<PAGE> 1
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
Date of Report (Date of earliest event reported): September 4, 1995
-----------------
BANK SOUTH CORPORATION
----------------------
(Exact name of registrant as specified in its charter)
Georgia 0-4554 58-1048216
--------------- ------------ -------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
55 Marietta Street, Atlanta, Georgia 30303
------------------------------------------
(Addresses, including zip codes, of principal executive offices)
(404) 529-4118
--------------
(Registrant's telephone numbers, including area code)
<PAGE> 2
ITEM 5. OTHER EVENTS.
On September 4, 1995, Bank South Corporation ("BSC") and NationsBank
Corporation ("NationsBank") entered into an Agreement and Plan of Merger (the
"Agreement"), pursuant to which BSC will be merged with and into NationsBank
(the "Merger"). The Board of Directors of BSC approved the Agreement and the
transactions contemplated thereby at a meeting held on September 4, 1995.
In accordance with the terms of the Agreement, each share of the $5.00
par value common stock of BSC ("BSC Common Stock") outstanding immediately
prior to the effective time of the Merger (the "Effective Time") will be
converted into the right to receive 0.44 of a share (the "Exchange Ratio") of
the common stock of NationsBank ("NationsBank Common Stock"). If the price of
NationsBank Common Stock declines by a specified amount during a defined
measuring period prior to closing, there are circumstances in which BSC may
give notice of termination of the Agreement unless NationsBank determines, in
its discretion, to increase the Exchange Ratio to eliminate BSC's right to
terminate the Agreement.
The Merger is intended to constitute a tax-free transaction under the
Internal Revenue Code of 1986, as amended, and to be accounted for as a pooling
of interests.
In addition, the Agreement contemplates that each of the stock options
and stock appreciation rights granted by BSC under its stock option and other
stock-based compensation plans will be converted into and become an option or
right to purchase shares of NationsBank Common Stock or to receive cash in
accordance with the terms of the stock option or other plan under which such
option or right was issued and the agreement by which it is evidenced, except
that (i) the number of shares of NationsBank Common Stock subject to each BSC
option or right shall be equal to the number of shares of BSC Common Stock
subject to such option or right multiplied by the Exchange Ratio, and (ii) the
exercise price per share of NationsBank Common Stock purchasable thereunder or
upon which the amount of a cash payment is determined shall be that specified
in the BSC option or right divided by the Exchange Ratio.
Immediately after executing the Agreement, BSC and NationsBank entered
into a Stock Option Agreement, pursuant to which BSC granted to NationsBank an
option to purchase, under certain circumstances and subject to adjustment, up
to 11,691,142 shares of BSC Common Stock at a price of $23.75 per share (also
subject to adjustment) (the "NationsBank Option"). The NationsBank Option,
which, if exercised, would equal 19.9% of the outstanding shares of BSC Common
Stock before giving effect to the exercise of the NationsBank Option, was
granted by BSC as a condition of and in consideration for NationsBank's
entering into the Agreement. Under certain circumstances, BSC may be required
to repurchase the NationsBank Option or the shares acquired pursuant to the
exercise of the NationsBank Option.
Consummation of the Merger is subject to various conditions,
including: (i) receipt of approval by the shareholders of BSC of appropriate
matters relating to the Agreement and the Merger, as required to be approved
under applicable law; (ii) receipt of certain regulatory approvals from the
Board of Governors of the Federal Reserve System and various other federal and
state regulatory authorities; (iii) receipt of an opinion of counsel as to the
tax-free nature of certain aspects of the Merger; (iv) listing, subject to
notice of issuance, with the New York Stock Exchange of the NationsBank Common
Stock to be issued in the Merger; and (v) satisfaction of certain other
conditions.
The Agreement and the Merger will be submitted for approval at a
meeting of the shareholders of BSC. Prior to such meeting, NationsBank will
file a registration statement with the Securities and
<PAGE> 3
Exchange Commission registering under the Securities Act of 1933, as amended,
the NationsBank Common Stock to be issued in exchange for the outstanding
shares of BSC Common Stock. Such shares of NationsBank Common Stock will be
offered to the BSC shareholders pursuant to a prospectus that will also serve
as a proxy statement for the BSC shareholders' meeting.
On September 4, 1995, BSC also amended its Rights Agreement, dated
March 17, 1988, as amended April 6, 1988, with Bank South, as Rights Agent (the
"BSC Rights Agreement"), so that the entering into of the Agreement and
consummation of the Merger and the other transactions contemplated thereby do
not and will not result in the ability of any person to exercise any BSC Rights
under the BSC Rights Agreement or enable or require the BSC Rights to be
separated from the shares of BSC Common Stock to which they are attached or to
be triggered or become exercisable.
For additional information regarding the Agreement, the Stock Option
Agreement, and the Amendment to the Rights Agreement, please refer to the
copies of such documents, which are incorporated herein by reference, included
as Exhibits to this Current Report on Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
C. Exhibits
99.1 Agreement and Plan of Merger, dated as of September 4,
1995, by and between Bank South Corporation and NationsBank
Corporation (including exhibits thereto, other than the
Stock Option Agreement, which is included herein as Exhibit
99.2).
99.2 Stock Option Agreement, dated as of September 4, 1995,
issued by BSC Corporation to NationsBank Corporation.
99.3 Amendment to Rights Agreement, dated September 4, 1995,
with respect to the Rights Agreement, dated March 17, 1988,
as amended April 6, 1988, between Bank South Corporation
and Bank South.
99.4 Text of joint press release, dated September 5, 1995,
issued by NationsBank Corporation and Bank South
Corporation.
<PAGE> 4
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.
BANK SOUTH CORPORATION
(REGISTRANT)
/s/ RALPH E. HUTCHINS, JR.
----------------------------
Ralph E. Hutchins, Jr.
Chief Financial Officer
Date: September 7, 1995
<PAGE> 5
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequential
Exhibit Page No.
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<S> <C> <C>
99.1 Agreement and Plan of Merger, dated as of September 4, 1995, by and
between Bank South Corporation and NationsBank Corporation (including
exhibits thereto, other than the Stock Option Agreement, which is included
herein as Exhibit 99.2).
99.2 Stock Option Agreement, dated as of September 4, 1995, issued by BSC
Corporation to NationsBank Corporation.
99.3 Amendment to Rights Agreement, dated September 4, 1995, with respect to
the Rights Agreement, dated March 17, 1988, as amended April 6, 1988,
between Bank South Corporation and Bank South.
99.4 Text of joint press release, dated September 5, 1995, issued by
NationsBank Corporation and Bank South Corporation.
</TABLE>
<PAGE> 1
EXHIBIT 99.1
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
BANK SOUTH CORPORATION
AND
NATIONSBANK CORPORATION
DATED AS OF SEPTEMBER 4, 1995
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Preamble . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 1 - TRANSACTIONS AND TERMS OF MERGER . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Time and Place of Closing . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Execution of Stock Option Agreement . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2 - TERMS OF MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 Charter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 3 - MANNER OF CONVERTING SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.1 Conversion of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.2 Anti-Dilution Provisions . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.3 Shares Held by BSC or NationsBank . . . . . . . . . . . . . . . . . . . . 3
3.4 Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.5 Conversion of Stock Options . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 4 - EXCHANGE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.1 Exchange Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.2 Rights of Former BSC Shareholders . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF BSC . . . . . . . . . . . . . . . . . . . . . 6
5.1 Organization, Standing, and Power . . . . . . . . . . . . . . . . . . . . 6
5.2 Authority; No Breach By Agreement . . . . . . . . . . . . . . . . . . . . 6
5.3 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.4 BSC Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.5 SEC Filings; Financial Statements . . . . . . . . . . . . . . . . . . . . 8
5.6 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . 9
5.7 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.8 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.9 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.10 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.11 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.12 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.13 Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.14 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.15 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.16 Statements True and Correct . . . . . . . . . . . . . . . . . . . . . . . 15
5.17 Accounting, Tax and Regulatory Matters . . . . . . . . . . . . . . . . . . 16
5.18 State Takeover Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.19 Charter Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.20 Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>
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<TABLE>
<S> <C>
5.21 Derivatives Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF NATIONSBANK . . . . . . . . . . . . . . . . . 17
6.1 Organization, Standing, and Power . . . . . . . . . . . . . . . . . . . . 17
6.2 Authority; No Breach By Agreement . . . . . . . . . . . . . . . . . . . . 17
6.3 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.4 SEC Filings; Financial Statements . . . . . . . . . . . . . . . . . . . . 18
6.5 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . 19
6.6 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.8 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.8 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.9 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.10 Statements True and Correct . . . . . . . . . . . . . . . . . . . . . . . 20
6.12 Tax, and Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 7 - CONDUCT OF BUSINESS PENDING CONSUMMATION . . . . . . . . . . . . . . . . . . . 21
7.1 Affirmative Covenants of BSC . . . . . . . . . . . . . . . . . . . . . . . 21
7.2 Negative Covenants of BSC . . . . . . . . . . . . . . . . . . . . . . . . 21
7.3 Covenants of NationsBank . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.4 Adverse Changes in Condition . . . . . . . . . . . . . . . . . . . . . . . 24
7.5 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 8 - ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.1 Registration Statement; Proxy Statement; Shareholder Approval . . . . . . 24
8.2 Exchange Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.3 Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.4 Filings with State Offices . . . . . . . . . . . . . . . . . . . . . . . . 25
8.5 Agreement as to Efforts to Consummate . . . . . . . . . . . . . . . . . . 25
8.6 Investigation and Confidentiality . . . . . . . . . . . . . . . . . . . . 25
8.7 Press Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.8 Certain Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.9 Accounting and Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . 27
8.10 State Takeover Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.11 Charter Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.12 Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.13 Agreements of Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.14 Employee Benefits and Contracts . . . . . . . . . . . . . . . . . . . . . 28
8.15 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.16 Bank Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE . . . . . . . . . . . . . . . 29
9.1 Conditions to Obligations of Each Party . . . . . . . . . . . . . . . . . 29
9.2 Conditions to Obligations of NationsBank . . . . . . . . . . . . . . . . . 31
9.3 Conditions to Obligations of BSC . . . . . . . . . . . . . . . . . . . . . 32
</TABLE>
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<TABLE>
<S> <C>
ARTICLE 10 - TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.3 Non-Survival of Representations and Covenants . . . . . . . . . . . . . . 36
ARTICLE 11 - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
11.3 Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
11.4 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
11.5 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
11.6 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
11.7 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
11.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
11.9 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
11.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
11.11 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
11.12 Interpretations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
11.13 Enforcement of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 48
11.14 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
</TABLE>
-iii-
<PAGE> 5
LIST OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
<S> <C>
1. Form of Stock Option Agreement. (Section 1.4).
2. Form of agreement of affiliates of BSC. (Section Section 8.13, 9.2(e)).
3. Bank Plan of Merger. (Section 8.16).
</TABLE>
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<PAGE> 6
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into as of September 4, 1995, by and between BANK SOUTH CORPORATION ("BSC"), a
Georgia corporation having its principal office located in Atlanta, Georgia; and
NATIONSBANK CORPORATION ("NationsBank"), a North Carolina corporation having its
principal office located in Charlotte, North Carolina.
PREAMBLE
The Boards of Directors of BSC and NationsBank are of the opinion that
the transactions described herein are in the best interests of the parties and
their respective shareholders. This Agreement provides for the acquisition of
BSC by NationsBank pursuant to the merger of BSC with and into NationsBank. At
the effective time of such merger, the outstanding shares of the capital stock
of BSC shall be converted into the right to receive shares of the common stock
of NationsBank (except as provided herein). As a result, shareholders of BSC
shall become shareholders of NationsBank. The transactions described in this
Agreement are subject to the approvals of the shareholders of BSC, the Board of
Governors of the Federal Reserve System, the Georgia Department of Banking and
Finance, and the satisfaction of certain other conditions described in this
Agreement. It is the intention of the parties to this Agreement that the Merger
for federal income tax purposes shall qualify as a "reorganization" within the
meaning of Section 368(a) of the Internal Revenue Code, and for accounting
purposes shall qualify for treatment as a pooling of interests.
Immediately after the execution and delivery of this Agreement, as a
condition and inducement to NationsBank's willingness to enter into this
Agreement, BSC and NationsBank are entering into a Stock Option Agreement (the
"Stock Option Agreement"), in substantially the form of Exhibit 1, pursuant to
which BSC is granting to NationsBank an option to purchase shares of BSC Common
Stock.
Certain terms used in this Agreement are defined in Section 11.1 of
this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants, and agreements set forth herein, the parties agree
as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 MERGER. Subject to the terms and conditions of this Agreement,
at the Effective Time, BSC shall be merged with and into NationsBank in
accordance with the provisions of Sections 14-2-1101 and 14-2-1107(a) of the
GBCC and Sections 55-11-01 and 55-11-07(a) of the NCBCA and with the effect
provided in Sections 14-2-1106 and 14-2-1107(b) of the GBCC
-1-
<PAGE> 7
and Sections 55-11-06 and 55-11-07(b) of the NCBCA (the "Merger"). NationsBank
shall be the Surviving Corporation resulting from the Merger and shall continue
to be governed by the Laws of the State of North Carolina. The Merger shall be
consummated pursuant to the terms of this Agreement, which has been approved
and adopted by the respective Boards of Directors of BSC and NationsBank.
1.2 TIME AND PLACE OF CLOSING. The Closing will take place at 9:00
A.M. on the date that the Effective Time occurs (or the immediately preceding
day if the Effective Time is earlier than 9:00 A.M.), or at such other time as
the Parties, acting through their chief executive officers or chief financial
officers, may mutually agree. The place of Closing shall be at such location as
may be mutually agreed upon by the Parties.
1.3 EFFECTIVE TIME. The Merger and other transactions contemplated
by this Agreement shall become effective on the date and at the time the Georgia
Certificate of Merger reflecting the Merger shall become effective with the
Secretary of State of the State of Georgia and the North Carolina Articles of
Merger reflecting the Merger shall become effective with the Secretary of State
of the State of North Carolina (the "Effective Time"). Subject to the terms and
conditions hereof, unless otherwise mutually agreed upon in writing by the chief
executive officers or chief financial officers of each Party, the Parties shall
use their reasonable efforts to cause the Effective Time to occur on or before
the fifth business day (as designated by NationsBank) following the last to
occur of (i) the effective date (including expiration of any applicable waiting
period) of the last required Consent of any Regulatory Authority having
authority over and approving or exempting the Merger, and (ii) the date on which
the shareholders of BSC approve this Agreement to the extent such approval is
required by applicable Law.
1.4 EXECUTION OF STOCK OPTION AGREEMENT. Immediately after the
execution of this Agreement and as a condition thereto, BSC is executing and
delivering to NationsBank the Stock Option Agreement.
ARTICLE 2
TERMS OF MERGER
2.1 CHARTER. The Articles of Incorporation of NationsBank in
effect immediately prior to the Effective Time shall be the Articles of
Incorporation of the Surviving Corporation until otherwise amended or repealed.
2.2 BYLAWS. The Bylaws of NationsBank in effect immediately prior
to the Effective Time shall be the Bylaws of the Surviving Corporation until
otherwise amended or repealed.
-2-
<PAGE> 8
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 CONVERSION OF SHARES. Subject to the provisions of this
Article 3, at the Effective Time, by virtue of the Merger and without any action
on the part of NationsBank or BSC, or the shareholders of either of the
foregoing, the shares of the constituent corporations shall be converted as
follows:
(a) Each share of NationsBank Capital Stock issued and
outstanding immediately prior to the Effective Time shall remain issued
and outstanding from and after the Effective Time.
(b) Each share of BSC Common Stock (including any
associated BSC Rights, but excluding shares held by any BSC Company or
any NationsBank Company, in each case other than in a fiduciary capacity
or as a result of debts previously contracted) issued and outstanding at
the Effective Time shall cease to be outstanding and shall be converted
into and exchanged for 0.44 of a share of NationsBank Common Stock
(subject to possible adjustment pursuant to Section 10.1(g) of this
Agreement, the "Exchange Ratio").
3.2 ANTI-DILUTION PROVISIONS. In the event NationsBank changes the
number of shares of NationsBank Common Stock issued and outstanding prior to the
Effective Time as a result of a stock split, stock dividend, or similar
recapitalization with respect to such stock and the record date therefor (in the
case of a stock dividend) or the effective date thereof (in the case of a stock
split or similar recapitalization for which a record date is not established)
shall be prior to the Effective Time, the Exchange Ratio shall be
proportionately adjusted.
3.3 SHARES HELD BY BSC OR NATIONSBANK. Each of the shares of BSC
Common Stock held by any BSC Company or by any NationsBank Company, in each case
other than in a fiduciary capacity or as a result of debts previously
contracted, shall be canceled and retired at the Effective Time and no
consideration shall be issued in exchange therefor.
3.4 FRACTIONAL SHARES. Notwithstanding any other provision of this
Agreement, each holder of shares of BSC Common Stock exchanged pursuant to the
Merger who would otherwise have been entitled to receive a fraction of a share
of NationsBank Common Stock (after taking into account all certificates
delivered by such holder) shall receive, in lieu thereof, cash (without
interest) in an amount equal to such fractional part of a share of NationsBank
Common Stock multiplied by the market value of one share of NationsBank Common
Stock at the Effective Time. The market value of one share of NationsBank
Common Stock at the Effective Time shall be the closing price of such common
stock on the NYSE-Composite Transactions List (as reported by The Wall Street
Journal or, if not reported thereby, any other authoritative source selected by
NationsBank) on the last trading day preceding the Effective Time. No such
holder will be entitled to dividends, voting rights, or any other rights as a
shareholder in respect of any fractional shares.
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<PAGE> 9
3.5 CONVERSION OF STOCK OPTIONS.
(a) At the Effective Time, each option or other right to
purchase shares of BSC Common Stock pursuant to stock options or stock
appreciation rights ("BSC Options") granted by BSC under the BSC Stock Plans,
which are outstanding at the Effective Time, whether or not exercisable, shall
be converted into and become rights with respect to NationsBank Common Stock,
and NationsBank shall assume each BSC Option, in accordance with the terms of
the BSC Stock Plan and stock option agreement by which it is evidenced, except
that from and after the Effective Time, (i) NationsBank and its Compensation
Committee shall be substituted for BSC and the Committee of BSC's Board of
Directors (including, if applicable, the entire Board of Directors of BSC)
administering such BSC Stock Plan, (ii) each BSC Option assumed by NationsBank
may be exercised solely for shares of NationsBank Common Stock (or cash in the
case of stock appreciation rights), (iii) the number of shares of NationsBank
Common Stock subject to such BSC Option shall be equal to the number of shares
of BSC Common Stock subject to such BSC Option immediately prior to the
Effective Time multiplied by the Exchange Ratio, and (iv) the per share exercise
price under each such BSC Option shall be adjusted by dividing the per share
exercise price under each such BSC Option by the Exchange Ratio and rounding up
to the nearest cent. Notwithstanding the provisions of clause (iii) of the
preceding sentence, NationsBank shall not be obligated to issue any fraction of
a share of NationsBank Common Stock upon exercise of BSC Options and any
fraction of a share of NationsBank Common Stock that otherwise would be subject
to a converted BSC Option shall represent the right to receive a cash payment
equal to the product of such fraction and the difference between the market
value of one share of NationsBank Common Stock and the per share exercise price
of such Option. The market value of one share of NationsBank Common Stock shall
be the closing price of such common stock on the NYSE-Composite Transactions
List (as reported by The Wall Street Journal or, if not reported thereby, any
other authoritative source selected by NationsBank) on the last trading day
preceding the Effective Time. In addition, notwithstanding the provisions of
clauses (iii) and (iv) of the first sentence of this Section 3.5, each BSC
Option which is an "incentive stock option" shall be adjusted as required by
Section 424 of the Internal Revenue Code, and the regulations promulgated
thereunder, so as not to constitute a modification, extension, or renewal of the
option, within the meaning of Section 424(h) of the Internal Revenue Code. BSC
agrees to take all necessary steps to effectuate the foregoing provisions of
this Section 3.5.
(b) As soon as practicable after the Effective Time,
NationsBank shall deliver to the participants in each BSC Stock Plan an
appropriate notice setting forth such participant's rights pursuant thereto and
the grants pursuant to such BSC Stock Plan shall continue in effect on the same
terms and conditions (subject to the adjustments required by Section 3.5(a)
after giving effect to the Merger), and NationsBank shall comply with the terms
of each BSC Stock Plan to ensure, to the extent required by, and subject to the
provisions of, such BSC Stock Plan, that BSC Options which qualified as
incentive stock options prior to the Effective Time continue to qualify as
incentive stock options after the Effective Time. At or prior to the Effective
Time, NationsBank shall take all corporate action necessary to reserve for
issuance sufficient shares of NationsBank Common Stock for delivery upon
exercise of BSC Options assumed by it in accordance with this Section 3.5. As
soon as practicable after the Effective Time, NationsBank
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shall file a registration statement on Form S-3 or Form S-8, as the case may be
(or any successor or other appropriate forms), with respect to the shares of
NationsBank Common Stock subject to such options and shall use its reasonable
efforts to maintain the effectiveness of such registration statements (and
maintain the current status of the prospectus or prospectuses contained
therein) for so long as such options remain outstanding. With respect to those
individuals who subsequent to the Merger will be subject to the reporting
requirements under Section 16(a) of the Exchange Act, where applicable,
NationsBank shall administer the BSC Option Plan assumed pursuant to this
Section 3.5 in a manner that complies with Rule 16b-3 promulgated under the
Exchange Act to the extent the BSC Option Plan complied with such rule prior to
the Merger.
(c) All restrictions or limitations on transfer with
respect to BSC Common Stock awarded under the BSC Stock Plans or any other plan,
program, or arrangement of any BSC Company, to the extent that such restrictions
or limitations shall not have already lapsed, and except as otherwise expressly
provided in such plan, program, or arrangement, shall remain in full force and
effect with respect to shares of NationsBank Common Stock into which such
restricted stock is converted pursuant to Section 3.1 of this Agreement.
ARTICLE 4
EXCHANGE OF SHARES
4.1 EXCHANGE PROCEDURES. Promptly after the Effective Time,
NationsBank and BSC shall cause the exchange agent selected by NationsBank (the
"Exchange Agent") to mail to the former shareholders of BSC appropriate
transmittal materials (which shall specify that delivery shall be effected, and
risk of loss and title to the certificates theretofore representing shares of
BSC Common Stock shall pass, only upon proper delivery of such certificates to
the Exchange Agent). After the Effective Time, each holder of shares of BSC
Common Stock (other than shares to be canceled pursuant to Section 3.3 of this
Agreement) issued and outstanding at the Effective Time shall surrender the
certificate or certificates representing such shares to the Exchange Agent and
shall promptly upon surrender thereof receive in exchange therefor the
consideration provided in Section 3.1 of this Agreement, together with all
undelivered dividends or distributions in respect of such shares (without
interest thereon) pursuant to Section 4.2 of this Agreement. To the extent
required by Section 3.4 of this Agreement, each holder of shares of BSC Common
Stock issued and outstanding at the Effective Time also shall receive, upon
surrender of the certificate or certificates representing such shares, cash in
lieu of any fractional share of NationsBank Common Stock to which such holder
may be otherwise entitled (without interest). NationsBank shall not be
obligated to deliver the consideration to which any former holder of BSC Common
Stock is entitled as a result of the Merger until such holder surrenders such
holder's certificate or certificates representing the shares of BSC Common Stock
for exchange as provided in this Section 4.1. The certificate or certificates
of BSC Common Stock so surrendered shall be duly endorsed as the Exchange Agent
may require. Any other provision of this Agreement notwithstanding, neither the
Surviving Corporation nor the Exchange Agent shall be liable to a holder of BSC
Common Stock for any amounts paid or property delivered in good faith to a
public official pursuant to any applicable abandoned property LAW.
