisition
Transaction; or
(iv) after a proposal is made by a third party to Issuer or the
holders of Issuer Trust Shares to engage in an Acquisition Transaction,
Issuer shall have breached any covenant or obligation contained in the Plan
and such breach would entitle Grantee to terminate the Plan under SECTION
7.02 thereof (without regard to the cure period provided for therein unless
such cure is promptly effected without jeopardizing consummation of the
Mergers pursuant to the terms of the Plan); or
(v) any person (other than Grantee or any affiliate of Grantee) shall
have filed an application or notice with any Regulatory Authority for
approval to engage in an Acquisition Transaction.
As used in this Agreement, "person" shall have the meaning specified in Sections
3(a)(9) and 13(d)(3) of the Exchange Act.
(d) Issuer shall notify Grantee promptly in writing of the occurrence of
any Preliminary Purchase Event or Purchase Event (in either case, a "Triggering
Event"), it being understood that the giving of such notice by Issuer shall not
be a condition to the right of Holder to exercise the Option.
(e) 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
five business days nor later than 15 business days from the Notice Date for the
closing (the "Closing") of such purchase (the "Closing Date"). If prior
notification to or approval of a Regulatory Authority is required in connection
with such purchase, Issuer shall cooperate with the Holder in the filing of the
required notice of application for approval and the obtaining of such approval
and the Closing shall occur immediately following such regulatory approval (and
any mandatory waiting periods). Any exercise of the Option shall be deemed to
occur on the Notice Date relating thereto.
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 SUBSECTION (F) of
SECTION 11.
(b) At each Closing, simultaneously with the delivery of immediately
available funds and surrender of this Agreement as provided in subsection (a) of
this Section 4, (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, and subject to no
A-2
<PAGE>
preemptive 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 Option Shares 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 SHARES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND PURSUANT
TO THE TERMS OF AN OPTION AGREEMENT DATED AS OF OCTOBER 11, 1994. A COPY OF SUCH
AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF WITHOUT CHARGE UPON RECEIPT BY
THE ISSUER OF A WRITTEN REQUEST THEREFOR.
It is understood and agreed that the above legend shall be removed by delivery
of substitute certificate(s) without such legend if 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.
(d) Upon the giving by Holder to Issuer of the written notice of exercise
of the Option provided for under SECTION 3(E), the tender of the applicable
purchase price in immediately available funds and the tender of this Agreement
to Issuer, Holder shall be deemed to be the holder of record of the Issuer Trust
Shares issuable upon such exercise, notwithstanding that the transfer books of
Issuer shall then be closed or that certificates representing such Issuer Trust
Shares shall not then be actually delivered to Holder. Issuer shall pay all
expenses, and any and all United States federal, state, and local transfer taxes
and similar charges that may be payable in connection with the preparation,
issuance and delivery of share certificates under this Section in the name of
Holder or its assignee, transferee, or designee.
(e) Issuer agrees (i) that it shall at all times maintain, free from
preemptive rights, sufficient authorized but unissued or treasury shares of
Issuer Trust Shares so that the Option may be exercised without additional
authorization of Issuer Trust Shares after giving effect to all other options,
warrants, convertible securities and other rights to purchase Issuer Trust
Shares, (ii) that it will not, by amendment of its Declaration of Trust or
through reorganization, consolidation, merger, dissolution or sale of assets, or
by any other voluntary act, avoid or seek to avoid the observance or performance
of any of the covenants, stipulations or conditions to be observed or performed
hereunder by Issuer, (iii) promptly to take all action as may from time to time
be required (including (A) complying with all premerger notification, reporting
and waiting period requirements specified in 15 U.S.C. (section mark) 18a and
regulations promulgated thereunder and (B) in the event, under the BHC Act, the
HOLA, the Bank Merger Act, or the Change in Bank Control Act of 1978, or a state
banking law, prior approval of or notice to a Regulatory Authority is necessary
before the Option may be exercised, cooperating fully with Holder in preparing
such applications or notices and providing such information to such Regulatory
Authorities as they may require) in order to permit Holder to exercise the
Option and Issuer duly and effectively to issue the Issuer Trust Shares pursuant
hereto, and (iv) promptly to take all action provided herein to protect the
rights of Holder against dilution.
5. REPRESENTATIONS AND WARRANTIES OF ISSUER. Issuer hereby represents and
warrants to Grantee (and Holder, if different than Grantee) as follows:
(a) DUE AUTHORIZATION. Issuer has all requisite 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 action on the part of Issuer.
