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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
_______________________________________
August 25, 1995
Date of Report (Date of earliest event reported)
FOURTH FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
KANSAS 0-4170 48-0761683
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
100 NORTH BROADWAY
WICHITA, KANSAS 67202
(Address of principal executive offices) (Zip Code)
(316) 261-4444
(Registrant's telephone number, including area code)
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Items 1-4. Not Applicable.
Item 5. Other Events.
(a) On August 25, 1995, Fourth Financial Corporation (the
"Company"), a Kansas corporation, Boatmen's Bancshares, Inc. ("Boatmen's"),
a Missouri corporation, and Acquisition Sub, Inc. ("Aquisition Sub"), a
Kansas corporation and a wholly-owned subsidiary of Boatmen's, entered into
an Agreement and Plan of Merger, dated as of August 25, 1995 (the "Merger
Agreement"). The Merger Agreement contemplates the merger of the Company
with and into Acquisition Sub (the "Merger"), subject to the affirmative
vote of a majority of all of the outstanding voting shares of the Company
and Boatmen's.
Pursuant to the Merger Agreement, (i) each outstanding share of
the Company's Common Stock, par value $5.00 per share (the "Company Common
Stock"), will be converted into the right to receive one (1) share of
Boatmen's Common Stock, par value $1.00 per share (the "Boatmen's Common
Stock"), and (ii) each outstanding share of the Company's Class A 7%
Cumulative Convertible Preferred Stock, par value $100 per share, liquidation
preference $400 per share (the "Company Preferred") will be converted into
the right to receive one share of Boatmen's 7% Cumulative Convertible
Preferred Stock, par value $100 per share, liquidation preference $400 per
share, having substantially the same rights and preferences as the Company
Preferred.
The foregoing description is qualified in its entirety by
reference to the Merger Agreement, which is attached hereto as Exhibit 2
and is incorporated herein by reference. All capitalized terms used but
not defined in this paragraph (a) shall have the meanings ascribed to such
terms in the Merger Agreement.
(b) On August 26, 1995, the Company and Boatmen's entered into
a Stock Option Agreement (the "Option Agreement") providing Boatmen's with
the right to purchase 5,500,000 shares of the Company Common Stock at a
price of $33.50 per share.<PAGE>
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The foregoing summary is qualified in its entirety by reference
to the Option Agreement, a copy of which is attached hereto as Exhibit
99(a) and is incorporated by reference herein. Capitalized terms not
defined in this paragraph (b) shall have the meanings ascribed to such
terms in the Option Agreement.
Item 6. Not Applicable.
Item 7. Financial Statements
Pro Forma Financial Information and Exhibits.
(a)-(b) Not Applicable.
(c) Exhibits Required by Item 601 of Regulation S-K
2 Merger Agreement among Fourth Financial Corporation,
Boatmen's Bancshares, Inc., and Acquisition Sub, Inc.,
dated as of August 25, 1995.
99(a) Stock Option Agreement, dated as of August 26, 1995
between Fourth Financial Corporation and Boatmen's
Bancshares, Inc.
99(b) Press release issued by Fourth Financial Corporation
on August 25, 1995.
Item 8. Not Applicable.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
FOURTH FINANCIAL CORPORATION
Dated: August 29, 1995 By: /s/ William J. Rainey
Name: William J. Rainey
Title: Executive Vice President,
Secretary and General Counsel
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AGREEMENT AND PLAN OF MERGER
by and among
FOURTH FINANCIAL CORPORATION,
a Kansas corporation,
and
BOATMEN'S BANCSHARES, INC.,
a Missouri corporation,
and
ACQUISITION SUB, INC.,
a Kansas corporation,
Dated August 25, 1995.
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TABLE OF CONTENTS
Page
ARTICLE ONE TERMS OF THE MERGER AND CLOSING . . . . . . . . . . . . . . 1
Section 1.01. Merger . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Merging Corporation . . . . . . . . . . . . . . . 1
Section 1.03. Surviving Corporation . . . . . . . . . . . . . . 1
Section 1.04. Effect of the Merger . . . . . . . . . . . . . . . 1
Section 1.05. Conversion of Fourth Common . . . . . . . . . . . 1
Section 1.06. Conversion of Fourth Preferred . . . . . . . . . . 2
Section 1.07. Share Adjustments . . . . . . . . . . . . . . . . 2
Section 1.08. Closing . . . . . . . . . . . . . . . . . . . . . 3
Section 1.09. Exchange Procedures; Surrender of Certificates . . 3
Section 1.10. Closing Date . . . . . . . . . . . . . . . . . . . 4
Section 1.11. Closing Deliveries . . . . . . . . . . . . . . . . 4
ARTICLE TWO REPRESENTATIONS OF FOURTH . . . . . . . . . . . . . . . . . 5
Section 2.01. Organization and Capital Stock . . . . . . . . . . 5
Section 2.02. Authorization; No Defaults . . . . . . . . . . . . 6
Section 2.03. Subsidiaries . . . . . . . . . . . . . . . . . . . 6
Section 2.04. Financial Information . . . . . . . . . . . . . . 6
Section 2.05. Absence of Changes . . . . . . . . . . . . . . . . 7
Section 2.06. Regulatory Enforcement Matters . . . . . . . . . . 7
Section 2.07. Tax Matters . . . . . . . . . . . . . . . . . . . 7
Section 2.08. Litigation . . . . . . . . . . . . . . . . . . . . 8
Section 2.09. Employment Agreements . . . . . . . . . . . . . . 8
Section 2.10. Reports . . . . . . . . . . . . . . . . . . . . . 9
Section 2.11. Loan Portfolio . . . . . . . . . . . . . . . . . . 9
Section 2.12. Investment Portfolio . . . . . . . . . . . . . . . 9
Section 2.13. Interest Rate Risk Management Instruments . . . . 9
Section 2.14. Employee Matters and ERISA . . . . . . . . . . . . 10
Section 2.15. Title to Properties; Insurance . . . . . . . . . . 11
Section 2.16. Environmental Matters . . . . . . . . . . . . . . 11
Section 2.17. Compliance with Law . . . . . . . . . . . . . . . 12
Section 2.18. Brokerage . . . . . . . . . . . . . . . . . . . . 12
Section 2.19. Non-Banking Activities of Fourth and its
Subsidiaries . . . . . . . . . . . . . . . . . . 12
Section 2.20. Trust Administration . . . . . . . . . . . . . . . 12
Section 2.21. State Takeover Laws . . . . . . . . . . . . . . . 13
Section 2.22. Pooling of Interests; Tax-Free Reorganization . . 13
Section 2.23. Certain Contracts . . . . . . . . . . . . . . . . 13
Section 2.24. No Undisclosed Liabilities . . . . . . . . . . . . 13
Section 2.25. Fair Lending; Community Reinvestment Act . . . . . 13
Section 2.26. Statements True and Correct . . . . . . . . . . . 13
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ARTICLE THREE REPRESENTATIONS OF BOATMEN'S AND
ACQUISITION SUB . . . . . . . . . . . . . . . . . 14
Section 3.01. Organization and Capital Stock . . . . . . . . . . 14
Section 3.02. Authorization . . . . . . . . . . . . . . . . . . 15
Section 3.03. Subsidiaries . . . . . . . . . . . . . . . . . . . 15
Section 3.04. Financial Information . . . . . . . . . . . . . . 15
Section 3.05. Absence of Changes . . . . . . . . . . . . . . . . 16
Section 3.06. Litigation . . . . . . . . . . . . . . . . . . . . 16
Section 3.07. Reports . . . . . . . . . . . . . . . . . . . . . 16
Section 3.08. Compliance With Law . . . . . . . . . . . . . . . 16
Section 3.09. Pooling of Interests; Tax-Free Reorganization . . 16
Section 3.10. Tax Matters . . . . . . . . . . . . . . . . . . . 16
Section 3.11. Interest Rate Risk Management Instruments . . . . 17
Section 3.12. Brokerage . . . . . . . . . . . . . . . . . . . . 17
Section 3.13. Non-Banking Activities of Boatmen's and its
Subsidiaries . . . . . . . . . . . . . . . . . . 17
Section 3.14. State Takeover Laws . . . . . . . . . . . . . . . 17
Section 3.15. Fair Lending; Community Reinvestment Act. . . . 17
Section 3.16. Knowledge as to Certain Conditions. . . . . . . 17
Section 3.17. Regulatory Enforcement Matters . . . . . . . . . . 17
Section 3.18. Statements True and Correct . . . . . . . . . . . 18
ARTICLE FOUR AGREEMENTS OF FOURTH . . . . . . . . . . . . . . . 18
Section 4.01. Business in Ordinary Course . . . . . . . . . . . 18
Section 4.02. Breaches . . . . . . . . . . . . . . . . . . . . . 21
Section 4.03. Submission to Shareholders . . . . . . . . . . . . 21
Section 4.04. Consents to Contracts and Leases . . . . . . . . . 21
Section 4.05. Consummation of Agreement . . . . . . . . . . . . 21
Section 4.06. Environmental Reports . . . . . . . . . . . . . . 21
Section 4.07. Restriction on Resales . . . . . . . . . . . . . . 22
Section 4.08. Subsidiary Bank Mergers . . . . . . . . . . . . . 22
Section 4.09. Access to Information . . . . . . . . . . . . . . 22
ARTICLE FIVE AGREEMENTS OF BOATMEN'S AND ACQUISITION SUB . . . 23
Section 5.01. Regulatory Approvals and Registration Statement;
Submission to Shareholders . . . . . . . . . . . 23
Section 5.02. Breaches . . . . . . . . . . . . . . . . . . . . . 24
Section 5.03. Consummation of Agreement . . . . . . . . . . . . 24
Section 5.04. Stock Options . . . . . . . . . . . . . . . . . . 24
Section 5.05. Directors and Officers' Liability Insurance and
Indemnification . . . . . . . . . . . . . . . . . 25
Section 5.06. Employee Benefits . . . . . . . . . . . . . . . . 25
Section 5.07. Board Composition . . . . . . . . . . . . . . . . 26
Section 5.08. Other Agreements . . . . . . . . . . . . . . . . . 26
Section 5.09. Access to Information . . . . . . . . . . . . . . 26
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ARTICLE SIX CONDITIONS PRECEDENT TO THE MERGER . . . . . . . . . . . . 26
Section 6.01. Conditions to Boatmen's Obligations . . . . . . . 27
Section 6.02. Conditions to Fourth's Obligations . . . . . . . . 28
ARTICLE SEVEN TERMINATION OR ABANDONMENT . . . . . . . . . . . . 29
Section 7.01. Mutual Agreement . . . . . . . . . . . . . . . . . 29
Section 7.02. Breach of Agreements . . . . . . . . . . . . . . . 29
Section 7.03. Environmental Reports . . . . . . . . . . . . . . 30
Section 7.04. Failure of Conditions . . . . . . . . . . . . . . 30
Section 7.05. Regulatory Approval Denial . . . . . . . . . . . . 30
Section 7.06. Shareholder Approval Denial . . . . . . . . . . . 30
Section 7.07. Regulatory Enforcement Matters . . . . . . . . . . 30
Section 7.08. Termination Date . . . . . . . . . . . . . . . . . 30
Section 7.09. Due Diligence Review . . . . . . . . . . . . . . . 30
Section 7.10. Fourth Option Agreement . . . . . . . . . . . . . 31
ARTICLE EIGHT GENERAL . . . . . . . . . . . . . . . . . . . . . 31
Section 8.01. Confidential Information . . . . . . . . . . . . . 31
Section 8.02. Publicity . . . . . . . . . . . . . . . . . . . . 31
Section 8.03. Return of Documents . . . . . . . . . . . . . . . 31
Section 8.04. Notices . . . . . . . . . . . . . . . . . . . . . 31
Section 8.05. Liabilities . . . . . . . . . . . . . . . . . . . 32
Section 8.06. Nonsurvival of Representations, Warranties and
Agreements . . . . . . . . . . . . . . . . . . . 33
Section 8.07. Entire Agreement . . . . . . . . . . . . . . . . . 33
Section 8.08. Headings and Captions . . . . . . . . . . . . . . 33
Section 8.09. Waiver, Amendment or Modification . . . . . . . . 33
Section 8.10. Rules of Construction . . . . . . . . . . . . . . 33
Section 8.11. Counterparts . . . . . . . . . . . . . . . . . . . 33
Section 8.12. Successors and Assigns . . . . . . . . . . . . . . 33
Section 8.13. Severability . . . . . . . . . . . . . . . . . . . 34
Section 8.14. Governing Law; Assignment . . . . . . . . . . . . 34
Section 8.15. Definition of Material Adverse Effect . . . . . . 34
EXHIBIT 4.07 - Form of Affiliate's Letter
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AGREEMENT AND PLAN OF MERGER
This is an AGREEMENT AND PLAN OF MERGER (this "Agreement") made
August 25, 1995, by and among FOURTH FINANCIAL CORPORATION, a Kansas
corporation ("Fourth"), BOATMEN'S BANCSHARES, INC., a Missouri corporation
("Boatmen's"), and ACQUISITION SUB, INC., a Kansas corporation and wholly-
owned subsidiary of Boatmen's ("Acquisition Sub").
In consideration of the premises and the mutual terms and provisions
set forth in this Agreement, the parties agree as follows.
ARTICLE ONE
TERMS OF THE MERGER AND CLOSING
Section 1.01. Merger. Pursuant to the terms and provisions of this
Agreement and the General Corporation Code of Kansas (the "Corporate Law"),
Fourth shall merge with and into Acquisition Sub (the "Merger").
Section 1.02. Merging Corporation. Fourth shall be the merging
corporation under the Merger and its corporate identity and existence,
separate and apart from Acquisition Sub, shall cease on consummation of the
Merger.
Section 1.03. Surviving Corporation. Acquisition Sub shall be the
surviving corporation in the Merger. No changes in the articles of
incorporation of Acquisition Sub shall be effected by the Merger.
Section 1.04. Effect of the Merger. The Merger shall have all of
the effects provided by this Agreement and the Corporate Law.
Section 1.05. Conversion of Fourth Common.
(a) At the Effective Time (as defined in Section 1.10 hereof), each
share of common stock, par value $5.00 per share, of Fourth (the "Fourth
Common") issued and outstanding immediately prior to the Effective Time
shall be converted into the right to receive one (1) share of common stock,
par value $1.00 per share, of Boatmen's (together with any rights attached
thereto under or by virtue of the Rights Agreement, dated August 14, 1990,
as amended, between Boatmen's and the Rights Agent named therein, prior to
the Distribution Date (as defined in the Rights Agreement), the "Boatmen's
Common"). The shares of Boatmen's Common to be issued pursuant to the
foregoing sentence, together with any cash payment in lieu of fractional
shares, as provided below, is referred to herein as the "Common Merger
Consideration." No fractional shares of Boatmen's Common shall be issued
and, in lieu thereof, holders of shares of Fourth Common who would
otherwise be entitled to a fractional share interest (after taking into
account all shares of Fourth Common held by such holder) shall be paid an
amount in cash equal to the product of such fractional share interest and
the closing price of a share of Boatmen's Common on the Nasdaq Stock
Market's National Market ("Nasdaq") on the business day immediately
preceding the date on which the Effective Time occurs.
(b) At the Effective Time, all of the shares of Fourth Common, by
virtue of the Merger and without any action on the part of the holders
thereof, shall no longer be outstanding and shall be canceled
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and retired and shall cease to exist, and each holder of any certificate or
certificates which immediately prior to the Effective Time represented
outstanding shares of Fourth Common (the "Common Certificates") shall
thereafter cease to have any rights with respect to such shares, except the
right of such holders to receive, without interest, the Common Merger
Consideration upon the surrender of such Common Certificate or Common
Certificates in accordance with Section 1.09 hereof.
(c) At the Effective Time, each share of Fourth Common, if any, held
in the treasury of Fourth or by any direct or indirect subsidiary of Fourth
(other than shares held in trust accounts for the benefit of others or in
other fiduciary, nominee or similar capacities and shares held by Fourth or
any of its subsidiaries in respect of a debt previously contracted)
immediately prior to the Effective Time shall be canceled.
(d) Each share of common stock, par value $1.00 per share, of
Acquisition Sub outstanding immediately prior to the Effective Time shall
remain outstanding unaffected by the Merger.
Section 1.06. Conversion of Fourth Preferred.
(a) At the Effective Time, each share of Class A 7% Cumulative
Convertible Preferred Stock, par value $100 per share, liquidation
preference $400 per share, of Fourth (the "Fourth Preferred"), issued and
outstanding immediately prior to the Effective Time shall be converted into
the right to receive one (1) share of 7% cumulative convertible preferred
stock, par value $100 per share, liquidation preference $400 per share, of
Boatmen's (the "Boatmen's Preferred")(and, as a result, each depositary
share representing a one-sixteenth (1/16) interest in a share of Fourth
Preferred shall be converted into the right to receive a one-sixteenth
(1/16) share of Boatmen's Preferred). The terms of the Boatmen's Preferred
shall be substantially the same as the terms of the Fourth Preferred (with
such stock being convertible at the same conversion price into the number
of shares of Boatmen's Common included in the Common Merger Consideration).
The shares of Boatmen's Preferred to be issued pursuant to the foregoing
sentence are referred to herein as the "Preferred Merger Consideration";
the Common Merger Consideration and the Preferred Merger Consideration are
referred to herein collectively as the "Merger Consideration."
(b) At the Effective Time, all of the shares of Fourth Preferred, by
virtue of the Merger and without any action on the part of the holders
thereof, shall no longer be outstanding and shall be canceled and retired
and shall cease to exist, and each holder of any certificate or
certificates which immediately prior to the Effective Time represented
outstanding shares of Fourth Preferred ("Preferred Certificates"; the
Common Certificates and the Preferred Certificates are referred to herein
collectively as the "Certificates") shall thereafter cease to have any
rights with respect to such shares, except the right of such holders to
receive, without interest, the Preferred Merger Consideration upon the
surrender of such Preferred Certificate or Preferred Certificates in
accordance with Section 1.09 hereof.
(c) At the Effective Time, any deposit agreements pursuant to which
shares of Fourth Preferred are held subject to depositary receipts shall
automatically, and without further action on the part of Boatmen's or
Acquisition Sub, be assumed by Acquisition Sub.
Section 1.07. Share Adjustments. If between the date hereof and the
Effective Time a share of Boatmen's Common shall be changed into a
different number of shares of Boatmen's Common or a different class of
shares (a "Share Adjustment") by reason of reclassification,
recapitalization, splitup,
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exchange of shares or readjustment, or if a stock dividend thereon shall be
declared with a record date within such period, then the number of shares
of Boatmen's Common into which a share of Fourth Common shall be converted
pursuant to Section 1.05(a) hereof shall be appropriately and
proportionately adjusted so that each shareholder of Fourth shall be
entitled to receive such number of shares of Boatmen's Common as such
shareholder would have received pursuant to such Share Adjustment had the
record date therefor been immediately following the Effective Time of the
Merger.