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4.2 RIGHTS OF FORMER BSC SHAREHOLDERS. At the Effective Time, the
stock transfer books of BSC shall be closed as to holders of BSC Common Stock
immediately prior to the Effective Time and no transfer of BSC Common Stock by
any such holder shall thereafter be made or recognized. Until surrendered for
exchange in accordance with the provisions of Section 4.1 of this Agreement,
each certificate theretofore representing shares of BSC Common Stock (other than
shares to be canceled pursuant to Section 3.3 of this Agreement) shall from and
after the Effective Time represent for all purposes only the right to receive
the consideration provided in Sections 3.1 and 3.4 of this Agreement in exchange
therefor, subject, however, to the Surviving Corporation's obligation to pay any
dividends or make any other distributions with a record date prior to the
Effective Time which have been declared or made by BSC in respect of such shares
of BSC Common Stock in accordance with the terms of this Agreement and which
remain unpaid at the Effective Time. Whenever a dividend or other distribution
is declared by NationsBank on the NationsBank Common Stock, the record date for
which is at or after the Effective Time, the declaration shall include dividends
or other distributions on all shares issuable pursuant to this Agreement, but
beginning 30 days after the Effective Time no dividend or other distribution
payable to the holders of record of NationsBank Common Stock as of any time
subsequent to the Effective Time shall be delivered to the holder of any
certificate representing shares of BSC Common Stock issued and outstanding at
the Effective Time until such holder surrenders such certificate for exchange as
provided in Section 4.1 of this Agreement. However, upon surrender of such BSC
Common Stock certificate, both the NationsBank Common Stock certificate
(together with all such undelivered dividends or other distributions without
interest) and any undelivered dividends and cash payments to be paid for
fractional share interests (without interest) shall be delivered and paid with
respect to each share represented by such certificate.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BSC
BSC hereby represents and warrants to NationsBank as follows:
5.1 ORGANIZATION, STANDING, AND POWER. BSC is a corporation duly
organized, validly existing, and in good standing under the Laws of the State of
Georgia, and has the corporate power and authority to carry on its business as
now conducted and to own, lease, and operate its material Assets. BSC is duly
qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on BSC.
5.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) BSC has the corporate power and authority necessary to
execute, deliver, and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery, and
performance of this Agreement and the consummation of the transactions
contemplated herein, including the Merger, have been duly and
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validly authorized by all necessary corporate action in respect thereof on the
part of BSC, subject to the approval of this Agreement by the holders of a
majority of the outstanding shares of BSC Common Stock, which is the only
shareholder vote required for approval of this Agreement and consummation of
the Merger by BSC. Subject to such requisite shareholder approval, this
Agreement represents a legal, valid, and binding obligation of BSC, enforceable
against BSC in accordance with its terms (except in all cases as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement
by BSC, nor the consummation by BSC of the transactions contemplated hereby, nor
compliance by BSC with any of the provisions hereof, will (i) conflict with or
result in a breach of any provision of BSC's Articles of Incorporation or
Bylaws, or, (ii) except as disclosed in Section 5.2(b)(ii) of the BSC Disclosure
Memorandum, constitute or result in a Default under, or require any Consent
pursuant to, or result in the creation of any Lien on any Asset of any BSC
Company under, any Contract or Permit of any BSC Company, where such Default or
Lien, or any failure to obtain such Consent, is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on BSC, or, (iii)
subject to receipt of the requisite Consents referred to in Section 9.1(b) of
this Agreement, violate any Law or Order applicable to any BSC Company or any of
their respective material Assets.
(c) Other than in connection or compliance with the
provisions of the Securities Laws, applicable state corporate and securities
Laws, and rules of the NASD, and other than Consents required from Regulatory
Authorities, and other than notices to or filings with the Internal Revenue
Service or the Pension Benefit Guaranty Corporation with respect to any employee
benefit plans, or under the HSR Act, and other than Consents, filings, or
notifications which, if not obtained or made, are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on BSC, no notice
to, filing with, or Consent of, any public body or authority is necessary for
the consummation by BSC of the Merger and the other transactions contemplated in
this Agreement.
5.3 CAPITAL STOCK.
(a) The authorized capital stock of BSC consists of (i)
100,000,000 shares of BSC Common Stock, of which 58,750,868 shares are issued
and outstanding as of the date of this Agreement and not more than 61,451,063
shares will be issued and outstanding at the Effective Time, and (ii) 5,000,000
shares of preferred stock, par value $25.00 per share, none of which is issued
and outstanding. All of the issued and outstanding shares of capital stock of
BSC are duly and validly issued and outstanding and are fully paid and
nonassessable under the GBCC. None of the outstanding shares of capital stock
of BSC has been issued in violation of any preemptive rights of the current or
past shareholders of BSC. BSC has reserved 4,105,693 shares of BSC Common Stock
for issuance under the BSC Stock Plans, pursuant to which options to purchase
not more than 2,510,195 shares of BSC Common Stock are outstanding.
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(b) Except as set forth in Section 5.3(a) of this
Agreement, or as provided pursuant to the Stock Option Agreement, the BSC
Dividend Reinvestment and Stock Purchase Plan or the BSC Rights Agreement, there
are no shares of capital stock or other equity securities of BSC outstanding and
no outstanding Rights relating to the capital stock of BSC.
5.4 BSC SUBSIDIARIES. BSC has disclosed in Section 5.4 of the BSC
Disclosure Memorandum all of the BSC Subsidiaries as of the date of this
Agreement. Except as disclosed in Section 5.4 of the BSC Disclosure Memorandum,
BSC or one of its Subsidiaries owns all of the issued and outstanding shares of
capital stock of each BSC Subsidiary. No equity securities of any BSC
Subsidiary are or may become required to be issued (other than to another BSC
Company) by reason of any Rights, and there are no Contracts by which any BSC
Subsidiary is bound to issue (other than to another BSC Company) additional
shares of its capital stock or Rights or by which any BSC Company is or may be
bound to transfer any shares of the capital stock of any BSC Subsidiary (other
than to another BSC Company). There are no Contracts relating to the rights of
any BSC Company to vote or to dispose of any shares of the capital stock of any
BSC Subsidiary. All of the shares of capital stock of each BSC Subsidiary held
by a BSC Company are fully paid and nonassessable under the applicable
corporation Law of the jurisdiction in which such Subsidiary is incorporated or
organized and are owned by the BSC Company free and clear of any Lien. Each BSC
Subsidiary is either a bank or a corporation, and is duly organized, validly
existing, and (as to corporations) in good standing under the Laws of the
jurisdiction in which it is incorporated or organized, and has the corporate
power and authority necessary for it to own, lease, and operate its Assets and
to carry on its business as now conducted. Each BSC Subsidiary is duly qualified
or licensed to transact business as a foreign corporation in good standing in
the States of the United States and foreign jurisdictions where the character of
its Assets or the nature or conduct of its business requires it to be so
qualified or licensed, except for such jurisdictions in which the failure to be
so qualified or licensed is not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on BSC. Each BSC Subsidiary that is a
depository institution is an "insured institution" as defined in the Federal
Deposit Insurance Act and applicable regulations thereunder, and the deposits in
which are insured by the Bank Insurance Fund or Savings Association Insurance
Fund.
5.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) BSC has filed and made available to NationsBank all
forms, reports, and documents required to be filed by BSC with the SEC since
December 31, 1992 (collectively, the "BSC SEC Reports"). The BSC SEC Reports
(i) at the time filed, complied in all material respects with the applicable
requirements of the Securities Act and the Exchange Act, as the case may be, and
(ii) did not at the time they were filed (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a material fact or omit to state a material fact
required to be stated in such BSC SEC Reports or necessary in order to make the
statements in such BSC SEC Reports, in light of the circumstances under which
they were made, not misleading. Except for BSC Subsidiaries that are registered
as a broker, dealer or investment advisor, none of BSC's Subsidiaries is
required to file any forms, reports, or other documents with the SEC.
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(b) Each of the BSC Financial Statements (including, in
each case, any related notes) contained in the BSC SEC Reports, including any
BSC SEC Reports filed after the date of this Agreement until the Effective Time,
complied as to form in all material respects with the applicable published rules
and regulations of the SEC with respect thereto, was prepared in accordance with
GAAP applied on a consistent basis throughout the periods involved (except as
may be indicated in the notes to such financial statements, or, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC), and fairly
presented the consolidated financial position of BSC and its Subsidiaries as at
the respective dates and the consolidated results of its operations and cash
flows for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not or are not expected to be material in amount.
5.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since June 30, 1995,
except as disclosed in Section 5.6 of the BSC Disclosure Memorandum, (i) there
have been no events, changes, or occurrences which have had, or are reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
BSC, and (ii) the BSC Companies have not taken any action, or failed to take any
action, prior to the date of this Agreement, which action or failure, if taken
after the date of this Agreement, would represent or result in a material breach
or violation of any of the covenants and agreements of BSC provided in Article 7
of this Agreement.
5.7 TAX MATTERS.
(a) All Tax Returns required to be filed by or on behalf
of any of the BSC Companies have been timely filed or requests for extensions
have been timely filed, granted, and have not expired for periods ended on or
before December 31, 1994, and on or before the date of the most recent fiscal
year end immediately preceding the Effective Time, except to the extent that all
such failures to file, taken together, are not reasonably likely to have a
Material Adverse Effect on BSC, and all Tax Returns filed are complete and
accurate in all material respects. All Taxes shown on filed Tax Returns have
been paid. There is no audit examination, deficiency, or refund Litigation with
respect to any Taxes that is reasonably likely to result in a determination that
would have, individually or in the aggregate, a Material Adverse Effect on BSC,
except as reserved against in the BSC Financial Statements delivered prior to
the date of this Agreement or as disclosed in Section 5.7 of the BSC Disclosure
Memorandum. All Taxes and other Liabilities due with respect to completed and
settled examinations or concluded Litigation have been paid.
(b) Except as disclosed in Section 5.7 of the BSC
Disclosure Memorandum, none of the BSC Companies has executed an extension or
waiver of any statute of limitations on the assessment or collection of any Tax
due that is currently in effect.
(c) Adequate provision for any Taxes due or to become due
for any of the BSC Companies for the period or periods through and including the
date of the respective BSC Financial Statements has been made and is reflected
on such BSC Financial Statements, except as disclosed in Section 5.7 of the BSC
Disclosure Memorandum.
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(d) Deferred Taxes of the BSC Companies have been
adequately provided for in the BSC Financial Statements.
(e) Each of the BSC Companies is in compliance with, and
its records contain all information and documents (including properly completed
IRS Forms W-9) necessary to comply with, all applicable information reporting
and Tax withholding requirements under federal, state, and local Tax Laws, and
such records identify with specificity all accounts subject to backup
withholding under Section 3406 of the Internal Revenue Code, except for such
instances of noncompliance and such omissions as are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on BSC.
(f) Except as disclosed in Section 5.7 of the BSC
Disclosure Memorandum, none of the BSC Companies has made any payments, is
obligated to make any payments, or is a party to any contract, agreement, or
other arrangement that could obligate it to make any payments that would be
disallowed as a deduction under Section 280G or 162(m) of the Internal Revenue
Code.
(g) There are no Liens with respect to Taxes upon any of
the assets of the BSC Companies.
(h) There has not been an ownership change, as defined in
Internal Revenue Code Section 382(g), of the BSC Companies that occurred during
or after any Taxable Period in which the BSC Companies incurred a net operating
loss that carries over to any Taxable Period ending after December 31, 1994.
(i) No BSC Company has filed any consent under Section
341(f) of the Internal Revenue Code concerning collapsible corporation.
(j) All material elections with respect to Taxes affecting
the BSC Companies as of the date of this Agreement have been or will be timely
made as set forth in Section 5.7 of the BSC Disclosure Memorandum. After the
date hereof, other than as set forth in Section 5.7 of the BSC Disclosure
Memorandum, no election with respect to Taxes will be made without the prior
written consent of NationsBank, which consent will not be unreasonably withheld.
(k) No BSC Company has or has had a permanent
establishment in any foreign country, as defined in any applicable tax treaty
or convention between the United States and such foreign country.
5.8 ASSETS. Except as disclosed in Section 5.8 of the BSC
Disclosure Memorandum, the BSC Companies have good and marketable title, free
and clear of all Liens, to all of their respective Assets. All tangible
properties used in the businesses of the BSC Companies are in good condition,
reasonable wear and tear excepted, and are usable in the ordinary course of
business consistent with BSC's past practices. All Assets which are material to
BSC's business on a consolidated basis, held under leases or subleases by any of
the BSC Companies, are held under valid Contracts enforceable in accordance with
their respective terms
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(except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceedings may be brought), and each
such Contract is in full force and effect. The BSC Companies currently
maintain insurance similar in amounts, scope, and coverage to that maintained
by other peer banking organizations. None of the BSC Companies has received
notice from any insurance carrier that (i) such insurance will be canceled or
that coverage thereunder will be reduced or eliminated, or (ii) premium costs
with respect to such policies of insurance will be substantially increased.
Except as disclosed in Section 5.8 of the BSC Disclosure Memorandum, there are
presently no claims pending under such policies of insurance and no notices
have been given by any BSC Company under such policies. The Assets of the BSC
Companies include all Assets required to operate the business of the BSC
Companies as presently conducted.
5.9 ENVIRONMENTAL MATTERS.
(a) To the Knowledge of BSC, except as disclosed in
Section 5.9 of the BSC Disclosure Memorandum, each BSC Company, its
Participation Facilities, and its Loan Properties are, and have been, in
compliance with all Environmental Laws, except for violations which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on BSC.
(b) Except as disclosed in Section 5.9 of the BSC
Disclosure Memorandum, there is no Litigation pending, or, to the Knowledge of
BSC, threatened before any court, governmental agency, or authority or other
forum in which any BSC Company or any of its Loan Properties or Participation
Facilities (or any BSC Company in respect of any such Loan Property or
Participation Facility) has been or, with respect to threatened Litigation, may
be named as a defendant or potentially responsible party (i) for alleged
noncompliance (including by any predecessor) with any Environmental Law or (ii)
relating to the release into the environment of any Hazardous Material, whether
or not occurring at, on, under, or involving any of its Loan Properties or
Participation Facilities, except for such Litigation pending or threatened that
is not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on BSC.
(c) To the Knowledge of BSC, except as disclosed in
Section 5.9 of the BSC Disclosure Memorandum, there is no reasonable basis
for any Litigation of a type described in subsections (b) or (c), except such
as is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on BSC.
(d) To the Knowledge of BSC, except as disclosed in
Section 5.9 of the BSC Disclosure Memorandum, there have been no releases of
Hazardous Material in, on, under, or affecting any Participation Facility or
Loan Property of a BSC Company, except such as are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on BSC.
5.10 COMPLIANCE WITH LAWS. BSC is duly registered as a bank holding
company under the BHC Act. Each BSC Company has in effect all Permits necessary
for it to own, lease, or operate its material Assets and to carry on its
business as now conducted, except for those
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Permits the absence of which are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on BSC, and there has occurred no
Default under any such Permit, other than Defaults which are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
BSC. None of the BSC Companies:
(a) is in violation of any Laws, Orders, or Permits
applicable to its business or employees conducting its business, except
for violations which are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on BSC; and
(b) has received any notification or communication from
any agency or department of federal, state, or local government or any
Regulatory Authority or the staff thereof (i) asserting that any BSC
Company is not in compliance with any of the Laws or Orders which such
governmental authority or Regulatory Authority enforces, where such
noncompliance is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on BSC, (ii) threatening to revoke
any Permits, the revocation of which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on BSC, or
(iii) requiring any BSC Company to enter into or consent to the issuance
of a cease and desist order, formal agreement, directive, commitment, or
memorandum of understanding, or to adopt any Board resolution or similar
undertaking, which restricts materially the conduct of its business, or
in any manner relates to its capital adequacy, its credit or reserve
policies, its management, or the payment of dividends.
5.11 LABOR RELATIONS. No BSC Company is the subject of any
Litigation asserting that it or any other BSC Company has committed an unfair
labor practice (within the meaning of the National Labor Relations Act or
comparable state law) or seeking to compel it or any other BSC Company to
bargain with any labor organization as to wages or conditions of employment, nor
is there any strike or other labor dispute involving any BSC Company, pending or
threatened, or to the Knowledge of BSC, is there any activity involving any BSC
Company's employees seeking to certify a collective bargaining unit or engaging
in any other organization activity.
5.12 EMPLOYEE BENEFIT PLANS.
(a) BSC has disclosed in Section 5.12 of the BSC
Disclosure Memorandum, and has delivered or made available to NationsBank prior
to the execution of this Agreement copies in each case of, all pension,
retirement, profit-sharing, deferred compensation, stock option, employee stock
ownership, severance pay, vacation, bonus, or other incentive plan, all other
written employee programs, arrangements, or agreements, all medical, vision,
dental, or other health plans, all life insurance plans, and all other employee
benefit plans or fringe benefit plans, including "employee benefit plans" as
that term is defined in Section 3(3) of ERISA, currently adopted, maintained by,
sponsored in whole or in part by, or contributed to by any BSC Company or ERISA
Affiliate (as defined below) thereof for the benefit of employees, retirees,
dependents, spouses, directors, independent contractors, or other beneficiaries
and under which employees, retirees, dependents, spouses, directors, independent
contractors, or other beneficiaries are eligible to participate (collectively,
the "BSC Benefit Plans"). Any of the BSC Benefit Plans which is an "employee
pension benefit plan," as that term is defined in Section 3(2)
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of ERISA, is referred to herein as a "BSC ERISA Plan." Each BSC ERISA Plan
which is also a "defined benefit plan" (as defined in Section 414(j) of the
Internal Revenue Code) is referred to herein as a "BSC Pension Plan." No BSC
Pension Plan is or has been a multiemployer plan within the meaning of Section
3(37) of ERISA.
(b) Except as disclosed in Section 5.12 of the BSC
Disclosure Memorandum, all BSC Benefit Plans are in compliance with the
applicable terms of ERISA, the Internal Revenue Code, and any other applicable
Laws the breach or violation of which are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on BSC, and each BSC
ERISA Plan which is intended to be qualified under Section 401(a) of the
Internal Revenue Code has received a favorable determination letter from the
Internal Revenue Service, and BSC is not aware of any circumstances likely to
result in revocation of any such favorable determination letter. Except as
disclosed in Section 5.12 of the BSC Disclosure Memorandum, to the Knowledge of
BSC, no BSC Company has engaged in a transaction with respect to any BSC Benefit
Plan that, assuming the taxable period of such transaction expired as of the
date hereof, would subject any BSC Company to a Tax imposed by either Section
4975 of the Internal Revenue Code or Section 502(i) of ERISA in amounts which
are reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on BSC.
(c) Except as disclosed in Section 5.12 of the BSC
Disclosure Memorandum, no BSC Pension Plan has any "unfunded current liability,"
as that term is defined in Section 302(d)(8)(A) of ERISA, and the fair market
value of the assets of any such plan exceeds the plan's "benefit liabilities,"
as that term is defined in Section 4001(a)(16) of ERISA, when determined under
actuarial factors that would apply if the plan terminated in accordance with all
applicable legal requirements. Except as disclosed in Section 5.12 of the BSC
Disclosure Memorandum, since the date of the most recent actuarial valuation,
there has been (i) no material change in the financial position of any BSC
Pension Plan, (ii) no change in the actuarial assumptions with respect to any
BSC Pension Plan, and (iii) no increase in benefits under any BSC Pension Plan
as a result of plan amendments or changes in applicable Law which is reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
BSC or materially adversely affect the funding status of any such plan. Neither
any BSC Pension Plan nor any "single-employer plan," within the meaning of
Section 4001(a)(15) of ERISA, currently or formerly maintained by any BSC
Company, or the single- employer plan of any entity which is considered one
employer with BSC under Section 4001 of ERISA or Section 414 of the Internal
Revenue Code or Section 302 of ERISA (whether or not waived) (an "ERISA
Affiliate") has an "accumulated funding deficiency" within the meaning of
Section 412 of the Internal Revenue Code or Section 302 of ERISA, which is
reasonably likely to have a Material Adverse Effect on BSC. No BSC Company has
provided, or is required to provide, security to a BSC Pension Plan or to any
single-employer plan of an ERISA Affiliate pursuant to Section 401(a)(29) of the
Internal Revenue Code.
(d) Within the six-year period preceding the Effective
Time, no Liability under Subtitle C or D of Title IV of ERISA has been or is
expected to be incurred by any BSC Company with respect to any ongoing, frozen,
or terminated single-employer plan or the single-employer plan of any ERISA
Affiliate, which Liability is reasonably likely to have a Material Adverse
Effect on BSC. No BSC Company has incurred any withdrawal Liability with
respect to
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a multiemployer plan under Subtitle B of Title IV of ERISA (regardless of
whether based on contributions of an ERISA Affiliate), which Liability is
reasonably likely to have a Material Adverse Effect on BSC. No notice of a
"reportable event," within the meaning of Section 4043 of ERISA for which the
30-day reporting requirement has not been waived, has been required to be filed
for any BSC Pension Plan or by any ERISA Affiliate within the 12-month period
ending on the date hereof.
(e) Except as disclosed in Section 5.12 of the BSC
Disclosure Memorandum, no BSC Company has any Liability for retiree health and
life benefits under any of the BSC Benefit Plans and there are no restrictions
on the rights of such BSC Company to amend or terminate any such Plan without
incurring any Liability thereunder, which Liability is reasonably likely to have
a Material Adverse Effect on BSC.
(f) Except as disclosed in Section 5.12 of the BSC
Disclosure Memorandum, neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will (i) result in any
payment (including severance, unemployment compensation, golden parachute, or
otherwise) becoming due to any director or any employee of any BSC Company from
any BSC Company under any BSC Benefit Plan or otherwise, (ii) increase any
benefits otherwise payable under any BSC Benefit Plan, or (iii) result in any
acceleration of the time of payment or vesting of any such benefit, where such
payment, increase, or acceleration is reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on BSC.
(g) The actuarial present values of all accrued deferred
compensation entitlements (including entitlements under any executive
compensation, supplemental retirement, or employment agreement) of employees and
former employees of any BSC Company and their respective beneficiaries, other
than entitlements accrued pursuant to funded retirement plans subject to the
provisions of Section 412 of the Internal Revenue Code or Section 302 of ERISA,
have been fully reflected on the BSC Financial Statements to the extent required
by and in accordance with GAAP.
5.13 MATERIAL CONTRACTS. Except as disclosed in Section 5.13 of the
BSC Disclosure Memorandum, none of the BSC Companies, nor any of their
respective Assets, businesses, or operations, is a party to, or is bound or
affected by, or receives benefits under, (i) any employment, severance,
termination, consulting, or retirement Contract providing for aggregate payments
to any Person in any calendar year in excess of $100,000, (ii) any Contract
relating to the borrowing of money by any BSC Company or the guarantee by any
BSC Company of any such obligation (other than Contracts evidencing deposit
liabilities, purchases of federal funds, fully-secured repurchase agreements,
and Federal Home Loan Bank advances of depository institution Subsidiaries,
trade payables, and Contracts relating to borrowings or guarantees made in the
ordinary course of business), and (iii) any other Contract or amendment thereto
that would be required to be filed as an exhibit to a Form 10-K filed by BSC
with the SEC as of the date of this Agreement that has not been filed as an
exhibit to BSC's Form 10-K filed for the fiscal year ended December 31, 1994, or
in another SEC Document and identified to NationsBank (together with all
Contracts referred to in Sections 5.8 and 5.12(a) of this Agreement, the "BSC
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Contracts"). With respect to each BSC Contract and except as disclosed in
Section 5.13 of the BSC Disclosure Memorandum: (i) the Contract is in full
force and effect; (ii) no BSC Company is in Default thereunder, other than
Defaults which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on BSC; (iii) no BSC Company has
repudiated or waived any material provision of any such Contract; and (iv) no
other party to any such Contract is, to the Knowledge of BSC, in Default in any
respect, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on BSC, or has
repudiated or waived any material provision thereunder. Except for Federal
Home Loan Bank advances, all of the indebtedness of any BSC Company for money
borrowed is prepayable at any time by such BSC Company without penalty or
premium.
