<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended March 31, 1997.
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from to
---------- -----------
Commission file number 0-13307
---------
The New Iberia Bancorp, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Louisiana 72-0969631
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
800 South Lewis, New Iberia, Louisiana 70560
- ---------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (318) 365-6761
--------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
2,999,988 shares common stock
<PAGE> 2
10-Q INDEX
PART I
FINANCIAL INFORMATION
Item 1 Financial Statements
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . 1
Consolidated Comparative Balance Sheets . . . . . . . . . . . . 2-4
Consolidated Comparative Statements of Income . . . . . . . . . 5-6
Consolidated Statement of Changes in Stockholder's Equity . . . . 7
Consolidated Statements of Cash Flows . . . . . . . . . . . . . 8-9
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Capital Resources . . . . . . . . . . . . . . . . . . . . . . . 10
Results of Operations:
Net Interest Income . . . . . . . . . . . . . . . . . . . . . 11
Earning Assets . . . . . . . . . . . . . . . . . . . . . . . . 11
Investment Securities . . . . . . . . . . . . . . . . . . . 11-12
Interest-Bearing Liabilities . . . . . . . . . . . . . . . . . 12
Interest Expense . . . . . . . . . . . . . . . . . . . . . . . 13
Reserve and Provision for Possible Loan Losses . . . . . . . 13-14
Other Income . . . . . . . . . . . . . . . . . . . . . . . . . 14
Other Expenses . . . . . . . . . . . . . . . . . . . . . . . . 14
Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 14
Nonperforming Assets and Past Due Loans . . . . . . . . . . 15-16
Non-accrual of Interest on Loans . . . . . . . . . . . . . . . 16
Liquidity and Interest Rate Sensitivity. . . . . . . . . . . . 16-17
PART II
OTHER INFORMATION
Item 1 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . 18
Item 6 Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . 19
<PAGE> 3
ITEM 1 (A) FINANCIAL HIGHLIGHTS
(ALL DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
PERCENT
1997 1996 CHANGE
---- ---- ------
<S> <C> <C> <C> <C>
FOR 3 MOS. Net Income $696 $885 (21.4%)
ENDED 3/31/97 Cash dividends declared $240* $150 60.0%
Average Common Shares
Outstanding (in thousands) 3,000 3,000
</TABLE>
*Dividends for the quarter ended March 31, 1997 were declared on April 7, 1997;
record date April 18, 1997; payment date April 30, 1997
<TABLE>
<S> <C> <C> <C> <C>
PER SHARE Net Income $.23 $.30 (23.3%)
FOR 3 MOS. Cash dividends declared $.08 $.05 60.0%
ENDED 3/31/97 Shareholder's Equity
Book Value $8.63 $7.96 8.41%
Market Value $20.75 $17.09 21.42%
</TABLE>
<TABLE>
<CAPTION>
PERCENT
AS OF 03/31/97 12/31/96 CHANGE
----- -------- -------- -------
<S> <C> <C> <C>
Total Assets $313,494 $299,423 4.70%
Total Earning Assets $291,075 $280,920 3.61%
Total Loans Gross $181,660 $181,292 0.20%
Total Deposits $283,202 $269,145 5.22%
Total Shareholder's Equity $ 25,894 $ 25,833 0.24%
Total Trust Assets $ 2,514 $ 2,520 (.24%)
</TABLE>
1
<PAGE> 4
REPRESENTATION OF MANAGEMENT:
All adjustments have been made that, in the opinion of Management, are
necessary to fairly present the financial results for the interim periods
presented.
Operating results for the three months ended March 31, 1997 are not necessarily
indicative of the results that may be expected for the year ended December 31,
1997.
In August 1996, a three-for-two stock split was effected in the form of a 50%
stock dividend. The number of shares and per share data presented in this
document have been adjusted to give effect to the stock split.
2
<PAGE> 5
ITEM I (B)- CONSOLIDATED COMPARATIVE BALANCE SHEET
<TABLE>
<CAPTION>
ASSETS CURRENT QUARTER PREVIOUS YEAR
AS OF 3/31/97 AS OF 12/31/96
--------------- --------------
<S> <C> <C>
CASH AND DUE FROM BANKS $ 16,744,607 $ 12,939,531
FEDERAL FUNDS SOLD $ 20,320,628 $ 17,737,804
------------- -------------
TOTAL CASH, DUE FROM BANKS, FEDERAL FUNDS SOLD $ 37,065,235 $ 30,677,335
INVESTMENT SECURITIES:
1. HELD TO MATURITY: Fair Value of $33,268,355 at 3/31/97 and
$34,160,075 at 12/31/96, respectively
(A) U.S. GOVERNMENT:
MORTGAGE BACKED SECURITIES $ 10,414,377 $ 10,908,602
(B) OBLIGATIONS OF STATES & POLITICAL
SUBDIVISIONS $ 21,888,286 $ 22,019,792
------------- -------------
TOTAL INVESTMENT SECURITIES HELD TO MATURITY $ 32,302,663 $ 32,928,394
2. AVAILABLE FOR SALE, at Fair value
(A) U.S. TREASURY SECURITIES $ 31,980,390 $ 22,979,480
(B) U.S. GOVERNMENT:
AGENCY NOTES $ 3,926,960 $ 3,983,640
MORTGAGE BACKED SECURITIES $ 21,331,146 $ 22,396,852
(C) CORPORATE STOCKS IN OTHER BANKS $ 150,084 $ 150,084
------------- -------------
TOTAL INVESTMENT SECURITIES AVAILABLE FOR SALE $ 57,388,580 $ 49,510,056
TOTAL INVESTMENT SECURITIES $ 89,691,243 $ 82,438,450
LOANS HELD FOR SALE $ 478,426 $ 738,050
LOANS: GROSS $ 181,251,684 $ 180,632,685
LESS:
(A) UNEARNED INCOME ON LOANS $ (70,285) $ (78,252)
(B) RESERVE FOR POSSIBLE LOAN LOSSES $ (3,544,254) $ (3,546,853)
------------- -------------
LOANS: NET $ 178,115,571 $ 177,745,630
BANK PREMISES, EQUIPMENT, FURNITURE & FIXTURES $ 5,288,453 $ 5,157,438
INTANGIBLE ASSETS $ 76,066 $ 105,818
OTHER ASSETS $ 3,257,740 $ 3,297,989
TOTAL OTHER ASSETS $ 8,622,259 $ 8,561,245
------------- -------------
TOTAL ASSETS $ 313,494,308 $ 299,422,660
============= =============
</TABLE>
3
<PAGE> 6
ITEM I (B)- CONSOLIDATED COMPARATIVE BALANCE SHEET
(CONTINUED)
<TABLE>
<CAPTION>
CURRENT QUARTER PREVIOUS YEAR
LIABILITIES AND CAPITAL AS OF 3/31/97 AS OF 12/31/96
--------------- --------------
DEPOSITS IN DOMESTIC OFFICES
<S> <C> <C>
(A) DEMAND $ 42,964,850 $ 46,108,749
(B) NOW, SUPER NOW & MONEY MARKET ACCOUNTS $ 95,264,324 $ 78,409,974
(C) SAVINGS & CHRISTMAS CLUB $ 16,057,535 $ 17,115,001
(D) TIME CD'S - $100,000 AND OVER $ 44,774,287 $ 44,825,313
(E) TIME CD'S - OTHER $ 67,392,419 $ 66,101,879
(F) IRA CD'S $ 16,748,674 $ 16,584,278
------------- -------------
TOTAL DEPOSITS $ 283,202,089 $ 269,145,194
FEDERAL FUNDS PURCHASED AND SECURITIES SOLD $ 2,904,387 $ 3,575,744
OTHER LIABILITIES $ 1,493,893 $ 868,398
TOTAL LIABILITIES $ 287,600,369 $ 273,589,336
COMMON STOCK:
(1) SHARES AUTHORIZED 10,000,000
(2) COMMON STOCK, NO PAR 2,999,988 outstanding $ 14,250,558 $ 14,250,558
(3) UNDIVIDED PROFITS $ 11,971,913 $ 11,725,761
(4) UNREALIZED GAIN(LOSS) ON AFS INVESTMENTS $ ( 328,532) $ (142,995)
------------- -------------
NET OF INCOME TAX EFFECT
TOTAL EQUITY CAPITAL $ 25,893,939 $ 25,833,324
------------- -------------
TOTAL LIABILITIES AND EQUITY CAPITAL $ 313,494,308 $ 299,422,660
============= =============
</TABLE>
4
<PAGE> 7
ITEM I - (C) CONSOLIDATED COMPARATIVE STATEMENTS OF INCOME
<TABLE>
<CAPTION>
QUARTER QUARTER
ENDING ENDING
3/31/97 3/31/96
---------- ----------
<S> <C> <C>
INTEREST INCOME:
INTEREST & FEES ON LOANS $3,904,978 $3,250,576
U.S. TREASURY NOTES $ 416,394 $ 333,437
U.S. GOVERNMENT:
AGENCY NOTES $ 72,622 $ 94,640
MORTGAGE BACKED SECURITIES $ 583,171 $ 657,930
OBLIGATIONS OF STATE & POLITICAL SUB. $ 284,819 $ 291,329
OTHER INTEREST INCOME $ 322,952 $ 181,661
---------- ----------
TOTAL INTEREST INCOME $5,584,936 $4,809,574
INTEREST EXPENSE:
INTEREST ON DEPOSITS $2,631,477 $2,139,410
INTEREST ON SHORT TERM BORROWING $ 39,361 $ 18,658
---------- ----------
TOTAL INTEREST EXPENSE $2,670,838 $2,158,067
---------- ----------
NET INTEREST INCOME $2,914,098 $2,651,507
PROVISION FOR LOAN LOSSES $ 180,000 $ 0
---------- ----------
NET INTEREST INCOME AFTER PROVISION $2,734,098 $2,651,507
FOR LOAN LOSSES
INSURANCE COMMISSIONS, FEES & PREMIUMS $ 9,602 $ 25,443
FEES ON OTHER CUSTOMER SERVICES $ 327,399 $ 313,144
ALL OTHER INCOME $ 190,631 $ 187,234
---------- ----------
TOTAL INCOME BEFORE OVERHEAD COST $3,261,730 $3,177,327
</TABLE>
5
<PAGE> 8
ITEM I - (C) CONSOLIDATED COMPARATIVE STATEMENTS OF INCOME (CONTINUED)
<TABLE>
<CAPTION>
QUARTER QUARTER
ENDING ENDING
3/31/97 3/31/96
---------- ----------
<S> <C> <C>
OTHER EXPENSES:
SALARIES $1,023,381 $ 961,303
NET OCCUPANCY EXPENSE OF PREMISES $ 135,502 $ 133,683
FURNITURE & EQUIPMENT $ 121,754 $ 122,200
OTHER EXPENSES $ 989,389 $ 761,192
---------- ----------
TOTAL OTHER EXPENSES $2,270,026 $1,978,379
---------- ----------
NET INCOME BEFORE INCOME TAX $ 991,704 $1,198,949
INCOME TAX EXPENSE $ 295,554 $ 313,563
---------- ----------
INCOME OR LOSS BEFORE EXTRAORDINARY ITEMS $ 696,150 $ 885,385
---------- ----------
EARNINGS PER SHARE DATA $ 0.23 $ 0.30
DIVIDENDS PER SHARES OUTSTANDING* $ 0.08 $ 0.05
</TABLE>
*Dividends for the quarter ended March 31, 1997 were declared on April 7, 1997,
Record Date April 18, 1997, payment date April 30, 1997
6
<PAGE> 9
ITEM I - (D) CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
THREE MONTHS PREVIOUS YEAR
ENDED 3/31/97 ENDED 3/31/96
------------- -------------
<S> <C> <C>
STATEMENT OF CHANGES IN CAPITAL ACCOUNTS
BALANCE AT BEGINNING OF YEAR $ 25,833,324 $ 23,638,556
NET INCOME $ 696,150 $ 885,385
NET CHANGE IN UNREALIZED GAIN/LOSS
ON AVAILABLE FOR SALE SECURITIES
(NET OF TAX EFFECT) $ (185,537) $ (198,756)
------------ ------------
TOTAL ADDITIONS $ 510,613 $ 686,629
DEDUCTIONS:
CASH DIVIDENDS DECLARED AND PAID* $ 449,998 $ 450,000
------------ ------------
TOTAL DEDUCTIONS $ 449,998 $ 450,000
BALANCE AT END OF PERIOD $ 25,893,939 $ 23,875,185
============ ============
</TABLE>
*Dividends for the quarter ended December 31, 1996 were declared on January 13,
1997; record date January 27,1997; payment date February 6, 1997
7
<PAGE> 10
THE NEW IBERIA BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME $ 696,150 $ 885,385
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
DEPRECIATION & AMORTIZATION 128,299 128,642
DISCOUNT ACCRETION & PREMIUM AMORTIZATION 27,576 (13,816)
PROVISION FOR LOAN LOSSES 180,000 0
NET GAIN (LOSS) ON SALE OF MORTGAGE LOANS 3,493 0
INCREASE IN OTHER LIABILITIES 625,494 472,573
DECREASE IN OTHER ASSETS 61,135 177,113
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,722,147 1,649,897
CASH FLOWS FROM INVESTING ACTIVITIES:
PROCEEDS FROM MATURITIES & CALL OF INVESTMENT SEC.(HTM) 618,370 853,525
PROCEEDS FROM MATURITIES & CALL OF INVESTMENT SEC.(AFS) 5,016,293 12,055,248
PURCHASE OF INVESTMENT SECURITIES(AFS) (13,045,937) (11,216,584)
NET (INCREASE) DECREASE IN LOANS (427,951) (5,978,246)
PURCHASE OF BANK PREMISES & EQUIPMENT (230,562) (17,051)
NET CASH PROVIDED BY (USED IN)
------------ ------------
INVESTMENT ACTIVITIES $ (8,069,787) $ (4,303,108)
</TABLE>
8
<PAGE> 11
CONSOLIDATED STATEMENTS OF CASH FLOWS
(CONTINUED)
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
DECREASE IN REPURCHASE AGREEMENTS (671,357) (270,467)
INCREASE IN DEMAND, NOW & SAVINGS DEPOSITS 12,652,985 1,930,544
INCREASE IN CERTIFICATES OF DEPOSITS 1,403,910 97,000
DIVIDENDS PAID (449,998) (450,000)
----------- -----------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 12,935,540 1,307,077
NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS 6,587,900 (1,346,134)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 30,677,335 23,141,728
CASH AND CASH EQUIVALENTS AT END OF PERIOD 37,265,235 21,795,594
SUPPLEMENTAL DISCLOSURE:
INTEREST PAID ON BORROWINGS AND DEPOSITS 2,661,418 2,162,317
FEDERAL INCOME TAX PAID 0 0
</TABLE>
9
<PAGE> 12
PART I -- FINANCIAL INFORMATION
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
In the first quarter of 1997, The New Iberia Bancorp, Inc. (the "Corporation")
recorded net income of $696,150 ($.23 per share) compare to $885,385 ($.30 per
share) for the first quarter in 1996. The change in net income is explained by
the following changes: (i) net interest income increase of $262,591, (ii) an
increase in non interest expense by $291,647, primarily due to an increase in
legal and professional fees from existing litigation and potential merger
activities, and (iii) a provision for loan losses of $180,000 for the first
quarter of 1997 as compared to no provision for the first quarter of 1996. The
increase in the provision for loan losses was due the increased size of the
loan portfolio and to higher consumer loan charge offs during the first quarter
as compared to last year during the same period. Consumer and credit card
charge offs during the first quarter of 1997 were approximately .11 percent of
average loans outstanding, compared to approximately .07 percent of average
loans outstanding during the first quarter of 1996.
On March 31, 1997, total assets of the Corporation were $313,494,308, which is
an increase of $14,071,648 (4.70%) from the $299,422,660 reported for December
31, 1996 and an increase of $47,159,604 (17.71%) from the balance at March 31,
1996 of $266,334,704. Gross loans on March 31, 1997 were $181,659,825, a
$367,342 (.20%) increase from the December 31, 1996 balance of $181,292,483 and
an increase of $33,095,315 (22.28%) from the balance on March 31, 1996 of
$148,564,510. Loans held for sale, at their fair value, on March 31, 1997,
December 31, 1996, and March 31, 1996, were $478,426, $738,050, and $1,205,357,
respectively. The increase in gross loans outstanding as compared to the first
quarter of 1996 is a result of an increase in real estate loans ($18 million)
and consumer loans ($11.5 million). Total deposits were $283,202,089 on March
31, 1997, a $14,056,895 (5.22%) increase from the balance of $269,145,194 on
December 31, 1996 and an increase of $43,548,941 (18.17%) from the balance on
March 31, 1996 of $239,653,148. The increase in deposits from December 1996 is
primarily attributable to an increase in interest bearing checking accounts,
including funds expected to be retained for one customer for only a short
period of time (approximately $10 million).
CAPITAL RESOURCES
Capital ratios for the quarters ending March 31, 1997, 1996, and 1995:
<TABLE>
<CAPTION>
Regulatory
1997 1996 1995 Minimum*
---- ---- ---- ----------
<S> <C> <C> <C> <C>
Leverage 8.24% 8.90% 8.85% 3.00%
Risk-based capital
Tier I 14.43% 16.08% 16.76% 4.00%
Total 15.68% 17.33% 18.26% 8.00%
</TABLE>
*Current levels for a well capitalized institution in accordance with the
Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA). The
unrealized loss on Available for Sale securities reflected in the equity
section of the balance sheet was excluded as required by regulatory agencies in
the computation of these ratios.
10
<PAGE> 13
RESULTS OF OPERATIONS
NET INTEREST INCOME - Net interest income is the difference between interest
earned on assets and interest paid for the funds supporting those assets. As of
March 31, 1997, net interest income was $2,914,098, an increase of $262,591
(9.90%) over the same period in 1996. The increase in net interest income is
the result of an increase in interest and fees on loans ($654,402), an increase
in investment income ($120,960), offset by an increase in interest cost on
deposits ($512,771) over the last year. It is expected that interest rates will
rise slightly during the remainder of 1997 (although such changes cannot be
reliably predicted), and given the current local economic environment, net
interest income is expected to continue to increase (although there can be no
assurance that this will occur), but at a slower pace due to increased
competition in both loans and deposit accounts.
EARNING ASSETS - Earning assets on March 31, 1997 were $291,074,663, an
increase of $10,154,664 (3.61%) from the December 31, 1996 balance of
$280,919,999. The change is the result of an increase in loans outstanding of
$319,047, an increase of $7,252,793 in investment securities and $2,582,824 in
federal funds sold.
The average tax equivalent yield (TEY) on earning assets for the first three
months of 1997 was 7.92%. In 1996 the average tax equivalent yield on earning
assets was 8.03%. The TEY on average gross loans has decreased to an average of
8.82% from an average of 9.02% in 1996. The TEY on investments has decreased
slightly to an average of 6.81% from an average of 6.82% in 1996. The average
rate on Fed Funds Sold has decreased to an average of 5.16% from an average of
5.26% in 1996. (All yields are year to date through March of the respective
year.)
INVESTMENT SECURITIES - The Corporation's goals with respect to investment
portfolio management is to ensure (i) quality of securities, (ii) the
maintenance of attractive rates of return on the funds invested and (iii)
adequate liquidity to the Corporation. The portfolio consists primarily of U.S.
Treasury Notes, Municipal Bonds, and Mortgage-Backed Securities. U.S. Treasury
Notes and Municipal Bonds maturities are laddered to provide a constant
liquidity source. Mortgage-Backed Securities provide liquidity, monthly cash
flow and higher yields. The mix of the investment portfolio continues to
change, primarily due to prepayments on mortgage-backed securities. The
Corporation has primarily reinvested maturities and pay downs in 1996 and 1997
into loans, where demand has been strong.