Section 1.08. Closing. The closing of the Merger (the "Closing")
shall take place at a location mutually agreeable to the parties at 10:00
A.M. Central Time on the Closing Date described in Section 1.10 hereof.
Section 1.09. Exchange Procedures; Surrender of Certificates.
(a) Boatmen's Trust Company shall act as Exchange Agent in the
Merger (the "Exchange Agent").
(b) As soon as reasonably practicable after the Effective Time, the
Exchange Agent shall mail to each record holder of any Certificate or
Certificates whose shares were converted into the right to receive the
Merger Consideration, a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon proper delivery of the Certificates to the Exchange
Agent and shall be in such form and have such other provisions as Boatmen's
may reasonably specify) (each such letter, the "Merger Letter of
Transmittal") and instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration. Upon surrender to
the Exchange Agent of a Certificate, together with a Merger Letter of
Transmittal duly executed and any other required documents, the holder of
such Certificate shall be entitled to receive in exchange therefor solely
the Merger Consideration. No interest on the Merger Consideration issuable
upon the surrender of the Certificates shall be paid or accrued for the
benefit of holders of Certificates. If the Merger Consideration is to be
issued to a person other than a person in whose name a surrendered
Certificate is registered, it shall be a condition of issuance that the
surrendered Certificate shall be properly endorsed or otherwise in proper
form for transfer and that the person requesting such issuance shall pay to
the Exchange Agent any required transfer taxes or other taxes or establish
to the satisfaction of the Exchange Agent that such tax has been paid or is
not applicable.
(c) Notwithstanding anything to the contrary contained herein, no
Common Merger Consideration shall be delivered to a person who is an
"affiliate" (as such term is used in Section 4.07 hereof) of Fourth unless
such "affiliate" shall have theretofore executed and delivered to Boatmen's
the agreement referred to in Section 4.07 hereof.
(d) No dividends that are otherwise payable on shares of Boatmen's
Common constituting the Merger Consideration shall be paid after the
sixtieth (60th) day after the Closing Date to persons entitled to receive
such shares of Boatmen's Common until such persons surrender their
Certificates in exchange for shares of such Boatmen's Common. Upon such
surrender, there shall be paid to the person in whose name the shares of
Boatmen's Common shall be issued any dividends which shall have become
payable with respect to such shares of Boatmen's Common (without interest
and less the amount of taxes, if any, which may have been imposed thereon),
between the sixtieth (60th) day after the Closing Date and the time of such
surrender.
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(e) In the event that any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required
by Boatmen's in its sole discretion, the posting by such person of a bond
in such amount as Boatmen's may determine is reasonably necessary as
indemnity against any claim that may be made against it with respect to
such Certificate, the Exchange Agent shall issue in exchange for such lost,
stolen or destroyed Certificate the Merger Consideration deliverable in
respect thereof pursuant to this Agreement.
(f) Notwithstanding anything in this Agreement to the contrary, for
a period of ninety (90) days after the Closing Date holders of Common
Certificates representing shares of Fourth Common shall be entitled to vote
as holders of shares of Boatmen's Common notwithstanding that such Common
Certificates shall not have been exchanged for shares of Boatmen's Common
as provided in this Section 1.09.
Section 1.10. Closing Date. At Boatmen's election, the Closing
shall take place on (i) the last business day of, or (ii) the first
business day of the month following, in each case, the month during which
each of the conditions in Sections 6.01(d) and 6.02(d) hereof is satisfied
or waived by the appropriate party or on such other date after such
satisfaction or waiver as Fourth and Boatmen's may agree (the "Closing
Date"). The Merger shall be effective upon the filing of a Certificate of
Merger with the Secretary of State of the State of Kansas (the "Effective
Time"), which the parties shall use their best efforts to cause to occur on
the Closing Date.
Section 1.11. Closing Deliveries.
(a) At the Closing, Fourth shall deliver to Boatmen's and
Acquisition Sub:
(i) a certified copy of the Restated Articles of
Incorporation of Fourth and each of its subsidiaries;
(ii) a Certificate signed by an appropriate officer of Fourth
stating that, to the best knowledge of such officer, all of the
conditions set forth in Sections 6.01(a) and 6.01(b) hereof have been
satisfied or waived as provided therein;
(iii) a certified copy of the resolutions of Fourth's Board of
Directors and shareholders, as required for valid approval of the
execution of this Agreement and the consummation of the Merger and
the other transactions contemplated hereby;
(iv) Certificate of the Kansas Secretary of State, dated a
recent date, stating that Fourth is in good standing; and
(v) Certificate of Merger executed by Fourth, reflecting the
terms and provisions of this Agreement and in proper form for filing
with the Secretary of State of the State of Kansas in order to cause
the Merger to become effective pursuant to the Corporate Law.
(b) At the Closing, Boatmen's and Acquisition Sub shall deliver to
Fourth:
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(i) a Certificate signed by an appropriate officer of
Boatmen's and Acquisition Sub, to the best knowledge of such officer,
stating that all of the conditions set forth in Sections 6.02(a),
6.02(b) and 6.02(d) hereof (but excluding the approval of Fourth's
shareholders) have been satisfied;
(ii) a certified copy of the resolutions of Boatmen's Board of
Directors and shareholders, as required for valid approval of the
execution of this Agreement and the consummation of the Merger and
the other transactions contemplated hereby; and
(iii) a certified copy of the resolutions of Acquisition Sub's
Board of Directors and shareholder, as required for valid approval of
the execution of this Agreement and the consummation of the
transactions contemplated hereby.
ARTICLE TWO
REPRESENTATIONS OF FOURTH
Fourth hereby makes the following representations and warranties:
Section 2.01. Organization and Capital Stock.
(a) Fourth is a corporation duly organized, validly existing and in
good standing under the laws of the State of Kansas and has the corporate
power to own all of its property and assets, to incur all of its
liabilities and to carry on its business as now being conducted. Fourth is
a bank holding company registered with the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board") under the Bank Holding
Company Act of 1956, as amended (the "B.H.C.A.").
(b) The authorized capital stock of Fourth consists of
(i) 50,000,000 shares of Fourth Common, of which, as of the date hereof,
27,626,660 shares are issued, 2,009 are held as treasury shares, and
27,624,651 are issued and outstanding, (ii) 250,000 shares of Fourth
Preferred, of which, as of the date hereof, 250,000 shares are issued and
outstanding, and (iii) 5,000,000 shares of Class B preferred stock, of
which, as of the date hereof, no shares are issued and outstanding. All of
the issued and outstanding shares of Fourth Common and Fourth Preferred are
duly and validly issued and outstanding and are fully paid and non-
assessable. None of the outstanding shares of Fourth Common or Fourth
Preferred has been issued in violation of any preemptive rights of the
current or past shareholders of Fourth. As of the date hereof, Fourth had
reserved 1,944,489 shares of Fourth Common for issuance under Fourth's
Stock Option Plans (as defined in Section 5.04 hereof) and 3,448,275 shares
of Fourth Common for issuance pursuant to the conversion provisions of the
Fourth Preferred. As of the date hereof, Fourth had outstanding employee
stock options representing the right to acquire not more than 1,700,474
shares of Fourth Common pursuant to the Stock Option Plans.
(c) Except as set forth in subsection 2.01(b) above and that certain
Stock Option Agreement to be entered into between Fourth and Boatmen's (the
"Fourth Option Agreement"), there are no shares of capital stock or other
equity securities of Fourth outstanding and no outstanding options,
warrants, rights to subscribe for, calls, or commitments of any character
whatsoever relating to, or securities or rights convertible into or
exchangeable for, shares of Fourth Common or other capital stock of Fourth
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or contracts, commitments, understandings or arrangements by which Fourth
is or may be obligated to issue additional shares of its capital stock or
options, warrants or rights to purchase or acquire any additional shares of
its capital stock.
Section 2.02. Authorization; No Defaults. Fourth's Board of
Directors has, by all appropriate action, approved this Agreement and the
Merger and authorized the execution hereof and thereof on its behalf by its
duly authorized officers and the performance by Fourth of its obligations
hereunder. Nothing in the articles of incorporation or bylaws of Fourth,
as amended, or any other agreement, instrument, decree, proceeding, law or
regulation (except as specifically referred to in or contemplated by this
Agreement) by or to which it or any of its subsidiaries are bound or
subject would prohibit Fourth from consummating this Agreement and the
Merger on the terms and conditions herein contained. This Agreement has
been duly and validly executed and delivered by Fourth and constitutes a
legal, valid and binding obligation of Fourth, enforceable against Fourth
in accordance with its terms and, except for the requisite approval of the
shareholders of Fourth, no other corporate acts or proceedings are required
to be taken by Fourth to authorize the execution, delivery and performance
of this Agreement. Fourth and its subsidiaries are neither in default
under nor in violation of any provision of their articles of incorporation
or association, as the case may be, bylaws, or any promissory note,
indenture or any evidence of indebtedness or security therefor, lease,
contract, insurance policy, purchase or other commitment or any other
agreement or arrangement, whether written or oral, which default or
violation would have a Material Adverse Effect (as defined in Section 8.15
hereof) on Fourth, and there has not occurred any event that, with the
lapse of time or giving of notice or both, would constitute such a default
or violation.
Section 2.03. Subsidiaries. Each of Fourth's banking subsidiaries
and its other direct or indirect subsidiaries (collectively, the
"subsidiaries") the name and jurisdiction of incorporation of which is
disclosed in Section 2.03 of that certain confidential writing delivered by
Fourth to Boatmen's and executed by both Fourth and Boatmen's concurrently
with the delivery and execution of this Agreement (the "Disclosure
Schedule"), is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation and has the corporate
power to own its respective properties and assets, to incur its respective
liabilities and to carry on its respective business as now being conducted.
All of the issued and outstanding shares of capital stock of each such
subsidiary (except as may be otherwise specified in Section 2.03 of the
Disclosure Schedule) are owned by Fourth or Fourth's subsidiaries, as the
case may be, free and clear of all material liens, encumbrances, rights of
first refusal, options or other restrictions of any nature whatsoever,
except for directors' qualifying shares, assessibility under 12 U.S.C.
sec.55 and comparable state laws, if applicable, and as may be stated in
Section 2.03 of the Disclosure Schedule. There are no options, warrants or
rights outstanding to acquire any capital stock of any of Fourth's
subsidiaries and no person or entity has any other right to purchase or
acquire any unissued shares of stock of any of Fourth's subsidiaries, nor
does any such subsidiary have any obligation of any nature with respect to
its unissued shares of stock. Except as may be disclosed in Section 2.03
of the Disclosure Schedule, neither Fourth nor any of Fourth's subsidiaries
is a party to any partnership or joint venture or owns an equity interest
in any other business or enterprise.
Section 2.04. Financial Information. The consolidated balance
sheets of Fourth and its subsidiaries as of December 31, 1994 and related
consolidated income statements and statements of changes in shareholders'
equity and of cash flows for the three (3) years ended December 31, 1994,
together with the notes thereto, included in Fourth's Form 10-K for the
year ended December 31, 1994, as currently on file with the Securities and
Exchange Commission (the "S.E.C."), and the unaudited
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consolidated balance sheets of Fourth and its subsidiaries as of March 31,
1995 and June 30, 1995 and the related unaudited consolidated income
statements and statements of changes in shareholders' equity and cash flows
for the three (3) months and six (6) months, respectively, then ended
included in Fourth's Quarterly Reports on Form 10-Q for the quarters then
ended, as currently on file with the S.E.C., and the year-end and quarterly
Reports of Condition and Reports of Income of BANK IV, National Association
and BANK IV Oklahoma, National Association (individually, a "Subsidiary
Bank"; collectively, the "Subsidiary Banks") for 1994 and June 30, 1995,
respectively, as currently on file with the Office of the Comptroller of
the Currency (the "O.C.C.") (together, the "Fourth Financial Statements"),
have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis (except as may be disclosed
therein and except for regulatory accounting reporting differences required
by the Subsidiary Banks' reports) and fairly present in all material
respects the consolidated financial position and the consolidated results
of operations, changes in shareholders' equity and cash flows of the
respective entity and its respective consolidated subsidiaries as of the
dates and for the periods indicated (subject, in the case of interim
financial statements, to normal recurring year-end adjustments, none of
which will be material).
Section 2.05. Absence of Changes. Since December 31, 1994, there
has not been any change in the financial condition, the results of
operations or the business of Fourth and its subsidiaries taken as a whole
which would have a Material Adverse Effect on Fourth, except as disclosed
by Fourth since December 31, 1994 in its periodic reports filed with the
S.E.C. under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Since the date of their respective most recent O.C.C. examination
report, there has been no change in the financial condition, the results of
operations or the business of either of the Subsidiary Banks which would
have a Material Adverse Effect on either of the Subsidiary Banks, except as
disclosed by such Subsidiary Banks since December 31, 1994 in their
respective quarterly Reports of Condition and Reports of Income filed with
the O.C.C.
Section 2.06. Regulatory Enforcement Matters. Except as may be
disclosed in Section 2.06 of the Disclosure Schedule, neither Fourth nor
any Subsidiary Bank or any other of its subsidiaries is subject or is party
to, or has received any notice or advice that it may become subject or
party to, any cease-and-desist order, agreement, consent agreement,
memorandum of understanding or other regulatory enforcement action,
proceeding or order with or by, or is a party to any commitment letter or
similar undertaking to, or is subject to any directive by, or has been
since January 1, 1993, a recipient of any supervisory letter from, or since
January 1, 1993, has adopted any board resolutions at the request of, any
Regulatory Agency (as defined below in this Section 2.06) that currently
restricts in any material respect the conduct of its business or that in
any material manner relates to its capital adequacy, its credit policies,
its management or its business (each, a "Regulatory Agreement"), nor has
Fourth or any of its subsidiaries been advised since January 1, 1993, by
any Regulatory Agency that it is considering issuing or requesting any such
Regulatory Agreement. As used in this Agreement, the term "Regulatory
Agency" means any federal or state agency charged with the supervision or
regulation of banks or bank holding companies, or engaged in the insurance
of bank deposits, or any court, administrative agency or commission or
other governmental agency, authority or instrumentality having supervisory
or regulatory authority with respect to Fourth or any of its subsidiaries.
Section 2.07. Tax Matters.
(a) Each of Fourth and its subsidiaries has filed with the
appropriate governmental agencies all federal, state and local income,
franchise, excise, sales, use, real and personal property and other tax
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<PAGE> 8
returns and reports required to be filed by it. Except as set forth in
Section 2.07(a) of the Disclosure Schedule or except as it may relate to a
Tax or Tax liability that Fourth is in good faith contesting, neither
Fourth nor its subsidiaries are (a) delinquent in the payment of any Taxes
(as defined below in this Section 2.07) shown on such returns or reports or
on any written assessments received by it for such Taxes, (b) subject to
any agreement extending the period for assessment or collection of any Tax,
or (c) a party to any action or proceeding with, nor has any claim been
asserted or threatened against any of them by, any governmental authority
for assessment or collection of Taxes. Except as set forth in Section
2.07(a) of the Disclosure Schedule, the United States Federal income tax
returns of Fourth and its subsidiaries have been examined by the Internal
Revenue Service (the "I.R.S.") and any liability with respect thereto has
been satisfied for all years to and including 1990, and either no material
deficiencies were asserted as a result of such examination for which Fourth
does not have adequate reserves or all such deficiencies have been
satisfied. The reserve for Taxes in the financial statements of Fourth for
the year ended December 31, 1994, is adequate to cover all of the
liabilities for Taxes of Fourth and its subsidiaries that may become
payable in future years with respect to any transactions consummated prior
to December 31, 1994. As used in this Agreement, the term "Taxes" means
any federal, state, local, or foreign income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental, customs duties, capital stock, franchise,
profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated or
other tax of any kind whatsoever, including any interest, penalty or
addition thereto, whether disputed or undisputed.
(b) Except as set forth in Section 2.07(b) of the Disclosure
Schedule, any amount that could be received (whether in cash or property or
the vesting of property) as a result of any of the transactions
contemplated by this Agreement by any employee, officer or director of
Fourth or any of its affiliates who is a "Disqualified Individual" (as such
term is defined in proposed Treasury Regulation Section 1.280G-1) under any
employment, severance or termination agreement, other compensation
arrangement or Fourth Employee Plan (as defined in Section 2.14(c) hereof)
currently in effect would not be characterized as an "excess parachute
payment" (as such term is defined in Section 280G(b)(1) of the Internal
Revenue Code of 1986, as amended (the "Code").
(c) Except as set forth in Section 2.07(c) of the Disclosure
Schedule, Fourth has not been subject to any disallowance of a deduction
under Section 162(m) of the Code nor does Fourth reasonably believe that
such a disallowance is reasonably likely to be applicable for any tax year
of Fourth ended on or before the Closing Date.
Section 2.08. Litigation. Except as may be disclosed in
Section 2.08 of the Disclosure Schedule, there is no litigation, claim or
other proceeding pending or, to the knowledge of Fourth, threatened,
against Fourth or any of its subsidiaries, or of which the property of
Fourth or any of its subsidiaries is or would be subject, which would have
a Material Adverse Effect on Fourth.
Section 2.09. Employment Agreements. Except as may be disclosed in
Section 2.09 of the Disclosure Schedule, neither Fourth nor any of its
subsidiaries is a party to or bound by any agreement, arrangement,
commitment or contract (whether written or oral) for the employment,
election, retention or engagement, or with respect to the severance, of any
present or former officer or employee which, by its terms, is not
terminable by Fourth or such subsidiary on thirty (30) days written notice
or less without the payment of any amount in excess of $25,000 by reason of
such termination. A true, accurate
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and complete list of each such agreement and any and all amendments or
supplements thereto is included in Section 2.09 of the Disclosure Schedule.
Section 2.10. Reports. Except as may be disclosed in Section 2.10
of the Disclosure Schedule, Fourth and each of its subsidiaries has filed
all material reports and statements, together with any amendments required
to be made with respect thereto, if any, that it was required to file with
(i) the Federal Reserve Board, (ii) the O.C.C., (iii) the Federal Deposit
Insurance Corporation (the "F.D.I.C."), (iv) the S.E.C., (v) any state
securities authorities, (vi) Nasdaq, and (vii) any other Regulatory Agency
with jurisdiction over Fourth or any of its subsidiaries. As of their
respective dates, each of such reports and documents, including any
financial statements, exhibits and schedules thereto, complied in all
material respects with the relevant statutes, rules and regulations
enforced or promulgated by the regulatory authority with which they were
filed.