5.14 LEGAL PROCEEDINGS. Except as disclosed in Section 5.14 of the
BSC Disclosure Memorandum, there is no Litigation instituted or pending, or, to
the Knowledge of BSC, threatened (or unasserted but considered probable of
assertion and which if asserted would have at least a reasonable probability of
an unfavorable outcome) against any BSC Company, or against any Asset, employee
benefit plan, interest, or right of any of them, that is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on BSC, nor
are there any Orders of any Regulatory Authorities, other governmental
authorities, or arbitrators outstanding against any BSC Company, that are
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on BSC. Section 5.14 of the BSC Disclosure Memorandum includes a summary
report of all Litigation as of the date of this Agreement to which any BSC
Company is a party and which names a BSC Company as a defendant or
cross-defendant and where the estimated maximum exposure to be $300,000 or more.
5.15 REPORTS. Since January 1, 1992, or the date of organization if
later, each BSC Company has timely filed all reports and statements, together
with any amendments required to be made with respect thereto, that it was
required to file with any Regulatory Authorities (except, in the case of state
securities authorities, failures to file which are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on BSC). As
of their respective dates, each of such reports and documents, including the
financial statements, exhibits, and schedules thereto, complied in all material
respects with all applicable Laws. As of its respective date, each such report
and document did not, in all material respects, contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
5.16 STATEMENTS TRUE AND CORRECT. None of the information supplied
or to be supplied by any BSC Company or any Affiliate thereof for inclusion in
the Registration Statement to be filed by NationsBank with the SEC will, when
the Registration Statement becomes effective, be false or misleading with
respect to any material fact, or omit to state any material fact necessary to
make the statements therein not misleading. None of the information supplied or
to be supplied by any BSC Company or any Affiliate thereof for inclusion in the
Proxy Statement to be mailed to BSC's shareholders in connection with the
Shareholders' Meeting, and any other documents to be filed by a BSC Company or
any Affiliate thereof with the SEC or any other Regulatory Authority in
connection with the transactions contemplated hereby, will, at the
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respective time such documents are filed, and with respect to the Proxy
Statement, when first mailed to the shareholders of BSC, be false or misleading
with respect to any material fact, or omit to state any material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, or, in the case of the Proxy Statement or any
amendment thereof or supplement thereto, at the time of the Shareholders'
Meeting, be false or misleading with respect to any material fact, or omit to
state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of any proxy for the
Shareholders' Meeting. All documents that any BSC Company or any Affiliate
thereof is responsible for filing with any Regulatory Authority in connection
with the transactions contemplated hereby will comply as to form in all
material respects with the provisions of applicable Law.
5.17 ACCOUNTING, TAX, AND REGULATORY MATTERS. No BSC Company or any
Affiliate thereof has taken or agreed to take any action or has any Knowledge of
any fact or circumstance that is reasonably likely to (i) prevent the
transactions contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment or as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code, or (ii) materially
impede or delay receipt of any Consents of Regulatory Authorities referred to in
Section 9.1(b) of this Agreement or result in the imposition of a condition or
restriction of the type referred to in the last sentence of such Section.
5.18 STATE TAKEOVER LAWS. Each BSC Company has taken all necessary
action to exempt the transactions contemplated by this Agreement from any
applicable "moratorium," "control share," "fair price," "business combination,"
or other anti-takeover laws and regulations of the State of Georgia
(collectively, "Takeover Laws"), including Sections 14-2-1111 and 14-2-1132 of
the GBCC.
5.19 CHARTER PROVISIONS. Each BSC Company has taken all action so
that the entering into of this Agreement and the consummation of the Merger and
the other transactions contemplated by this Agreement do not and will not result
in the grant of any rights to any Person under the Articles of Incorporation,
Bylaws, or other governing instruments of any BSC Company or restrict or impair
the ability of NationsBank or any of its Subsidiaries to vote, or otherwise to
exercise the rights of a shareholder with respect to, shares of any BSC Company
that may be directly or indirectly acquired or controlled by it.
5.20 RIGHTS AGREEMENT. BSC has taken all necessary action
(including, if required, redeeming all of the outstanding BSC Rights or amending
or terminating the BSC Rights Agreement) so that the entering into of this
Agreement and consummation of the Merger and the other transactions contemplated
hereby do not and will not result in the ability of any Person to exercise any
BSC Rights under the BSC Rights Agreement or enable or require the BSC Rights to
be separated from the shares of BSC Common Stock to which they are attached or
to be triggered or become exercisable.
5.21 DERIVATIVES CONTRACTS. Neither BSC nor any of its Subsidiaries
is a party to or has agreed to enter into an exchange-traded or
over-the-counter swap, forward, future, option,
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cap, floor, or collar financial contract, or any other interest rate or foreign
currency protection contract not included on its balance sheet which is a
financial derivative contract (including various combinations thereof) (each a
"Derivatives Contract"), except for those Derivatives Contracts set forth in
Section 5.21 of the BSC Disclosure Memorandum.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF NATIONSBANK
NationsBank hereby represents and warrants to BSC as follows:
6.1 ORGANIZATION, STANDING, AND POWER. NationsBank is a
corporation duly organized, validly existing, and in good standing under the
Laws of the State of North Carolina, and has the corporate power and authority
to carry on its business as now conducted and to own, lease, and operate its
material Assets. NationsBank is duly qualified or licensed to transact business
as a foreign corporation in good standing in the States of the United States and
foreign jurisdictions where the character of its Assets or the nature or conduct
of its business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on NationsBank.
6.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) NationsBank has the corporate power and authority
necessary to execute, deliver, and perform its obligations under this Agreement
and to consummate the transactions contemplated hereby. The execution,
delivery, and performance of this Agreement and the consummation of the
transactions contemplated herein, including the Merger, have been duly and
validly authorized by all necessary corporate action in respect thereof on the
part of NationsBank. Subject to such requisite shareholder approval, this
Agreement represents a legal, valid, and binding obligation of NationsBank,
enforceable against NationsBank in accordance with its terms (except in all
cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar Laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement
by NationsBank, nor the consummation by NationsBank of the transactions
contemplated hereby, nor compliance by NationsBank with any of the provisions
hereof, will (i) conflict with or result in a breach of any provision of
NationsBank's Articles of Incorporation or Bylaws, or (ii) constitute or result
in a Default under, or require any Consent pursuant to, or result in the
creation of any Lien on any Asset of any NationsBank Company under, any Contract
or Permit of any NationsBank Company, where such Default or Lien, or any failure
to obtain such Consent, is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on NationsBank, or, (iii) subject to
receipt of the requisite Consents referred to in Section 9.1(b) of this
Agreement,
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violate any Law or Order applicable to any NationsBank Company or any of their
respective material Assets.
(c) Other than in connection or compliance with the
provisions of the Securities Laws, applicable state corporate and securities
Laws, and rules of the NYSE, and other than Consents required from Regulatory
Authorities, and other than notices to or filings with the Internal Revenue
Service or the Pension Benefit Guaranty Corporation with respect to any employee
benefit plans, or under the HSR Act, and other than Consents, filings, or
notifications which, if not obtained or made, are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on NationsBank, no
notice to, filing with, or Consent of, any public body or authority is necessary
for the consummation by NationsBank of the Merger and the other transactions
contemplated in this Agreement.
6.3 CAPITAL STOCK. The authorized capital stock of NationsBank
consists of (i) 800,000,000 shares of NationsBank Common Stock, of which
270,039,586 shares were issued and outstanding as of July 31, 1995, and (ii)
45,000,000 shares of NationsBank Preferred Stock, of which 2,553,552 shares of
ESOP Convertible Preferred Stock, Series C, were issued and outstanding as of
June 30, 1995. All of the issued and outstanding shares of NationsBank Capital
Stock are, and all of the shares of NationsBank Common Stock to be issued in
exchange for shares of BSC Common Stock upon consummation of the Merger, when
issued in accordance with the terms of this Agreement, will be, duly and validly
issued and outstanding and fully paid and nonassessable under the NCBCA. None
of the outstanding shares of NationsBank Capital Stock has been, and none of the
shares of NationsBank Common Stock to be issued in exchange for shares of BSC
Common Stock upon consummation of the Merger will be, issued in violation of any
preemptive rights of the current or past shareholders of NationsBank.
6.4 SEC FILINGS; FINANCIAL STATEMENTS.
(a) NationsBank has filed and made available to BSC all
forms, reports, and documents required to be filed by NationsBank with the SEC
since December 31, 1992, other than registration statements on Forms S-4 and S-8
(collectively, the "NationsBank SEC Reports"). The NationsBank SEC Reports (i)
at the time filed, complied in all material respects with the applicable
requirements of the Securities Act and the Exchange Act, as the case may be, and
(ii) did not at the time they were filed (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a material fact or omit to state a material fact
required to be stated in such NationsBank SEC Reports or necessary in order to
make the statements in such NationsBank SEC Reports, in light of the
circumstances under which they were made, not misleading.
(b) Each of the NationsBank Financial Statements
(including, in each case, any related notes) contained in the NationsBank SEC
Reports, including any NationsBank SEC Reports filed after the date of this
Agreement until the Effective Time, complied as to form in all material respects
with the applicable published rules and regulations of the SEC with respect
thereto, was prepared in accordance with GAAP applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes to such
financial statements or, in the
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case of unaudited statements, as permitted by Form 10-Q of the SEC), and fairly
presented the consolidated financial position of NationsBank and its
Subsidiaries as at the respective dates and the consolidated results of its
operations and cash flows for the periods indicated, except that the unaudited
interim financial statements were or are subject to normal and recurring
year-end adjustments which were not or are not expected to be material in
amount.
6.5 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since June 30, 1995,
except as disclosed in the NationsBank Financial Statements delivered prior to
the date of this Agreement, (i) there have been no events, changes or
occurrences which have had, or are reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on NationsBank, and (ii) the
NationsBank Companies have not taken any action, or failed to take any action,
prior to the date of this Agreement, which action or failure, if taken after the
date of this Agreement, would represent or result in a material breach or
violation of any of the covenants and agreements of NationsBank provided in
Article 7 of this Agreement.
6.6 TAX MATTERS.
(a) All Tax Returns required to be filed by or on behalf
of any of the NationsBank Companies have been timely filed or requests for
extensions have been timely filed, granted, and have not expired for periods
ended on or before December 31, 1994, and on or before the date of the most
recent fiscal year end immediately preceding the Effective Time, except to the
extent that all such failures to file, taken together, are not reasonably likely
to have a Material Adverse Effect on NationsBank, and all Tax Returns filed are
complete and accurate in all material respects. All Taxes shown on filed Tax
Returns have been paid. There is no audit examination, deficiency, or refund
Litigation with respect to any Taxes that is reasonably likely to result in a
determination that would have, individually or in the aggregate, a Material
Adverse Effect on NationsBank, except as reserved against in the NationsBank
Financial Statements delivered prior to the date of this Agreement. All Taxes
and other Liabilities due with respect to completed and settled examinations or
concluded Litigation have been paid.
(b) Adequate provision for any Taxes due or to become due
for any of the NationsBank Companies for the period or periods through and
including the date of the respective NationsBank Financial Statements has been
made and is reflected on such NationsBank Financial Statements.
(c) Deferred Taxes of the NationsBank Companies have been
adequately provided for in the NationsBank Financial Statements.
6.7 COMPLIANCE WITH LAWS. NationsBank is duly registered as a bank
holding company under the BHC Act. Each NationsBank Company has in effect all
Permits necessary for it to own, lease, or operate its material Assets and to
carry on its business as now conducted, except for those Permits the absence of
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on NationsBank, and there has occurred no Default under
any such Permit, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on NationsBank. No
NationsBank Company:
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<PAGE> 25
(a) is in violation of any Laws, Orders, or Permits
applicable to its business or employees conducting its business, except
for violations which are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on NationsBank; and
(b) has received any notification or communication from
any agency or department of federal, state, or local government or any
Regulatory Authority or the staff thereof (i) asserting that any
NationsBank Company is not in compliance with any of the Laws or Orders
which such governmental authority or Regulatory Authority enforces,
where such noncompliance is reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on NationsBank, (ii)
threatening to revoke any Permits, the revocation of which is reasonably
likely to have, individually or in the aggregate, a Material Adverse
Effect on NationsBank, or (iii) requiring any NationsBank Company to
enter into or consent to the issuance of a cease and desist order,
formal agreement, directive, commitment, or memorandum of understanding,
or to adopt any Board resolution or similar undertaking, which restricts
materially the conduct of its business, or in any manner relates to its
capital adequacy, its credit or reserve policies, its management, or the
payment of dividends.
6.8 LEGAL PROCEEDINGS. There is no Litigation instituted or
pending, or, to the Knowledge of NationsBank, threatened (or unasserted but
considered probable of assertion and which if asserted would have at least a
reasonable probability of an unfavorable outcome) against any NationsBank
Company, or against any Asset, interest, or right of any of them, that is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on NationsBank, nor are there any Orders of any Regulatory Authorities,
other governmental authorities, or arbitrators outstanding against any
NationsBank Company, that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on NationsBank.
6.9 REPORTS. Since January 1, 1992, or the date of organization if
later, each NationsBank Company has filed all reports and statements, together
with any amendments required to be made with respect thereto, that it was
required to file with Regulatory Authorities (except, in the case of state
securities authorities, failures to file which are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on
NationsBank). As of their respective dates, each of such reports and documents,
including the financial statements, exhibits, and schedules thereto, complied in
all material respects with all applicable Laws. As of its respective date, each
such report and document did not, in all material respects, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
6.10 STATEMENTS TRUE AND CORRECT. None of the information supplied
or to be supplied by any NationsBank Company or any Affiliate thereof for
inclusion in the Registration Statement to be filed by NationsBank with the SEC,
will, when the Registration Statement becomes effective, be false or misleading
with respect to any material fact, or omit to state any material fact necessary
to make the statements therein not misleading. None of the information
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supplied or to be supplied by any NationsBank Company or any Affiliate thereof
for inclusion in the Proxy Statement to be mailed to BSC's shareholders in
connection with the Shareholders' Meeting, and any other documents to be filed
by any NationsBank Company or any Affiliate thereof with the SEC or any other
Regulatory Authority in connection with the transactions contemplated hereby,
will, at the respective time such documents are filed, and with respect to the
Proxy Statement, when first mailed to the shareholders of BSC, be false or
misleading with respect to any material fact, or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, or, in the case of the Proxy
Statement or any amendment thereof or supplement thereto, at the time of the
Shareholders' Meeting, be false or misleading with respect to any material
fact, or omit to state any material fact necessary to correct any statement in
any earlier communication with respect to the solicitation of any proxy for the
Shareholders' Meeting. All documents that any NationsBank Company or any
Affiliate thereof is responsible for filing with any Regulatory Authority in
connection with the transactions contemplated hereby will comply as to form in
all material respects with the provisions of applicable Law.
6.11 TAX AND REGULATORY MATTERS. No NationsBank Company or any
Affiliate thereof has taken or agreed to take any action or has any Knowledge of
any fact or circumstance that is reasonably likely to (i) prevent the
transactions contemplated hereby, including the Merger, from qualifying as a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code, or (ii) materially impede or delay receipt of any Consents of Regulatory
Authorities referred to in Section 9.1(b) of this Agreement or result in the
imposition of a condition or restriction of the type referred to in the last
sentence of such Section.
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 AFFIRMATIVE COVENANTS OF BSC. Unless the prior written consent
of NationsBank shall have been obtained, and except as otherwise expressly
contemplated herein, BSC shall and shall cause each of its Subsidiaries to (i)
operate its business only in the usual, regular, and ordinary course, (ii)
preserve intact its business organization and Assets and maintain its rights and
franchises, (iii) use its reasonable efforts to maintain its current employee
relationships, and (iv) take no action which would (a) adversely affect the
ability of any Party to obtain any Consents required for the transactions
contemplated hereby without imposition of a condition or restriction of the type
referred to in the last sentence of Section 9.1(b) of this Agreement, or (b)
adversely affect the ability of any Party to perform its covenants and
agreements under this Agreement.
7.2 NEGATIVE COVENANTS OF BSC. From the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement,
BSC covenants and agrees that it will not do or agree or commit to do, or permit
any of its Subsidiaries to do or agree or commit to do, any of the following
without the prior written consent of the chief executive officer, president,
chief financial officer, or any executive vice president of NationsBank:
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(a) amend the Articles of Incorporation, Bylaws, or other
governing instruments of any BSC Company or, except as expressly
contemplated by this Agreement, the BSC Rights Agreement, or
(b) incur any additional debt obligation or other
obligation for borrowed money (other than indebtedness of a BSC Company
to another BSC Company) in excess of an aggregate of $500,000 (for the
BSC Companies on a consolidated basis) except in the ordinary course of
the business of BSC Subsidiaries consistent with past practices (which
shall include, for BSC Subsidiaries that are depository institutions,
creation of deposit liabilities, purchases of federal funds, advances
from the Federal Reserve Bank or Federal Home Loan Bank, and entry into
repurchase agreements fully secured by U.S. government or agency
securities), or impose, or suffer the imposition, on any Asset of any
BSC Company of any Lien or permit any such Lien to exist (other than in
connection with deposits, repurchase agreements, bankers acceptances,
"treasury tax and loan" accounts established in the ordinary course of
business, the satisfaction of legal requirements in the exercise of
trust powers, and Liens in effect as of the date hereof that are
disclosed in the BSC Disclosure Memorandum); or
(c) repurchase, redeem, or otherwise acquire or exchange
(other than exchanges in the ordinary course under employee benefit
plans), directly or indirectly, any shares, or any securities
convertible into any shares, of the capital stock of any BSC Company, or
declare or pay any dividend or make any other distribution in respect of
BSC's capital stock, provided that BSC may (to the extent legally and
contractually permitted to do so), but shall not be obligated to,
declare and pay regular quarterly cash dividends on the shares of BSC
Common Stock at a rate not in excess of $.14 per share with usual and
regular record and payment dates in accordance with past practice
disclosed in Section 7.2(c) of the BSC Disclosure Memorandum and such
dates may not be changed without the prior written consent of
NationsBank; provided, that, notwithstanding the provisions of Section
1.3, the Parties shall cooperate in selecting the Effective Time to
ensure that, with respect to the quarterly period in which the Effective
Time occurs, the holders of BSC Common Stock do not receive both a
dividend in respect of their BSC Common Stock and a dividend in respect
of NationsBank Common Stock or fail to receive any dividend; or
(d) except for this Agreement, or pursuant to the Stock
Option Agreement or pursuant to the exercise of stock options
outstanding as of the date hereof and pursuant to the terms thereof in
existence on the date hereof, or as disclosed in Section 7.2(d) of the
BSC Disclosure Memorandum, issue, sell, pledge, encumber, authorize the
issuance of, enter into any Contract to issue, sell, pledge, encumber,
or authorize the issuance of, or otherwise permit to become outstanding,
any additional shares of BSC Common Stock or any other capital stock of
any BSC Company, or any stock appreciation rights, or any option,
warrant, conversion, or other right to acquire any such stock, or any
security convertible into any such stock; or
(e) adjust, split, combine, or reclassify any capital
stock of any BSC Company or issue or authorize the issuance of any other
securities in respect of or in substitution for
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shares of BSC Common Stock, or sell, lease, mortgage, or otherwise
dispose of or otherwise encumber (x) any shares of capital stock of any
BSC Subsidiary (unless any such shares of stock are sold or otherwise
transferred to another BSC Company) or (y) any Asset other than in the
ordinary course of business for reasonable and adequate consideration;
or
(f) except for purchases of U.S. Treasury securities or
U.S. Government agency securities, which in either case have maturities
of three years or less, purchase any securities or make any material
investment, either by purchase of stock or securities, contributions to
capital, Asset transfers, or purchase of any Assets, in any Person other
than a wholly owned BSC Subsidiary, or otherwise acquire direct or
indirect control over any Person, other than in connection with (i)
foreclosures in the ordinary course of business, (ii) acquisitions of
control by a depository institution Subsidiary in its fiduciary
capacity, or (iii) the creation of new wholly owned Subsidiaries
organized to conduct or continue activities otherwise permitted by this
Agreement; or
(g) grant any increase in compensation or benefits to the
employees or officers of any BSC Company, except in accordance with past
practice disclosed in Section 7.2(g) of the BSC Disclosure Memorandum or
as required by Law; pay any severance or termination pay or any bonus
other than pursuant to written policies or written Contracts in effect
on the date of this Agreement or as otherwise disclosed in Section
7.2(g) of the BSC Disclosure Memorandum; enter into or amend any
severance agreements with officers of any BSC Company; grant any
material increase in fees or other increases in compensation or other
benefits to directors of any BSC Company except in accordance with past
practice disclosed in Section 7.2(g) of the BSC Disclosure Memorandum;
or voluntarily accelerate the vesting of any stock options or other
stock-based compensation or employee benefits; or
(h) enter into or amend any employment Contract between
any BSC Company and any Person (unless such amendment is required by
Law) that the BSC Company does not have the unconditional right to
terminate without Liability (other than Liability for services already
rendered), at any time on or after the Effective Time; or
(i) adopt any new employee benefit plan of any BSC
Company or make any material change in or to any existing employee
benefit plans of any BSC Company other than any such change that is
required by Law or that, in the opinion of counsel, is necessary or
advisable to maintain the tax qualified status of any such plan; or
(j) make any significant change in any Tax or accounting
methods or systems of internal accounting controls, except as may be
appropriate to conform to changes in Tax Laws or regulatory accounting
requirements or GAAP; or
(k) except as disclosed in Section 7.2(k) of the BSC
Disclosure Memorandum, commence any Litigation other than in accordance
with past practice or settle any Litigation involving any Liability of
any BSC Company for material money damages or restrictions upon the
operations of any BSC Company; or
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(l) except in the ordinary course of business, modify,
amend, or terminate any material Contract or waive, release, compromise,
or assign any material rights or claims.
7.3 COVENANTS OF NATIONSBANK. From the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement,
NationsBank covenants and agrees that it shall (i) continue to conduct its
business and the business of its Subsidiaries in a manner designed in its
reasonable judgment, to enhance the long-term value of the NationsBank Common
Stock and the business prospects of the NationsBank Companies, and (ii) take no
action which would (a) materially adversely affect the ability of any Party to
obtain any Consents required for the transactions contemplated hereby without
imposition of a condition or restriction of the type referred to in the last
sentence of Section 9.1(b) of this Agreement, or (b) materially adversely affect
the ability of any Party to perform its covenants and agreements under this
Agreement; provided, that the foregoing shall not prevent any NationsBank
Company from discontinuing or disposing of any of its Assets or business if such
action is, in the judgment of NationsBank, desirable in the conduct of the
business of NationsBank and its Subsidiaries.
7.4 ADVERSE CHANGES IN CONDITION. Each Party agrees to give
written notice promptly to the other Party upon becoming aware of the occurrence
or impending occurrence of any event or circumstance relating to it or any of
its Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on it or (ii) would cause or constitute a
material breach of any of its representations, warranties, or covenants
contained herein, and to use its reasonable efforts to prevent or promptly to
remedy the SAME.
7.5 REPORTS. Each Party and its Subsidiaries shall file all
reports required to be filed by it with Regulatory Authorities between the date
of this Agreement and the Effective Time and shall deliver to the other Party
copies of all such reports promptly after the same are filed. If financial
statements are contained in any such reports filed with the SEC, such financial
statements will fairly present the consolidated financial position of the entity
filing such statements as of the dates indicated and the consolidated results of
operations, changes in shareholders' equity, and cash flows for the periods then
ended in accordance with GAAP (subject in the case of interim financial
statements to normal recurring year-end adjustments that are not material). As
of their respective dates, such reports filed with the SEC will comply in all
material respects with the Securities Laws and will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. Any financial
statements contained in any other reports to another Regulatory Authority shall
be prepared in accordance with Laws applicable to such reports.
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 REGISTRATION STATEMENT; PROXY STATEMENT; SHAREHOLDER APPROVAL.
As soon as practicable after execution of this Agreement, NationsBank shall file
the Registration Statement with the SEC, and shall use its reasonable efforts to
cause the Registration Statement to become
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effective under the 1933 Act and take any action required to be taken under the
applicable state Blue Sky or securities Laws in connection with the issuance of
the shares of NationsBank Common Stock upon consummation of the Merger. BSC
shall furnish all information concerning it and the holders of its capital
stock as NationsBank may reasonably request in connection with such action.