11
<PAGE> 14
The breakdown of the investment portfolio as of March 31, 1997 is listed below:
(In Thousands of Dollars)
<TABLE>
<CAPTION>
Held to Maturity Available for Sale
----------------- ------------------
Amortized Fair Amortized Fair
Cost Value Cost Value
--------- ----- --------- -----
<S> <C> <C> <C> <C>
U.S. Treasury Notes -0- -0- $32,048 $31,980
U.S. Government
Agency Notes -0- -0- 3,976 3,927
Mortgage-Backed $10,414 $10,944 20,154 19,972
Obligation State
& Political 21,888 22,324 -0- -0-
Domestic Debt -0- -0- 1,384 1,360
Corporate Stock -0- -0- 150 150
Total $32,302 $33,268 $57,712 $57,389
</TABLE>
Gross unrealized gains and losses on "Held to Maturity" securities were as
follows:
(In Thousands of Dollars)
<TABLE>
<CAPTION>
BOOK UNREALIZED UNREALIZED MARKET
VALUE GAINS LOSSES VALUE
<S> <C> <C> <C> <C>
U. S. Government:
Mortgage-Backed Sec. $10,414 $ 530 -0- $10,944
Obligation State
& Political 21,888 498 62 22,324
Total $32,302 $1,028 $62 $33,268
</TABLE>
Under current regulatory capital rules, the unrealized loss as of March 31,
1997, in the "Available for Sale" securities totaling $328,532, net of tax, is
excluded from capital when calculating leverage, primary capital and risk-based
capital ratios.
The Corporation had no sales of securities during the first quarter of 1997.
INTEREST-BEARING LIABILITIES - Interest-bearing liabilities on March 31, 1997,
were $243,141,626, reflecting an increase of $16,529,437 (7.29%) from the
December 31, 1996 balance of $226,612,189 and an increase of $40,147,275
(19.78%) from the March 31, 1996 balance, which totaled $202,994,351. As noted
previously the increase in this category from December 1996 is due to an
increase in interest bearing checking accounts and the increase from the same
period last year is due to an increase in both interest bearing checking
accounts and certificates of deposit.
12
<PAGE> 15
INTEREST EXPENSE - Interest Expense as of March 31, 1997 totaled $2,670,838,
which represents an increase of $512,771 (23.76%) from the 1996 amount of
$2,158,067. The reason for the increase is the interest cost for certificates
of deposits and interest bearing deposits. The average rates paid year to date
for all interest-bearing liabilities were 4.47% through March 1997 as compared
to 4.28% for the same period in 1996. All yields are year to date through March
of the respective year.
RESERVE AND PROVISION FOR POSSIBLE LOAN LOSSES
An adequate level of the Allowance for Possible Loan Losses is determined by
reviewing the quality of the loan portfolio, actual loan loss experience and
the current and anticipated economic conditions and their effect on the market
served by the Corporation. The Provision for Possible Loan Losses is the amount
charged to earnings in order to maintain an adequate level of reserves. Other
significant factors considered in determining the levels of the provision and
the reserve are the growth or decline in the loan portfolio, the composition of
the portfolio, industry concentrations, differing risks associated with each
category of loans, the current and prospective financial condition of
borrowers, the level of past due and nonperforming loans and the relationship
of the reserve to the total loan portfolio. Management regularly reviews the
loan portfolio in an effort to identify potential losses and to determine that
the level of reserves adequately reflects the potential loss exposure. Loans
identified as problem credits are reviewed more frequently to determine
potential changes in the allowance.
Since actual losses may vary from current assessments, any necessary
adjustments to the reserve are recorded in the period in which they become
known. The loan review department of the Corporation monitors adherence to
lending policies and procedures as well as asset quality.
Provision for loan losses for the first quarter of 1997 were $180,000 as
compared to no provision for the same period the previous year. The balance in
the reserve over the last year reflects levels of charge-offs and management's
estimates of collateral values when evaluating exposure in the loan portfolio.
The reserve as a percentage of loans and leases was 1.95% at quarter end (March
31, 1997) compared to 1.96% at year end (December 1996). Management projects
loan growth to continue steadily throughout the remainder of the year. This
growth is a factor in Management's periodic determination of the reserve.
Management plans to make adjustments to the reserve based on recoveries
received and charge-offs made to ensure that an adequate loan loss reserve is
maintained.
The diversification of the loan portfolio is an important factor in the
assessment of loan quality and loss potential. Although the Corporation has
extended a significant amount of loans to energy services and agricultural
customers due to the prevalence of those industries in the local economy, the
Corporation attempts to lend to a variety of industries to minimize its
exposure to possible losses occurring from concentration of loans in any single
sector. Broadening the Corporation's base of loan activity into the Lafayette,
Louisiana market, along with the steadily improving local economy over the last
few years, has had a positive effect on the performance of the loan portfolio.
Still, a review of the loan portfolio has found that the effects of gaming
establishments in the Corporation's market area has had some influence on the
local consumer, as evidenced by a higher percentage of consumer past due loans
and increased charge offs of consumer loans. Management reviews on an ongoing
basis the changes occurring in the loan portfolio and adjusts internal
procedures to address those changes.
13
<PAGE> 16
Charge-offs year to date for 1997 were $215,486 (.12% of average gross loans
outstanding ) compared to $98,267 (.07% of average gross loans outstanding) in
1996. Recoveries year to date for 1997 were $32,630 compared to $20,099 in
1996. The relatively small levels of charge-offs are attributable to
management's continued efforts to identify and work out problem loans.
Year to date Loan Recoveries compared to prior year charge-offs was 6.41% and
7.11% for March 1997 and March 1996, respectively.
OTHER EXPENSES
Total Other Expenses for the first quarter of 1997 was $2,270,026 compared to
$1,978,948 for the same period in 1996. This reflects an increase of $291,078
(14.71%). Salary cost and benefits have increased $62,078, and there was an
increase in legal and professional fees related to ongoing litigation,
potential merger activities, and loan collection activities ($127,000), as well
as an increase in other operational expenses ($102,000).
INCOME TAXES
The effective tax rate as of March 31, 1997 is approximately 30%, which
compares to approximately 26% as of March 31, 1996. The change in the effective
tax rate is largely due to a decrease in tax free interest income.
NONPERFORMING ASSETS AND PAST DUE LOANS
Crucial to earnings performance is the monitoring of asset quality, chiefly in
the evaluation of credit risk, and the minimization of the Corporation's
exposure to losses. Management views these two critical functions as essential
to sound banking practice. Therefore, management regularly obtains appraisals
for the collateral supporting nonperforming assets and specifically establishes
reserves for them based on the current market value of the collateral if
necessary.
Nonperforming assets are those loans carried on a non-accrual basis, those
classified as troubled debt restructuring, real estate acquired through
foreclosure and repossessed movable property. The following schedule reflects
the balance of each category:
(In Thousands of Dollars)
<TABLE>
<CAPTION>
March 31, 1997 March 31, 1996
-------------- --------------
<S> <C> <C>
Non-accrual Loans $487 $132
Troubled Debt Restructuring $306 $565
Other Real Estate Owned -0- $ 50
Repossessed Movable Prop. $ 73 $ 43
Total $866 $790
</TABLE>
The increase in non-accrual loans is due to an increase in non-accrual consumer
loans ($186,000) and non-accrual real estate loans ($172,000). The non-accrual
real estate loan increase was one loan previously reported as a troubled debt
restructuring loan.
14
<PAGE> 17
RISK ELEMENT INFORMATION
<TABLE>
<CAPTION>
(In Thousands of Dollars)
March 31, 1997 March 31, 1996
-------------- --------------
<S> <C> <C>
Past due loans 90 days $809 $727
and still accruing
Amount of income on non-accrual $ 8 $ 3
loans that would have been
in income if still accruing
Interest income on restructured $ 12 $ 18
loans included in net income
</TABLE>
Typically, the Corporation's restructured loans are based on the ability to
provide principal and interest repayment instead of providing a rate less than
the market. As a result, any rate adjustment would have resulted in an
immaterial change in earnings during the quarter.
Management is not aware of any loans classified for regulatory purposes as
loss, doubtful, substandard, or special mention and excluded from the
non-accrual, past due 90 days and still accruing, or restructured loans which:
(1) represent or result from trends or uncertainties that will materially
impact future operating results, liquidity, or capital resources, or (2)
represent material credits about which Management is aware of any information
which causes doubts as to the ability of such borrowers to comply with the loan
repayment terms.
On March 31, 1997, impaired loans totaled $629,595. Total impaired loans of
$291,021 required a total reserve of $136,821. There was no reserve for
impairment on the remaining $338,574 of impaired loans. During the three month
period ended March 31, 1997, impaired loans averaged $580,461. Interest income
recognized on impaired loans totalled approximately $11,000 for the quarter.
NON-ACCRUAL OF INTEREST ON LOANS
It is the policy of the Corporation to discontinue the accrual of interest on
loans when principal or interest is in default for ninety days or more, unless,
in the best judgment of the Officer Loan Committee, the loan is well secured
and is in the process of collection. Interest previously accrued is reversed
and the accrual of interest is discontinued.
15
<PAGE> 18
LIQUIDITY AND INTEREST RATE SENSITIVITY
Built into the Corporation's financial structure is the goal of maintenance of
adequate liquidity; i.e., the ability to meet customers' requirements on a
timely basis. The Corporation has in place an Asset/Liability computer software
program to aid it in maintaining a reasonable balance between interest earning
assets and interest bearing liabilities. The information is updated and
analyzed by management on a monthly basis in order to allow management to
diversify investments as needed to keep a proper balance of maturities.
Management also regularly evaluates and manages interest rate sensitivity of
assets and liabilities. This is critical to protect net income against wide
fluctuations in interest rates and to maintain consistent growth of net
interest income.
The Corporation's liquidity ratio on March 31, 1997 was 36.93% with a
dependency ratio of 4.81%; the liquidity ratio on December 31, 1996 was 33.65%
with a dependency ratio of 1.77%. Management believes that liquidity is
enhanced by its ability to manage the interest rate sensitivity of assets and
liabilities. The increase in the liquidity and dependency ratio is from an
increase in short term funds and an increase in the investment portfolio.
Management actively monitors and controls the relationship between interest
sensitive assets and liabilities by means of an interest rate simulation model.
The off balance sheet commitments, if funded, would have a limited impact on
the liquidity of the Corporation, primarily due to the maturity structure of
the investment portfolio.
16
<PAGE> 19
CUMULATIVE MATURITY/RATE SENSITIVITY (All Dollar Amounts in Thousands)
- --------------------------------------------------------------------------------
EARNING ASSETS
<TABLE>
<CAPTION>
1-30 1-60 1-90 1-365 YEAR & OVER TOTAL
<S> <C> <C> <C> <C> <C> <C>
LOANS* 19,740 23,202 27,546 35,613 145,450 181,063
SHORT TERM INVESTMENTS 20,321 20,321 20,321 20,321 0 20,321
INVESTMENTS*** 2,001 4,011 5,019 12,757 76,932 89,689
--------- --------- --------- --------- --------- ---------
TOTAL EARNING ASSETS 42,062 47,534 52,886 68,691 222,382 291,073
FUNDING SOURCES
PUBLIC FUNDS DDA 11,927 11,927 11,927 11,927 0 11,927
NOW ACCOUNTS** 0 0 0 0 26,138 26,138
MONEY MARKET (IMFA) 57,199 57,199 57,199 57,199 0 57,199
CERT. OF DEPOSIT (GREATER
THAN) 100M 4,331 8,608 13,115 22,665 24,708 47,373
OTHER TIME DEPOSITS 13,603 26,888 54,655 81,543
SAVINGS** 0 0 0 0 16,058 16,058
REPURCHASE AGREEMENTS 2,904 2,904 2,904 2,904 0 2,904
--------- --------- --------- --------- --------- ---------
TOTAL FUNDING 76,361 80,638 98,748 121,583 121,559 243,142
--------- --------- --------- --------- --------- ---------
CUMULATIVE MATURITY/ (34,299) (33,104) (45,862) (52,892) 100,823 47,931
--------- --------- --------- --------- --------- ---------
RATE SENSITIVITY (GAP)
AS A % OF EARNING ASSETS -11.78% -11.37% -15.76% -18.17%
AS A % OF TOTAL ASSETS -10.93% -10.55% -14.62% -16.86%
</TABLE>
- --------------------------------------------------------------------------------
* LOAN FIGURES REPRESENT RATE SENSITIVITY ONLY, WHILE THE BALANCE SHEET
REPRESENTS TOTAL GROSS LOANS INCLUDING NON-ACCRUALS AND OVERDRAFTS
** HISTORICALLY, RATES ON THESE TYPES OF ACCOUNTS HAVE CHANGED LITTLE AS
COMPARED TO OTHER TYPES OF DEPOSITS, THEREFORE, THESE ACCOUNTS ARE NOT
CONSIDERED RATE SENSITIVE.
*** $150,084 - FIRST NATIONAL BANKERS BANK AND FNMA STOCK IS NOT RATE
SENSITIVE AND IS NOT INCLUDED IN THE ONE YEAR AND OVER.
THE AMOUNT OF PAYDOWNS RECEIVED ON A MONTHLY BASIS ON MORTGAGE BACKED
SECURITIES IS NOT REFLECTED IN THIS SCHEDULE. PAY DOWNS AVERAGED ABOUT
$500,000 A MONTH OVER THE FIRST THREE MONTHS OF 1997, AND WOULD NOT HAVE
CREATED A SIGNIFICANT DIFFERENCE IN THE PERCENTAGES ABOVE.
THE GAP PERCENTAGES NOTED ABOVE ARE A REFLECTION OF A NEGATIVE POSITION.
THIS MEASUREMENT SIMPLY SHOWS AT WHAT REPRICING INTERVAL ASSETS AND
LIABILITIES WILL REPRICE. IT DOES NOT TAKE INTO ACCOUNT AT WHAT LEVEL OF
RATE CHANGE THE ASSET OR LIABILITY WILL REPRICE. IN GENERAL TERMS, IF
RATES FALL, NET INTEREST INCOME SHOULD INCREASE AND IF RATES RISE, NET
INTEREST INCOME SHOULD DECREASE. IN LOOKING AT THE ONE YEAR HORIZON, AND
GIVEN THAT (ALTHOUGH CHANGES IN INTEREST RATES CANNOT NECESSARILY BE
RELIABLY PREDICTED) IN GENERAL, INTEREST RATES MAY REMAIN FLAT OR SLIGHTLY
HIGHER IN THE NEAR FUTURE, THE CORPORATION SHOULD ADJUST ITS CURRENT
POSITION BY SHORTENING THE REPRICING OF ASSETS OR EXTEND DEPOSIT
MATURITIES. THE CORPORATION SHOULD CLOSELY MONITOR FUTURE CHANGES IN
INTEREST RATES AND ACCORDINGLY ADJUST ITS INTEREST RATE POSITION AS
NEEDED. THE USE OF THE ASSET/LIABILITY MODEL ON A MONTHLY BASIS PROVIDES A
GOOD REVIEW AND GIVES REALISTIC EXPECTATIONS OF THE AFFECT THAT CHANGES IN
INTEREST RATES WILL HAVE ON THE INTEREST RATE RISK OF THE CORPORATION.
17
<PAGE> 20
PART II OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS:
The Bank is named as the trustee of The Jules B. Schwing Childrens Trust (the
"Trust") in the last will and testament of Jules B. Schwing. Under the will,
the main asset of the Trust will be stock of The New Iberia Bancorp, Inc. (the
"Stock"). The Succession has not been closed and the Bank, as Trustee, has not
been placed in possession or control of the Stock.
On or about April 21, 1996, in the 16th Judicial District Court, Iberia Parish,
Louisiana (Docket No. 13847) certain of the children of Jules B. Schwing,
namely Jules A. Schwing, Marie Louise Schwing, Edmond L. Schwing, John E.
Schwing, III, and Charles E. Schwing (the "Petitioning Heirs"), filed in the
Succession proceedings a Petition to Annul Probated Testament (the "Petition"),
seeking to annul the last will and testament of Jules B. Schwing. The Bank, as
trustee of the Trust created by the will, was named as a defendant in the
Petition.
On June 24, 1996, the Bank, in its capacity as trustee of the Trust, filed in
the Succession proceedings an Exception to Unauthorized Use of Ordinary
Proceeding and Motion to Convert Petition to Annul Probated Testament to
Summary Proceeding. Prior to the hearing on this matter, in support of the
Bank's exceptions and motion, Robert M. Fleming, the court appointed Executor
of the Succession, filed a Memorandum in Opposition to Use of Ordinary
Proceeding to Annul Testament. The Bank's exceptions were granted on August 8,
1996, and the matter will now proceed to trial as a summary proceeding.
On October 16, 1996, the Petitioning Heirs filed in the Succession proceedings
a Motion to Terminate, In Part, or Modify Trust, or Alternatively, to Appoint a
Substitute Trustee, which seeks to terminate or modify the Trust or to appoint
a substitute trustee in place of the Bank. Motions for Partial Summary Judgment
on these motions were heard on February 21, 1997 and are pending.
A trial on these matters was set for March 31, 1997. Pursuant to a Motion to
Continue filed by all parties, the trial has been continued without date.
In connection with a proposed merger transaction whereby Bancorp would merge
with and into Regions Financial Corporation (the "Merger"), the Executor of the
Succession of Jules B. Schwing, on behalf of the Succession, the Petitioning
Heirs (other than Charles E. Schwing), and others, executed releases that would
release, effective upon the consummation of the Merger, the Bank, Bancorp and
others from any claims, losses, damages, and liabilities (or actions in respect
thereof) with certain limited exceptions described in certain of the releases.
It is anticipated that if all conditions to the Merger are met, the Merger
would take place in the second or third quarter of 1997. The Merger is subject
to, among other things, regulatory approval and approval by the shareholders of
Bancorp.
18
<PAGE> 21
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
2 Agreement and Plan of Merger by and between The New Iberia
Bancorp, Inc. and Regions Financial Corporation dated as of
February 13, 1997, included as Appendix A of the Corporation's
Proxy Statement included as part of Regions Financial
Corporation's Registration Statement on Form S-4 filed with
the Commission on April 23, 1997.
3.1 Copy of Amended and Restated Articles of Incorporation,
incorporated by reference to Exhibit 3(i) of the Corporation's
Registration Statement on Form 8-A/A1 filed with the
Commission on July 19, 1995.
3.2 Copy of Amended and Restated Bylaws, incorporated by reference
to Exhibit 4 of the Corporation's Form S-8 Registration
Statement filed with the Commission on October 21, 1996.
10.1 The New Iberia Bancorp, Inc. Nonstatutory Stock Option Plan,
incorporated by reference to Exhibit 10.1 of the Corporation's
3rd Quarter 1996 10-Q.
10.2 Form of Stock Option Agreement pursuant to The New Iberia
Bancorp, Inc. Nonstatutory Stock Option Plan, incorporated by
reference to Exhibit 10.2 of the Corporation's 3rd Quarter
1996 10-Q.
10.3 Copy of Employment Agreement between The New Iberia Bank, The
New Iberia Bancorp, Inc. and Ernest Freyou, incorporated by
reference to Exhibit 10.1 of the Corporation's 1995 10-K.
10.4 Copy of Nonqualified Deferred Compensation Agreement between
The New Iberia Bank and Ernest Freyou, incorporated by
reference to Exhibit 10.2 of the Corporation's 1995 10-K.
27 Financial Data Schedule
(B) Report on Form 8-K
The Corporation filed a Form 8-K with the Commission on February 18,
1997. The Form 8-K reported an Agreement and Plan of Merger with
Regions Financial Corporation had been entered into on February 13,
1997.
19
<PAGE> 22
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 thereunto duly authorized.
The New Iberia Bancorp, Inc.