Section 2.11. Loan Portfolio. Except as may be disclosed in
Section 2.11 of the Disclosure Schedule, (i) the loans and discounts shown
on the Fourth Financial Statements or which were entered into after the
date of the most recent balance sheet included in the Fourth Financial
Statements were and will be made in all material respects in the ordinary
course of the business of Fourth and its subsidiaries, and are not subject
to any material known defenses, setoffs or counterclaims, including without
limitation any such as are afforded by usury or truth in lending laws,
except as may be provided by bankruptcy, insolvency or similar laws or by
general principles of equity, (ii) the notes or other evidences of
indebtedness evidencing such loans and all forms of pledges, mortgages and
other collateral documents and security agreements are and will be, in all
material respects, enforceable, valid, true and genuine and what they
purport to be, and (iii) Fourth and its subsidiaries have complied and will
prior to the Closing Date comply with all laws and regulations relating to
such loans, or to the extent there has not been such compliance, such
failure to comply will not materially interfere with the collection of such
loans.
Section 2.12. Investment Portfolio. All United States Treasury
securities, obligations of other United States Government agencies and
corporations, obligations of States and political subdivisions of the
United States and other investment securities held by Fourth or its
subsidiaries, as reflected in the latest consolidated balance sheet of
Fourth included in the Fourth Financial Statements, are carried in the
aggregate at no more than cost adjusted for amortization of premiums and
accretion of discounts in accordance with generally accepted accounting
principles, specifically including but not limited to FAS 115.
Section 2.13. Interest Rate Risk Management Instruments. All
interest rate swaps, caps, floors, option agreements and other interest
rate risk management agreements with third parties, whether entered into
for the account of Fourth or its subsidiaries or for the account of a
customer of Fourth or one of its subsidiaries, were entered into in the
ordinary course of business and in accordance with prudent banking practice
and applicable rules, regulations and policies and with counterparties
believed to be financially responsible at the time and are legal, valid and
binding obligations of Fourth or one of its subsidiaries enforceable in
accordance with their terms (subject to the provisions of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar
laws affecting the enforceability of creditors' rights generally from time
to time in effect, and equitable principles relating to the granting of
specific performance and other equitable remedies as a matter of judicial
discretion), and are in full force and effect. Fourth and each of its
subsidiaries have duly performed in all material respects all of their
material obligations thereunder to the extent that such obligations to
perform have accrued; and, to
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Fourth's knowledge, there are no material breaches, violations or defaults
or allegations or assertions of such by any party thereunder.
Section 2.14. Employee Matters and ERISA.
(a) Except as may be disclosed in Section 2.14(a) of the Disclosure
Schedule, neither Fourth nor any of its subsidiaries has entered into any
collective bargaining agreement with any labor organization with respect to
any group of employees of Fourth or any of its subsidiaries and to the
knowledge of Fourth there is no present effort nor existing proposal to
attempt to unionize any group of employees of Fourth or any of its
subsidiaries.
(b) Except as may be disclosed in Section 2.14(b) of the Disclosure
Schedule, (i) Fourth and its subsidiaries are and have been in material
compliance with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours,
including, without limitation, any such laws respecting employment
discrimination and occupational safety and health requirements, and neither
Fourth nor any of its subsidiaries is engaged in any unfair labor practice,
(ii) there is no material unfair labor practice complaint against Fourth or
any subsidiary pending or, to the knowledge of Fourth, threatened before
the National Labor Relations Board, (iii) there is no labor dispute,
strike, slowdown or stoppage actually pending or, to the knowledge of
Fourth, threatened against or directly affecting Fourth or any subsidiary,
and (iv) neither Fourth nor any subsidiary has experienced any material
work stoppage or other material labor difficulty during the past five (5)
years.
(c) Except as may be disclosed in Section 2.14(c) of the Disclosure
Schedule, neither Fourth nor any subsidiary maintains, contributes to or
participates in or has any liability under any employee benefit plans, as
defined in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or any nonqualified employee benefit plans or
deferred compensation, bonus, stock or incentive plans, or other employee
benefit or fringe benefit programs for the benefit of former or current
employees of Fourth or any subsidiary (the "Fourth Employee Plans"). To
the knowledge of Fourth, no present or former employee of Fourth or any
subsidiary has been charged with breaching nor has breached a fiduciary
duty under any of the Fourth Employee Plans. Neither Fourth nor any of its
subsidiaries participates in, nor has it in the past five (5) years
participated in, nor has it any present or future obligation or liability
under, any multiemployer plan (as defined at Section 3(37) of ERISA).
Except as may be separately disclosed in Section 2.14(c) of the Disclosure
Schedule, neither Fourth nor any subsidiary maintains, contributes to, or
participates in, any plan that provides health, major medical, disability
or life insurance benefits to former employees of Fourth or any subsidiary.
(d) All liabilities of the Fourth Employee Plans subject to Title IV
of ERISA have been funded on the basis of consistent methods in accordance
with sound actuarial assumptions and practices. No actuarial assumptions
have been changed since the last written report of actuaries on such Fourth
Employee Plans. All insurance premiums (including premiums to the Pension
Benefit Guaranty Corporation) have been paid in full to the extent due,
subject only to normal retrospective adjustments in the ordinary course.
Except as may be noted on the Fourth Financial Statements, Fourth and its
subsidiaries have no contingent or actual liabilities under Title IV of
ERISA as of December 31, 1994. No accumulated funding deficiency (within
the meaning of Section 302 of ERISA or Section 412 of the Code) has ever
been incurred with respect to any of the Fourth Employee Plans, whether or
not waived. No reportable event (as defined in Section 4043 of ERISA) has
occurred with respect to any of the Fourth Employee Plans as to which a
notice would be required to be filed with the Pension Benefit Guaranty
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Corporation. No claim is pending or, to the knowledge of Fourth,
threatened or imminent with respect to any Fourth Employee Plan (other than
a routine claim for benefits for which plan administrative review
procedures have not been exhausted) for which Fourth or any of its
subsidiaries would be liable after December 31, 1994, except as is
reflected on the Fourth Financial Statements. After December 31, 1994,
Fourth and its subsidiaries have no liability for excise taxes under
Sections 4971, 4975, 4976, 4977, 4979 or 4980B of the Code or for a fine
under Section 502 of ERISA with respect to any Fourth Employee Plan. All
Fourth Employee Plans have been operated, administered and maintained
materially in accordance with the terms thereof and in material compliance
with the requirements of all applicable laws, including, without
limitation, ERISA.
(e) Except as may be disclosed in Section 2.14(e) of the Disclosure
Schedule, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby (either alone or upon
the occurrence of any additional acts or events) will (i) result in any
material payment (including, without limitation, severance, golden
parachute or otherwise) becoming due to any director, officer or employee
of Fourth or any of its affiliates from Fourth or any of its affiliates
under any Fourth Employee Plan or otherwise, (ii) materially increase any
benefits otherwise payable under any Fourth Employee Plan, or (iii) result
in any acceleration of the time of payment or vesting of any such benefits
to any material extent.
Section 2.15. Title to Properties; Insurance. Except as may be
disclosed in Section 2.15 of the Disclosure Schedule, (i) Fourth and its
subsidiaries have marketable title, insurable at standard rates, free and
clear of all liens, charges and encumbrances (except taxes which are a lien
but not yet payable and liens, charges or encumbrances reflected in the
Fourth Financial Statements and easements, rights-of-way, and other
restrictions which are not material) to all of their real properties
(except Other Real Estate Owned, as such real estate is internally
classified on the books of Fourth or its subsidiaries), (ii) all leasehold
interests for real property and any material personal property used by
Fourth and its subsidiaries in their businesses are held pursuant to lease
agreements which are valid and enforceable in accordance with their terms,
(iii) all such properties comply in all material respects with all
applicable private agreements, zoning requirements and other governmental
laws and regulations relating thereto and there are no condemnation
proceedings pending or, to the knowledge of Fourth, threatened with respect
to such properties, (iv) Fourth and its subsidiaries have valid title or
other ownership rights under licenses to all material intangible personal
or intellectual property necessary to conduct the business and operations
of Fourth and its subsidiaries as presently conducted, free and clear of
any claim, defense or right of any other person or entity which is material
to such property, subject only to rights of the licensors pursuant to
applicable license agreements, which rights do not materially adversely
interfere with the use of such property, and (v) all material insurable
properties owned or held by Fourth and its subsidiaries are adequately
insured by financially sound and reputable insurers in such amounts and
against fire and other risks insured against by extended coverage and
public liability insurance, as is customary with bank holding companies of
similar size.
Section 2.16. Environmental Matters.
(a) As used in this Agreement, "Environmental Laws" means all local,
state and federal environmental, health and safety laws and regulations in
all jurisdictions in which Fourth and its subsidiaries have done business
or owned, leased or operated property, including, without limitation, the
Federal Resource Conservation and Recovery Act, the Federal Comprehensive
Environmental Response,
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Compensation and Liability Act, the Federal Clean Water Act, the Federal
Clean Air Act, and the Federal Occupational Safety and Health Act.
(b) Except as may be disclosed in Section 2.16 of the Disclosure
Schedule, neither the conduct nor operation of Fourth or its subsidiaries
nor any condition of any property presently or previously owned, leased or
operated by any of them violates or violated Environmental Laws in any
respect material to the business of Fourth and its subsidiaries and no
condition has existed or event has occurred with respect to any of them or
any such property that, with notice or the passage of time, or both, would
constitute a violation material to the business of Fourth and its
subsidiaries of Environmental Laws or obligate (or potentially obligate)
Fourth or its subsidiaries to remedy, stabilize, neutralize or otherwise
alter the environmental condition of any such property where the aggregate
cost of such actions would be material to Fourth and its subsidiaries.
Except as may be disclosed in Section 2.16 of the Disclosure Schedule,
neither Fourth nor any of its subsidiaries has received any notice from any
person or entity that Fourth or its subsidiaries or the operation or
condition of any property ever owned, leased or operated by any of them are
or were in violation of any Environmental Laws or that any of them are
responsible (or potentially responsible) for the cleanup or other
remediation of any pollutants, contaminants, or hazardous or toxic wastes,
substances or materials at, on or beneath any such property.
Section 2.17. Compliance with Law. Fourth and Subsidiary Banks have
all material licenses, franchises, permits and other governmental
authorizations that are legally required to enable them to conduct their
respective businesses in all material respects and are in compliance in all
material respects with all applicable laws and regulations.
Section 2.18. Brokerage. Except as may be disclosed in Section 2.18
of the Disclosure Schedule, there are no existing claims or agreements for
brokerage commissions, finders' fees, or similar compensation in connection
with the transactions contemplated by this Agreement payable by Fourth or
its subsidiaries.
Section 2.19. Non-Banking Activities of Fourth and its Subsidiaries.
Neither Fourth nor any of its subsidiaries that is neither a bank, a bank
operating subsidiary or a bank service corporation, directly or indirectly,
engages in any activity prohibited by the B.H.C.A. Without limiting the
generality of the foregoing, any equity investment of Fourth and each of
its subsidiaries that is not a bank, a bank operating subsidiary or a bank
service corporation, is not prohibited by the B.H.C.A.
Section 2.20. Trust Administration. Each Subsidiary Bank and each
other subsidiary of Fourth which is a trust company or otherwise acts in a
fiduciary capacity has properly administered all accounts for which it acts
as a fiduciary or agent, including but not limited to accounts for which it
serves as a trustee, agent, custodian, personal representative, guardian,
conservator or investment advisor, in accordance with the terms of the
governing documents and applicable state and federal law and regulation and
common law, except where the failure to do so would not, individually or in
the aggregate, have a Material Adverse Effect on Fourth. Neither Fourth,
any subsidiary of Fourth, nor any director, officer or employee of Fourth
or any of its subsidiaries acting on behalf of Fourth or any of its
subsidiaries, has committed any breach of trust with respect to any such
fiduciary or agency account, and the accountings for each such fiduciary or
agency account are true and correct in all material respects and accurately
reflect the assets of such fiduciary or agency account, except for such
breaches and failures to be true, correct and accurate which would not,
individually or in the aggregate, have a Material Adverse Effect on Fourth.
There is no investigation or inquiry by any Regulatory Agency pending, or
to the knowledge
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of Fourth, threatened, against or affecting Fourth or any of its
subsidiaries relating to the compliance by Fourth or any such subsidiary
with sound fiduciary principles and applicable regulations which would have
a Material Adverse Effect on Fourth.
Section 2.21. State Takeover Laws. The Board of Directors of Fourth
has approved the transactions contemplated by this Agreement and the Fourth
Option Agreement such that Article VIII of the Articles of Incorporation of
Fourth and the provisions of KAN. STAT. ANN. sec.sec. 17-1286 et seq. and
17-12,100 et seq. will not apply to this Agreement or the Fourth Option
Agreement or any of the transactions contemplated hereby or thereby.
Section 2.22. Pooling of Interests; Tax-Free Reorganization. As of
the date of this Agreement, Fourth has no reason to believe that the Merger
will not qualify as a "pooling of interests" for accounting purposes or a
tax-free reorganization within the meaning of Section 368(a) of the Code.
Section 2.23. Certain Contracts. Except as disclosed in
Section 2.23 of the Disclosure Schedule or filed or incorporated by
reference in periodic reports filed by Fourth with the S.E.C. under the
Exchange Act, neither Fourth nor any of its subsidiaries is a party to, or
is bound by, (i) any material contract as defined in Item 601(b)(10) of
Regulation S-K of the S.E.C. or any other contract not made in the ordinary
course of business (other than loans or loan commitments and funding
transactions in the ordinary course of business of Fourth's subsidiaries),
(ii) any agreement restricting the nature or geographic scope of any line
of business or activity of Fourth or its subsidiaries, or (iii) any
agreement, indenture or other instrument relating to the borrowing of money
by Fourth or any of its subsidiaries or the guarantee by Fourth or any of
its subsidiaries of any such obligation, other than instruments relating to
transactions entered into in the ordinary course of business.
Section 2.24. No Undisclosed Liabilities. Fourth and its
subsidiaries do not have any material liability, whether known or unknown,
whether asserted or unasserted, whether absolute or contingent, whether
accrued or unaccrued, whether liquidated or unliquidated, and whether due
or to become due (and there is no past or present fact, situation,
circumstance, condition or other basis for any present or future action,
suit or proceeding, hearing, charge, complaint, claim or demand against
Fourth or its subsidiaries giving rise to any such liability), except
(i) for liabilities set forth in the Fourth Financial Statements,
(ii) normal fluctuation in the amount of the liabilities referred to in
clause (i) above occurring in the ordinary course of business of Fourth and
its subsidiaries since the date of the most recent balance sheet included
in the Fourth Financial Statements, and (iii) as may be disclosed in
Section 2.24 of the Disclosure Schedule.
Section 2.25. Fair Lending; Community Reinvestment Act. As of the
date hereof, with the exception of routine investigation of consumer
complaints, neither Fourth nor any of its subsidiaries has been advised by
any Regulatory Agency that it is or may be in violation of the Equal Credit
Opportunity Act or the Fair Housing Act or any similar federal or state
statute. As of the date hereof, each of Fourth's depository institution
subsidiaries received a Community Reinvestment Act ("CRA") rating of "1" or
"2" in its most recent CRA examination.
Section 2.26. Statements True and Correct. None of the information
supplied or to be supplied by Fourth or its subsidiaries for inclusion in
(i) the Registration Statement (as defined in Section 4.05 hereof),
(ii) the Joint Proxy Statement/Prospectus (as defined in Section 4.03
hereof), and (iii) any other documents to be filed with the S.E.C., Nasdaq
or any banking or other regulatory authority in connection
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with the transactions contemplated hereby will, at the respective times
such documents are filed, and, in the case of the Registration Statement,
when it becomes effective, and, with respect to the Joint Proxy Statement/
Prospectus, when first mailed to the shareholders of Boatmen's and Fourth
and at the time of the Boatmen's Shareholders' Meeting (as defined in
Section 5.01(c) hereof) and the Fourth Shareholders' Meeting (as defined in
Section 4.03 hereof), 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 are made, not
misleading. All documents that Fourth is responsible for filing with the
S.E.C., Nasdaq or any other regulatory authority in connection with the
transactions contemplated hereby will comply as to form in all material
respects with the provisions of applicable law and the applicable rules and
regulations thereunder.
ARTICLE THREE
REPRESENTATIONS OF BOATMEN'S AND ACQUISITION SUB
Boatmen's and Acquisition Sub hereby make the following
representations and warranties:
Section 3.01. Organization and Capital Stock.
(a) Boatmen's is a corporation duly incorporated, validly existing,
and in good standing under the laws of the State of Missouri with full
corporate power and authority to carry on its business as it is now being
conducted. Boatmen's is a bank holding company registered with the Federal
Reserve Board under the B.H.C.A. Acquisition Sub is a corporation duly
incorporated, validly existing, and in good standing under the laws of the
State of Kansas with full corporate power and authority to carry on its
business as it is now being conducted.
(b) The authorized capital stock of Boatmen's consists of
(i) 200,000,000 shares of Boatmen's Common, of which, as of August 23,
1995, 129,350,750 shares were issued and outstanding, and (ii) 10,300,000
Cumulative Preferred Shares, no par value per share, of which 35,045 shares
are designated "7% Cumulative Redeemable Preferred Stock, Series B",
$100.00 stated value per share (the "Boatmen's Series B Preferred Stock"),
and 2,000,000 shares are designated "Junior Participating Preferred Stock,
Series C", no par value per share (the "Boatmen's Series C Preferred
Stock"). No shares of the Boatmen's Series C Preferred Stock are issued
and outstanding and 11,321 shares of the Boatmen's Series B Preferred Stock
were issued and outstanding as of August 23, 1995. All of the issued and
outstanding shares of Boatmen's Common and Boatmen's Series B Preferred
Stock are duly and validly issued and outstanding and are fully paid and
non-assessable. None of the outstanding shares of Boatmen's Common has
been issued in violation of any preemptive rights of the current or past
shareholders of Boatmen's. As of August 23, 1995, Boatmen's had
outstanding options and other rights to acquire not more than 4,911,941
shares of Boatmen's Common and no shares of the Boatmen's Series B
Preferred Stock or the Boatmen's Series C Preferred Stock.
(c) Acquisition Sub has authorized capital of 10,000 shares of
common stock, par value one dollar ($1.00) per share (the "Acquisition Sub
Common"). As of the date hereof, 1,000 shares of Acquisition Sub Common
are issued and outstanding, fully paid and non-assessable and owned by
Boatmen's.