BSC shall call a Shareholders' Meeting, to be held as soon as reasonably
practicable after the Registration Statement is declared effective by the SEC,
for the purpose of voting upon approval of this Agreement and such other
related matters as it deems appropriate. In connection with the Shareholders'
Meeting, (i) BSC shall prepare and file with the SEC a Proxy Statement and mail
such Proxy Statement to its shareholders, (ii) the Parties shall furnish to
each other all information concerning them that they may reasonably request in
connection with such Proxy Statement, (iii) the Board of Directors of BSC shall
recommend (subject to compliance with their fiduciary duties as advised by
counsel) to its shareholders the approval of this Agreement, and (iv) the Board
of Directors and officers of BSC shall (subject to compliance with their
fiduciary duties as advised by counsel) use their reasonable efforts to obtain
such shareholders' approval.
8.2 EXCHANGE LISTING. NationsBank shall use its reasonable efforts
to list, prior to the Effective Time, on the NYSE, subject to official notice of
issuance, the shares of NationsBank Common Stock to be issued to the holders of
BSC Common Stock pursuant to the Merger.
8.3 APPLICATIONS. NationsBank shall promptly prepare and file, and
BSC shall cooperate in the preparation and, where appropriate, filing of,
applications with all Regulatory Authorities having jurisdiction over the
transactions contemplated by this Agreement seeking the requisite Consents
necessary to consummate the transactions contemplated by this Agreement.
8.4 FILINGS WITH STATE OFFICES. Upon the terms and subject to the
conditions of this Agreement, NationsBank shall execute and file the Georgia
Certificate of Merger with the Secretary of State of the State of Georgia and
the North Carolina Articles of Merger with the Secretary of State of the State
of North Carolina in connection with the Closing.
8.5 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the terms
and conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
practicable after the date of this Agreement, the transactions contemplated by
this Agreement, including using its reasonable efforts to lift or rescind any
Order adversely affecting its ability to consummate the transactions
contemplated herein and to cause to be satisfied the conditions referred to in
Article 9 of this Agreement; provided, that nothing herein shall preclude either
Party from exercising its rights under this Agreement. Each Party shall use,
and shall cause each of its Subsidiaries to use, its reasonable efforts to
obtain all Consents necessary or desirable for the consummation of the
transactions contemplated by this Agreement.
8.6 INVESTIGATION AND CONFIDENTIALITY.
(a) Prior to the Effective Time, each Party shall keep the
other Party advised of all material developments relevant to its business and to
consummation of the Merger and shall
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permit the other Party to make or cause to be made such investigation of the
business and properties of it and its Subsidiaries and of their respective
financial and legal conditions as the other Party reasonably requests, provided
that such investigation shall be reasonably related to the transactions
contemplated hereby and shall not interfere unnecessarily with normal
operations. No investigation by a Party shall affect the representations and
warranties of the other Party.
(b) In addition to the Parties' respective obligations
under the Confidentiality Agreements, each Party shall, and shall cause its
advisers and agents to, maintain the confidentiality of all confidential
information furnished to it by the other Party concerning its and its
Subsidiaries' businesses, operations, and financial positions and shall not use
such information for any purpose except in furtherance of the transactions
contemplated by this Agreement. If this Agreement is terminated prior to the
Effective Time, each Party shall promptly return or certify the destruction of
all documents and copies thereof, and all work papers containing confidential
information received from the other Party.
(c) Each Party agrees to give the other Party notice as
soon as practicable after any determination by it of any fact or occurrence
relating to the other Party which it has discovered through the course of its
investigation and which represents, or is reasonably likely to represent, either
a material breach of any representation, warranty, covenant, or agreement of the
other Party or which has had or is reasonably likely to have a Material Adverse
Effect on the other Party.
8.7 PRESS RELEASES. Prior to the Effective Time, BSC and
NationsBank shall consult with each other as to the form and substance of any
press release or other public disclosure materially related to this Agreement or
any other transaction contemplated hereby; provided, that nothing in this
Section 8.7 shall be deemed to prohibit any Party from making any disclosure
which its counsel deems necessary or advisable in order to satisfy such Party's
disclosure obligations imposed by Law.
8.8 CERTAIN ACTIONS. Except with respect to this Agreement and the
transactions contemplated hereby, no BSC Company nor any Affiliate thereof nor
any Representatives thereof retained by any BSC Company shall directly or
indirectly solicit any Acquisition Proposal by any Person. Except to the extent
necessary to comply with the fiduciary duties of BSC's Board of Directors as
advised by Alston & Bird or other outside counsel reasonably acceptable to
NationsBank, no BSC Company or any Affiliate or Representative thereof shall
furnish any non- public information that it is not legally obligated to
furnish, negotiate with respect to, or enter into any Contract with respect to,
any Acquisition Proposal, but BSC may communicate information about such an
Acquisition Proposal to its shareholders if and to the extent that it is
required to do so in order to comply with its legal obligations as advised by
counsel. BSC shall promptly notify NationsBank orally and in writing in the
event that it receives any inquiry or proposal relating to any such
transaction. BSC shall (i) immediately cease and cause to be terminated any
existing activities, discussions, or negotiations with any Persons conducted
heretofore with respect to any of the foregoing, and (ii) direct and use its
reasonable efforts to cause of all its Representatives not to engage in any of
the foregoing.
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8.9 ACCOUNTING AND TAX TREATMENT. Merger, and to take no action
which would cause the Merger not, to qualify for treatment as a "reorganization"
within the meaning of Section 368(a) of the Internal Revenue Code for federal
income tax purposes. BSC undertakes and agrees to use its reasonable efforts to
cause the Merger, and to take no action that would cause the Merger not, to
qualify for pooling-of-interests accounting treatment.
8.10 STATE TAKEOVER LAWS. Each BSC Company shall take all necessary
steps to exempt the transactions contemplated by this Agreement from, or if
necessary challenge the validity or applicability of, any applicable Takeover
Laws, including Sections 14-2-1111 and 14-2-1132 of the GBCC.
8.11 CHARTER PROVISIONS. Each BSC Company shall take all necessary
action to ensure that the entering into of this Agreement and the consummation
of the Merger and the other transactions contemplated hereby do not and will not
result in the grant of any rights to any Person under the Articles of
Incorporation, Bylaws, or other governing instruments of any BSC Company or
restrict or impair the ability of NationsBank or any of its Subsidiaries to
vote, or otherwise to exercise the rights of a shareholder with respect to,
shares of any BSC Company that may be directly or indirectly acquired or
controlled by it.
8.12 RIGHTS AGREEMENT. BSC shall take all necessary action
(including, if required, redeeming all of the outstanding BSC Rights or amending
or terminating the BSC Rights Agreement) so that the entering into of this
Agreement and consummation of the Merger and the other transactions contemplated
hereby do not and will not result in the ability of any Person to exercise any
BSC Rights under the BSC Rights Agreement or enable or require the BSC Rights to
be separated from the shares of BSC Common Stock to which they are attached or
to be triggered or become exercisable.
8.13 AGREEMENT OF AFFILIATES. BSC has disclosed in Section 8.13 of
the BSC Disclosure Memorandlum all Persons whom it reasonably believes is an
"affiliate" of BSC for purposes of Rule 145 under the 1933 Act. BSC shall use
its reasonable efforts to cause each such Person to deliver to NationsBank not
later than 30 days prior to the Effective Time, a written agreement,
substantially in the form of Exhibit 2, providing that such Person will not
sell, pledge, transfer, or otherwise dispose of the shares of BSC Common Stock
held by such Person except as contemplated by such agreement or by this
Agreement and will not sell, pledge, transfer, or otherwise dispose of the
shares of NationsBank Common Stock to be received by such Person upon
consummation of the Merger except in compliance with applicable provisions of
the 1933 Act and the rules and regulations thereunder and if the Merger will be
accounted for as a pooling of interests until such time as financial results
covering at least 30 days of combined operations of NationsBank and BSC have
been published within the meaning of Section 201.01 of the SEC's Codification of
Financial Reporting Policies. If the Merger is accounted for using the
pooling-of-interests method of accounting, shares of NationsBank Common Stock
issued to such affiliates of BSC in exchange for shares of BSC Common Stock
shall not be transferable until such time as financial results covering at
least 30 days of combined operations of NationsBank and BSC have been published
within the meaning of Section 201.01 of the SEC's Codification of Financial
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Reporting Policies, regardless of whether each such affiliate has provided the
written agreement referred to in this Section 8.13 (and NationsBank shall be
entitled to place restrictive legends upon certificates for shares of
NationsBank Common Stock issued to affiliates of BSC pursuant to this Agreement
to enforce the provisions of this Section 8.13). NationsBank shall not be
required to maintain the effectiveness of the Registration Statement under the
1933 Act for the purposes of resale of NationsBank Common Stock by such
affiliates.
8.14 EMPLOYEE BENEFITS AND CONTRACTS. Following the Effective Time,
NationsBank shall provide generally to officers and employees of the BSC
Companies employee benefits under employee benefit plans (other than stock
option or other plans involving the potential issuance of NationsBank Common
Stock), on terms and conditions which when taken as a whole are substantially
similar to those currently provided by the NationsBank Companies to their
similarly situated officers and employees; provided, that, for a period of 12
months after the Effective Time, NationsBank shall provide generally to officers
and employees of BSC Companies severance benefits in accordance with the
policies of either (i) BSC as disclosed in Section 8.14 of the BSC Disclosure
Memorandum, or (ii) NationsBank, whichever of (i) or (ii) will provide the
greater benefit to the officer or employee. For purposes of participation and
vesting (but not benefit accrual) under such employee benefit plans, the service
of the employees of the BSC Companies prior to the Effective Time shall be
treated as service with a NationsBank Company participating in such employee
benefit plans. The Surviving Corporation shall, and shall cause its
Subsidiaries to, honor in accordance with their terms all employment, severance,
consulting, and other compensation Contracts disclosed in Section 8.14 of the
BSC Disclosure Memorandum to NationsBank between any BSC Company and any current
or former director, officer, or employee thereof, and all provisions for vested
benefits or other vested amounts earned or accrued through the Effective Time
under the BSC Benefit Plans.
8.15 INDEMNIFICATION.
(a) NationsBank shall indemnify, defend, and hold harmless
the present and former directors, officers, employees, and agents of the BSC
Companies (each, an "Indemnified Party") against all Liabilities arising out of
actions or omissions occurring at or prior to the Effective Time (including the
transactions contemplated by this Agreement) to the full extent permitted under
Georgia Law and by BSC's Articles of Incorporation and Bylaws as in effect on
the date hereof, including provisions relating to advances of expenses incurred
in the defense of any Litigation. Without limiting the foregoing, in any case
in which approval by NationsBank is required to effectuate any indemnification,
NationsBank shall direct, at the election of the Indemnified Party, that the
determination of any such approval shall be made by independent counsel mutually
agreed upon between NationsBank and the Indemnified Party.
(b) NationsBank shall use its reasonable efforts (and BSC
shall cooperate prior to the Effective Time in these efforts) to maintain in
effect for a period of six years after the Effective Time BSC's existing
directors' and officers' liability insurance policy (provided that NationsBank
may substitute therefor (i) policies of at least the same coverage and amounts
containing terms and conditions which are substantially no less advantageous or
(ii) with the consent of BSC given prior to the Effective Time, any other
policy) with respect to claims arising
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from facts or events which occurred prior to the Effective Time and covering
persons who are currently covered by such insurance; provided, that NationsBank
shall not be obligated to make premium payments for such six-year period in
respect of such policy (or coverage replacing such policy) which exceed, for
the portion related to BSC's directors and officers, 200% of the annual premium
payments on BSC's current policy in effect as of the date of this Agreement
(the "Maximum Amount"). If the amount of the premiums necessary to maintain or
procure such insurance coverage exceeds the Maximum Amount, NationsBank shall
use its reasonable efforts to maintain the most advantageous policies of
directors' and officers' liability insurance obtainable for a premium equal to
the Maximum Amount.
(c) If NationsBank or any of its successors or assigns
shall consolidate with or merge into any other Person and shall not be the
continuing or surviving Person of such consolidation or merger or shall transfer
all or substantially all of its assets to any Person, then and in each case,
proper provision shall be made so that the successors and assigns of NationsBank
shall assume the obligations set forth in this Section 8.15.
(d) The provisions of this Section 8.15 are intended to be
for the benefit of and shall be enforceable by, each Indemnified Party, his or
her heirs and representatives.
8.16 BANK MERGER. After consummation of the Merger, Bank South
shall (at NationsBank's discretion) be merged with NationsBank of Georgia,
National Association (the "Bank Merger") in accordance with the provisions of
and with the effect provided in Section 215a of the National Bank Act and
7-1-550 et seq. of the Financial Institutions Code of Georgia on terms and
subject to the provisions of the Bank Plan of Merger ("Bank Plan"), attached
hereto as Exhibit 30. The Bank Plan shall be executed and the transactions
contemplated therein shall be consummated at such time following the Effective
Time as NationsBank directs. BSC shall vote the shares of capital stock of Bank
South in favor of the Bank Plan and the Bank Merger provided therein.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective
obligations of each Party to perform this Agreement and consummate the Merger
and the other transactions contemplated hereby are subject to the satisfaction
of the following conditions, unless waived by both Parties pursuant to Section
11.6 of this Agreement:
(a) SHAREHOLDER APPROVAL. The shareholders of BSC shall
have approved this Agreement, and the consummation of the transactions
contemplated hereby, including the Merger, as and to the extent required
by Law, by the provisions of any governing instruments, or by the rules
of the NASD.
(b) REGULATORY APPROVALS. All Consents of, filings and
registrations with, and notifications to, all Regulatory Authorities
required for consummation of the Merger
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shall have been obtained or made and shall be in full force and effect
and all waiting periods required by Law shall have expired. No Consent
obtained from any Regulatory Authority which is necessary to consummate
the transactions contemplated hereby shall be conditioned or restricted
in a manner (including requirements relating to the raising of
additional capital or the disposition of Assets) which in the reasonable
judgment of the Board of Directors of either Party would so materially
adversely impact the economic or business benefits of the transactions
contemplated by this Agreement that, had such condition or requirement
been known, such Party would not, in its reasonable judgment, have
entered into this Agreement.
(c) CONSENTS AND APPROVALS. Each Party shall have
obtained any and all Consents required for consummation of the Merger
(other than those referred to in Section 9.1(b) of this Agreement or
listed in Section 9.1(c) of the BSC Disclosure Memorandum) or for the
preventing of any Default under any Contract or Permit of such Party
which, if not obtained or made, is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on such
Party.
(d) LEGAL PROCEEDINGS. No court or governmental or
regulatory authority of competent jurisdiction shall have enacted,
issued, promulgated, enforced, or entered any Law or Order (whether
temporary, preliminary, or permanent) or taken any other action which
prohibits, restricts, or makes illegal consummation of the transactions
contemplated by this Agreement.
(e) REGISTRATION STATEMENT. The Registration Statement
shall be effective under the 1933 Act, no stop orders suspending the
effectiveness of the Registration Statement shall have been issued, no
action, suit, proceeding, or investigation by the SEC to suspend the
effectiveness thereof shall have been initiated and be continuing, and
all necessary approvals under state securities Laws or the 1933 Act or
1934 Act relating to the issuance or trading of the shares of
NationsBank Common Stock issuable pursuant to the Merger shall have been
received.
(f) EXCHANGE LISTING. The shares of NationsBank Common
Stock issuable pursuant to the Merger shall have been approved for
listing on the NYSE, subject to official notice of issuance.
(g) TAX MATTERS. Each Party shall have received a
written opinion or opinions from counsel and in a form reasonably
satisfactory to such Parties (the "Tax Opinion"), to the effect that (i)
the Merger will constitute a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code and (ii) the exchange in the
Merger of BSC Common Stock for NationsBank Common Stock will not give
rise to gain or loss to the shareholders of BSC with respect to such
exchange (except to the extent of any cash received). In rendering such
Tax Opinion, such counsel shall be entitled to rely upon representations
of officers of BSC and NationsBank reasonably satisfactory in form and
substance to such counsel.
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9.2 CONDITIONS TO OBLIGATIONS OF NATIONSBANK. The obligations of
NationsBank to perform this Agreement and consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by NationsBank pursuant to Section 11.6(a)
of this Agreement:
(a) REPRESENTATIONS AND WARRANTIES. for purposes of this
Section 9.2(a), the accuracy of the representations and warranties of
BSC set forth in this Agreement shall be assessed as of the date of this
Agreement and as of the Effective Time with the same effect as though
all such representations and warranties had been made on and as of the
Effective Time (provided that representations and warranties which are
confined to a specified date shall speak only as of such date). The
representations and warranties of BSC set forth in Section 5.3 of this
Agreement shall be true and correct (except for inaccuracies which are
de minimus in amount). The representations and warranties of BSC set
forth in Sections 5.17, 5.18, 5.19, and 5.20 of this Agreement shall be
true and correct in all material respects. There shall not exist
inaccuracies in the representations and warranties of BSC set forth in
this Agreement (including the representations and warranties set forth
in Sections 5.3, 5.17, 5.18, 5.19, and 5.20) such that the aggregate
effect of such inaccuracies has, or is reasonably likely to have, a
Material Adverse Effect on BSC; provided that, for purposes of this
sentence only, those representations and warranties which are qualified
by references to "material" or "Material Adverse Effect" shall be deemed
not to include such qualifications.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and
all of the agreements and covenants of BSC to be performed and complied
with pursuant to this Agreement and the other agreements contemplated
hereby prior to the Effective Time shall have been duly performed and
complied with in all material respects.
(c) CERTIFICATES. BSC shall have delivered to
NationsBank (i) a certificate, dated as of the Effective Time and signed
on its behalf by its chief executive officer and its chief financial
officer, to the effect that the conditions of its obligations set forth
in Section 9.2(a) and 9.2(b) of this Agreement have been satisfied, and
(ii) certified copies of resolutions duly adopted by BSC's Board of
Directors and shareholders evidencing the taking of all corporate action
necessary to authorize the execution, delivery, and performance of this
Agreement, and the consummation of the transactions contemplated hereby,
all in such reasonable detail as NationsBank and its counsel shall
request.
(d) AFFILIATES AGREEMENTS. NationsBank shall have
received from each affiliate of BSC the affiliates letter referred to in
Section 8.13 of this Agreement, to the extent necessary to assure in the
reasonable judgment of NationsBank that the transactions contemplated
hereby will qualify for pooling-of-interests accounting treatment.
(e) RIGHTS AGREEMENT. None of the events described in
Sections 11(a)(ii) or 13 of the BSC Rights Agreement shall have
occurred, and the BSC Rights shall not have become non-redeemable or
exercisable for capital stock of NationsBank upon consummation of the
Merger.
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9.3 CONDITIONS TO OBLIGATIONS OF BSC. The obligations of BSC to
perform this Agreement and consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the following conditions,
unless waived by BSC pursuant to Section 11.6(b) of this Agreement:
(a) REPRESENTATIONS AND WARRANTIES. For purposes of this
Section 9.3(a), the accuracy of the representations and warranties of
NationsBank set forth in this Agreement shall be assessed as of the date
of this Agreement and as of the Effective Time with the same effect as
though all such representations and warranties had been made on and as
of the Effective Time (provided that representations and warranties
which are confined to a specified date shall speak only as of such
date). The representations and warranties of NationsBank set forth in
Section 6.3 of this Agreement shall be true and correct (except for
inaccuracies which are de minimus in amount). The representations and
warranties of NationsBank set forth in Section 6.11 of this Agreement
shall be true and correct in all material respects. There shall not
exist inaccuracies in the representations and warranties of NationsBank
set forth in this Agreement (including the representations and
warranties set forth in Sections 6.3 and 6.11) such that the aggregate
effect of such inaccuracies has, or is reasonably likely to have, a
Material Adverse Effect on NationsBank; provided that, for purposes of
this sentence only, those representations and warranties which are
qualified by references to "material" or "Material Adverse Effect" shall
be deemed not to include such qualifications.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and
all of the agreements and covenants of NationsBank to be performed and
complied with pursuant to this Agreement and the other agreements
contemplated hereby prior to the Effective Time shall have been duly
performed and complied with in all material respects.
(c) CERTIFICATES. NationsBank shall have delivered to
BSC (i) a certificate, dated as of the Effective Time and signed on its
behalf by its chief executive officer and its chief financial officer,
to the effect that the conditions of its obligations set forth in
Section 9.3(a) and 9.3(b) of this Agreement have been satisfied, and
(ii) certified copies of resolutions duly adopted by NationsBank's Board
of Directors evidencing the taking of all corporate action necessary to
authorize the execution, delivery, and performance of this Agreement,
and the consummation of the transactions contemplated hereby, all in
such reasonable detail as BSC and its counsel shall request.
ARTICLE 10
TERMINATION
10.1 TERMINATION. Notwithstanding any other provision of this
Agreement, and notwithstanding the approval of this Agreement by the
shareholders of BSC, this Agreement may be terminated and the Merger abandoned
at any time prior to the Effective Time:
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(a) By mutual consent of the Board of Directors of
NationsBank and the Board of Directors of BSC; or
(b) By the Board of Directors of either Party (provided
that the terminating Party is not then in breach of any representation
or warranty contained in this Agreement under the applicable standard
set forth in Section 9.2(a) of this Agreement in the case of BSC and
Section 9.3(a) in the case of NationsBank or in material breach of any
covenant or other agreement contained in this Agreement) in the event of
an inaccuracy of any representation or warranty of the other Party
contained in this Agreement which cannot be or has not been cured within
30 days after the giving of written notice to the breaching Party of
such inaccuracy and which inaccuracy would provide the terminating Party
the ability to refuse to consummate the Merger under the applicable
standard set forth in Section 9.2(a) of this Agreement in the case of
BSC and Section 9.3(a) of this Agreement in the case of NationsBank; or
(c) By the Board of Directors of either Party in the
event of a material breach by the other Party of any covenant or
agreement contained in this Agreement which cannot be or has not been
cured within 30 days after the giving of written notice to the breaching
Party of such breach; or
(d) By the Board of Directors of either Party in the
event (i) any Consent of any Regulatory Authority required for
consummation of the Merger and the other transactions contemplated
hereby shall have been denied by final nonappealable action of such
authority or if any action taken by such authority is not appealed
within the time limit for appeal, or (ii) the shareholders of BSC fail
to vote their approval of this Agreement and the transactions
contemplated hereby as required by the GBCC at the Shareholders' Meeting
where the transactions were presented to such shareholders for approval
and voted upon; or
(e) By the Board of Directors of either Party in the
event that the Merger shall not have been consummated by June 30, 1996,
if the failure to consummate the transactions contemplated hereby on or
before such date is not caused by any breach of this Agreement by the
Party electing to terminate pursuant to this Section 10.1(e); or
(f) By the Board of Directors of either Party (provided
that the terminating Party is not then in breach of any representation
or warranty contained in this Agreement under the applicable standard
set forth in Section 9.2(a) of this Agreement in the case of BSC and
Section 9.3(a) in the case of NationsBank or in material breach of any
covenant or other agreement contained in this Agreement) in the event
that any of the conditions precedent to the obligations of such Party to
consummate the Merger cannot be satisfied or fulfilled by the date
specified in Section 10.1(e) of this Agreement; or
(g) By BSC, if its Board of Directors determines by a
vote of a majority of the members of its entire Board, at any time
during the ten-day period commencing two days after the Determination
Date, if either:
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(x) both of the following conditions are satisfied:
(1) the Average Closing Price on the
Determination Date of shares of NationsBank Common Stock shall be
less than $52.169; and
(2) (i) the quotient obtained by
dividing the Average Closing Price on the Determination Date by
$61.375 (such number being referred to herein as the "NationsBank
Ratio") shall be less than (ii) the quotient obtained by dividing
the Index Price on the Determination Date by the Index Price on
the Starting Date and subtracting 0.15 from the quotient in this
clause (x)(2)(ii) (such number being referred to herein as the
"Index Ratio"); or
(y) the Average Closing Price on the Determination
Date of shares of NationsBank Common Stock shall be less than $49.10;
subject, however, to the following four sentences. If BSC refuses to
consummate the Merger pursuant to this Section 10.1(g), it shall give
prompt written notice thereof to NationsBank, which notice shall specify
which of clauses (x) or (y) is applicable (or if both would be
applicable, which clause is being invoked); provided, that such notice
of election to terminate may be withdrawn at any time within the
aforementioned ten-day period. During the five-day period commencing
with its receipt of such notice, NationsBank shall have the option, in
the case of a failure to satisfy the condition in clause (x), to elect
to increase the Exchange Ratio to equal the lesser of (i) the quotient
obtained by dividing (1) the product of $52.169 and the Exchange Ratio
(as then in effect) by (2) the Average Closing Price, and (ii) the
quotient obtained by dividing (1) the product of the Index Ratio and the
Exchange Ratio (as then in effect) by (2) the NationsBank Ratio. During
such five-day period, NationsBank shall have the option, in the case of
a failure to satisfy the condition in clause (y), to elect to increase
the Exchange Ratio to equal the quotient obtained by dividing (i) the
product of $49.10 and the Exchange Ratio (as then in effect) by (ii) the
Average Closing Price. If NationsBank makes an election contemplated by
either of the two preceding sentences, within such five-day period, it
shall give prompt written notice to BSC of such election and the revised
Exchange Ratio, whereupon no termination shall have occurred pursuant to
this Section 10.1(g) and this Agreement shall remain in effect in
accordance with its terms (except as the Exchange Ratio shall have been
so modified), and any references in this Agreement to "Exchange Ratio"
shall thereafter be deemed to refer to the Exchange Ratio as adjusted
pursuant to this Section 10.1(g).