Date: May 8, 1997 By: /s/ ERNEST FREYOU
-------------------------------------
Ernest Freyou
President and Chief Executive Officer
Date: May 8, 1997 By: /s/ LEONARD J. FREYOU
-------------------------------------
Leonard J. Freyou
Senior Vice President and Cashier
20
<PAGE> 23
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
2 Agreement and Plan of Merger by and between The New Iberia
Bancorp, Inc. and Regions Financial Corporation dated as of
February 13, 1997, included as Appendix A of the Corporations
Proxy Statement included as part of Regions Financial
Corporation's Registration Statement on Form S-4 filed with
the Commission on April 23, 1997.
27 Financial Data Schedule
<PAGE> 1
EXHIBIT 2
APPENDIX A
FINAL AGREEMENT
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
THE NEW IBERIA BANCORP, INC.
AND
REGIONS FINANCIAL CORPORATION
DATED AS OF FEBRUARY 13, 1997
A-1
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Parties............................................................ A-5
Preamble........................................................... A-5
ARTICLE 1 -- TRANSACTIONS AND TERMS OF MERGER...................... A-5
1.1 Merger...................................................... A-5
1.2 Time and Place of Closing................................... A-5
1.3 Effective Time.............................................. A-5
ARTICLE 2 -- TERMS OF MERGER....................................... A-6
2.1 Certificate of Incorporation................................ A-6
2.2 Bylaws...................................................... A-6
2.3 Directors and Officers...................................... A-6
ARTICLE 3 -- MANNER OF CONVERTING SHARES........................... A-6
3.1 Conversion of Shares........................................ A-6
3.2 Anti-Dilution Provisions.................................... A-6
3.3 Shares Held by New Iberia or Regions........................ A-6
3.4 Fractional Shares........................................... A-6
3.5 Conversion of Stock Options; Restricted Stock............... A-7
ARTICLE 4 -- EXCHANGE OF SHARES.................................... A-7
4.1 Exchange Procedures......................................... A-7
4.2 Rights of Former New Iberia Stockholders.................... A-8
ARTICLE 5 -- REPRESENTATIONS AND WARRANTIES OF NEW IBERIA.......... A-8
5.1 Organization, Standing, and Power........................... A-8
5.2 Authority; No Breach By Agreement........................... A-8
5.3 Capital Stock............................................... A-9
5.4 New Iberia Subsidiaries..................................... A-9
5.5 Financial Statements........................................ A-10
5.6 Absence of Undisclosed Liabilities.......................... A-10
5.7 Absence of Certain Changes or Events........................ A-10
5.8 Tax Matters................................................. A-10
5.9 Assets...................................................... A-11
5.10 Environmental Matters....................................... A-11
5.11 Compliance With Laws........................................ A-12
5.12 Employee Benefit Plans...................................... A-12
5.13 Material Contracts.......................................... A-13
5.14 Legal Proceedings........................................... A-14
5.15 Statements True and Correct................................. A-14
5.16 Accounting, Tax, and Regulatory Matters..................... A-15
5.17 State Takeover Laws......................................... A-15
5.18 Directors' Agreements....................................... A-15
5.19 Charter Provisions.......................................... A-15
5.20 Derivatives Contracts....................................... A-15
</TABLE>
A-2
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE 6 -- REPRESENTATIONS AND WARRANTIES OF REGIONS............. A-15
6.1 Organization, Standing, and Power........................... A-15
6.2 Authority; No Breach By Agreement........................... A-16
6.3 Capital Stock............................................... A-16
6.4 SEC Filings; Financial Statements........................... A-16
6.5 Absence of Undisclosed Liabilities.......................... A-17
6.6 Absence of Certain Changes or Events........................ A-17
6.7 Compliance With Laws........................................ A-17
6.8 Legal Proceedings........................................... A-17
6.9 Statements True and Correct................................. A-18
6.10 Accounting, Tax, and Regulatory Matters..................... A-18
ARTICLE 7 -- CONDUCT OF BUSINESS PENDING CONSUMMATION.............. A-18
7.1 Affirmative Covenants of New Iberia......................... A-18
7.2 Negative Covenants of New Iberia............................ A-19
7.3 Covenants of Regions........................................ A-20
7.4 Adverse Changes in Condition................................ A-20
7.5 Reports..................................................... A-21
ARTICLE 8 -- ADDITIONAL AGREEMENTS................................. A-21
8.1 Registration Statement; Proxy Statement; Stockholder
Approval.................................................... A-21
8.2 Exchange Listing............................................ A-21
8.3 Applications................................................ A-21
8.4 Filings with State Offices.................................. A-21
8.5 Agreement as to Efforts to Consummate....................... A-21
8.6 Investigation and Confidentiality........................... A-22
8.7 Press Releases.............................................. A-22
8.8 Certain Actions............................................. A-22
8.9 Accounting and Tax Treatment................................ A-23
8.10 State Takeover Laws......................................... A-23
8.11 Charter Provisions.......................................... A-23
8.12 Agreement of Affiliates..................................... A-23
8.13 Employee Benefits and Contracts............................. A-23
8.14 Indemnification............................................. A-24
ARTICLE 9 -- CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE..... A-24
9.1 Conditions to Obligations of Each Party..................... A-24
9.2 Conditions to Obligations of Regions........................ A-25
9.3 Conditions to Obligations of New Iberia..................... A-26
ARTICLE 10 -- TERMINATION.......................................... A-27
10.1 Termination................................................. A-27
10.2 Effect of Termination....................................... A-28
10.3 Non-Survival of Representations and Covenants............... A-28
</TABLE>
A-3
<PAGE> 4
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE 11 -- MISCELLANEOUS........................................ A-29
11.1 Definitions................................................. A-29
11.2 Expenses.................................................... A-34
11.3 Brokers and Finders......................................... A-35
11.4 Entire Agreement............................................ A-35
11.5 Amendments.................................................. A-35
11.6 Waivers..................................................... A-35
11.7 Assignment.................................................. A-36
11.8 Notices..................................................... A-36
11.9 Governing Law............................................... A-36
11.10 Counterparts................................................ A-36
11.11 Captions.................................................... A-36
11.12 Interpretations............................................. A-37
11.13 Enforcement of Agreement.................................... A-37
11.14 Severability................................................ A-37
Signatures......................................................... A-37
</TABLE>
A-4
<PAGE> 5
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into as of February 13, 1997, by and between THE NEW IBERIA BANCORP, INC. ("New
Iberia"), a corporation organized and existing under the laws of the State of
Louisiana, with its principal office located in New Iberia, Louisiana; and
REGIONS FINANCIAL CORPORATION ("Regions"), a corporation organized and existing
under the laws of the State of Delaware, with its principal office located in
Birmingham, Alabama.
PREAMBLE
The Boards of Directors of New Iberia and Regions are of the opinion that
the transactions described herein are in the best interests of the parties and
their respective stockholders. This Agreement provides for the acquisition of
New Iberia by Regions pursuant to the merger of New Iberia into and with
Regions. At the effective time of such merger, the outstanding shares of the
capital stock of New Iberia shall be converted into shares of the common stock
of Regions (except as provided herein). As a result, stockholders of New Iberia
shall become stockholders of Regions and each of the subsidiaries of New Iberia
shall continue to conduct its business and operations as a wholly owned
subsidiary of Regions. The transactions described in this Agreement are subject
to the approvals of the stockholders of New Iberia, the Board of Governors of
the Federal Reserve System, and the appropriate state regulatory authorities and
the satisfaction of certain other conditions described in this Agreement. It is
the intention of the parties to this Agreement that the merger for federal
income tax purposes shall qualify as a "reorganization" within the meaning of
Section 368(a) of the Internal Revenue Code, and for accounting purposes shall
qualify for treatment as a pooling of interests. Simultaneously with the
execution and delivery of this Agreement, as a condition and inducement to
Regions' willingness to consummate the transactions contemplated by this
Agreement, each of New Iberia's directors will execute and deliver to Regions an
agreement (a "Support Agreement"), in substantially the form of Exhibit 1.
Certain terms used in this Agreement are defined in Section 11.1 of this
Agreement.
NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants, and agreements set forth herein, the parties agree
as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 Merger. Subject to the terms and conditions of this Agreement, at the
Effective Time, New Iberia shall be merged into and with Regions in accordance
with the provisions of Section 12:115 of the LBCL and of Section 258 of the DGCL
and with the effect provided in Section 259 of the DGCL (the "Merger"). Regions
shall be the Surviving Corporation resulting from the Merger and shall continue
to be governed by the Laws of the State of Delaware. The Merger shall be
consummated pursuant to the terms of this Agreement, which has been approved and
adopted by the Boards of Directors of New Iberia and Regions.
1.2 Time and Place of Closing. The Closing will take place at 9:00 A.M.,
Central Time, on the date that the Effective Time occurs (or the immediately
preceding day if the Effective Time is earlier than 9:00 A.M., Central Time), or
at such other time as the Parties, acting through their duly authorized
officers, may mutually agree. The place of Closing shall be at such place as may
be mutually agreed upon by the Parties.
1.3 Effective Time. The Merger and other transactions contemplated by this
Agreement shall become effective on the date and at the time, or the later of
such date and time, the Louisiana Certificate of Merger reflecting the Merger
shall become effective with the Secretary of State of the State of Louisiana and
the Delaware Certificate of Merger reflecting the Merger shall become effective
with the Secretary of State of the State of Delaware (the "Effective Time").
Subject to the terms and conditions hereof, unless otherwise mutually agreed
upon in writing by the duly authorized officers of each Party, the Parties shall
use their reasonable efforts to cause the Effective Time to occur on the last
business day of the month in which occurs
A-5
<PAGE> 6
the last to occur of (i) the effective date (including expiration of any
applicable waiting period) of the last required Consent of any Regulatory
Authority having authority over and approving or exempting the Merger, and (ii)
the date on which the stockholders of New Iberia approve this Agreement to the
extent such approval is required by applicable Law.
ARTICLE 2
TERMS OF MERGER
2.1 Certificate of Incorporation. The Certificate of Incorporation of
Regions in effect immediately prior to the Effective Time shall be the
Certificate of Incorporation of the Surviving Corporation after the Effective
Time until otherwise amended or repealed.
2.2 Bylaws. The Bylaws of Regions in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation after the
Effective Time until otherwise amended or repealed.
2.3 Directors and Officers. The directors of Regions in office immediately
prior to the Effective Time, together with such additional persons as may
thereafter be elected, shall serve as the directors of the Surviving Corporation
from and after the Effective Time in accordance with the Bylaws of the Surviving
Corporation. The officers of Regions in office immediately prior to the
Effective Time, together with such additional persons as may thereafter be
elected, shall serve as the officers of the Surviving Corporation from and after
the Effective Time in accordance with the Bylaws of the Surviving Corporation.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 Conversion of Shares. Subject to the provisions of this Article 3, at
the Effective Time, by virtue of the Merger and without any action on the part
of the holders thereof, the shares of the constituent corporations shall be
converted as follows:
(a) Each share of Regions Common Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding
from and after the Effective Time.
(b) Each share of New Iberia Common Stock (excluding shares held by
New Iberia or any of its Subsidiaries or by Regions or any of its
Subsidiaries, in each case other than in a fiduciary capacity or as a
result of debts previously contracted) issued and outstanding at the
Effective Time shall be converted into .36 of a share of Regions Common
Stock, subject to adjustment as provided in Section 10.1(h) of this
Agreement (the "Exchange Ratio").
3.2 Anti-Dilution Provisions. In the event Regions changes the number of
shares of Regions Common Stock issued and outstanding prior to the Effective
Time as a result of a stock split, stock dividend, or similar recapitalization
with respect to such stock and the record date therefor (in the case of a stock
dividend) or the effective date thereof (in the case of a stock split or similar
recapitalization for which a record date is not established) shall be prior to
the Effective Time, the Exchange Ratio shall be proportionately adjusted.
3.3 Shares Held by New Iberia or Regions. Each of the shares of New Iberia
Common Stock held by any New Iberia Company or by any Regions Company, in each
case other than in a fiduciary capacity or as a result of debts previously
contracted, shall be canceled and retired at the Effective Time and no
consideration shall be issued in exchange therefor.
3.4 Fractional Shares. Notwithstanding any other provision of this
Agreement, each holder of shares of New Iberia Common Stock exchanged pursuant
to the Merger, who would otherwise have been entitled to receive a fraction of a
share of Regions Common Stock (after taking into account all certificates
delivered by such holder) shall receive, in lieu thereof, cash (without
interest) in an amount equal to such fractional part of a share of Regions
Common Stock multiplied by the market value of one share of Regions Common Stock
at the Effective Time. The market value of one share of Regions Common Stock at
the Effective Time shall be
A-6
<PAGE> 7
the closing price of such common stock on the Nasdaq NMS (as reported by The
Wall Street Journal or, if not reported thereby, any other authoritative source
selected by Regions) on the last trading day preceding the Effective Time. No
such holder will be entitled to dividends, voting rights, or any other rights as
a stockholder in respect of any fractional shares.
3.5 Conversion of Stock Options; Restricted Stock.
(a) At the Effective Time, all rights with respect to New Iberia Common
Stock pursuant to stock options or stock appreciation rights ("New Iberia
Options") granted by New Iberia under the New Iberia Stock Plans, which are
outstanding at the Effective Time, whether or not exercisable, shall be
converted into and become rights with respect to Regions Common Stock, and
Regions shall assume each New Iberia Option, in accordance with the terms of the
New Iberia Stock Plan and stock option agreement by which it is evidenced. From
and after the Effective Time, (i) each New Iberia Option assumed by Regions may
be exercised solely for shares of Regions Common Stock (or cash in the case of
stock appreciation rights), (ii) the number of shares of Regions Common Stock
subject to such New Iberia Option shall be equal to the number of shares of New
Iberia Common Stock subject to such New Iberia Option immediately prior to the
Effective Time multiplied by the Exchange Ratio, and (iii) the per share
exercise price under each such New Iberia Option shall be adjusted by dividing
the per share exercise price under each such New Iberia Option by the Exchange
Ratio and rounding down to the nearest cent. It is intended that the foregoing
assumption shall be undertaken in a manner that will not constitute a
"modification" as defined in Section 424 of the Internal Revenue Code, as to any
stock option which is an "incentive stock option." New Iberia agrees to take all
necessary steps to effectuate the foregoing provisions of this Section 3.5.
(b) All restrictions or limitations on transfer with respect to New Iberia
Common Stock awarded under the New Iberia Stock Plans or any other plan,
program, or arrangement of any New Iberia Company, to the extent that such
restrictions or limitations shall not have already lapsed, and except as
otherwise expressly provided in such plan, program, or arrangement, shall remain
in full force and effect with respect to shares of Regions Common Stock into
which such restricted stock is converted pursuant to Section 3.1 of this
Agreement.
ARTICLE 4
EXCHANGE OF SHARES
4.1 Exchange Procedures. Promptly after the Effective Time, the Surviving
Corporation shall cause the exchange agent selected by Regions (the "Exchange
Agent") to mail to the former stockholders of New Iberia appropriate transmittal
materials (which shall specify that delivery shall be effected, and risk of loss
and title to the certificates theretofore representing shares of New Iberia
Common Stock shall pass, only upon proper delivery of such certificates to the
Exchange Agent). After the Effective Time, each holder of shares of New Iberia
Common Stock (other than shares to be canceled pursuant to Section 3.3 of this
Agreement) issued and outstanding at the Effective Time, promptly upon the
surrender of the certificate or certificates representing such shares to the
Exchange Agent, shall receive in exchange therefor the consideration provided in
Section 3.1 of this Agreement, together with all undelivered dividends and other
distributions in respect of such shares (without interest thereon) pursuant to
Section 4.2 of this Agreement and, to the extent required by Section 3.4 of this
Agreement, cash in lieu of any fractional share of Regions Common Stock to which
such holder otherwise would be entitled (without interest). Until so
surrendered, each outstanding certificate of New Iberia Common Stock shall be
deemed for all purposes, other than as provided below with respect to the
payment of dividends or other distributions payable to the holders of shares of
Regions Common Stock, to represent the consideration into which the number of
shares of New Iberia Common Stock represented thereby prior to the Effective
Time shall have been converted. Regions shall not be obligated to deliver the
certificate or certificates representing the shares of Regions Common Stock or
any cash payments to which any former holder of New Iberia Common Stock is
entitled as a result of the Merger, or any dividends or distributions in respect
of shares of Regions Common Stock, until such holder surrenders such holder's
certificate or certificates representing the shares of New Iberia Common Stock
for exchange as provided in this Section 4.1, or otherwise complies with the
procedures of the Exchange Agent with respect to lost, stolen,
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or destroyed certificates. The certificate or certificates of New Iberia Common
Stock so surrendered shall be duly endorsed as the Exchange Agent may require.
Any other provision of this Agreement notwithstanding, neither Regions, New
Iberia, nor the Exchange Agent shall be liable to a holder of New Iberia Common
Stock for any amounts paid or property delivered in good faith to a public
official pursuant to any applicable abandoned property Law.
4.2 Rights of Former New Iberia Stockholders. At the Effective Time, the
stock transfer books of New Iberia shall be closed as to holders of New Iberia
Common Stock immediately prior to the Effective Time and no transfer of New
Iberia Common Stock by any such holder shall thereafter be made or recognized.
Until surrendered for exchange in accordance with the provisions of Section 4.1
of this Agreement, each certificate theretofore representing shares of New
Iberia Common Stock (other than shares to be canceled pursuant to Section 3.3 of
this Agreement) shall from and after the Effective Time represent for all
purposes only the right to receive the consideration provided in Sections 3.1
and 3.4 of this Agreement in exchange therefor, subject, however, to the
Surviving Corporation's obligation to pay any dividends or make any other
distributions with a record date prior to the Effective Time which have been
declared or made by New Iberia in respect of such shares of New Iberia Common
Stock in accordance with the terms of this Agreement and which remain unpaid at
the Effective Time. To the extent permitted by Law, former stockholders of
record of New Iberia shall be entitled to vote after the Effective Time at any
meeting of Regions stockholders the number of whole shares of Regions Common
Stock into which their respective shares of New Iberia Common Stock are
converted, regardless of whether such holders have exchanged their certificates
representing New Iberia Common Stock for certificates representing Regions
Common Stock in accordance with the provisions of this Agreement. Whenever a
dividend or other distribution is declared by Regions on the Regions Common
Stock, the record date for which is at or after the Effective Time, the
declaration shall include dividends or other distributions on all shares
issuable pursuant to this Agreement, but no dividend or other distribution
payable to the holders of record of Regions Common Stock as of any time
subsequent to the Effective Time shall be delivered to the holder of any
certificate representing shares of New Iberia Common Stock issued and
outstanding at the Effective Time until such holder surrenders such certificate
for exchange as provided in Section 4.1 of this Agreement. However, upon
surrender of such New Iberia Common Stock certificate, both the Regions Common
Stock certificate (together with all such undelivered dividends or other
distributions without interest), and any undelivered dividends and cash payments
to be paid for fractional share interests (without interest) shall be delivered
and paid with respect to each share represented by such certificate.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF NEW IBERIA
Except as set forth in the New Iberia Disclosure Memorandum, New Iberia
hereby represents and warrants to Regions that:
5.1 Organization, Standing, and Power. New Iberia is a corporation duly
organized and validly existing, and in good standing under the Laws of the State
of Louisiana, and has the corporate power and authority to carry on its business
as now conducted and to own, lease, and operate its material Assets. New Iberia
is duly qualified or licensed to transact business as a foreign corporation in
good standing in the States of the United States and foreign jurisdictions where
the character of its Assets or the nature or conduct of its business requires it
to be so qualified or licensed, except for such jurisdictions in which the
failure to be so qualified or licensed is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on New Iberia.