This Agreement has been duly executed and delivered by Issuer. Neither this
Agreement, the transactions contemplated by this Agreement, nor the Option
Shares (or Substitute Shares) that may be purchased pursuant to exercise of the
Option are or will be subject to any of the provisions of Subtitle 7 of Title 3
of the Maryland General Corporation Law.
(b) AUTHORIZED SHARES. Issuer has taken all necessary 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 Trust Shares upon the exercise of the
Option terminates, will have reserved for issuance, upon exercise of the Option,
the number of Issuer Trust Shares necessary for Holder to exercise the Option,
and Issuer will take all necessary action to authorize and reserve for issuance
all additional Issuer Trust Shares or other securities which may be issued
pursuant to Section 7 upon exercise of the Option. The Issuer Trust Shares to be
issued upon due exercise of the Option, including all additional Issuer Trust
Shares 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, including any
preemptive rights of any holder of Issuer Trust Shares.
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6. REPRESENTATIONS AND WARRANTIES OF GRANTEE. Grantee hereby represents and
warrants to Issuer that:
(a) DUE AUTHORIZATION. Grantee has all requisite 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 action on the part of Grantee.
This Agreement has been duly executed and delivered by Grantee.
(b) PURCHASE NOT FOR DISTRIBUTION. The 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 Act of 1933, as amended (the
"Securities Act").
7. ADJUSTMENT UPON CHANGES IN ISSUER CAPITALIZATION, ETC.
(a) In the event of any change in Issuer Trust Shares by reason of a stock
dividend, stock split, split-up, recapitalization, combination, exchange of
shares or similar transaction, the type and number of shares or securities
subject to the Option, and the Purchase Price therefor, shall be adjusted
appropriately, and proper provision shall be made in the agreements governing
such transaction so that 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 Trust Shares if the Option had been exercised
immediately prior to such event, or the record date therefor, as applicable. If
any additional Issuer Trust Shares are issued after the date of this Agreement
(other than pursuant to an event described in the first sentence of this
SUBSECTION (A)), the number of Issuer Trust Shares subject to the Option shall
be adjusted so that, after such issuance, it, together with any Issuer Trust
Shares previously issued pursuant hereto, equals 19.9% of the number of Issuer
Trust Shares then issued and outstanding, without giving effect to any shares
subject to or issued pursuant to the Option. No provision of this Section 7
shall be deemed to affect or change, or constitute authorization for any
violation of, any of the covenants or representations in the Plan.
(b) In the event that Issuer shall enter in an agreement (i) to consolidate
with or merge into any person, other than Grantee or one of its affiliates, and
shall not be the continuing or surviving entity of such consolidation or merger,
(ii) to permit any person, other than Grantee or one of its affiliates, to merge
into Issuer and Issuer shall be the continuing or surviving entity, but, in
connection with such merger, the then outstanding Issuer Trust Shares 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 Issuer Trust Shares
immediately prior to such merger shall after such merger represent less than 50%
of the outstanding shares and share equivalents of the merged entity, or (iii)
to sell or otherwise transfer all or substantially all of its assets to any
person, other than Grantee or one of its affiliates, 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 Holder, of either (x)
the Acquiring Corporation (as hereinafter defined), (y) any person that controls
the Acquiring Corporation, or (z) in the case of a merger described in clause
(ii), Issuer (such person being referred to as "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 Holder. The Substitute Option Issuer shall also enter
into an agreement with the Holder 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
Substitute Shares (as hereinafter defined) as is equal to the Assigned Value (as
hereinafter defined) multiplied by the number of Issuer Trust Shares for which
the Option was theretofore exercisable, divided by the Average Price (as
hereinafter defined). The exercise price of Substitute Option per share of
Substitute Shares (the "Substitute Option Price") shall then be equal to the
Purchase Price multiplied by a fraction in which the numerator is the number of
Issuer Trust Shares for which the Option was theretofore exercisable and the
denominator is the number of Substitute Shares for which the Substitute Option
is exercisable.
(e) The following terms have the meanings indicated:
(1) "Acquiring Corporation" shall mean (i) the continuing or surviving
person of a consolidation or merger with Issuer (if other than Issuer),
(ii) Issuer in a merger in which Issuer is the continuing or surviving
person, or (iii) the transferee of all or substantially all of Issuer's
assets (or a substantial part of the assets of its subsidiaries taken as a
whole).