For purposes of this Section 10.1(g), the following terms
shall have the meanings indicated:
"Average Closing Price" shall mean the average of the
daily closing sales prices of NationsBank Common Stock as
reported on the NYSE-Composite Transactions List (as reported by
The Wall Street Journal or, if not reported thereby, another
authoritative source as chosen by NationsBank) for the ten
consecutive full
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<PAGE> 40
trading days in which such shares are traded on the NYSE ending
at the close of trading on the Determination Date.
"Determination Date" shall mean the date on which the
Consent of the Board of Governors of the Federal Reserve System
shall be received.
"Index Group" shall mean the 20 bank holding
companies listed below, the common stocks of all of which shall
be publicly traded and as to which there shall not have been,
since the Starting Date and before the Determination Date, any
public announcement of a proposal for such company to be acquired
or for such company to acquire another company or companies in
transactions with a value exceeding 25% of the acquiror's market
capitalization. In the event that any such company or companies
are removed from the Index Group, the weights (which have been
determined based upon the number of outstanding shares of common
stock) redistributed proportionately for purposes of determining
the Index Price. The 20 bank holding companies and the weights
attributed to them are as follows:
<TABLE>
<CAPTION>
Bank Holding Companies Weighting
---------------------- ---------
<S> <C>
Citicorp 8.92%
BankAmerica Corporation 8.02
Chemical Banking Corp. 9.28
J.P. Morgan & Co. Incorporated 4.04
BancOne Corporation 8.45
Norwest Corporation 7.50
Wells Fargo & Company 1.04
First Union Corporation 6.36
Bank of New York Company 4.13
First Interstate Bancorp 1.64
KeyCorp 4.93
SunTrust Banks, Inc. 2.48
Wachovia Corporation 3.67
Mellon Bank Corporation 3.07
First Bank System, Inc. 3.22
PNC Bank Corp. 7.23
NBD Bancorp, Inc. 6.88
Barnett Banks, Inc. 2.08
Bankers Trust New York Corp. 1.69
Fleet Financial Group 5.37
------
Total 100.00%
======
</TABLE>
"Index Price" on a given date shall mean the weighted
average (weighted in accordance with the factors listed above) of
the closing prices of the companies composing the Index Group.
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<PAGE> 41
"Starting Date" shall mean August 30, 1995.
If any company belonging to the Index Group or NationsBank
declares or effects a stock dividend, reclassification,
recapitalization, split-up, combination, exchange of shares, or similar
transaction between the Starting Date and the Determination Date, the
prices for the common stock of such company or NationsBank shall be
appropriately adjusted for the purposes of applying this Section
10.1(g).
10.2 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to Section 10.1 of this Agreement, this
Agreement shall become void and have no effect, except that (i) the provisions
of this Section 10.2 and Article 11 and Section 8.6(b) of this Agreement shall
survive any such termination and abandonment, and (ii) a termination pursuant to
Sections 10.1(b), 10.1(c), or 10.1(f) of this Agreement shall not relieve the
breaching Party from Liability for an uncured willful breach of a
representation, warranty, covenant, or agreement giving rise to such
termination.
10.3 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS. The respective
representations, warranties, obligations, covenants, and agreements of the
Parties shall not survive the Effective Time except this Section 10.3 and
Articles 2, 3, 4, and 11 and Sections 8.14 and 8.15 of this Agreement.
ARTICLE 11
MISCELLANEOUS
11.1 DEFINITIONS.
(a) Except as otherwise provided herein, the capitalized
terms set forth below shall have the following meanings:
"ACQUISITION PROPOSAL" with respect to a Party shall mean any
tender offer or exchange offer or any proposal for a merger, acquisition
of all of the stock or assets of, or other business combination
involving such Party or any of its Subsidiaries or the acquisition of a
substantial equity interest in, or a substantial portion of the assets
of, such Party or any of its Subsidiaries.
"AFFILIATE" of a Person shall mean: (i) any other Person
directly, or indirectly through one or more intermediaries, controlling,
controlled by or under common control with such Person; (ii) any
officer, director, partner, employer, or direct or indirect beneficial
owner of any 10% or greater equity or voting interest of such Person; or
(iii) any other Person for which a Person described in clause (ii) acts
in any such capacity.
"AGREEMENT" shall mean this Agreement and Plan of Merger,
including the Exhibits delivered pursuant hereto and incorporated herein
by reference.
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<PAGE> 42
"ASSETS" of a Person shall mean all of the assets, properties,
businesses, and rights of such Person of every kind, nature, character,
and description, whether real, personal, or mixed, tangible or
intangible, accrued or contingent, or otherwise relating to or utilized
in such Person's business, directly or indirectly, in whole or in part,
whether or not carried on the books and records of such Person, and
whether or not owned in the name of such Person or any Affiliate of such
Person and wherever located.
"BHC ACT" shall mean the federal Bank Holding Company Act of
1956, as amended.
"BSC COMMON STOCK" shall mean the $5.00 par value common stock
of BSC.
"BSC COMPANIES" shall mean, collectively, BSC and all BSC
Subsidiaries.
"BSC DISCLOSURE MEMORANDUM" shall mean the written information
entitled "Bank South Corporation Disclosure Memorandum" delivered prior
to the date of this Agreement to NationsBank describing in reasonable
detail the matters contained therein and, with respect to each
disclosure made therein, specifically referencing each Section of this
Agreement under which such disclosure is being made. Information
disclosed with respect to one Section shall not be deemed to be
disclosed for purposes of any other Section not specifically referenced
with respect thereto.
"BSC FINANCIAL STATEMENTS" shall mean (i) the consolidated
balance sheets (including related notes and schedules, if any) of BSC as
of June 30, 1995, and as of December 31, 1994 and 1993, and the related
statements of income, changes in shareholders' equity, and cash flows
(including related notes and schedules, if any) for the six months ended
June 30, 1995, and for each of the three fiscal years ended December 31,
1994, 1993, and 1992, as filed by BSC in SEC Documents, and (ii) the
consolidated balance sheets of BSC (including related notes and
schedules, if any) and related statements of income, changes in
shareholders' equity, and cash flows (including related notes and
schedules, if any) included in SEC Documents filed with respect to
periods ended subsequent to June 30, 1995.
"BSC RIGHTS" shall mean the preferred stock purchase rights
issued pursuant to the BSC Rights Agreement.
"BSC RIGHTS AGREEMENT" shall mean that certain Rights
Agreement, dated as of March 17, 1988, and amended as of April 16, 1988,
between BSC and Bank South, as Rights Agent.
"BSC STOCK PLANS" shall mean the existing stock option and
other stock-based compensation plans of BSC designated as follows: (i)
Bank South Corporation 1982 Key Employee Stock Option Plan, (ii) Bank
South Corporation 1992 Key Employee Stock Option Plan, (iii) Bank South
Corporation 1993 Equity Incentive Plan, (iv) Bank South
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<PAGE> 43
Corporation 1994 Stock Option Plan for Outside Directors, (v) Southern
Bancorp, Inc. 1986 Incentive and Nonstatutory Stock Option Plan, (vi)
Heritage Bancshares, Inc. Key Executive Incentive Stock Option Plan,
(vii) Heritage Bancshares, Inc. Employees Non-Qualified Stock Option
Plan, (viii) The Merchant Bank of Atlanta Incentive Stock Option Plan,
(ix) Merchant Bank Corporation Director Stock Option Plan, (x) 1988
Substitute Stock Option Plan of Chattahoochee Bancorp, Inc. for the 1987
Stock Option Plan of The Chattahoochee Financial Corporation, (xi) 1988
Substitute Stock Option Plan of Chattahoochee Bancorp, Inc. for the 1987
Stock Option Plan of The Buckhead Bank, and (xii) Gwinnett Bancshares,
Inc. Stock Option Plan.
"BSC SUBSIDIARIES" shall mean the Subsidiaries of BSC, which
shall include the BSC Subsidiaries described in Section 5.4 of this
Agreement and any corporation, bank, savings association, or other
organization acquired as a Subsidiary of BSC in the future and owned by
BSC at the Effective Time.
"CLOSING DATE" shall mean the date on which the Closing occurs.
"CONFIDENTIALITY AGREEMENTS" shall mean those certain
Confidentiality Agreements, dated August 28, 1995, and August 30, 1995,
between BSC and NationsBank.
"CONSENT" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person
pursuant to any Contract, Law, Order, or Permit.
"CONTRACT" shall mean any written or oral agreement,
arrangement, authorization, commitment, contract, indenture, instrument,
lease, obligation, plan, practice, restriction, understanding, or
undertaking of any kind or character, or other document to which any
Person is a party or that is binding on any Person or its capital stock,
Assets, or business.
"DEFAULT" shall mean (i) any breach or violation of or default
under any Contract, Order, or Permit, (ii) any occurrence of any event
that with the passage of time or the giving of notice or both would
constitute a breach or violation of or default under any Contract,
Order, or Permit, or (iii) any occurrence of any event that with or
without the passage of time or the giving of notice would give rise to a
right to terminate or revoke, change the current terms of, or
renegotiate, or to accelerate, increase, or impose any Liability under,
any Contract, Order, or Permit, where, in any such event, such Default
is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on a Party.
"ENVIRONMENTAL LAWS" shall mean all Laws relating to pollution
or protection of human health or the environment (including ambient air,
surface water, ground water, land surface, or subsurface strata) and
which are administered, interpreted, or enforced by the United States
Environmental Protection Agency and state and local agencies with
jurisdiction over, and including common law in respect of, pollution or
protection of the
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<PAGE> 44
environment, including the Comprehensive Environmental Response
Compensation and Liability Act, as amended, 42 U.S.C. 9601 et seq.
("CERCLA"), the Resource Conservation and Recovery Act, as amended, 42
U.S.C. 6901 et seq. ("RCRA"), and other Laws relating to emissions,
discharges, releases, or threatened releases of any Hazardous Material,
or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of any Hazardous
Material.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
"EXHIBITS" 1 through 3, inclusive, shall mean the Exhibits so
marked, copies of which are attached to this Agreement. Such Exhibits
are hereby incorporated by reference herein and made a part hereof, and
may be referred to in this Agreement and any other related instrument or
document without being attached hereto.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"GBCC" shall mean the Georgia Business Corporation Code.
"GEORGIA CERTIFICATE OF MERGER" shall mean the Certificate of
Merger to be executed by NationsBank and filed with the Secretary of
State of the State of Georgia relating to the Merger as contemplated by
Section 1.1 of this Agreement.
"HAZARDOUS MATERIAL" shall mean (i) any hazardous substance,
hazardous material, hazardous waste, regulated substance, or toxic
substance (as those terms are defined by any applicable Environmental
Laws) and (ii) any chemicals, pollutants, contaminants, petroleum,
petroleum products, or oil (and specifically shall include asbestos
requiring abatement, removal, or encapsulation pursuant to the
requirements of governmental authorities and any polychlorinated
biphenyls).
"HSR ACT" shall mean Section 7A of the Clayton Act, as added
by Title II of the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code
of 1986, as amended, and the rules and regulations promulgated
thereunder.
"KNOWLEDGE" as used with respect to a Person (including
references to such Person being aware of a particular matter) shall mean
the personal knowledge of the chairman, president, chief financial
officer, chief accounting officer, chief credit officer, general
counsel, any assistant or deputy general counsel, or any senior or
executive vice president of such Person and the knowledge of any such
persons obtained or which would have been obtained from a reasonable
investigation.
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<PAGE> 45
"LAW" shall mean any code, law, ordinance, regulation,
reporting or licensing requirement, rule, or statute applicable to a
Person or its Assets, Liabilities, or business, including those
promulgated, interpreted, or enforced by any Regulatory Authority.
"LIABILITY" shall mean any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost, or
expense (including costs of investigation, collection, and defense),
claim, deficiency, guaranty, or endorsement of or by any Person (other
than endorsements of notes, bills, checks, and drafts presented for
collection or deposit in the ordinary course of business) of any type,
whether accrued, absolute or contingent, liquidated or unliquidated,
matured or unmatured, or otherwise.
"LIEN" shall mean any conditional sale agreement, default of
title, easement, encroachment, encumbrance, hypothecation, infringement,
lien, mortgage, pledge, reservation, restriction, security interest,
title retention, or other security arrangement, or any adverse right or
interest, charge, or claim of any nature whatsoever of, on, or with
respect to any property or property interest, other than (i) Liens for
current property Taxes not yet due and payable, and (ii) for depository
institution Subsidiaries of a Party, pledges to secure deposits, and
other Liens incurred in the ordinary course of the banking business.
"LITIGATION" shall mean any action, arbitration, cause of
action, claim, complaint, criminal prosecution, demand letter,
governmental or other examination or investigation, hearing, inquiry,
administrative or other proceeding, or notice (written or oral) by any
Person alleging potential Liability or requesting information relating
to or affecting a Party, its business, its Assets (including Contracts
related to it), or the transactions contemplated by this Agreement, but
shall not include regular, periodic examinations of depository
institutions and their Affiliates by Regulatory Authorities.
"LOAN PROPERTY" shall mean any property owned, leased, or
operated by the Party in question or by any of its Subsidiaries or in
which such Party or Subsidiary holds a security or other interest
(including an interest in a fiduciary capacity), and, where required by
the context, includes the owner or operator of such property, but only
with respect to such property.
"MATERIAL" for purposes of this Agreement shall be determined
in light of the facts and circumstances of the matter in question;
provided that any specific monetary amount stated in this Agreement
shall determine materiality in that instance.
"MATERIAL ADVERSE EFFECT" on a Party shall mean an event,
change, or occurrence which, individually or together with any other
event, change, or occurrence, has a material adverse impact on (i) the
financial position, business, or results of operations of such Party and
its Subsidiaries, taken as a whole, or (ii) the ability of such Party to
perform its obligations under this Agreement or to consummate the Merger
or the other transactions contemplated by this Agreement, provided that
"Material Adverse Effect" shall not be deemed to include the impact of
(a) changes in banking and similar Laws of general applicability or
interpretations thereof by courts or governmental authorities, (b)
changes in
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<PAGE> 46
GAAP or regulatory accounting principles generally applicable to banks
and their holding companies, (c) actions and omissions of a Party (or
any of its Subsidiaries) taken with the prior informed consent of the
other Party in contemplation of the transactions contemplated hereby,
(d) circumstances affecting regional bank holding companies generally,
and (e) the Merger and compliance with the provisions of this Agreement
on the operating performance of the Parties.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"NATIONSBANK CAPITAL STOCK" shall mean, collectively, the
NationsBank Common Stock, the NationsBank Preferred Stock, and any other
class or series of capital stock of NationsBank.
"NATIONSBANK COMMON STOCK" shall mean the common stock of
NationsBank.
"NATIONSBANK COMPANIES" shall mean, collectively, NationsBank
and all NationsBank Subsidiaries.
"NATIONSBANK FINANCIAL STATEMENTS" shall mean (i) the
consolidated statements of condition (including related notes and
schedules, if any) of NationsBank as of June 30, 1995, and as of
December 31, 1994 and 1993, and the related statements of income,
changes in shareholders' equity, and cash flows (including related notes
and schedules, if any) for the six months ended June 30, 1995, and for
each of the three years ended December 31, 1994, 1993, and 1992, as
filed by NationsBank in SEC Documents, and (ii) the consolidated
statements of condition of NationsBank (including related notes and
schedules, if any) and related statements of income, changes in
shareholders' equity, and cash flows (including related notes and
schedules, if any) included in SEC Documents filed with respect to
periods ended subsequent to June 30, 1995.
"NATIONSBANK PREFERRED STOCK" shall mean the preferred stock
of NationsBank.
"NATIONSBANK SUBSIDIARIES" shall mean the Subsidiaries of
NationsBank, which shall include any corporation, bank, savings
association, or other organization acquired as a Subsidiary of
NationsBank in the future and owned by NationsBank at the Effective
Time.
"NCBCA" shall mean the North Carolina Business Corporation Act.
"NORTH CAROLINA ARTICLES OF MERGER" shall mean the Articles of
Merger to be executed by NationsBank and filed with the Secretary of
State of the State of North Carolina relating to the Merger as
contemplated by Section 1.1 of this Agreement.
"NYSE" shall mean the New York Stock Exchange, Inc.
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<PAGE> 47
"1933 ACT" shall mean the Securities Act of 1933, as amended.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"ORDER" shall mean any administrative decision or award,
decree, injunction, judgment, order, quasi-judicial decision or award,
ruling, or writ of any federal, state, local, or foreign or other court,
arbitrator, mediator, tribunal, administrative agency, or Regulatory
Authority.
"PARTICIPATION FACILITY" shall mean any facility or property
in which the Party in question or any of its Subsidiaries participates
in the management and, where required by the context, said term means
the owner or operator of such facility or property, but only with
respect to such facility or PROPERTY.
"PARTY" shall mean either BSC or NationsBank, and "PARTIES"
shall mean both BSC and NationsBank.
"PERMIT" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit, or right to which any Person is a
party or that is or may be binding upon or inure to the benefit of any
Person or its securities, Assets, or business.
"PERSON" shall mean a natural person or any legal, commercial,
or governmental entity, such as, but not limited to, a corporation,
general partnership, joint venture, limited partnership, limited
liability company, trust, business association, group acting in concert,
or any person acting in a representative capacity.
"PROXY STATEMENT" shall mean the proxy statement used by BSC
to solicit the approval of its shareholders of the transactions
contemplated by this Agreement, which shall include the prospectus of
NationsBank relating to the issuance of the NationsBank Common Stock to
holders of BSC Common Stock.
"REGISTRATION STATEMENT" shall mean the Registration Statement
on Form S-4, or other appropriate form, including any pre-effective or
post-effective amendments or supplements thereto, filed with the SEC by
NationsBank under the 1933 Act with respect to the shares of NationsBank
Common Stock to be issued to the shareholders of BSC in connection with
the transactions contemplated by this agreement.
"REGULATORY AUTHORITIES" shall mean, collectively, the Federal
Trade Commission, the United States Department of Justice, the Board of
the Governors of the Federal Reserve System, the Office of the
Comptroller of the Currency, the Federal Deposit Insurance Corporation,
all state regulatory agencies having jurisdiction over the Parties and
their respective Subsidiaries, the NYSE, the NASD, and the SEC.
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<PAGE> 48
"REPRESENTATIVE" shall mean any investment banker, financial
advisor, attorney, accountant, consultant, or other representative of a
Person.
"RIGHTS" shall mean all arrangements, calls, commitments,
Contracts, options, rights to subscribe to, scrip, understandings,
warrants, or other binding obligations of any character whatsoever
relating to, or securities or rights convertible into or exchangeable
for, shares of the capital stock of a Person or by which a Person is or
may be bound to issue additional shares of its capital stock or other
Rights.
"SEC DOCUMENTS" shall mean all forms, proxy statements,
registration statements, reports, schedules, and other documents filed,
or required to be filed, by a Party or any of its Subsidiaries with any
Regulatory Authority pursuant to the Securities Laws.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act
of 1940, as amended, the Trust Indenture Act of 1939, as amended, and
the rules and regulations of any Regulatory Authority promulgated
thereunder.
"SHAREHOLDERS' MEETING" shall mean the meeting of the
shareholders of BSC to be held pursuant to Section 8.1 of this
Agreement, including any adjournment or adjournments thereof.
"SUBSIDIARIES" shall mean all those corporations, banks,
associations, or other entities of which the entity in question owns or
controls 50% or more of the outstanding equity securities either
directly or through an unbroken chain of entities as to each of which
50% or more of the outstanding equity securities is owned directly or
indirectly by its parent; provided, there shall not be included any such
entity acquired through foreclosure or any such entity the equity
securities of which are owned or controlled in a fiduciary capacity.
"SURVIVING CORPORATION" shall mean NationsBank as the
surviving corporation resulting from the Merger.
"TAX" OR "TAXES" shall mean all federal, state, local, and
foreign taxes, charges, fees, levies, imposts, duties, or other
assessments, including income, gross receipts, excise, employment,
sales, use, transfer, license, payroll, franchise, severance, stamp,
occupation, windfall profits, environmental, federal highway use,
commercial rent, customs duties, capital stock, paid-up capital,
profits, withholding, Social Security, single business and unemployment,
disability, real property, personal property, registration, ad valorem,
value added, alternative or add-on minimum, estimated, or other tax or
governmental fee of any kind whatsoever, imposed or required to be
withheld by the United States or any state, local, foreign government or
subdivision or agency thereof, including any interest, penalties or
additions thereto.
"TAXABLE PERIOD" shall mean any period prescribed by any
governmental authority, including the United States or any state, local,
foreign government or subdivision
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<PAGE> 49
or agency thereof for which a Tax Return is required to be filed or Tax
is required to be paid.
"TAX RETURN" shall mean any report, return, information
return, or other information required to be supplied to a taxing
authority in connection with Taxes, including any return of an
affiliated or combined or unitary group that includes a Party or its
Subsidiaries.
(b) The terms set forth below shall have the meanings
ascribed thereto in the referenced sections:
<TABLE>
<S> <C>
Average Closing Price Section 10.1(g)
Bank Merger Section 8.16
Bank Plan Section 8.16
BSC Benefit Plans Section 5.12
BSC Contracts Section 5.13
BSC ERISA Plan Section 5.12
BSC Options Section 3.5
BSC Pension Plan Section 5.12
BSC SEC Reports Section 5.5
Closing Section 1.2
Derivatives Contracts Section 5.21
Determination Date Section 10.1(g)
Effective Time Section 1.3
ERISA Affiliate Section 5.12
Exchange Agent Section 4.1
Exchange Ratio Section 3.1(b)
Indemnified Party Section 8.15
Index Group Section 10.1(g)
Index Price Section 10.1(g)
Index Ratio Section 10.1(g)
Maximum Amount Section 8.15
Merger Section 1.1
NationsBank Ratio Section 10.1(g)
NationsBank SEC Reports Section 6.4
Starting Date Section 10.1(g)
Takeover Laws Section 5.18
Tax Opinion Section 9.1(g)
</TABLE>
(c) Any singular term in this Agreement shall be deemed to
include the plural, and any plural term the singular. Whenever the words
"include," "includes," or "including" are used in this Agreement, they shall be
deemed followed by the words "without limitation."
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<PAGE> 50
11.2 EXPENSES.
(a) Except as otherwise provided in this Section 11.2,
each of the Parties shall bear and pay all direct costs and expenses incurred by
it or on its behalf in connection with the transactions contemplated hereunder,
including filing, registration, and application fees, printing fees, and fees
and expenses of its own financial or other consultants, investment bankers,
accountants, and counsel, except that each of the Parties shall bear and pay
one-half of the printing costs incurred in connection with the printing of the
Registration Statement and the Proxy Statement.