5.2 Authority; No Breach By Agreement.
(a) New Iberia has the corporate power and authority necessary to execute,
deliver, and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery, and performance of
this Agreement and the consummation of the transactions contemplated herein,
including the Merger, have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of New Iberia, subject to the
approval of this Agreement by the required vote of the
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outstanding shares of New Iberia Common Stock, which is the only stockholder
vote required for approval of this Agreement and consummation of the Merger by
New Iberia. Subject to such requisite stockholder approval, this Agreement
represents a legal, valid, and binding obligation of New Iberia, enforceable
against New Iberia in accordance with its terms (except in all cases as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and (ii) application of, and limitations on the
application of, equitable principles and remedies, including limitations on the
availability of the equitable remedy of specific performance or injunctive
relief).
(b) Neither the execution and delivery of this Agreement by New Iberia, nor
the consummation by New Iberia of the transactions contemplated hereby, nor
compliance by New Iberia with any of the provisions hereof, will (i) conflict
with or result in a breach of any provision of New Iberia's Articles of
Incorporation or Bylaws, or (ii) constitute or result in a Default under, or
require any Consent pursuant to, or result in the creation of any Lien on any
Asset of any New Iberia Company under, any Contract or Permit of any New Iberia
Company, where such Default or Lien, or any failure to obtain such Consent, is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on New Iberia, or (iii) subject to receipt of the requisite approvals
referred to in Section 9.1(b) of this Agreement, violate any Law or Order
applicable to any New Iberia Company or any of their respective material Assets.
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and rules of
the AMEX and the NASD, and other than Consents required from Regulatory
Authorities, and other than notices to or filings with the Internal Revenue
Service or the Pension Benefit Guaranty Corporation or both with respect to any
employee benefit plans, or under the HSR Act, and other than Consents, filings,
or notifications which, if not obtained or made, are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on New Iberia,
no notice to, filing with, or Consent of, any public body or authority is
necessary for the consummation by New Iberia of the Merger and the other
transactions contemplated in this Agreement.
5.3 Capital Stock. The authorized capital stock of New Iberia consists of
10,000,000 shares of New Iberia Common Stock, of which 2,999,988 shares are
issued and outstanding as of the date of this Agreement and not more than
3,149,988 shares will be issued and outstanding at the Effective Time. All of
the issued and outstanding shares of capital stock of New Iberia are duly and
validly issued and outstanding and are fully paid and nonassessable under the
LBCL. None of the outstanding shares of capital stock of New Iberia has been
issued in violation of any preemptive rights of the current or past stockholders
of New Iberia. New Iberia has reserved 150,000 shares of New Iberia Common Stock
for issuance under the New Iberia Stock Plans, pursuant to which options to
purchase not more than 150,000 shares of New Iberia Common Stock are
outstanding. Except as set forth above, there are no shares of capital stock or
other equity securities of New Iberia outstanding and no outstanding Rights
relating to the capital stock of New Iberia.
5.4 New Iberia Subsidiaries. New Iberia will disclose in the New Iberia
Disclosure Memorandum all of the New Iberia Subsidiaries as of the date of this
Agreement. New Iberia or one of its Subsidiaries owns all of the issued and
outstanding shares of capital stock of each New Iberia Subsidiary. No equity
securities of any New Iberia Subsidiary are or may become required to be issued
(other than to another New Iberia Company) by reason of any Rights, and there
are no Contracts by which any New Iberia Subsidiary is bound to issue (other
than to another New Iberia Company) additional shares of its capital stock or
Rights or by which any New Iberia Company is or may be bound to transfer any
shares of the capital stock of any New Iberia Subsidiary (other than to another
New Iberia Company). There are no Contracts relating to the rights of any New
Iberia Company to vote or to dispose of any shares of the capital stock of any
New Iberia Subsidiary. All of the shares of capital stock of each New Iberia
Subsidiary held by a New Iberia Company are authorized, validly issued, fully
paid, and nonassessable (except pursuant to 12 U.S.C. Section 55 in the case of
national banks and comparable, applicable state Law, if any, in the case of
state depository institutions) under the applicable corporation or banking Law
of the jurisdiction in which such Subsidiary is incorporated or organized and
are owned by the New Iberia Company free and clear of any Lien. Each New Iberia
Subsidiary is either a bank, savings association or a corporation, and is duly
organized, validly existing, and (as to corporations) in good standing under the
Laws of the jurisdiction in which it is incorporated or organized, and
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has the corporate power and authority necessary for it to own, lease, and
operate its Assets and to carry on its business as now conducted. Each New
Iberia Subsidiary is duly qualified or licensed to transact business as a
foreign corporation in good standing in the States of the United States and
foreign jurisdictions where the character of its Assets or the nature or conduct
of its business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on New Iberia. Each New Iberia Subsidiary that is a depository
institution is an "insured institution" as defined in the Federal Deposit
Insurance Act and applicable regulations thereunder, and the deposits in which
are insured by the Bank Insurance Fund or the Savings Association Insurance
Fund, as appropriate.
5.5 Financial Statements. New Iberia will include in the New Iberia
Disclosure Memorandum copies of all New Iberia Financial Statements for periods
ended prior to the date hereof and will deliver to Regions copies of all New
Iberia Financial Statements prepared subsequent to the date hereof. The New
Iberia Financial Statements (as of the dates thereof and for the periods covered
thereby) present or will present, as the case may be, fairly the consolidated
financial position of the New Iberia Companies as of the dates indicated and the
consolidated results of operations, changes in stockholders' equity, and cash
flows of the New Iberia Companies for the periods indicated, in accordance with
GAAP (subject to any exceptions as to consistency specified therein or as may be
indicated in the notes thereto or, in the case of interim financial statements,
to normal recurring year-end adjustments that are not material in amount or
effect and to the absence from interim financial statements of any footnote
disclosures).
5.6 Absence of Undisclosed Liabilities. No New Iberia Company has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on New Iberia, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of New Iberia as
of September 30, 1996 included in the New Iberia Financial Statements or
reflected in the notes thereto. No New Iberia Company has incurred or paid any
Liability since September 30, 1996, except for such Liabilities incurred or paid
in the ordinary course of business consistent with past business practice or
incurred in connection with the process leading up to the execution and
consummation of this Agreement and which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on New Iberia.
5.7 Absence of Certain Changes or Events. Since September 30, 1996, except
as disclosed in the New Iberia Financial Statements delivered with the New
Iberia Disclosure Memorandum, to the Knowledge of New Iberia, (i) there have
been no events, changes, or occurrences which have had, or are reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on New
Iberia, and (ii) the New Iberia Companies have not taken any action, or failed
to take any action, prior to the date of this Agreement, which action or
failure, if taken after the date of this Agreement, would represent or result in
a material breach or violation of any of the covenants and agreements of New
Iberia provided in Article 7 of this Agreement, other than conducting the
process that has led up to the execution and consummation of this Agreement.
5.8 Tax Matters.
(a) All Tax returns required to be filed by or on behalf of any of the New
Iberia Companies have been timely filed or requests for extensions have been
timely filed, granted, and have not expired for periods ended on or before
December 31, 1995, and on or before the date of the most recent fiscal year end
immediately preceding the Effective Time, except to the extent that all such
failures to file or untimely filings, individually or in the aggregate, are not
reasonably likely to have a Material Adverse Effect on New Iberia and all
returns filed are complete and accurate in all material respects. All Taxes
shown on filed returns have been paid. There is no audit examination,
deficiency, refund Litigation, or penalties due or owed with respect to any
Taxes that is reasonably likely to result in a determination that would have a
Material Adverse Effect on New Iberia, except as reserved against in the New
Iberia Financial Statements delivered with the New Iberia Disclosure Memorandum.
All Taxes and other Liabilities due with respect to completed and settled
examinations or concluded Litigation have been paid.
(b) None of the New Iberia Companies has executed an extension or waiver of
any statute of limitations on the assessment or collection of any Tax due that
is currently in effect.
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(c) Adequate provision for any Taxes due or to become due for any of the
New Iberia Companies for the period or periods through and including the date of
the respective New Iberia Financial Statements has been made and is reflected on
such New Iberia Financial Statements.
(d) Deferred Taxes of the New Iberia Companies have been adequately
provided for in the New Iberia Financial Statements.
(e) Each of the New Iberia Companies is in compliance with, and its records
contain the information and documents (including properly completed IRS Forms
W-9) necessary to comply with, in all material respects, applicable information
reporting and Tax withholding requirements under federal, state, and local Tax
Laws, and such records identify the accounts subject to backup withholding under
Section 3406 of the Internal Revenue Code.
(f) None of the New Iberia Companies has made any payments, is obligated to
make any payments, or is a party to any contract, agreement, or other
arrangement that could obligate it to make any payments that would be disallowed
as a deduction under Section 280G or 162(m) of the Internal Revenue Code.
(g) There are no Liens with respect to Taxes upon any of the assets of the
New Iberia Companies.
(h) There has not been an ownership change, as defined in Internal Revenue
Code Section 382(g), of the New Iberia Companies that occurred during or after
any Taxable Period in which the New Iberia Companies incurred a net operating
loss that carries over to any Taxable Period ending after December 31, 1995.
(i) No New Iberia Company has filed any consent under Section 341(f) of the
Internal Revenue Code concerning collapsible corporations.
(j) All material elections with respect to Taxes affecting the New Iberia
Companies as of the date of this Agreement have been or will be timely made.
After the date hereof, no election with respect to Taxes will be made without
the prior written consent of Regions, which consent will not be unreasonably
withheld.
(k) No New Iberia Company has or has had a permanent establishment in any
foreign country, as defined in any applicable tax treaty or convention between
the United States and such foreign country.
5.9 Assets. The New Iberia Companies have good and marketable title, free
and clear of all Liens, to all of their respective owned Assets material to
their business. All material tangible properties used in the businesses of the
New Iberia Companies are in good condition, reasonable wear and tear excepted,
and are usable in the ordinary course of business consistent with New Iberia's
past practices. All Assets which are material to New Iberia's business on a
consolidated basis, held under leases or subleases by any of the New Iberia
Companies, are held under valid Contracts enforceable in accordance with their
respective terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or other Laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceedings may be brought), and
each such Contract is in full force and effect. The New Iberia Companies
currently maintain insurance similar in amounts, scope, and coverage to that
maintained by other peer banking organizations in their geographic area. None of
the New Iberia Companies has received notice from any insurance carrier that (i)
such insurance will be canceled or that coverage thereunder will be reduced or
eliminated, or (ii) premium costs with respect to such policies of insurance
will be substantially increased. There are presently no claims pending under
such policies of insurance and no notices have been given by any New Iberia
Company under such policies. The Assets of the New Iberia Companies include all
Assets required to operate the business of the New Iberia Companies as presently
conducted.
5.10 Environmental Matters.
(a) To the Knowledge of New Iberia, each New Iberia Company, its
Participation Facilities, and its Loan Properties are, and have been, in
compliance with all Environmental Laws, except for such instances of
non-compliance that are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on New Iberia.
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(b) There is no Litigation pending or, to the Knowledge of New Iberia,
threatened before any court, governmental agency, or authority or other forum in
which any New Iberia Company or any of its Loan Properties or Participation
Facilities (or any New Iberia Company in respect of any such Loan Property or
Participation Facility) has been or, with respect to threatened Litigation, may
be named as a defendant or potentially responsible party (i) for alleged
noncompliance (including by any predecessor) with any Environmental Law or (ii)
relating to the release into the environment of any Hazardous Material, whether
or not occurring at, on, under, or involving a site owned, leased, or operated
by any New Iberia Company or any of its Loan Properties or Participation
Facilities, except for such Litigation pending or threatened that is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on New Iberia, and to the Knowledge of New Iberia, there is no reasonable
basis for any such Litigation.
(c) To the Knowledge of New Iberia, there have been no releases of
Hazardous Material in, on, under, or affecting any Participation Facility, or
Loan Property, except such as are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on New Iberia.
5.11 Compliance with Laws. Each New Iberia Company has in effect all
Permits necessary for it to own, lease, or operate its material Assets and to
carry on its business as now conducted, and there has occurred no Default under
any such Permit other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on New Iberia. None
of the New Iberia Companies:
(a) is in violation of any Laws, Orders, or Permits applicable to its
business or employees conducting its business, except for violations which
are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on New Iberia; and
(b) has received any notification or communication from any agency or
department of federal, state, or local government or any Regulatory
Authority or the staff thereof (i) asserting that any New Iberia Company is
not in compliance with any of the Laws or Orders which such governmental
authority or Regulatory Authority enforces, where such noncompliance is
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on New Iberia, (ii) threatening to revoke any Permits, the
revocation of which is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on New Iberia, or (iii) requiring any
New Iberia Company to enter into or consent to the issuance of a cease and
desist order, formal agreement, directive, commitment, or memorandum of
understanding, or to adopt any Board resolution or similar undertaking,
which restricts materially the conduct of its business, or in any material
manner relates to its capital adequacy, its credit or reserve policies, its
management, or the payment of dividends.
5.12 Employee Benefit Plans.
(a) New Iberia will disclose in the New Iberia Disclosure Memorandum, and
will deliver or make available to Regions concurrently with the New Iberia
Disclosure Memorandum, copies in each case of all written pension, retirement,
profit-sharing, deferred compensation, stock option, employee stock ownership,
severance pay, vacation, bonus, or other incentive plan, all other written
employee programs, arrangements, or agreements, all medical, vision, dental, or
other written health plans, all life insurance plans, and all other written
employee benefit plans or fringe benefit plans, including written "employee
benefit plans" as that term is defined in Section 3(3) of ERISA, currently
adopted, maintained by, sponsored in whole or in part by, or contributed to, by
any New Iberia Company or Affiliate thereof for the benefit of employees,
retirees, dependents, spouses, directors, independent contractors, or other
beneficiaries and under which employees, retirees, dependents, spouses,
directors, independent contractors, or other beneficiaries are eligible to
participate (collectively, the "New Iberia Benefit Plans"). Any of the New
Iberia Benefit Plans which is an "employee pension benefit plan," as that term
is defined in Section 3(2) of ERISA, is referred to herein as a "New Iberia
ERISA Plan." Each New Iberia ERISA Plan which is also a "defined benefit plan"
(as defined in Section 414(j) of the Internal Revenue Code) is referred to
herein as a "New Iberia Pension Plan." No New Iberia Pension Plan is or has been
a multiemployer plan within the meaning of Section 3(37) of ERISA.
(b) To the Knowledge of New Iberia, all New Iberia Benefit Plans are in
compliance with the applicable terms of ERISA, the Internal Revenue Code, and
any other applicable Laws the breach or violation of which
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are reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on New Iberia. Each New Iberia ERISA Plan which is intended to be
qualified under Section 401(a) of the Internal Revenue Code has received a
favorable determination letter from the Internal Revenue Service, and New Iberia
is not aware of any circumstances likely to result in revocation of any such
favorable determination letter. No New Iberia Company has engaged in a
transaction with respect to any New Iberia Benefit Plan that, assuming the
taxable period of such transaction expired as of the date hereof, would subject
any New Iberia Company to a tax or penalty imposed by either Section 4975 of the
Internal Revenue Code or Section 502(i) of ERISA that, individually or in the
aggregate, is reasonably likely to have a Material Adverse Effect on New Iberia.
(c) No New Iberia Pension Plan has any "unfunded current liability," as
that term is defined in Section 302(d)(8)(A) of ERISA, and the fair market value
of the assets of any such plan equals or exceeds the plan's "benefit
liabilities," as that term is defined in Section 4001(a)(16) of ERISA, when
determined under actuarial factors that would apply if the plan terminated in
accordance with all applicable legal requirements. Since the date of the most
recent actuarial valuation, there has been (i) no material change in the
financial position of any New Iberia Pension Plan, (ii) no change in the
actuarial assumptions with respect to any New Iberia Pension Plan, and (iii) no
increase in benefits under any New Iberia Pension Plan as a result of plan
amendments or changes in applicable Law which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on New Iberia or
materially adversely affect the funding status of any such plan. Neither any New
Iberia Pension Plan nor any "single-employer plan," within the meaning of
Section 4001(a)(15) of ERISA, currently or formerly maintained by any New Iberia
Company, or the single-employer plan of any entity which is considered one
employer with New Iberia under Section 4001 of ERISA or Section 414 of the
Internal Revenue Code or Section 302 of ERISA (whether or not waived) (an "ERISA
Affiliate") has an "accumulated funding deficiency" within the meaning of
Section 412 of the Internal Revenue Code or Section 302 of ERISA. No New Iberia
Company has provided, or is required to provide, security to a New Iberia
Pension Plan or to any single-employer plan of an ERISA Affiliate pursuant to
Section 401(a)(29) of the Code.
(d) No Liability under Subtitle C or D of Title IV of ERISA has been or is
expected to be incurred by any New Iberia Company with respect to any ongoing,
frozen, or terminated single-employer plan or the single-employer plan of any
ERISA Affiliate. No New Iberia Company has incurred any withdrawal Liability
with respect to a multiemployer plan under Subtitle B of Title IV of ERISA
(regardless of whether based on contributions of an ERISA Affiliate). No notice
of a "reportable event," within the meaning of Section 4043 of ERISA for which
the 30-day reporting requirement has not been waived, has been required to be
filed for any New Iberia Pension Plan or by any ERISA Affiliate within the
12-month period ending on the date hereof.
(e) No New Iberia Company has any Liability for retiree health and life
benefits under any of the New Iberia Benefit Plans and there are no restrictions
on the rights of such New Iberia Company to amend or terminate any such Plan
without incurring any Liability thereunder.
(f) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment (including severance, unemployment compensation, golden parachute, or
otherwise) becoming due to any director or any employee of any New Iberia
Company from any New Iberia Company under any New Iberia Benefit Plan or
otherwise, (ii) increase any benefits otherwise payable under any New Iberia
Benefit Plan, or (iii) result in any acceleration of the time of payment or
vesting of any such benefit.
(g) The actuarial present values of all accrued deferred compensation
entitlements (including entitlements under any executive compensation,
supplemental retirement, or employment agreement) of employees and former
employees of any New Iberia Company and their respective beneficiaries, other
than entitlements accrued pursuant to funded retirement plans subject to the
provisions of Section 412 of the Internal Revenue Code or Section 302 of ERISA,
have been fully reflected on the New Iberia Financial Statements to the extent
required by and in accordance with GAAP.
5.13 Material Contracts. Except as reflected in the New Iberia Disclosure
Memorandum, none of the New Iberia Companies, nor any of their respective
Assets, businesses, or operations, is a party to, or is bound
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or affected by, or receives benefits under, (i) any employment, severance,
termination, consulting, or retirement Contract providing for aggregate payments
to any Person in any calendar year in excess of $50,000, (ii) any Contract
relating to the borrowing of money by any New Iberia Company or the guarantee by
any New Iberia Company of any such obligation (other than Contracts evidencing
deposit liabilities, purchases of federal funds, fully-secured repurchase
agreements, and Federal Home Loan Bank advances of depository institution
Subsidiaries, trade payables, and Contracts relating to borrowings or guarantees
made in the ordinary course of business), and (iii) any other Contract or
amendment thereto that would be required to be filed as an exhibit to a Form
10-K filed by New Iberia with the SEC as of the date of this Agreement that has
not been filed as an exhibit to New Iberia's Form 10-K filed for the fiscal year
ended December 31, 1995 (together with all Contracts referred to in Section 5.12
of this Agreement, the "New Iberia Contracts"). With respect to each New Iberia
Contract: (i) the Contract is in full force and effect; (ii) no New Iberia
Company is in Default thereunder, other than Defaults which are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
New Iberia; (iii) no New Iberia Company has repudiated or waived any material
provision of any such Contract; and (iv) no other party to any such Contract is,
to the Knowledge of New Iberia, in Default in any respect, other than Defaults
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on New Iberia, or has repudiated or waived any material
provision thereunder. Except for Federal Home Loan Bank advances, all of the
indebtedness of any New Iberia Company for money borrowed is prepayable at any
time by such New Iberia Company without penalty or premium.
