<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) August 29, 1995
(August 25, 1995)
BOATMEN'S BANCSHARES, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Missouri 1-3750 43-0672260
---------------------------- ---------------- --------------
(State or other jurisdiction (Commission File (IRS Employer
of incorporation Number) Identification No.)
One Boatmen's Plaza, 800 Market Street, St. Louis, Missouri 63101
- -------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 314-466-6000
----------------
==============================================================================
<PAGE> 2
ITEM 5. OTHER EVENTS.
- ----------------------
On August 25, 1995, Boatmen's Bancshares, Inc. (the "Registrant")
entered into an Agreement and Plan of Merger to acquire, in a stock
transaction, Fourth Financial Corporation ("Fourth Financial"),
headquartered in Wichita, Kansas. Copies of the Registrant's press release
announcing the agreement to acquire Fourth Financial, the Agreement and
Plan of Merger, dated August 25, 1995 among the Registrant, Fourth
Financial and a wholly-owned subsidiary of the Registrant, and a Stock
Option Agreement dated August 26, 1995, between Fourth Financial and the
Registrant are attached hereto as exhibits.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
- -------------------------------------------
(a) Financial Statements of Business Acquired - Not applicable
(b) Pro Forma Financial Information - Not applicable
(c) Exhibits - The following exhibits are included with this Report:
Exhibit 99.(a) Press Release dated August 25, 1995
99.(b) Agreement and Plan of Merger, dated August 25,
1995, among Boatmen's Bancshares, Inc., Fourth
Financial Corporation and Acquisition Sub, Inc.
99.(c) Stock Option Agreement, dated August 26, 1995,
between Fourth Financial Corporation and
Boatmen's Bancshares, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
BOATMEN'S BANCSHARES, INC.
--------------------------
(Registrant)
By /s/ JAMES W. KIENKER
-------------------------------
James W. Kienker
Executive Vice President and
Chief Financial Officer
Dated: August 29, 1995
<PAGE> 1
Boatmen's Bancshares, Inc.
Boatmen's Bancshares, Inc.
One Boatmen's Plaza
800 Market Street
St. Louis, Missouri 63101
NEWS
For further information, contact:
Kevin R. Stitt
Boatmen's Bancshares
314/466-7662
Michael J. Shonka
Fourth Financial
316/261-4510
FOR IMMEDIATE RELEASE
- ---------------------
BOATMEN'S BANCSHARES, FOURTH FINANCIAL ANNOUNCE MERGER AGREEMENT
----------------------------------------------------------------
August 25, 1995 - Boatmen's Bancshares, Inc. (NASDAQ:BOAT),
headquartered in St. Louis, and Fourth Financial Corporation (NASDAQ:FRTH),
based in Wichita, Kansas, today announced that they have signed a
definitive agreement for Boatmen's Bancshares to acquire Fourth Financial
in a stock transaction valued at approximately $1.2 billion.
Boatmen's will exchange one share of its common stock for each share
of Fourth Financial's common shares outstanding. The transaction is
subject to the completion of due diligence and shareholder and regulatory
approval. The merger will be accounted for as a pooling of interests and
is expected to close in the first quarter of 1996.
Boatmen's Bancshares, with assets of $33.4 billion, is one of the 30
largest U.S. bank holding companies, operating more than 500 locations in
nine states. Boatmen's also ranks among the nation's largest providers of
trust services with approximately $45 billion in assets under management.
Fourth Financial is the largest banking company in Kansas and third
largest in Oklahoma. As of June 30, 1995, Fourth Financial had
approximately $7.5 billion in assets, $6.0 billion in deposits and operated
<PAGE> 2
146 offices: 87 in Kansas, 56 in Oklahoma and three in Missouri.
When the transaction is completed, Boatmen's will have the leading
deposit market share in five states: Missouri, Kansas, Oklahoma, Arkansas,
and New Mexico. The combined organizations will have an extensive network
of more than 650 retail offices and 1,350 ATMs throughout nine states.
"We are enthusiastic about the business opportunities and synergies
created from the combination of Boatmen's and Fourth Financial," explained
Andrew B. Craig, III, chairman and chief executive officer, of Boatmen's
Bancshares. "Oklahoma and Kansas are two key markets with good growth
potential. We currently have operations in Kansas City, Oklahoma City, and
Tulsa and this in-market acquisition will provide us the opportunity to
further leverage our strengths in these markets."
Darrell G. Knudson, chairman and chief executive officer of Fourth
Financial, said, "We are pleased to join the Boatmen's organization. Our
strength in Kansas and Oklahoma, combined with Boatmen's nine-state
franchise, creates a formidable organization that will be a premier
financial services provider."
Cost savings due to increased efficiencies are expected to total $60
million before tax and be realized over a three-year period, with the bulk
of the savings in the first two years. These savings represent
approximately 14 percent of current in-market expenses for the combined
organization. Boatmen's believes that the transaction will result in
earnings per share dilution of less than 2 percent in 1996, before
nonrecurring merger-related expenses and be accretive to earnings per share
in 1997 and thereafter.
- table attached -
<PAGE> 3
<TABLE>
BOATMEN'S/FOURTH FINANCIAL
PRO FORMA FINANCIAL HIGHLIGHTS
<CAPTION>
Fourth Pro Forma
Boatmen's Financial Combined
--------- --------- ---------
At June 30, 1995 ($ millions)
<S> <C> <C> <C>
Assets $33,408 $7,505 $40,913
Loans 19,921 4,386 24,307
Reserve for loan losses 385 72 457
Deposits 24,417 6,042 30,459
Long-term debt 522 --- 522
Common equity 2,782 550 3,332
Nonperforming assets 191 34 225
Common equity/assets 8.33% 7.33% 8.14%
Reserve/nonperforming loans 291% 256% 285%
Offices 515 146 661
Employees 16,900 3,550 20,450
<CAPTION>
For the six months ended June 30, 1995 ($ millions)
<S> <C> <C>
Net interest income (FTE) $615 $140
Provision for loan losses 19 2
Noninterest income 328 51 <F**>
Noninterest expense 579 <F*> 126
Net income 215 <F*> 37 <F**>
Return on assets 1.32% <F*> 0.97% <F**>
Return on equity 16.0% <F*> 12.8% <F**>
Net interest margin 4.25% 4.02%
<FN>
<F*> Excludes pretax nonrecurring merger expenses of $26 million.
<F**> Excludes pretax securities losses of $22 million.
</TABLE>
<PAGE> 1
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- ---------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
by and among
FOURTH FINANCIAL CORPORATION,
a Kansas corporation,
and
BOATMEN'S BANCSHARES, INC.,
a Missouri corporation,
and
ACQUISITION SUB, INC.,
a Kansas corporation,
Dated August 25, 1995.
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
-----------------
<CAPTION>
Page
----
<C> <S> <C>
ARTICLE ONE TERMS OF THE MERGER AND CLOSING . . . . . . . 1
Section 1.01. Merger. . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Merging Corporation . . . . . . . . . . . . . . 1
Section 1.03. Surviving Corporation . . . . . . . . . . . . . 1
Section 1.04. Effect of the Merger. . . . . . . . . . . . . . 1
Section 1.05. Conversion of Fourth Common . . . . . . . . . . 1
Section 1.06. Conversion of Fourth Preferred. . . . . . . . . 2
Section 1.07. Share Adjustments . . . . . . . . . . . . . . . 2
Section 1.08. Closing . . . . . . . . . . . . . . . . . . . . 3
Section 1.09. Exchange Procedures; Surrender of
Certificates. . . . . . . . . . . . . . . . . 3
Section 1.10. Closing Date. . . . . . . . . . . . . . . . . . 4
Section 1.11. Closing Deliveries. . . . . . . . . . . . . . . 4
ARTICLE TWO REPRESENTATIONS OF FOURTH . . . . . . . . . . 5
Section 2.01. Organization and Capital Stock. . . . . . . . . 5
Section 2.02. Authorization; No Defaults. . . . . . . . . . . 6
Section 2.03. Subsidiaries. . . . . . . . . . . . . . . . . . 6
Section 2.04. Financial Information . . . . . . . . . . . . . 6
Section 2.05. Absence of Changes. . . . . . . . . . . . . . . 7
Section 2.06. Regulatory Enforcement Matters. . . . . . . . . 7
Section 2.07. Tax Matters . . . . . . . . . . . . . . . . . . 7
Section 2.08. Litigation. . . . . . . . . . . . . . . . . . . 8
Section 2.09. Employment Agreements . . . . . . . . . . . . . 8
Section 2.10. Reports . . . . . . . . . . . . . . . . . . . . 9
Section 2.11. Loan Portfolio. . . . . . . . . . . . . . . . . 9
Section 2.12. Investment Portfolio. . . . . . . . . . . . . . 9
Section 2.13. Interest Rate Risk Management
Instruments . . . . . . . . . . . . . . . . . 9
Section 2.14. Employee Matters and ERISA. . . . . . . . . . . 10
Section 2.15. Title to Properties; Insurance. . . . . . . . . 11
Section 2.16. Environmental Matters . . . . . . . . . . . . . 11
Section 2.17. Compliance with Law . . . . . . . . . . . . . . 12
Section 2.18. Brokerage . . . . . . . . . . . . . . . . . . . 12
Section 2.19. Non-Banking Activities of Fourth and its
Subsidiaries. . . . . . . . . . . . . . . . . 12
Section 2.20. Trust Administration. . . . . . . . . . . . . . 12
Section 2.21. State Takeover Laws . . . . . . . . . . . . . . 13
Section 2.22. Pooling of Interests; Tax-Free
Reorganization. . . . . . . . . . . . . . . . 13
Section 2.23. Certain Contracts . . . . . . . . . . . . . . . 13
Section 2.24. No Undisclosed Liabilities. . . . . . . . . . . 13
Section 2.25. Fair Lending; Community Reinvestment
Act . . . . . . . . . . . . . . . . . . . . . 13
Section 2.26. Statements True and Correct . . . . . . . . . . 13
i
<PAGE> 3
ARTICLE THREE REPRESENTATIONS OF BOATMEN'S AND
ACQUISITION SUB . . . . . . . . . . . . . . . 14
Section 3.01. Organization and Capital Stock. . . . . . . . . 14
Section 3.02. Authorization . . . . . . . . . . . . . . . . . 15
Section 3.03. Subsidiaries. . . . . . . . . . . . . . . . . . 15
Section 3.04. Financial Information . . . . . . . . . . . . . 15
Section 3.05. Absence of Changes. . . . . . . . . . . . . . . 16
Section 3.06. Litigation. . . . . . . . . . . . . . . . . . . 16
Section 3.07. Reports . . . . . . . . . . . . . . . . . . . . 16
Section 3.08. Compliance With Law . . . . . . . . . . . . . . 16
Section 3.09. Pooling of Interests; Tax-Free
Reorganization. . . . . . . . . . . . . . . . 16
Section 3.10. Tax Matters . . . . . . . . . . . . . . . . . . 16
Section 3.11. Interest Rate Risk Management
Instruments . . . . . . . . . . . . . . . . . 17
Section 3.12. Brokerage . . . . . . . . . . . . . . . . . . . 17
Section 3.13. Non-Banking Activities of Boatmen's and
its Subsidiaries. . . . . . . . . . . . . . . 17
Section 3.14. State Takeover Laws . . . . . . . . . . . . . . 17
Section 3.15. Fair Lending; Community Reinvestment Act. . . . 17
Section 3.16. Knowledge as to Certain Conditions. . . . . . 17
Section 3.17. Regulatory Enforcement Matters. . . . . . . . . 17
Section 3.18. Statements True and Correct . . . . . . . . . . 18
ARTICLE FOUR AGREEMENTS OF FOURTH. . . . . . . . . . . . . 18
Section 4.01. Business in Ordinary Course . . . . . . . . . . 18
Section 4.02. Breaches. . . . . . . . . . . . . . . . . . . . 21
Section 4.03. Submission to Shareholders. . . . . . . . . . . 21
Section 4.04. Consents to Contracts and Leases. . . . . . . . 21
Section 4.05. Consummation of Agreement . . . . . . . . . . . 21
Section 4.06. Environmental Reports . . . . . . . . . . . . . 21
Section 4.07. Restriction on Resales. . . . . . . . . . . . . 22
Section 4.08. Subsidiary Bank Mergers . . . . . . . . . . . . 22
Section 4.09. Access to Information . . . . . . . . . . . . . 22
ARTICLE FIVE AGREEMENTS OF BOATMEN'S AND
ACQUISITION SUB . . . . . . . . . . . . . . . 23
Section 5.01. Regulatory Approvals and Registration
Statement; Submission to Shareholders . . . . 23
Section 5.02. Breaches. . . . . . . . . . . . . . . . . . . . 24
Section 5.03. Consummation of Agreement . . . . . . . . . . . 24
Section 5.04. Stock Options . . . . . . . . . . . . . . . . . 24
Section 5.05. Directors and Officers' Liability
Insurance and Indemnification . . . . . . . . 25
Section 5.06. Employee Benefits . . . . . . . . . . . . . . . 25
Section 5.07. Board Composition . . . . . . . . . . . . . . . 26
Section 5.08. Other Agreements. . . . . . . . . . . . . . . . 26
Section 5.09. Access to Information . . . . . . . . . . . . . 26
ii
<PAGE> 4
ARTICLE SIX CONDITIONS PRECEDENT TO THE MERGER. . . . . . 26
Section 6.01. Conditions to Boatmen's Obligations . . . . . . 27
Section 6.02. Conditions to Fourth's Obligations. . . . . . . 28
ARTICLE SEVEN TERMINATION OR ABANDONMENT. . . . . . . . . . 29
Section 7.01. Mutual Agreement. . . . . . . . . . . . . . . . 29
Section 7.02. Breach of Agreements. . . . . . . . . . . . . . 29
Section 7.03. Environmental Reports . . . . . . . . . . . . . 30
Section 7.04. Failure of Conditions . . . . . . . . . . . . . 30
Section 7.05. Regulatory Approval Denial. . . . . . . . . . . 30
Section 7.06. Shareholder Approval Denial . . . . . . . . . . 30
Section 7.07. Regulatory Enforcement Matters. . . . . . . . . 30
Section 7.08. Termination Date. . . . . . . . . . . . . . . . 30
Section 7.09. Due Diligence Review. . . . . . . . . . . . . . 30
Section 7.10. Fourth Option Agreement . . . . . . . . . . . . 31
ARTICLE EIGHT GENERAL . . . . . . . . . . . . . . . . . . . 31
Section 8.01. Confidential Information. . . . . . . . . . . . 31
Section 8.02. Publicity . . . . . . . . . . . . . . . . . . . 31
Section 8.03. Return of Documents . . . . . . . . . . . . . . 31
Section 8.04. Notices . . . . . . . . . . . . . . . . . . . . 31
Section 8.05. Liabilities . . . . . . . . . . . . . . . . . . 32
Section 8.06. Nonsurvival of Representations,
Warranties and Agreements . . . . . . . . . . 33
Section 8.07. Entire Agreement. . . . . . . . . . . . . . . . 33
Section 8.08. Headings and Captions . . . . . . . . . . . . . 33
Section 8.09. Waiver, Amendment or Modification . . . . . . . 33
Section 8.10. Rules of Construction . . . . . . . . . . . . . 33
Section 8.11. Counterparts. . . . . . . . . . . . . . . . . . 33
Section 8.12. Successors and Assigns. . . . . . . . . . . . . 33
Section 8.13. Severability. . . . . . . . . . . . . . . . . . 34
Section 8.14. Governing Law; Assignment . . . . . . . . . . . 34
Section 8.15. Definition of Material Adverse Effect . . . . . 34
EXHIBIT 4.07 - Form of Affiliate's Letter
</TABLE>
iii
<PAGE> 5
AGREEMENT AND PLAN OF MERGER
----------------------------
This is an AGREEMENT AND PLAN OF MERGER (this "Agreement")
made August 25, 1995, by and among FOURTH FINANCIAL CORPORATION, a
Kansas corporation ("Fourth"), BOATMEN'S BANCSHARES, INC., a
Missouri corporation ("Boatmen's"), and ACQUISITION SUB, INC., a
Kansas corporation and wholly-owned subsidiary of Boatmen's
("Acquisition Sub").
In consideration of the premises and the mutual terms and
provisions set forth in this Agreement, the parties agree as
follows.
ARTICLE ONE
-----------
TERMS OF THE MERGER AND CLOSING
-------------------------------
SECTION 1.01. MERGER. Pursuant to the terms and provisions
------------ ------
of this Agreement and the General Corporation Code of Kansas (the
"Corporate Law"), Fourth shall merge with and into Acquisition Sub
(the "Merger").
SECTION 1.02. MERGING CORPORATION. Fourth shall be the
------------ -------------------
merging corporation under the Merger and its corporate identity and
existence, separate and apart from Acquisition Sub, shall cease on
consummation of the Merger.
SECTION 1.03. SURVIVING CORPORATION. Acquisition Sub shall
------------ ---------------------
be the surviving corporation in the Merger. No changes in the
articles of incorporation of Acquisition Sub shall be effected by
the Merger.
SECTION 1.04. EFFECT OF THE MERGER. The Merger shall have
------------ --------------------
all of the effects provided by this Agreement and the Corporate
Law.
SECTION 1.05. CONVERSION OF FOURTH COMMON.
------------ ---------------------------
(a) At the Effective Time (as defined in Section 1.10 hereof),
each share of common stock, par value $5.00 per share, of Fourth
(the "Fourth Common") issued and outstanding immediately prior to
the Effective Time shall be converted into the right to receive one
(1) share of common stock, par value $1.00 per share, of Boatmen's
(together with any rights attached thereto under or by virtue of
the Rights Agreement, dated August 14, 1990, as amended, between
Boatmen's and the Rights Agent named therein, prior to the
Distribution Date (as defined in the Rights Agreement), the
"Boatmen's Common"). The shares of Boatmen's Common to be issued
pursuant to the foregoing sentence, together with any cash payment
in lieu of fractional shares, as provided below, is referred to
herein as the "Common Merger Consideration." No fractional shares
of Boatmen's Common shall be issued and, in lieu thereof, holders
of shares of Fourth Common who would otherwise be entitled to a
fractional share interest (after taking into account all shares of
Fourth Common held by such holder) shall be paid an amount in cash
equal to the product of such fractional share interest and the
closing price of a share of Boatmen's Common on the Nasdaq Stock
Market's National Market ("Nasdaq") on the business day immediately
preceding the date on which the Effective Time occurs.
(b) At the Effective Time, all of the shares of Fourth Common,
by virtue of the Merger and without any action on the part of the
holders thereof, shall no longer be outstanding and shall be canceled
<PAGE> 6
and retired and shall cease to exist, and each holder of any
certificate or certificates which immediately prior to the Effective
Time represented outstanding shares of Fourth Common (the "Common
Certificates") shall thereafter cease to have any rights with respect
to such shares, except the right of such holders to receive, without
interest, the Common Merger Consideration upon the surrender of such
Common Certificate or Common Certificates in accordance with Section
1.09 hereof.
(c) At the Effective Time, each share of Fourth Common, if
any, held in the treasury of Fourth or by any direct or indirect
subsidiary of Fourth (other than shares held in trust accounts for
the benefit of others or in other fiduciary, nominee or similar
capacities and shares held by Fourth or any of its subsidiaries in
respect of a debt previously contracted) immediately prior to the
Effective Time shall be canceled.
(d) Each share of common stock, par value $1.00 per share, of
Acquisition Sub outstanding immediately prior to the Effective Time
shall remain outstanding unaffected by the Merger.
SECTION 1.06. CONVERSION OF FOURTH PREFERRED.
------------ ------------------------------
(a) At the Effective Time, each share of Class A 7% Cumulative
Convertible Preferred Stock, par value $100 per share, liquidation
preference $400 per share, of Fourth (the "Fourth Preferred"),
issued and outstanding immediately prior to the Effective Time
shall be converted into the right to receive one (1) share of 7%
cumulative convertible preferred stock, par value $100 per share,
liquidation preference $400 per share, of Boatmen's (the "Boatmen's
Preferred")(and, as a result, each depositary share representing a
one-sixteenth (1/16) interest in a share of Fourth Preferred shall
be converted into the right to receive a one-sixteenth (1/16) share
of Boatmen's Preferred). The terms of the Boatmen's Preferred
shall be substantially the same as the terms of the Fourth
Preferred (with such stock being convertible at the same conversion
price into the number of shares of Boatmen's Common included in the
Common Merger Consideration). The shares of Boatmen's Preferred to
be issued pursuant to the foregoing sentence are referred to herein
as the "Preferred Merger Consideration"; the Common Merger
Consideration and the Preferred Merger Consideration are referred
to herein collectively as the "Merger Consideration."
(b) At the Effective Time, all of the shares of Fourth
Preferred, by virtue of the Merger and without any action on the
part of the holders thereof, shall no longer be outstanding and
shall be canceled and retired and shall cease to exist, and each
holder of any certificate or certificates which immediately prior
to the Effective Time represented outstanding shares of Fourth
Preferred ("Preferred Certificates"; the Common Certificates and
the Preferred Certificates are referred to herein collectively as
the "Certificates") shall thereafter cease to have any rights with
respect to such shares, except the right of such holders to
receive, without interest, the Preferred Merger Consideration upon
the surrender of such Preferred Certificate or Preferred
Certificates in accordance with Section 1.09 hereof.