(b) Nothing contained in this Section 11.2 shall
constitute or shall be deemed to constitute liquidated damages for the willful
breach by a Party of the terms of this Agreement or otherwise limit the rights
of the nonbreaching Party.
11.3 BROKERS AND FINDERS. NationsBank, each of the Parties
represents and warrants that neither it nor any of its officers, directors,
employees, or Affiliates has employed any broker or finder or incurred any
Liability for any financial advisory fees, investment bankers' fees, brokerage
fees, commissions, or finders' fees in connection with this Agreement or the
transactions contemplated hereby. In the event of a claim by any broker or
finder based upon his or its representing or being retained by or allegedly
representing or being retained by BSC or NationsBank, each of BSC and
NationsBank, as the case may be, agrees to indemnify and hold the other Party
harmless of and from any Liability in respect of any such claim.
11.4 ENTIRE AGREEMENT. Except as otherwise expressly provided
herein, this Agreement (including the documents and instruments referred to
herein) constitutes the entire agreement between the Parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral (except for the
Confidentiality Agreements). Nothing in this Agreement expressed or implied, is
intended to confer upon any Person, other than the Parties or their respective
successors, any rights, remedies, obligations, or liabilities under or by reason
of this Agreement, other than as provided in Sections 8.13 and 8.15 of this
Agreement.
11.5 AMENDMENTS. To the extent permitted by Law, this Agreement may
be amended by a subsequent writing signed by each of the Parties upon the
approval of the Boards of Directors of each of the Parties, whether before or
after shareholder approval of this Agreement has been obtained; provided, that
after any such approval by the holders of BSC Common Stock, there shall be made
no amendment that reduces or modifies in any material respect the consideration
to be received by holders of BSC Common Stock without the further approval of
such shareholders.
11.6 WAIVERS.
(a) Prior to or at the Effective Time, NationsBank, acting
through its Board of Directors, chief executive officer, president or other
authorized officer, shall have the right to
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<PAGE> 51
waive any Default in the performance of any term of this Agreement by BSC, to
waive or extend the time for the compliance or fulfillment by BSC of any and
all of its obligations under this Agreement, and to waive any or all of the
conditions precedent to the obligations of NationsBank under this Agreement,
except any condition which, if not satisfied, would result in the violation of
any Law. No such waiver shall be effective unless in writing signed by a duly
authorized officer of NationsBank.
(b) Prior to or at the Effective Time, BSC, acting through
its Board of Directors, chief executive officer, president or other authorized
officer, shall have the right to waive any Default in the performance of any
term of this Agreement by NationsBank, to waive or extend the time for the
compliance or fulfillment by NationsBank of any and all of its obligations under
this Agreement, and to waive any or all of the conditions precedent to the
obligations of BSC under this Agreement, except any condition which, if not
satisfied, would result in the violation of any Law. No such waiver shall be
effective unless in writing signed by a duly authorized officer of BSC.
(c) The failure of any Party at any time or times to
require performance of any provision hereof shall in no manner affect the right
of such Party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained in
this Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.
11.7 ASSIGNMENT. Except as expressly contemplated hereby, neither
this Agreement nor any of the rights, interests, or obligations hereunder shall
be assigned by any Party hereto (whether by operation of Law or otherwise)
without the prior written consent of the other Party. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of, and be
enforceable by the Parties and their respective successors and assigns.
11.8 NOTICES. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
by hand, by facsimile transmission, by registered or certified mail, postage
pre-paid, or by courier or overnight carrier, to the persons at the addresses
set forth below (or at such other address as may be provided hereunder), and
shall be deemed to have been delivered as of the date so delivered:
BSC: Bank South Corporation
55 Marietta Street
Atlanta, Georgia 30303
Telecopy Number: (404) 522-4127
Attention: Chairman and Chief Executive Officer
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<PAGE> 52
Copy to Counsel: Alston & Bird
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
Telecopy Number: (404) 881-7777
Attention: F. Dean Copeland
NationsBank: NationsBank Corporation
NationsBank Corporate Center
Charlotte, North Carolina 28255
Telecopy Number: (704) 386-4578
Attention: President
Copy to Counsel: NationsBank Corporation
NationsBank Corporate Center
Charlotte, North Carolina 28255
Telecopy Number: (704) 386-6453
Attention: General Counsel
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Telecopy Number: (212) 403-2000
Attention: Edward D. Herlihy
11.9 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Georgia, without regard to
any applicable conflicts of Laws, except to the extent that the Laws of the
State of North Carolina relate to the consummation of the Merger.
11.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
11.11 CAPTIONS. The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.
11.12 INTERPRETATIONS. Neither this Agreement nor any uncertainty
or ambiguity herein shall be construed or resolved against any party, whether
under any rule of construction or otherwise. No Party to this Agreement shall
be considered the draftsman. The parties acknowledge and agree that this
Agreement has been reviewed, negotiated, and accepted by all
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<PAGE> 53
Parties and their attorneys and shall be construed and interpreted according to
the ordinary meaning of the words used so as fairly to accomplish the purposes
and intentions of all parties hereto.
11.13 ENFORCEMENT OF AGREEMENT. The Parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
11.14 SEVERABILITY. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf and its corporate seal to be hereunto affixed and
attested by officers thereunto as of the day and year first above written.
BANK SOUTH CORPORATION
By: /s/ Patrick L. Flinn
------------------------------------
Chairman and Chief Executive Officer
NATIONSBANK CORPORATION
By: /s/ Kenneth D. Lewis
------------------------------------
President
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<PAGE> 54
EXHIBIT 1
STOCK OPTION AGREEMENT
(Exhibit 1 is included as Exhibit 99.2 of this Current Report)
<PAGE> 55
EXHIBIT 2
FORM OF AFFILIATE AGREEMENT
NationsBank Corporation
NationsBank Corporate Center
Charlotte, North Carolina 28255
Gentlemen:
The undersigned is a stockholder of Bank South Corporation ("BSC"), a
corporation organized and existing under the laws of the State of Georgia, and
will become a stockholder of NationsBank Corporation("NationsBank") pursuant to
the transactions described in the Agreement and Plan of Merger, dated as of
September 4, 1995 (the "Agreement"), by and between BSC and NationsBank. Under
the terms of the Agreement, BSC will be merged into and with NationsBank (the
"Merger"), and the shares of the $5.00 par value common stock of BSC ("BSC
Common Stock") will be converted into and exchanged for shares of the common
stock of NationsBank ("NationsBank Common Stock"). This Affiliate Agreement
represents an agreement between the undersigned and NationsBank regarding
certain rights and obligations of the undersigned in connection with the shares
of NationsBank to be received by the undersigned as a result of the Merger.
In consideration of the Merger and the mutual covenants contained herein,
the undersigned and NationsBank hereby agree as follows:
1. Affiliate Status. The undersigned understands and agrees that as
to BSC the undersigned is an "affiliate" under Rule 145(c) as defined in Rule
405 of the Rules and Regulations of the Securities and Exchange Commission
("SEC") under the Securities Act of 1933, as amended ("1933 Act"), and the
undersigned anticipates that the undersigned will be such an "affiliate" at the
time of the meeting of the stockholders of BSC to be held to consider approval
of the Merger and at the time the Merger is effective.
2. Initial Restriction on Disposition. Unless NationsBank informs the
undersigned that the Merger will not be accounted for as a pooling of
interests, the undersigned agrees that the undersigned will not sell, transfer,
or otherwise dispose of the undersigned's interests in, or reduce the
undersigned's risk relative to, any of the shares of NationsBank Common Stock
into which the undersigned's shares of BSC Common Stock are converted upon
consummation of the Merger until such time as NationsBank notifies the
undersigned that the requirements of SEC Accounting Series Release Nos. 130 and
135 ("ASR 130 and 135") have been met. The undersigned understands that ASR
130 and 135 relate to publication of financial results of post-Merger combined
operations of NationsBank and BSC. NationsBank agrees that it will publish
such results within 45 days after the end of the first fiscal quarter of
NationsBank containing the required period of post-Merger combined operations
and that it will notify the undersigned promptly following such publication.
3. Covenants and Warranties of Undersigned. The undersigned
represents, warrants, and agrees that:
<PAGE> 56
(a) Unless NationsBank has informed the undersigned that the
Merger will not be accounted for as a pooling of interests, during the 30
days immediately preceding the Effective Time of the Merger, the
undersigned has not sold, transferred, or otherwise disposed of the
undersigned's interests in, or reduced the undersigned's risk relative
to, any of the shares of NationsBank Common Stock or BSC Common Stock
beneficially owned by the undersigned as of the date of the Stockholders'
Meeting of BSC held to approve the Merger.
(b) The NationsBank Common Stock received by the undersigned as a
result of the Merger will be taken for the undersigned's own account and
not for others, directly or indirectly, in whole or in part.
(c) NationsBank has informed the undersigned that any
distribution by the undersigned of NationsBank Common Stock has not been
registered under the 1933 Act and that shares of NationsBank Common Stock
received pursuant to the Merger can only be sold by the undersigned (1)
following registration under the 1933 Act, or (2) in conformity with the
volume and other requirements of Rule 145(d) promulgated by the SEC as
the same now exist or may hereafter be amended, or (3) to the extent some
other exemption from registration under the 1933 Act might be available.
The undersigned understands that NationsBank is under no obligation to
file a registration statement with the SEC covering the disposition of
the undersigned's shares of NationsBank Common Stock or to take any other
action necessary to make compliance with an exemption from such
registration available.
(d) The undersigned will, and will cause each of the other
parties whose shares are deemed to be beneficially owned by the
undersigned pursuant to Section 8 hereof to, have all shares of BSC
Common Stock beneficially owned by the undersigned registered in the name
of the undersigned or such parties, as applicable, prior to the effective
date of the Merger and not in the name of any bank, broker-dealer,
nominee, or clearinghouse.
4. Restrictions on Transfer. The undersigned understands and agrees
that stop transfer instructions with respect to the shares of NationsBank
Common Stock received by the undersigned pursuant to the Merger will be given
to NationsBank's transfer agent and that there will be placed on the
certificates for such shares, or shares issued in substitution thereof, a
legend stating in substance (as modified to the extent the Merger is not
accounted for as a pooling of interests):
"The shares represented by this certificate were issued pursuant to a
business combination which is accounted for as a "pooling of interests"
and may not be sold, nor may the owner thereof reduce the owner's risks
relative thereto in any way, until such time as NationsBank Corporation
("NationsBank") has published the financial results covering at least 30
days of combined operations after the effective date of the merger
through which the business combination was effected. In addition, the
shares represented by this certificate may not be sold, transferred, or
otherwise disposed of except or unless (1) covered by an effective
registration statement under the Securities
-2-
<PAGE> 57
Act of 1933, as amended, (2) in accordance with (i) Rule 145(d) (in the
case of shares issued to an individual who is not an affiliate of
NationsBank) or (ii) Rule 144 (in the case of shares issued to an
individual who is an affiliate of NationsBank) of the Rules and
Regulations of such Act, or (3) in accordance with a legal opinion
satisfactory to counsel for NationsBank that such sale or transfer is
otherwise exempt from the registration requirements of such Act."
Such legend will also be placed on any certificate representing NationsBank
securities issued subsequent to the original issuance of the NationsBank Common
Stock pursuant to the Merger as a result of any transfer of such shares or any
stock dividend, stock split, or other recapitalization as long as the
NationsBank Common Stock issued to the undersigned pursuant to the Merger has
not been transferred in such manner to justify the removal of the legend
therefrom. Upon the request of the undersigned, NationsBank shall cause the
certificates representing the shares of NationsBank Common Stock issued to the
undersigned in connection with the Merger to be reissued free of any legend
relating to restrictions on transfer by virtue of ASR 130 and 135 as soon as
practicable after the requirements of ASR 130 and 135 have been met. In
addition, i][I]f the provisions of Rules 144 and 145 are amended to eliminate
restrictions applicable to the NationsBank Common Stock received by the
undersigned pursuant to the Merger, or at the expiration of the restrictive
period set forth in Rule 145(d), NationsBank, upon the request of the
undersigned, will cause the certificates representing the shares of NationsBank
Common Stock issued to the undersigned in connection with the Merger to be
reissued free of any legend relating to the restrictions set forth in Rules 144
and 145(d) upon receipt by NationsBank of an opinion of its counsel to the
effect that such legend may be removed.
5. Understanding of Restrictions on Dispositions. The undersigned has
carefully read the Agreement and this Affiliate Agreement and discussed their
requirements and impact upon the undersigned's ability to sell, transfer, or
otherwise dispose of the shares of NationsBank Common Stock received by the
undersigned, to the extent the undersigned believes necessary, with the
undersigned's counsel or counsel for BSC.
6. Filing of Reports by NationsBank. NationsBank agrees, for a period
of three years after the effective date of the Merger, to file on a timely basis
all reports required to be filed by it pursuant to Section 13 of the Securities
Exchange Act of 1934, as amended, so that the public information provisions of
Rule 145(d) promulgated by the SEC as the same are presently in effect will be
available to the undersigned in the event the undersigned desires to transfer
any shares of NationsBank Common Stock issued to the undersigned pursuant to the
Merger.
7. Transfer Under Rule 145(d). If the undersigned desires to sell or
otherwise transfer the shares of NationsBank Common Stock received by the
undersigned in connection with the Merger at any time during the restrictive
period set forth in Rule 145(d), the undersigned will provide the necessary
representation letter to the transfer agent for NationsBank Common Stock
together with such additional information as the transfer agent may reasonably
request. If NationsBank's counsel concludes that such proposed sale or transfer
complies with the requirements of Rule 145(d), NationsBank shall cause such
counsel to provide such opinions as may be necessary to NationsBank's Transfer
Agent so that the undersigned may complete the proposed sale or transfer.
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<PAGE> 58
8. Acknowledgments. The undersigned recognizes and agrees that the
foregoing provisions also apply to all shares of the capital stock of BSC and
NationsBank that are deemed to be beneficially owned by the undersigned pursuant
to applicable federal securities laws, which the undersigned agrees may include,
without limitation, shares owned or held in the name of (i) the undersigned's
spouse, (ii) any relative of the undersigned or of the undersigned's spouse who
has the same home as the undersigned, (iii) any trust or estate in which the
undersigned, the undersigned's spouse, and any such relative collectively own at
least a 10% beneficial interest or of which any of the foregoing serves as
trustee, executor, or in any similar capacity, and (iv) any corporation or other
organization in which the undersigned, the undersigned's spouse, and any such
relative collectively own at least 10% of any class of equity securities or of
the equity interest. The undersigned further recognizes that, in the event that
the undersigned is a director or officer of NationsBank or becomes a director or
officer of NationsBank upon consummation of the Merger, among other things, any
sale of NationsBank Common Stock by the undersigned within a period of less than
six months following the effective time of the Mergers may subject the
undersigned to liability pursuant to Section 16(b) of the Securities Exchange
Act of 1934, as amended.
9. Miscellaneous. This Affiliate Agreement is the complete agreement
between NationsBank and the undersigned concerning the subject matter hereof.
Any notice required to be sent to any party hereunder shall be sent by
registered or certified mail, return receipt requested, using the addresses set
forth herein or such other address as shall be furnished in writing by the
parties. This Affiliate Agreement shall be governed by the laws of the State of
Georgia.
This Affiliate Agreement is executed as of the 4th day of September, 1995.
Very truly yours,
___________________________
Signature
___________________________
Print Name
___________________________
___________________________
___________________________
Address
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<PAGE> 59
[add below the signatures of all registered
owners of shares deemed beneficially owned
by the affiliate]
___________________________
Name:
___________________________
Name:
___________________________
Name:
AGREED TO AND ACCEPTED as of
_______________, 1995
NATIONSBANK CORPORATION
By:_________________________
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<PAGE> 60
EXHIBIT 3
PLAN OF MERGER
OF
BANK SOUTH
WITH AND INTO
NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION
This PLAN OF MERGER ("Plan of Merger") is made and entered into as of
September 4, 1994, by and between BANK SOUTH, a state bank organized and
existing under the laws of the State of Georgia with its main office located in
Atlanta, Georgia ("Bank South"), and NATIONSBANK OF GEORGIA, NATIONAL
ASSOCIATON, a national banking association organized and existing under the laws
of the United States with its main office located in Atlanta, Georgia
("NationsBank").
Bank South is a wholly-owned subsidiary of Bank South Corporation, a
corporation organized and existing under the laws of the State of Georgia, with
its principal office located in Atlanta, Georgia ("BSC"). NationsBank is a
wholly-owned subsidiary of NationsBank Corporation, a corporation organized and
existing under the laws of the State of North Carolina, with its principal
office located in Charlotte, North Carolina ("NB"). Prior to the execution and
delivery of this Plan of Merger, BSC and NB have entered into a Agreement and
Plan of Merger (the "Parent Agreement") pursuant to which Bank South would merge
with and into NB. The Parent Agreement also contemplates that Bank South will
be merged with and into NationsBank. The Boards of Directors of Bank South and
NationsBank are of the opinion that the best interests of their respective banks
would be served if Bank South is merged with and into NationsBank on the terms
and conditions provided in this Plan of Merger.
NOW, THEREFORE, in consideration of the covenants and agreements
contained herein, Bank South and NationsBank hereby make, adopt and approve this
Plan of Merger in order to set forth the terms and conditions for the merger of
Bank South with and into NationsBank.
ARTICLE ONE
DEFINITIONS
Except as otherwise provided herein, the capitalized terms set forth
below shall have the following meanings:
<PAGE> 61
1.1 "BANK MERGER" shall refer to the merger of Bank South with and
into NationsBank as provided in Section 2.1 of this Plan of Merger.
1.2 "BANK SOUTH COMMON STOCK" shall mean the $5.00 par value common
stock of Bank South.
1.3 "CERTIFICATE OF MERGER" shall mean the Certificate of Merger or
other order to be issued by the Office of the Comptroller of the Currency of the
United States approving the Bank Merger.
1.4 "EFFECTIVE TIME" shall mean the date and time on which the Bank
Merger becomes effective as specified in the Certificate of Merger.
1.5 "NATIONSBANK COMMON STOCK" shall mean the $2.50 par value
common stock of NationsBank.
1.6 "RESULTING BANK" shall mean NationsBank upon and after the
Effective Time.
ARTICLE TWO
TERMS OF BANK MERGER
2.1 MERGER. subject to the terms and conditions set forth in this
Plan of Merger, at the Effective Time, Bank South shall be merged with and into
NationsBank under the Charter and Articles of Association of NationsBank
pursuant to the provisions of and with the effect provided in Title 12, United
States Code, Section 215a. NationsBank shall be the Resulting Bank and
receiving association resulting from the Bank Merger and shall continue to
conduct its business under the name "NationsBank of Georgia, National
Association." The Bank Merger shall be consummated pursuant to the terms of
this Plan of Merger, which has been approved and adopted by the respective
Boards of Directors and shareholders of Bank South and NationsBank.
2.2 METHOD OF CONVERTING SHARES. Each share of NationsBank Common
Stock issued and outstanding immediately prior to the Effective Time shall
remain issued and outstanding from and after the Effective Time and shall be
unaffected by the Bank Merger. At the Effective Time, the certificates
representing all of the issued and outstanding shares of Bank South Common Stock
shall be surrendered to NationsBank for cancellation, and no consideration shall
be issued in exchange therefor.
ARTICLE THREE
EFFECT OF BANK MERGER
3.1 BUSINESS OF THE RESULTING BANK. From and after the Effective
Time, the business of the Resulting Bank shall continue to be that of a national
banking association. The Resulting Bank's business shall be conducted from its
main office located in Atlanta, Georgia and
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<PAGE> 62
at its legally established branches, which shall also include the main office
and all branches, whether in operation or approved but unopened, of Bank South
at the Effective Time.
3.2 ASSUMPTION OF RIGHTS. At the Effective Time, the separate
existence and corporate organization of Bank South shall be merged into and
continued in NationsBank, as the Resulting Bank and receiving association of the
Bank Merger. All rights, franchises and interests of Bank South and NationsBank
in and to every type of property (real, personal and mixed), and all choses in
action of Bank South and NationsBank shall be transferred to and vested in the
Resulting Bank by virtue of the Bank Merger without any deed or other transfer.
The Resulting Bank, upon consummation of the Bank Merger and without any order
or other action on the part of any court or otherwise, shall hold and enjoy all
rights of property, franchises and interests, including appointments,
designations and nominations, and all other rights and interests as trustee,
executor, administrator, registrar of stocks and bonds, guardian of estates,
assignee, receiver and committee of estates of lunatics, and in every other
fiduciary capacity, in the same manner and to the same extent as such rights,
franchises, and interests were held or enjoyed by either of Bank South or by
NationsBank immediately prior to the Effective Time, subject to the conditions
imposed by Title 12, United States Code, Section 215a.
3.3 ASSUMPTION OF LIABILITIES. All liabilities and obligations of
both of Bank South and of NationsBank of every kind and description shall be
assumed by the Resulting Bank by virtue of the Bank Merger, and the Resulting
Bank shall be bound thereby in the same manner and to the same extent that
either of Bank South or NationsBank was so bound at the Effective Time.
3.4 ARTICLES OF ASSOCIATION AND BYLAWS. The Articles of
Association and Bylaws of NationsBank, as in effect immediately prior to the
Effective Time, shall continue in full force and effect as the Articles of
Association and Bylaws of the Resulting Bank.
3.5 OFFICERS, EMPLOYEES AND DIRECTORS. The officers and employees
of the Resulting Bank immediately following the Effective Time shall include the
officers and employees of NationsBank and such officers and employees of Bank
South designated by the Resulting Bank. The Board of Directors of the Resulting
Bank immediately following the Effective Time shall consist of the same persons
who were NationsBank directors immediately prior to the Effective Time, each of
whom shall serve until his respective successor is elected and qualified.
3.6 CAPITAL STOCK OF THE RESULTING BANK. The capital stock of the
Resulting Bank upon completion of the Bank Merger shall be $______ million,
consisting of __________ issued and outstanding shares of common stock of a par
value of $__.__ per share. In addition, the Resulting Bank shall have a surplus
of approximately $__________ million and undivided profits, including capital
reserves, of approximately $__________ million adjusted, however, for earnings
and expenses between June 30, 1995 and the Effective Time. The capital
structures of Bank South and NationsBank are set forth in Annex A to this Plan
of Merger.
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<PAGE> 63
ARTICLE FOUR
EFFECTIVENESS
4.1 CONDITIONS PRECEDENT. Consummation of the Bank Merger is
conditioned upon (i) the prior Closing and Effective Time of the Parent Merger
and all other transactions contemplated by the Parent Agreement, and (ii)
receipt of all approvals, consents, waivers, and other clearances of all federal
and state Regulatory Authorities having jurisdiction over the transactions
contemplated by this Plan of Merger, and expiration of any required waiting
periods.
4.2 TERMINATION. This Plan of Merger may be terminated at any time
prior to the Effective Time by the parties hereto after termination of the
Parent Agreement in accordance with the provisions of Section 10.1 thereof.
4.3 EFFECTIVENESS. Subject to the satisfaction of all requirements
of applicable laws and regulations and the terms and conditions set forth
herein, the Bank Merger contemplated by this Plan of Merger shall be and become
effective at the time and on the date specified in the Certificate of Merger.
ARTICLE FIVE
MISCELLANEOUS
5.1 AMENDMENT. To the extent permitted by law, this Plan of Merger
may be amended by a subsequent written instrument upon the approval of the
Boards of Directors of each of the parties hereto and upon execution of such
instrument by the duly authorized officers of each and by a majority of the
Boards of Directors of each; provided, that no amendment to this Plan of Merger
shall modify the requirements of regulatory approval as set forth in Section 4.1
hereof.
5.2 GOVERNING LAW. This Plan of Merger shall be governed by and
construed in accordance with the laws of the State of Georgia, except to the
extent that the federal laws of the United States of America apply to
consummation of the Bank Merger.
5.3 HEADINGS. The headings in this Plan of Merger are for
convenience only and shall not affect the construction or interpretation of this
Plan of Merger.
5.4 COUNTERPARTS. This Plan of Merger may be executed in two or
more counterparts, each of which shall be deemed an original instrument, but all
of which together shall constitute one and the same instrument.