5.14 Legal Proceedings. There is no Litigation instituted or pending, or,
to the Knowledge of New Iberia, threatened (or unasserted but considered
probable of assertion and which if asserted would have at least a reasonable
probability of an unfavorable outcome) against any New Iberia Company, or
against any Asset, interest, or right of any of them, that is reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on New
Iberia, nor are there any Orders of any Regulatory Authorities, other
governmental authorities, or arbitrators outstanding against any New Iberia
Company that is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on New Iberia. The New Iberia Disclosure Memorandum
includes a summary report of all Litigation as of the date of this Agreement to
which any New Iberia Company is a party as a defendant or cross-defendant and
where the maximum exposure is estimated to be $50,000 or more.
5.15 Statements True and Correct. Since January 1, 1994, or the date of
organization if later, each New Iberia Company has timely filed all reports and
statements, together with any amendments required to be made with respect
thereto, that it was required to file with any Regulatory Authorities (except,
in the case of state securities authorities, failures to file which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on New Iberia). At the time of filing (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing):
(i) each report and other document, including financial statements, exhibits,
and schedules thereto, filed by a New Iberia Company with any Regulatory
Authority complied in all material respects with all applicable Laws, and (ii)
each such report and document did not, in all material respects, contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made therein, in light of
the circumstances under which they were made, not misleading. The statements,
certificates, instruments, or other writings, taken as a whole, furnished or to
be furnished by any New Iberia Company or any Affiliate thereof to Regions
pursuant to this Agreement or any other document, agreement, or instrument
referred to herein, do not and will not contain any untrue statement of material
fact or omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. None
of the information supplied or to be supplied by any New Iberia Company or any
Affiliate thereof for inclusion in the Registration Statement to be filed by
Regions with the SEC will, when the Registration Statement becomes effective, be
false or misleading with respect to any material fact, or contain any untrue
statement of a material fact, or omit to state any material fact required to be
stated thereunder or necessary to make the statements therein not misleading.
None of the information supplied or to be supplied by any New Iberia Company or
any Affiliate thereof for inclusion in the Proxy Statement to be mailed to New
Iberia stockholders in connection with the Stockholders' Meeting, and any other
documents to be filed by a New Iberia Company or any Affiliate thereof with the
SEC or any other Regulatory Authority in connection with
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the transactions contemplated hereby, will, at the respective time such
documents are filed, and with respect to the Proxy Statement, when first mailed
to the stockholders of New Iberia, be false or misleading with respect to any
material fact, or contain any misstatement of material fact, or omit to state
any material fact required to be stated thereunder or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or, in the case of the Proxy Statement or any amendment thereof
or supplement thereto, at the time of the Stockholders' Meeting, be false or
misleading with respect to any material fact, or omit to state any material fact
required to be stated thereunder or necessary to correct any material statement
in any earlier communication with respect to the solicitation of any proxy for
the Stockholders' Meeting. All documents that any New Iberia Company or any
Affiliate thereof is responsible for filing with any Regulatory Authority in
connection with the transactions contemplated hereby will comply as to form in
all material respects with the provisions of applicable Law.
5.16 Accounting, Tax, and Regulatory Matters. Except as specifically
contemplated by this Agreement, no New Iberia Company or any Affiliate thereof
has taken any action, or agreed to take any action, or has any Knowledge of any
fact or circumstance that is reasonably likely to (i) prevent the transactions
contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment as a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code, or (ii) materially impede or
delay receipt of any Consents of Regulatory Authorities referred to in Section
9.1(b) of this Agreement. To the Knowledge of New Iberia there exists no fact,
circumstance, or reason why the requisite Consents referred to in Section 9.1(b)
of this Agreement cannot be received in a timely manner without imposition of
any condition of the type described in the last sentence of such Section 9.1(b).
5.17 State Takeover Laws. To the extent applicable, each New Iberia
Company has taken all necessary action to exempt the transactions contemplated
by this Agreement from Sections 132 et. seq. and 135 et. seq. of the LBCL and
any comparable provisions of the Articles of Incorporation of New Iberia.
5.18 Directors' Agreements. Each of the directors of New Iberia has
executed and delivered to Regions a Support Agreement and a claims letter in
substantially the form of Exhibit 4.
5.19 Charter Provisions. Each New Iberia Company has taken all action so
that the entering into of this Agreement and the consummation of the Merger and
the other transactions contemplated by this Agreement do not and will not result
in the grant of any rights to any Person under the Articles of Incorporation,
Bylaws, or other governing instruments of any New Iberia Company or restrict or
impair the ability of Regions or any of its Subsidiaries to vote, or otherwise
to exercise the rights of a stockholder with respect to, shares of any New
Iberia Company that may be directly or indirectly acquired or controlled by it.
5.20 Derivatives Contracts. Neither New Iberia nor any of its Subsidiaries
is a party to or has agreed to enter into an exchange-traded or over-the-counter
swap, forward, future, option, cap, floor, or collar financial contract, or any
other interest rate or foreign currency protection contract not included on its
balance sheet which is a financial derivative contract (including various
combinations thereof) and which might reasonably be expected to have a Material
Adverse Effect on New Iberia.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF REGIONS
Regions hereby represents and warrants to New Iberia as follows:
6.1 Organization, Standing, and Power. Regions is a corporation duly
organized, validly existing, and in good standing under the Laws of the State of
Delaware, and has the corporate power and authority to carry on its business as
now conducted and to own, lease, and operate its material Assets. Regions is
duly qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Regions.
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6.2 Authority; No Breach By Agreement.
(a) Regions has the corporate power and authority necessary to execute,
deliver, and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery, and performance of
this Agreement and the consummation of the transactions contemplated herein,
including the Merger, have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of Regions. This Agreement
represents a legal, valid, and binding obligation of Regions, enforceable
against Regions in accordance with its terms (except in all cases as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by Regions, nor
the consummation by Regions of the transactions contemplated hereby, nor
compliance by Regions with any of the provisions hereof, will (i) conflict with
or result in a breach of any provision of Regions' Certificate of Incorporation
or Bylaws, or (ii) constitute or result in a Default under, or require any
Consent pursuant to, or result in the creation of any Lien on any Asset of any
Regions Company under, any Contract or Permit of any Regions Company, where such
Default or Lien, or any failure to obtain such Consent, is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Regions, or
(iii) subject to receipt of the requisite approvals referred to in Section
9.1(b) of this Agreement, violate any Law or Order applicable to any Regions
Company or any of their respective material Assets.
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and rules of
the NYSE and the NASD, and other than Consents required from Regulatory
Authorities, and other than notices to or filings with the Internal Revenue
Service or the Pension Benefit Guaranty Corporation, or both, with respect to
any employee benefit plans, or under the HSR Act, and other than Consents,
filings, or notifications which, if not obtained or made, are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Regions, no notice to, filing with, or Consent of, any public body or authority
is necessary for the consummation by Regions of the Merger and the other
transactions contemplated in this Agreement.
6.3 Capital Stock. The authorized capital stock of Regions consists of
120,000,000 shares of Regions Common Stock, of which 62,654,750 shares were
issued and outstanding as of December 31, 1996. All of the issued and
outstanding shares of Regions Common Stock are, and all of the shares of Regions
Common Stock to be issued in exchange for shares of New Iberia Common Stock upon
consummation of the Merger, when issued in accordance with the terms of this
Agreement, will be, duly and validly issued and outstanding, and fully paid and
nonassessable under the DGCL. None of the outstanding shares of Regions Common
Stock has been, and none of the shares of Regions Common Stock to be issued in
exchange for shares of New Iberia Common Stock upon consummation of the Merger
will be, issued in violation of any preemptive rights of the current or past
stockholders of Regions.
6.4 SEC Filings; Financial Statements.
(a) Regions has filed and made available to New Iberia all forms, reports,
and documents required to be filed by Regions with the SEC since January 1,
1994, other than registration statements on Forms S-4 and S-8 (collectively, the
"Regions SEC Reports"). The Regions SEC Reports (i) at the time filed, complied
in all material respects with the applicable requirements of the Securities Act
and the Exchange Act, as the case may be, and (ii) did not at the time they were
filed (or if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing) contain any untrue statement of a
material fact or omit to state a material fact required to be stated in such
Regions SEC Reports or necessary in order to make the statements in such Regions
SEC Reports, in light of the circumstances under which they were made, not
misleading.
(b) Each of the Regions Financial Statements (including, in each case, any
related notes) contained in the Regions SEC Reports, including any Regions SEC
Reports filed after the date of this Agreement until the
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Effective Time, complied or will comply as to form in all material respects with
the applicable published rules and regulations of the SEC with respect thereto,
was or will be prepared in accordance with GAAP applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes to such
financial statements or, in the case of unaudited statements, as permitted by
Form 10-Q of the SEC), and fairly presented or will fairly present the
consolidated financial position of Regions and its Subsidiaries as at the
respective dates and the consolidated results of its operations and cash flows
for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not or are not expected to be material in amount.
6.5 Absence of Undisclosed Liabilities. No Regions Company has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Regions, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of Regions as of
September 30, 1996, included in the Regions Financial Statements or reflected in
the notes thereto. No Regions Company has incurred or paid any Liability since
June 30, 1996, except for such Liabilities incurred or paid in the ordinary
course of business consistent with past business practice and which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Regions.
6.6 Absence of Certain Changes or Events. Since September 30, 1996, except
as disclosed in the Regions Financial Statements delivered prior to the date of
this Agreement, (i) there have been no events, changes, or occurrences which
have had, or are reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Regions, and (ii) the Regions Companies have not
taken any action, or failed to take any action, prior to the date of this
Agreement, which action or failure, if taken after the date of this Agreement
would represent or result in a material breach or violation of any of the
covenants and agreements of Regions provided in Article 7 of this Agreement.
6.7 Compliance with Laws. Regions is duly registered as a bank holding
company under the BHC Act. Each Regions Company has in effect all Permits
necessary for it to own, lease, or operate its material Assets and to carry on
its business as now conducted, and there has occurred no Default under any such
Permit, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Regions. No
Regions Company:
(a) is in violation of any Laws, Orders, or Permits applicable to its
business or employees conducting its business, except for violations which
are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Regions; and
(b) has received any notification or communication from any agency or
department of federal, state, or local government or any Regulatory
Authority or the staff thereof (i) asserting that any Regions Company is
not in compliance with any of the Laws or Orders which such governmental
authority or Regulatory Authority enforces, where such noncompliance is
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Regions, (ii) threatening to revoke any Permits, the
revocation of which is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Regions, or (iii) requiring any
Regions Company to enter into or consent to the issuance of a cease and
desist order, formal agreement, directive, commitment or memorandum of
understanding, or to adopt any Board resolution or similar undertaking,
which restricts materially the conduct of its business, or in any material
manner relates to its capital adequacy, its credit or reserve policies, its
management, or the payment of dividends.
6.8 Legal Proceedings. There is no Litigation instituted or pending, or,
to the Knowledge of Regions, threatened (or unasserted but considered probable
of assertion and which if asserted would have at least a reasonable probability
of an unfavorable outcome) against any Regions Company, or against any Asset,
interest, or right of any of them, that is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Regions, nor are
there any Orders of any Regulatory Authorities, other governmental authorities,
or arbitrators outstanding against any Regions Company, that are reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Regions.
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6.9 Statements True and Correct. Since January 1, 1994, or the date of
organization if later, each Regions Company has filed all reports and
statements, together with any amendments required to be made with respect
thereto, that it was required to file with Regulatory Authorities (except, in
the case of state securities authorities, failures to file which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Regions). At the time of filing (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing):
(i) each report and other document, including financial statements, exhibits,
and schedules thereto, filed by a Regions Company with any Regulatory Authority
complied in all material respects with all applicable Laws, and (ii) each such
report and document did not, in all material respects, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading. The statements,
certificates, instruments, or other writings, taken as a whole, furnished or to
be furnished by any Regions Company or any Affiliate thereof to New Iberia
pursuant to this Agreement or any other document, agreement, or instrument
referred to herein, do not and will not contain any untrue statement of material
fact or omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. None
of the information supplied or to be supplied by any Regions Company or any
Affiliate thereof for inclusion in the Registration Statement to be filed by
Regions with the SEC, will, when the Registration Statement becomes effective,
be false or misleading with respect to any material fact, or contain any untrue
statement of a material fact, or omit to state any material fact required to be
stated thereunder or necessary to make the statements therein not misleading.
None of the information supplied or to be supplied by any Regions Company or any
Affiliate thereof for inclusion in the Proxy Statement to be mailed to New
Iberia stockholders in connection with the Stockholders' Meeting, and any other
documents to be filed by any Regions Company or any Affiliate thereof with the
SEC or any other Regulatory Authority in connection with the transactions
contemplated hereby, will, at the respective time such documents are filed, and
with respect to the Proxy Statement, when first mailed to the stockholders of
New Iberia, be false or misleading with respect to any material fact, or contain
any misstatement of a material fact or, omit to state any material fact required
to be stated thereunder or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, or, in the case of
the Proxy Statement, or any amendment thereof or supplement thereto, at the time
of the Stockholders' Meeting, be false or misleading with respect to any
material fact, or omit to state any material fact required to be stated
thereunder or necessary to correct any statement in any earlier communication
with respect to the solicitation of any proxy for the Stockholders' Meeting. All
documents that any Regions Company or any Affiliate thereof is responsible for
filing with any Regulatory Authority in connection with the transactions
contemplated hereby will comply as to form in all material respects with the
provisions of applicable Law.
6.10 Accounting, Tax, and Regulatory Matters. Except as specifically
contemplated by this Agreement, no Regions Company or any Affiliate thereof has
taken any action, or agreed to take any action, or has any Knowledge of any fact
or circumstance that is reasonably likely to (i) prevent the transactions
contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting or treatment as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code, or (ii) materially
impede or delay receipt of any Consents of Regulatory Authorities referred to in
Section 9.1(b) of this Agreement. To the Knowledge of Regions, there exists no
fact, circumstance, or reason why the requisite Consents referred to in Section
9.1(b) of this Agreement cannot be received in a timely manner without
imposition of any condition of the type described in the last sentence of such
Section 9.1(b).
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 Affirmative Covenants of New Iberia. Unless the prior written consent
of the duly authorized officer of Regions shall have been obtained, and except
as otherwise expressly contemplated herein, New Iberia shall and shall cause
each of its Subsidiaries to, from the date of this Agreement until the Effective
Time or termination of this Agreement, (i) operate its business only in the
usual, regular, and ordinary course, (ii) preserve intact in all material
respects its business organization and Assets and maintain its rights and
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franchises, and (iii) take no action which would (x) materially adversely affect
the ability of any Party to obtain any Consents required for the transactions
contemplated hereby without imposition of a condition or restriction of the type
referred to in the last sentences of Sections 9.1(b) and 9.1(c) of this
Agreement, or (y) materially adversely affect the ability of any Party to
perform its covenants and agreements under this Agreement.
7.2 Negative Covenants of New Iberia. From the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement,
New Iberia covenants and agrees that it will not do or agree or commit to do, or
permit any of its Subsidiaries to do or agree or commit to do, any of the
following without the prior written consent of the duly authorized officer of
Regions, which consent shall not be unreasonably withheld:
(a) amend the Articles of Incorporation, Bylaws, or other governing
instruments of any New Iberia Company; or
(b) incur any additional debt obligation or other obligation for
borrowed money (other than indebtedness of a New Iberia Company to another
New Iberia Company) in excess of an aggregate amount outstanding at any
time of $150,000 (for the New Iberia Companies on a consolidated basis)
except in the ordinary course of the business of New Iberia, or such
Subsidiary, consistent with past practices (which shall include, for New
Iberia, creation of deposit liabilities, purchases of federal funds,
advances from the Federal Reserve Bank or Federal Home Loan Bank, whether
or not New Iberia has previously received any such advances, overnight
borrowings to meet temporary liquidity needs, and entry into repurchase
agreements fully secured by U.S. Government or agency securities), or
impose, or suffer the imposition on any Asset of any New Iberia Company of
any Lien or permit any such Lien to exist (other than in connection with
deposits, repurchase agreements, bankers acceptances, "treasury tax and
loan" accounts established in the ordinary course of business, the
satisfaction of legal requirements in the exercise of trust powers, Liens
to secure debt obligations or other obligations for borrowed money
permitted under this paragraph (b), and Liens in effect as of the date
hereof that are disclosed in the New Iberia Disclosure Memorandum); or
(c) repurchase, redeem, or otherwise acquire or exchange (other than
exchanges in the ordinary course under employee benefit plans), directly or
indirectly, any shares, or any securities convertible into any shares, of
the capital stock of any New Iberia Company, or declare or pay any dividend
or make any other distribution in respect of New Iberia's capital stock,
provided that New Iberia may (to the extent legally and contractually
permitted to do so), but shall not be obligated to, declare and pay
quarterly cash dividends on the shares of New Iberia Common Stock at a rate
not in excess of $0.10 per share, with usual and regular record and payment
dates, in accordance with past practice disclosed in the New Iberia
Disclosure Memorandum and such dates may not be changed without the prior
written consent of Regions; or
(d) except for this Agreement, or pursuant to the exercise of stock
options outstanding as of the date hereof and pursuant to the terms thereof
in existence on the date hereof, issue, sell, pledge, encumber, authorize
the issuance of, enter into any Contract to issue, sell, pledge, encumber,
or authorize the issuance of, or otherwise permit to become outstanding,
any additional shares of New Iberia Common Stock or any other capital stock
of any New Iberia Company, or any Rights to acquire such stock; or
(e) adjust, split, combine, or reclassify any capital stock of any New
Iberia Company or issue or authorize the issuance of any other securities
in respect of or in substitution for shares of New Iberia Common Stock, or
sell, lease, mortgage, or otherwise dispose of or otherwise encumber any
shares of capital stock of any New Iberia Subsidiary (unless any such
shares of stock are sold or otherwise transferred to another New Iberia
Company) or any Asset having a book value in excess of $50,000 other than
in the ordinary course of business for reasonable and adequate
consideration and other than dispositions in the ordinary course of
business of (i) investment securities, (ii) loans, including dispositions
thereof through loan participation agreements, and (iii) other real estate
owned by any New Iberia Company; or
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(f) except for purchases of U.S. Treasury securities or U.S.
Government agency securities, which in each case have maturities of five
years or less, purchase any securities or make any material investment,
either by purchase of stock or securities, contributions to capital, Asset
transfers, or purchase of any Assets, in any Person other than a wholly
owned New Iberia Subsidiary, or otherwise acquire direct or indirect
control over any Person, other than in connection with (i) foreclosures in
the ordinary course of business, or (ii) acquisitions of control by a
depository institution Subsidiary in its fiduciary capacity; or
(g) grant any increase in compensation or benefits to the employees or
officers of any New Iberia Company, except in accordance with past practice
or previously approved by the Board of Directors of New Iberia, in each
case as disclosed in the New Iberia Disclosure Memorandum or as required by
Law; except as disclosed in the New Iberia Disclosure Memorandum, pay any
severance or termination pay or any bonus other than pursuant to written
policies or written Contracts in effect on the date of this Agreement and
disclosed in the New Iberia Disclosure Memorandum; and enter into or amend
any severance agreements with officers of any New Iberia Company; grant any
increase in fees or other increases in compensation or other benefits to
directors of any New Iberia Company except in accordance with past practice
disclosed in the New Iberia Disclosure Memorandum; or voluntarily
accelerate the vesting of any stock options or other stock-based
compensation or employee benefits; or
(h) enter into or amend any employment Contract between any New Iberia
Company and any Person (unless such amendment is required by Law) that the
New Iberia Company does not have the unconditional right to terminate
without Liability (other than Liability for services already rendered) at
any time on or after the Effective Time; or
(i) adopt any new employee benefit plan of any New Iberia Company or
make any material change in or to any existing employee benefit plans of
any New Iberia Company other than any such change that is required by Law
or that, in the opinion of counsel, is necessary or advisable to maintain
the tax qualified status of any such plan; or
(j) make any significant change in any Tax or accounting methods or
systems of internal accounting controls, except as may be appropriate to
conform to changes in Tax Laws or regulatory accounting requirements or
GAAP; or
(k) commence any material Litigation other than in accordance with
past practice, settle any Litigation involving any Liability of any New
Iberia Company for money damages in excess of $100,000 or imposing material
restrictions upon the operations of any New Iberia Company; or
(l) modify, amend, or terminate any material Contract or waive,
release, compromise, or assign any material rights or claims.