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(d) The shares of Boatmen's Common and Boatmen's Preferred that are
to be issued to the shareholders of Fourth pursuant to the Merger have been
duly authorized and, when so issued in accordance with the terms of this
Agreement, will be validly issued and outstanding, fully paid and non-
assessable, free of preemptive rights with no personal liability attaching
to the ownership thereof.
Section 3.02. Authorization. The Board of Directors of Boatmen's
and the Board of Directors and sole shareholder of Acquisition Sub have, by
all appropriate action, approved this Agreement and the Merger and
authorized the execution hereof on their behalf by their respective duly
authorized officers and the performance by such respective entity of their
obligations hereunder. Nothing in the articles of incorporation or bylaws
of Boatmen's or Acquisition Sub, as amended, or any other agreement,
instrument, decree, proceeding, law or regulation (except as specifically
referred to in or contemplated by this Agreement) by or to which either of
them or any of their subsidiaries are bound or subject would prohibit
Boatmen's or Acquisition Sub from entering into and consummating this
Agreement and the Merger on the terms and conditions herein contained.
This Agreement has been duly and validly executed and delivered by
Boatmen's and Acquisition Sub and constitutes a legal, valid and binding
obligation of Boatmen's and Acquisition Sub, enforceable against Boatmen's
and Acquisition Sub in accordance with its terms and, except for the
requisite approval of the shareholders of Boatmen's, no other corporate
acts or proceedings are required to be taken by Boatmen's or Acquisition
Sub to authorize the execution, delivery and performance of this Agreement.
Boatmen's and its subsidiaries are neither in default under nor in
violation of any provision of their articles of incorporation or
association, as the case may be, bylaws, or any promissory note, indenture
or any evidence of indebtedness or security therefor, lease, contract,
insurance policy, purchase or other commitment or any other agreement or
arrangement, whether written or oral, which default or violation would have
a Material Adverse Effect on Boatmen's, and there has not occurred any
event that, with the lapse of time or giving of notice or both, would
constitute such a default or violation. Except for the requisite approval
of the Federal Reserve Board, the Oklahoma State Bank Department and the
Kansas State Banking Board, no notice to, filing with, authorization by, or
consent or approval of, any federal or state bank regulatory authority is
necessary for the execution and delivery of this Agreement or consummation
of the Merger by Boatmen's or Acquisition Sub.
Section 3.03. Subsidiaries. Each of The Boatmen's National Bank of
St. Louis, Boatmen's First National Bank of Kansas City, Boatmen's Sunwest,
Inc. and Boatmen's Arkansas, Inc. (collectively, "Boatmen's Significant
Subsidiaries") is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation and has the
corporate power to own its respective properties and assets, to incur its
respective liabilities and to carry on its respective business as now being
conducted.
Section 3.04. Financial Information. The consolidated balance
sheets of Boatmen's and its subsidiaries as of December 31, 1993 and 1994
and related consolidated statements of income, changes in shareholders'
equity and cash flows for the three (3) years ended December 31, 1994,
together with the notes thereto, included in Boatmen's Form 10-K for the
year ended December 31, 1994, as currently on file with the S.E.C., and the
unaudited consolidated balance sheets of Boatmen's and its subsidiaries as
of March 31, 1995 and June 30, 1995 and the related unaudited consolidated
income statements and statements of changes in shareholders' equity and
cash flows for the three (3) months and six (6) months, respectively, then
ended included in Boatmen's Quarterly Reports on Form 10-Q for the quarters
then ended, as currently on file with the S.E.C. (together, the "Boatmen's
Financial Statements"), have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis (except
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as may be disclosed therein) and fairly present in all material respects
the consolidated financial position and the consolidated results of
operations, changes in shareholders' equity and cash flows of Boatmen's and
its consolidated subsidiaries as of the dates and for the periods indicated
(subject, in the case of interim financial statements, to normal recurring
year-end adjustments, none of which will be material).
Section 3.05. Absence of Changes. Since December 31, 1994, there
has not been any change in the financial condition, the results of
operations or the business of Boatmen's and its subsidiaries taken as a
whole which would have a Material Adverse Effect on Boatmen's, except as
disclosed by Boatmen's since December 31, 1994 in its periodic reports
filed with the S.E.C. under the Exchange Act.
Section 3.06. Litigation. There is no litigation, claim or other
proceeding pending or, to the knowledge of Boatmen's, threatened, against
Boatmen's or any of its subsidiaries, or of which the property of Boatmen's
or any of its subsidiaries is or would be subject which would have a
Material Adverse Effect on Boatmen's.
Section 3.07. Reports. Boatmen's and each of Boatmen's Significant
Subsidiaries has filed all material reports and statements, together with
any amendments required to be made with respect thereto, that it was
required to file with (i) the S.E.C., (ii) the Federal Reserve Board,
(iii) the O.C.C., (iv) the F.D.I.C., (v) any applicable state securities or
banking authorities having jurisdiction, (vi) Nasdaq, and (vii) any other
Regulatory Agency with jurisdiction over Boatmen's or any of Boatmen's
Significant Subsidiaries. As of their respective dates, each of such
reports and documents, as amended, including any financial statements,
exhibits and schedules thereto, complied in all material respects with the
relevant statutes, rules and regulations enforced or promulgated by the
regulatory authority with which they were filed.
Section 3.08. Compliance With Law. Boatmen's and Boatmen's
Significant Subsidiaries have all material licenses, franchises, permits
and other governmental authorizations that are legally required to enable
them to conduct their respective businesses in all material respects and
are in compliance in all material respects with all applicable laws and
regulations.
Section 3.09. Pooling of Interests; Tax-Free Reorganization. As of
the date of this Agreement, Boatmen's has no reason to believe that the
Merger will not qualify as a "pooling of interests" for accounting purposes
or a tax-free reorganization within the meaning of Section 368(a) of the
Code.
Section 3.10. Tax Matters. Each of Boatmen's and its subsidiaries
has filed with the appropriate governmental agencies all federal, state and
local income, franchise, excise, sales, use, real and personal property and
other tax returns and reports required to be filed by it. Except as it may
relate to a Tax or Tax liability that Boatmen's is in good faith
contesting, neither Boatmen's nor its subsidiaries are (a) delinquent in
the payment of any Taxes shown on such returns or reports or on any written
assessments received by it for such Taxes, (b) subject to any agreement
extending the period for assessment or collection of any Tax, or (c) a
party to any action or proceeding with, nor has any claim been asserted or
threatened against any of them by, any governmental authority for
assessment or collection of Taxes. The United States Federal income tax
returns of Boatmen's and its subsidiaries have been examined by the I.R.S.
and any liability with respect thereto has been satisfied for all years to
and including 1989, and either no material deficiencies were asserted as a
result of such examination for which Boatmen's does not have adequate
reserves or all such deficiencies have been satisfied. The reserve for
Taxes in the financial statements of Boatmen's for the year ended December
31, 1994, is
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adequate to cover all of the liabilities for Taxes of Boatmen's and its
subsidiaries that may become payable in future years with respect to any
transactions consummated prior to December 31, 1994.
Section 3.11. Interest Rate Risk Management Instruments. All
interest rate swaps, caps, floors, option agreements and other interest
rate risk management agreements with third parties, whether entered into
for the account of Boatmen's or its subsidiaries or for the account of a
customer of Boatmen's or one of its subsidiaries, were entered into in the
ordinary course of business and in accordance with prudent banking practice
and applicable rules, regulations and policies and with counterparties
believed to be financially responsible at the time and are legal, valid and
binding obligations of Boatmen's or one of its subsidiaries enforceable in
accordance with their terms (subject to the provisions of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar
laws affecting the enforceability of creditors' rights generally from time
to time in effect, and equitable principles relating to the granting of
specific performance and other equitable remedies as a matter of judicial
discretion), and are in full force and effect. Boatmen's and each of its
subsidiaries have duly performed in all material respects all of their
material obligations thereunder to the extent that such obligations to
perform have accrued; and, to Boatmen's knowledge, there are no material
breaches, violations or defaults or allegations or assertions of such by
any party thereunder.
Section 3.12. Brokerage. Except for fees payable to Donaldson,
Lufkin & Jenrette, there are no existing claims or agreements for brokerage
commissions, finders' fees, or similar compensation in connection with the
transactions contemplated by this Agreement payable by Boatmen's or its
subsidiaries.
Section 3.13. Non-Banking Activities of Boatmen's and its
Subsidiaries. Neither Boatmen's nor any of its subsidiaries that is
neither a bank, a bank operating subsidiary or a bank service corporation,
directly or indirectly, engages in any activity prohibited by the B.H.C.A.
Without limiting the generality of the foregoing, any equity investment of
Boatmen's and each of its subsidiaries that is not a bank, a bank operating
subsidiary or a bank service corporation, is not prohibited by the B.H.C.A.
Section 3.14. State Takeover Laws. The Board of Directors of
Boatmen's has approved the transactions contemplated by this Agreement such
that the provisions of Section 351.459 of the General and Business
Corporation Law of Missouri will not apply to this Agreement or any of the
transactions contemplated hereby.
Section 3.15. Fair Lending; Community Reinvestment Act. As of the
date hereof, with the exception of routine investigation of consumer
complaints, neither Boatmen's nor any of its subsidiaries has been advised
by any Regulatory Agency that it is or may be in violation of the Equal
Credit Opportunity Act or the Fair Housing Act or any similar federal or
state statute. As of the date hereof, each of Boatmen's depository
institution subsidiaries as of the date hereof received a CRA rating of "1"
or "2" in its most recent CRA examination.
Section 3.16. Knowledge as to Certain Conditions. As of the date
hereof, Boatmen's knows of no reason why the approvals, consents and
waivers of governmental authorities referred to in Section 6.01(d) hereof
will not be obtained in a timely manner or why the accountant's letter
referred to in Section 6.01(f) hereof cannot be obtained.
Section 3.17. Regulatory Enforcement Matters. Neither Boatmen's nor
any of its subsidiaries is subject or is party to, or has received any
notice or advice that it may become subject or party to, any
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<PAGE> 18
Regulatory Agreement that materially impairs the ability of Boatmen's to
obtain the regulatory approvals of the Merger.
Section 3.18. Statements True and Correct. None of the information
supplied or to be supplied by Boatmen's or Acquisition Sub for inclusion in
(i) the Registration Statement, (ii) the Joint Proxy Statement/Prospectus,
and (iii) any other documents to be filed with the S.E.C., Nasdaq or any
banking or other regulatory authority in connection with the transactions
contemplated hereby will, at the respective times such documents are filed,
and, in the case of the Registration Statement, when it becomes effective,
and with respect to the Joint Proxy Statement/Prospectus, when first mailed
to the shareholders of Boatmen's and Fourth and at the time of the
Boatmen's Shareholders' Meeting and the Fourth Shareholders' Meeting,
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 are made, not misleading. All
documents that Boatmen's is responsible for filing with the S.E.C., Nasdaq
or any other regulatory authority in connection with the transactions
contemplated hereby will comply as to form in all material respects with
the provisions of applicable law and the applicable rules and regulations
thereunder.
ARTICLE FOUR
AGREEMENTS OF FOURTH
Section 4.01. Business in Ordinary Course.
(a) Fourth shall not declare or pay any dividend or make any other
distribution to shareholders, whether in cash, stock or other property,
after the date of this Agreement, except that Fourth may declare and pay
its regular quarterly dividend on the Fourth Common not to exceed $0.29 per
share and its regular quarterly dividend on the Fourth Preferred at
approximately the same times during each quarter which it has historically
declared and paid such dividends; provided, however, that beginning in the
fourth quarter of 1995 and for each quarter thereafter Fourth may declare
and pay a conforming quarterly dividend on the Fourth Common not to exceed
$0.37 per share and, in order to take into account the fact that Boatmen's
quarterly dividend is paid one month later than Fourth's quarterly
dividend, Fourth may pay an additional one time conforming dividend in a
per share amount equal to $0.10; provided, further, that Fourth and
Boatmen's shall cooperate with each other to coordinate the record and
payment dates of their respective dividends for the quarter in which the
Effective Time occurs such that the Fourth shareholders shall receive a
quarterly dividend from either Fourth or Boatmen's but not from both during
or with respect to such quarter.
(b) Fourth shall, and shall cause each of its subsidiaries to,
continue to carry on after the date hereof its respective business and the
discharge or incurrence of obligations and liabilities, only in the usual,
regular and ordinary course of business, and by way of amplification and
not limitation, Fourth and each of its subsidiaries will not, without the
prior written consent of Boatmen's (which shall not be unreasonably
withheld):
(i) issue any Fourth Common or other capital stock or any
options, warrants, or other rights to subscribe for or purchase
Fourth Common or any other capital stock or any securities
convertible into or exchangeable for any capital stock of Fourth or
any of its subsidiaries (except
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for the issuance of Fourth Common pursuant to the valid exercise of Fourth
Stock Options, as defined in Section 5.04(a) hereof, which are outstanding
on the date of this Agreement, or pursuant to the Fourth Option Agreement,
or pursuant to the conversion of the Fourth Preferred pursuant to the terms
thereof); or
(ii) directly or indirectly redeem, purchase or otherwise
acquire any Fourth Common or any other capital stock of Fourth or its
subsidiaries; or
(iii) effect a reclassification, recapitalization, splitup,
exchange of shares, readjustment or other similar change in or to any
capital stock or otherwise reorganize or recapitalize; or
(iv) change its certificate or articles of incorporation or
association, as the case may be, or bylaws; or
(v) grant any increase, other than ordinary and normal
increases consistent with past practices, in the compensation payable
or to become payable to officers or salaried employees, grant any
stock options or, except as required by law, adopt or make any change
in any bonus, insurance, pension, or other Fourth Employee Plan,
agreement, payment or arrangement made to, for or with any of such
officers or employees; or
(vi) borrow or agree to borrow any amount of funds except in
the ordinary course of business, or directly or indirectly guarantee
or agree to guarantee any obligations of others except in the
ordinary course of business; or
(vii) make or commit to make any new loan or letter of credit
or any new or additional discretionary advance under any existing
line of credit, in principal amounts in excess of $6 million or that
would increase the aggregate credit outstanding to any one borrower
(or group of affiliated borrowers) to more than $6 million (excluding
for this purpose any accrued interest or overdrafts) (a "Pre-Approval
Loan"), without the prior written consent of Boatmen's, acting
through its Executive Vice President-Loan Administration or such
other designee as Boatmen's may give notice of to Fourth; provided,
however, that if Boatmen's should not consent in writing to a Pre-
Approval Loan, neither Boatmen's nor its subsidiaries shall make or
commit to make such Pre-Approval Loan; or
(viii) purchase or otherwise acquire any investment security for
its own account having an average remaining life to maturity greater
than five (5) years or any asset-backed securities other than those
issued or guaranteed by the Government National Mortgage Association,
the Federal National Mortgage Association or the Federal Home Loan
Mortgage Corporation; or
(ix) enter into any agreement, contract or commitment out of
the ordinary course of business other than letters of credit, loan
agreements, deposit agreements, and other lending, credit and deposit
agreements and documents made in the ordinary course of business; or
(x) except in the ordinary course of business, place on any
of its assets or properties any mortgage, pledge, lien, charge, or
other encumbrance; or
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(xi) except in the ordinary course of business, cancel or
accelerate any material indebtedness owing to Fourth or its
subsidiaries or any claims which Fourth or its subsidiaries may
possess or waive any material rights with respect thereto; or
(xii) sell or otherwise dispose of any material real property
or any material amount of any tangible or intangible personal
property other than properties acquired in foreclosure or otherwise
in the ordinary collection of indebtedness to Fourth and its
subsidiaries; or
(xiii) foreclose upon or otherwise take title to or possession
or control of any real property without first obtaining a phase one
environmental report thereon which indicates that the property is
free of pollutants, contaminants or hazardous or toxic waste
materials; provided, however, that Fourth and its subsidiaries shall
not be required to obtain such a report with respect to single
family, non-agricultural residential property of one acre or less to
be foreclosed upon unless it has reason to believe that such property
might contain any such waste materials or otherwise might be
contaminated; or
(xiv) commit any act or fail to do any act which will cause a
breach of any agreement, contract or commitment and which will have a
Material Adverse Effect on Fourth; or
(xv) violate any law, statute, rule, governmental regulation,
or order, which violation might have a Material Adverse Effect on
Fourth; or
(xvi) purchase any real or personal property or make any other
capital expenditure where the amount paid or committed therefor is in
excess of $500,000; or
(xvii) take any action which would adversely effect or delay the
ability of either Boatmen's or Fourth to obtain any necessary
approvals of any Regulatory Agency or other governmental authority
required for the transactions contemplated hereby or to perform its
covenants and agreements under this Agreement or the Fourth Option
Agreement.
(c) Fourth and its subsidiaries shall not, without the prior written
consent of Boatmen's, engage in any transaction or take any action that
would render untrue in any material respect any of the representations and
warranties of Fourth contained in Article Two hereof, if such
representations and warranties were given as of the date of such
transaction or action.
(d) Fourth shall promptly notify Boatmen's in writing of the
occurrence of any matter or event known to and directly involving Fourth,
which would not include any changes in conditions that affect the banking
industry generally, that would constitute a Material Adverse Effect on
Fourth.
(e) Fourth shall not, on or before the earlier of the Closing Date
or the date of termination of this Agreement, solicit or encourage, or,
subject to the fiduciary duties of its directors as advised by counsel,
hold discussions or negotiations with or provide any information to, any
person in connection with, any proposal from any person for the acquisition
of all or any substantial portion of the business, assets, shares of Fourth
Common or other securities of Fourth and its subsidiaries. Fourth shall
promptly (which for this purpose shall mean within twenty-four (24) hours)
advise Boatmen's of its receipt of any such proposal or inquiry concerning
any possible such proposal, the substance of such proposal or inquiry, and
the identity of such person.
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Section 4.02. Breaches. Fourth shall, in the event it has knowledge
of the occurrence, or impending or threatened occurrence, of any event or
condition which would cause or constitute a breach (or would have caused or
constituted a breach had such event occurred or been known prior to the
date hereof) of any of its representations or agreements contained or
referred to herein, give prompt written notice thereof to Boatmen's and use
its best efforts to prevent or promptly remedy the same.
Section 4.03. Submission to Shareholders. Fourth shall cause to be
duly called and held, on a date mutually selected by Boatmen's and Fourth,
a special meeting of its shareholders (the "Fourth Shareholders' Meeting")
for submission of this Agreement and the Merger for approval of such Fourth
shareholders as required by the Corporate Law. In connection with the
Fourth Shareholders' Meeting, (i) Fourth shall cooperate and assist
Boatmen's in preparing and filing a Joint Proxy Statement/Prospectus (the
"Joint Proxy Statement/Prospectus") with the S.E.C. and Fourth shall mail
it to its shareholders, (ii) Fourth shall furnish Boatmen's all information
concerning itself that Boatmen's may reasonably request in connection with
such Joint Proxy Statement/Prospectus, and (iii) the Board of Directors of
Fourth (subject to compliance with its fiduciary duties as advised by
counsel) shall recommend to its shareholders the approval of this Agreement
and the Merger contemplated hereby and use its best efforts to obtain such
shareholder approval.