(2) "Substitute Shares" shall mean the securities issued by Substitute
Option Issuer upon exercise of the Substitute Option.
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(3) "Assigned Value" shall mean the highest of (x) the price per share
of Issuer Trust Shares at which a Tender Offer or an Exchange Offer
therefor has been made, (y) the price per Issuer Trust Share to be paid by
any third party pursuant to an agreement with Issuer, and (z) the highest
closing price for Issuer Trust Shares within the six-month period
immediately preceding the consolidation, merger, or sale in question. In
the event that a Tender Offer or an Exchange Offer is made for Issuer Trust
Shares 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 Issuer Trust Shares
shall be determined by a nationally recognized investment banking firm
selected by Holder or the owner of Option Shares issued upon exercise of
the Option ("Owner"), as the case may be (and if there are both a Holder
and an Owner, the Holder).
(4) "Average Price" shall mean the average closing price of a
Substitute Share for the one year immediately preceding the consolidation,
merger, or sale in question, but in no event higher than the closing price
of a Substitute Share 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 an Issuer Trust Share or a
share of common stock issued by the person merging into Issuer or by any
company which controls such person, as Holder 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 Substitute
Shares 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 Substitute Shares but for the limitation in the first sentence of this
SUBSECTION (F), Substitute Option Issuer shall make a cash payment to Holder
equal to the excess of (i) the value of the Substitute Option without giving
effect to the limitation in the first sentence of this SUBSECTION (F) over (ii)
the value of the Substitute Option after giving effect to the limitation in the
first sentence of this SUBSECTION (F). This difference in value shall be
determined by a nationally-recognized investment banking firm selected by
Holder.
(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 holders of the other
shares issued by Substitute Option Issuer are not entitled to exercise any
rights by reason of the issuance or exercise of the Substitute Option and the
Substitute Shares are otherwise in no way distinguishable from or have lesser
economic value than other shares issued by Substitute Option Issuer).
8. REGISTRATION RIGHTS.
(a) DEMAND REGISTRATION RIGHTS. Issuer shall, subject to the conditions of
SUBPARAGRAPH (C) below, if requested by any Holder or Owner, as applicable,
including Grantee and any permitted transferee ("Selling Shareholder"), as
expeditiously as possible prepare and file a registration statement under the
Securities Act if such registration is necessary in order to permit the sale or
other disposition of any or all Issuer Trust Shares or other securities that
have been acquired by or are issuable to the Selling Shareholder upon exercise
of the Option in accordance with the intended method of sale or other
disposition stated by the Selling Shareholder in such request, including without
limitation a "shelf" registration statement under Rule 415 under the Securities
Act or any successor provision, and Issuer shall use its best efforts to qualify
such shares or other securities for sale under any applicable state securities
laws.
(b) ADDITIONAL REGISTRATION RIGHTS. If Issuer at any time after the
exercise of the Option proposes to register any Issuer Trust Shares under the
Securities Act in connection with an underwritten public offering of such Issuer
Trust Shares, Issuer will promptly give written notice to the Selling
Shareholder of its intention to do so and, upon the written request of any
Selling Shareholder given within 30 days after receipt of any such notice (which
request shall specify the number of Issuer Trust Shares intended to be included
in such underwritten public offering by the Selling Shareholder), Issuer will
cause all such shares for which a Selling Shareholder requests participation in
such registration, to be so registered and included in such underwritten public
offering; PROVIDED, HOWEVER, that Issuer may elect to not cause any such shares
to be so registered (i) if the underwriters in good faith object for valid
business reasons, or (ii) in the case of a registration solely to implement an
employee benefit plan or a registration filed on Form S-4; PROVIDED, FURTHER,
HOWEVER, that such election pursuant to (i) may only be made one time. If some
but not all the Issuer Trust Shares with respect to which Issuer shall have
received requests for registration pursuant to this SUBSECTION (B), shall be
excluded from such registration, Issuer shall make appropriate allocation of
shares to be registered among the Selling Shareholders desiring to register
their shares pro rata in the proportion that the number of shares requested to
be registered by each such Selling Shareholder bears to the total number of
shares requested to be registered by all such Selling Shareholders then desiring
to have Issuer Trust Shares registered for sale.