7.3 Covenants of Regions. From the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement, Regions
covenants and agrees that it shall and shall cause each of its Subsidiaries to
(x) continue to conduct its business and the business of its Subsidiaries in a
manner designed in its reasonable judgment to enhance the long-term value of the
Regions Common Stock and the business prospects of the Regions Companies and to
the extent consistent therewith use all reasonable efforts to preserve intact
the Regions Companies' core businesses and goodwill with their respective
employees and the communities they serve, (y) take no action which would (i)
materially adversely affect the ability of any Party to obtain any Consents
required for the transactions contemplated hereby without imposition of a
condition or restriction of the type referred to in the last sentences of
Sections 9.1(b) and 9.1(c) of this Agreement, or (ii) materially adversely
affect the ability of any Party to perform its covenants and agreements under
this Agreement; provided, that the foregoing shall not prevent any Regions
Company from discontinuing or disposing of any of its Assets or business if such
action is, in the judgment of Regions, desirable in the conduct of the business
of Regions and its Subsidiaries, and (z) not amend the Certificate of
Incorporation or Bylaws of Regions, in each case, in any manner which is adverse
to, and discriminates against, the holders of New Iberia Common Stock.
7.4 Adverse Changes in Condition. Each Party agrees to give written notice
promptly to the other Party upon becoming aware of the occurrence or impending
occurrence of any event or circumstance relating to it or
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any of its Subsidiaries which (i) is reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on it or (ii) would cause or
constitute a material breach of any of its representations, warranties, or
covenants contained herein, and to use its reasonable efforts to prevent or
promptly to remedy the same.
7.5 Reports. Each Party and its Subsidiaries shall file all reports
required to be filed by it with Regulatory Authorities between the date of this
Agreement and the Effective Time and shall deliver to the other Party copies of
all such reports promptly after the same are filed. If financial statements are
contained in any such reports filed with the SEC, such financial statements will
fairly present the consolidated financial position of the entity filing such
statements as of the dates indicated and the consolidated results of operations,
changes in stockholders' equity, and cash flow for the periods then ended in
accordance with GAAP (subject in the case of interim financial statements to
normal recurring year-end adjustments that are not material). As of the
respective dates, such reports filed with the SEC will comply in all material
respects with the Securities Laws and will not contain any untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Any financial statements contained
in any other reports to another Regulatory Authority shall be prepared in
accordance with Laws applicable to such reports.
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 Registration Statement; Proxy Statement; Stockholder Approval. As soon
as reasonably practicable after execution of this Agreement, Regions shall
prepare and file the Registration Statement with the SEC, and shall use its
reasonable efforts to cause the Registration Statement to become effective under
the 1933 Act and take any action required to be taken under the applicable state
Blue Sky or securities Laws in connection with the issuance of the shares of
Regions Common Stock upon consummation of the Merger. New Iberia shall furnish
all information concerning it and the holders of its capital stock as Regions
may reasonably request in connection with such action. New Iberia shall call a
Stockholders' Meeting, to be held as soon as reasonably practicable after the
Registration Statement is declared effective by the SEC, for the purpose of
voting upon approval of this Agreement and such other related matters as it
deems appropriate. In connection with the Stockholders' Meeting, (i) New Iberia
shall mail or cause to be mailed the Proxy Statement, in a form reasonably
acceptable to it, to its stockholders, (ii) the Parties shall furnish to each
other all information concerning them that they may reasonably request in
connection with such Proxy Statement, (iii) the Board of Directors of New Iberia
shall recommend (subject to compliance with their fiduciary duties as advised by
counsel) to its stockholders the approval of this Agreement, and (iv) the Board
of Directors and officers of New Iberia shall (subject to compliance with their
fiduciary duties as advised by counsel) use their reasonable efforts to obtain
such stockholders' approval.
8.2 Exchange Listing. Regions shall use its reasonable efforts to list,
prior to the Effective Time, on the Nasdaq NMS, subject to official notice of
issuance, the shares of Regions Common Stock to be issued to the holders of New
Iberia Common Stock pursuant to the Merger.
8.3 Applications. Regions shall promptly prepare and file, and New Iberia
shall cooperate in the preparation and, where appropriate, filing of,
applications with all Regulatory Authorities having jurisdiction over the
transactions contemplated by this Agreement seeking the requisite Consents
necessary to consummate the transactions contemplated by this Agreement.
8.4 Filings with State Offices. Upon the terms and subject to the
conditions of this Agreement, Regions shall execute and file the Louisiana
Certificate of Merger with the Secretary of State of the State of Louisiana and
Regions shall execute and file the Delaware Certificate of Merger with the
Secretary of State of the State of Delaware in connection with the Closing.
8.5 Agreement as to Efforts to Consummate. Subject to the terms and
conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable
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Laws to consummate and make effective, as soon as practicable after the date of
this Agreement, the transactions contemplated by this Agreement, including using
its reasonable efforts to lift or rescind any Order adversely affecting its
ability to consummate the transactions contemplated herein and to cause to be
satisfied the conditions referred to in Article 9 of this Agreement; provided,
that nothing herein shall preclude either Party from exercising its rights under
this Agreement. Each Party shall use, and shall cause each of its Subsidiaries
to use, its reasonable efforts to obtain all Consents necessary or desirable for
the consummation of the transactions contemplated by this Agreement.
8.6 Investigation and Confidentiality.
(a) Prior to the Effective Time, each Party shall keep the other Party
advised of all material developments relevant to its business and to
consummation of the Merger and shall permit the other Party to make or cause to
be made such investigation of the business and properties of it and its
Subsidiaries and of their respective financial and legal conditions as the other
Party reasonably requests, provided that such investigation shall be reasonably
related to the transactions contemplated hereby and shall not interfere
unreasonably with normal operations. New Iberia shall cooperate with Regions in
obtaining, at Regions' election and expense, environmental audits of any or all
of the properties owned or occupied by New Iberia. No investigation by a Party
shall affect the representations and warranties of the other Party.
(b) Each Party shall, and shall cause its Representatives to, maintain the
confidentiality of all written, oral, and other confidential information
furnished to it by the other Party concerning its and its Subsidiaries'
businesses, operations, and financial positions ("Confidential Information") and
shall not use such information for any purpose except in furtherance of the
transactions contemplated by this Agreement. Each Party shall maintain the
confidentiality of all Confidential Information obtained in connection with this
Agreement or the transactions contemplated hereby unless (i) such information
becomes publicly available through no fault of such Party, or was, is, or
becomes available to that Party from a source other than the other Party or its
Representatives, which source was itself not bound by a confidentiality
agreement with, or other contractual, legal, or fiduciary obligation of
confidentiality with respect to that information, or (ii) the furnishing or use
of such information is required by proper judicial, administrative, or other
legal proceeding, provided that the other Party is promptly notified in writing
of such request, unless such notification is not, in the opinion of counsel,
permitted by Law. Each Party and its Representatives will hold and maintain all
Confidential Information in confidence and will not disclose to any third party
or permit any third party access to any Confidential Information or the
substance thereof provided that a Party may disclose Confidential Information to
such of its Representatives who need to know such information in connection with
the transactions contemplated hereby. If this Agreement is terminated prior to
the Effective Time, each Party shall promptly return or certify the destruction
of all documents and copies thereof, and all work papers containing confidential
information received from the other Party.
(c) Each Party agrees to give the other Party notice as soon as practicable
after any determination by it of any fact or occurrence relating to the other
Party which it has discovered through the course of its investigation and which
represents, or is reasonably likely to represent, either a material breach of
any representation, warranty, covenant, or agreement of the other Party or which
has had or is reasonably likely to have a Material Adverse Effect on the other
Party.
8.7 Press Releases. Prior to the Effective Time, New Iberia and Regions
shall consult with each other as to the form and substance of any press release
or other public disclosure materially related to this Agreement or any other
transaction contemplated hereby; provided, that nothing in this Section 8.7
shall be deemed to prohibit any Party from making any disclosure which its
counsel deems necessary or advisable in order to satisfy such Party's disclosure
obligations imposed by Law.
8.8 Certain Actions. Except with respect to this Agreement and the
transactions contemplated hereby, no New Iberia Company nor any Affiliate
thereof nor any Representatives retained by any New Iberia Company shall
directly or indirectly solicit any Acquisition Proposal by any Person. Except to
the extent necessary to comply with the fiduciary duties of New Iberia's Board
of Directors as advised in writing by counsel to such Board of Directors, no New
Iberia Company or any Affiliate or Representative thereof shall furnish any
non-public information that it is not legally obligated to furnish, negotiate
with respect to, or enter
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into any Contract with respect to, any Acquisition Proposal, and shall direct
and use its reasonable efforts to cause all of its Representatives not to engage
in any of the foregoing, but New Iberia may communicate information about such
an Acquisition Proposal to its stockholders if and to the extent that it is
required to do so in order to comply with its legal obligations. New Iberia
shall promptly notify Regions orally and in writing in the event that it
receives any inquiry or proposal relating to any such transaction. New Iberia
shall (i) immediately cease and cause to be terminated any existing activities,
discussions, or negotiations with any Persons conducted heretofore with respect
to any of the foregoing, and (ii) direct and use its reasonable efforts to cause
all of its Representatives not to engage in any of the foregoing subject to
legal obligations and fiduciary duties as aforesaid.
8.9 Accounting and Tax Treatment. Each of the Parties undertakes and
agrees to use its reasonable efforts to cause the Merger, and to take no action
which would cause the Merger not, to qualify for treatment as a
pooling-of-interests for accounting purposes or as a "reorganization" within the
meaning of Section 368(a) of the Internal Revenue Code for federal income tax
purposes.
8.10 State Takeover Laws. Each New Iberia Company shall take all necessary
steps to exempt the transactions contemplated by this Agreement from, or if
necessary challenge the validity or applicability of Sections 132 et seq. of the
LBCL.
8.11 Charter Provisions. Each New Iberia Company shall take all necessary
action to ensure that the entering into of this Agreement and the consummation
of the Merger and the other transactions contemplated hereby or thereby do not
and will not result in the grant of any rights to any Person under the Articles
of Incorporation, Bylaws, or other governing instruments of any New Iberia
Company or restrict or impair the ability of Regions or any of its Subsidiaries
to vote, or otherwise to exercise the rights of a stockholder with respect to,
shares of any New Iberia Company that may be directly or indirectly acquired or
controlled by it.
8.12 Agreement of Affiliates. New Iberia will disclose in the New Iberia
Disclosure Memorandum each Person whom it reasonably believes is an "affiliate"
of New Iberia for purposes of Rule 145 under the 1933 Act. New Iberia shall use
its reasonable efforts to cause each such Person to deliver to Regions not later
than 30 days prior to the Effective Time a written agreement, substantially in
the form of Exhibit 2, providing that such Person will not sell, pledge,
transfer, or otherwise dispose of the shares of New Iberia Common Stock held by
such Person except as contemplated by such agreement or by this Agreement and
will not sell, pledge, transfer, or otherwise dispose of the shares of Regions
Common Stock to be received by such Person upon consummation of the Merger
except in compliance with applicable provisions of the 1933 Act and the rules
and regulations thereunder and until such time as financial results covering at
least 30 days of combined operations of Regions and New Iberia have been
published within the meaning of Section 201.01 of the SEC's Codification of
Financial Reporting Policies. Shares of Regions Common Stock issued to such
affiliates of New Iberia in exchange for shares of New Iberia Common Stock shall
not be transferable until such time as financial results covering at least 30
days of combined operations of Regions and New Iberia have been published within
the meaning of Section 201.01 of the SEC's Codification of Financial Reporting
Policies, regardless of whether each such affiliate has provided the written
agreement referred to in this Section 8.12 (and Regions shall be entitled to
place restrictive legends upon certificates for shares of Regions Common Stock
issued to affiliates of New Iberia pursuant to this Agreement to enforce the
provisions of this Section 8.12). Regions shall not be required to maintain the
effectiveness of the Registration Statement under the 1933 Act for the purposes
of resale of Regions Common Stock by such affiliates.
8.13 Employee Benefits and Contracts. Following the Effective Time,
Regions shall provide generally to officers and employees of the New Iberia
Companies, who at or after the Effective Time become employees of a Regions
Company, employee benefits under employee benefit plans (other than stock option
or other plans involving the potential issuance of Regions Common Stock except
as set forth in this Section 8.13), on terms and conditions which when taken as
a whole are substantially similar to those currently provided by the Regions
Companies to their similarly situated officers and employees. For purposes of
participation and vesting (but not accrual of benefits) under such employee
benefit plans, (i) service under any qualified defined benefit plans of New
Iberia should be treated as service under Regions' qualified defined benefit
plans, (ii) service under any qualified defined contribution plans of New Iberia
shall be treated as service under
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Regions' qualified defined contribution plans, and (iii) service under any other
employee benefit plans of New Iberia shall be treated as service under any
similar employee benefit plans maintained by Regions. Regions also shall cause
New Iberia and its Subsidiaries to honor on terms reasonably agreed upon by the
Parties all employment, severance, consulting, and other compensation Contracts
disclosed in the New Iberia Disclosure Memorandum to Regions between any New
Iberia Company and any current or former director, officer, or employee thereof,
and all provisions for vested benefits or other vested amounts earned or accrued
through the Effective Time under the New Iberia Benefit Plans.
8.14 Indemnification.
(a) With respect to any claims made within a period of six years after the
Effective Time, Regions shall, and shall cause the Surviving Corporation to,
indemnify, defend, and hold harmless the present and former directors, officers,
employees, and agents of each of the New Iberia Companies (each, an "Indemnified
Party") against all Liabilities arising out of actions or omissions occurring at
or prior to the Effective Time (including the transactions contemplated by this
Agreement) to the full extent permitted under Louisiana Law and by New Iberia's
Articles of Incorporation and Bylaws as in effect on the date hereof, including
provisions relating to advances of expenses incurred in the defense of any
Litigation, provided, however, that the indemnification provided by this Section
8.14(a) shall not apply to any claim against an Indemnified Party if such
Indemnified Party knew of the existence of the claim and failed to make a good
faith effort to require New Iberia to notify its director and officer liability
insurance carrier of the existence of such claim prior to the Effective Time.
Without limiting the foregoing, in any case in which approval is required to
effectuate any indemnification, the determination of any such approval shall be
made, at the election of the Indemnified Party, by independent counsel mutually
agreed upon between Regions and the Indemnified Party.
(b) Any Indemnified Party wishing to claim indemnification under paragraph
(a) of this Section 8.14, upon learning of any such Liability or Litigation,
shall promptly notify Regions thereof. In the event of any such Litigation
(whether arising before or after the Effective Time), (i) Regions or New Iberia
shall have the right to assume the defense thereof and Regions shall not be
liable to such Indemnified Parties for any legal expenses of other counsel or
any other expenses subsequently incurred by such Indemnified Parties in
connection with the defense thereof, except that if Regions or New Iberia elects
not to assume such defense or counsel for the Indemnified Parties advises in
writing that there are material substantive issues which raise conflicts of
interest between Regions or New Iberia and the Indemnified Parties, each of the
Indemnified Parties may retain counsel satisfactory to them, and Regions or New
Iberia shall pay all reasonable fees and expenses of such counsel for the
Indemnified Parties promptly as statements therefor are received; provided, that
(i) Regions shall be obligated pursuant to this paragraph (b) to pay for only
one firm of counsel for each of the Indemnified Parties in any jurisdiction,
(ii) the Indemnified Parties will cooperate (to the extent reasonably
appropriate under the circumstances) in the defense of any such Litigation, and
(iii) Regions shall not be liable for any settlement effected without its prior
written consent; and provided further that Regions shall not have any obligation
hereunder to any Indemnified Party when and if a court of competent jurisdiction
shall determine, and such determination shall have become final, that the
indemnification of such Indemnified Party in the manner contemplated hereby is
prohibited by applicable Law.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 Conditions to Obligations of Each Party. The respective obligations of
each Party to consummate the Merger and the other transactions contemplated
hereby are subject to the satisfaction of the following conditions, unless
waived by both Parties pursuant to Section 11.6 of this Agreement:
(a) Stockholder Approval. The stockholders of New Iberia shall have
approved this Agreement, and the consummation of the transactions
contemplated hereby, including the Merger, as and to the extent required by
Law or by the provisions of any governing instruments.
(b) Regulatory Approvals. All Consents of, filings and registrations
with, and notifications to, all Regulatory Authorities required for
consummation of the Merger shall have been obtained or made and
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shall be in full force and effect and all waiting periods required by Law
shall have expired. No Consent obtained from any Regulatory Authority which
is necessary to consummate the transactions contemplated hereby shall be
conditioned or restricted in a manner (including requirements relating to
the raising of additional capital or the disposition of Assets) which in
the reasonable judgment of the Board of Directors of Regions would so
materially adversely impact the economic or business benefits of the
transactions contemplated by this Agreement that, had such condition or
requirement been known, Regions would not, in its reasonable judgment, have
entered into this Agreement.
(c) Consents and Approvals. Each Party shall have obtained any and
all Consents required for consummation of the Merger (other than those
referred to in Section 9.1(b) of this Agreement) or for the preventing of
any Default under any Contract or Permit of such Party which, if not
obtained or made, is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on such Party. No Consent so obtained
which is necessary to consummate the transactions contemplated hereby shall
be conditioned or restricted in a manner which in the reasonable judgment
of the Board of Directors of Regions would so materially adversely impact
the economic or business benefits of the transactions contemplated by this
Agreement that, had such condition or requirement been known, Regions would
not, in its reasonable judgment, have entered into this Agreement.
(d) Legal Proceedings. No court or governmental or regulatory
authority of competent jurisdiction shall have enacted, issued,
promulgated, enforced, or entered any Law or Order (whether temporary,
preliminary, or permanent) or taken any other action which prohibits,
restricts, or makes illegal consummation of the transactions contemplated
by this Agreement.
(e) Registration Statement. The Registration Statement shall be
effective under the 1933 Act, no stop orders suspending the effectiveness
of the Registration Statement shall have been issued, no action, suit,
proceeding, or investigation by the SEC to suspend the effectiveness
thereof shall have been initiated and be continuing, and all necessary
approvals under state securities Laws or the 1933 Act or 1934 Act relating
to the issuance or trading of the shares of Regions Common Stock issuable
pursuant to the Merger shall have been received.
(f) Exchange Listing. The shares of Regions Common Stock issuable
pursuant to the Merger shall have been approved for listing on the Nasdaq
NMS subject to official notice of issuance.
(g) Tax Matters. Each Party shall have received a written opinion of
Alston & Bird, special counsel to Regions, in form reasonably satisfactory
to the Parties (the "Tax Opinion"), to the effect that (i) the Merger will
constitute a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code, and (ii) the exchange in the Merger of New Iberia
Common Stock for Regions Common Stock will not give rise to gain or loss to
the stockholders of New Iberia with respect to such exchange (except to the
extent of any cash received). In rendering such Tax Opinion, such special
counsel for Regions shall be entitled to rely upon representations of
officers of New Iberia and Regions reasonably satisfactory in form and
substance to such counsel.