(c) At the Effective Time, any deposit agreements pursuant to
which shares of Fourth Preferred are held subject to depositary
receipts shall automatically, and without further action on the
part of Boatmen's or Acquisition Sub, be assumed by Acquisition
Sub.
SECTION 1.07. SHARE ADJUSTMENTS. If between the date hereof
------------ -----------------
and the Effective Time a share of Boatmen's Common shall be changed
into a different number of shares of Boatmen's Common or a different
class of shares (a "Share Adjustment") by reason of reclassification,
recapitalization, splitup,
2
<PAGE> 7
exchange of shares or readjustment, or if a stock dividend thereon
shall be declared with a record date within such period, then the
number of shares of Boatmen's Common into which a share of Fourth
Common shall be converted pursuant to Section 1.05(a) hereof shall be
appropriately and proportionately adjusted so that each shareholder of
Fourth shall be entitled to receive such number of shares of Boatmen's
Common as such shareholder would have received pursuant to such
Share Adjustment had the record date therefor been immediately
following the Effective Time of the Merger.
SECTION 1.08. CLOSING. The closing of the Merger (the
------------ -------
"Closing") shall take place at a location mutually agreeable to the
parties at 10:00 A.M. Central Time on the Closing Date described in
Section 1.10 hereof.
SECTION 1.09. EXCHANGE PROCEDURES; SURRENDER OF CERTIFICATES.
------------ ----------------------------------------------
(a) Boatmen's Trust Company shall act as Exchange Agent in the
Merger (the "Exchange Agent").
(b) As soon as reasonably practicable after the Effective
Time, the Exchange Agent shall mail to each record holder of any
Certificate or Certificates whose shares were converted into the
right to receive the Merger Consideration, a letter of transmittal
(which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper
delivery of the Certificates to the Exchange Agent and shall be in
such form and have such other provisions as Boatmen's may
reasonably specify) (each such letter, the "Merger Letter of
Transmittal") and instructions for use in effecting the surrender
of the Certificates in exchange for the Merger Consideration. Upon
surrender to the Exchange Agent of a Certificate, together with a
Merger Letter of Transmittal duly executed and any other required
documents, the holder of such Certificate shall be entitled to
receive in exchange therefor solely the Merger Consideration. No
interest on the Merger Consideration issuable upon the surrender of
the Certificates shall be paid or accrued for the benefit of
holders of Certificates. If the Merger Consideration is to be
issued to a person other than a person in whose name a surrendered
Certificate is registered, it shall be a condition of issuance that
the surrendered Certificate shall be properly endorsed or otherwise
in proper form for transfer and that the person requesting such
issuance shall pay to the Exchange Agent any required transfer
taxes or other taxes or establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not applicable.
(c) Notwithstanding anything to the contrary contained herein,
no Common Merger Consideration shall be delivered to a person who
is an "affiliate" (as such term is used in Section 4.07 hereof) of
Fourth unless such "affiliate" shall have theretofore executed and
delivered to Boatmen's the agreement referred to in Section 4.07
hereof.
(d) No dividends that are otherwise payable on shares of
Boatmen's Common constituting the Merger Consideration shall be
paid after the sixtieth (60th) day after the Closing Date to
persons entitled to receive such shares of Boatmen's Common until
such persons surrender their Certificates in exchange for shares of
such Boatmen's Common. Upon such surrender, there shall be paid to
the person in whose name the shares of Boatmen's Common shall be
issued any dividends which shall have become payable with respect
to such shares of Boatmen's Common (without interest and less the
amount of taxes, if any, which may have been imposed thereon),
between the sixtieth (60th) day after the Closing Date and the time
of such surrender.
3
<PAGE> 8
(e) In the event that any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact
by the person claiming such Certificate to be lost, stolen or
destroyed and, if required by Boatmen's in its sole discretion, the
posting by such person of a bond in such amount as Boatmen's may
determine is reasonably necessary as indemnity against any claim
that may be made against it with respect to such Certificate, the
Exchange Agent shall issue in exchange for such lost, stolen or
destroyed Certificate the Merger Consideration deliverable in
respect thereof pursuant to this Agreement.
(f) Notwithstanding anything in this Agreement to the
contrary, for a period of ninety (90) days after the Closing Date
holders of Common Certificates representing shares of Fourth Common
shall be entitled to vote as holders of shares of Boatmen's Common
notwithstanding that such Common Certificates shall not have been
exchanged for shares of Boatmen's Common as provided in this
Section 1.09.
SECTION 1.10. CLOSING DATE. At Boatmen's election, the
------------ ------------
Closing shall take place on (i) the last business day of, or
(ii) the first business day of the month following, in each case,
the month during which each of the conditions in Sections 6.01(d)
and 6.02(d) hereof is satisfied or waived by the appropriate party
or on such other date after such satisfaction or waiver as Fourth
and Boatmen's may agree (the "Closing Date"). The Merger shall be
effective upon the filing of a Certificate of Merger with the
Secretary of State of the State of Kansas (the "Effective Time"),
which the parties shall use their best efforts to cause to occur on
the Closing Date.
SECTION 1.11. CLOSING DELIVERIES.
------------ ------------------
(a) At the Closing, Fourth shall deliver to Boatmen's and
Acquisition Sub:
(i) a certified copy of the Restated Articles of
Incorporation of Fourth and each of its subsidiaries;
(ii) a Certificate signed by an appropriate officer of
Fourth stating that, to the best knowledge of such officer,
all of the conditions set forth in Sections 6.01(a) and
6.01(b) hereof have been satisfied or waived as provided
therein;
(iii) a certified copy of the resolutions of Fourth's
Board of Directors and shareholders, as required for valid
approval of the execution of this Agreement and the
consummation of the Merger and the other transactions
contemplated hereby;
(iv) Certificate of the Kansas Secretary of State, dated
a recent date, stating that Fourth is in good standing; and
(v) Certificate of Merger executed by Fourth, reflecting
the terms and provisions of this Agreement and in proper form
for filing with the Secretary of State of the State of Kansas
in order to cause the Merger to become effective pursuant to
the Corporate Law.
(b) At the Closing, Boatmen's and Acquisition Sub shall
deliver to Fourth:
4
<PAGE> 9
(i) a Certificate signed by an appropriate officer of
Boatmen's and Acquisition Sub, to the best knowledge of such
officer, stating that all of the conditions set forth in
Sections 6.02(a), 6.02(b) and 6.02(d) hereof (but excluding
the approval of Fourth's shareholders) have been satisfied;
(ii) a certified copy of the resolutions of Boatmen's
Board of Directors and shareholders, as required for valid
approval of the execution of this Agreement and the
consummation of the Merger and the other transactions
contemplated hereby; and
(iii) a certified copy of the resolutions of Acquisition
Sub's Board of Directors and shareholder, as required for
valid approval of the execution of this Agreement and the
consummation of the transactions contemplated hereby.
ARTICLE TWO
-----------
REPRESENTATIONS OF FOURTH
-------------------------
Fourth hereby makes the following representations and
warranties:
SECTION 2.01. ORGANIZATION AND CAPITAL STOCK.
------------ ------------------------------
(a) Fourth is a corporation duly organized, validly existing
and in good standing under the laws of the State of Kansas and has
the corporate power to own all of its property and assets, to incur
all of its liabilities and to carry on its business as now being
conducted. Fourth is a bank holding company registered with the
Board of Governors of the Federal Reserve System (the "Federal
Reserve Board") under the Bank Holding Company Act of 1956, as
amended (the "B.H.C.A.").
(b) The authorized capital stock of Fourth consists of
(i) 50,000,000 shares of Fourth Common, of which, as of the date
hereof, 27,626,660 shares are issued, 2,009 are held as treasury
shares, and 27,624,651 are issued and outstanding, (ii) 250,000
shares of Fourth Preferred, of which, as of the date hereof,
250,000 shares are issued and outstanding, and (iii) 5,000,000
shares of Class B preferred stock, of which, as of the date hereof,
no shares are issued and outstanding. All of the issued and
outstanding shares of Fourth Common and Fourth Preferred are duly
and validly issued and outstanding and are fully paid and non-
assessable. None of the outstanding shares of Fourth Common or
Fourth Preferred has been issued in violation of any preemptive
rights of the current or past shareholders of Fourth. As of the
date hereof, Fourth had reserved 1,944,489 shares of Fourth Common
for issuance under Fourth's Stock Option Plans (as defined in
Section 5.04 hereof) and 3,448,275 shares of Fourth Common for
issuance pursuant to the conversion provisions of the Fourth
Preferred. As of the date hereof, Fourth had outstanding employee
stock options representing the right to acquire not more than
1,700,474 shares of Fourth Common pursuant to the Stock Option
Plans.
(c) Except as set forth in subsection 2.01(b) above and that
certain Stock Option Agreement to be entered into between Fourth
and Boatmen's (the "Fourth Option Agreement"), there are no shares
of capital stock or other equity securities of Fourth outstanding
and no outstanding options, warrants, rights to subscribe for,
calls, or commitments of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, shares
of Fourth Common or other capital stock of Fourth
5
<PAGE> 10
or contracts, commitments, understandings or arrangements by which
Fourth is or may be obligated to issue additional shares of its capital
stock or options, warrants or rights to purchase or acquire any
additional shares of its capital stock.
SECTION 2.02. AUTHORIZATION; NO DEFAULTS. Fourth's Board of
------------ --------------------------
Directors has, by all appropriate action, approved this Agreement
and the Merger and authorized the execution hereof and thereof on
its behalf by its duly authorized officers and the performance by
Fourth of its obligations hereunder. Nothing in the articles of
incorporation or bylaws of Fourth, as amended, or any other
agreement, instrument, decree, proceeding, law or regulation
(except as specifically referred to in or contemplated by this
Agreement) by or to which it or any of its subsidiaries are bound
or subject would prohibit Fourth from consummating this Agreement
and the Merger on the terms and conditions herein contained. This
Agreement has been duly and validly executed and delivered by
Fourth and constitutes a legal, valid and binding obligation of
Fourth, enforceable against Fourth in accordance with its terms
and, except for the requisite approval of the shareholders of
Fourth, no other corporate acts or proceedings are required to be
taken by Fourth to authorize the execution, delivery and
performance of this Agreement. Fourth and its subsidiaries are
neither in default under nor in violation of any provision of their
articles of incorporation or association, as the case may be,
bylaws, or any promissory note, indenture or any evidence of
indebtedness or security therefor, lease, contract, insurance
policy, purchase or other commitment or any other agreement or
arrangement, whether written or oral, which default or violation
would have a Material Adverse Effect (as defined in Section 8.15
hereof) on Fourth, and there has not occurred any event that, with
the lapse of time or giving of notice or both, would constitute
such a default or violation.
SECTION 2.03. SUBSIDIARIES. Each of Fourth's banking
------------ ------------
subsidiaries and its other direct or indirect subsidiaries
(collectively, the "subsidiaries") the name and jurisdiction of
incorporation of which is disclosed in Section 2.03 of that certain
confidential writing delivered by Fourth to Boatmen's and executed
by both Fourth and Boatmen's concurrently with the delivery and
execution of this Agreement (the "Disclosure Schedule"), is duly
organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation and has the corporate power
to own its respective properties and assets, to incur its
respective liabilities and to carry on its respective business as
now being conducted. All of the issued and outstanding shares of
capital stock of each such subsidiary (except as may be otherwise
specified in Section 2.03 of the Disclosure Schedule) are owned by
Fourth or Fourth's subsidiaries, as the case may be, free and clear
of all material liens, encumbrances, rights of first refusal,
options or other restrictions of any nature whatsoever, except for
directors' qualifying shares, assessibility under 12 U.S.C. Section 55
and comparable state laws, if applicable, and as may be stated in
Section 2.03 of the Disclosure Schedule. There are no options,
warrants or rights outstanding to acquire any capital stock of any
of Fourth's subsidiaries and no person or entity has any other
right to purchase or acquire any unissued shares of stock of any of
Fourth's subsidiaries, nor does any such subsidiary have any
obligation of any nature with respect to its unissued shares of
stock. Except as may be disclosed in Section 2.03 of the
Disclosure Schedule, neither Fourth nor any of Fourth's
subsidiaries is a party to any partnership or joint venture or owns
an equity interest in any other business or enterprise.
SECTION 2.04. FINANCIAL INFORMATION. The consolidated
------------ ---------------------
balance sheets of Fourth and its subsidiaries as of December 31,
1994 and related consolidated income statements and statements of
changes in shareholders' equity and of cash flows for the three (3)
years ended December 31, 1994, together with the notes thereto,
included in Fourth's Form 10-K for the year ended December 31,
1994, as currently on file with the Securities and Exchange
Commission (the "S.E.C."), and the unaudited
6
<PAGE> 11
consolidated balance sheets of Fourth and its subsidiaries as of March
31, 1995 and June 30, 1995 and the related unaudited consolidated
income statements and statements of changes in shareholders' equity and
cash flows for the three (3) months and six (6) months, respectively,
then ended included in Fourth's Quarterly Reports on Form 10-Q for the
quarters then ended, as currently on file with the S.E.C., and the
year-end and quarterly Reports of Condition and Reports of Income of
BANK IV, National Association and BANK IV Oklahoma, National
Association (individually, a "Subsidiary Bank"; collectively, the
"Subsidiary Banks") for 1994 and June 30, 1995, respectively, as
currently on file with the Office of the Comptroller of the Currency
(the "O.C.C.") (together, the "Fourth Financial Statements"), have been
prepared in accordance with generally accepted accounting principles
applied on a consistent basis (except as may be disclosed therein and
except for regulatory accounting reporting differences required by the
Subsidiary Banks' reports) and fairly present in all material respects
the consolidated financial position and the consolidated results of
operations, changes in shareholders' equity and cash flows of the
respective entity and its respective consolidated subsidiaries as
of the dates and for the periods indicated (subject, in the case of
interim financial statements, to normal recurring year-end
adjustments, none of which will be material).
SECTION 2.05. ABSENCE OF CHANGES. Since December 31, 1994,
------------ ------------------
there has not been any change in the financial condition, the
results of operations or the business of Fourth and its
subsidiaries taken as a whole which would have a Material Adverse
Effect on Fourth, except as disclosed by Fourth since December 31,
1994 in its periodic reports filed with the S.E.C. under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
Since the date of their respective most recent O.C.C. examination
report, there has been no change in the financial condition, the
results of operations or the business of either of the Subsidiary
Banks which would have a Material Adverse Effect on either of the
Subsidiary Banks, except as disclosed by such Subsidiary Banks
since December 31, 1994 in their respective quarterly Reports of
Condition and Reports of Income filed with the O.C.C.
SECTION 2.06. REGULATORY ENFORCEMENT MATTERS. Except as may
------------ ------------------------------
be disclosed in Section 2.06 of the Disclosure Schedule, neither
Fourth nor any Subsidiary Bank or any other of its subsidiaries is
subject or is party to, or has received any notice or advice that
it may become subject or party to, any cease-and-desist order,
agreement, consent agreement, memorandum of understanding or other
regulatory enforcement action, proceeding or order with or by, or
is a party to any commitment letter or similar undertaking to, or
is subject to any directive by, or has been since January 1, 1993,
a recipient of any supervisory letter from, or since January 1,
1993, has adopted any board resolutions at the request of, any
Regulatory Agency (as defined below in this Section 2.06) that
currently restricts in any material respect the conduct of its
business or that in any material manner relates to its capital
adequacy, its credit policies, its management or its business
(each, a "Regulatory Agreement"), nor has Fourth or any of its
subsidiaries been advised since January 1, 1993, by any Regulatory
Agency that it is considering issuing or requesting any such
Regulatory Agreement. As used in this Agreement, the term
"Regulatory Agency" means any federal or state agency charged with
the supervision or regulation of banks or bank holding companies,
or engaged in the insurance of bank deposits, or any court,
administrative agency or commission or other governmental agency,
authority or instrumentality having supervisory or regulatory
authority with respect to Fourth or any of its subsidiaries.
SECTION 2.07. TAX MATTERS.
------------ -----------
(a) Each of Fourth and its subsidiaries has filed with the
appropriate governmental agencies all federal, state and local
income, franchise, excise, sales, use, real and personal property
and other tax
7
<PAGE> 12
returns and reports required to be filed by it. Except as set forth
in Section 2.07(a) of the Disclosure Schedule or except as it may
relate to a Tax or Tax liability that Fourth is in good faith
contesting, neither Fourth nor its subsidiaries are (a) delinquent in
the payment of any Taxes (as defined below in this Section 2.07)
shown on such returns or reports or on any written assessments
received by it for such Taxes, (b) subject to any agreement extending
the period for assessment or collection of any Tax, or (c) a party to
any action or proceeding with, nor has any claim been asserted or
threatened against any of them by, any governmental authority for
assessment or collection of Taxes. Except as set forth in Section
2.07(a) of the Disclosure Schedule, the United States Federal income
tax returns of Fourth and its subsidiaries have been examined by the
Internal Revenue Service (the "I.R.S.") and any liability with
respect thereto has been satisfied for all years to and including
1990, and either no material deficiencies were asserted as a result
of such examination for which Fourth does not have adequate reserves
or all such deficiencies have been satisfied. The reserve for Taxes
in the financial statements of Fourth for the year ended December 31,
1994, is adequate to cover all of the liabilities for Taxes of
Fourth and its subsidiaries that may become payable in future years
with respect to any transactions consummated prior to December 31,
1994. As used in this Agreement, the term "Taxes" means any
federal, state, local, or foreign income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental, customs duties, capital stock,
franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on
minimum, estimated or other tax of any kind whatsoever, including
any interest, penalty or addition thereto, whether disputed or
undisputed.
(b) Except as set forth in Section 2.07(b) of the Disclosure
Schedule, any amount that could be received (whether in cash or
property or the vesting of property) as a result of any of the
transactions contemplated by this Agreement by any employee,
officer or director of Fourth or any of its affiliates who is a
"Disqualified Individual" (as such term is defined in proposed
Treasury Regulation Section 1.280G-1) under any employment,
severance or termination agreement, other compensation arrangement
or Fourth Employee Plan (as defined in Section 2.14(c) hereof)
currently in effect would not be characterized as an "excess
parachute payment" (as such term is defined in Section 280G(b)(1)
of the Internal Revenue Code of 1986, as amended (the "Code").
(c) Except as set forth in Section 2.07(c) of the Disclosure
Schedule, Fourth has not been subject to any disallowance of a
deduction under Section 162(m) of the Code nor does Fourth
reasonably believe that such a disallowance is reasonably likely to
be applicable for any tax year of Fourth ended on or before the
Closing Date.
SECTION 2.08. LITIGATION. Except as may be disclosed in
------------ ----------
Section 2.08 of the Disclosure Schedule, there is no litigation,
claim or other proceeding pending or, to the knowledge of Fourth,
threatened, against Fourth or any of its subsidiaries, or of which
the property of Fourth or any of its subsidiaries is or would be
subject, which would have a Material Adverse Effect on Fourth.
SECTION 2.09. EMPLOYMENT AGREEMENTS. Except as may be
------------ ---------------------
disclosed in Section 2.09 of the Disclosure Schedule, neither
Fourth nor any of its subsidiaries is a party to or bound by any
agreement, arrangement, commitment or contract (whether written or
oral) for the employment, election, retention or engagement, or
with respect to the severance, of any present or former officer or
employee which, by its terms, is not terminable by Fourth or such
subsidiary on thirty (30) days written notice or less without the
payment of any amount in excess of $25,000 by reason of such
termination. A true, accurate
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<PAGE> 13
and complete list of each such agreement and any and all amendments
or supplements thereto is included in Section 2.09 of the Disclosure
Schedule.
SECTION 2.10. REPORTS. Except as may be disclosed in
------------ -------
Section 2.10 of the Disclosure Schedule, Fourth and each of its
subsidiaries has filed all material reports and statements,
together with any amendments required to be made with respect
thereto, if any, that it was required to file with (i) the Federal
Reserve Board, (ii) the O.C.C., (iii) the Federal Deposit Insurance
Corporation (the "F.D.I.C."), (iv) the S.E.C., (v) any state
securities authorities, (vi) Nasdaq, and (vii) any other Regulatory
Agency with jurisdiction over Fourth or any of its subsidiaries.
As of their respective dates, each of such reports and documents,
including any financial statements, exhibits and schedules thereto,
complied in all material respects with the relevant statutes, rules
and regulations enforced or promulgated by the regulatory authority
with which they were filed.
SECTION 2.11. LOAN PORTFOLIO. Except as may be disclosed in
------------ --------------
Section 2.11 of the Disclosure Schedule, (i) the loans and
discounts shown on the Fourth Financial Statements or which were
entered into after the date of the most recent balance sheet
included in the Fourth Financial Statements were and will be made
in all material respects in the ordinary course of the business of
Fourth and its subsidiaries, and are not subject to any material
known defenses, setoffs or counterclaims, including without
limitation any such as are afforded by usury or truth in lending
laws, except as may be provided by bankruptcy, insolvency or
similar laws or by general principles of equity, (ii) the notes or
other evidences of indebtedness evidencing such loans and all forms
of pledges, mortgages and other collateral documents and security
agreements are and will be, in all material respects, enforceable,
valid, true and genuine and what they purport to be, and
(iii) Fourth and its subsidiaries have complied and will prior to
the Closing Date comply with all laws and regulations relating to
such loans, or to the extent there has not been such compliance,
such failure to comply will not materially interfere with the
collection of such loans.