Section 4.04. Consents to Contracts and Leases. Fourth shall use
its best efforts to obtain all necessary consents with respect to all
interests of Fourth and its subsidiaries in any material leases, licenses,
contracts, instruments and rights which require the consent of another
person for their transfer or assumption pursuant to the Merger, if any.
Section 4.05. Consummation of Agreement. Fourth shall use its best
efforts to perform and fulfill all conditions and obligations on its part
to be performed or fulfilled under this Agreement and to effect the Merger
promptly in accordance with the terms and provisions hereof. Fourth shall
furnish to Boatmen's in a timely manner all information, data and documents
in the possession of Fourth requested by Boatmen's as may be required to
obtain any necessary regulatory or other approvals of the Merger or to file
with the S.E.C. a registration statement on Form S-4 (the "Registration
Statement") relating to the shares of Boatmen's Common and Boatmen's
Preferred to be issued to the shareholders of Fourth pursuant to the Merger
and this Agreement and shall otherwise cooperate fully with Boatmen's to
carry out the purpose and intent of this Agreement.
Section 4.06. Environmental Reports. Fourth shall provide to
Boatmen's, as soon as reasonably practical, but not later than sixty (60)
days after the date hereof, a report of a phase one environmental
investigation on all real property owned, leased or operated by Fourth or
its subsidiaries as of the date hereof (but excluding space in retail and
similar establishments leased by Fourth for automatic teller machines or
bank branch facilities where the space leased comprises less than 20% of
the total space leased to all tenants of such property) and within ten (10)
days after the acquisition or lease of any real property acquired or leased
by Fourth or its subsidiaries after the date hereof (but excluding space in
retail and similar establishments leased by Fourth for automatic teller
machines or bank branch facilities where the space leased comprises less
than 20% of the total space leased to all tenants of such property), except
as otherwise provided in Section 4.01(b)(xiii) hereof. If required by the
phase one investigation in Boatmen's reasonable opinion, Fourth shall
provide to Boatmen's a report of a phase two investigation on properties
requiring such additional study. Boatmen's shall have fifteen (15)
business days from the receipt of any such phase two investigation report
to notify Fourth of any dissatisfaction with the contents of such report.
Should the cost of taking all remedial or other corrective actions and
measures required
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by applicable law or reasonably likely to be required by applicable law, in
the aggregate, exceed the sum of Twenty Million Dollars ($20,000,000) as
reasonably estimated by an environmental expert retained for such purpose
by Boatmen's and reasonably acceptable to Fourth, then Boatmen's shall have
the right pursuant to Section 7.03 hereof, for a period of fifteen (15)
business days following receipt of such estimate, to terminate this
Agreement, which shall be Boatmen's sole remedy in such event; provided,
however, that for purposes of determining the cost of all remedial or other
corrective actions and measures as provided in this sentence, there shall
be excluded any such costs which arise from or are attributable to the
contamination of the ground water underneath the banking facilities owned
by Fourth in the downtown business district of Wichita, Kansas provided (i)
such contamination originated from sources other than such Fourth owned
property, and (ii) liability for the clean-up and remediation of such
contamination continues to be undertaken by the City of Wichita, Kansas or
another governmental entity.
Section 4.07. Restriction on Resales. Fourth shall use its best
efforts to obtain and deliver to Boatmen's, at least thirty-one (31) days
prior to the Closing Date, the signed agreement, in the form of Exhibit
4.07 hereto, of each person who may reasonably be deemed an "affiliate" of
Fourth within the meaning of such term as used in Rule 145 under the
Securities Act of 1933, as amended (the "Securities Act"), regarding
(i) compliance with the provisions of such Rule 145, and (ii) compliance
with the requirements of Accounting Principles Board Opinion No. 16
regarding the disposition of shares of Fourth Common, Fourth Preferred,
Boatmen's Common or Boatmen's Preferred (or reduction of risk with respect
thereto) until such time as financial results covering at least thirty (30)
days of post-Merger combined operations have been published.
Section 4.08. Subsidiary Bank Mergers. Upon the request of
Boatmen's, Fourth shall cause one or more of the Subsidiary Banks to enter
into one or more merger agreements with any wholly-owned banking subsidiary
of Boatmen's, and take all other actions and cooperate with Boatmen's in
causing such merger or mergers, as the case may be (the "Subsidiary Bank
Mergers") to be effected. Such subsidiary bank merger agreement or
agreements shall provide, in addition to customary terms for the
combination of subsidiary bank operations in transactions such as this:
(i) for consummation of any such merger on a date on or after the Closing
Date, as may be selected by Boatmen's, and (ii) that the obligations of the
Subsidiary Bank thereunder are conditioned on the prior or simultaneous
consummation of the Merger pursuant to this Agreement. The Merger shall
not be conditioned upon the consummation of the Subsidiary Bank Mergers.
Section 4.09. Access to Information. Fourth shall permit Boatmen's
reasonable access in a manner which will avoid undue disruption or
interference with Fourth's normal operations to its properties and shall
disclose and make available to Boatmen's, unless prohibited by applicable
law, all books, documents, papers and records relating to its assets, stock
ownership, properties, operations, obligations and liabilities, including,
but not limited to, all books of account (including the general ledger),
tax records, minute books of directors' and shareholders' meetings,
organizational documents, material contracts and agreements, loan files,
filings with any regulatory authority, accountants' workpapers (if
available and subject to the respective independent accountants' consent),
litigation files (but only to the extent that such review would not result
in a material waiver of the attorney-client or attorney work product
privileges under the rules of evidence), plans affecting employees, and any
other business activities or prospects in which Boatmen's may have a
reasonable and legitimate interest in furtherance of the transactions
contemplated by this Agreement. Fourth shall deliver to Boatmen's within
twenty (20) business days after the date hereof a true, accurate and
complete copy of each written plan or program disclosed in Section 2.14(c)
of the Disclosure Schedule and, with respect to each such plan
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or program, all (i) amendments or supplements thereto, (ii) summary plan
descriptions, (iii) lists of all current participants and all participants
with benefit entitlements, (iv) contracts relating to plan documents,
(v) actuarial valuations for any defined benefit plan, (vi) valuations for
any plan as of the most recent date, (vii) determination letters from the
I.R.S., (viii) the most recent annual report filed with the I.R.S.,
(ix) registration statements on Form S-8 and prospectuses, and (x) trust
agreements. Boatmen's will hold any such information which is nonpublic in
confidence in accordance with the provisions of Section 8.01 hereof.
ARTICLE FIVE
AGREEMENTS OF BOATMEN'S AND ACQUISITION SUB
Section 5.01. Regulatory Approvals and Registration Statement;
Submission to Shareholders.
(a) Boatmen's shall promptly file all regulatory applications
required in order to consummate the Merger, including but not limited to
the necessary applications for the prior approval of the Federal Reserve
Board, the Oklahoma State Bank Department and the Kansas State Banking
Board. Boatmen's shall provide Fourth a complete copy of such applications
and any other submissions in the form in which Boatmen's intends to submit
such applications and submissions for its review and comment prior to the
filing thereof with the appropriate Regulatory Agency. Boatmen's shall
keep Fourth reasonably informed as to the status of such applications and
make available to Fourth copies of such applications and any supplementally
filed materials.
(b) Boatmen's shall promptly file with the S.E.C. the Registration
Statement relating to the shares of Boatmen's Common and Boatmen's
Preferred to be issued to the shareholders of Fourth pursuant to this
Agreement, and shall use its best efforts to cause the Registration
Statement to become effective. At the time the Registration Statement
becomes effective, the Registration Statement shall comply in all material
respects with the provisions of the Securities Act and the published rules
and regulations thereunder, and shall 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 therein not false or
misleading, and at the time of mailing thereof to the shareholders of
Boatmen's and Fourth, at the time of the Boatmen's Shareholders' Meeting
and the Fourth Shareholders' Meeting and at the Effective Time, the Joint
Proxy Statement/Prospectus included as part of the Registration Statement,
as amended or supplemented by any amendment or supplement, shall not
contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not false or
misleading. Boatmen's shall timely file all documents required to obtain
all necessary Blue Sky permits and approvals, if any, required to carry out
the transactions contemplated by this Agreement, shall pay all expenses
incident thereto and shall use its best efforts to obtain such permits and
approvals on a timely basis. Boatmen's shall promptly and properly prepare
and file (i) any application required to list on Nasdaq the shares of
Boatmen's Common and Boatmen's Preferred to be issued pursuant to the
Merger, and (ii) any filings required under the Exchange Act relating to
the Merger and the transactions contemplated herein.
(c) Boatmen's shall cause to be duly called and held, on a date
mutually selected by Boatmen's and Fourth, a special meeting of its
shareholders (the "Boatmen's Shareholders' Meeting") for submission of the
transactions contemplated by this Agreement for approval of such Boatmen's
shareholders. In connection with the Boatmen's Shareholders' Meeting,
(i) Boatmen's shall prepare and file the Joint
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<PAGE> 24
Proxy Statement/Prospectus with the S.E.C. and mail it to its shareholders,
and (ii) the Board of Directors of Boatmen's shall (subject to compliance
with its fiduciary duties as advised by counsel) recommend to its
shareholders the approval of this Agreement and the Merger contemplated
hereby and use its best efforts to obtain such shareholder approval.
Section 5.02. Breaches. Boatmen's shall, in the event it has
knowledge of the occurrence, or impending or threatened occurrence, of any
event or condition which would cause or constitute a breach (or would have
caused or constituted a breach had such event occurred or been known prior
to the date hereof) of any of its representations or agreements contained
or referred to herein, give prompt written notice thereof to Fourth and use
its best efforts to prevent or promptly remedy the same.
Section 5.03. Consummation of Agreement. Boatmen's and Acquisition
Sub shall use their respective best efforts to perform and fulfill all
conditions and obligations on their part to be performed or fulfilled under
this Agreement and to effect the Merger promptly in accordance with the
terms and conditions of this Agreement.
Section 5.04. Stock Options.
(a) At the Effective Time, each outstanding option to purchase
shares of Fourth Common (a "Fourth Stock Option") issued pursuant to the
Amended and Restated Fourth Financial Corporation 1981 Stock Incentive
Plan, the Amended and Restated Fourth Financial Corporation 1986 Stock
Incentive Plan, the Fourth Financial Corporation 1993 Incentive Stock
Option Plan, and the Fourth Financial Corporation Non-Employee Directors
Stock Option Plan (together, the "Stock Option Plans") whether or not
exercisable or vested, shall be assumed by Boatmen's as hereinafter
provided. Each Fourth Stock Option shall be deemed to constitute an option
to acquire, on the same terms and conditions as were applicable under such
Fourth Stock Option, the same number of full shares of Boatmen's Common as
the holder of such Fourth Stock Option would have been entitled to receive
pursuant to the Merger had such holder exercised such option in full
immediately prior to the Effective Time, at a price per share equal to
(y) the aggregate exercise price for Fourth Common otherwise purchasable
pursuant to such Fourth Stock Option divided by (z) the number of full
shares of Boatmen's Common deemed purchasable pursuant to such Fourth Stock
Option. In no event shall Boatmen's be required to issue fractional shares
of Boatmen's Common.
(b) As soon as practicable after the Effective Time, Boatmen's shall
deliver to each holder of Fourth Stock Options appropriate notices setting
forth such holders' rights pursuant to the Stock Option Plans, and the
agreements evidencing the grants of such Fourth Stock Options shall
continue in effect on the same terms and conditions (subject to the
conversion required by this Section 5.04 after giving effect to the Merger
and the assumption by Boatmen's as set forth above). To the extent
necessary to effectuate the provisions of this Section 5.04, Boatmen's may
deliver new or amended agreements reflecting the terms of each Fourth Stock
Option assumed by Boatmen's and amend the Stock Option Plans to reflect the
terms hereof.
(c) As soon as practicable after the Effective Time, Boatmen's shall
file with the S.E.C. a registration statement on an appropriate form with
respect to the shares of Boatmen's Common subject to such options and shall
use its best efforts to maintain the effectiveness of such registration
statement or registration statements (and maintain the current status of
the prospectus or prospectuses with respect thereto) for so long as such
options remain outstanding.
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<PAGE> 25
(d) The adjustment provided in this Section 5.04 with respect to any
Fourth Stock Options which are "incentive stock options" (as defined in
Section 422 of the Code) shall be and is intended to be effected in a
manner which is consistent with Section 424(a) of the Code.
Section 5.05. Directors and Officers' Liability Insurance and
Indemnification.
(a) Following the Effective Time, Boatmen's will provide the
directors and officers of Fourth and its subsidiaries with the same
directors' and officers' liability insurance coverage that Boatmen's
provides to directors and officers of its other banking subsidiaries
generally, and, in addition, for a period of five (5) years will use its
best efforts to continue Fourth's directors' and officers' liability
insurance coverage with respect to actions occurring prior to the Effective
Time to the extent that such coverage is obtainable for an aggregate
premium not to exceed 200% of the annual premium presently being paid by
Fourth. If the premium of such insurance would exceed such maximum amount,
Boatmen's shall use its best efforts to procure such level of insurance
having the coverage described above as can be obtained for a premium equal
to such maximum amount.
(b) For ten (10) years after the Effective Time, Boatmen's shall
indemnify, defend and hold harmless the present and former officers,
directors, employees and agents of Fourth and its subsidiaries (each, an
"Indemnified Party") against all losses, expenses, claims, damages or
liabilities arising out of actions or omissions occurring on or prior to
the Effective Time (including, without limitation, the transactions
contemplated by this Agreement and the Fourth Option Agreement) to the full
extent then permitted under the Corporate Law and by Fourth's Articles of
Incorporation as in effect on the date hereof, including provisions
relating to advances of expenses incurred in the defense of any action or
suit.
(c) If after the Effective Time Boatmen's or any of its successors
or assigns (i) shall consolidate with or merge into any other corporation
or entity and shall not be the continuing or surviving corporation or
entity of such consolidation or merger, or (ii) shall transfer all or
substantially all of its properties and assets to any individual,
corporation or other entity, then and in each such case, proper provision
shall be made so that the successors and assigns of Boatmen's shall assume
any remaining obligations set forth in this Section 5.05.
Section 5.06. Employee Benefits. Boatmen's shall, with respect to
each employee of Fourth or its subsidiaries at the Closing Date who
continues in employment with Fourth, Boatmen's or any of their respective
subsidiaries (each a "Continued Employee"), provide the benefits described
in this Section 5.06. Subject to the right of subsequent amendment,
modification or termination in Boatmen's sole discretion, each Continued
Employee shall be entitled, as a new employee of a subsidiary of Boatmen's,
to participate in such employee benefit plans, as defined in Section 3(3)
of ERISA, or any non-qualified employee benefit plans or deferred
compensation, stock option, bonus or incentive plans, or other employee
benefit or fringe benefit programs that may be in effect generally for
employees of all of Boatmen's subsidiaries (the "Boatmen's Employee
Plans"), if and as a Continued Employee shall be eligible and, if required,
selected for participation therein under the terms thereof and otherwise
shall not be participating in a similar plan maintained by Fourth after the
Closing Date. Fourth employees will be eligible to participate on the same
basis as similarly situated employees of other Boatmen's subsidiaries. All
such participation shall be subject to such terms of such plans as may be
in effect from time to time and this Section 5.06 is not intended to give
Continued Employees any rights or privileges superior to those of other
employees of Boatmen's subsidiaries. Boatmen's may terminate or modify all
Fourth Employee Plans except insofar as benefits thereunder shall have
vested on the Closing Date and
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<PAGE> 26
cannot be modified and Boatmen's obligation under this Section 5.06 shall
not be deemed or construed so as to provide duplication of similar benefits
but, subject to that qualification, Boatmen's shall, for purposes of
vesting and any age or period of service requirements for commencement of
participation with respect to any Boatmen's Employee Plans in which
Continued Employees may participate, credit each Continued Employee with
his or her term of service with Fourth and its subsidiaries.
Section 5.07. Board Composition. Boatmen's Board of Directors shall
take all requisite action to elect two (2) persons as directors of
Boatmen's effective as of the first meeting of Boatmen's Board of Directors
after the Effective Time, which persons shall be selected by Fourth subject
to approval by Boatmen's.
Section 5.08. Other Agreements. After the date hereof, (i) neither
Boatmen's nor any of its subsidiaries shall enter into any agreement to
acquire or merge with another company which results in the Federal Reserve
Board disapproving or materially delaying approval of the Merger, (ii)
Boatmen's shall not, without the prior written consent of Fourth, engage in
any transaction or take any action that would render untrue in any material
respect any of the representations and warranties of Boatmen's contained in
Article Three hereof, if such representations and warranties were given as
of the date of such transaction or action, (iii) Boatmen's shall promptly
notify Fourth in writing of the occurrence of any matter or event known to
and directly involving Boatmen's, which would not include any changes in
conditions that affect the banking industry generally, that would
constitute a Material Adverse Effect on Boatmen's, (iv) Boatmen's shall, in
the event it has knowledge of the occurrence, or impending or threatened
occurrence, of any event or condition which would cause or constitute a
breach (or would have caused or constituted a breach had such event
occurred or been known prior to the date hereof) of any of its
representations or agreements contained or referred to herein, give prompt
written notice thereof to Fourth and use its best efforts to prevent or
promptly remedy the same, and (v) Boatmen's shall not declare or pay any
extraordinary or special dividend on the Boatmen's Common.
Section 5.09. Access to Information. Boatmen's shall permit Fourth
reasonable access in a manner which will avoid undue disruption or
interference with Boatmen's normal operations to its properties and shall
disclose and make available to Fourth, unless prohibited by applicable law,
all books, documents, papers and records relating to its assets, stock
ownership, properties, operations, obligations and liabilities, including,
but not limited to, all books of account (including the general ledger),
tax records, minute books of directors' and shareholders' meetings,
organizational documents, material contracts and agreements, loan files,
filings with any regulatory authority, accountants' workpapers (if
available and subject to the respective independent accountants' consent),
litigation files (but only to the extent that such review would not result
in a material waiver of the attorney-client or attorney work product
privileges under the rules of evidence), plans affecting employees, and any
other business activities or prospects in which Fourth may have a
reasonable and legitimate interest in furtherance of the transactions
contemplated by this Agreement. Fourth will hold any such information
which is nonpublic in confidence in accordance with the provisions of
Section 8.01 hereof.