9.2 Conditions to Obligations of Regions. The obligations of Regions to
consummate the Merger and the other transactions contemplated hereby are subject
to the satisfaction of the following conditions, unless waived by Regions
pursuant to Section 11.6(a) of this Agreement:
(a) Representations and Warranties. For purposes of this Section
9.2(a), the accuracy of the representations and warranties of New Iberia
set forth in this Agreement shall be assessed as of the date of this
Agreement and as of the Effective Time with the same effect as though all
such representations and warranties had been made on and as of the
Effective Time (provided that representations and warranties which are
confined to a specified date shall speak only as of such date). The
representations and warranties of New Iberia set forth in Section 5.3 of
this Agreement shall be true and correct (except for inaccuracies which are
de minimus in amount). The representations and warranties of New Iberia set
forth in Sections 5.16, 5.17, and 5.19 of this Agreement shall be true and
correct in all material respects. There shall not exist inaccuracies in the
representations and warranties of New Iberia set forth in this Agreement
(including the representations and warranties set forth in Sections 5.3,
5.16, 5.17, and 5.19)
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such that the aggregate effect of such inaccuracies has, or is reasonably
likely to have, a Material Adverse Effect on New Iberia; provided that, for
purposes of this sentence only, those representations and warranties which
are qualified by references to "material" or "Material Adverse Effect" or
to the "Knowledge" of New Iberia or to a matter being "known" by New Iberia
shall be deemed not to include such qualifications.
(b) Performance of Agreements and Covenants. Each and all of the
agreements and covenants of New Iberia to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby
prior to the Effective Time shall have been duly performed and complied
with in all material respects.
(c) Certificates. New Iberia shall have delivered to Regions (i) a
certificate, dated as of the Effective Time and signed on its behalf by its
duly authorized officer, to the effect that the conditions of its
obligations set forth in Sections 9.2(a) and 9.2(b) of this Agreement have
been satisfied, and (ii) certified copies of resolutions duly adopted by
New Iberia's Board of Directors and stockholders evidencing the taking of
all corporate action necessary to authorize the execution, delivery, and
performance of this Agreement, and the consummation of the transactions
contemplated hereby, all in such reasonable detail as Regions and its
counsel shall request.
(d) Opinion of Counsel. Regions shall have received an opinion of
Gordon, Arata, McCollam & Duplantis, L.L.P., counsel to New Iberia, dated
as of the Effective Time, in form reasonably satisfactory to Regions, as to
the matters set forth in Exhibit 3.
(e) Affiliates Agreements. Regions shall have received from each
affiliate of New Iberia the affiliate letter referred to in Section 8.12 of
this Agreement.
(f) Claims Letters. Each of the directors and officers of New Iberia
shall have executed and delivered to Regions letters in substantially the
form of Exhibit 4 dated as of the Effective Time.
9.3 Conditions to Obligations of New Iberia. The obligations of New Iberia
to consummate the Merger and the other transactions contemplated hereby are
subject to the satisfaction of the following conditions, unless waived by New
Iberia pursuant to Section 11.6(b) of this Agreement:
(a) Representations and Warranties. For purposes of this Section
9.3(a), the accuracy of the representations and warranties of Regions set
forth in this Agreement shall be assessed as of the date of this Agreement
and as of the Effective Time with the same effect as though all such
representations and warranties had been made on and as of the Effective
Time (provided that representations and warranties which are confined to a
specified date shall speak only as of such date). The representations and
warranties of Regions set forth in Section 6.3 of this Agreement shall be
true and correct (except for inaccuracies which are de minimus in amount).
The representations and warranties of Regions set forth in Section 6.10 of
this Agreement shall be true and correct in all material respects. There
shall not exist inaccuracies in the representations and warranties of
Regions set forth in this Agreement (including the representations and
warranties set forth in Sections 6.3 and 6.10) such that the aggregate
effect of such inaccuracies has, or is reasonably likely to have, a
Material Adverse Effect on Regions; provided that, for purposes of this
sentence only, those representations and warranties which are qualified by
references to "material" or "Material Adverse Effect" or to the "Knowledge"
of Regions or to a matter being "known" by Regions shall be deemed not to
include such qualifications.
(b) Performance of Agreements and Covenants. Each and all of the
agreements and covenants of Regions to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby
prior to the Effective Time shall have been duly performed and complied
with in all material respects.
(c) Certificates. Regions shall have delivered to New Iberia (i) a
certificate, dated as of the Effective Time and signed on its behalf by its
duly authorized officer to the effect that the conditions of its
obligations set forth in Sections 9.3(a) and 9.3(b) of this Agreement have
been satisfied, and (ii) certified copies of resolutions duly adopted by
Regions' Board of Directors evidencing the taking of
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all corporate action necessary to authorize the execution, delivery, and
performance of this Agreement, and the consummation of the transactions
contemplated hereby, all in such reasonable detail as New Iberia and its
counsel shall request.
(d) Opinion of Counsel. New Iberia shall have received an opinion of
Lange, Simpson, Robinson & Somerville, counsel to Regions, dated as of the
Effective Time, in form reasonably acceptable to New Iberia, as to the
matters set forth in Exhibit 5.
(e) Fairness Opinion. New Iberia shall have received a letter from a
financial advisor selected by New Iberia dated not more than five days
prior to (i) the date of the Proxy Statement and (ii) in the event the
Effective Time occurs more than 30 days subsequent to the Stockholders'
Meeting, the Effective Time, in each case, to the effect that in the
opinion of such firm, the Exchange Ratio is fair to the stockholders of New
Iberia from a financial point of view.
ARTICLE 10
TERMINATION
10.1 Termination. Notwithstanding any other provision of this Agreement,
and notwithstanding the approval of this Agreement by the stockholders of New
Iberia, this Agreement may be terminated (and shall automatically terminate in
the case of Section 10.1(h)) and the Merger abandoned at any time prior to the
Effective Time:
(a) By mutual consent of the Board of Directors of Regions and the
Board of Directors of New Iberia; or
(b) By the Board of Directors of either Party (provided that the
terminating Party is not then in breach of any representation or warranty
contained in this Agreement under the applicable standard set forth in
Section 9.2(a) of this Agreement in the case of New Iberia and Section
9.3(a) of this Agreement in the case of Regions or in material breach of
any covenant or other agreement contained in this Agreement) in the event
of an inaccuracy of any representation or warranty of the other Party
contained in this Agreement which cannot be or has not been cured within 30
days after the giving of written notice to the breaching Party of such
inaccuracy and which inaccuracy would provide the terminating Party the
ability to refuse to consummate the Merger under the applicable standard
set forth in Section 9.2(a) of this Agreement in the case of New Iberia and
Section 9.3(a) of this Agreement in the case of Regions; or
(c) By the Board of Directors of either Party (provided that the
terminating Party is not then in breach of any representation or warranty
contained in this Agreement under the applicable standard set forth in
Section 9.2(a) of this Agreement in the case of New Iberia and Section
9.3(a) in the case of Regions or in material breach of any covenant or
other agreement contained in this Agreement) in the event of a material
breach by the other Party of any covenant or agreement contained in this
Agreement which cannot be or has not been cured within 30 days after the
giving of written notice to the breaching Party of such breach; or
(d) By the Board of Directors of either Party in the event (i) any
Consent of any Regulatory Authority required for consummation of the Merger
and the other transactions contemplated hereby shall have been denied by
final nonappealable action of such authority or if any action taken by such
authority is not appealed within the time limit for appeal, or (ii) the
stockholders of New Iberia fail to vote their approval of this Agreement
and the transactions contemplated hereby as required by the LBCL at the
Stockholders' Meeting where the transactions were presented to such
stockholders for approval and voted upon; or
(e) By the Board of Directors of either Party in the event that the
Merger shall not have been consummated by December 31, 1997, except that a
Party that has breached the obligation to consummate the Closing and has
failed to cure such breach may not terminate under this subsection; or
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(f) By the Board of Directors of either Party in the event that any of
the conditions precedent to the obligations of such Party to consummate the
Merger, other than the conditions in Section 9.2(a) in the case of New
Iberia or 9.3(a) in the case of Regions, cannot be satisfied or fulfilled
by the date specified in Section 10.1(e) of this Agreement; or
(g) By the Board of Directors of Regions, at any time prior to the
45th day after execution of this Agreement without any Liability in the
event that the review of the Assets, business, financial condition, results
of operations, and prospects of New Iberia undertaken by Regions during
such time period or any of the disclosures contained in the New Iberia
Disclosure Memorandum causes the Board of Directors of Regions to
determine, in its reasonable good faith judgment, that a fact or
circumstance exists or is likely to exist or result which materially and
adversely impacts one or more of the economic benefits to Regions of the
transactions contemplated by this Agreement so as to render inadvisable the
consummation of the Merger; or
(h) Without any action by the Board of Directors of New Iberia, if the
Average Closing Price shall be less than $52.912, subject however to the
following two sentences. During the five-day period commencing with the
Determination Date, Regions shall have the option to elect to increase the
Exchange Ratio to equal the quotient obtained by dividing (1) the product
of $52.912 and the Exchange Ratio (as then in effect) by (2) the Average
Closing Price. If Regions makes an election contemplated by the preceding
sentence, it shall give prompt written notice to New Iberia of such
election and the revised Exchange Ratio, whereupon no termination shall
have occurred pursuant to this Section 10.1(h) and this Agreement shall
remain in effect in accordance with its terms (except as the "Exchange
Ratio" shall have been modified), and any reference to "Exchange Ratio"
shall thereafter be deemed to refer to the Exchange Ratio as adjusted
pursuant to this Section 10.1(h).
For purposes of this Section 10.1(h), the following terms shall have the
meanings indicated:
"Average Closing Price" shall mean the average of the daily last sales
prices of Regions Common Stock as reported on the Nasdaq NMS (as reported
by The Wall Street Journal or, if not reported thereby, another
authoritative source as chosen by Regions) for the ten consecutive full
trading days in which such shares are traded on the Nasdaq NMS ending at
the close of trading on the Determination Date.
"Determination Date" shall mean the later of (i) the date of the New
Iberia Stockholders' Meeting or (ii) the date the Consent of the Federal
Reserve to the Merger is received.
10.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 10.1 of this Agreement, this
Agreement shall become void and have no effect, and neither Party shall have any
claim or legal right to redress, whether for breach of contract or otherwise, as
a result of a breach of any representation, warranty, covenant, or condition of
this Agreement, except that (i) the provisions of this Section 10.2 and Article
11 and Section 8.6(b) of this Agreement shall survive any such termination and
abandonment, and (ii) a termination pursuant to Section 10.1(b), 10.1(c), or
10.1(f) of this Agreement shall not relieve the breaching Party from Liability
for an uncured willful and knowing breach of a representation, warranty,
material covenant, or material agreement giving rise to such termination.
10.3 Non-Survival of Representations and Covenants. The respective
representations, warranties, obligations, covenants, and agreements of the
Parties shall not survive the Effective Time except this Section 10.3 and
Articles 2, 3, 4, and 11 of this Agreement and Sections 8.12 and 8.14 of this
Agreement.
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ARTICLE 11
MISCELLANEOUS
11.1 Definitions. Except as otherwise provided herein, the capitalized
terms set forth below shall have the following meanings:
"Acquisition Proposal" with respect to a Party shall mean any tender
offer or exchange offer or any proposal for a merger, acquisition of all of
the stock or assets of, or other business combination involving such Party
or any of its Subsidiaries or the acquisition of a substantial equity
interest in, or a substantial portion of the assets of, such Party or any
of its Subsidiaries.
"Affiliate" of a Person shall mean any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by,
or under common control with such Person.
"Agreement" shall mean this Agreement and Plan of Merger, including
the Exhibits delivered pursuant hereto and incorporated herein by
reference.
"AMEX" shall mean the American Stock Exchange, Inc.
"Assets" of a Person shall mean all of the assets, properties,
businesses, and rights of such Person of every kind, nature, character, and
description, whether real, personal or mixed, tangible or intangible,
accrued or contingent, or otherwise relating to or utilized in such
Person's business, directly or indirectly, in whole or in part, whether or
not carried on the books and records of such Person, and whether or not
owned in the name of such Person or any Affiliate of such Person and
wherever located.
"BHC Act" shall mean the federal Bank Holding Company Act of 1956, as
amended.
"Closing" shall mean the closing of the transactions contemplated
hereby, as described in Section 1.2 of this Agreement.
"Closing Date" shall mean the date on which the Closing occurs.
"Consent" shall mean any consent, approval, authorization, clearance,
exemption, waiver, or similar affirmation by any Person pursuant to any
Contract, Law, Order, or Permit.
"Contract" shall mean any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease,
obligation, plan, practice, restriction, understanding or undertaking of
any kind or character, or other document to which any Person is a party or
that is binding on any Person or its capital stock, Assets, or business.
"Default" shall mean (i) any breach or violation of or default under
any Contract, Order, or Permit, (ii) any occurrence of any event that with
the passage of time or the giving of notice or both would constitute a
breach or violation of or default under any Contract, Order, or Permit, or
(iii) any occurrence of any event that with or without the passage of time
or the giving of notice would give rise to a right to terminate or revoke,
change the current terms of, or renegotiate, or to accelerate, increase, or
impose any Liability under, any Contract, Order, or Permit where, in any
such event, such Default is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on a Party.
"DGCL" shall mean the General Corporation Law of Delaware.
"Effective Time" shall mean the date and time at which the Merger
becomes effective as defined in Section 1.3 of this Agreement.
"Environmental Laws" shall mean all Laws relating to pollution or
protection of human health or the environment (including ambient air,
surface water, ground water, land surface, or subsurface strata) and which
are administered, interpreted, or enforced by the United States
Environmental Protection Agency and state and local agencies with
jurisdiction over, and including common law in respect of, pollution or
protection of the environment, including the Comprehensive Environmental
Response Compensation and Liability Act, as amended, 42 U.S.C. 9601 et seq.
("CERCLA"), the Resource Conservation and Recovery Act, as amended, 42
U.S.C. 6901 et seq. ("RCRA"), and other Laws
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relating to emissions, discharges, releases, or threatened releases of any
Hazardous Material, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
any Hazardous Material.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" shall have the meaning provided in Section 5.8 of
this Agreement.
"ERISA Plan" shall have the meaning provided in Section 5.8 of this
Agreement.
"Exchange Agent" shall have the meaning provided in Section 4.1 of
this Agreement.
"Exchange Ratio" shall have the meaning provided in Section 3.1(b) of
this Agreement.
"Exhibits" 1 through 5, inclusive, shall mean the Exhibits so marked,
copies of which are attached to this Agreement. Such Exhibits are hereby
incorporated by reference herein and made a part hereof, and may be
referred to in this Agreement and any other related instrument or document
without being attached hereto.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"Hazardous Material" shall mean (i) any hazardous substance, hazardous
material, hazardous waste, regulated substance, or toxic substance (as
those terms are defined by any applicable Environmental Laws) and (ii) any
chemicals, pollutants, contaminants, petroleum, petroleum products, or oil
(and specifically shall include asbestos requiring abatement, removal, or
encapsulation pursuant to the requirements of governmental authorities and
any polychlorinated biphenyls).
"HOLA" shall mean the Home Owners' Loan Act of 1933, as amended.
"HSR Act" shall mean Section 7A of the Clayton Act, as added by Title
II of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules and regulations promulgated thereunder.
"Indemnified Party" shall have the meaning set forth in Section 8.14
of this Agreement.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
as amended, and the rules and regulations promulgated thereunder.
"Knowledge" as used with respect to a Person shall mean the actual
knowledge of the chairman, president, chief financial officer, chief
accounting officer, chief credit officer, general counsel, any assistant or
deputy general counsel, or any senior or executive vice president of such
Person.
"LBCL" shall mean the Louisiana Business Corporation Law.
"Law" shall mean any code, law, ordinance, regulation, reporting or
licensing requirement, rule, or statute applicable to a Person or its
Assets, Liabilities, or business, including those promulgated, interpreted,
or enforced by any of the Regulatory Authorities.
"Liability" shall mean any direct or indirect, primary or secondary
liability, indebtedness, obligation, penalty, cost, or expense (including
costs of investigation, collection, and defense), claim, deficiency,
guaranty, or endorsement of or by any Person (other than endorsements of
notes, bills, checks, and drafts presented for collection or deposit in the
ordinary course of business) of any type, whether accrued, absolute, or
contingent, liquidated or unliquidated, matured or unmatured, or otherwise.
"Lien" shall mean any conditional sale agreement, default of title,
easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, restriction, security interest, title
retention, or other security arrangement, or any adverse right or interest,
charge, or claim of any nature whatsoever of, on, or with respect to any
property or property interest, other than (i) Liens for current property or
other Taxes not yet due and payable, (ii) such imperfections of title and
encumbrances, if any, as do not materially detract from the value or
materially interfere with the present
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use of any of such Party's Assets, (iii) for depository institution
Subsidiaries of a Party, pledges to secure deposits, and other Liens
incurred in the ordinary course of the banking business, and (iv) Liens
that arise by operation of Law with respect to Liabilities that are not
delinquent or are being contested in good faith.
"Litigation" shall mean any action, arbitration, cause of action,
claim, complaint, criminal prosecution, demand letter, governmental or
other examination or investigation, hearing, inquiry, administrative, or
other proceeding, or notice (written or oral) by any Person alleging
potential Liability or requesting information about a potential claim
relating to or affecting a Party, its business, its Assets (including
Contracts related to it), or the transactions contemplated by this
Agreement, but shall not include regular, periodic examinations of
depository institutions and their Affiliates by Regulatory Authorities.
"Loan Property" shall mean any property owned by the Party in question
or by any of its Subsidiaries or in which such Party or Subsidiary holds a
security interest, and, where required by the context, includes the owner
or operator of such property, but only with respect to such property.
"Material" for purposes of this Agreement shall be determined in light
of the facts and circumstances of the matter in question; provided that any
specific monetary amount stated in this Agreement shall determine
materiality in that instance.
"Material Adverse Effect" on a Party shall mean an event, change, or
occurrence which, together with any other event, change, or occurrence, has
a material adverse impact on (i) the financial position, business, or
results of operations of such Party and its Subsidiaries, taken as a whole,
or (ii) the ability of such Party to perform its obligations under this
Agreement or to consummate the Merger or the other transactions
contemplated by this Agreement, provided that "material adverse impact"
shall not be deemed to include the impact of (a) changes in banking and
similar Laws of general applicability or interpretations thereof by courts
or governmental authorities, (b) changes in GAAP or regulatory accounting
principles generally applicable to banks and savings associations and their
holding companies, (c) actions and omissions of a Party (or any of its
Subsidiaries) taken with the prior informed consent of the other Party in
contemplation of the transactions contemplated hereby, and (d) the Merger
and compliance with the provisions of this Agreement on the operating
performance of the Parties.
"Merger" shall mean the merger of New Iberia into and with Regions
referred to in Section 1.1 of this Agreement.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Nasdaq NMS" shall mean the National Market Service of Nasdaq or other
principal exchange on which Regions Common Stock is listed or quoted at the
relevant time.
"New Iberia Benefit Plans" shall have the meaning set forth in Section
5.12 of this Agreement.
"New Iberia Common Stock" shall mean the no par value common stock of
New Iberia.
"New Iberia Companies" shall mean, collectively, New Iberia and all
New Iberia Subsidiaries.
"New Iberia Contracts" shall have the meaning set forth in Section
5.13.
"New Iberia Disclosure Memorandum" shall mean the written information
entitled "New Iberia Bancorp, Inc. Disclosure Memorandum" delivered within
15 days of the date of this Agreement to Regions describing in reasonable
detail the matters contained therein.
"New Iberia ERISA Plan" shall have the meaning set forth in Section
5.12(a) of this Agreement.