SECTION 2.12. INVESTMENT PORTFOLIO. All United States
------------ --------------------
Treasury securities, obligations of other United States Government
agencies and corporations, obligations of States and political
subdivisions of the United States and other investment securities
held by Fourth or its subsidiaries, as reflected in the latest
consolidated balance sheet of Fourth included in the Fourth
Financial Statements, are carried in the aggregate at no more than
cost adjusted for amortization of premiums and accretion of
discounts in accordance with generally accepted accounting
principles, specifically including but not limited to FAS 115.
SECTION 2.13. INTEREST RATE RISK MANAGEMENT INSTRUMENTS. All
------------ -----------------------------------------
interest rate swaps, caps, floors, option agreements and other
interest rate risk management agreements with third parties,
whether entered into for the account of Fourth or its subsidiaries
or for the account of a customer of Fourth or one of its
subsidiaries, were entered into in the ordinary course of business
and in accordance with prudent banking practice and applicable
rules, regulations and policies and with counterparties believed to
be financially responsible at the time and are legal, valid and
binding obligations of Fourth or one of its subsidiaries
enforceable in accordance with their terms (subject to the
provisions of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws affecting the
enforceability of creditors' rights generally from time to time in
effect, and equitable principles relating to the granting of
specific performance and other equitable remedies as a matter of
judicial discretion), and are in full force and effect. Fourth and
each of its subsidiaries have duly performed in all material
respects all of their material obligations thereunder to the extent
that such obligations to perform have accrued; and, to
9
<PAGE> 14
Fourth's knowledge, there are no material breaches, violations or
defaults or allegations or assertions of such by any party
thereunder.
SECTION 2.14. EMPLOYEE MATTERS AND ERISA.
------------ --------------------------
(a) Except as may be disclosed in Section 2.14(a) of the
Disclosure Schedule, neither Fourth nor any of its subsidiaries has
entered into any collective bargaining agreement with any labor
organization with respect to any group of employees of Fourth or
any of its subsidiaries and to the knowledge of Fourth there is no
present effort nor existing proposal to attempt to unionize any
group of employees of Fourth or any of its subsidiaries.
(b) Except as may be disclosed in Section 2.14(b) of the
Disclosure Schedule, (i) Fourth and its subsidiaries are and have
been in material compliance with all applicable laws respecting
employment and employment practices, terms and conditions of
employment and wages and hours, including, without limitation, any
such laws respecting employment discrimination and occupational
safety and health requirements, and neither Fourth nor any of its
subsidiaries is engaged in any unfair labor practice, (ii) there is
no material unfair labor practice complaint against Fourth or any
subsidiary pending or, to the knowledge of Fourth, threatened
before the National Labor Relations Board, (iii) there is no labor
dispute, strike, slowdown or stoppage actually pending or, to the
knowledge of Fourth, threatened against or directly affecting
Fourth or any subsidiary, and (iv) neither Fourth nor any
subsidiary has experienced any material work stoppage or other
material labor difficulty during the past five (5) years.
(c) Except as may be disclosed in Section 2.14(c) of the
Disclosure Schedule, neither Fourth nor any subsidiary maintains,
contributes to or participates in or has any liability under any
employee benefit plans, as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or
any nonqualified employee benefit plans or deferred compensation,
bonus, stock or incentive plans, or other employee benefit or
fringe benefit programs for the benefit of former or current
employees of Fourth or any subsidiary (the "Fourth Employee
Plans"). To the knowledge of Fourth, no present or former employee
of Fourth or any subsidiary has been charged with breaching nor has
breached a fiduciary duty under any of the Fourth Employee Plans.
Neither Fourth nor any of its subsidiaries participates in, nor has
it in the past five (5) years participated in, nor has it any
present or future obligation or liability under, any multiemployer
plan (as defined at Section 3(37) of ERISA). Except as may be
separately disclosed in Section 2.14(c) of the Disclosure Schedule,
neither Fourth nor any subsidiary maintains, contributes to, or
participates in, any plan that provides health, major medical,
disability or life insurance benefits to former employees of Fourth
or any subsidiary.
(d) All liabilities of the Fourth Employee Plans subject to
Title IV of ERISA have been funded on the basis of consistent
methods in accordance with sound actuarial assumptions and
practices. No actuarial assumptions have been changed since the
last written report of actuaries on such Fourth Employee Plans.
All insurance premiums (including premiums to the Pension Benefit
Guaranty Corporation) have been paid in full to the extent due,
subject only to normal retrospective adjustments in the ordinary
course. Except as may be noted on the Fourth Financial Statements,
Fourth and its subsidiaries have no contingent or actual
liabilities under Title IV of ERISA as of December 31, 1994. No
accumulated funding deficiency (within the meaning of Section 302
of ERISA or Section 412 of the Code) has ever been incurred with
respect to any of the Fourth Employee Plans, whether or not waived.
No reportable event (as defined in Section 4043 of ERISA) has
occurred with respect to any of the Fourth Employee Plans as to
which a notice would be required to be filed with the Pension
Benefit Guaranty
10
<PAGE> 15
Corporation. No claim is pending or, to the knowledge of Fourth,
threatened or imminent with respect to any Fourth Employee Plan
(other than a routine claim for benefits for which plan
administrative review procedures have not been exhausted) for which
Fourth or any of its subsidiaries would be liable after December 31,
1994, except as is reflected on the Fourth Financial Statements.
After December 31, 1994, Fourth and its subsidiaries have no
liability for excise taxes under Sections 4971, 4975, 4976, 4977,
4979 or 4980B of the Code or for a fine under Section 502 of ERISA
with respect to any Fourth Employee Plan. All Fourth Employee Plans
have been operated, administered and maintained materially in
accordance with the terms thereof and in material compliance with the
requirements of all applicable laws, including, without limitation,
ERISA.
(e) Except as may be disclosed in Section 2.14(e) of the
Disclosure Schedule, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated
hereby (either alone or upon the occurrence of any additional acts
or events) will (i) result in any material payment (including,
without limitation, severance, golden parachute or otherwise)
becoming due to any director, officer or employee of Fourth or any
of its affiliates from Fourth or any of its affiliates under any
Fourth Employee Plan or otherwise, (ii) materially increase any
benefits otherwise payable under any Fourth Employee Plan, or
(iii) result in any acceleration of the time of payment or vesting
of any such benefits to any material extent.
SECTION 2.15. TITLE TO PROPERTIES; INSURANCE. Except as may
------------ ------------------------------
be disclosed in Section 2.15 of the Disclosure Schedule, (i) Fourth
and its subsidiaries have marketable title, insurable at standard
rates, free and clear of all liens, charges and encumbrances
(except taxes which are a lien but not yet payable and liens,
charges or encumbrances reflected in the Fourth Financial
Statements and easements, rights-of-way, and other restrictions
which are not material) to all of their real properties (except
Other Real Estate Owned, as such real estate is internally
classified on the books of Fourth or its subsidiaries), (ii) all
leasehold interests for real property and any material personal
property used by Fourth and its subsidiaries in their businesses
are held pursuant to lease agreements which are valid and
enforceable in accordance with their terms, (iii) all such
properties comply in all material respects with all applicable
private agreements, zoning requirements and other governmental laws
and regulations relating thereto and there are no condemnation
proceedings pending or, to the knowledge of Fourth, threatened with
respect to such properties, (iv) Fourth and its subsidiaries have
valid title or other ownership rights under licenses to all
material intangible personal or intellectual property necessary to
conduct the business and operations of Fourth and its subsidiaries
as presently conducted, free and clear of any claim, defense or
right of any other person or entity which is material to such
property, subject only to rights of the licensors pursuant to
applicable license agreements, which rights do not materially
adversely interfere with the use of such property, and (v) all
material insurable properties owned or held by Fourth and its
subsidiaries are adequately insured by financially sound and
reputable insurers in such amounts and against fire and other risks
insured against by extended coverage and public liability
insurance, as is customary with bank holding companies of similar
size.
SECTION 2.16. ENVIRONMENTAL MATTERS.
------------ ---------------------
(a) As used in this Agreement, "Environmental Laws" means all
local, state and federal environmental, health and safety laws and
regulations in all jurisdictions in which Fourth and its
subsidiaries have done business or owned, leased or operated
property, including, without limitation, the Federal Resource
Conservation and Recovery Act, the Federal Comprehensive
Environmental Response,
11
<PAGE> 16
Compensation and Liability Act, the Federal Clean Water Act, the
Federal Clean Air Act, and the Federal Occupational Safety and Health
Act.
(b) Except as may be disclosed in Section 2.16 of the
Disclosure Schedule, neither the conduct nor operation of Fourth or
its subsidiaries nor any condition of any property presently or
previously owned, leased or operated by any of them violates or
violated Environmental Laws in any respect material to the business
of Fourth and its subsidiaries and no condition has existed or
event has occurred with respect to any of them or any such property
that, with notice or the passage of time, or both, would constitute
a violation material to the business of Fourth and its subsidiaries
of Environmental Laws or obligate (or potentially obligate) Fourth
or its subsidiaries to remedy, stabilize, neutralize or otherwise
alter the environmental condition of any such property where the
aggregate cost of such actions would be material to Fourth and its
subsidiaries. Except as may be disclosed in Section 2.16 of the
Disclosure Schedule, neither Fourth nor any of its subsidiaries has
received any notice from any person or entity that Fourth or its
subsidiaries or the operation or condition of any property ever
owned, leased or operated by any of them are or were in violation
of any Environmental Laws or that any of them are responsible (or
potentially responsible) for the cleanup or other remediation of
any pollutants, contaminants, or hazardous or toxic wastes,
substances or materials at, on or beneath any such property.
SECTION 2.17. COMPLIANCE WITH LAW. Fourth and Subsidiary
------------ -------------------
Banks have all material licenses, franchises, permits and other
governmental authorizations that are legally required to enable
them to conduct their respective businesses in all material
respects and are in compliance in all material respects with all
applicable laws and regulations.
SECTION 2.18. BROKERAGE. Except as may be disclosed in
------------ ---------
Section 2.18 of the Disclosure Schedule, there are no existing
claims or agreements for brokerage commissions, finders' fees, or
similar compensation in connection with the transactions
contemplated by this Agreement payable by Fourth or its
subsidiaries.
SECTION 2.19. NON-BANKING ACTIVITIES OF FOURTH AND ITS
------------ ----------------------------------------
SUBSIDIARIES. Neither Fourth nor any of its subsidiaries that is
- ------------
neither a bank, a bank operating subsidiary or a bank service
corporation, directly or indirectly, engages in any activity
prohibited by the B.H.C.A. Without limiting the generality of the
foregoing, any equity investment of Fourth and each of its
subsidiaries that is not a bank, a bank operating subsidiary or a
bank service corporation, is not prohibited by the B.H.C.A.
SECTION 2.20. TRUST ADMINISTRATION. Each Subsidiary Bank and
------------ --------------------
each other subsidiary of Fourth which is a trust company or
otherwise acts in a fiduciary capacity has properly administered
all accounts for which it acts as a fiduciary or agent, including
but not limited to accounts for which it serves as a trustee,
agent, custodian, personal representative, guardian, conservator or
investment advisor, in accordance with the terms of the governing
documents and applicable state and federal law and regulation and
common law, except where the failure to do so would not,
individually or in the aggregate, have a Material Adverse Effect on
Fourth. Neither Fourth, any subsidiary of Fourth, nor any
director, officer or employee of Fourth or any of its subsidiaries
acting on behalf of Fourth or any of its subsidiaries, has
committed any breach of trust with respect to any such fiduciary or
agency account, and the accountings for each such fiduciary or
agency account are true and correct in all material respects and
accurately reflect the assets of such fiduciary or agency account,
except for such breaches and failures to be true, correct and
accurate which would not, individually or in the aggregate, have a
Material Adverse Effect on Fourth. There is no investigation or
inquiry by any Regulatory Agency pending, or to the knowledge
12
<PAGE> 17
of Fourth, threatened, against or affecting Fourth or any of its
subsidiaries relating to the compliance by Fourth or any such
subsidiary with sound fiduciary principles and applicable
regulations which would have a Material Adverse Effect on Fourth.
SECTION 2.21. STATE TAKEOVER LAWS. The Board of Directors of
------------ -------------------
Fourth has approved the transactions contemplated by this Agreement
and the Fourth Option Agreement such that Article VIII of the
Articles of Incorporation of Fourth and the provisions of KAN.
STAT. ANN. Sections 17-1286 et seq. and 17-12,100 et seq. will not
apply to this Agreement or the Fourth Option Agreement or any of the
transactions contemplated hereby or thereby.
SECTION 2.22. POOLING OF INTERESTS; TAX-FREE REORGANIZATION.
------------ ---------------------------------------------
As of the date of this Agreement, Fourth has no reason to believe
that the Merger will not qualify as a "pooling of interests" for
accounting purposes or a tax-free reorganization within the meaning
of Section 368(a) of the Code.
SECTION 2.23. CERTAIN CONTRACTS. Except as disclosed in
------------ -----------------
Section 2.23 of the Disclosure Schedule or filed or incorporated by
reference in periodic reports filed by Fourth with the S.E.C. under
the Exchange Act, neither Fourth nor any of its subsidiaries is a
party to, or is bound by, (i) any material contract as defined in
Item 601(b)(10) of Regulation S-K of the S.E.C. or any other
contract not made in the ordinary course of business (other than
loans or loan commitments and funding transactions in the ordinary
course of business of Fourth's subsidiaries), (ii) any agreement
restricting the nature or geographic scope of any line of business
or activity of Fourth or its subsidiaries, or (iii) any agreement,
indenture or other instrument relating to the borrowing of money by
Fourth or any of its subsidiaries or the guarantee by Fourth or any
of its subsidiaries of any such obligation, other than instruments
relating to transactions entered into in the ordinary course of
business.
SECTION 2.24. NO UNDISCLOSED LIABILITIES. Fourth and its
------------ --------------------------
subsidiaries do not have any material liability, whether known or
unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, and whether due or to become due (and there is no
past or present fact, situation, circumstance, condition or other
basis for any present or future action, suit or proceeding,
hearing, charge, complaint, claim or demand against Fourth or its
subsidiaries giving rise to any such liability), except (i) for
liabilities set forth in the Fourth Financial Statements,
(ii) normal fluctuation in the amount of the liabilities referred
to in clause (i) above occurring in the ordinary course of business
of Fourth and its subsidiaries since the date of the most recent
balance sheet included in the Fourth Financial Statements, and
(iii) as may be disclosed in Section 2.24 of the Disclosure
Schedule.
SECTION 2.25. FAIR LENDING; COMMUNITY REINVESTMENT ACT. As
------------ ----------------------------------------
of the date hereof, with the exception of routine investigation of
consumer complaints, neither Fourth nor any of its subsidiaries has
been advised by any Regulatory Agency that it is or may be in
violation of the Equal Credit Opportunity Act or the Fair Housing
Act or any similar federal or state statute. As of the date
hereof, each of Fourth's depository institution subsidiaries
received a Community Reinvestment Act ("CRA") rating of "1" or "2"
in its most recent CRA examination.
SECTION 2.26. STATEMENTS TRUE AND CORRECT. None of the
------------ ---------------------------
information supplied or to be supplied by Fourth or its
subsidiaries for inclusion in (i) the Registration Statement (as
defined in Section 4.05 hereof), (ii) the Joint Proxy Statement/
Prospectus (as defined in Section 4.03 hereof), and (iii) any other
documents to be filed with the S.E.C., Nasdaq or any banking or
other regulatory authority in connection
13
<PAGE> 18
with the transactions contemplated hereby will, at the respective
times such documents are filed, and, in the case of the Registration
Statement, when it becomes effective, and, with respect to the Joint
Proxy Statement/Prospectus, when first mailed to the shareholders of
Boatmen's and Fourth and at the time of the Boatmen's Shareholders'
Meeting (as defined in Section 5.01(c) hereof) and the Fourth
Shareholders' Meeting (as defined in Section 4.03 hereof), contain
any untrue statement of a material fact, or omit to state any
material fact necessary in order to make the statements made therein,
in light of the circumstances under which they are made, not
misleading. All documents that Fourth is responsible for filing with
the S.E.C., Nasdaq or any other regulatory authority in connection
with the transactions contemplated hereby will comply as to form in
all material respects with the provisions of applicable law and the
applicable rules and regulations thereunder.
ARTICLE THREE
-------------
REPRESENTATIONS OF BOATMEN'S AND ACQUISITION SUB
------------------------------------------------
Boatmen's and Acquisition Sub hereby make the following
representations and warranties:
SECTION 3.01. ORGANIZATION AND CAPITAL STOCK.
------------ ------------------------------
(a) Boatmen's is a corporation duly incorporated, validly
existing, and in good standing under the laws of the State of
Missouri with full corporate power and authority to carry on its
business as it is now being conducted. Boatmen's is a bank holding
company registered with the Federal Reserve Board under the
B.H.C.A. Acquisition Sub is a corporation duly incorporated,
validly existing, and in good standing under the laws of the State
of Kansas with full corporate power and authority to carry on its
business as it is now being conducted.
(b) The authorized capital stock of Boatmen's consists of
(i) 200,000,000 shares of Boatmen's Common, of which, as of August
23, 1995, 129,350,750 shares were issued and outstanding, and
(ii) 10,300,000 Cumulative Preferred Shares, no par value per
share, of which 35,045 shares are designated "7% Cumulative
Redeemable Preferred Stock, Series B", $100.00 stated value per
share (the "Boatmen's Series B Preferred Stock"), and 2,000,000
shares are designated "Junior Participating Preferred Stock, Series
C", no par value per share (the "Boatmen's Series C Preferred
Stock"). No shares of the Boatmen's Series C Preferred Stock are
issued and outstanding and 11,321 shares of the Boatmen's Series B
Preferred Stock were issued and outstanding as of August 23, 1995.
All of the issued and outstanding shares of Boatmen's Common and
Boatmen's Series B Preferred Stock are duly and validly issued and
outstanding and are fully paid and non-assessable. None of the
outstanding shares of Boatmen's Common has been issued in violation
of any preemptive rights of the current or past shareholders of
Boatmen's. As of August 23, 1995, Boatmen's had outstanding
options and other rights to acquire not more than 4,911,941 shares
of Boatmen's Common and no shares of the Boatmen's Series B
Preferred Stock or the Boatmen's Series C Preferred Stock.
(c) Acquisition Sub has authorized capital of 10,000 shares
of common stock, par value one dollar ($1.00) per share (the
"Acquisition Sub Common"). As of the date hereof, 1,000 shares of
Acquisition Sub Common are issued and outstanding, fully paid and
non-assessable and owned by Boatmen's.
14
<PAGE> 19
(d) The shares of Boatmen's Common and Boatmen's Preferred
that are to be issued to the shareholders of Fourth pursuant to the
Merger have been duly authorized and, when so issued in accordance
with the terms of this Agreement, will be validly issued and
outstanding, fully paid and non-assessable, free of preemptive
rights with no personal liability attaching to the ownership
thereof.
SECTION 3.02. AUTHORIZATION. The Board of Directors of
------------ -------------
Boatmen's and the Board of Directors and sole shareholder of
Acquisition Sub have, by all appropriate action, approved this
Agreement and the Merger and authorized the execution hereof on
their behalf by their respective duly authorized officers and the
performance by such respective entity of their obligations
hereunder. Nothing in the articles of incorporation or bylaws of
Boatmen's or Acquisition Sub, as amended, or any other agreement,
instrument, decree, proceeding, law or regulation (except as
specifically referred to in or contemplated by this Agreement) by
or to which either of them or any of their subsidiaries are bound
or subject would prohibit Boatmen's or Acquisition Sub from
entering into and consummating this Agreement and the Merger on the
terms and conditions herein contained. This Agreement has been
duly and validly executed and delivered by Boatmen's and
Acquisition Sub and constitutes a legal, valid and binding
obligation of Boatmen's and Acquisition Sub, enforceable against
Boatmen's and Acquisition Sub in accordance with its terms and,
except for the requisite approval of the shareholders of Boatmen's,
no other corporate acts or proceedings are required to be taken by
Boatmen's or Acquisition Sub to authorize the execution, delivery
and performance of this Agreement. Boatmen's and its subsidiaries
are neither in default under nor in violation of any provision of
their articles of incorporation or association, as the case may be,
bylaws, or any promissory note, indenture or any evidence of
indebtedness or security therefor, lease, contract, insurance
policy, purchase or other commitment or any other agreement or
arrangement, whether written or oral, which default or violation
would have a Material Adverse Effect on Boatmen's, and there has
not occurred any event that, with the lapse of time or giving of
notice or both, would constitute such a default or violation.