-4-
<PAGE> 64
IN WITNESS WHEREOF, each of Bank South and NationsBank has caused this
Plan of Merger to be executed on its behalf by its officers thereunto duly
authorized and by a majority of its Board of Directors, all as of the day and
year first above written.
ATTEST: BANK SOUTH
By: _________________________________ By: ____________________________________
Name: Patrick L. Flinn
Secretary: Chairman and Chief Executive Officer
[BANK SEAL]
A Majority of the Entire
Board of Directors of Bank South
_________________________________ ____________________________________
Bernard W. Abrams John E. McKinley, III
_________________________________ ____________________________________
Ray C. Anderson Julia W. Morgan
_________________________________ ____________________________________
Kenneth W. Cannestra Barry Phillips
_________________________________ ____________________________________
John S. Carr Ben G. Porter
_________________________________ ____________________________________
Patrick L. Flinn John W. Robinson, Jr.
_________________________________ ____________________________________
S. E. Jennette, Jr. Felker W. Ward
_________________________________ ____________________________________
Lynn H. Johnston Virgil Williams
_________________________________
William M. McClatchey, M.D.
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<PAGE> 65
ATTEST: NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION
By: _________________________________ By: ____________________________________
Name: Name:
Title: Title:
[BANK SEAL]
A Majority of the Entire
Board of Directors of NationsBank of Georgia,
National Association
_________________________________ __________________________________
_________________________________ __________________________________
_________________________________ __________________________________
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<PAGE> 66
ANNEX A
Capital Structures of Bank South
and
NationsBank of Georgia, National Association
(as of June 30, 1995)
<TABLE>
<CAPTION>
Bank South NationsBank
---------- -----------
<S> <C> <C>
Equity Securities 1,500,000 shares common _________ shares common
Authorized $5.00 par value $__.__ par value
Outstanding Equity Securities 1,164,000 shares common _________ shares common
$5.00 par value $1.00 par value
Capital $_______ million $_______ million
Surplus $_______ million $_______ million
Unrealized Gain (Loss) on $_______ $_______
Investment Securities and
Investment Securities Held for
Sale
Undivided Profits $_______ million $_______ million
Total Stockholders'
Equity $_______ million $_______ million
</TABLE>
<PAGE> 1
EXHIBIT 99.2
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated September 4, 1995, between NationsBank
Corporation, a North Carolina corporation ("Grantee"), and Bank South
Corporation, a Georgia corporation ("Issuer").
W I T N E S S E T H
WHEREAS, Grantee and Issuer have entered into an Agreement and Plan of
Merger of even date herewith (the "Merger Agreement"), which agreement has been
executed by the parties hereto prior to this Agreement; and
WHEREAS, 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 mutual
covenants and agreements set forth herein and in the Merger Agreement, the
parties hereto agree as follows:
1. (a) Issuer hereby grants to Grantee an unconditional,
irrevocable option (the "Option") to purchase, subject to the terms hereof, up
to 11,691,142 fully paid and nonassessable shares of the common stock, $5.00 par
value, of Issuer ("Common Stock"), at a price per share equal to $23.75 (as
adjusted as set forth herein, the "Option Price"); provided, that in no event
shall the number of shares for which this Option is exercisable exceed 19.9% of
the issued and outstanding shares of Common Stock. The number of shares of
Common Stock that may be received upon the exercise of the Option and the Option
Price are subject to adjustment as herein set forth. Each share of Common Stock
to be issued upon exercise of the Option shall be accompanied by and represent a
BSC Right.
(b) In the event that any additional shares of Common Stock are
issued or otherwise become outstanding after the date of this Agreement (other
than pursuant to this Agreement), the number of shares of Common Stock subject
to the Option shall be increased so that, after such issuance, it equals 19.9%
of the number of shares of Common Stock then issued and outstanding without
giving effect to any shares subject or issued pursuant to the Option. Nothing
contained in this Section l(b) or elsewhere in this Agreement shall be deemed
to authorize Issuer or Grantee to breach any provision of the Merger Agreement.
2. (a) The Holder (as hereinafter defined) may exercise the Option,
notwithstanding the provisions of the Confidentiality Agreements, in whole or
part, if, but only if, both an Initial Triggering Event (as hereinafter defined)
and a Subsequent Triggering Event (as hereinafter defined) shall have occurred
prior to the occurrence of an Exercise Termination Event (as hereinafter
defined). Each of the following shall be an Exercise Termination Event: (i) the
Effective Time of the Merger; (ii) termination of the Merger Agreement in
accordance with the provisions thereof if such termination occurs prior to the
occurrence of an Initial Triggering Event; or (iii) the passage of 12 months (or
such longer period as provided in Section 10) after
<PAGE> 2
termination of the Merger Agreement if such termination follows the occurrence
of an Initial Triggering Event. The term "Holder" shall mean the holder or
holders of the Option. The rights set forth in Sections 7 and 9 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) The term "Initial Triggering Event" shall mean any of the
following events or transactions occurring after the date hereof:
(i) Issuer or any of its Subsidiaries (as hereinafter
defined) (each an "Issuer Subsidiary"), without having received Grantee's
prior written consent, shall have entered into an agreement to engage in
an Acquisition Transaction (as hereinafter defined) with any person (the
term "person" for purposes of this Agreement having the meaning assigned
thereto in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act
of 1934 (the "1934 Act"), and the rules and regulations thereunder) other
than Grantee or any of its Subsidiaries (each a "Grantee Subsidiary") or
the Board of Directors of Issuer shall have recommended that the
shareholders of Issuer approve or accept any Acquisition Transaction
other than as contemplated by the Merger Agreement or this Agreement.
For purposes of this Agreement, (a) "Acquisition Transaction" shall mean
(x) a merger or consolidation, or any similar transaction, involving
Issuer or any Significant Subsidiary (as defined in Rule 1-02 of
Regulation S-X promulgated by the Securities and Exchange Commission (the
"SEC")) of Issuer, (y) a purchase, lease or other acquisition of all or
substantially all of the assets or deposits of Issuer or any Significant
Subsidiary of Issuer, or (z) a purchase or other acquisition (including
by way of merger, consolidation, share exchange or otherwise) of
securities representing 15% or more of the voting power of Issuer or any
Significant Subsidiary of Issuer, and (b) "Subsidiary" shall have the
meaning set forth in Rule 12b-2 under the 1934 Act;
(ii) Any person other than Grantee, any Grantee Subsidiary
or any Issuer Subsidiary acting in a fiduciary capacity shall have
acquired beneficial ownership or the right to acquire beneficial
ownership of 15% or more of the outstanding shares of Common Stock (the
term "beneficial ownership" for purposes of this Agreement having the
meaning assigned thereto in Section 13(d) of the 1934 Act, and the rules
and regulations thereunder);
(iii) The shareholders of the Issuer shall not have
approved the transactions contemplated by the Merger Agreement at the
meeting held for that purpose or any adjustment thereof, or such meeting
shall not have been held or shall have been canceled prior to termination
of the Merger Agreement, in either case, after Issuer's Board of
Directors shall have withdrawn or modified (or publicly announced its
intention to withdraw or modify or interest in withdrawing or modifying)
its recommendation that the shareholders of Issuer approve the
transactions contemplated by the Merger Agreement, or Issuer or any
Issuer Subsidiary, without having received Grantee's prior written
consent, shall have authorized, recommended, proposed (or publicly
announced its intention to authorize, recommend or propose or interest in
authorizing, recommending or proposing) an agreement to engage in an
Acquisition Transaction, with any person other than Grantee or a Grantee
Subsidiary;
<PAGE> 3
(iv) Any person other than Grantee or any Grantee
Subsidiary shall have made a bona fide proposal to Issuer or its
shareholders to engage in an Acquisition Transaction;
(v) Issuer shall have willfully breached any covenant or
obligation contained in the Merger Agreement in anticipation of engaging
in an Acquisition Transaction, and such breach would entitle Grantee to
terminate the Merger Agreement; or
(vi) Any person other than Grantee or any Grantee
Subsidiary, other than in connection with a transaction to which Grantee
has given its prior written consent, shall have filed an application or
notice with the Federal Reserve Board or other federal or state bank
regulatory authority, which application or notice has been accepted for
processing, for approval to engage in an Acquisition Transaction.
(c) The term "Subsequent Triggering Event" shall mean any of the
following events or transactions occurring after the date hereof:
(i) The acquisition by any person of beneficial ownership
of 25% or more of the then outstanding Common Stock; or
(ii) The occurrence of the Initial Triggering Event
described in clause (i) of subsection (b) of this Section 2, except that
the percentage referred to in clause (z) shall be 25%.
(d) Issuer shall notify Grantee promptly in writing of the
occurrence of any Initial Triggering Event or Subsequent Triggering Event
(together, a ("Triggering Event"), it being understood that the giving of such
notice by Issuer shall not be a condition to the right of the Holder to
exercise the Option.
(e) In the event the Holder is entitled to and wishes to
exercise the Option, it shall send to Issuer a written notice prior to an
Exercise Termination Event (the date of which being herein referred to as the
"Notice Date") specifying (i) the total number of shares it will purchase
pursuant to such exercise and (ii) a place and date not earlier than three
business days nor later than 10 business days from the Notice Date for the
closing of such purchase (the "Closing Date"); provided that if prior
notification to or approval of the Federal Reserve Board or any other regulatory
agency is required in connection with such purchase, the Holder shall promptly
file the required notice or application for approval, shall promptly notify the
Issuer of such filing, and shall expeditiously process the same and the period
of time that otherwise would run pursuant to this sentence shall run instead
from the date on which any required notification periods have expired or been
terminated or such approvals have been obtained and any requisite waiting period
or periods shall have passed. Any exercise of the Option shall be deemed to
occur on the Notice Date relating thereto.
(f) At the closing referred to in subsection (e) of this Section
2, the Holder shall pay to Issuer the aggregate purchase price for the shares
of Common Stock purchased pursuant to the
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<PAGE> 4
exercise of the Option in immediately available funds by wire transfer to a
bank account designated by Issuer, provided that failure or refusal of Issuer
to designate such a bank account shall not preclude the Holder from exercising
the Option.
(g) At such closing, simultaneously with the delivery of
immediately available funds as provided in subsection (f) of this Section 2,
Issuer shall deliver to the Holder a certificate or certificates representing
the number of shares of Common Stock purchased by the Holder and, if the Option
should be exercised in part only, a new Option evidencing the rights of the
Holder thereof to purchase the balance of the shares purchasable thereunder.
(h) Certificates for Common Stock delivered at a closing
hereunder may be endorsed with a restrictive legend that shall read
substantially as follows:
"The transfer of the shares represented by this certificate is
subject to certain provisions of an agreement between the
registered holder hereof and Issuer and to resale restrictions
arising under the Securities Act of 1933, as amended. A copy of
such agreement is on file at the principal office of Issuer and
will be provided to the holder hereof without charge upon receipt
by Issuer of a written request therefor."
It is understood and agreed that: (i) the reference to the resale restrictions
of the Securities Act of 1933 (the "1933 Act") in the above legend shall be
removed by delivery of substitute certificate(s) without such reference if the
Holder shall have delivered to Issuer a copy of a letter from the staff of the
SEC, or an opinion of counsel, in form and substance satisfactory to Issuer, to
the effect that such legend is not required for purposes of the 1933 Act; (ii)
the reference to the provisions of this Agreement in the above legend shall be
removed by delivery of substitute certificate(s) without such reference if the
shares have been sold or transferred in compliance with the provisions of this
Agreement and under circumstances that do not require the retention of such
reference; and (iii) the legend shall be removed in its entirety if the
conditions in the proceeding clauses (i) and (ii) are both satisfied. In
addition, such certificates shall bear any other legend as may be required by
law.
(i) Upon the giving by the Holder to Issuer of the written
notice of exercise of the Option provided for under subsection (e) of this
Section 2 and the tender of the applicable purchase price in immediately
available funds the Holder shall be deemed to be the holder of record of the
shares of Common Stock issuable upon such exercise, notwithstanding that the
stock transfer books of Issuer shall then be closed or that certificates
representing such shares of Common Stock shall not then be actually delivered to
the 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, issue and delivery of stock certificates under
this Section 2 in the name of the Holder or its assignee, transferee or
designee.
3. Issuer agrees: (i) that it shall at all times maintain, free from
preemptive rights, sufficient authorized but unissued or treasury shares of
Common Stock so that the Option may be
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<PAGE> 5
exercised without additional authorization of Common Stock after giving effect
to all other options, warrants, convertible securities and other rights to
purchase Common Stock; (ii) that it will not, by 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 (x) complying with all premerger notification, reporting
and waiting period requirements specified in 15 U.S.C. Section 18a and
regulations promulgated thereunder and (y) in the event, under the Bank Holding
Company Act of 1956, as amended, or any state or other federal banking law,
prior approval of or notice to the Federal Reserve Board or to any state or
other federal regulatory authority is necessary before the Option may be
exercised, cooperating fully with the Holder in preparing such applications or
notices and providing such information to the Federal Reserve Board or such
state or other federal regulatory authority as they may require) in order to
permit the Holder to exercise the Option and Issuer duly and effectively to
issue shares of Common Stock pursuant hereto; and (iv) promptly to take all
action provided herein to protect the rights of the Holder against dilution.
4. This Agreement (and the Option granted hereby) are exchangeable,
without expense, at the option of the 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,
on the same terms and subject to the same conditions as are set forth herein, in
the aggregate the same number of shares of Common Stock purchasable hereunder.
The terms "Agreement" and "Option" as used herein include any 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.
5. The number of shares of Common Stock purchasable upon the exercise
of the Option shall be subject to adjustment from time to time as provided in
this Section 5.
(a) In the event of any change in Common Stock by reason of
stock dividends, split-ups, mergers, recapitalizations, combinations,
subdivisions, conversions, exchanges of shares or the like, the
type and number of shares of Common Stock purchasable upon exercise
hereof shall be appropriately adjusted and proper provision shall be
made so that, in the event that any additional shares of Common Stock
are to be issued or otherwise become outstanding as a result of any such
change (other than pursuant to an exercise of the Option), the number of
shares of Common Stock that remain subject to the Option shall be
increased so that, after such issuance and together with shares of
Common Stock previously issued pursuant to the exercise of the Option
(as adjusted on account of any of the foregoing changes in the Common
Stock), it equals 19.9% of the number of shares of Common Stock then
issued and outstanding.
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<PAGE> 6
(b) Whenever the number of shares of Common Stock purchasable
upon exercise hereof is adjusted as provided in this Section 5, the
Option Price shall be adjusted by multiplying the Option Price by a
fraction, the numerator of which shall be equal to the number of shares
of Common Stock purchasable prior to the adjustment and the denominator
of which shall be equal to the number of shares of Common Stock
purchasable after the adjustment.
6. Upon the occurrence of a Subsequent Triggering Event that occurs
prior to an Exercise Termination Event, Issuer shall, at the request of Grantee
delivered prior to an Exercise Termination Event (or such later period as
provided in Section 10) (whether on its own behalf or on behalf of any
subsequent holder of this Option (or part thereof) or any of the shares of
Common Stock issued pursuant hereto), promptly prepare, file and keep current a
registration statement under the 1933 Act covering any shares issued and
issuable pursuant to this Option and shall use its best efforts to cause such
registration statement to become effective and remain current in order to permit
the sale or other disposition of any shares of Common Stock issued upon total or
partial exercise of this Option ("Option Shares") in accordance with any plan of
disposition requested by Grantee. Issuer will use its best efforts to cause
such registration statement first to become effective and then to remain
effective for such period not in excess of 120 days from the day such
registration statement first becomes effective or such shorter time as may be
reasonably necessary to effect such sales or other dispositions. Grantee shall
have the right to demand two such registrations. The Issuer shall bear the
costs of such registrations (including, but not limited to, attorneys' fees,
printing costs and filing fees). The foregoing notwithstanding, if, at the time
of any request by Grantee for registration of Option Shares as provided above,
Issuer is in registration with respect to an underwritten public offering of
shares of Common Stock, and if in the good faith judgment of the managing
underwriter or managing underwriters, or, if none, the sole underwriter or
underwriters, of such offering the inclusion of the Option Shares would
interfere with the successful marketing of the shares of Common Stock offered by
Issuer, the number of Option Shares otherwise to be covered in the registration
statement contemplated hereby may be reduced; provided, however, that after any
such required reduction the number of Option Shares to be included in such
offering for the account of the Holder shall constitute at least 25% of the
total number of shares to be sold by the Holder and Issuer in the aggregate; and
provided further, however, that if such reduction occurs, then the Issuer shall
file a registration statement for the balance as promptly as practical
thereafter as to which no reduction pursuant to this Section 6 shall be
permitted or occur and the Holder shall thereafter be entitled to one additional
registration. Each such Holder shall provide all information reasonably
requested by Issuer for inclusion in any registration statement to be filed
hereunder. If requested by any such Holder in connection with such
registration, Issuer shall become a party to any underwriting agreement relating
to the sale of such shares, but only to the extent of obligating itself in
respect of representations, warranties, indemnities and other agreements
customarily included in such underwriting agreements for Issuer. Upon receiving
any request under this Section 6 from any Holder, Issuer agrees to send a copy
thereof to any other person known to Issuer to be entitled to registration
rights under this Section 6, in each case by promptly mailing the same, postage
prepaid, to the address of record of the persons entitled to receive such
copies.
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<PAGE> 7
7. (a) Upon the occurrence of a Repurchase Event (as hereinafter
defined) that occurs prior to an Exercise Termination Event, (i) at the request
of the Holder, delivered prior to an Exercise Termination Event (or such later
period as provided in Section 10), Issuer shall repurchase the Option from the
Holder at a price (the "Option Repurchase Price") equal to the amount by which
(A) the market/offer price (as defined below) exceeds (B) the Option Price,
multiplied by the number of shares for which this Option may then be exercised
and (ii) at the request of the owner of Option Shares from time to time (the
"Owner"), delivered prior to the occurrence of an Exercise Termination Event (or
such later period as provided in Section 10), Issuer shall repurchase such
number of the Option Shares from the Owner as the Owner shall designate at a
price (the "Option Share Repurchase Price") equal to the market/offer price
multiplied by the number of Option Shares so designated. The term "Repurchase
Event" shall occur if (i) any person (the term "person" for purposes of this
Agreement having the meaning assigned thereto in Sections 3(a)(9) and 13(d)(3)
of the 1934 Act, and the rules and regulations thereunder) other than Grantee or
any of its Subsidiaries shall have acquired beneficial ownership, or the right
to acquire beneficial ownership, or any "group" (as such term is defined under
the 1934 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
Common Stock (the term "beneficial ownership" for purposes of this Agreement
having the meaning assigned thereto in Section 13(d) of the 1934 Act, and the
rules and regulations thereunder), or (ii) any of the transactions described in
Section 8(a)(i), 8(a)(ii), or 8(a)(iii) shall be consummated. The term
"market/offer price" shall mean the highest of (i) the price per share of Common
Stock at which a tender or exchange offer therefor has been made, (ii) the price
per share of Common Stock to be paid by any third party pursuant to an agreement
with Issuer, (iii) the highest closing price for shares of Common Stock within
the three-month period immediately preceding the date the Holder gives notice of
the required repurchase of this Option or the Owner gives notice of the required
repurchase of Option Shares, as the case may be, or (iv) in the event of a sale
of all or substantially all of Issuer's assets or deposits, the sum of the net
price paid in such sale for such assets or deposits, the sum of the net price
paid in such sale for such assets or deposits and the current market value of
the remaining net assets of Issuer as determined by a nationally recognized
investment banking firm selected by the Holder or the Owner, as the case may be,
divided by the number of shares of Common Stock of Issuer outstanding at the
time of such sale. In determining the market/offer price, the value of
consideration other than cash shall be determined by a nationally recognized
investment banking firm selected by the Holder or Owner, as the case may be.
(b) The Holder and the Owner, as the case may be, may exercise
its right to require Issuer to repurchase the Option and any Option Shares
pursuant to this Section 7 by surrendering for such purpose to Issuer, at its
principal office, a copy of this Agreement or certificates for Option Shares,
as applicable, accompanied by a written notice or notices stating that the
Holder or the Owner, as the case may be, elects to require Issuer to repurchase
this Option and/or the Option Shares in accordance with the provisions of this
Section 7. As promptly as practicable, and in any event within ten business
days after the surrender of the Option and/or certificates representing Option
Shares and the receipt of such notice or notices relating thereto, Issuer shall
deliver or cause to be delivered to the Holder the Option Repurchase Price
and/or to the Owner
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<PAGE> 8
the Option Share Repurchase Price therefor or the portion thereof that Issuer
is not then prohibited under applicable law and regulation from so delivering.
(c) To the extent that Issuer is prohibited under applicable law
or regulation, or as a consequence of administrative policy, from repurchasing
the Option and/or the Option Shares in full, Issuer shall immediately so notify
the Holder and/or the Owner and thereafter deliver or cause to be delivered/
from time to time, to the Holder and/or the Owner, as appropriate, the portion
of the Option Repurchase Price and the Option Share Repurchase Price,
respectively, that it is no longer prohibited from delivering, within ten
business days after the date on which Issuer is no longer so prohibited;
provided, however, that if Issuer at any time after delivery of a notice of
repurchase pursuant to paragraph (b) of this Section 7 is prohibited under
applicable law or regulation, or as a consequence of administrative policy,
from delivery to the Holder and/or the Owner, as appropriate, the Option
Repurchase Price and the Option Share Repurchase Price, respectively, in full
(and Issuer hereby undertakes to use its best efforts to obtain all required
regulatory and legal approvals and to file any required notices as promptly as
practicable in order to accomplish such repurchase), the Holder or Owner may
revoke its notice of repurchase of the Option or the Option Shares whether in
whole or to the extent of the prohibition, whereupon, in the latter case,
Issuer shall promptly (i) deliver to the Holder and/or the Owner, as
appropriate, that portion of the Option Purchase Price or the Option Share
Repurchase Price that Issuer is not prohibited from delivering; and (ii)
deliver, as appropriate, either (A) to the Holder, a new Agreement evidencing
the right of the Holder to purchase that number of shares of Common Stock
obtained by multiplying the number of shares of Common Stock for which the
surrendered Agreement was exercisable at the time of delivery of the notice of
repurchase by a fraction, the numerator of which is the Option Repurchase Price
less the portion thereof theretofore delivered to the Holder and the
denominator of which is the Option Repurchase Price, or (B) to the Owner, a
certificate for the Option Shares it is then so prohibited from repurchasing.
8. (a) In the event that prior to an Exercise Termination Event,
Issuer shall enter into an agreement (i) to consolidate with or merge into any
person, other than Grantee or a Grantee Subsidiary, and shall not be the
continuing or surviving corporation of such consolidation or merger, (ii) to
permit any person, other than Grantee or a Grantee Subsidiary, to merge into
Issuer and Issuer shall be the continuing or surviving corporation, but, in
connection with such merger, the then outstanding shares of Common Stock shall
be changed into or exchanged for stock or other securities of any other person
or cash or any other property or the then outstanding shares of Common Stock
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 or any Significant Subsidiary's assets or
deposits to any person, other than Grantee or a Grantee Subsidiary, then, and in
each such case, the agreement governing such transaction shall make proper
provision 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
the Holder, of either (x) the Acquiring Corporation (as hereinafter defined) or
(y) any person that controls the Acquiring Corporation.
(b) The following terms have the meanings indicated:
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<PAGE> 9
(i) "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, and (iii) the transferee of all or
substantially all of Issuer's assets or deposits (or the assets or
deposits of a Significant Subsidiary of Issuer).
(ii) "Substitute Common Stock" shall mean the common stock
issued by the issuer of the Substitute Option upon exercise of the
Substitute Option.
(iii) "Assigned Value" shall mean the market/ offer price,
as defined in Section 7.