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<PAGE> 27
ARTICLE SIX
CONDITIONS PRECEDENT TO THE MERGER
Section 6.01. Conditions to Boatmen's Obligations. Boatmen's and
Acquisition Sub's obligations to effect the Merger shall be subject to the
satisfaction (or waiver by Boatmen's) prior to or on the Closing Date of
the following conditions:
(a) The representations and warranties made by Fourth in this
Agreement shall be true and correct on and as of the Closing Date with the
same effect as though such representations and warranties had been made or
given on and as of the Closing Date (except for any such representations
and warranties made as of a specified date which shall be true and correct
as of such date); provided, however, that (i) in determining whether or not
the condition contained in this Section 6.01(a) shall be satisfied, no
effect shall be given to any exceptions in such representations and
warranties relating to materiality or Material Adverse Effect, and (ii) the
condition contained in this Section 6.01(a) shall be deemed to be satisfied
unless the failure of such representations and warranties to be so true and
correct shall constitute, individually or in the aggregate, a Material
Adverse Effect on Fourth;
(b) Fourth shall have performed and complied in all material
respects with all of its obligations and agreements required to be
performed on or prior to the Closing Date under this Agreement;
(c) No temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or
other legal restraint or prohibition (an "Injunction") preventing the
consummation of the Merger shall be in effect, nor shall any proceeding by
any bank regulatory authority or other governmental agency seeking any of
the foregoing be pending. There shall not be any action taken, or any
statute, rule, regulation or order enacted, entered, enforced or deemed
applicable to the Merger which makes the consummation of the Merger
illegal;
(d) All necessary regulatory approvals, consents, authorizations and
other approvals, including the requisite approval of this Agreement and the
Merger by the shareholders of Boatmen's and Fourth, required by law for
consummation of the Merger shall have been obtained and all waiting periods
required by law shall have expired; provided, however, that the condition
contained in this Section 6.01(d) shall be deemed to be satisfied
notwithstanding the failure of Fourth to receive any third-party non-
Regulatory Agency consents provided (i) Fourth used its reasonable efforts
to obtain such consents, and (ii) the failure to obtain such consents shall
not constitute, individually or in the aggregate, a Material Adverse Effect
on Fourth;
(e) Boatmen's shall have received all documents required to be
received from Fourth on or prior to the Closing Date as set forth in
Section 1.11 hereof, all in form and substance reasonably satisfactory to
Boatmen's;
(f) Boatmen's shall have received an opinion letter, dated as of the
Closing Date, from Ernst & Young, L.L.P., its independent public
accountants, to the effect that the Merger will qualify for pooling of
interests accounting treatment under Accounting Principles Board Opinion
No. 16 if closed and consummated in accordance with this Agreement;
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<PAGE> 28
(g) The Registration Statement shall be effective under the
Securities Act and no stop order suspending the effectiveness of the
Registration Statement shall be in effect or proceedings for such purpose
pending before or threatened by the S.E.C.; and
(h) Boatmen's shall have received an opinion of its counsel, Lewis,
Rice & Fingersh, L.C., to the effect that if the Merger is consummated in
accordance with the terms set forth in this Agreement (i) the Merger will
constitute a reorganization within the meaning of Section 368(a) of the
Code, (ii) no gain or loss will be recognized by the holders of shares of
Fourth Common or Fourth Preferred upon receipt of Merger Consideration
(except for cash received in lieu of fractional shares), (iii) the basis of
shares of Boatmen's Common and Boatmen's Preferred received by the
shareholders of Fourth will be the same as the basis of shares of Fourth
Common or Fourth Preferred, as the case may be, exchanged therefor, and
(iv) the holding period of the shares of Boatmen's Common and Boatmen's
Preferred received by such shareholders will include the holding period of
the shares of Fourth Common or Fourth Preferred, as the case may be,
exchanged therefor, provided such shares were held as capital assets as of
the Effective Time.
Section 6.02. Conditions to Fourth's Obligations. Fourth's
obligation to effect the Merger shall be subject to the satisfaction (or
waiver by Fourth) prior to or on the Closing Date of the following
conditions:
(a) The representations and warranties made by Boatmen's and
Acquisition Sub in this Agreement shall be true and correct on and as of
the Closing Date with the same effect as though such representations and
warranties had been made or given on the Closing Date (except for any such
representations and warranties made as of a specified date which shall be
true and correct as of such date); provided, however, that with the
exception of the representation and warranty set forth in Section 3.01(d)
hereof, which shall be true and correct in all respects on and as of the
Closing Date, (i) in determining whether or not the condition contained in
this Section 6.02(a) shall be satisfied, no effect shall be given to any
exceptions in such representations and warranties relating to materiality
or Material Adverse Effect, and (ii) the condition contained in this
Section 6.02(a) shall be deemed to be satisfied unless the failure of such
representations and warranties to be so true and correct shall constitute,
individually or in the aggregate, a Material Adverse Effect on Boatmen's;
(b) Boatmen's and Acquisition Sub shall have performed and complied
in all material respects with all of their obligations and agreements
hereunder required to be performed on or prior to the Closing Date under
this Agreement;
(c) No Injunction preventing the consummation of the Merger shall be
in effect, nor shall any proceeding by any bank regulatory authority or
other governmental agency seeking any of the foregoing be pending. There
shall not be any action taken, or any statute, rule, regulation or order
enacted, entered, enforced or deemed applicable to the Merger which makes
the consummation of the Merger illegal;
(d) All necessary regulatory approvals, consents, authorizations and
other approvals, including the requisite approval of this Agreement and the
Merger by the shareholders of Boatmen's and Fourth, required by law for
consummation of the Merger shall have been obtained and all waiting periods
required by law shall have expired; provided, however, that the condition
contained in this Section 6.02(d) shall be deemed to be satisfied
notwithstanding the failure of Boatmen's to receive any third-party non-
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<PAGE> 29
Regulatory Agency consents provided (i) Boatmen's used its reasonable
efforts to obtain such consents, and (ii) the failure to obtain such
consents shall not constitute, individually or in the aggregate, a Material
Adverse Effect on Boatmen's;
(e) Fourth shall have received all documents required to be received
from Boatmen's on or prior to the Closing Date as set forth in Section 1.11
hereof, all in form and substance reasonably satisfactory to Fourth;
(f) The Registration Statement shall be effective under the
Securities Act and no stop order suspending the effectiveness of the
Registration Statement shall be in effect or proceedings for such purpose
pending before or threatened by the S.E.C.;
(g) Fourth shall have received an opinion letter, dated as of the
Closing Date, from Ernst & Young, L.L.P., independent public accountants
for Boatmen's, to the effect that the Merger will qualify for pooling of
interests accounting treatment under Accounting Principles Board Opinion
No. 16 if closed and consummated in accordance with this Agreement;
(h) Fourth shall have received an opinion of its counsel, Sullivan &
Cromwell, to the effect that if the Merger is consummated in accordance
with the terms set forth in this Agreement (i) the Merger will constitute a
reorganization within the meaning of Section 368(a) of the Code, (ii) no
gain or loss will be recognized by the holders of shares of Fourth Common
or Fourth Preferred upon receipt of Merger Consideration (except for cash
received in lieu of fractional shares), (iii) the basis of shares of
Boatmen's Common and Boatmen's Preferred received by the shareholders of
Fourth will be the same as the basis of shares of Fourth Common or Fourth
Preferred, as the case may be, exchanged therefor, and (iv) the holding
period of the shares of Boatmen's Common and Boatmen's Preferred received
by such shareholders will include the holding period of the shares of
Fourth Common or Fourth Preferred, as the case may be, exchanged therefor,
provided such shares were held as capital assets as of the Effective Time;
and
(i) No "Shares Acquisition Date" or "Distribution Date" (as such
terms are defined in Boatmen's Rights Agreement) shall have occurred under
the Rights Agreement prior to the Effective Time.
ARTICLE SEVEN
TERMINATION OR ABANDONMENT
Section 7.01. Mutual Agreement. This Agreement may be terminated by
the mutual written agreement of Boatmen's and Fourth at any time prior to
the Closing Date, regardless of whether approval of this Agreement and the
Merger by the shareholders of Fourth shall have been previously obtained.
Section 7.02. Breach of Agreements. In the event that there is a
material breach in any of the representations and warranties or agreements
of Boatmen's or Fourth, which breach would entitle the non-breaching party
to not consummate the Merger and which breach is not cured within thirty
(30) days after notice to cure such breach is given to the breaching party
by the non-breaching party, then the non-breaching party, regardless of
whether shareholder approval of this Agreement and the Merger shall have
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<PAGE> 30
been previously obtained, may terminate and cancel this Agreement by
providing written notice of such action to the other party hereto.
Section 7.03. Environmental Reports. Boatmen's may terminate this
Agreement to the extent provided by Section 4.06 hereof by giving written
notice thereof to Fourth.
Section 7.04. Failure of Conditions. In the event any of the
conditions to the obligations of either party are not satisfied or waived
on or prior to the Closing Date, and if any applicable cure period provided
in Section 7.02 hereof has lapsed, then such party may, regardless of
whether approval of this Agreement and the Merger by the shareholders of
Boatmen's or Fourth shall have been previously obtained, terminate and
cancel this Agreement by delivery of written notice of such action to the
other party on such date.
Section 7.05. Regulatory Approval Denial. If any regulatory
application filed pursuant to Section 5.01(a) hereof should be finally
denied or disapproved by the respective regulatory authority, then this
Agreement thereupon shall be deemed terminated and canceled.
Section 7.06. Shareholder Approval Denial. If this Agreement or the
relevant transactions contemplated hereby are not approved by the requisite
vote of the shareholders of Fourth at the Fourth Shareholders' Meeting or
the shareholders of Boatmen's at the Boatmen's Shareholders' Meeting, then
either party may terminate this Agreement.
Section 7.07. Regulatory Enforcement Matters. In the event that
Fourth or any of its subsidiaries shall become a party or subject to any
new or amended written agreement, memorandum of understanding, cease and
desist order, imposition of civil money penalties or other regulatory
enforcement action or proceeding with any Regulatory Agency, which would
have a Material Adverse Effect on Fourth after the date of this Agreement,
then Boatmen's may terminate this Agreement. In the event that Boatmen's
or any of its subsidiaries shall become a party or subject to any new or
amended written agreement, memorandum of understanding, cease and desist
order, imposition of civil money penalties or other regulatory enforcement
action or proceeding with any Regulatory Agency, which would have a
Material Adverse Effect on Boatmen's after the date of this Agreement, then
Fourth may terminate this Agreement.
Section 7.08. Termination Date. If the Closing Date does not occur
on or prior to the first anniversary of the date of this Agreement, then
this Agreement may be terminated by either party by giving written notice
thereof to the other.
Section 7.09. Due Diligence Review. In accordance with Section 4.09
hereof, Fourth shall provide Boatmen's full and complete access to its
books, records and staff and those of its subsidiaries to facilitate
Boatmen's due diligence review of the asset quality of Fourth and its
subsidiaries. On or before September 25, 1995, Boatmen's may terminate
this Agreement by giving written notice thereof to Fourth if: (i) Fourth's
allowance for credit losses is inadequate by more than $50,000,000 based
upon loan grading and reserve methodologies utilized by the O.C.C., or
(ii) Fourth's credit administration practices vary materially from accepted
industry standards such that they are either inadequate to reasonably
achieve their intended function or to permit a reasonably accurate
assessment of the level of risk inherent in Fourth's credit portfolio.
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<PAGE> 31
Section 7.10. Fourth Option Agreement. Boatmen's may terminate this
Agreement if the Fourth Option Agreement shall not have been executed and
delivered by Fourth on the day following the execution of this Agreement.
ARTICLE EIGHT
GENERAL
Section 8.01. Confidential Information. The parties acknowledge the
confidential and proprietary nature of the "Information" (as herein
described) which has heretofore been exchanged and which will be received
from each other hereunder and agree to hold and keep the same confidential.
Such Information will include any and all financial, technical, commercial,
marketing, customer or other information concerning the business,
operations and affairs of a party that may be provided to the other,
irrespective of the form of the communications, by such party's employees
or agents. Such Information shall not include information which is or
becomes generally available to the public other than as a result of a
disclosure by a party or its representatives in violation of this
Agreement. The parties agree that the Information will be used solely for
the purposes contemplated by this Agreement and that such Information will
not be disclosed to any person other than employees and agents of a party
who are directly involved in evaluating the transaction. The Information
shall not be used in any way detrimental to a party, including use directly
or indirectly in the conduct of the other party's business or any business
or enterprise in which such party may have an interest, now or in the
future, and whether or not now in competition with such other party.
Section 8.02. Publicity. Boatmen's and Fourth shall cooperate with
each other in the development and distribution of all news releases and
other public disclosures concerning this Agreement and the Merger and shall
not issue any news release or make any other public disclosure without the
prior consent of the other party, unless it reasonably believes such is
required by law upon the advice of counsel or is in response to published
newspaper or other mass media reports regarding the transaction
contemplated hereby, in which such latter event the parties shall give
reasonable notice, and to the extent practicable, consult with each other
regarding such responsive public disclosure.
Section 8.03. Return of Documents. Upon termination of this
Agreement without the Merger becoming effective, each party, to the extent
permitted by applicable law, (i) shall deliver to the other originals and
all copies of all Information made available to such party, (ii) will not
retain any copies, extracts or other reproductions in whole or in part of
such Information, and (iii) will destroy all memoranda, notes and other
writings prepared by any party based on the Information.
Section 8.04. Notices. Any notice or other communication shall be
in writing and shall be deemed to have been given or made on the date of
delivery, in the case of hand delivery, or three (3) business days after
deposit in the United States Registered Mail, postage prepaid, or upon
receipt if transmitted by facsimile telecopy or any other means, addressed
(in any case) as follows:
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<PAGE> 32
(a) if to Boatmen's or Acquisition Sub:
Boatmen's Bancshares, Inc.
One Boatmen's Plaza
800 Market Street
St. Louis, Missouri 63102
Attention: Mr. Gregory L. Curl
Facsimile: 314/466-5645
with a copy to:
Lewis, Rice & Fingersh, L.C.
500 North Broadway, Suite 2000
St. Louis, Missouri 63102
Attention: Thomas C. Erb, Esq.
Facsimile: 314/241-6056
and
(b) if to Fourth:
Fourth Financial Corporation
100 North Broadway
Wichita, Kansas 67202
Attention: Mr. Darrell G. Knudson
Facsimile: 316/261-4595
with a copy to:
Foulston & Siefkin L.L.P.
700 Fourth Financial Center
Broadway at Douglas
Wichita, Kansas 67202
Attention: Benjamin C. Langel, Esq.
Facsimile: 316/267-6345
- and -
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: H. Rodgin Cohen, Esq.
Facsimile: 212/558-3588
or to such other address as any party may from time to time designate by
notice to the others.
Section 8.05. Liabilities. In the event that this Agreement is
terminated pursuant to the provisions of Article Seven hereof, no party
hereto shall have any liability to any other party for costs, expenses,
damages or otherwise; provided, however, that, notwithstanding the
foregoing, in the event that
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<PAGE> 33
this Agreement is terminated pursuant to Section 7.02 hereof on account of
a willful breach of any of the representations and warranties set forth
herein or any breach of any of the agreements set forth herein, then the
non-breaching party shall be entitled to recover appropriate damages from
the breaching party.
Section 8.06. Nonsurvival of Representations, Warranties and
Agreements. Except for, and as provided in, this Section 8.06, no
representation, warranty or agreement contained in this Agreement shall
survive the Effective Time or the earlier termination of this Agreement;
provided, however, that no such representation, warranty or covenant shall
be deemed to be terminated or extinguished so as to deprive Boatmen's,
Acquisition Sub or Fourth (or any director, officer or controlling person
thereof) of any defense in law or equity which otherwise would be available
against the claims of any person, including, without limitation, any
shareholder or former shareholder of either Boatmen's or Fourth, the
aforesaid representations, warranties and covenants being material
inducements to the consummation by Boatmen's, Acquisition Sub and Fourth of
the transactions contemplated herein. The agreements set forth in Article
One, and Sections 5.04, 5.05, 5.06 and 5.07 hereof shall survive the
Effective Time and the agreements set forth in Sections 8.01, 8.02, 8.03,
8.05 and 8.06 hereof shall survive the Effective Time or the earlier
termination of this Agreement.
Section 8.07. Entire Agreement. This Agreement and the Fourth
Option Agreement constitute the entire agreement between the parties and
supersede and cancel any and all prior discussions, negotiations,
undertakings, agreements in principle or other agreements between the
parties relating to the subject matter hereof.
Section 8.08. Headings and Captions. The captions of Articles and
Sections hereof are for convenience only and shall not control or affect
the meaning or construction of any of the provisions of this Agreement.
Section 8.09. Waiver, Amendment or Modification. The conditions of
this Agreement which may be waived may only be waived by notice to the
other party waiving such condition. The failure of any party at any time
or times to require performance of any provision hereof shall in no manner
affect the right at a later time to enforce the same. This Agreement may
be amended or modified by the parties hereto, at any time before or after
shareholder approval of the Agreement; provided, however, that after any
such approval no such amendment or modification shall alter the amount or
change the form of the Merger Consideration contemplated by this Agreement
to be received by shareholders of Fourth. This Agreement may not be
amended or modified except by a written document duly executed by the
parties hereto.
Section 8.10. Rules of Construction. Unless the context otherwise
requires: (i) a term has the meaning assigned to it, (ii) an accounting
term not otherwise defined has the meaning assigned to it in accordance
with generally accepted accounting principles, (iii) "or" is not exclusive,
and (iv) words in the singular may include the plural and in the plural
include the singular.
Section 8.11. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original and all of
which shall be deemed one and the same instrument.
Section 8.12. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. There shall be no third party
beneficiaries hereof except with respect to Sections 5.04 and 5.05 hereof.
<PAGE>
<PAGE> 34
Section 8.13. Severability. In the event that any provisions of
this Agreement or any portion thereof shall be finally determined to be
unlawful or unenforceable, such provision or portion thereof shall be
deemed to be severed from this Agreement, and every other provision, and
any portion of a provision, that is not invalidated by such determination,
shall remain in full force and effect. To the extent that a provision is
deemed unenforceable by virtue of its scope but may be made enforceable by
limitation thereof, such provision shall be enforceable to the fullest
extent permitted under the laws and public policies of the State whose laws
are deemed to govern enforceability. It is declared to be the intention of
the parties that they would have executed the remaining provisions without
including any that may be declared unenforceable.