Except for the requisite approval of the Federal Reserve Board, the
Oklahoma State Bank Department and the Kansas State Banking Board,
no notice to, filing with, authorization by, or consent or approval
of, any federal or state bank regulatory authority is necessary for
the execution and delivery of this Agreement or consummation of the
Merger by Boatmen's or Acquisition Sub.
SECTION 3.03. SUBSIDIARIES. Each of The Boatmen's National
------------ ------------
Bank of St. Louis, Boatmen's First National Bank of Kansas City,
Boatmen's Sunwest, Inc. and Boatmen's Arkansas, Inc. (collectively,
"Boatmen's Significant Subsidiaries") is duly organized, validly
existing and in good standing under the laws of the jurisdiction of
its incorporation and has the corporate power to own its respective
properties and assets, to incur its respective liabilities and to
carry on its respective business as now being conducted.
SECTION 3.04. FINANCIAL INFORMATION. The consolidated
------------ ---------------------
balance sheets of Boatmen's and its subsidiaries as of December 31,
1993 and 1994 and related consolidated statements of income,
changes in shareholders' equity and cash flows for the three (3)
years ended December 31, 1994, together with the notes thereto,
included in Boatmen's Form 10-K for the year ended December 31,
1994, as currently on file with the S.E.C., and the unaudited
consolidated balance sheets of Boatmen's and its subsidiaries as of
March 31, 1995 and June 30, 1995 and the related unaudited
consolidated income statements and statements of changes in
shareholders' equity and cash flows for the three (3) months and
six (6) months, respectively, then ended included in Boatmen's
Quarterly Reports on Form 10-Q for the quarters then ended, as
currently on file with the S.E.C. (together, the "Boatmen's
Financial Statements"), have been prepared in accordance with
generally accepted accounting principles applied on a consistent
basis (except
15
<PAGE> 20
as may be disclosed therein) and fairly present in all material
respects the consolidated financial position and the consolidated
results of operations, changes in shareholders' equity and cash flows
of Boatmen's and its consolidated subsidiaries as of the dates and
for the periods indicated (subject, in the case of interim financial
statements, to normal recurring year-end adjustments, none of which
will be material).
SECTION 3.05. ABSENCE OF CHANGES. Since December 31, 1994,
------------ ------------------
there has not been any change in the financial condition, the
results of operations or the business of Boatmen's and its
subsidiaries taken as a whole which would have a Material Adverse
Effect on Boatmen's, except as disclosed by Boatmen's since
December 31, 1994 in its periodic reports filed with the S.E.C.
under the Exchange Act.
SECTION 3.06. LITIGATION. There is no litigation, claim or
------------ ----------
other proceeding pending or, to the knowledge of Boatmen's,
threatened, against Boatmen's or any of its subsidiaries, or of
which the property of Boatmen's or any of its subsidiaries is or
would be subject which would have a Material Adverse Effect on
Boatmen's.
SECTION 3.07. REPORTS. Boatmen's and each of Boatmen's
------------ -------
Significant Subsidiaries has filed all material reports and
statements, together with any amendments required to be made with
respect thereto, that it was required to file with (i) the S.E.C.,
(ii) the Federal Reserve Board, (iii) the O.C.C., (iv) the
F.D.I.C., (v) any applicable state securities or banking
authorities having jurisdiction, (vi) Nasdaq, and (vii) any other
Regulatory Agency with jurisdiction over Boatmen's or any of
Boatmen's Significant Subsidiaries. As of their respective dates,
each of such reports and documents, as amended, including any
financial statements, exhibits and schedules thereto, complied in
all material respects with the relevant statutes, rules and
regulations enforced or promulgated by the regulatory authority
with which they were filed.
SECTION 3.08. COMPLIANCE WITH LAW. Boatmen's and Boatmen's
------------ -------------------
Significant Subsidiaries have all material licenses, franchises,
permits and other governmental authorizations that are legally
required to enable them to conduct their respective businesses in
all material respects and are in compliance in all material
respects with all applicable laws and regulations.
SECTION 3.09. POOLING OF INTERESTS; TAX-FREE REORGANIZATION.
------------ ---------------------------------------------
As of the date of this Agreement, Boatmen's has no reason to
believe that the Merger will not qualify as a "pooling of
interests" for accounting purposes or a tax-free reorganization
within the meaning of Section 368(a) of the Code.
SECTION 3.10. TAX MATTERS. Each of Boatmen's and its
------------ -----------
subsidiaries has filed with the appropriate governmental agencies
all federal, state and local income, franchise, excise, sales, use,
real and personal property and other tax returns and reports
required to be filed by it. Except as it may relate to a Tax or
Tax liability that Boatmen's is in good faith contesting, neither
Boatmen's nor its subsidiaries are (a) delinquent in the payment of
any Taxes shown on such returns or reports or on any written
assessments received by it for such Taxes, (b) subject to any
agreement extending the period for assessment or collection of any
Tax, or (c) a party to any action or proceeding with, nor has any
claim been asserted or threatened against any of them by, any
governmental authority for assessment or collection of Taxes. The
United States Federal income tax returns of Boatmen's and its
subsidiaries have been examined by the I.R.S. and any liability
with respect thereto has been satisfied for all years to and
including 1989, and either no material deficiencies were asserted
as a result of such examination for which Boatmen's does not have
adequate reserves or all such deficiencies have been satisfied.
The reserve for Taxes in the financial statements of Boatmen's for
the year ended December 31, 1994, is
16
<PAGE> 21
adequate to cover all of the liabilities for Taxes of Boatmen's and
its subsidiaries that may become payable in future years with respect
to any transactions consummated prior to December 31, 1994.
SECTION 3.11. INTEREST RATE RISK MANAGEMENT INSTRUMENTS. All
------------ -----------------------------------------
interest rate swaps, caps, floors, option agreements and other
interest rate risk management agreements with third parties,
whether entered into for the account of Boatmen's or its
subsidiaries or for the account of a customer of Boatmen's or one
of its subsidiaries, were entered into in the ordinary course of
business and in accordance with prudent banking practice and
applicable rules, regulations and policies and with counterparties
believed to be financially responsible at the time and are legal,
valid and binding obligations of Boatmen's or one of its
subsidiaries enforceable in accordance with their terms (subject to
the provisions of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws affecting the
enforceability of creditors' rights generally from time to time in
effect, and equitable principles relating to the granting of
specific performance and other equitable remedies as a matter of
judicial discretion), and are in full force and effect. Boatmen's
and each of its subsidiaries have duly performed in all material
respects all of their material obligations thereunder to the extent
that such obligations to perform have accrued; and, to Boatmen's
knowledge, there are no material breaches, violations or defaults
or allegations or assertions of such by any party thereunder.
SECTION 3.12. BROKERAGE. Except for fees payable to
------------ ---------
Donaldson, Lufkin & Jenrette, there are no existing claims or
agreements for brokerage commissions, finders' fees, or similar
compensation in connection with the transactions contemplated by
this Agreement payable by Boatmen's or its subsidiaries.
SECTION 3.13. NON-BANKING ACTIVITIES OF BOATMEN'S AND ITS
------------ -------------------------------------------
SUBSIDIARIES. Neither Boatmen's nor any of its subsidiaries that
- ------------
is neither a bank, a bank operating subsidiary or a bank service
corporation, directly or indirectly, engages in any activity
prohibited by the B.H.C.A. Without limiting the generality of the
foregoing, any equity investment of Boatmen's and each of its
subsidiaries that is not a bank, a bank operating subsidiary or a
bank service corporation, is not prohibited by the B.H.C.A.
SECTION 3.14. STATE TAKEOVER LAWS. The Board of Directors of
------------ -------------------
Boatmen's has approved the transactions contemplated by this
Agreement such that the provisions of Section 351.459 of the
General and Business Corporation Law of Missouri will not apply to
this Agreement or any of the transactions contemplated hereby.
SECTION 3.15. FAIR LENDING; COMMUNITY REINVESTMENT ACT. As
------------ ----------------------------------------
of the date hereof, with the exception of routine investigation of
consumer complaints, neither Boatmen's nor any of its subsidiaries
has been advised by any Regulatory Agency that it is or may be in
violation of the Equal Credit Opportunity Act or the Fair Housing
Act or any similar federal or state statute. As of the date
hereof, each of Boatmen's depository institution subsidiaries as of
the date hereof received a CRA rating of "1" or "2" in its most
recent CRA examination.
SECTION 3.16. KNOWLEDGE AS TO CERTAIN CONDITIONS. As of the
------------ ----------------------------------
date hereof, Boatmen's knows of no reason why the approvals,
consents and waivers of governmental authorities referred to in
Section 6.01(d) hereof will not be obtained in a timely manner or
why the accountant's letter referred to in Section 6.01(f) hereof
cannot be obtained.
SECTION 3.17. REGULATORY ENFORCEMENT MATTERS. Neither
------------ ------------------------------
Boatmen's nor any of its subsidiaries is subject or is party to, or
has received any notice or advice that it may become subject or
party to, any
17
<PAGE> 22
Regulatory Agreement that materially impairs the ability of Boatmen's
to obtain the regulatory approvals of the Merger.
SECTION 3.18. STATEMENTS TRUE AND CORRECT. None of the
------------ ---------------------------
information supplied or to be supplied by Boatmen's or Acquisition
Sub for inclusion in (i) the Registration Statement, (ii) the Joint
Proxy Statement/Prospectus, and (iii) any other documents to be
filed with the S.E.C., Nasdaq or any banking or other regulatory
authority in connection with the transactions contemplated hereby
will, at the respective times such documents are filed, and, in the
case of the Registration Statement, when it becomes effective, and
with respect to the Joint Proxy Statement/Prospectus, when first
mailed to the shareholders of Boatmen's and Fourth and at the time
of the Boatmen's Shareholders' Meeting and the Fourth Shareholders'
Meeting, contain any untrue statement of a material fact, or omit
to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which
they are made, not misleading. All documents that Boatmen's is
responsible for filing with the S.E.C., Nasdaq or any other
regulatory authority in connection with the transactions
contemplated hereby will comply as to form in all material respects
with the provisions of applicable law and the applicable rules and
regulations thereunder.
ARTICLE FOUR
------------
AGREEMENTS OF FOURTH
--------------------
SECTION 4.01. BUSINESS IN ORDINARY COURSE.
------------ ---------------------------
(a) Fourth shall not declare or pay any dividend or make any
other distribution to shareholders, whether in cash, stock or other
property, after the date of this Agreement, except that Fourth may
declare and pay its regular quarterly dividend on the Fourth Common
not to exceed $0.29 per share and its regular quarterly dividend on
the Fourth Preferred at approximately the same times during each
quarter which it has historically declared and paid such dividends;
provided, however, that beginning in the fourth quarter of 1995 and
for each quarter thereafter Fourth may declare and pay a conforming
quarterly dividend on the Fourth Common not to exceed $0.37 per
share and, in order to take into account the fact that Boatmen's
quarterly dividend is paid one month later than Fourth's quarterly
dividend, Fourth may pay an additional one time conforming dividend
in a per share amount equal to $0.10; provided, further, that
Fourth and Boatmen's shall cooperate with each other to coordinate
the record and payment dates of their respective dividends for the
quarter in which the Effective Time occurs such that the Fourth
shareholders shall receive a quarterly dividend from either Fourth
or Boatmen's but not from both during or with respect to such
quarter.
(b) Fourth shall, and shall cause each of its subsidiaries to,
continue to carry on after the date hereof its respective business
and the discharge or incurrence of obligations and liabilities,
only in the usual, regular and ordinary course of business, and by
way of amplification and not limitation, Fourth and each of its
subsidiaries will not, without the prior written consent of
Boatmen's (which shall not be unreasonably withheld):
(i) issue any Fourth Common or other capital stock or
any options, warrants, or other rights to subscribe for or
purchase Fourth Common or any other capital stock or any
securities convertible into or exchangeable for any capital
stock of Fourth or any of its subsidiaries (except
18
<PAGE> 23
for the issuance of Fourth Common pursuant to the valid exercise
of Fourth Stock Options, as defined in Section 5.04(a) hereof,
which are outstanding on the date of this Agreement, or
pursuant to the Fourth Option Agreement, or pursuant to the
conversion of the Fourth Preferred pursuant to the terms
thereof); or
(ii) directly or indirectly redeem, purchase or otherwise
acquire any Fourth Common or any other capital stock of Fourth
or its subsidiaries; or
(iii) effect a reclassification, recapitalization,
splitup, exchange of shares, readjustment or other similar
change in or to any capital stock or otherwise reorganize or
recapitalize; or
(iv) change its certificate or articles of incorporation
or association, as the case may be, or bylaws; or
(v) grant any increase, other than ordinary and normal
increases consistent with past practices, in the compensation
payable or to become payable to officers or salaried
employees, grant any stock options or, except as required by
law, adopt or make any change in any bonus, insurance,
pension, or other Fourth Employee Plan, agreement, payment or
arrangement made to, for or with any of such officers or
employees; or
(vi) borrow or agree to borrow any amount of funds except
in the ordinary course of business, or directly or indirectly
guarantee or agree to guarantee any obligations of others
except in the ordinary course of business; or
(vii) make or commit to make any new loan or letter of
credit or any new or additional discretionary advance under
any existing line of credit, in principal amounts in excess of
$6 million or that would increase the aggregate credit
outstanding to any one borrower (or group of affiliated
borrowers) to more than $6 million (excluding for this purpose
any accrued interest or overdrafts) (a "Pre-Approval Loan"),
without the prior written consent of Boatmen's, acting through
its Executive Vice President-Loan Administration or such other
designee as Boatmen's may give notice of to Fourth; provided,
however, that if Boatmen's should not consent in writing to a
Pre-Approval Loan, neither Boatmen's nor its subsidiaries
shall make or commit to make such Pre-Approval Loan; or
(viii) purchase or otherwise acquire any investment
security for its own account having an average remaining life
to maturity greater than five (5) years or any asset-backed
securities other than those issued or guaranteed by the
Government National Mortgage Association, the Federal National
Mortgage Association or the Federal Home Loan Mortgage
Corporation; or
(ix) enter into any agreement, contract or commitment out
of the ordinary course of business other than letters of
credit, loan agreements, deposit agreements, and other
lending, credit and deposit agreements and documents made in
the ordinary course of business; or
(x) except in the ordinary course of business, place on
any of its assets or properties any mortgage, pledge, lien,
charge, or other encumbrance; or
19
<PAGE> 24
(xi) except in the ordinary course of business, cancel or
accelerate any material indebtedness owing to Fourth or its
subsidiaries or any claims which Fourth or its subsidiaries
may possess or waive any material rights with respect thereto;
or
(xii) sell or otherwise dispose of any material real
property or any material amount of any tangible or intangible
personal property other than properties acquired in
foreclosure or otherwise in the ordinary collection of
indebtedness to Fourth and its subsidiaries; or
(xiii) foreclose upon or otherwise take title to or
possession or control of any real property without first
obtaining a phase one environmental report thereon which
indicates that the property is free of pollutants,
contaminants or hazardous or toxic waste materials; provided,
however, that Fourth and its subsidiaries shall not be
required to obtain such a report with respect to single
family, non-agricultural residential property of one acre or
less to be foreclosed upon unless it has reason to believe
that such property might contain any such waste materials or
otherwise might be contaminated; or
(xiv) commit any act or fail to do any act which will
cause a breach of any agreement, contract or commitment and
which will have a Material Adverse Effect on Fourth; or
(xv) violate any law, statute, rule, governmental
regulation, or order, which violation might have a Material
Adverse Effect on Fourth; or
(xvi) purchase any real or personal property or make any
other capital expenditure where the amount paid or committed
therefor is in excess of $500,000; or
(xvii) take any action which would adversely effect or
delay the ability of either Boatmen's or Fourth to obtain any
necessary approvals of any Regulatory Agency or other
governmental authority required for the transactions
contemplated hereby or to perform its covenants and agreements
under this Agreement or the Fourth Option Agreement.
(c) Fourth and its subsidiaries shall not, without the prior
written consent of Boatmen's, engage in any transaction or take any
action that would render untrue in any material respect any of the
representations and warranties of Fourth contained in Article Two
hereof, if such representations and warranties were given as of the
date of such transaction or action.
(d) Fourth shall promptly notify Boatmen's in writing of the
occurrence of any matter or event known to and directly involving
Fourth, which would not include any changes in conditions that
affect the banking industry generally, that would constitute a
Material Adverse Effect on Fourth.
(e) Fourth shall not, on or before the earlier of the Closing
Date or the date of termination of this Agreement, solicit or
encourage, or, subject to the fiduciary duties of its directors as
advised by counsel, hold discussions or negotiations with or
provide any information to, any person in connection with, any
proposal from any person for the acquisition of all or any
substantial portion of the business, assets, shares of Fourth
Common or other securities of Fourth and its subsidiaries. Fourth
shall promptly (which for this purpose shall mean within twenty-
four (24) hours) advise Boatmen's of its receipt of any such
proposal or inquiry concerning any possible such proposal, the
substance of such proposal or inquiry, and the identity of such
person.
20
<PAGE> 25
SECTION 4.02. BREACHES. Fourth shall, in the event it has
------------ --------
knowledge of the occurrence, or impending or threatened occurrence,
of any event or condition which would cause or constitute a breach
(or would have caused or constituted a breach had such event
occurred or been known prior to the date hereof) of any of its
representations or agreements contained or referred to herein, give
prompt written notice thereof to Boatmen's and use its best efforts
to prevent or promptly remedy the same.
SECTION 4.03. SUBMISSION TO SHAREHOLDERS. Fourth shall cause
------------ --------------------------
to be duly called and held, on a date mutually selected by
Boatmen's and Fourth, a special meeting of its shareholders (the
"Fourth Shareholders' Meeting") for submission of this Agreement
and the Merger for approval of such Fourth shareholders as required
by the Corporate Law. In connection with the Fourth Shareholders'
Meeting, (i) Fourth shall cooperate and assist Boatmen's in
preparing and filing a Joint Proxy Statement/Prospectus (the "Joint
Proxy Statement/Prospectus") with the S.E.C. and Fourth shall mail
it to its shareholders, (ii) Fourth shall furnish Boatmen's all
information concerning itself that Boatmen's may reasonably request
in connection with such Joint Proxy Statement/Prospectus, and
(iii) the Board of Directors of Fourth (subject to compliance with
its fiduciary duties as advised by counsel) shall recommend to its
shareholders the approval of this Agreement and the Merger
contemplated hereby and use its best efforts to obtain such
shareholder approval.
SECTION 4.04. CONSENTS TO CONTRACTS AND LEASES. Fourth shall
------------ --------------------------------
use its best efforts to obtain all necessary consents with respect
to all interests of Fourth and its subsidiaries in any material
leases, licenses, contracts, instruments and rights which require
the consent of another person for their transfer or assumption
pursuant to the Merger, if any.
SECTION 4.05. CONSUMMATION OF AGREEMENT. Fourth shall use
------------ -------------------------
its best efforts to perform and fulfill all conditions and
obligations on its part to be performed or fulfilled under this
Agreement and to effect the Merger promptly in accordance with the
terms and provisions hereof. Fourth shall furnish to Boatmen's in
a timely manner all information, data and documents in the
possession of Fourth requested by Boatmen's as may be required to
obtain any necessary regulatory or other approvals of the Merger or
to file with the S.E.C. a registration statement on Form S-4 (the
"Registration Statement") relating to the shares of Boatmen's
Common and Boatmen's Preferred to be issued to the shareholders of
Fourth pursuant to the Merger and this Agreement and shall
otherwise cooperate fully with Boatmen's to carry out the purpose
and intent of this Agreement.
SECTION 4.06. ENVIRONMENTAL REPORTS. Fourth shall provide to
------------ ---------------------
Boatmen's, as soon as reasonably practical, but not later than
sixty (60) days after the date hereof, a report of a phase one
environmental investigation on all real property owned, leased or
operated by Fourth or its subsidiaries as of the date hereof (but
excluding space in retail and similar establishments leased by
Fourth for automatic teller machines or bank branch facilities
where the space leased comprises less than 20% of the total space
leased to all tenants of such property) and within ten (10) days
after the acquisition or lease of any real property acquired or
leased by Fourth or its subsidiaries after the date hereof (but
excluding space in retail and similar establishments leased by
Fourth for automatic teller machines or bank branch facilities
where the space leased comprises less than 20% of the total space
leased to all tenants of such property), except as otherwise
provided in Section 4.01(b)(xiii) hereof. If required by the phase
one investigation in Boatmen's reasonable opinion, Fourth shall
provide to Boatmen's a report of a phase two investigation on
properties requiring such additional study. Boatmen's shall have
fifteen (15) business days from the receipt of any such phase two
investigation report to notify Fourth of any dissatisfaction with
the contents of such report. Should the cost of taking all
remedial or other corrective actions and measures required
21
<PAGE> 26
by applicable law or reasonably likely to be required by applicable
law, in the aggregate, exceed the sum of Twenty Million Dollars
($20,000,000) as reasonably estimated by an environmental expert
retained for such purpose by Boatmen's and reasonably acceptable to
Fourth, then Boatmen's shall have the right pursuant to
Section 7.03 hereof, for a period of fifteen (15) business days
following receipt of such estimate, to terminate this Agreement,
which shall be Boatmen's sole remedy in such event; provided,
however, that for purposes of determining the cost of all remedial
or other corrective actions and measures as provided in this
sentence, there shall be excluded any such costs which arise from
or are attributable to the contamination of the ground water
underneath the banking facilities owned by Fourth in the downtown
business district of Wichita, Kansas provided (i) such
contamination originated from sources other than such Fourth owned
property, and (ii) liability for the clean-up and remediation of
such contamination continues to be undertaken by the City of
Wichita, Kansas or another governmental entity.