(iv) "Average Price" shall mean the average closing price
of a share of the Substitute Common Stock for the one year immediately
preceding the consolidation, merger or sale in question, but in no event
higher than the closing price of the shares of substitute Common Stock on
the day preceding such consolidation, merger or sale; provided that if
Issuer is the issuer of the Substitute Option, the Average Price shall be
computed with respect to a share of common stock issued by the person
merging into Issuer or by any company which controls or is controlled by
such person, as the Holder may elect
(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 the Holder. The issuer of the Substitute
Option shall also enter into an agreement with the then Holder or Holders of
the Substitute Option in substantially the same form as this Agreement (after
giving effect for such purpose to the provisions of Section 9), which agreement
shall be applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such number
of shares of Substitute Common Stock as is equal to the Assigned Value
multiplied by the number of shares of Common Stock for which the Option is then
exercisable, divided by the Average Price. The exercise price of the Substitute
Option per share of Substitute Common Stock shall then be equal to the Option
Price multiplied by a fraction, the numerator of which shall be the number of
shares of Common Stock for which the Option is then exercisable and the
denominator of which shall be the number of shares of Substitute Common Stock
for which the Substitute Option is exercisable.
(e) In no event, pursuant to any of the foregoing paragraphs,
shall the Substitute Option be exercisable for more than 19.9% of the shares of
Substitute Common Stock outstanding prior to exercise of the Substitute Option.
(f) Issuer shall not enter into any transaction described in
subsection (a) of this Section 8 unless the Acquiring Corporation and any
person that controls the Acquiring Corporation assume in writing all the
obligations of Issuer hereunder.
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<PAGE> 10
9. (a) At the request of the holder of the Substitute Option (the
"Substitute Option Holder"), the issuer of the Substitute Option (the
"Substitute Option Issuer") shall repurchase the Substitute Option from the
Substitute Option Holder at a price (the "Substitute Option Repurchase Price")
equal to the amount by which (i) the highest Closing Price (as hereinafter
defined) exceeds (ii) the exercise price of the Substitute Option, multiplied by
the number of shares of Substitute Common Stock for which the Substitute Option
may then be exercised, and at the request of the owner (the "Substitute Share
Owner") of shares of Substitute Common Stock (the "Substitute Shares"), the
Substitute Option Issuer shall repurchase the Substitute Shares at a price (the
"Substitute Share Repurchase Price") equal to the highest Closing Price
multiplied by the number of Substitute Shares so designated. The term "Highest
Closing Price" shall mean the highest closing price for shares of Substitute
Common Stock within the three-month period immediately preceding the date the
Substitute Option Holder gives notice of the required repurchase of the
Substitute Option or the Substitute Share Owner gives notice of the required
repurchase of the Substitute Shares, as applicable.
(b) The Substitute Option Holder and the Substitute Share Owner,
as the case may be, may exercise its respective right to require the Substitute
Option Issuer to repurchase the Substitute Option and the Substitute Shares
pursuant to this Section 9 by surrendering for such purpose to the Substitute
Option Issuer, at its principal office, the agreement for such Substitute
Option (or, in the absence of such an agreement, a copy of this Agreement) and
certificates for Substitute Shares accompanied by a written notice or notices
stating that the Substitute Option Holder or the Substitute Share Owner, as the
case may be, elects to require the Substitute Option Issuer to repurchase the
Substitute Option and/or the Substitute Shares in accordance with the
provisions of this Section 9. As promptly as practicable, and in any event
within ten business days after the surrender of the Substitute Option and/or
certificates representing Substitute Shares and the receipt of such notice or
notices relating thereto, the Substitute Option Issuer shall deliver or cause
to be delivered to the Substitute Option Holder the Substitute Option
Repurchase Price and/or to the Substitute Share Owner the Substitute Share
Repurchase Price therefor or the portion thereof which the Substitute Option
Issuer is not then prohibited under applicable law and regulation from so
delivering.
(c) To the extent that the Substitute Option Issuer is
prohibited under applicable law or regulation, or as a consequence of
administrative policy, from repurchasing the Substitute Option and/or the
Substitute Shares in part or in full, the Substitute Option Issuer shall
immediately so notify the Substitute Option Holder and/or the Substitute Share
Owner and thereafter deliver or cause to be delivered, from time to time, to the
Substitute Option Holder and/or the Substitute Share Owner, as appropriate, the
portion of the Substitute Share Repurchase Price, respectively, which it is no
longer prohibited from delivering, within ten business days after the date on
which the Substitute Option Issuer is no longer so prohibited; provided,
however, that if the Substitute Option Issuer is at any time after delivery of a
notice of repurchase pursuant to subsection (b) of this Section 9 prohibited
under applicable law or regulation, or as a consequence of administrative
policy, from delivering to the substitute Option Holder and/or the Substitute
Share Owner, as appropriate, the Substitute Option Repurchase Price and the
Substitute Share Repurchase Price, respectively, in full (and the Substitute
Option Issuer shall use its best efforts to receive all required regulatory and
legal approvals as promptly
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<PAGE> 11
as practicable in order to accomplish such repurchase), the Substitute Option
Holder or Substitute Share Owner may revoke its notice of repurchase of the
Substitute Option or the Substitute Shares either in whole or to the extent of
the prohibition, whereupon, in the latter case, the Substitute Option Issuer
shall promptly (i) deliver to the Substitute Option Holder or Substitute Share
Owner, as appropriate, that portion of the Substitute Option Repurchase Price
or the Substitute Share Repurchase Price that the Substitute Option Issuer is
not prohibited from delivering; and (ii) deliver, as appropriate, either (A) to
the Substitute Option Holder, a new Substitute Option evidencing the right of
the Substitute Option Holder to purchase that number of shares of the
Substitute Common Stock obtained by multiplying the number of shares of the
Substitute Common Stock for which the surrendered Substitute Option was
exercisable at the time of delivery of the notice of repurchase by a fraction,
the numerator of which is the Substitute Option Repurchase Price less the
portion thereof theretofore delivered to the Substitute Option Holder and the
denominator of which is the Substitute Option Repurchase Price, or (B) to the
Substitute Share Owner, a certificate for the Substitute Option Shares it is
then so prohibited from repurchasing.
10. The periods for exercise of certain rights under Sections 2, 6, 7,
9 and 12 shall be extended: (i) to the extent necessary to obtain all regulatory
approvals for the exercise of such rights (for so long as the Holder is using
commercially reasonable efforts to obtain such regulatory approvals), and for
the expiration of all statutory waiting periods; and (ii) to the extent
necessary to avoid liability under Section 16(b) of the 1934 Act by reason of
such exercise.
11. Issuer hereby represents and warrants to Grantee as follows:
(a) Issuer has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery 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) Issuer has taken all necessary corporate action to authorize
and reserve and to permit it to issue, and at all times from the date hereof
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 Common Stock equal to the maximum number of shares of Common Stock at
any time and from time to time issuable hereunder, and all such shares, upon
issuance pursuant thereto, will be duly authorized, validly issued, fully paid,
nonassessable, and will be delivered free and dear of all claims, liens,
encumbrance and security interests and not subject to any preemptive rights.
12. Neither of the parties hereto may assign any of its rights or
obligations under this Agreement or the Option created hereunder to any other
person, without the express written consent of the other party, except that in
the event a Subsequent Triggering Event shall have occur prior to an Exercise
Termination Event, Grantee, subject to the express provisions hereof, may assign
in whole or in part its rights and obligations hereunder following such
Subsequent
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<PAGE> 12
Triggering Event; provided, however that until the date 30 days following the
date on which the Federal Reserve Board has approved applications by Grantee to
acquire the shares of Common Stock subject to the Option, Grantee may not
assign its rights under the Option except in (i) a widely dispersed public
distribution, (ii) a private placement in which no one party acquires the right
to purchase in excess of 2% of the voting shares of issuer, (iii) an assignment
to a single party (i.e., a broker or investment banker) for the purpose of
conducting a widely disbursed public distribution on Grantee's behalf, or (iv)
any other manner approved by the Federal Reserve Board.
13. Each of Grantee and Issuer will use its best efforts to make all
filings with, and to obtain consents of, all third parties and governmental
authorities necessary to the consummation of the transactions contemplated by
this Agreement, including without limitation applying to the Federal Reserve
Board under the Bank Holding Company Act for approval to acquire the shares
issuable here under, but Grantee shall not be obligated to apply to state
banking authorities for approval to acquire the shares of Common Stock issuable
hereunder until such time, if ever, as it deems appropriate to do so.
14. The parties hereto acknowledge that damages would be an inadequate
remedy for a breach of this Agreement by either party hereto and that the
obligations of the parties hereto shall be enforceable by either party hereto
through injunctive or other equitable relief.
15. If any term, provision, covenant or restriction contained in this
Agreement is held by a court or a federal or state regulatory agency of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions and covenants and restrictions contained in 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 Holder is not permitted to acquire, or Issuer is not permitted to
repurchase pursuant to Section 7, the full number of shares of Common Stock
provided in Section l(a) hereof (as adjusted pursuant to Section 5 hereof), it
is the express intention of Issuer to allow the Holder to acquire or to require
Issuer to repurchase such lesser number of shares as may be permissible, without
any amendment or modification hereof.
16. All notices, requests, claims, demands and other communications
hereunder shall be deemed to have been duly given when delivered in person, by
fax, telecopy, or by registered or certified mail (postage prepaid, return
receipt requested) at the respective address of the parties set forth in the
Merger Agreement.
17. This Agreement shall be governed by and construed in accordance
with the laws of the State of Georgia, regardless of the laws that might
otherwise govern under applicable principles of conflicts of laws thereof.
18. This Agreement may be executed in two or more counterparts, each
of which shall be deemed to be an original, but all of which shall constitute
one and the same agreement.
19. Except as otherwise expressly provided herein, 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
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<PAGE> 13
contemplated hereunder, including fees and expenses of its own financial
consultants, investment bankers, accountants and counsel.
20. Except as otherwise expressly provided herein or in the Merger
Agreement, this Agreement contains the entire agreement between the parties
with respect to the transactions contemplated hereunder and supersedes all
prior arrangements or understandings with respect thereof, written or oral. The
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and permitted
assignees. Nothing in this Agreement, expressed or implied, is intended to
confer upon any party, other than the parties hereto, and their respective
successors except as assignees, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
herein.
21. Capitalized terms used in this Agreement and not defined herein
shall have the meanings assigned thereto in the Merger Agreement.
IN WITNESS WHEREOF, each of the parties had caused this Agreement to be
executed on its behalf by their officers thereunto duly authorized, all as the
date first above written.
NATIONSBANK CORPORATION
By: /s/ Kenneth D. Lewis
---------------------------------------
President
BANK SOUTH CORPORATION
By: /s/ Patrick L. Flinn
---------------------------------------
Chairman and Chief Executive Officer
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<PAGE> 1
EXHIBIT 99.3
AMENDMENT TO
BANK SOUTH CORPORATION RIGHTS AGREEMENT
AMENDMENT, dated as of September 4, 1995 (the "Amendment"), to the
Rights Agreement, dated as of March 17, 1988, and amended as of April 6, 1988
(as heretofore supplemented and amended, the "Rights Agreement"), between Bank
South Corporation, a Georgia corporation (the "Company"), and Bank South, a
Georgia bank (the "Rights Agent").
WITNESSETH
WHEREAS, pursuant to the Rights Agreement, the Board of Directors of the
Company has previously authorized and declared a dividend of one Right with
respect to each outstanding Common Share (such term and other capitalized terms
used and not otherwise defined herein shall have the meanings ascribed to them
in the Rights Agreement), each Right representing the right to purchase one
one-hundredth of a Preferred Share upon the terms and conditions set forth in
the Rights Agreement; and
WHEREAS, the Rights remain issued and outstanding and the Rights
Agreement remains in effect with respect thereto; and
WHEREAS, no Trigger Event has occurred; and
WHEREAS, the Company and NationsBank Corporation, a North Carolina
corporation ("NationsBank"), propose to enter into an Agreement and Plan of
Merger (the "Merger Agreement"), pursuant to which the Company would merge with
and into NationsBank, with NationsBank surviving; and
WHEREAS, after entry into the Merger Agreement, the Company and
NationsBank may enter into a Stock Option Agreement referred to therein (the
"Stock Option Agreement") pursuant to which the Company would grant to
NationsBank an option to acquire up to 19.9% of the outstanding Common Shares of
the Company under certain circumstances; and
WHEREAS, in connection with the anticipated approval, execution, and
delivery of the Merger Agreement and the Stock Option Agreement, the Board of
Directors of the Company has approved, in accordance with Section 27 of the
Rights Agreement, this Amendment and has directed the appropriate officers of
the Company to take all appropriate steps to execute and deliver this Amendment.
NOW, THEREFORE, in consideration of the premises and mutual agreements
herein set forth, the parties hereby agree as follows:
(1) Amendment to Section 1(a)
Section 1(a) of the Rights Agreement is hereby amended in its
entirety to read as follows:
<PAGE> 2
"(a) "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which, together with all
Affiliates and Associates (as such terms are hereinafter defined) of
such Person, shall be the Beneficial Owner (as such term is
hereinafter defined) of 10% or more of the Common Shares of the
Company then outstanding, but shall not include any of the following:
(i) the Company, any Subsidiary (as such term is
hereinafter defined) of the Company, any employee benefit plan
of the Company or any Subsidiary of the Company, or an entity
holding Common Shares for or pursuant to the terms of any such
plan, or
(ii) until the termination of the Stock Option
Agreement in accordance with its terms prior to any exercise
thereunder, NationsBank or any Affiliate or Associate of
NationsBank, as a result of their acquisition of Beneficial
Ownership of Common Shares of the Company by reason of the
approval, execution, or delivery of the Merger Agreement or by
reason of the consummation of any transaction or the exercise
of any option contemplated by the Stock Option Agreement or
the Merger Agreement, so long as (A) NationsBank is in
compliance with the material terms, conditions, and
obligations imposed upon it in the Stock Option Agreement and
the Merger Agreement, and (B) NationsBank and any Affiliate or
Associate of NationsBank is not the Beneficial Owner of any
Common Shares of the Company other than (w) Common Shares of
the Company of which NationsBank or any Affiliate or Associate
of NationsBank is or becomes the Beneficial Owner by reason of
the approval, execution, or delivery of the Stock Option
Agreement or the Merger Agreement or by reason of the
consummation of any transaction or the exercising of the
option, contemplated by the Stock Option Agreement, the Merger
Agreement, or both, and additional Common Shares not exceeding
5.0% of the outstanding Common Shares of the Company acquired
prior to the earlier of (i) the effective time of the merger
contemplated by the Merger Agreement or (ii) termination of
the Merger Agreement, (x) Common Shares of the Company
Beneficially Owned by NationsBank or any Affiliate or
Associate of NationsBank on the date hereof, (y) Common Shares
of the Company of which NationsBank or any Affiliate or
Associate of NationsBank inadvertently becomes the Beneficial
Owner after the date hereof, provided that the number of such
shares of Common Shares does not exceed 1.0% of the Common
Shares of the Company outstanding on the date hereof and that
NationsBank or any such Affiliate or Associate, as the case
may be, divests such Common Shares as soon as practicable
after it becomes aware of such acquisition of Beneficial
Ownership, and (z) Common Shares of the Company Beneficially
Owned or otherwise held by NationsBank or any Affiliate or
Associate of NationsBank in a bona fide fiduciary capacity or
in satisfaction of debts previously contracted in good faith,
in either case in the ordinary course of its banking business;
Notwithstanding the foregoing, no Person shall become an "Acquiring
Person" solely as the result of any acquisition of Common Shares by
the Company which, by reducing the number
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<PAGE> 3
of shares outstanding, increases the proportionate number of shares
beneficially owned by such Person to 10% or more of the Common Shares
of the Company then outstanding; provided, however, that if a Person
shall become the Beneficial Owner of 10% or more of the Common Shares
of the Company then outstanding by reason of share purchases by the
Company and shall, after such share purchases by the Company, become
the Beneficial Owner of any additional Common Shares of the Company,
then such Person shall be deemed to be an "Acquiring Person.""
(2) Addition of Section 1(v).
A new Section 1(v) is added to the Rights Agreement, to read
as follows:
"(v) "NationsBank" shall mean NationsBank
Corporation, a corporation duly organized and existing under the laws
of the State of North Carolina, and its successors."
(3) Addition of Section 1(w).
A new Section l(w) is added to the Rights Agreement, to read
as follows:
"(w) "Merger Agreement" shall mean the Agreement
and Plan of Merger, to be dated as of September 4, 1995, by and
between NationsBank and the Company, as the same may be amended from
time to time."
(4) Addition of Section 1(x).
A new Section 1(x) is added to the Rights Agreement, to read
as follows:
"(x) "Stock Option Agreement" shall mean the Stock
Option Agreement, to be dated as of September 4, 1995, by and between
the Company, as Issuer, and NationsBank, as Grantee, as the same may
be amended from time to time."
(5) Addition of Section 1(y).
A new Section 1(y) is added to the Rights Agreement, to read
as follows:
"(s) "Termination Time" shall be immediately prior
to the Effective Time, as defined in the Merger Agreement."
(6) Amendment to Section 7(a).
Section 7(a) of the Rights Agreement is amended to read as
follows:
"(a) The registered holder of any Right Certificate
may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the
form of election to
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<PAGE> 4
purchase on the reverse side thereof duly executed, to the Rights
Agent at the principal office of the Rights Agent, together with
payment of the Purchase Price for each one one-hundredth of a
Preferred Share as to which the Rights are exercised, at or prior to
the earliest of (i) the close of business on September 1, 1999 (the
"Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 24 hereof (the "Redemption Date"),
(iii) the time at which such Rights are exchanged as provided in
Section 24 hereof, or (iv) the Termination Time."
(7) Amendment to Section 13.
The language of Section 13 of the Rights Agreement prior to
Section 13, Clause (w) is amended to read as follows:
"Section 13. Consolidation, Merger or Sale or
Transfer of Assets of Earning Power. (a) In the event, directly or
indirectly, (i) the Company shall consolidate with, or merge with and
into, any other Person, (ii) any Person shall consolidate with the
Company, or merge with and into the Company and the Company shall be
the continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the Common Shares shall be
changed into or exchanged for stock or other securities of any other
Person (or the Company) or cash or any other property, (iii) the
Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as
a whole) to any other Person other than the Company or one or more of
its wholly-owned Subsidiaries, or (iv) the Company shall acquire all
or any part of its Common Shares pursuant to a binding share exchange,
provided, however that as long as the Merger Agreement shall not have
been terminated, the references to "other Person" and "any Person" in
the above transactions (i) through (iv) shall not include NationsBank
or any of its Affiliates, then, and in each such case, proper
provision shall be made so that"
(8) Amendment to Section 25.
Clause (d) of Section 25(a) of the Rights Agreement is amended
to read as follows:
"(iv) to effect any consolidation or merger into or
with, or to effect any sale or other transfer (or to permit one or
more of its Subsidiaries to effect any sale or other transfer), in one
or more transactions, of 50% or more of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to, any other
Person, provided, however, that as long as the Merger Agreement shall
not have been terminated, such other Person shall not, in any such
consolidation, merger, or sale or transfer of assets or earning power,
include NationsBank or any of its Affiliates or Associates,"
(9) Addition of Section 35.
A new Section 35 is added to the Rights Agreement, to read as
follows:
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<PAGE> 5
"Section 35. Termination. This Agreement shall
terminate at the Termination Time and all rights, benefits,
obligations, duties and agencies created by this Agreement shall be
terminated at such Termination Time. All Rights issued and outstanding
shall, at the Termination Time, cease to exist and shall be terminated
without any payment to any holder thereof."
(10) Effectiveness. This Amendment shall be deemed to be in force
and effective immediately prior to the execution and delivery of the Merger
Agreement. Except as amended hereby, the Rights Agreement shall remain in full
force and effect and shall be otherwise unaffected hereby, until the
Termination Time.
(11) Governing Law. This Amendment shall be deemed to be a
contract made under the laws of the State of Georgia and for all purposes shall
be governed by and construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely within such State.
(12) Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall for all purposes be deemed an original and
all of which shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the day and year first above written.
BANK SOUTH CORPORATION
By: /s/ Patrick L. Flinn
--------------------------------------------
Patrick L. Flinn
Chairman and Chief Executive Officer
BANK SOUTH, as Rights Agent
By: /s/ Patrick L. Flinn
--------------------------------------------
Name: Patrick L. Flinn
Title: Chairman and Chief Executive Officer
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<PAGE> 1
EXHIBIT 99.4
NATIONSBANK NEWS RELEASE
FOR IMMEDIATE RELEASE
September 5, 1995 -- NationsBank Corporation and Bank South Corporation today
jointly announced a definitive agreement under which Bank South will merge with
NationsBank.
The merger represents a major increase in the already sizable NationsBank
commitment to Atlanta and will enhance the NationsBank position as the largest
bank in metro Atlanta and Georgia.
"This merger seriously expands the NationsBank commitment to Atlanta -- one of
America's great cities," said Ken Lewis, president of NationsBank Corporation.
"A great city needs to have a great bank as a partner, and that's what Atlanta
gets with this merger.
"By joining with Bank South, NationsBank expands its stake in Atlanta's
economic growth, and dramatically enhances its clout to assist that growth,"
Lewis said. "What this merger will produce is a financial institution with the
ability and the commitment to be a full partner in promoting economic growth
throughout metro Atlanta."
Bank South has 149 offices in Georgia, including 60 in-store offices in
supermarkets. It has $7.4 billion in assets and $5.1 billion in deposits. In
addition, Bank South has 267 Automated Teller Machines (ATMs), the largest
number of any bank in Georgia.
The merger agreement, which has been unanimously approved by the boards of
directors of both companies, provides that each share of Bank South common
stock will be exchanged for 0.44 shares of NationsBank common stock. Based on
the closing price of NationsBank stock of $61.50 per share on Friday, September
1, the transaction would be valued at approximately $1.6 billion, or $27 per
share of Bank South common stock.
"Bank South is a well-positioned bank in one of the most attractive markets in
the country," said Lewis. "This merger also reinforces the NationsBank
commitment to Atlanta and will allow us to play an even more effective role in
serving markets throughout Georgia."
Georgia is the fourth fastest-growing state among the most populous states in
the country, trailing only Florida, California, and Arizona.
Lewis also complimented Bank South Chief Executive Officer Patrick L. Flinn and
his management team on successfully restructuring the company and developing a
strong customer franchise in key Georgia markets.
"Pat Flinn's leadership and the teamwork displayed by people throughout the
company made Bank South a success," said Lewis.
"They excel at customer service. We look forward to working closely with them,
and a transition process will begin immediately to assure a smooth and seamless
merger."
<PAGE> 2
"The fact that Bank South is joining one of the country's premier financial
services companies is yet another indication of the success we have achieved,"
said Patrick L. Flinn, chairman and chief executive officer of Bank South.
"NationsBank is an excellent corporate citizen and a fixture in the Georgia
market," Flinn continued, "and we are forming a partnership that rewards
shareholders and offers customers access to an even broader array of products
and services."
Lewis also noted that Bank South's strong consumer, small business and middle
market base will create significant opportunities for increased customer
service and revenue enhancement. In addition, the combined company will be
able to reduce costs and operate more efficiently.
As a result, NationsBank expects this transaction will have no discernible
impact on earnings per share in 1996 and will add to earnings per share in
1997.
In addition, NationsBank stated that earnings per common share will exceed
$7.00 in 1995, before any special items such as the benefit from deposit
insurance premium reductions, the corporate trust sale gain, any one-time
charge on SAIF deposits, or any Bank South merger expenses.
These results will be at or above the upper end of the company's stated goal of
earnings per share growth of 12 percent to 15 percent. Earnings per common
share totaled $6.12 in 1994.
The merger will be tax-free to Bank South shareholders and is expected to be
accounted for as a pooling of interests. The transaction is expected to be
completed during the first quarter of 1996, and is subject to approval by Bank
South shareholders and customary regulators. Bank South has granted
NationsBank an option to purchase 19.9% of its common stock, under certain
circumstances.
NationsBank is the largest bank in Georgia with $18 billion in assets and 189
offices. NationsBank Corporation is the third largest banking company in the
United States with $184 billion in assets and full-service banking offices in
nine states and the District of Columbia.
# # #
Contacts: News Media, Scott Scredon, NationsBank (404) 607-5225
Matt Lewis, Bank South (404) 529-4725
Investor Relations, Susan Carr (704) 386-8059
Jenny Repass (704) 386-8465
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