"New Iberia Financial Statements" shall mean (i) the consolidated
balance sheets (including related notes and schedules, if any) of New
Iberia as of September 30, 1996, and as of December 31, 1995 and 1994, and
the related consolidated statements of income, changes in stockholders'
equity, and cash flows (including related notes and schedules, if any) for
the nine months ended September 30, 1996, and for each of the three years
ended December 31, 1995, 1994, and 1993, as filed by New Iberia in SEC
Documents, and (ii) the consolidated balance sheets of New Iberia
(including related notes and
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schedules, if any) and related statements of income, changes in
stockholders' equity, and cash flows (including related notes and
schedules, if any) with respect to periods ended subsequent to September
30, 1996.
"New Iberia Pension Plan" shall have the meaning set forth in Section
5.12(a) of this Agreement.
"New Iberia Stock Plans" shall mean the existing stock option and
other stock-based compensation plans of New Iberia disclosed in Section
5.12 of the New Iberia Disclosure Memorandum.
"New Iberia Subsidiaries" shall mean the Subsidiaries of New Iberia,
which shall include the New Iberia Subsidiaries described in Section 5.4 of
this Agreement and any corporation, bank, savings association, or other
organization acquired as a Subsidiary of New Iberia in the future and owned
by New Iberia at the Effective Time.
"1933 Act" shall mean the Securities Act of 1933, as amended.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Order" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling, or
writ of any federal, state, local, or foreign or other court, arbitrator,
mediator, tribunal, administrative agency, or Regulatory Authority.
"Participation Facility" shall mean any facility or property in which
the Party in question or any of its Subsidiaries participates in the
management and, where required by the context, said term means the owner or
operator of such facility or property, but only with respect to such
facility or property.
"Party" shall mean either New Iberia or Regions, and "Parties" shall
mean both New Iberia and Regions.
"Permit" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit, or right to which any Person is a party
or that is or may be binding upon any Person or its securities, Assets, or
business.
"Person" shall mean a natural person or any legal, commercial, or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
trust, business association, group acting in concert, or any person acting
in a representative capacity.
"Proxy Statement" shall mean the proxy statement used by New Iberia to
solicit the approval of its stockholders of the transactions contemplated
by this Agreement, which shall include the prospectus of Regions relating
to the issuance of the Regions Common Stock to holders of New Iberia Common
Stock.
"Regions Common Stock" shall mean the $0.625 par value common stock of
Regions.
"Regions Companies" shall mean, collectively, Regions and all Regions
Subsidiaries.
"Regions Financial Statements" shall mean (i) the consolidated
statements of condition (including related notes and schedules, if any) of
Regions as of September 30, 1996, and the restated consolidated statements
of condition (including related notes and schedules, if any) of Regions as
of December 31, 1995 and 1994, the related statements of income, changes in
stockholders' equity, and cash flows (including related notes and
schedules, if any) for the nine months ended September 30, 1996 and the
related restated statements of income, changes in stockholders' equity, and
cash flows (including related notes and schedules, if any) for each of the
three years ended December 31, 1995, 1994, and 1993, as filed by Regions in
SEC Documents and reflecting the acquisition of First National Bancorp
accounted for as a pooling of interests and (ii) the consolidated
statements of condition of Regions (including related notes and schedules,
if any) and related statements of income, changes in stockholders' equity,
and cash flows (including related notes and schedules, if any) included in
SEC Documents filed with respect to periods ended subsequent to September
30, 1996.
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"Regions Subsidiaries" shall mean the Subsidiaries of Regions, which
shall include any corporation, bank, savings association, or other
organization acquired as a Subsidiary of Regions in the future and owned by
Regions at the Effective Time.
"Registration Statement" shall mean the Registration Statement on Form
S-4, or other appropriate form, including any pre-effective or
post-effective amendments or supplements thereto, filed with the SEC by
Regions under the 1933 Act with respect to the shares of Regions Common
Stock to be issued to the stockholders of New Iberia in connection with the
transactions contemplated by this Agreement and which shall include the
Proxy Statement.
"Regulatory Authorities" shall mean, collectively, the Federal Trade
Commission, the United States Department of Justice, the Board of the
Governors of the Federal Reserve System, the Office of Thrift Supervision
(including its predecessor, the Federal Home Loan Bank Board), the Office
of the Comptroller of the Currency, Federal Deposit Insurance Corporation,
all state regulatory agencies having jurisdiction over the Parties and
their respective Subsidiaries, the NYSE, the NASD, the AMEX, and the SEC.
"Representatives" means with respect to any Party its directors,
officers, employees, agents, advisors, attorneys, accountants, and other
representatives.
"Rights" shall mean all arrangements, calls, commitments, Contracts,
options, rights to subscribe to, scrip, understandings, warrants, or other
binding obligations of any character whatsoever relating to, or securities
or rights convertible into or exchangeable for, shares of the capital stock
of a Person or by which a Person is or may be bound to issue additional
shares of its capital stock or other Rights.
"SEC" shall mean the United States Securities and Exchange Commission.
"SEC Documents" shall mean all forms, proxy statements, registration
statements, reports, schedules, and other documents filed, or required to
be filed, by a Party or any of its Subsidiaries with any Regulatory
Authority pursuant to the Securities Laws.
"Securities Laws" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act of
1940, as amended, the Trust Indenture Act of 1939, as amended, and the
rules and regulations of any Regulatory Authority promulgated thereunder.
"Stockholders' Meeting" shall mean the meeting of the stockholders of
New Iberia to be held pursuant to Section 8.1 of this Agreement, including
any adjournment or adjournments or postponements thereof.
"Subsidiaries" shall mean all those corporations, banks, associations,
or other entities of which the entity in question owns or controls 50% or
more of the outstanding equity securities either directly or through an
unbroken chain of entities as to each of which 50% or more of the
outstanding equity securities is owned directly or indirectly by its
parent; provided, there shall not be included any such entity acquired
through foreclosure or any such entity the equity securities of which are
owned or controlled in a fiduciary capacity.
"Support Agreement" shall mean the various support agreements, each in
substantially the form of Exhibit 1.
"Surviving Corporation" shall mean Regions as the Surviving
Corporation resulting from the Merger.
"Tax" or "Taxes" shall mean all federal, state, local, and foreign
taxes, charges, fees, levies, imposts, duties, or other assessments,
including income, gross receipts, excise, employment, sales, use, transfer,
license, payroll, franchise, severance, stamp, occupation, windfall
profits, environmental, federal highway use, commercial rent, customs
duties, capital stock, paid-up capital, profits, withholding, Social
Security, single business and unemployment, disability, real property,
personal property, registration, ad valorem, value added, alternative or
add-on minimum, estimated, or other tax or governmental fee of any kind
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whatsoever, imposed or required to be withheld by the United States or any
state, local, foreign government or subdivision or agency thereof,
including any interest, penalties or additions thereto.
Any singular term in this Agreement shall be deemed to include the plural,
and any plural term the singular. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed followed by the
words "without limitation."
11.2 Expenses.
(a) Except as otherwise provided in this Section 11.2, each of the Parties
shall bear and pay all direct costs and expenses incurred by it or on its behalf
in connection with the transactions contemplated hereunder, including filing,
registration, and application fees, printing fees, and fees and expenses of its
own financial or other consultants, investment bankers, accountants, and
counsel, except that Regions shall bear and pay the filing fees payable in
connection with the Registration Statement and the Proxy Statement and printing
costs incurred in connection with the printing of the Registration Statement and
the Proxy Statement.
(b) Notwithstanding the foregoing, if, after the date of this Agreement and
within 12 months following
(i) any termination of this Agreement
(1) by Regions pursuant to Section 10.1(c) (but only in the case of
a willful breach by New Iberia of a covenant or agreement) or 10.1(f)
(but only on the basis of the failure of New Iberia to satisfy the
condition enumerated in Section 9.1(a) (but only in the event the
Stockholders' Meeting shall have been cancelled prior to the termination
of this Agreement or New Iberia's Board of Directors shall have
withdrawn or modified in a manner adverse to Regions the recommendation
of New Iberia's Board of Directors with respect to the Merger or this
Agreement, in each case after it shall have been publicly disclosed that
any Person made, or disclosed an intention to make, an Acquisition
Proposal) or 9.2(b) (but only in the case of a willful breach by New
Iberia of a covenant or agreement) of this Agreement); or
(2) by either Party pursuant to Section 10.1(d)(ii) (but only in
the event New Iberia's Board of Directors shall have withdrawn or
modified in a manner adverse to Regions the recommendation of New
Iberia's Board of Directors with respect to the Merger or this Agreement
after it shall have been publicly disclosed that any Person made, or
disclosed an intention to make, an Acquisition Proposal) of this
Agreement, or
(3) by mutual consent of the Parties pursuant to Section 10.1(a)
(but only if Regions shall at that time have been entitled to terminate
this Agreement pursuant to Section 10.1(c) (but only in the case of a
willful breach by New Iberia of a covenant or agreement) or if either
Party shall at that time have been entitled to terminate this Agreement
pursuant to Section 10.1(d)(ii) (but only in the event New Iberia's
Board of Directors shall have withdrawn or modified in a manner adverse
to Regions the recommendation of New Iberia's Board of Directors with
respect to the Merger or this Agreement after it shall have been
publicly disclosed that any Person made, or disclosed an intention to
make, an Acquisition Proposal) of this Agreement, or
(ii) failure to consummate the Merger by reason of any failure of New
Iberia to satisfy the conditions enumerated in Section 9.1(a) (but only in
the event the Stockholders' Meeting shall have been cancelled prior to the
termination of this Agreement or New Iberia's Board of Directors shall have
withdrawn or modified in a manner adverse to Regions the recommendation of
New Iberia's Board of Directors with respect to the Merger or this
Agreement, in each case after it shall have been publicly disclosed that
any Person made, or disclosed an intention to make, an Acquisition
Proposal), 9.2(b) (but only in the case of a willful breach by New Iberia
of a covenant or agreement), or 9.3(d) (but only after it shall have been
publicly disclosed that any Person made, or disclosed an intention to make,
an Acquisition Proposal) of this Agreement,
any third-party shall acquire, merge with, combine with, purchase 25% or more of
the Assets of, or engage in any other business combination with, or purchase any
equity securities involving an acquisition of 25% or more of the voting stock
of, any New Iberia Company, or enter into any binding agreement, letter of
intent,
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memorandum of understanding, or similar instrument to do any of the foregoing
(collectively, a "Business Combination"), such third-party that is a party to
the Business Combination shall pay to Regions, prior to the earlier of
consummation of the Business Combination or execution of any binding agreement,
letter of intent, memorandum of understanding, or similar instrument with New
Iberia relating to such Business Combination, an amount in cash equal to
$2,000,000, for the direct costs and expenses (including, without limitation,
fees and expenses of Regions' financial or other consultants, printing costs,
investment bankers, accountants, and counsel) incurred by Regions in negotiating
and carrying out the transactions contemplated by this Agreement and for the
indirect costs and expenses incurred by Regions in connection with the
transactions contemplated by this Agreement, including Regions' management time
devoted to negotiation and preparation for such transaction. In the event such
third-party shall refuse to pay such amounts, the amounts shall be an obligation
of New Iberia and shall be paid by New Iberia promptly upon notice to New Iberia
by Regions.
(c) Nothing contained in this Section 11.2 shall constitute or shall be
deemed to constitute liquidated damages for the willful breach by a Party of the
terms of this Agreement.
11.3 Brokers and Finders. Except as disclosed by New Iberia in the New
Iberia Disclosure Memorandum, each of the Parties represents and warrants that
neither it nor any of its officers, directors, employees, or Affiliates has
employed any broker or finder or incurred any Liability for any financial
advisory fees, investment bankers' fees, brokerage fees, commissions, or
finders' fees in connection with this Agreement or the transactions contemplated
hereby. In the event of a claim by any broker or finder based upon his or its
representing or being retained by or allegedly representing or being retained by
New Iberia or Regions, each of New Iberia and Regions, as the case may be,
agrees to indemnify and hold the other Party harmless of and from any Liability
in respect of any such claim.
11.4 Entire Agreement. Except as otherwise expressly provided herein, this
Agreement (including the documents and instruments referred to herein)
constitutes the entire agreement between the Parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral, other than the
confidentiality agreement between the Parties, which shall remain in effect.
Except as contemplated by Articles 3 and 4 of this Agreement and Sections 8.12
and 8.14 of this Agreement, nothing in this Agreement expressed or implied, is
intended to confer upon any Person, other than the Parties or their respective
successors, any rights, remedies, obligations, or liabilities under or by reason
of this Agreement.
11.5 Amendments. To the extent permitted by Law, this Agreement may be
amended by a subsequent writing signed by each of the Parties upon the approval
of the Boards of Directors of each of the Parties; provided, that after any
approval by the holders of New Iberia Common Stock, there shall be made no
amendment that pursuant to the LBCL requires further approval by such
stockholders without the further approval of such stockholders.
11.6 Waivers.
(a) Prior to or at the Effective Time, Regions, acting through its Board of
Directors, chief executive officer, vice chairman, or other authorized officer,
shall have the right to waive any Default in the performance of any term of this
Agreement by New Iberia, to waive or extend the time for the compliance or
fulfillment by New Iberia of any and all of its obligations under this
Agreement, and to waive any or all of the conditions precedent to the
obligations of Regions under this Agreement, except any condition which, if not
satisfied, would result in the violation of any Law. No such waiver shall be
effective unless in writing signed by a duly authorized officer of Regions
except that any unfulfilled conditions shall be deemed to have been waived at
the Effective Time.
(b) Prior to or at the Effective Time, New Iberia, acting through its Board
of Directors, chief executive officer, or other authorized officer, shall have
the right to waive any Default in the performance of any term of this Agreement
by Regions, to waive or extend the time for the compliance or fulfillment by
Regions of any and all of its obligations under this Agreement, and to waive any
or all of the conditions precedent to the obligations of New Iberia under this
Agreement, except any condition which, if not satisfied, would result in the
violation of any Law. No such waiver shall be effective unless in writing signed
by a duly authorized officer
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of New Iberia except that any unfulfilled conditions shall be deemed to have
been waived at the Effective Time.
(c) The failure of any Party at any time or times to require performance of
any provision hereof shall in no manner affect the right of such Party at a
later time to enforce the same or any other provision of this Agreement. No
waiver of any condition or of the breach of any term contained in this Agreement
in one or more instances shall be deemed to be or construed as a further or
continuing waiver of such condition or breach or a waiver of any other condition
or of the breach of any other term of this Agreement.
11.7 Assignment. Except as expressly contemplated hereby, neither this
Agreement nor any of the rights, interests, or obligations hereunder shall be
assigned by any Party hereto (whether by operation of Law or otherwise) without
the prior written consent of the other Party. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of, and be enforceable
by the Parties and their respective successors and assigns.
11.8 Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered by hand, by
facsimile transmission, by registered or certified mail, postage pre-paid, or by
courier or overnight carrier, to the persons at the addresses set forth below
(or at such other address as may be provided hereunder), and shall be deemed to
have been delivered as of the date so delivered:
<TABLE>
<S> <C>
New Iberia: The New Iberia Bancorp, Inc.
800 South Lewis
New Iberia, Louisiana 70560
Telecopy Number: (318) 373-1215
Attention: Ernest Freyou
President and Chief Executive Officer
Copy to Counsel: Gordon, Arata, McCollam & Duplantis, L.L.P.
201 St. Charles Avenue, 40th Floor
New Orleans, Louisiana 70170-1000
Telecopy Number: (504) 582-1121
Attention: Cathy E. Chessin
Regions: Regions Financial Corporation
417 North 20th Street
Birmingham, Alabama 35203
Telecopy Number: (205) 326-7571
Attention: Richard D. Horsley
Vice Chairman and Executive Financial Officer
Copy to Counsel: Regions Financial Corporation
417 North 20th Street
Birmingham, Alabama 35203
Telecopy Number: (205) 326-7099
Attention: Samuel E. Upchurch, Jr.
General Counsel and Corporate Secretary
</TABLE>
11.9 Governing Law. Except to the extent the laws of the State of
Louisiana apply to the Merger, this Agreement shall be governed by and construed
in accordance with the Laws of the State of Delaware, without regard to any
applicable conflicts of Laws.
11.10 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
11.11 Captions. The captions contained in this Agreement are for reference
purposes only and are not part of this Agreement.
A-36
<PAGE> 37
11.12 Interpretations. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against any Party, whether under
any rule of construction or otherwise. No Party to this Agreement shall be
considered the draftsman. The Parties acknowledge and agree that this Agreement
has been reviewed, negotiated, and accepted by all Parties and their attorneys
and shall be construed and interpreted according to the ordinary meaning of the
words used so as fairly to accomplish the purposes and intentions of the
Parties.
11.13 Enforcement of Agreement. The Parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement was
not performed in accordance with its specific terms or was otherwise breached.
It is accordingly agreed that the Parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.
11.14 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf and its corporate seal to be hereunto affixed and
attested by officers thereunto as of the day and year first above written.
<TABLE>
<S> <C>
ATTEST: THE NEW IBERIA BANCORP, INC.
By: /s/ ROBERT F. EPPLEY By: /s/ ERNEST FREYOU
------------------------------------------------- -------------------------------------------------
Robert F. Eppley Ernest Freyou
Secretary President and Chief Executive Officer
[CORPORATE SEAL]
REGIONS FINANCIAL CORPORATION
By: /s/ SAMUEL E. UPCHURCH, JR. By: /s/ RICHARD D. HORSLEY
------------------------------------------------- -------------------------------------------------
Samuel E. Upchurch, Jr. Richard D. Horsley
General Counsel and Corporate Secretary Vice Chairman and Executive Financial Officer
[CORPORATE SEAL]
</TABLE>
A-37
<PAGE> 38
LIST OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
<C> <S>
1. Form of Directors' Agreement. (sec. 5.18).
2. Form of agreement of affiliates of New Iberia.
(sec.sec. 8.12, 9.2(e)).
3. Matters as to which Gordon, Arata, McCollam & Duplantis,
L.L.P. will opine. (sec. 9.2(d)).
4. Form of Claims Letter. (sec. 9.2(f)).
5. Matters as to which Lange, Simpson, Robinson & Somerville
will opine. (sec. 9.3(d)).
</TABLE>
[Exhibits Omitted]
A-38
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 16,744,607
<INT-BEARING-DEPOSITS> 240,237,239
<FED-FUNDS-SOLD> 20,320,628
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 57,388,580
<INVESTMENTS-CARRYING> 32,302,663
<INVESTMENTS-MARKET> 33,268,355
<LOANS> 181,659,825
<ALLOWANCE> 3,544,254
<TOTAL-ASSETS> 313,494,308
<DEPOSITS> 283,202,089
<SHORT-TERM> 2,904,387
<LIABILITIES-OTHER> 1,493,893
<LONG-TERM> 0
0
0
<COMMON> 14,250,558
<OTHER-SE> 11,643,381
<TOTAL-LIABILITIES-AND-EQUITY> 313,494,308
<INTEREST-LOAN> 3,904,978
<INTEREST-INVEST> 1,357,006
<INTEREST-OTHER> 322,952
<INTEREST-TOTAL> 5,584,936
<INTEREST-DEPOSIT> 2,631,477
<INTEREST-EXPENSE> 2,670,838
<INTEREST-INCOME-NET> 2,914,098
<LOAN-LOSSES> 180,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,270,026
<INCOME-PRETAX> 991,704
<INCOME-PRE-EXTRAORDINARY> 991,704
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 696,150
<EPS-PRIMARY> .23
<EPS-DILUTED> .23
<YIELD-ACTUAL> 4.02
<LOANS-NON> 486,584
<LOANS-PAST> 809,257
<LOANS-TROUBLED> 305,995
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,546,853
<CHARGE-OFFS> 215,586
<RECOVERIES> 32,987
<ALLOWANCE-CLOSE> 3,544,254
<ALLOWANCE-DOMESTIC> 3,544,254
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