SECTION 4.07. RESTRICTION ON RESALES. Fourth shall use its
------------ ----------------------
best efforts to obtain and deliver to Boatmen's, at least thirty-
one (31) days prior to the Closing Date, the signed agreement, in
the form of Exhibit 4.07 hereto, of each person who may reasonably
be deemed an "affiliate" of Fourth within the meaning of such term
as used in Rule 145 under the Securities Act of 1933, as amended
(the "Securities Act"), regarding (i) compliance with the
provisions of such Rule 145, and (ii) compliance with the
requirements of Accounting Principles Board Opinion No. 16
regarding the disposition of shares of Fourth Common, Fourth
Preferred, Boatmen's Common or Boatmen's Preferred (or reduction of
risk with respect thereto) until such time as financial results
covering at least thirty (30) days of post-Merger combined
operations have been published.
SECTION 4.08. SUBSIDIARY BANK MERGERS. Upon the request of
------------ -----------------------
Boatmen's, Fourth shall cause one or more of the Subsidiary Banks
to enter into one or more merger agreements with any wholly-owned
banking subsidiary of Boatmen's, and take all other actions and
cooperate with Boatmen's in causing such merger or mergers, as the
case may be (the "Subsidiary Bank Mergers") to be effected. Such
subsidiary bank merger agreement or agreements shall provide, in
addition to customary terms for the combination of subsidiary bank
operations in transactions such as this: (i) for consummation of
any such merger on a date on or after the Closing Date, as may be
selected by Boatmen's, and (ii) that the obligations of the
Subsidiary Bank thereunder are conditioned on the prior or
simultaneous consummation of the Merger pursuant to this Agreement.
The Merger shall not be conditioned upon the consummation of the
Subsidiary Bank Mergers.
SECTION 4.09. ACCESS TO INFORMATION. Fourth shall permit
------------ ---------------------
Boatmen's reasonable access in a manner which will avoid undue
disruption or interference with Fourth's normal operations to its
properties and shall disclose and make available to Boatmen's,
unless prohibited by applicable law, all books, documents, papers
and records relating to its assets, stock ownership, properties,
operations, obligations and liabilities, including, but not limited
to, all books of account (including the general ledger), tax
records, minute books of directors' and shareholders' meetings,
organizational documents, material contracts and agreements, loan
files, filings with any regulatory authority, accountants'
workpapers (if available and subject to the respective independent
accountants' consent), litigation files (but only to the extent
that such review would not result in a material waiver of the
attorney-client or attorney work product privileges under the rules
of evidence), plans affecting employees, and any other business
activities or prospects in which Boatmen's may have a reasonable
and legitimate interest in furtherance of the transactions
contemplated by this Agreement. Fourth shall deliver to Boatmen's
within twenty (20) business days after the date hereof a true,
accurate and complete copy of each written plan or program
disclosed in Section 2.14(c) of the Disclosure Schedule and, with
respect to each such plan
22
<PAGE> 27
or program, all (i) amendments or supplements thereto, (ii) summary
plan descriptions, (iii) lists of all current participants and all
participants with benefit entitlements, (iv) contracts relating to
plan documents, (v) actuarial valuations for any defined benefit
plan, (vi) valuations for any plan as of the most recent date,
(vii) determination letters from the I.R.S., (viii) the most recent
annual report filed with the I.R.S., (ix) registration statements
on Form S-8 and prospectuses, and (x) trust agreements. Boatmen's
will hold any such information which is nonpublic in confidence in
accordance with the provisions of Section 8.01 hereof.
ARTICLE FIVE
------------
AGREEMENTS OF BOATMEN'S AND ACQUISITION SUB
-------------------------------------------
SECTION 5.01. REGULATORY APPROVALS AND REGISTRATION
------------ -------------------------------------
STATEMENT; SUBMISSION TO SHAREHOLDERS.
- -------------------------------------
(a) Boatmen's shall promptly file all regulatory applications
required in order to consummate the Merger, including but not
limited to the necessary applications for the prior approval of the
Federal Reserve Board, the Oklahoma State Bank Department and the
Kansas State Banking Board. Boatmen's shall provide Fourth a
complete copy of such applications and any other submissions in the
form in which Boatmen's intends to submit such applications and
submissions for its review and comment prior to the filing thereof
with the appropriate Regulatory Agency. Boatmen's shall keep
Fourth reasonably informed as to the status of such applications
and make available to Fourth copies of such applications and any
supplementally filed materials.
(b) Boatmen's shall promptly file with the S.E.C. the
Registration Statement relating to the shares of Boatmen's Common
and Boatmen's Preferred to be issued to the shareholders of Fourth
pursuant to this Agreement, and shall use its best efforts to cause
the Registration Statement to become effective. At the time the
Registration Statement becomes effective, the Registration
Statement shall comply in all material respects with the provisions
of the Securities Act and the published rules and regulations
thereunder, and shall not contain any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
false or misleading, and at the time of mailing thereof to the
shareholders of Boatmen's and Fourth, at the time of the Boatmen's
Shareholders' Meeting and the Fourth Shareholders' Meeting and at
the Effective Time, the Joint Proxy Statement/Prospectus included
as part of the Registration Statement, as amended or supplemented
by any amendment or supplement, shall not contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein not false or misleading.
Boatmen's shall timely file all documents required to obtain all
necessary Blue Sky permits and approvals, if any, required to carry
out the transactions contemplated by this Agreement, shall pay all
expenses incident thereto and shall use its best efforts to obtain
such permits and approvals on a timely basis. Boatmen's shall
promptly and properly prepare and file (i) any application required
to list on Nasdaq the shares of Boatmen's Common and Boatmen's
Preferred to be issued pursuant to the Merger, and (ii) any filings
required under the Exchange Act relating to the Merger and the
transactions contemplated herein.
(c) Boatmen's shall cause to be duly called and held, on a
date mutually selected by Boatmen's and Fourth, a special meeting
of its shareholders (the "Boatmen's Shareholders' Meeting") for
submission of the transactions contemplated by this Agreement for
approval of such Boatmen's shareholders. In connection with the
Boatmen's Shareholders' Meeting, (i) Boatmen's shall prepare and
file the Joint
23
<PAGE> 28
Proxy Statement/Prospectus with the S.E.C. and mail it to its
shareholders, and (ii) the Board of Directors of Boatmen's shall
(subject to compliance with its fiduciary duties as advised by
counsel) recommend to its shareholders the approval of this Agreement
and the Merger contemplated hereby and use its best efforts to obtain
such shareholder approval.
SECTION 5.02. BREACHES. Boatmen's shall, in the event it has
------------ --------
knowledge of the occurrence, or impending or threatened occurrence,
of any event or condition which would cause or constitute a breach
(or would have caused or constituted a breach had such event
occurred or been known prior to the date hereof) of any of its
representations or agreements contained or referred to herein, give
prompt written notice thereof to Fourth and use its best efforts to
prevent or promptly remedy the same.
SECTION 5.03. CONSUMMATION OF AGREEMENT. Boatmen's and
------------ -------------------------
Acquisition Sub shall use their respective best efforts to perform
and fulfill all conditions and obligations on their part to be
performed or fulfilled under this Agreement and to effect the
Merger promptly in accordance with the terms and conditions of this
Agreement.
SECTION 5.04. STOCK OPTIONS.
------------ -------------
(a) At the Effective Time, each outstanding option to purchase
shares of Fourth Common (a "Fourth Stock Option") issued pursuant
to the Amended and Restated Fourth Financial Corporation 1981 Stock
Incentive Plan, the Amended and Restated Fourth Financial
Corporation 1986 Stock Incentive Plan, the Fourth Financial
Corporation 1993 Incentive Stock Option Plan, and the Fourth
Financial Corporation Non-Employee Directors Stock Option Plan
(together, the "Stock Option Plans") whether or not exercisable or
vested, shall be assumed by Boatmen's as hereinafter provided.
Each Fourth Stock Option shall be deemed to constitute an option to
acquire, on the same terms and conditions as were applicable under
such Fourth Stock Option, the same number of full shares of
Boatmen's Common as the holder of such Fourth Stock Option would
have been entitled to receive pursuant to the Merger had such
holder exercised such option in full immediately prior to the
Effective Time, at a price per share equal to (y) the aggregate
exercise price for Fourth Common otherwise purchasable pursuant to
such Fourth Stock Option divided by (z) the number of full shares
of Boatmen's Common deemed purchasable pursuant to such Fourth
Stock Option. In no event shall Boatmen's be required to issue
fractional shares of Boatmen's Common.
(b) As soon as practicable after the Effective Time, Boatmen's
shall deliver to each holder of Fourth Stock Options appropriate
notices setting forth such holders' rights pursuant to the Stock
Option Plans, and the agreements evidencing the grants of such
Fourth Stock Options shall continue in effect on the same terms and
conditions (subject to the conversion required by this Section 5.04
after giving effect to the Merger and the assumption by Boatmen's
as set forth above). To the extent necessary to effectuate the
provisions of this Section 5.04, Boatmen's may deliver new or
amended agreements reflecting the terms of each Fourth Stock Option
assumed by Boatmen's and amend the Stock Option Plans to reflect
the terms hereof.
(c) As soon as practicable after the Effective Time, Boatmen's
shall file with the S.E.C. a registration statement on an
appropriate form with respect to the shares of Boatmen's Common
subject to such options and shall use its best efforts to maintain
the effectiveness of such registration statement or registration
statements (and maintain the current status of the prospectus or
prospectuses with respect thereto) for so long as such options
remain outstanding.
24
<PAGE> 29
(d) The adjustment provided in this Section 5.04 with respect
to any Fourth Stock Options which are "incentive stock options" (as
defined in Section 422 of the Code) shall be and is intended to be
effected in a manner which is consistent with Section 424(a) of the
Code.
SECTION 5.05. DIRECTORS AND OFFICERS' LIABILITY INSURANCE AND
------------ -----------------------------------------------
INDEMNIFICATION.
- ---------------
(a) Following the Effective Time, Boatmen's will provide the
directors and officers of Fourth and its subsidiaries with the same
directors' and officers' liability insurance coverage that
Boatmen's provides to directors and officers of its other banking
subsidiaries generally, and, in addition, for a period of five (5)
years will use its best efforts to continue Fourth's directors' and
officers' liability insurance coverage with respect to actions
occurring prior to the Effective Time to the extent that such
coverage is obtainable for an aggregate premium not to exceed 200%
of the annual premium presently being paid by Fourth. If the
premium of such insurance would exceed such maximum amount,
Boatmen's shall use its best efforts to procure such level of
insurance having the coverage described above as can be obtained
for a premium equal to such maximum amount.
(b) For ten (10) years after the Effective Time, Boatmen's
shall indemnify, defend and hold harmless the present and former
officers, directors, employees and agents of Fourth and its
subsidiaries (each, an "Indemnified Party") against all losses,
expenses, claims, damages or liabilities arising out of actions or
omissions occurring on or prior to the Effective Time (including,
without limitation, the transactions contemplated by this Agreement
and the Fourth Option Agreement) to the full extent then permitted
under the Corporate Law and by Fourth's Articles of Incorporation
as in effect on the date hereof, including provisions relating to
advances of expenses incurred in the defense of any action or suit.
(c) If after the Effective Time Boatmen's or any of its
successors or assigns (i) shall consolidate with or merge into any
other corporation or entity and shall not be the continuing or
surviving corporation or entity of such consolidation or merger, or
(ii) shall transfer all or substantially all of its properties and
assets to any individual, corporation or other entity, then and in
each such case, proper provision shall be made so that the
successors and assigns of Boatmen's shall assume any remaining
obligations set forth in this Section 5.05.
SECTION 5.06. EMPLOYEE BENEFITS. Boatmen's shall, with
------------ -----------------
respect to each employee of Fourth or its subsidiaries at the
Closing Date who continues in employment with Fourth, Boatmen's or
any of their respective subsidiaries (each a "Continued Employee"),
provide the benefits described in this Section 5.06. Subject to
the right of subsequent amendment, modification or termination in
Boatmen's sole discretion, each Continued Employee shall be
entitled, as a new employee of a subsidiary of Boatmen's, to
participate in such employee benefit plans, as defined in
Section 3(3) of ERISA, or any non-qualified employee benefit plans
or deferred compensation, stock option, bonus or incentive plans,
or other employee benefit or fringe benefit programs that may be in
effect generally for employees of all of Boatmen's subsidiaries
(the "Boatmen's Employee Plans"), if and as a Continued Employee
shall be eligible and, if required, selected for participation
therein under the terms thereof and otherwise shall not be
participating in a similar plan maintained by Fourth after the
Closing Date. Fourth employees will be eligible to participate on
the same basis as similarly situated employees of other Boatmen's
subsidiaries. All such participation shall be subject to such
terms of such plans as may be in effect from time to time and this
Section 5.06 is not intended to give Continued Employees any rights
or privileges superior to those of other employees of Boatmen's
subsidiaries. Boatmen's may terminate or modify all Fourth
Employee Plans except insofar as benefits thereunder shall have
vested on the Closing Date and
25
<PAGE> 30
cannot be modified and Boatmen's obligation under this Section 5.06
shall not be deemed or construed so as to provide duplication of
similar benefits but, subject to that qualification, Boatmen's shall,
for purposes of vesting and any age or period of service requirements
for commencement of participation with respect to any Boatmen's
Employee Plans in which Continued Employees may participate, credit
each Continued Employee with his or her term of service with Fourth
and its subsidiaries.
SECTION 5.07. BOARD COMPOSITION. Boatmen's Board of
------------ -----------------
Directors shall take all requisite action to elect two (2) persons
as directors of Boatmen's effective as of the first meeting of
Boatmen's Board of Directors after the Effective Time, which
persons shall be selected by Fourth subject to approval by
Boatmen's.
SECTION 5.08. OTHER AGREEMENTS. After the date hereof, (i)
------------ ----------------
neither Boatmen's nor any of its subsidiaries shall enter into any
agreement to acquire or merge with another company which results in
the Federal Reserve Board disapproving or materially delaying
approval of the Merger, (ii) Boatmen's shall not, without the prior
written consent of Fourth, engage in any transaction or take any
action that would render untrue in any material respect any of the
representations and warranties of Boatmen's contained in
Article Three hereof, if such representations and warranties were
given as of the date of such transaction or action, (iii) Boatmen's
shall promptly notify Fourth in writing of the occurrence of any
matter or event known to and directly involving Boatmen's, which
would not include any changes in conditions that affect the banking
industry generally, that would constitute a Material Adverse Effect
on Boatmen's, (iv) Boatmen's shall, in the event it has knowledge
of the occurrence, or impending or threatened occurrence, of any
event or condition which would cause or constitute a breach (or
would have caused or constituted a breach had such event occurred
or been known prior to the date hereof) of any of its
representations or agreements contained or referred to herein, give
prompt written notice thereof to Fourth and use its best efforts to
prevent or promptly remedy the same, and (v) Boatmen's shall not
declare or pay any extraordinary or special dividend on the
Boatmen's Common.
SECTION 5.09. ACCESS TO INFORMATION. Boatmen's shall permit
------------ ---------------------
Fourth reasonable access in a manner which will avoid undue
disruption or interference with Boatmen's normal operations to its
properties and shall disclose and make available to Fourth, unless
prohibited by applicable law, all books, documents, papers and
records relating to its assets, stock ownership, properties,
operations, obligations and liabilities, including, but not limited
to, all books of account (including the general ledger), tax
records, minute books of directors' and shareholders' meetings,
organizational documents, material contracts and agreements, loan
files, filings with any regulatory authority, accountants'
workpapers (if available and subject to the respective independent
accountants' consent), litigation files (but only to the extent
that such review would not result in a material waiver of the
attorney-client or attorney work product privileges under the rules
of evidence), plans affecting employees, and any other business
activities or prospects in which Fourth may have a reasonable and
legitimate interest in furtherance of the transactions contemplated
by this Agreement. Fourth will hold any such information which is
nonpublic in confidence in accordance with the provisions of
Section 8.01 hereof.
26
<PAGE> 31
ARTICLE SIX
-----------
CONDITIONS PRECEDENT TO THE MERGER
----------------------------------
SECTION 6.01. CONDITIONS TO BOATMEN'S OBLIGATIONS. Boatmen's
------------ -----------------------------------
and Acquisition Sub's obligations to effect the Merger shall be
subject to the satisfaction (or waiver by Boatmen's) prior to or on
the Closing Date of the following conditions:
(a) The representations and warranties made by Fourth in this
Agreement shall be true and correct on and as of the Closing Date
with the same effect as though such representations and warranties
had been made or given on and as of the Closing Date (except for
any such representations and warranties made as of a specified date
which shall be true and correct as of such date); provided,
however, that (i) in determining whether or not the condition
contained in this Section 6.01(a) shall be satisfied, no effect
shall be given to any exceptions in such representations and
warranties relating to materiality or Material Adverse Effect, and
(ii) the condition contained in this Section 6.01(a) shall be
deemed to be satisfied unless the failure of such representations
and warranties to be so true and correct shall constitute,
individually or in the aggregate, a Material Adverse Effect on
Fourth;
(b) Fourth shall have performed and complied in all material
respects with all of its obligations and agreements required to be
performed on or prior to the Closing Date under this Agreement;
(c) No temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent
jurisdiction or other legal restraint or prohibition (an
"Injunction") preventing the consummation of the Merger shall be in
effect, nor shall any proceeding by any bank regulatory authority
or other governmental agency seeking any of the foregoing be
pending. There shall not be any action taken, or any statute,
rule, regulation or order enacted, entered, enforced or deemed
applicable to the Merger which makes the consummation of the Merger
illegal;
(d) All necessary regulatory approvals, consents,
authorizations and other approvals, including the requisite
approval of this Agreement and the Merger by the shareholders of
Boatmen's and Fourth, required by law for consummation of the
Merger shall have been obtained and all waiting periods required by
law shall have expired; provided, however, that the condition
contained in this Section 6.01(d) shall be deemed to be satisfied
notwithstanding the failure of Fourth to receive any third-party
non-Regulatory Agency consents provided (i) Fourth used its
reasonable efforts to obtain such consents, and (ii) the failure to
obtain such consents shall not constitute, individually or in the
aggregate, a Material Adverse Effect on Fourth;
(e) Boatmen's shall have received all documents required to
be received from Fourth on or prior to the Closing Date as set
forth in Section 1.11 hereof, all in form and substance reasonably
satisfactory to Boatmen's;
(f) Boatmen's shall have received an opinion letter, dated as
of the Closing Date, from Ernst & Young, L.L.P., its independent
public accountants, to the effect that the Merger will qualify for
pooling of interests accounting treatment under Accounting
Principles Board Opinion No. 16 if closed and consummated in
accordance with this Agreement;
27
<PAGE> 32
(g) The Registration Statement shall be effective under the
Securities Act and no stop order suspending the effectiveness of
the Registration Statement shall be in effect or proceedings for
such purpose pending before or threatened by the S.E.C.; and
(h) Boatmen's shall have received an opinion of its counsel,
Lewis, Rice & Fingersh, L.C., to the effect that if the Merger is
consummated in accordance with the terms set forth in this
Agreement (i) the Merger will constitute a reorganization within
the meaning of Section 368(a) of the Code, (ii) no gain or loss
will be recognized by the holders of shares of Fourth Common or
Fourth Preferred upon receipt of Merger Consideration (except for
cash received in lieu of fractional shares), (iii) the basis of
shares of Boatmen's Common and Boatmen's Preferred received by the
shareholders of Fourth will be the same as the basis of shares of
Fourth Common or Fourth Preferred, as the case may be, exchanged
therefor, and (iv) the holding period of the shares of Boatmen's
Common and Boatmen's Preferred received by such shareholders will
include the holding period of the shares of Fourth Common or Fourth
Preferred, as the case may be, exchanged therefor, provided such
shares were held as capital assets as of the Effective Time.