Section 8.14. Governing Law; Assignment. This Agreement shall be
governed by the laws of the State of Missouri, except to the extent that
the Corporate Law must govern the Merger procedures, and applicable federal
laws and regulations. This Agreement may not be assigned by either of the
parties hereto.
Section 8.15. Definition of Material Adverse Effect. As used in
this Agreement, the term "Material Adverse Effect," with respect to either
Boatmen's or Fourth, means any condition, event, change or occurrence that
has or will have a material adverse effect upon (A) the financial
condition, business or results of operations of Boatmen's or Fourth and
their respective subsidiaries taken as a whole (other than as a result of
changes in federal laws or regulations and other than changes in accounting
rules of general applicability), or (B) the ability of Boatmen's or Fourth
to perform its respective obligations under, and to consummate the
transactions contemplated by, this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
FOURTH FINANCIAL CORPORATION
By /s/ Darrell G. Knudson
Darrell G. Knudson
Chairman and Chief Executive Officer
BOATMEN'S BANCSHARES, INC.
By /s/ Gregory L. Curl
Gregory L. Curl
Vice Chairman
<PAGE>
<PAGE> 35
ACQUISITION SUB, INC.
By /s/ Gregory L. Curl
Gregory L. Curl
President
<PAGE>
<PAGE> 1
EXHIBIT 4.07
___________________, 199__
________________________
________________________
________________________
________________________
Attention: __________________
__________________
Re: Agreement and Plan of Merger, dated August 25, 1995 (the "Merger
Agreement"), by and among Fourth Financial Corporation
("Fourth"), Boatmen's Bancshares, Inc. ("Boatmen's"), and
Acquisition Sub, Inc. ("Acquisition Sub")
Gentlemen:
I have been advised that I may be deemed to be an affiliate of
Fourth, as that term is defined for purposes of paragraphs (c) and (d) of
Rule 145 ("Rule 145") of the Rules and Regulations of the Securities and
Exchange Commission (the "Commission") promulgated under the Securities Act
of 1933, as amended (the "Securities Act").
Pursuant to the terms and conditions of the Merger Agreement, each
share of common stock of Fourth owned by me as of the effective time of the
merger contemplated by the Merger Agreement (the "Merger") may be converted
into the right to receive shares of common stock of Boatmen's and cash in
lieu of any fractional share and each share of preferred stock of Fourth
owned by me as of the effective time of the Merger may be converted into
the right to receive preferred stock of Boatmen's. As used in this letter,
the shares of common stock and preferred stock of Fourth owned by me as of
_________________________ (the date 30 days prior to the anticipated
effective time of the Merger) are referred to as the "Pre-Merger Shares"
and the shares of common stock and preferred stock of Boatmen's which may
be received by me in the Merger in exchange for my Pre-Merger Shares are
referred to as the "Post-Merger Shares." This letter is delivered to
Boatmen's pursuant to Section 4.07 of the Merger Agreement.
A. I represent and warrant to Boatmen's and agree that:
1. I shall not make any sale, transfer or other disposition
of the Post-Merger Shares I receive pursuant to the Merger in
violation of the Securities Act or the Rules and Regulations of the
Commission promulgated thereunder.
2. I understand that the issuance of the Post-Merger Shares
to me pursuant to the Merger will be registered with the Commission
under the Securities Act. I also understand that, because I may be
deemed an "affiliate" of Fourth and because any distributions by me
of the Post-Merger Shares will not be registered under the Securities
Act, such Post-Merger Shares must be held by me unless (i) the sale,
transfer or other distribution has been registered under the
Securities Act, (ii) the sale, transfer or other distribution of such
Post-Merger Shares is made in
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<PAGE> 2
accordance with the provisions of Rule 145, or (iii) in the opinion of
counsel acceptable to Boatmen's some other exemption from registration
under the Securities Act is available with respect to any such proposed
distribution, sale, transfer or other disposition of such Post-Merger
Shares.
3. In no event will I sell the Pre-Merger Shares or the Post-
Merger Shares, as the case may be, or otherwise transfer or reduce my
risk relative to the Pre-Merger Shares or Post-Merger Shares, as the
case may be, during the period beginning 30 days prior to the date on
which the Merger is consummated and ending on the date that Boatmen's
has published financial results covering at least 30 days of the
combined operations of Boatmen's and Fourth.
B. I understand and agree that:
1. Stop transfer instructions will be issued with respect to
the Post-Merger Shares and there will be placed on the certificates
representing such Post-Merger Shares, or any certificate delivered in
substitution therefor, a legend stating in substance:
"The shares represented by this Certificate were issued in a
transaction to which Rule 145 under the Securities Act of 1933,
as amended, applied. The shares represented by this certificate
may be transferred only in accordance with the terms of a letter
agreement dated _________________, 1994, by the registered
holder in favor of Boatmen's Bancshares, Inc., a copy of which
agreement is on file at the principal offices of Boatmen's
Bancshares, Inc."
2. Unless the transfer by me of Post-Merger Shares is a sale
made in compliance with the provisions of Rule 145(d) or made
pursuant to an effective registration statement under the Securities
Act, Boatmen's reserves the right to place the following legend on
the certificates issued to my transferee:
"The shares represented by this Certificate have not been
registered under the Securities Act of 1933, as amended, and
were acquired from a person who received such shares in a
transaction to which Rule 145 under the Securities Act of 1933,
as amended, applied. The shares have not been acquired by the
holder with a view to, or for resale in connection with, any
distribution thereof within the meaning of the Securities Act of
1933, as amended, and may not be sold or otherwise transferred
unless the shares have been registered under the Securities Act
of 1933, as amended, or an exemption from registration is
available."
I understand and agree that the legends set forth in paragraphs 1 and
2 above shall be removed by delivery of substitute certificates without any
legend if I deliver to Boatmen's a copy of a letter from the staff of the
Commission, or an opinion of counsel in form and substance satisfactory to
Boatmen's, to the effect that no such legend is required for the purpose of
the Securities Act.
<PAGE>
<PAGE> 3
I have carefully read this letter and the Merger Agreement and
understand the requirements of each and the limitations imposed upon the
distribution, sale, transfer or other disposition of Pre-Merger Shares or
Post-Merger Shares by me.
Very truly yours,
<PAGE> 1
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated August 26, 1995 (the "Agreement"), by
and between FOURTH FINANCIAL CORPORATION, a Kansas corporation ("Issuer"),
and BOATMEN'S BANCSHARES, INC., a Missouri corporation ("Grantee").
RECITALS
(A) Merger Agreement. Grantee and Issuer have, on a date prior to
the date hereof, entered into an Agreement and Plan of Merger, dated August
25, 1995 (the "Merger Agreement"), providing for, among other things, the
merger of Issuer with and into a wholly owned subsidiary of Grantee, with
such subsidiary being the surviving corporation.
(B) Condition to Merger Agreement. As a condition and inducement
to Grantee's pursuit of the transactions contemplated by the Merger
Agreement, and in consideration therefor, Issuer has agreed to grant
Grantee the Option (as hereinafter defined).
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and
in the Merger Agreement, and intending to be legally bound hereby, Issuer
and Grantee agree as follows:
1. Defined Terms. Capitalized terms which are used but not
defined herein shall have the meanings ascribed to such terms in the Merger
Agreement.
2. Grant of Option. Subject to the terms and conditions set forth
herein, Issuer hereby grants to Grantee an irrevocable option (the
"Option") to purchase a number of shares of common stock, par value $5.00
per share ("Issuer Common"), of Issuer up to 5,500,000 of such 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, but in
no event shall the number of Option Shares for which this Option is
exercisable exceed 19.9% of the issued and outstanding shares of Issuer
Common) at a purchase price per Option Share (as adjusted as set forth
herein, the "Purchase Price") equal to $33.50.
3. Exercise of Option.
(a) Provided that (i) Grantee or Holder (as hereinafter
defined), as applicable, shall not be in material breach of the agreements
or covenants contained in this Agreement or the Merger Agreement, and
(ii) no preliminary or permanent injunction or other order against the
delivery of shares covered by the Option issued by any court of competent
jurisdiction in the United States shall be in effect, 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 (as hereinafter defined);
provided that the Option shall terminate and be of no further force or
effect upon the earliest to occur of (A) the Effective Time, (B)
termination of the Merger Agreement in accordance with the terms thereof
prior to the occurrence of a Purchase Event or a Preliminary Purchase Event
(as hereinafter defined) other than a termination thereof by Grantee
pursuant to Section 7.02 of the Merger Agreement (but only if the breach of
Issuer giving rise to such termination was willful) (a termination of the
Merger Agreement by Grantee pursuant to Section 7.02 thereof as a result of
a willful breach by Issuer being referred to herein as a "Default
Termination"), (C) fifteen (15) months after a Default Termination, or
(D) fifteen (15) months after termination of the Merger Agreement (other
than by reason of a Default Termination) following the occurrence of a
Purchase Event or a Preliminary Purchase Event; provided, however, that any
purchase of shares upon
<PAGE>
<PAGE> 2
exercise of the Option shall be subject to compliance with applicable law.
The term "Holder" shall mean the holder or holders of the Option from time
to time, and which initially is Grantee. The rights set forth in Section 8
hereof shall terminate when the right to exercise the Option terminates
(other than as a result of a complete exercise of the Option) as set forth
herein.
(b) As used herein, a "Purchase Event" means any of the
following events:
(i) Without Grantee's prior written consent, Issuer
shall have recommended, publicly proposed or publicly announced an
intention to authorize, recommend or propose, or entered into an
agreement with any person (other than Grantee or any subsidiary of
Grantee) to effect (A) a merger, consolidation or similar transaction
involving Issuer or any of its significant subsidiaries (other than
transactions solely between Issuer's subsidiaries that are not
violative of the Merger Agreement), (B) the disposition, by sale,
lease, exchange or otherwise, of assets or deposits of Issuer or any
of its significant subsidiaries representing in either case 25% or
more of the consolidated assets or deposits of Issuer and its
subsidiaries, or (C) the issuance, sale or other disposition by
Issuer of (including by way of merger, consolidation, share exchange
or any similar transaction) securities representing 25% or more of
the voting power of Issuer or any of its significant subsidiaries,
other than, in each case of (A), (B), or (C), any merger,
consolidation or similar transaction involving Issuer or any of its
significant subsidiaries in which the voting securities of Issuer
outstanding immediately prior thereto continue to represent (by
either remaining outstanding or being converted into the voting
securities of the surviving entity of any such transaction) at least
65% of the combined voting power of the voting securities of the
Issuer or the surviving entity outstanding immediately after the
consummation of such merger, consolidation, or similar transaction
(provided any such transaction is not violative of the Merger
Agreement)(each of (A), (B), or (C), an "Acquisition Transaction");
or
(ii) any person (other than Grantee or any subsidiary of
Grantee) shall have acquired beneficial ownership (as such term is
defined in Rule 13d-3 promulgated under the Exchange Act) of or the
right to acquire beneficial ownership of, or any "group" (as such
term is defined in Section 13(d)(3) of the Exchange Act), other than
a group of which Grantee or any subsidiary of Grantee is a member,
shall have been formed which beneficially owns, or has the right to
acquire beneficial ownership of, 25% or more of the voting power of
Issuer or any of its significant subsidiaries.
(c) As used herein, a "Preliminary Purchase Event" means any
of the following events:
(i) any person (other than Grantee or any subsidiary of
Grantee) shall have commenced (as such term is defined in Rule 14d-2
under the Exchange Act) or shall have filed a registration statement
under the Securities Act, with respect to, a tender offer or exchange
offer to purchase any shares of Issuer Common such that, upon
consummation of such offer, such person would own or control 15% or
more of the then outstanding shares of Issuer Common (such an offer
being referred to herein as a "Tender Offer" or an "Exchange Offer,"
respectively); or
(ii) the shareholders shall not have approved the Merger
Agreement by the requisite vote at the Fourth Shareholders' Meeting,
the Fourth Shareholders' Meeting shall not have been held or shall
have been canceled prior to termination of the Merger Agreement, or
<PAGE>
<PAGE> 3
Issuer's Board of Directors shall have withdrawn or modified in a
manner adverse to Grantee the recommendation of Issuer's Board of
Directors with respect to the Merger Agreement, in each case after
it shall have been publicly announced that any person (other than
Grantee or any subsidiary of Grantee) shall have (A) made, or
disclosed an intention to make, a bona fide proposal to engage in an
Acquisition Transaction, (B) commenced a Tender Offer or filed a
registration statement under the Securities Act with respect to an
Exchange Offer, or (C) filed an application (or given a notice),
whether in draft or final form, under the Home Owners' Loan Act,
as amended, the B.H.C.A., the Bank Merger Act, as amended, or the
Change in Bank Control Act of 1978, as amended, for approval to engage
in an Acquisition Transaction; or
(iii) any person (other than Grantee or any subsidiary of
Grantee) shall have made a bona fide proposal to Issuer or its
shareholders 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 its shareholders to engage in an Acquisition Transaction, or such
third party states its intention to the Issuer to make such a
proposal if the Merger Agreement terminates, Issuer shall have
breached any representation, warranty, covenant or agreement
contained in the Merger Agreement and such breach would entitle
Grantee to terminate the Merger Agreement under Article Seven thereof
(without regard to the cure period provided for therein unless such
cure is promptly effected without jeopardizing consummation of the
Merger pursuant to the terms of the Merger Agreement); or
(v) any person (other than Grantee or any subsidiary of
Grantee), other than in connection with a transaction to which
Grantee has given its prior written consent, shall have filed an
application or notice with any Regulatory Agency 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, 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 three (3) business days nor later than fifteen
(15) business days from the Notice Date for the closing (the "Closing") of
such purchase (the "Closing Date"); provided that the first notice of
exercise shall be sent to Issuer within one hundred eighty (180) days after
the first Purchase Event of which Grantee has been notified. If prior
notification to or approval of any Regulatory Agency is required in
connection with such purchase, Issuer shall cooperate with the Holder in
the filing of the required notice or application for approval and the
obtaining of such approval and the Closing shall occur immediately
following such regulatory approvals (and any mandatory waiting periods).
Any exercise of the Option shall be deemed to occur on the Notice Date
relating thereto.
<PAGE>
<PAGE> 4
4. Payment and Delivery of Certificates.
(a) On each Closing Date, Holder shall (i) pay to Issuer, in
immediately available funds by wire transfer to a bank account designated
by Issuer, an amount equal to the Purchase Price multiplied by the number
of Option Shares to be purchased on such Closing Date, and (ii) present and
surrender this Agreement to the Issuer at the address of the Issuer
specified in Section 12(f).
(b) At each Closing, simultaneously with the delivery of
immediately available funds and surrender of this Agreement as provided in
Section 4(a), (i) Issuer shall deliver to Holder (A) a certificate or
certificates representing the Option Shares to be purchased at such
Closing, which Option Shares shall be free and clear of all liens and
subject to no 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 shares of Issuer Common
purchasable hereunder, and (ii) Holder shall deliver to Issuer a letter
agreeing that Holder shall not offer to sell or otherwise dispose of such
Option Shares in violation of applicable federal and state law or of the
provisions of this Agreement.
(c) In addition to any other legend that is required by
applicable law, certificates for the Option Shares delivered at each
Closing shall be endorsed with a restrictive legend which shall read
substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND PURSUANT TO THE TERMS OF A STOCK OPTION
AGREEMENT DATED AS OF AUGUST 26, 1995. 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 portion of the above legend relating
to the Securities Act 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 S.E.C., 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 shares of Issuer Common issuable upon such exercise,
notwithstanding that the stock transfer books of issuer shall then be
closed or that certificates representing such shares of Issuer Common shall
not then be actually delivered to Holder. Issuer shall pay all expenses,
and any and all United States federal, state, and local taxes and other
charges that may be payable in connection with the preparation, issuance
and delivery of stock 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 Common so that the Option may be exercised without
additional authorization of Issuer Common after giving effect to all other
options, warrants, convertible securities and other rights to purchase
Issuer Common, (ii) that it will not, by
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<PAGE> 5
charter amendment 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, and (B) in the event prior approval of or
notice to any Regulatory Agency 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 Agency as it may
require) in order to permit Holder to exercise the Option and Issuer duly
and effectively to issue shares of the Issuer Common 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) Corporate Authority. Issuer has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby; the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by the Board of Directors of Issuer, and
no other corporate proceedings on the part of Issuer are necessary to
authorize this Agreement or to consummate the transactions so contemplated;
this Agreement has been duly and validly executed and delivered by Issuer.
(b) Beneficial Ownership. To the best knowledge of Issuer,
as of the date of this Agreement, no person or group has beneficial
ownership of more than 10% of the issued and outstanding shares of Issuer
Common.
(c) Shares Reserved for Issuance; Capital Stock. Issuer has
taken all necessary corporate action to authorize and reserve and permit it
to issue, and at all times from the date hereof through the termination of
this Agreement in accordance with its terms, will have reserved for
issuance upon the exercise of the Option, that number of shares of Issuer
Common equal to the maximum number of shares of Issuer Common at any time
and from time to time purchasable upon exercise of the Option, and all such
shares, upon issuance pursuant to the Option, will be duly authorized,
validly issued, fully paid and nonassessable, and will be delivered free
and clear of all claims, liens, encumbrances, and security interests (other
than those created by this Agreement) and not subject to any preemptive
rights.
(d) No Violations. The execution, delivery and performance
of this Agreement does not or will not, and the consummation by Issuer of
any of the transactions contemplated hereby will not, constitute or result
in (A) a breach or violation of, or a default under, its certificate of
incorporation or by-laws, or the comparable governing instruments of any of
its subsidiaries, or (B) a breach or violation of, or a default under, any
agreement, lease, contract, note, mortgage, indenture, arrangement or other
obligation of it or any of its subsidiaries (with or without the giving of
notice, the lapse of time or both) or under any law, rule, ordinance or
regulation or judgment, decree, order, award or governmental or non-
governmental permit or license to which it or any of its subsidiaries is
subject, that would, in any case give any other person the ability to
prevent or enjoin Issuer's performance under this Agreement in any material
respect.
6. Representations and Warranties of Grantee. Grantee hereby
represents and warrants to Issuer that Grantee has full corporate power and
authority to enter into this Agreement and, subject to obtaining the
approvals referred to in this Agreement, to consummate the transactions
contemplated
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<PAGE> 6
by this Agreement; the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Grantee; and
this Agreement has been duly executed and delivered by Grantee.
7. Adjustment upon Changes in Issuer Capitalization, etc.
(a) In the event of any change in Issuer Common 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 Common if
the Option had been exercised immediately prior to such event, or the
record date therefor, as applicable. If any additional shares of Issuer
Common are issued after the date of this Agreement (other than pursuant to
an event described in the first sentence of this Section 7(a), upon
exercise of any option to purchase Issuer Common outstanding on the date
hereof or upon conversion into Issuer Common of any convertible security of
Issuer outstanding on the date hereof), the number of shares of Issuer
Common subject to the Option shall be adjusted so that, after such
issuance, it, together with any shares of Issuer Common previously issued
pursuant hereto, equals 19.9% of the number of shares of Issuer Common 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 Merger Agreement.