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(c) CONDITIONS TO REQUIRED REGISTRATION. Issuer shall use all reasonable
efforts to cause each registration statement referred to in SUBPARAGRAPH (A)
above to become effective and to obtain all consents or waivers of other parties
which are required therefor and to keep such registration statement effective;
PROVIDED, HOWEVER, that Issuer may delay any registration of Option Shares
required pursuant to SUBPARAGRAPH (A) above for a period not exceeding 120 days
(or 180 days in any calendar year in the aggregate) provided Issuer shall in
good faith determine that any such registration would adversely affect an
offering or contemplated offering of other securities by Issuer, and Issuer
shall not be required to register Option Shares under the Securities Act
pursuant to SUBSECTION (A) above:
(i) prior to the earliest of (a) termination of the Plan pursuant to
ARTICLE VII thereof, (b) failure to obtain the requisite approval pursuant
to SECTION 6.01 of the Plan, and (c) a Purchase Event or a Preliminary
Purchase Event;
(ii) on more than one occasion;
(iii) more than once during any calendar year;
(iv) within 90 days after the effective date of a registration
referred to in SUBSECTION (B) above pursuant to which the Selling
Shareholder or Selling Shareholders concerned were afforded the opportunity
to register such shares under the Securities Act and such shares were
registered as requested; and
(v) unless a request therefor is made to Issuer by Selling
Shareholders that hold at least 25% or more of the aggregate number of
Option Shares (including Issuer Trust Shares issuable upon exercise of the
Option) then outstanding.
In addition to the foregoing, Issuer shall not be required to maintain the
effectiveness of any registration statement after the expiration of nine months
from the effective date of such registration statement. Issuer shall use all
reasonable efforts to make any filings, and take all steps, under all applicable
state securities laws to the extent necessary to permit the sale or other
disposition of the Option Shares so registered in accordance with the intended
method of distribution for such shares; PROVIDED, HOWEVER, 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) EXPENSES. Except where applicable state law prohibits such payments,
Issuer will pay all expenses (including without limitation registration fees,
qualification fees, blue sky fees and expenses (including the fees and expenses
of counsel), legal expenses, including the reasonable fees and expenses of one
counsel to the holders whose Option Shares are being registered, printing
expenses and the costs of special audits or "cold comfort" letters, and the
reasonable fees and expenses of any necessary special experts) in connection
with each registration pursuant to SUBSECTION (A) or (B) above (including the
related offerings and sales by holders of Option Shares) and all other
qualifications, notifications or exemptions pursuant to SUBSECTION (A) or (B)
above.
(e) INDEMNIFICATION. In connection with any registration under SUBPARAGRAPH
(A) or (B) above Issuer hereby indemnifies the Selling Shareholders, 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, or
alleged untrue, statement of a material fact contained in any registration
statement or prospectus or notification or offering circular (including any
amendments or supplements thereto) or any preliminary prospectus, or caused by
any omission, or alleged omission, to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such expenses, losses, claims, damages or liabilities of such
indemnified party are caused by any untrue statement or alleged untrue statement
that was included by Issuer in any such registration statement or prospectus or
notification or offering circular (including any amendments or supplements
thereto) in reliance upon and in conformity with, information furnished in
writing to Issuer by such indemnified party expressly for use therein, and
Issuer and each officer, director and controlling person of Issuer shall be
indemnified by such Selling Shareholders, or by such underwriter, as the case
may be, for all such expenses, losses, claims, damages and liabilities caused by
any untrue, or alleged untrue, statement, that was included by Issuer in any
such registration statement or prospectus or notification or offering circular
(including any amendments or supplements thereto) in reliance upon, and in
conformity with, information furnished in writing to Issuer by such holder or
such underwriter, as the case may be, expressly for such use.
Promptly upon receipt by a party indemnified under this SUBSECTION (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 SUBSECTION (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
SUBSECTION (E). In case notice of commencement of any such action shall be given
to
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the indemnifying party as above provided, the indemnifying party shall be
entitled to participate in and, to the extent it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense of such
action at its own expense, with counsel chosen by it and satisfactory to such
indemnified party. The indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel (other than reasonable costs of investigation)
shall be paid by the indemnified party unless (i) the indemnifying party either
agrees to pay the same, (ii) the indemnifying party 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. No indemnifying party shall be liable for any
settlement entered into without its consent, which consent may not be
unreasonably withheld.