SECTION 6.02. CONDITIONS TO FOURTH'S OBLIGATIONS. Fourth's
------------ ----------------------------------
obligation to effect the Merger shall be subject to the
satisfaction (or waiver by Fourth) prior to or on the Closing Date
of the following conditions:
(a) The representations and warranties made by Boatmen's and
Acquisition Sub in this Agreement shall be true and correct on and
as of the Closing Date with the same effect as though such
representations and warranties had been made or given on the
Closing Date (except for any such representations and warranties
made as of a specified date which shall be true and correct as of
such date); provided, however, that with the exception of the
representation and warranty set forth in Section 3.01(d) hereof,
which shall be true and correct in all respects on and as of the
Closing Date, (i) in determining whether or not the condition
contained in this Section 6.02(a) shall be satisfied, no effect
shall be given to any exceptions in such representations and
warranties relating to materiality or Material Adverse Effect, and
(ii) the condition contained in this Section 6.02(a) shall be
deemed to be satisfied unless the failure of such representations
and warranties to be so true and correct shall constitute,
individually or in the aggregate, a Material Adverse Effect on
Boatmen's;
(b) Boatmen's and Acquisition Sub shall have performed and
complied in all material respects with all of their obligations and
agreements hereunder required to be performed on or prior to the
Closing Date under this Agreement;
(c) No Injunction preventing the consummation of the Merger
shall be in effect, nor shall any proceeding by any bank regulatory
authority or other governmental agency seeking any of the foregoing
be pending. There shall not be any action taken, or any statute,
rule, regulation or order enacted, entered, enforced or deemed
applicable to the Merger which makes the consummation of the Merger
illegal;
(d) All necessary regulatory approvals, consents,
authorizations and other approvals, including the requisite approval
of this Agreement and the Merger by the shareholders of Boatmen's and
Fourth, required by law for consummation of the Merger shall have
been obtained and all waiting periods required by law shall have
expired; provided, however, that the condition contained in this
Section 6.02(d) shall be deemed to be satisfied notwithstanding the
failure of Boatmen's to receive any third-party non-
28
<PAGE> 33
Regulatory Agency consents provided (i) Boatmen's used its
reasonable efforts to obtain such consents, and (ii) the failure to
obtain such consents shall not constitute, individually or in the
aggregate, a Material Adverse Effect on Boatmen's;
(e) Fourth shall have received all documents required to be
received from Boatmen's on or prior to the Closing Date as set
forth in Section 1.11 hereof, all in form and substance reasonably
satisfactory to Fourth;
(f) The Registration Statement shall be effective under the
Securities Act and no stop order suspending the effectiveness of
the Registration Statement shall be in effect or proceedings for
such purpose pending before or threatened by the S.E.C.;
(g) Fourth shall have received an opinion letter, dated as of
the Closing Date, from Ernst & Young, L.L.P., independent public
accountants for Boatmen's, to the effect that the Merger will
qualify for pooling of interests accounting treatment under
Accounting Principles Board Opinion No. 16 if closed and
consummated in accordance with this Agreement;
(h) Fourth shall have received an opinion of its counsel,
Sullivan & Cromwell, to the effect that if the Merger is
consummated in accordance with the terms set forth in this
Agreement (i) the Merger will constitute a reorganization within
the meaning of Section 368(a) of the Code, (ii) no gain or loss
will be recognized by the holders of shares of Fourth Common or
Fourth Preferred upon receipt of Merger Consideration (except for
cash received in lieu of fractional shares), (iii) the basis of
shares of Boatmen's Common and Boatmen's Preferred received by the
shareholders of Fourth will be the same as the basis of shares of
Fourth Common or Fourth Preferred, as the case may be, exchanged
therefor, and (iv) the holding period of the shares of Boatmen's
Common and Boatmen's Preferred received by such shareholders will
include the holding period of the shares of Fourth Common or Fourth
Preferred, as the case may be, exchanged therefor, provided such
shares were held as capital assets as of the Effective Time; and
(i) No "Shares Acquisition Date" or "Distribution Date" (as
such terms are defined in Boatmen's Rights Agreement) shall have
occurred under the Rights Agreement prior to the Effective Time.
ARTICLE SEVEN
-------------
TERMINATION OR ABANDONMENT
--------------------------
SECTION 7.01. MUTUAL AGREEMENT. This Agreement may be
------------ ----------------
terminated by the mutual written agreement of Boatmen's and Fourth
at any time prior to the Closing Date, regardless of whether
approval of this Agreement and the Merger by the shareholders of
Fourth shall have been previously obtained.
SECTION 7.02. BREACH OF AGREEMENTS. In the event that there
------------ --------------------
is a material breach in any of the representations and warranties
or agreements of Boatmen's or Fourth, which breach would entitle
the non-breaching party to not consummate the Merger and which
breach is not cured within thirty (30) days after notice to cure
such breach is given to the breaching party by the non-breaching
party, then the non-breaching party, regardless of whether
shareholder approval of this Agreement and the Merger shall have
29
<PAGE> 34
been previously obtained, may terminate and cancel this Agreement
by providing written notice of such action to the other party
hereto.
SECTION 7.03. ENVIRONMENTAL REPORTS. Boatmen's may terminate
------------ ---------------------
this Agreement to the extent provided by Section 4.06 hereof by
giving written notice thereof to Fourth.
SECTION 7.04. FAILURE OF CONDITIONS. In the event any of the
------------ ---------------------
conditions to the obligations of either party are not satisfied or
waived on or prior to the Closing Date, and if any applicable cure
period provided in Section 7.02 hereof has lapsed, then such party
may, regardless of whether approval of this Agreement and the
Merger by the shareholders of Boatmen's or Fourth shall have been
previously obtained, terminate and cancel this Agreement by
delivery of written notice of such action to the other party on
such date.
SECTION 7.05. REGULATORY APPROVAL DENIAL. If any regulatory
------------ --------------------------
application filed pursuant to Section 5.01(a) hereof should be
finally denied or disapproved by the respective regulatory
authority, then this Agreement thereupon shall be deemed terminated
and canceled.
SECTION 7.06. SHAREHOLDER APPROVAL DENIAL. If this Agreement
------------ ---------------------------
or the relevant transactions contemplated hereby are not approved
by the requisite vote of the shareholders of Fourth at the Fourth
Shareholders' Meeting or the shareholders of Boatmen's at the
Boatmen's Shareholders' Meeting, then either party may terminate
this Agreement.
SECTION 7.07. REGULATORY ENFORCEMENT MATTERS. In the event
------------ ------------------------------
that Fourth or any of its subsidiaries shall become a party or
subject to any new or amended written agreement, memorandum of
understanding, cease and desist order, imposition of civil money
penalties or other regulatory enforcement action or proceeding with
any Regulatory Agency, which would have a Material Adverse Effect
on Fourth after the date of this Agreement, then Boatmen's may
terminate this Agreement. In the event that Boatmen's or any of
its subsidiaries shall become a party or subject to any new or
amended written agreement, memorandum of understanding, cease and
desist order, imposition of civil money penalties or other
regulatory enforcement action or proceeding with any Regulatory
Agency, which would have a Material Adverse Effect on Boatmen's
after the date of this Agreement, then Fourth may terminate this
Agreement.
SECTION 7.08. TERMINATION DATE. If the Closing Date does not
------------ ----------------
occur on or prior to the first anniversary of the date of this
Agreement, then this Agreement may be terminated by either party by
giving written notice thereof to the other.
SECTION 7.09. DUE DILIGENCE REVIEW. In accordance with
------------ --------------------
Section 4.09 hereof, Fourth shall provide Boatmen's full and
complete access to its books, records and staff and those of its
subsidiaries to facilitate Boatmen's due diligence review of the
asset quality of Fourth and its subsidiaries. On or before
September 25, 1995, Boatmen's may terminate this Agreement by
giving written notice thereof to Fourth if: (i) Fourth's allowance
for credit losses is inadequate by more than $50,000,000 based upon
loan grading and reserve methodologies utilized by the O.C.C., or
(ii) Fourth's credit administration practices vary materially from
accepted industry standards such that they are either inadequate to
reasonably achieve their intended function or to permit a
reasonably accurate assessment of the level of risk inherent in
Fourth's credit portfolio.
30
<PAGE> 35
SECTION 7.10. FOURTH OPTION AGREEMENT. Boatmen's may
------------ -----------------------
terminate this Agreement if the Fourth Option Agreement shall not
have been executed and delivered by Fourth on the day following the
execution of this Agreement.
ARTICLE EIGHT
-------------
GENERAL
-------
SECTION 8.01. CONFIDENTIAL INFORMATION. The parties
------------ ------------------------
acknowledge the confidential and proprietary nature of the
"Information" (as herein described) which has heretofore been
exchanged and which will be received from each other hereunder and
agree to hold and keep the same confidential. Such Information
will include any and all financial, technical, commercial,
marketing, customer or other information concerning the business,
operations and affairs of a party that may be provided to the
other, irrespective of the form of the communications, by such
party's employees or agents. Such Information shall not include
information which is or becomes generally available to the public
other than as a result of a disclosure by a party or its
representatives in violation of this Agreement. The parties agree
that the Information will be used solely for the purposes
contemplated by this Agreement and that such Information will not
be disclosed to any person other than employees and agents of a
party who are directly involved in evaluating the transaction. The
Information shall not be used in any way detrimental to a party,
including use directly or indirectly in the conduct of the other
party's business or any business or enterprise in which such party
may have an interest, now or in the future, and whether or not now
in competition with such other party.
SECTION 8.02. PUBLICITY. Boatmen's and Fourth shall
------------ ---------
cooperate with each other in the development and distribution of
all news releases and other public disclosures concerning this
Agreement and the Merger and shall not issue any news release or
make any other public disclosure without the prior consent of the
other party, unless it reasonably believes such is required by law
upon the advice of counsel or is in response to published newspaper
or other mass media reports regarding the transaction contemplated
hereby, in which such latter event the parties shall give
reasonable notice, and to the extent practicable, consult with each
other regarding such responsive public disclosure.
SECTION 8.03. RETURN OF DOCUMENTS. Upon termination of this
------------ -------------------
Agreement without the Merger becoming effective, each party, to the
extent permitted by applicable law, (i) shall deliver to the other
originals and all copies of all Information made available to such
party, (ii) will not retain any copies, extracts or other
reproductions in whole or in part of such Information, and
(iii) will destroy all memoranda, notes and other writings prepared
by any party based on the Information.
SECTION 8.04. NOTICES. Any notice or other communication
------------ -------
shall be in writing and shall be deemed to have been given or made
on the date of delivery, in the case of hand delivery, or three (3)
business days after deposit in the United States Registered Mail,
postage prepaid, or upon receipt if transmitted by facsimile
telecopy or any other means, addressed (in any case) as follows:
31
<PAGE> 36
(a) if to Boatmen's or Acquisition Sub:
Boatmen's Bancshares, Inc.
One Boatmen's Plaza
800 Market Street
St. Louis, Missouri 63102
Attention: Mr. Gregory L. Curl
Facsimile: 314/466-5645
with a copy to:
Lewis, Rice & Fingersh, L.C.
500 North Broadway, Suite 2000
St. Louis, Missouri 63102
Attention: Thomas C. Erb, Esq.
Facsimile: 314/241-6056
and
(b) if to Fourth:
Fourth Financial Corporation
100 North Broadway
Wichita, Kansas 67202
Attention: Mr. Darrell G. Knudson
Facsimile: 316/261-4595
with a copy to:
Foulston & Siefkin L.L.P.
700 Fourth Financial Center
Broadway at Douglas
Wichita, Kansas 67202
Attention: Benjamin C. Langel, Esq.
Facsimile: 316/267-6345
- and -
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: H. Rodgin Cohen, Esq.
Facsimile: 212/558-3588
or to such other address as any party may from time to time
designate by notice to the others.
SECTION 8.05. LIABILITIES. In the event that this Agreement
------------ -----------
is terminated pursuant to the provisions of Article Seven hereof,
no party hereto shall have any liability to any other party for
costs, expenses, damages or otherwise; provided, however, that,
notwithstanding the foregoing, in the event that
32
<PAGE> 37
this Agreement is terminated pursuant to Section 7.02 hereof on
account of a willful breach of any of the representations and
warranties set forth herein or any breach of any of the agreements
set forth herein, then the non-breaching party shall be entitled to
recover appropriate damages from the breaching party.
SECTION 8.06. NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND
------------ ----------------------------------------------
AGREEMENTS. Except for, and as provided in, this Section 8.06, no
- ----------
representation, warranty or agreement contained in this Agreement
shall survive the Effective Time or the earlier termination of this
Agreement; provided, however, that no such representation, warranty
or covenant shall be deemed to be terminated or extinguished so as
to deprive Boatmen's, Acquisition Sub or Fourth (or any director,
officer or controlling person thereof) of any defense in law or
equity which otherwise would be available against the claims of any
person, including, without limitation, any shareholder or former
shareholder of either Boatmen's or Fourth, the aforesaid
representations, warranties and covenants being material
inducements to the consummation by Boatmen's, Acquisition Sub and
Fourth of the transactions contemplated herein. The agreements set
forth in Article One, and Sections 5.04, 5.05, 5.06 and 5.07 hereof
shall survive the Effective Time and the agreements set forth in
Sections 8.01, 8.02, 8.03, 8.05 and 8.06 hereof shall survive the
Effective Time or the earlier termination of this Agreement.
SECTION 8.07. ENTIRE AGREEMENT. This Agreement and the
------------ ----------------
Fourth Option Agreement constitute the entire agreement between the
parties and supersede and cancel any and all prior discussions,
negotiations, undertakings, agreements in principle or other
agreements between the parties relating to the subject matter
hereof.
SECTION 8.08. HEADINGS AND CAPTIONS. The captions of
------------ ---------------------
Articles and Sections hereof are for convenience only and shall not
control or affect the meaning or construction of any of the
provisions of this Agreement.
SECTION 8.09. WAIVER, AMENDMENT OR MODIFICATION. The
------------ ---------------------------------
conditions of this Agreement which may be waived may only be waived
by notice to the other party waiving such condition. The failure
of any party at any time or times to require performance of any
provision hereof shall in no manner affect the right at a later
time to enforce the same. This Agreement may be amended or
modified by the parties hereto, at any time before or after
shareholder approval of the Agreement; provided, however, that
after any such approval no such amendment or modification shall
alter the amount or change the form of the Merger Consideration
contemplated by this Agreement to be received by shareholders of
Fourth. This Agreement may not be amended or modified except by a
written document duly executed by the parties hereto.
SECTION 8.10. RULES OF CONSTRUCTION. Unless the context
------------ ---------------------
otherwise requires: (i) a term has the meaning assigned to it,
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles, (iii) "or" is not exclusive, and (iv) words in the
singular may include the plural and in the plural include the
singular.
SECTION 8.11. COUNTERPARTS. This Agreement may be executed
------------ ------------
in two or more counterparts, each of which shall be deemed an
original and all of which shall be deemed one and the same
instrument.
SECTION 8.12. SUCCESSORS AND ASSIGNS. This Agreement shall
------------ ----------------------
be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns. There shall be no third
party beneficiaries hereof except with respect to Sections 5.04 and
5.05 hereof.
33
<PAGE> 38
SECTION 8.13. SEVERABILITY. In the event that any provisions
------------ ------------
of this Agreement or any portion thereof shall be finally
determined to be unlawful or unenforceable, such provision or
portion thereof shall be deemed to be severed from this Agreement,
and every other provision, and any portion of a provision, that is
not invalidated by such determination, shall remain in full force
and effect. To the extent that a provision is deemed unenforceable
by virtue of its scope but may be made enforceable by limitation
thereof, such provision shall be enforceable to the fullest extent
permitted under the laws and public policies of the State whose
laws are deemed to govern enforceability. It is declared to be the
intention of the parties that they would have executed the
remaining provisions without including any that may be declared
unenforceable.
SECTION 8.14. GOVERNING LAW; ASSIGNMENT. This Agreement
------------ -------------------------
shall be governed by the laws of the State of Missouri, except to
the extent that the Corporate Law must govern the Merger
procedures, and applicable federal laws and regulations. This
Agreement may not be assigned by either of the parties hereto.
SECTION 8.15. DEFINITION OF MATERIAL ADVERSE EFFECT. As used
------------ -------------------------------------
in this Agreement, the term "Material Adverse Effect," with respect
to either Boatmen's or Fourth, means any condition, event, change
or occurrence that has or will have a material adverse effect upon
(A) the financial condition, business or results of operations of
Boatmen's or Fourth and their respective subsidiaries taken as a
whole (other than as a result of changes in federal laws or
regulations and other than changes in accounting rules of general
applicability), or (B) the ability of Boatmen's or Fourth to
perform its respective obligations under, and to consummate the
transactions contemplated by, this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
FOURTH FINANCIAL CORPORATION
By -----------------------------------------
Darrell G. Knudson
Chairman and Chief Executive Officer
BOATMEN'S BANCSHARES, INC.
By -----------------------------------------
Gregory L. Curl
Vice Chairman
34
<PAGE> 39
ACQUISITION SUB, INC.
By -----------------------------------------
Gregory L. Curl
President
35
<PAGE> 40
EXHIBIT 4.07
------------
-------------------, 199--
- ------------------------
- ------------------------
- ------------------------
- ------------------------
Attention: ------------------
------------------
Re: Agreement and Plan of Merger, dated August 25, 1995 (the
"Merger Agreement"), by and among Fourth Financial
Corporation ("Fourth"), Boatmen's Bancshares, Inc.
("Boatmen's"), and Acquisition Sub, Inc. ("Acquisition
Sub")
Gentlemen:
I have been advised that I may be deemed to be an affiliate of
Fourth, as that term is defined for purposes of paragraphs (c) and
(d) of Rule 145 ("Rule 145") of the Rules and Regulations of the
Securities and Exchange Commission (the "Commission") promulgated
under the Securities Act of 1933, as amended (the "Securities
Act").
Pursuant to the terms and conditions of the Merger Agreement,
each share of common stock of Fourth owned by me as of the
effective time of the merger contemplated by the Merger Agreement
(the "Merger") may be converted into the right to receive shares of
common stock of Boatmen's and cash in lieu of any fractional share
and each share of preferred stock of Fourth owned by me as of the
effective time of the Merger may be converted into the right to
receive preferred stock of Boatmen's. As used in this letter, the
shares of common stock and preferred stock of Fourth owned by me as
of ------------------------- (the date 30 days prior to the
anticipated effective time of the Merger) are referred to as the
"Pre-Merger Shares" and the shares of common stock and preferred
stock of Boatmen's which may be received by me in the Merger in
exchange for my Pre-Merger Shares are referred to as the "Post-
Merger Shares." This letter is delivered to Boatmen's pursuant to
Section 4.07 of the Merger Agreement.
A. I represent and warrant to Boatmen's and agree that:
1. I shall not make any sale, transfer or other
disposition of the Post-Merger Shares I receive pursuant to
the Merger in violation of the Securities Act or the Rules and
Regulations of the Commission promulgated thereunder.
2. I understand that the issuance of the Post-Merger
Shares to me pursuant to the Merger will be registered with
the Commission under the Securities Act. I also understand
that, because I may be deemed an "affiliate" of Fourth and
because any distributions by me of the Post-Merger Shares will
not be registered under the Securities Act, such Post-Merger
Shares must be held by me unless (i) the sale, transfer or
other distribution has been registered under the Securities
Act, (ii) the sale, transfer or other distribution of such
Post-Merger Shares is made in
Ex.-4.07-1
<PAGE> 41
- ------------------------
- ---------------------, 19--
Page 2
accordance with the provisions of Rule 145, or (iii) in the
opinion of counsel acceptable to Boatmen's some other exemption
from registration under the Securities Act is available with
respect to any such proposed distribution, sale, transfer or
other disposition of such Post-Merger Shares.
3. In no event will I sell the Pre-Merger Shares or the
Post-Merger Shares, as the case may be, or otherwise transfer
or reduce my risk relative to the Pre-Merger Shares or Post-
Merger Shares, as the case may be, during the period beginning
30 days prior to the date on which the Merger is consummated
and ending on the date that Boatmen's has published financial
results covering at least 30 days of the combined operations
of Boatmen's and Fourth.
B. I understand and agree that:
1. Stop transfer instructions will be issued with
respect to the Post-Merger Shares and there will be placed on
the certificates representing such Post-Merger Shares, or any
certificate delivered in substitution therefor, a legend
stating in substance:
"The shares represented by this Certificate were issued
in a transaction to which Rule 145 under the Securities
Act of 1933, as amended, applied. The shares represented
by this certificate may be transferred only in accordance
with the terms of a letter agreement dated
-----------------, 1994, by the registered holder in favor
of Boatmen's Bancshares, Inc., a copy of which agreement
is on file at the principal offices of Boatmen's
Bancshares, Inc."
2. Unless the transfer by me of Post-Merger Shares is a
sale made in compliance with the provisions of Rule 145(d) or
made pursuant to an effective registration statement under the
Securities Act, Boatmen's reserves the right to place the
following legend on the certificates issued to my transferee:
"The shares represented by this Certificate have not been
registered under the Securities Act of 1933, as amended,
and were acquired from a person who received such shares
in a transaction to which Rule 145 under the Securities
Act of 1933, as amended, applied. The shares have not
been acquired by the holder with a view to, or for resale
in connection with, any distribution thereof within the
meaning of the Securities Act of 1933, as amended, and may
not be sold or otherwise transferred unless the shares
have been registered under the Securities Act of 1933, as
amended, or an exemption from registration is available."
I understand and agree that the legends set forth in
paragraphs 1 and 2 above shall be removed by delivery of substitute
certificates without any legend if I deliver to Boatmen's a copy of
a letter from the staff of the Commission, or an opinion of counsel
in form and substance satisfactory to Boatmen's, to the effect that
no such legend is required for the purpose of the Securities Act.