(b) In the event that Issuer shall enter into an agreement
(i) to consolidate with or merge into any person, other than Grantee or one
of its subsidiaries, and shall not be the continuing or surviving
corporation of such consolidation or merger, (ii) to permit any person,
other than Grantee or one of its subsidiaries, to merge into Issuer and
Issuer shall be the continuing or surviving corporation, but, in connection
with such merger, the then outstanding shares of Issuer Common shall be
changed into or exchanged for stock or other securities of Issuer or any
other person or cash or any other property or the outstanding shares of
Issuer Common immediately prior to such merger shall after such merger
represent less than 50% of the outstanding shares and share equivalents of
the merged company, or (iii) to sell or otherwise transfer all or
substantially all of its assets or deposits to any person, other than
Grantee or one of its subsidiaries, then, and in each such case, the
agreement governing such transaction shall make proper provisions so that
the Option shall, upon the consummation of any such transaction and upon
the terms and conditions set forth herein, be converted into, or exchanged
for, an option (the "Substitute Option"), at the election of 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. Substitute Option
Issuer shall also enter into an agreement with 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 shares of Substitute Common (as hereinafter defined) as is equal
to the Assigned Value (as hereinafter defined) multiplied by the number of
shares of Issuer Common for which the Option was theretofore exercisable,
divided by
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<PAGE> 7
the Average Price (as hereinafter defined). The exercise price of
Substitute Option per share of Substitute Common (the "Substitute Option
Price") shall then be equal to the Purchase Price multiplied by a fraction
in which the numerator is the number of shares of Issuer Common for which
the Option was theretofore exercisable and the denominator is the number of
shares of the Substitute Common 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 corporation 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 Common" shall mean the shares of
capital stock (or similar equity interest) with the greatest voting
power in respect of the election of directors (or persons similarly
responsible for the direction of the business and affairs) of the
Substitute Option Issuer.
(3) "Assigned Value" shall mean the highest of (w) the
price per share of Issuer Common at which a Tender Offer or an
Exchange Offer therefor has been made, (x) the price per share of
Issuer Common to be paid by any third party pursuant to an agreement
with Issuer, (y) the highest closing price for shares of Issuer
Common within the six (6) month period immediately preceding the
consolidation, merger, or sale in question and (z) in the event of a
sale of all or substantially all of Issuer's assets or deposits an
amount equal to (i) the sum of the price paid in such sale for such
assets (and/or deposits) and the current market value of the
remaining assets of Issuer, as determined by a nationally recognized
investment banking firm selected by Holder divided by (ii) the number
of shares of Issuer Common outstanding at such time. In the event
that a Tender Offer or an Exchange Offer is made for Issuer Common 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 Common shall
be determined by a nationally recognized investment banking firm
selected by Holder.
(4) "Average Price" shall mean the average closing
price of a share of Substitute Common for the one year immediately
preceding the consolidation, merger, or sale in question, but in no
event higher than the closing price of the shares of Substitute
Common on the day preceding such consolidation, merger or sale;
provided that if Issuer is the issuer of the Substitute Option, the
Average Price shall be computed with respect to a share of common
stock issued by Issuer, the person merging into Issuer or by any
company which controls 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 of the shares of Substitute Common outstanding prior to exercise
of the Substitute Option. In the event that the Substitute Option would be
exercisable for more than 19.9% of the aggregate of the shares of
Substitute Common but for the limitation in the first sentence of this
Section 7(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 Section 7(f)
over (ii) the value of the Substitute Option after giving effect to the
limitation in the first sentence of this Section 7(f). This difference in
value shall be determined by a nationally-recognized investment banking
firm selected by Holder.
<PAGE>
<PAGE> 8
(g) Issuer shall not enter into any transaction described in
Section 7(b) 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 of common stock 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 shares of Substitute Common are otherwise in
no way distinguishable from or have lesser economic value (other than any
diminution in value resulting from the fact that the Substitute Common are
restricted securities, as defined in Rule 144 under the Securities Act or
any successor provision) than other shares of common stock issued by
Substitute Option Issuer).
8. Repurchase at the Option of Holder.
(a) Subject to the last sentence of Section 3(a), at the
request of Holder at any time commencing upon the first occurrence of a
Repurchase Event (as defined in Section 8(d)) and ending twelve (12) months
immediately thereafter, Issuer shall repurchase from Holder (i) the Option,
and (ii) all shares of Issuer Common purchased by Holder pursuant hereto
with respect to which Holder then has beneficial ownership. The date on
which Holder exercises its rights under this Section 8 is referred to as
the "Request Date". Such repurchase shall be at an aggregate price (the
"Section 8 Repurchase Consideration") equal to the sum of:
(i) the aggregate Purchase Price paid by Holder for any
shares of Issuer Common acquired pursuant to the Option with respect
to which Holder then has beneficial ownership;
(ii) the excess, if any, of (x) the Applicable Price (as
defined below) for each share of Issuer Common over (y) the Purchase
Price (subject to adjustment pursuant to Section 7), multiplied by
the number of shares of Issuer Common with respect to which the
Option has not been exercised; and
(iii) the excess, if any, of the Applicable Price over
the Purchase Price (subject to adjustment pursuant to Section 7) paid
(or, in the case of Option Shares with respect to which the Option
has been exercised but the Closing Date has not occurred, payable) by
Holder for each share of Issuer Common with respect to which the
Option has been exercised and with respect to which Holder then has
beneficial ownership, multiplied by the number of such shares.
(b) If Holder exercises its rights under this Section 8,
Issuer shall, within ten (10) business days after the Request Date, pay the
Section 8 Repurchase Consideration to Holder in immediately available
funds, and contemporaneously with such payment, Holder shall surrender to
Issuer the Option and the certificates evidencing the shares of Issuer
Common purchased thereunder with respect to which Holder then has
beneficial ownership, and Holder shall warrant that it has sole record and
beneficial ownership of such shares and that the same are then free and
clear of all liens. Notwithstanding the foregoing, to the extent that
prior notification to or approval of any Regulatory Agency is required in
connection with the payment of all or any portion of the Section 8
Repurchase Consideration, Holder shall have the ongoing option to revoke
its request for repurchase pursuant to Section 8, in whole or in part, or
to require that Issuer deliver from time to time that portion of the
Section 8 Repurchase Consideration that it is not then so prohibited from
paying and promptly file the
<PAGE>
<PAGE> 9
required notice or application for approval and expeditiously process the
same (and each party shall cooperate with the other in the filing of any
such notice or application and the obtaining of any such approval). If any
Regulatory Agency disapproves of any part of Issuer's proposed repurchase
pursuant to this Section 8, Issuer shall promptly give notice of such fact
to Holder. If any Regulatory Agency prohibits the repurchase in part but
not in whole, then Holder shall have the right (i) to revoke the repurchase
request, or (ii) to the extent permitted by such Regulatory Agency,
determine whether the repurchase should apply to the Option and/or Option
Shares and to what extent to each, and Holder shall thereupon have the
right to exercise the Option as to the number of Option Shares for which
the Option was exercisable at the Request Date less the sum of the number
of shares covered by the Option in respect of which payment has been made
pursuant to Section 8(a)(ii) and the number of shares covered by the
portion of the Option (if any) that has been repurchased. Holder shall
notify Issuer of its determination under the preceding sentence within five
(5) business days of receipt of notice of disapproval of the repurchase.
Notwithstanding anything herein to the contrary, all of
Holder's rights under this Section 8 shall terminate on the date of
termination of this Option pursuant to Section 3(a).
(c) For purposes of this Agreement, the "Applicable Price"
means the highest of (i) the highest price per share of Issuer Common paid
for any such share by the person or groups described in Section 8(d)(i),
(ii) the price per share of Issuer Common received by holders of Issuer
Common in connection with any merger or other business combination
transaction described in Section 7(b)(i), 7(b)(ii) or 7(b)(iii), or
(iii) the highest closing sales price per share of Issuer Common on Nasdaq
(or if Issuer Common is not traded on Nasdaq, the highest bid price per
share as quoted on the principal trading market or securities exchange on
which such shares are traded as reported by a recognized source chosen by
Holder) during the forty (40) business days preceding the Request Date;
provided, however, that in the event of a sale of less than all of Issuer's
assets, the Applicable Price shall be the sum of the price paid in such
sale for such assets and the current market value of the remaining assets
of Issuer as determined by a nationally recognized investment banking firm
selected by Holder, divided by the number of shares of the Issuer Common
outstanding at the time of such sale. If the consideration to be offered,
paid or received pursuant to either of the foregoing clauses (i) or (ii)
shall be other than in cash, the value of such consideration shall be
determined in good faith by an independent nationally recognized investment
banking firm selected by Holder and reasonably acceptable to Issuer, which
determination shall be conclusive for all purposes of this Agreement.
(d) As used herein, "Repurchase Event" shall occur if (i) any
person (other than Grantee or any subsidiary of Grantee) shall have
acquired beneficial ownership of (as such term is defined in Rule 13d-3
promulgated under the Exchange Act), 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, 50% or more of the then outstanding shares
of Issuer Common, or (ii) any of the transactions described in Section
7(b)(i), 7(b)(ii) or 7(b)(iii) shall be consummated.
<PAGE>
<PAGE> 10
9. Registration Rights.
(a) Demand Registration Rights. Issuer shall, subject to the
conditions of Section 9(c) below, if requested by any Holder, 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 shares of Issuer Common 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 shares of Issuer
Common under the Securities Act in connection with an underwritten public
offering of such Issuer Common, Issuer will promptly give written notice to
the Selling Shareholders of its intention to do so and, upon the written
request of any Selling Shareholder given within thirty (30) days after
receipt of any such notice (which request shall specify the number of
shares of Issuer Common 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 of the
Securities Act or any successor Form; provided, further, however, that such
election pursuant to (i) may only be made two times. If some but not all
the shares of Issuer Common, with respect to which Issuer shall have
received requests for registration pursuant to this Section 9(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 Common registered for sale.
(c) Conditions to Required Registration. Issuer shall use
all reasonable efforts to cause each registration statement referred to in
Section 9(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 Section 9(a) above
for a period not exceeding ninety (90) days provided Issuer shall in good
faith determine that any such registration would adversely affect an
offering or contemplated offering of other securities by Issuer, and Issuer
shall not be required to register Option Shares under the Securities Act
pursuant to Section 9(a) above:
(i) prior to the earliest of (a) termination of the
Merger Agreement pursuant to Article Seven thereof, (b) failure to
obtain the requisite shareholder approval pursuant to Sections
6.01(d) and 6.02(d) of the Merger Agreement, and (c) a Purchase Event
or a Preliminary Purchase Event;
(ii) on more than one occasion during any calendar year;
<PAGE>
<PAGE> 11
(iii) within ninety (90) days after the effective date of
a registration referred to in Section 9(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
(iv) 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 shares of Issuer Common 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 (9) 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, expenses of underwriters, excluding
discounts and commissions but including liability insurance if Issuer so
desires or the underwriters so require, and the reasonable fees and
expenses of any necessary special experts) in connection with each
registration pursuant to Section 9(a) or 9(b) above (including the related
offerings and sales by holders of Option Shares) and all other
qualifications, notifications or exemptions pursuant to Section 9(a) or
9(b) above.
(e) Indemnification. In connection with any registration
under Section 9(a) or 9(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.
<PAGE>
<PAGE> 12
Promptly upon receipt by a party indemnified under this Section
9(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 Section 9(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 Section 9(e). In case notice of commencement of any such
action shall be given to the indemnifying party as above provided, the
indemnifying party shall be entitled to participate in and, to the extent
it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense of such action at its own expense, with counsel
chosen by it and 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 Section 9(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 Section 9(a) or
9(b) above, Issuer and each Selling Shareholder (other than Grantee) shall
enter into an agreement containing the indemnification provisions of this
Section 9(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 S.E.C. 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
<PAGE>
<PAGE> 13
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.
10. Quotation; Listing. If Issuer Common 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 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 shares of
Issuer Common or other securities to be acquired upon exercise of the
Option on such securities exchange and will use its best efforts to obtain
approval, if required, of such quotation or listing as soon as practicable.
11. Division of Option. This Agreement (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 shares of Issuer Common purchasable hereunder. The terms
"Agreement" and "Option" as used herein include any other Agreements and
related Options for which this Agreement (and the Option granted hereby)
may be exchanged. Upon receipt by Issuer of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, Issuer will execute and deliver a new Agreement of
like tenor and date. Any such new Agreement executed and delivered shall
constitute an additional contractual obligation on the part of Issuer,
whether or not the Agreement so lost, stolen, destroyed or mutilated shall
at any time be enforceable by anyone.
12. Miscellaneous.
(a) Expenses. 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 Beneficiaries;
Severability. This Agreement, together with the Merger Agreement 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 the
indemnified parties under Section 9(e) and any transferees of the Option
Shares or any permitted transferee of this Agreement pursuant to Section
12(h)) any rights or remedies hereunder. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent
jurisdiction or Regulatory Agency to be invalid, void or unenforceable, the
remainder of the terms, provisions,
<PAGE>
<PAGE> 14
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 to acquire, or does not require Issuer to repurchase, the
full number of shares of Issuer Common as provided in Section 3 (as may be
adjusted herein), it is the express intention of Issuer to allow Holder to
acquire or to require Issuer to repurchase such lesser number of shares as
may be permissible without any amendment or modification hereof.
(d) Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Missouri 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 addresses set forth in the
Merger Agreement (or at such other address for a party as shall be
specified by like notice).
(g) Counterparts. This Agreement and any amendments hereto
may be executed in two counterparts, each of which shall be considered one
and the same agreement and shall become effective when both counterparts
have been signed and delivered, 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 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.
<PAGE>
<PAGE> 15
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.
FOURTH FINANCIAL CORPORATION
By /s/ Darrell G. Knudson
Darrell G. Knudson
Chairman and Chief Executive Officer
BOATMEN'S BANCSHARES, INC.
By /s/ Gregory L. Curl
Gregory L. Curl
Vice Chairman
BOATMEN'S BANCSHARES, INC.
One Boatmen's Plaza
800 Market Street
St. Louis, Missouri 63101
PRESS RELEASE
For further information, contact:
Kevin R. Stitt
Boatmen's Bancshares
314/466-7662
Michael J. Shonka
Fourth Financial
316/261-4510
FOR IMMEDIATE RELEASE
BOATMEN'S BANCSHARES, FOURTH FINANCIAL
ANNOUNCE MERGER AGREEMENT
August 25, 1995 -- Boatmen's Bancshares, Inc. (NASDAQ:BOAT),
headquartered in St. Louis, and Fourth Financial Corporation (NASDAQ:FRTH),
based in Wichita, Kansas, today announced that they have signed a definitive
agreement for Boatmen's Bancshares to acquire Fourth Financial in a stock
transaction valued at approximately $1.2 billion.
Boatmen's will exchange one share of its common stock for each share of
Fourth Financial's common shares outstanding. The transaction is subject to
the completion of due diligence and shareholder and regulatory approval. The
merger will be accounted for as a pooling of interests and is expected to
close in the first quarter of 1996.
-more-<PAGE>
<PAGE> 2
Add One
Boatmen's Bancshares, with assets of $33.4 billion, is one of the 30
largest U.S. bank holding companies, operating more than 500 locations in
nine states. Boatmen's also ranks among the nation's largest providers of
trust services with approximately $45 billion in assets under management.
Fourth Financial is the largest banking company in Kansas and third
largest in Oklahoma. As of June 30, 1995, Fourth Financial had approxi-
mately $7.5 billion in assets, $6.0 billion in deposits and operated 146
offices: 87 in Kansas, 56 in Oklahoma and three in Missouri.
When the transaction is completed, Boatmen's will have the leading
deposit market share in five states: Missouri, Kansas, Oklahoma, Arkansas
and New Mexico. The combined organizations will have an extensive network
of more than 650 retail offices and 1,350 ATMs throughout nine states.
"We are enthusiastic about the business opportunities and synergies
created from the combination of Boatmen's and Fourth Financial," explained
Andrew B. Craig, III, chairman and chief executive officr, of Boatmen's
Bancshares. "Oklahoma and Kansas are two key markets with good growth
potential. We currently have operations in Kansas City, Oklahoma City and
Tulsa and this in-market acquisition will provide us the opportunity to
further leverage our strengths in these markets."
-more-<PAGE>
<PAGE> 3
Add Two
Darrell G. Knudson, chairman and chief executive officer of Fourth
Financial, said, "We are pleased to joint the Boatmen's organization. Our
strength in Kansas and Oklahoma, combined with Boatmen's nine-state
franchise, creates a formidable organization that will be a premier financial
services provider."
Cost savings due to increased efficiencies are expected to total $60
million before tax and be realized over a three-year period, with the bulk of
the savings in the first two years. These savings represent approximately
14 percent of current in-market expenses for the combined organization.
Boatmen's believes that the transaction will result in earnings per share
dilution of less than 2 percent in 1996, before nonrecurring merger-related
expenses and be accretive to earnings per share in 1997 and thereafter.
-table attached-<PAGE>
<PAGE> 4
Add Three
<TABLE>
BOATMEN'S/FOURTH FINANCIAL
PRO FORMA FINANCIAL HIGHLIGHTS
<CAPTION>
Fourth Pro Forma
Boatmen's Financial Combined
<S> <C> <C> <C>
At June 30, 1995 ($ millions)
Assets $33,408 $7,505 $40,913
Loans 19,921 4,386 24,307
Reserve for loan losses 385 72 457
Deposits 24,417 6,042 30,459
Long-term debt 522 --- 522
Common equity 2,782 550 3,332
Nonperforming assets 191 34 225
Common equity/assets 8.33% 7.33% 8.14%
Reserve/non-performing loans 291% 256% 285%
Offices 515 146 661
Employees 16,900 3,550 20,450
For the six months ended June 30, 1995 ($ millions)
Net interest income (FTE) $615 $140
Provision for loan losses 19 2
Noninterest income 328 51 <F2>
Noninterest expense 579 <F1> 126
Net income 215 <F1> 37 <F2>
Return on assets 1.32% <F1> 0.97% <F2>
Return on equity 16.0% <F1> 12.8% <F2>
Net interest margin 4.25% 4.02%
<FN>
<F1>
Excludes pretax nonrecurring merger expenses of $26 million.
<F2>
Excludes pretax securities losses of $22 million.
</FN>
# # #
</TABLE>