If the indemnification provided for in this SUBSECTION (E) is unavailable
to a party otherwise entitled to be indemnified in respect of any expenses,
losses, claims, damages or liabilities referred to herein, then the indemnifying
party, in lieu of indemnifying such party otherwise entitled to be indemnified,
shall contribute to the amount paid or payable by such party to be indemnified
as a result of such expenses, losses, claims, damages or liabilities in such
proportion as is appropriate to reflect the relative benefits received by
Issuer, the Selling Shareholders and the underwriters from the offering of the
securities and also the relative fault of Issuer, the Selling Shareholders 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, HOWEVER, that in no case shall any Selling Shareholder 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 SUBSECTION (A) or (B)
above, Issuer and each Selling Shareholder (other than Grantee) shall enter into
an agreement containing the indemnification provisions of this SUBSECTION (E).
(f) MISCELLANEOUS REPORTING. Issuer shall comply with all reporting
requirements and will do all such other things as may be necessary to permit the
expeditious sale at any time of any Option Shares by the Selling Shareholders
thereof in accordance with and to the extent permitted by any rule or regulation
promulgated by the SEC from time to time, including, without limitation, Rule
144A. Issuer shall at its expense provide the Selling Shareholders with any
information necessary in connection with the completion and filing of any
reports or forms required to be filed by them under the Securities Act or the
Exchange Act, or required pursuant to any state securities laws or the rules of
any stock exchange.
(g) ISSUE TAXES. 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 the Selling Shareholders harmless, without
limitation as to time, against any and all liabilities, with respect to all such
taxes.
9. QUOTATION; LISTING. If Issuer Trust Shares or any other securities to be
acquired in connection with the exercise of the Option are then authorized for
quotation or trading or listing on the NASDAQ/NMS or any securities exchange,
Issuer, upon the request of Holder, will promptly file an application, if
required, to authorize for quotation or trading or listing the Issuer Trust
Shares or other securities to be acquired upon exercise of the Option on the
NASDAQ/NMS or such other securities exchange and will use its best efforts to
obtain approval, if required, of such quotation or listing as soon as
practicable.
10. DIVISION OF OPTION. This Agreement (and 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 Issuer Trust Shares
purchasable hereunder. The terms "Agreement" and "Option" as used herein include
any other Agreements and related Options for which this Agreement (and the
Option granted hereby) may be exchanged. Upon receipt by Issuer of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, Issuer will execute and deliver a new Agreement of like
tenor and date. Any such new Agreement executed and delivered shall constitute
an additional contractual obligation on the part of Issuer, whether or not the
Agreement so lost, stolen, destroyed or mutilated shall at any time be
enforceable by anyone.
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11. MISCELLANEOUS.
(a) EXPENSES. 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 Plan and the other documents and instruments
referred to herein and therein, between Grantee and Issuer (i) 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 (ii) 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 SUBSECTION (H) of this SECTION 11) any rights or
remedies hereunder. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or a federal or state
regulatory agency to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
If for any reason such court or regulatory agency determines that the Option
does not permit Holder or Owner to acquire the full number of shares of Issuer
Trust Shares as provided in SECTION 3 (as adjusted pursuant to SECTION 7), it is
the express intention of Issuer to allow Holder or Owner to acquire 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 North Carolina without regard to any
applicable conflicts of law rules.
(e) DESCRIPTIVE HEADINGS. The descriptive headings contained herein are for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
(f) NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (with
confirmation) or mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
<TABLE>
<C> <S>
If to Issuer to: Ameribanc Investors Group
7630 Little River Turnpike
Suite 610
Annandale, VA 22003
Attn: Chief Executive Officer
with a copy to: David B.H. Martin, Jr., Esq.
Hogan & Hartson LLP
555 13th Street, NW
Washington, D.C. 20004
If to Grantee to: First Union Corporation
One First Union Center
Charlotte, NC 28288-0013
Attn: Chief Executive Officer
with a copy to: First Union Corporation
One First Union Center
Charlotte, NC 28288-0013
Attn: Marion A. Cowell, Jr.
</TABLE>
(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 Holder may assign this Agreement
to a wholly-owned subsidiary of Holder and Holder may assign its
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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 the
Holder, Issuer and the 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.
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.
AMERIBANC INVESTORS GROUP
By: /s/ JOHN J. HOUSEMAN
NAME: JOHN J. HOUSEMAN
TITLE: PRESIDENT AND CHIEF EXECUTIVE
OFFICER
FIRST UNION CORPORATION
By: /s/ KENNETH R. STANCLIFF
NAME: KENNETH R. STANCLIFF
TITLE: SENIOR VICE PRESIDENT
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