Ex.-4.07-2
<PAGE> 42
- ------------------------
- ---------------------, 19--
Page 3
I have carefully read this letter and the Merger Agreement and
understand the requirements of each and the limitations imposed
upon the distribution, sale, transfer or other disposition of Pre-
Merger Shares or Post-Merger Shares by me.
Very truly yours,
Ex.-4.07-3
<PAGE> 1
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated August 26, 1995 (the
"Agreement"), by and between FOURTH FINANCIAL CORPORATION, a Kansas
corporation ("Issuer"), and BOATMEN'S BANCSHARES, INC., a Missouri
corporation ("Grantee").
RECITALS
(A) MERGER AGREEMENT. Grantee and Issuer have, on a date
prior to the date hereof, entered into an Agreement and Plan of
Merger, dated August 25, 1995 (the "Merger Agreement"), providing
for, among other things, the merger of Issuer with and into a
wholly owned subsidiary of Grantee, with such subsidiary being the
surviving corporation.
(B) CONDITION TO MERGER AGREEMENT. As a condition and
inducement to Grantee's pursuit of the transactions contemplated by
the Merger Agreement, and in consideration therefor, Issuer has
agreed to grant Grantee the Option (as hereinafter defined).
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements
set forth herein and in the Merger Agreement, and intending to be
legally bound hereby, Issuer and Grantee agree as follows:
1. DEFINED TERMS. Capitalized terms which are used but not
defined herein shall have the meanings ascribed to such terms in
the Merger Agreement.
2. GRANT OF OPTION. Subject to the terms and conditions set
forth herein, Issuer hereby grants to Grantee an irrevocable option
(the "Option") to purchase a number of shares of common stock, par
value $5.00 per share ("Issuer Common"), of Issuer up to 5,500,000
of such shares (as adjusted as set forth herein, the "Option
Shares", which shall include the Option Shares before and after any
transfer of such Option Shares, but in no event shall the number of
Option Shares for which this Option is exercisable exceed 19.9% of
the issued and outstanding shares of Issuer Common) at a purchase
price per Option Share (as adjusted as set forth herein, the
"Purchase Price") equal to $33.50.
3. EXERCISE OF OPTION.
(a) Provided that (i) Grantee or Holder (as hereinafter
defined), as applicable, shall not be in material breach of the
agreements or covenants contained in this Agreement or the Merger
Agreement, and (ii) no preliminary or permanent injunction or other
order against the delivery of shares covered by the Option issued
by any court of competent jurisdiction in the United States shall
be in effect, the Holder may exercise the Option, in whole or in
part, at any time and from time to time following the occurrence of
a Purchase Event (as hereinafter defined); provided that the Option
shall terminate and be of no further force or effect upon the
earliest to occur of (A) the Effective Time, (B) termination of the
Merger Agreement in accordance with the terms thereof prior to the
occurrence of a Purchase Event or a Preliminary Purchase Event (as
hereinafter defined) other than a termination thereof by Grantee
pursuant to Section 7.02 of the Merger Agreement (but only if the
breach of Issuer giving rise to such termination was willful) (a
termination of the Merger Agreement by Grantee pursuant to Section
7.02 thereof as a result of a willful breach by Issuer being
referred to herein as a "Default Termination"), (C) fifteen (15)
months after a Default Termination, or (D) fifteen (15) months
after termination of the Merger Agreement (other than by reason of
a Default Termination) following the occurrence of a Purchase Event
or a Preliminary Purchase Event; provided, however, that any
purchase of shares upon
<PAGE> 2
exercise of the Option shall be subject to compliance with applicable
law. The term "Holder" shall mean the holder or holders of the
Option from time to time, and which initially is Grantee. The rights
set forth in Section 8 hereof shall terminate when the right to
exercise the Option terminates (other than as a result of a complete
exercise of the Option) as set forth herein.
(b) As used herein, a "Purchase Event" means any of the
following events:
(i) Without Grantee's prior written consent, Issuer
shall have recommended, publicly proposed or publicly
announced an intention to authorize, recommend or propose, or
entered into an agreement with any person (other than Grantee
or any subsidiary of Grantee) to effect (A) a merger,
consolidation or similar transaction involving Issuer or any
of its significant subsidiaries (other than transactions
solely between Issuer's subsidiaries that are not violative of
the Merger Agreement), (B) the disposition, by sale, lease,
exchange or otherwise, of assets or deposits of Issuer or any
of its significant subsidiaries representing in either case
25% or more of the consolidated assets or deposits of Issuer
and its subsidiaries, or (C) the issuance, sale or other
disposition by Issuer of (including by way of merger,
consolidation, share exchange or any similar transaction)
securities representing 25% or more of the voting power of
Issuer or any of its significant subsidiaries, other than, in
each case of (A), (B), or (C), any merger, consolidation or
similar transaction involving Issuer or any of its significant
subsidiaries in which the voting securities of Issuer
outstanding immediately prior thereto continue to represent
(by either remaining outstanding or being converted into the
voting securities of the surviving entity of any such
transaction) at least 65% of the combined voting power of the
voting securities of the Issuer or the surviving entity
outstanding immediately after the consummation of such merger,
consolidation, or similar transaction (provided any such
transaction is not violative of the Merger Agreement)(each of
(A), (B), or (C), an "Acquisition Transaction"); or
(ii) any person (other than Grantee or any
subsidiary of Grantee) shall have acquired beneficial
ownership (as such term is defined in Rule 13d-3 promulgated
under the Exchange Act) of or the right to acquire beneficial
ownership of, or any "group" (as such term is defined in
Section 13(d)(3) of the Exchange Act), other than a group of
which Grantee or any subsidiary of Grantee is a member, shall
have been formed which beneficially owns, or has the right to
acquire beneficial ownership of, 25% or more of the voting
power of Issuer or any of its significant subsidiaries.
(c) As used herein, a "Preliminary Purchase Event" means
any of the following events:
(i) any person (other than Grantee or any subsidiary
of Grantee) shall have commenced (as such term is defined in
Rule 14d-2 under the Exchange Act) or shall have filed a
registration statement under the Securities Act, with respect
to, a tender offer or exchange offer to purchase any shares of
Issuer Common such that, upon consummation of such offer, such
person would own or control 15% or more of the then
outstanding shares of Issuer Common (such an offer being
referred to herein as a "Tender Offer" or an "Exchange Offer,"
respectively); or
(ii) the shareholders shall not have approved the
Merger Agreement by the requisite vote at the Fourth
Shareholders' Meeting, the Fourth Shareholders' Meeting shall
not have been held or shall have been canceled prior to
termination of the Merger Agreement, or
2
<PAGE> 3
Issuer's Board of Directors shall have withdrawn or modified in
a manner adverse to Grantee the recommendation of Issuer's Board
of Directors with respect to the Merger Agreement, in each case
after it shall have been publicly announced that any person
(other than Grantee or any subsidiary of Grantee) shall have (A)
made, or disclosed an intention to make, a bona fide proposal to
engage in an Acquisition Transaction, (B) commenced a Tender
Offer or filed a registration statement under the Securities Act
with respect to an Exchange Offer, or (C) filed an application
(or given a notice), whether in draft or final form, under the
Home Owners' Loan Act, as amended, the B.H.C.A., the Bank
Merger Act, as amended, or the Change in Bank Control Act of
1978, as amended, for approval to engage in an Acquisition
Transaction; or
(iii) any person (other than Grantee or any
subsidiary of Grantee) shall have made a bona fide proposal to
Issuer or its shareholders by public announcement, or written
communication that is or becomes the subject of public
disclosure, to engage in an Acquisition Transaction; or
(iv) after a proposal is made by a third party to
Issuer or its shareholders to engage in an Acquisition
Transaction, or such third party states its intention to the
Issuer to make such a proposal if the Merger Agreement
terminates, Issuer shall have breached any representation,
warranty, covenant or agreement contained in the Merger
Agreement and such breach would entitle Grantee to terminate
the Merger Agreement under Article Seven thereof (without
regard to the cure period provided for therein unless such
cure is promptly effected without jeopardizing consummation of
the Merger pursuant to the terms of the Merger Agreement); or
(v) any person (other than Grantee or any subsidiary
of Grantee), other than in connection with a transaction to
which Grantee has given its prior written consent, shall have
filed an application or notice with any Regulatory Agency for
approval to engage in an Acquisition Transaction.
As used in this Agreement, "person" shall have the meaning
specified in Sections 3(a)(9) and 13(d)(3) of the Exchange Act.
(d) Issuer shall notify Grantee promptly in writing of
the occurrence of any Preliminary Purchase Event or Purchase Event,
it being understood that the giving of such notice by Issuer shall
not be a condition to the right of Holder to exercise the Option.
(e) In the event Holder wishes to exercise the Option, it
shall send to Issuer a written notice (the date of which being
herein referred to as the "Notice Date") specifying (i) the total
number of Option Shares it intends to purchase pursuant to such
exercise and (ii) a place and date not earlier than three (3)
business days nor later than fifteen (15) business days from the
Notice Date for the closing (the "Closing") of such purchase (the
"Closing Date"); provided that the first notice of exercise shall
be sent to Issuer within one hundred eighty (180) days after the
first Purchase Event of which Grantee has been notified. If prior
notification to or approval of any Regulatory Agency is required in
connection with such purchase, Issuer shall cooperate with the
Holder in the filing of the required notice or application for
approval and the obtaining of such approval and the Closing shall
occur immediately following such regulatory approvals (and any
mandatory waiting periods). Any exercise of the Option shall be
deemed to occur on the Notice Date relating thereto.
3
<PAGE> 4
4. PAYMENT AND DELIVERY OF CERTIFICATES.
(a) On each Closing Date, Holder shall (i) pay to Issuer,
in immediately available funds by wire transfer to a bank account
designated by Issuer, an amount equal to the Purchase Price
multiplied by the number of Option Shares to be purchased on such
Closing Date, and (ii) present and surrender this Agreement to the
Issuer at the address of the Issuer specified in Section 12(f).
(b) At each Closing, simultaneously with the delivery of
immediately available funds and surrender of this Agreement as
provided in Section 4(a), (i) Issuer shall deliver to Holder (A) a
certificate or certificates representing the Option Shares to be
purchased at such Closing, which Option Shares shall be free and
clear of all liens and subject to no preemptive rights, and (B), if
the Option is exercised in part only, an executed new agreement
with the same terms as this Agreement evidencing the right to
purchase the balance of the shares of Issuer Common purchasable
hereunder, and (ii) Holder shall deliver to Issuer a letter
agreeing that Holder shall not offer to sell or otherwise dispose
of such Option Shares in violation of applicable federal and state
law or of the provisions of this Agreement.
(c) In addition to any other legend that is required by
applicable law, certificates for the Option Shares delivered at
each Closing shall be endorsed with a restrictive legend which
shall read substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE
IS SUBJECT TO RESTRICTIONS ARISING UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND PURSUANT TO THE TERMS OF A
STOCK OPTION AGREEMENT DATED AS OF AUGUST 26, 1995. A
COPY OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER
HEREOF WITHOUT CHARGE UPON RECEIPT BY THE ISSUER OF A
WRITTEN REQUEST THEREFOR.
It is understood and agreed that the portion of the above legend
relating to the Securities Act shall be removed by delivery of
substitute certificate(s) without such legend if Holder shall have
delivered to Issuer a copy of a letter from the staff of the
S.E.C., or an opinion of counsel in form and substance reasonably
satisfactory to Issuer and its counsel, to the effect that such
legend is not required for purposes of the Securities Act.
(d) Upon the giving by Holder to Issuer of the written
notice of exercise of the Option provided for under Section 3(e),
the tender of the applicable purchase price in immediately
available funds and the tender of this Agreement to Issuer, Holder
shall be deemed to be the holder of record of the shares of Issuer
Common issuable upon such exercise, notwithstanding that the stock
transfer books of issuer shall then be closed or that certificates
representing such shares of Issuer Common shall not then be
actually delivered to Holder. Issuer shall pay all expenses, and
any and all United States federal, state, and local taxes and other
charges that may be payable in connection with the preparation,
issuance and delivery of stock certificates under this Section in
the name of Holder or its assignee, transferee, or designee.
(e) Issuer agrees (i) that it shall at all times
maintain, free from preemptive rights, sufficient authorized but
unissued or treasury shares of Issuer Common so that the Option may
be exercised without additional authorization of Issuer Common after
giving effect to all other options, warrants, convertible securities
and other rights to purchase Issuer Common, (ii) that it will not, by
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<PAGE> 5
charter amendment or through reorganization, consolidation, merger,
dissolution or sale of assets, or by any other voluntary act, avoid
or seek to avoid the observance or performance of any of the
covenants, stipulations or conditions to be observed or performed
hereunder by Issuer, (iii) promptly to take all action as may from
time to time be required (including (A) complying with all premerger
notification, reporting and waiting period requirements, and (B) in
the event prior approval of or notice to any Regulatory Agency is
necessary before the Option may be exercised, cooperating fully with
Holder in preparing such applications or notices and providing such
information to such Regulatory Agency as it may require) in order to
permit Holder to exercise the Option and Issuer duly and effectively
to issue shares of the Issuer Common pursuant hereto, and (iv)
promptly to take all action provided herein to protect the rights of
Holder against dilution.
5. REPRESENTATIONS AND WARRANTIES OF ISSUER. Issuer hereby
represents and warrants to Grantee (and Holder, if different than
Grantee) as follows:
(a) Corporate Authority. Issuer has full corporate power
and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby; the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the
Board of Directors of Issuer, and no other corporate proceedings on
the part of Issuer are necessary to authorize this Agreement or to
consummate the transactions so contemplated; this Agreement has
been duly and validly executed and delivered by Issuer.
(b) Beneficial Ownership. To the best knowledge of
Issuer, as of the date of this Agreement, no person or group has
beneficial ownership of more than 10% of the issued and outstanding
shares of Issuer Common.
(c) Shares Reserved for Issuance; Capital Stock. Issuer
has taken all necessary corporate action to authorize and reserve
and permit it to issue, and at all times from the date hereof
through the termination of this Agreement in accordance with its
terms, will have reserved for issuance upon the exercise of the
Option, that number of shares of Issuer Common equal to the maximum
number of shares of Issuer Common at any time and from time to time
purchasable upon exercise of the Option, and all such shares, upon
issuance pursuant to the Option, will be duly authorized, validly
issued, fully paid and nonassessable, and will be delivered free
and clear of all claims, liens, encumbrances, and security
interests (other than those created by this Agreement) and not
subject to any preemptive rights.
(d) No Violations. The execution, delivery and
performance of this Agreement does not or will not, and the
consummation by Issuer of any of the transactions contemplated
hereby will not, constitute or result in (A) a breach or violation
of, or a default under, its certificate of incorporation or by-
laws, or the comparable governing instruments of any of its
subsidiaries, or (B) a breach or violation of, or a default under,
any agreement, lease, contract, note, mortgage, indenture,
arrangement or other obligation of it or any of its subsidiaries
(with or without the giving of notice, the lapse of time or both)
or under any law, rule, ordinance or regulation or judgment,
decree, order, award or governmental or non-governmental permit or
license to which it or any of its subsidiaries is subject, that
would, in any case give any other person the ability to prevent or
enjoin Issuer's performance under this Agreement in any material
respect.
6. REPRESENTATIONS AND WARRANTIES OF GRANTEE. Grantee hereby
represents and warrants to Issuer that Grantee has full corporate
power and authority to enter into this Agreement and, subject to
obtaining the approvals referred to in this Agreement, to
consummate the transactions contemplated
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<PAGE> 6
by this Agreement; the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of
Grantee; and this Agreement has been duly executed and delivered by
Grantee.
7. ADJUSTMENT UPON CHANGES IN ISSUER CAPITALIZATION, ETC.
(a) In the event of any change in Issuer Common by reason
of a stock dividend, stock split, split-up, recapitalization,
combination, exchange of shares or similar transaction, the type
and number of shares or securities subject to the Option, and the
Purchase Price therefor, shall be adjusted appropriately, and
proper provision shall be made in the agreements governing such
transaction so that Holder shall receive, upon exercise of the
Option, the number and class of shares or other securities or
property that Holder would have received in respect of Issuer
Common if the Option had been exercised immediately prior to such
event, or the record date therefor, as applicable. If any
additional shares of Issuer Common are issued after the date of
this Agreement (other than pursuant to an event described in the
first sentence of this Section 7(a), upon exercise of any option to
purchase Issuer Common outstanding on the date hereof or upon
conversion into Issuer Common of any convertible security of Issuer
outstanding on the date hereof), the number of shares of Issuer
Common subject to the Option shall be adjusted so that, after such
issuance, it, together with any shares of Issuer Common previously
issued pursuant hereto, equals 19.9% of the number of shares of
Issuer Common then issued and outstanding, without giving effect to
any shares subject to or issued pursuant to the Option. No
provision of this Section 7 shall be deemed to affect or change, or
constitute authorization for any violation of, any of the covenants
or representations in the Merger Agreement.
(b) In the event that Issuer shall enter into an
agreement (i) to consolidate with or merge into any person, other
than Grantee or one of its subsidiaries, and shall not be the
continuing or surviving corporation of such consolidation or
merger, (ii) to permit any person, other than Grantee or one of its
subsidiaries, to merge into Issuer and Issuer shall be the
continuing or surviving corporation, but, in connection with such
merger, the then outstanding shares of Issuer Common shall be
changed into or exchanged for stock or other securities of Issuer
or any other person or cash or any other property or the
outstanding shares of Issuer Common immediately prior to such
merger shall after such merger represent less than 50% of the
outstanding shares and share equivalents of the merged company, or
(iii) to sell or otherwise transfer all or substantially all of its
assets or deposits to any person, other than Grantee or one of its
subsidiaries, then, and in each such case, the agreement governing
such transaction shall make proper provisions so that the Option
shall, upon the consummation of any such transaction and upon the
terms and conditions set forth herein, be converted into, or
exchanged for, an option (the "Substitute Option"), at the election
of Holder, of either (x) the Acquiring Corporation (as hereinafter
defined), (y) any person that controls the Acquiring Corporation,
or (z) in the case of a merger described in clause (ii), Issuer
(such person being referred to as "Substitute Option Issuer").
(c) The Substitute Option shall have the same terms as
the Option, provided, that, if the terms of the Substitute Option
cannot, for legal reasons, be the same as the Option, such terms
shall be as similar as possible and in no event less advantageous
to Holder. Substitute Option Issuer shall also enter into an
agreement with Holder in substantially the same form as this
Agreement, which shall be applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such
number of shares of Substitute Common (as hereinafter defined) as
is equal to the Assigned Value (as hereinafter defined) multiplied
by the number of shares of Issuer Common for which the Option was
theretofore exercisable, divided by
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<PAGE> 7
the Average Price (as hereinafter defined). The exercise price of
Substitute Option per share of Substitute Common (the "Substitute
Option Price") shall then be equal to the Purchase Price multiplied
by a fraction in which the numerator is the number of shares of
Issuer Common for which the Option was theretofore exercisable and
the denominator is the number of shares of the Substitute Common for
which the Substitute Option is exercisable.
(e) The following terms have the meanings indicated:
(1) "Acquiring Corporation" shall mean (i) the
continuing or surviving corporation of a consolidation or
merger with Issuer (if other than Issuer), (ii) Issuer in a
merger in which Issuer is the continuing or surviving person,
or (iii) the transferee of all or substantially all of
Issuer's assets (or a substantial part of the assets of its
subsidiaries taken as a whole).
(2) "Substitute Common" shall mean the shares of
capital stock (or similar equity interest) with the greatest
voting power in respect of the election of directors (or
persons similarly responsible for the direction of the
business and affairs) of the Substitute Option Issuer.
(3) "Assigned Value" shall mean the highest of
(w) the price per share of Issuer Common at which a Tender
Offer or an Exchange Offer therefor has been made, (x) the
price per share of Issuer Common to be paid by any third party
pursuant to an agreement with Issuer, (y) the highest closing
price for shares of Issuer Common within the six (6) month
period immediately preceding the consolidation, merger, or
sale in question and (z) in the event of a sale of all or
substantially all of Issuer's assets or deposits an amount
equal to (i) the sum of the price paid in such sale for such
assets (and/or deposits) and the current market value of the
remaining assets of Issuer, as determined by a nationally
recognized investment banking firm selected by Holder divided
by (ii) the number of shares of Issuer Common outstanding at
such time. In the event that a Tender Offer or an Exchange
Offer is made for Issuer Common or an agreement is entered
into for a merger or consolidation involving consideration
other than cash, the value of the securities or other property
issuable or deliverable in exchange for Issuer Common shall be
determined by a nationally recognized investment banking firm
selected by Holder.
(4) "Average Price" shall mean the average closing
price of a share of Substitute Common for the one year
immediately preceding the consolidation, merger, or sale in
question, but in no event higher than the closing price of the
shares of Substitute Common on the day preceding such
consolidation, merger or sale; provided that if Issuer is the
issuer of the Substitute Option, the Average Price shall be
computed with respect to a share of common stock issued by
Issuer, the person merging into Issuer or by any company which
controls such person, as Holder may elect.
(f) In no event, pursuant to any of the foregoing
paragraphs, shall the Substitute Option be exercisable for more
than 19.9% of the aggregate of the shares of Substitute Common
outstanding prior to exercise of the Substitute Option. In the
event that the Substitute Option would be exercisable for more than
19.9% of the aggregate of the shares of Substitute Common but for
the limitation in the first sentence of this Section 7(f),
Substitute Option Issuer shall make a cash payment to Holder equal
to the excess of (i) the value of the Substitute Option without
giving effect to the limitation in the first sentence of this
Section 7(f) over (ii) the value of the Substitute Option after
giving effect to the limitation in the first sentence of this
Section 7(f). This difference in value shall be determined by a
nationally-recognized investment banking firm selected by Holder.
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<PAGE> 8
(g) Issuer shall not enter into any transaction described
in Section 7(b) unless the Acquiring Corporation and any person
that controls the Acquiring Corporation assume in writing all the
obligations of Issuer hereunder and take all other actions that may
be necessary so that the provisions of this Section 7 are given
full force and effect (including, without limitation, any action
that may be necessary so that the holders of the other shares of
common stock issued by Substitute Option Issuer are not entitled to
exercise any rights by reason of the issuance or exercise of the
Substitute Option and the shares of Substitute Common are otherwise
in no way distinguishable from or have lesser economic value (other
than any diminution in value resulting from the fact that the
Substitute Common are restricted securities, as defined in Rule 144
under the Securities Act or any successor provision) than other
shares of common stock issued by Substitute Option Issuer).
8. REPURCHASE AT THE OPTION OF HOLDER.
(a) Subject to the last sentence of Section 3(a), at the
request of Holder at any time commencing upon the first occurrence
of a Repurchase Event (as defined in Section 8(d)) and ending
twelve (12) months immediately thereafter, Issuer shall repurchase
from Holder (i) the Option, and (ii) all shares of Issuer Common
purchased by Holder pursuant hereto with respect to which Holder
then has beneficial ownership. The date on which Holder exercises
its rights under this Section 8 is referred to as the "Request
Date". Such repurchase shall be at an aggregate price (the
"Section 8 Repurchase Consideration") equal to the sum of:
(i) the aggregate Purchase Price paid by Holder for
any shares of Issuer Common acquired pursuant to the Option
with respect to which Holder then has beneficial ownership;
(ii) the excess, if any, of (x) the Applicable
Price (as defined below) for each share of Issuer Common over
(y) the Purchase Price (subject to adjustment pursuant to
Section 7), multiplied by the number of shares of Issuer
Common with respect to which the Option has not been
exercised; and
(iii) the excess, if any, of the Applicable Price
over the Purchase Price (subject to adjustment pursuant to
Section 7) paid (or, in the case of Option Shares with respect
to which the Option has been exercised but the Closing Date
has not occurred, payable) by Holder for each share of Issuer
Common with respect to which the Option has been exercised and
with respect to which Holder then has beneficial ownership,
multiplied by the number of such shares.
(b) If Holder exercises its rights under this Section 8,
Issuer shall, within ten (10) business days after the Request Date,
pay the Section 8 Repurchase Consideration to Holder in immediately
available funds, and contemporaneously with such payment, Holder
shall surrender to Issuer the Option and the certificates
evidencing the shares of Issuer Common purchased thereunder with
respect to which Holder then has beneficial ownership, and Holder
shall warrant that it has sole record and beneficial ownership of
such shares and that the same are then free and clear of all liens.
Notwithstanding the foregoing, to the extent that prior
notification to or approval of any Regulatory Agency is required in
connection with the payment of all or any portion of the Section 8
Repurchase Consideration, Holder shall have the ongoing option to
revoke its request for repurchase pursuant to Section 8, in whole
or in part, or to require that Issuer deliver from time to time
that portion of the Section 8 Repurchase Consideration that it is
not then so prohibited from paying and promptly file the
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<PAGE> 9
required notice or application for approval and expeditiously process
the same (and each party shall cooperate with the other in the filing
of any such notice or application and the obtaining of any such
approval). If any Regulatory Agency disapproves of any part of
Issuer's proposed repurchase pursuant to this Section 8, Issuer
shall promptly give notice of such fact to Holder. If any
Regulatory Agency prohibits the repurchase in part but not in
whole, then Holder shall have the right (i) to revoke the
repurchase request, or (ii) to the extent permitted by such
Regulatory Agency, determine whether the repurchase should apply to
the Option and/or Option Shares and to what extent to each, and
Holder shall thereupon have the right to exercise the Option as to
the number of Option Shares for which the Option was exercisable at
the Request Date less the sum of the number of shares covered by
the Option in respect of which payment has been made pursuant to
Section 8(a)(ii) and the number of shares covered by the portion of
the Option (if any) that has been repurchased. Holder shall notify
Issuer of its determination under the preceding sentence within
five (5) business days of receipt of notice of disapproval of the
repurchase.
Notwithstanding anything herein to the contrary, all of
Holder's rights under this Section 8 shall terminate on the date of
termination of this Option pursuant to Section 3(a).
(c) For purposes of this Agreement, the "Applicable
Price" means the highest of (i) the highest price per share of
Issuer Common paid for any such share by the person or groups
described in Section 8(d)(i), (ii) the price per share of Issuer
Common received by holders of Issuer Common in connection with any
merger or other business combination transaction described in
Section 7(b)(i), 7(b)(ii) or 7(b)(iii), or (iii) the highest
closing sales price per share of Issuer Common on Nasdaq (or if
Issuer Common is not traded on Nasdaq, the highest bid price per
share as quoted on the principal trading market or securities
exchange on which such shares are traded as reported by a
recognized source chosen by Holder) during the forty (40) business
days preceding the Request Date; provided, however, that in the
event of a sale of less than all of Issuer's assets, the Applicable
Price shall be the sum of the price paid in such sale for such
assets and the current market value of the remaining assets of
Issuer as determined by a nationally recognized investment banking
firm selected by Holder, divided by the number of shares of the
Issuer Common outstanding at the time of such sale. If the
consideration to be offered, paid or received pursuant to either of
the foregoing clauses (i) or (ii) shall be other than in cash, the
value of such consideration shall be determined in good faith by an
independent nationally recognized investment banking firm selected
by Holder and reasonably acceptable to Issuer, which determination
shall be conclusive for all purposes of this Agreement.
(d) As used herein, "Repurchase Event" shall occur if
(i) any person (other than Grantee or any subsidiary of Grantee)
shall have acquired beneficial ownership of (as such term is
defined in Rule 13d-3 promulgated under the Exchange Act), or the
right to acquire beneficial ownership of, or any "group" (as such
term is defined under the Exchange Act) shall have been formed
which beneficially owns or has the right to acquire beneficial
ownership of, 50% or more of the then outstanding shares of Issuer
Common, or (ii) any of the transactions described in Section
7(b)(i), 7(b)(ii) or 7(b)(iii) shall be consummated.
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9. REGISTRATION RIGHTS.
(a) Demand Registration Rights. Issuer shall, subject to
the conditions of Section 9(c) below, if requested by any Holder,
including Grantee and any permitted transferee ("Selling
Shareholder"), as expeditiously as possible prepare and file a
registration statement under the Securities Act if such
registration is necessary in order to permit the sale or other
disposition of any or all shares of Issuer Common or other
securities that have been acquired by or are issuable to the
Selling Shareholder upon exercise of the Option in accordance with
the intended method of sale or other disposition stated by the
Selling Shareholder in such request, including without limitation
a "shelf" registration statement under Rule 415 under the
Securities Act or any successor provision, and Issuer shall use its
best efforts to qualify such shares or other securities for sale
under any applicable state securities laws.
(b) Additional Registration Rights. If Issuer at any
time after the exercise of the Option proposes to register any
shares of Issuer Common under the Securities Act in connection with
an underwritten public offering of such Issuer Common, Issuer will
promptly give written notice to the Selling Shareholders of its
intention to do so and, upon the written request of any Selling
Shareholder given within thirty (30) days after receipt of any such
notice (which request shall specify the number of shares of Issuer
Common intended to be included in such underwritten public offering
by the Selling Shareholder), Issuer will cause all such shares for
which a Selling Shareholder requests participation in such
registration, to be so registered and included in such underwritten
public offering; provided, however, that Issuer may elect to not
cause any such shares to be so registered (i) if the underwriters
in good faith object for valid business reasons, or (ii) in the
case of a registration solely to implement an employee benefit plan
or a registration filed on Form S-4 of the Securities Act or any
successor Form; provided, further, however, that such election
pursuant to (i) may only be made two times. If some but not all
the shares of Issuer Common, with respect to which Issuer shall
have received requests for registration pursuant to this Section
9(b), shall be excluded from such registration, Issuer shall make
appropriate allocation of shares to be registered among the Selling
Shareholders desiring to register their shares pro rata in the
proportion that the number of shares requested to be registered by
each such Selling Shareholder bears to the total number of shares
requested to be registered by all such Selling Shareholders then
desiring to have Issuer Common registered for sale.
(c) Conditions to Required Registration. Issuer shall
use all reasonable efforts to cause each registration statement
referred to in Section 9(a) above to become effective and to obtain
all consents or waivers of other parties which are required
therefor and to keep such registration statement effective;
provided, however, that Issuer may delay any registration of Option
Shares required pursuant to Section 9(a) above for a period not
exceeding ninety (90) days provided Issuer shall in good faith
determine that any such registration would adversely affect an
offering or contemplated offering of other securities by Issuer,
and Issuer shall not be required to register Option Shares under
the Securities Act pursuant to Section 9(a) above:
(i) prior to the earliest of (a) termination of the
Merger Agreement pursuant to Article Seven thereof,
(b) failure to obtain the requisite shareholder approval
pursuant to Sections 6.01(d) and 6.02(d) of the Merger
Agreement, and (c) a Purchase Event or a Preliminary Purchase
Event;
(ii) on more than one occasion during any
calendar year;
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(iii) within ninety (90) days after the effective
date of a registration referred to in Section 9(b) above
pursuant to which the Selling Shareholder or Selling
Shareholders concerned were afforded the opportunity to
register such shares under the Securities Act and such shares
were registered as requested; and
(iv) unless a request therefor is made to Issuer
by Selling Shareholders that hold at least 25% or more of the
aggregate number of Option Shares (including shares of Issuer
Common issuable upon exercise of the Option) then outstanding.
In addition to the foregoing, Issuer shall not be required
to maintain the effectiveness of any registration statement after
the expiration of nine (9) months from the effective date of such
registration statement. Issuer shall use all reasonable efforts to
make any filings, and take all steps, under all applicable state
securities laws to the extent necessary to permit the sale or other
disposition of the Option Shares so registered in accordance with
the intended method of distribution for such shares; provided,
however, that Issuer shall not be required to consent to general
jurisdiction or qualify to do business in any state where it is not
otherwise required to so consent to such jurisdiction or to so
qualify to do business.
(d) Expenses. Except where applicable state law
prohibits such payments, Issuer will pay all expenses (including
without limitation registration fees, qualification fees, blue sky
fees and expenses (including the fees and expenses of counsel),
legal expenses, including the reasonable fees and expenses of one
counsel to the holders whose Option Shares are being registered,
printing expenses and the costs of special audits or "cold comfort"
letters, expenses of underwriters, excluding discounts and
commissions but including liability insurance if Issuer so desires
or the underwriters so require, and the reasonable fees and
expenses of any necessary special experts) in connection with each
registration pursuant to Section 9(a) or 9(b) above (including the
related offerings and sales by holders of Option Shares) and all
other qualifications, notifications or exemptions pursuant to
Section 9(a) or 9(b) above.
(e) Indemnification. In connection with any registration
under Section 9(a) or 9(b) above, Issuer hereby indemnifies the
Selling Shareholders, and each underwriter thereof, including each
person, if any, who controls such holder or underwriter within the
meaning of Section 15 of the Securities Act, against all expenses,
losses, claims, damages and liabilities caused by any untrue, or
alleged untrue, statement of a material fact contained in any
registration statement or prospectus or notification or offering
circular (including any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission, or alleged
omission, to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading,
except insofar as such expenses, losses, claims, damages or
liabilities of such indemnified party are caused by any untrue
statement or alleged untrue statement that was included by Issuer
in any such registration statement or prospectus or notification or
offering circular (including any amendments or supplements thereto)
in reliance upon and in conformity with, information furnished in
writing to issuer by such indemnified party expressly for use
therein, and Issuer and each officer, director and controlling
person of Issuer shall be indemnified by such Selling Shareholders,
or by such underwriter, as the case may be, for all such expenses,
losses, claims, damages and liabilities caused by any untrue, or
alleged untrue, statement, that was included by issuer in any such
registration statement or prospectus or notification or offering
circular (including any amendments or supplements thereto) in
reliance upon, and in conformity with, information furnished in
writing to issuer by such holder or such underwriter, as the case
may be, expressly for such use.
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Promptly upon receipt by a party indemnified under this
Section 9(e) of notice of the commencement of any action against
such indemnified party in respect of which indemnity or
reimbursement may be sought against any indemnifying party under
this Section 9(e), such indemnified party shall notify the
indemnifying party in writing of the commencement of such action,
but the failure so to notify the indemnifying party shall not
relieve it of any liability which it may otherwise have to any
indemnified party under this Section 9(e). In case notice of
commencement of any such action shall be given to the indemnifying
party as above provided, the indemnifying party shall be entitled
to participate in and, to the extent it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense
of such action at its own expense, with counsel chosen by it and
satisfactory to such indemnified party. The indemnified party
shall have the right to employ separate counsel in any such action
and participate in the defense thereof, but the fees and expenses
of such counsel (other than reasonable costs of investigation)
shall be paid by the indemnified party unless (i) the indemnifying
party either agrees to pay the same, (ii) the indemnifying party
fails to assume the defense of such action with counsel
satisfactory to the indemnified party, or (iii) the indemnified
party has been advised by counsel that one or more legal defenses
may be available to the indemnifying party that may be contrary to
the interest of the indemnified party, in which case the
indemnifying party shall be entitled to assume the defense of such
action notwithstanding its obligation to bear fees and expenses of
such counsel. No indemnifying party shall be liable for any
settlement entered into without its consent, which consent may not
be unreasonably withheld.
If the indemnification provided for in this Section 9(e)
is unavailable to a party otherwise entitled to be indemnified in
respect of any expenses, losses, claims, damages or liabilities
referred to herein, then the indemnifying party, in lieu of
indemnifying such party otherwise entitled to be indemnified, shall
contribute to the amount paid or payable by such party to be
indemnified as a result of such expenses, losses, claims, damages
or liabilities in such proportion as is appropriate to reflect the
relative benefits received by issuer, the Selling Shareholders and
the underwriters from the offering of the securities and also the
relative fault of Issuer, the Selling Shareholders and the
underwriters in connection with the statements or omissions which
resulted in such expenses, losses, claims, damages or liabilities,
as well as any other relevant equitable considerations. The amount
paid or payable by a party as a result of the expenses, losses,
claims, damages and liabilities referred to above shall be deemed
to include any legal or other fees or expenses reasonably incurred
by such party in connection with investigating or defending any
action or claim, provided, however, that in no case shall any
Selling Shareholder be responsible, in the aggregate, for any
amount in excess of the net offering proceeds attributable to its
Option Shares included in the offering. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
Any obligation by any holder to indemnify shall be several and not
joint with other holders.
In connection with any registration pursuant to Section
9(a) or 9(b) above, Issuer and each Selling Shareholder (other than
Grantee) shall enter into an agreement containing the
indemnification provisions of this Section 9(e).
(f) Miscellaneous Reporting. Issuer shall comply with
all reporting requirements and will do all such other things as may
be necessary to permit the expeditious sale at any time of any Option
Shares by the Selling Shareholders thereof in accordance with and to
the extent permitted by any rule or regulation promulgated by the
S.E.C. from time to time, including, without limitation, Rule 144A.
Issuer shall at its expense provide the Selling Shareholders with any
information necessary in connection with
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the completion and filing of any reports or forms required to
be filed by them under the Securities Act or the Exchange Act, or
required pursuant to any state securities laws or the rules of any
stock exchange.
(g) Issue Taxes. Issuer will pay all stamp taxes in
connection with the issuance and the sale of the Option Shares and
in connection with the exercise of the Option, and will save the
Selling Shareholders harmless, without limitation as to time,
against any and all liabilities, with respect to all such taxes.
10. QUOTATION; LISTING. If Issuer Common or any other
securities to be acquired in connection with the exercise of the
Option are then authorized for quotation or trading or listing on
any securities exchange, Issuer, upon the request of Holder, will
promptly file an application, if required, to authorize for
quotation or trading or listing the shares of Issuer Common or
other securities to be acquired upon exercise of the Option on such
securities exchange and will use its best efforts to obtain
approval, if required, of such quotation or listing as soon as
practicable.
11. DIVISION OF OPTION. This Agreement (and the Option
granted hereby) are exchangeable, without expense, at the option of
Holder, upon presentation and surrender of this Agreement at the
principal office of Issuer for other Agreements providing for
Options of different denominations entitling the holder thereof to
purchase in the aggregate the same number of shares of Issuer
Common purchasable hereunder. The terms "Agreement" and "Option"
as used herein include any other Agreements and related Options for
which this Agreement (and the Option granted hereby) may be
exchanged. Upon receipt by Issuer of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of
this Agreement, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification, and upon surrender and
cancellation of this Agreement, if mutilated, Issuer will execute
and deliver a new Agreement of like tenor and date. Any such new
Agreement executed and delivered shall constitute an additional
contractual obligation on the part of Issuer, whether or not the
Agreement so lost, stolen, destroyed or mutilated shall at any time
be enforceable by anyone.
12. MISCELLANEOUS.
(a) Expenses. Each of the parties hereto shall bear and
pay all costs and expenses incurred by it or on its behalf in
connection with the transactions contemplated hereunder, including
fees and expenses of its own financial consultants, investment
bankers, accountants and counsel.
(b) Waiver and Amendment. Any provision of this
Agreement may be waived at any time by the party that is entitled
to the benefits of such provision. This Agreement may not be
modified, amended, altered or supplemented except upon the
execution and delivery of a written agreement executed by the
parties hereto.
(c) Entire Agreement: No Third-Party Beneficiaries;
Severability. This Agreement, together with the Merger Agreement
and the other documents and instruments referred to herein and
therein, between Grantee and Issuer (i) constitutes the entire
agreement and supersedes all prior agreements and understandings,
both written and oral, between the parties with respect to the
subject matter hereof, and (ii) is not intended to confer upon any
person other than the parties hereto (other than the indemnified
parties under Section 9(e) and any transferees of the Option Shares
or any permitted transferee of this Agreement pursuant to Section
12(h)) any rights or remedies hereunder. If any term, provision,
covenant or restriction of this Agreement is held by a court of
competent jurisdiction or Regulatory Agency to be invalid, void or
unenforceable, the remainder of the terms, provisions,
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covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or
invalidated. If for any reason such court or Regulatory Agency
determines that the Option does not permit Holder to acquire, or does
not require Issuer to repurchase, the full number of shares of Issuer
Common as provided in Section 3 (as may be adjusted herein), it is
the express intention of Issuer to allow Holder to acquire or to
require Issuer to repurchase such lesser number of shares as may be
permissible without any amendment or modification hereof.
(d) Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Missouri
without regard to any applicable conflicts of law rules.
(e) Descriptive Headings. The descriptive headings
contained herein are for convenience of reference only and shall
not affect in any way the meaning or interpretation of this
Agreement.
(f) Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if
delivered personally, telecopied (with confirmation) or mailed by
registered or certified mail (return receipt requested) to the
parties at the addresses set forth in the Merger Agreement (or at
such other address for a party as shall be specified by like
notice).
(g) Counterparts. This Agreement and any amendments
hereto may be executed in two counterparts, each of which shall be
considered one and the same agreement and shall become effective
when both counterparts have been signed and delivered, it being
understood that both parties need not sign the same counterpart.
(h) Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder or under the Option
shall be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of
the other party, except that Holder may assign this Agreement to a
wholly-owned subsidiary of Holder and Holder may assign its rights
hereunder in whole or in part after the occurrence of a Purchase
Event. Subject to the preceding sentence, this Agreement shall be
binding upon, inure to the benefit of and be enforceable by the
parties and their respective successors and assigns.
(i) Further Assurances. In the event of any exercise of
the Option by the Holder, Issuer and the Holder shall execute and
deliver all other documents and instruments and take all other
action that may be reasonably necessary in order to consummate the
transactions provided for by such exercise.
(j) Specific Performance. The parties hereto agree that
this Agreement may be enforced by either party through specific
performance, injunctive relief and other equitable relief. Both
parties further agree to waive any requirement for the securing or
posting of any bond in connection with the obtaining of any such
equitable relief and that this provision is without prejudice to
any other rights that the parties hereto may have for any failure
to perform this Agreement.
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IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock
Option Agreement to be signed by their respective officers
thereunto duly authorized, all as of the day and year first written
above.
FOURTH FINANCIAL CORPORATION
By -----------------------------------------
Darrell G. Knudson
Chairman and Chief Executive Officer
BOATMEN'S BANCSHARES, INC.
By -----------------------------------------
Gregory L. Curl
Vice Chairman
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