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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a)
AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
(Amendment No. ____)/1/
FFBS BANCORP, INC.
________________________________________________________________________________
(Name of Issuer)
Common Stock, Par Value $0.01 Per Share
________________________________________________________________________________
(Title of Class and Securities)
30242P109
________________________________________________________________________________
(CUSIP Number of Class Securities)
Richard T. Haston, Executive Vice President, NBC Capital Corporation
1108 Highway 82W, Starkville, Mississippi 39759 (601) 324-4258
________________________________________________________________________________
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
February 3, 1999
________________________________________________________________________________
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box: [_]
(Page 1 of 8 pages)
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/1/The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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CUSIP NO. 30242P109 13D PAGE 2 OF 8 PAGES
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(1) NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
NBC Capital Corporation
64-0694775
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) [_]
(b) [_]
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(3) SEC USE ONLY
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(4) SOURCE OF FUNDS: 00
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(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
[_]
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(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Mississippi, U.S.A.
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: (7) SOLE VOTING POWER
: 313,551 shares
:
:------------------------------------------------
: (8) SHARED VOTING POWER
NUMBER OF SHARES : 0 shares
BENEFICIALLY OWNED BY EACH :
REPORTING PERSON WITH :------------------------------------------------
: (9) SOLE DISPOSITIVE POWER
: 313,551 shares
:
:------------------------------------------------
: (10) SHARED DISPOSITIVE POWER
: 0 shares
:
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(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
313,551 shares
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(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES
[_]
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(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
19.9%
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(14) TYPE OF REPORTING PERSON: CO
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CUSIP No. 30242P109 13D Page 3 of 8 pages
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Item 1. Security and Issuer
The class of equity securities to which this statement on Schedule 13D
relates is the common stock, par value $0.01 per share (the "Common Stock"), of
FFBS Bancorp, Inc. ("FFBS"), a Delaware corporation, with principal offices
located at 1121 Main Street, Columbus, Mississippi 39701.
Item 2. Identity and Background
This statement is filed by NBC Capital Corporation ("NBC"), a bank
holding company incorporated in the State of Mississippi, with respect to shares
of Common Stock beneficially owned by NBC. NBC's principal office is located at
301 East Main Street, Starkville, Mississippi, 39760.
(d) N/A
(e) N/A
Item 3. Source and Amount of Funds or Other Consideration
NBC beneficially owns 313,551 shares of Common Stock pursuant to a Stock
Option Agreement dated as of February 3, 1999, by and between NBC and FFBS (the
"Agreement"). The Agreement grants NBC the irrevocable option (the "Option"),
subject to certain terms and conditions, to acquire up to 313,515 shares of
Common Stock (the "Option Shares") for a purchase price of $27.00 per Option
Share. Under the terms of the Agreement, both the number of Option Shares and
the price per Option Share are subject to certain adjustments. The consideration
for the Agreement was NBC's inducement to enter into a merger agreement with
FFBS (the "Merger Agreement"). NBC intends to fund any exercise of the Option
through the declaration of dividends out of the excess capital of its
subsidiary, National Bank of Commerce. See Item 6 for additional information
regarding the Agreement.
Item 4. Purpose of Transaction
Under the terms of the Merger Agreement, FFBS will be merged into NBC,
and the current FFBS stockholders will beneficially own 18.25% of the
outstanding stock of NBC. Following the merger, two members of the board of
directors of FFBS will be appointed to the board of directors of NBC. Under the
Merger Agreement, FFBS may not engage in certain actions without the prior
approval of NBC. If the merger becomes effective, the Option will expire. See
Item 6 for additional information regarding the Agreement.
Other than as indicated above, NBC does not have any plans or proposals
which relate to or would result in:
a) The acquisition of additional securities of FFBS, or the
disposition of securities of FFBS;
b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving FFBS or any of its subsidiaries;
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CUSIP No. 30242P109 13D Page 4 of 8 pages
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c) A sale or transfer of a material amount of assets of FFBS or any
of its subsidiaries;
d) Any change in the present board of directors or management of
FFBS, including any plans or proposals to change the number or term of directors
or to fill any existing vacancies on the board;
e) Any material change in the present capitalization or dividend
policy of FFBS;
f) Any other material change in FFBS's business or corporate
structure;
g) Changes in FFBS's charter or bylaws or other actions which may
impede the acquisition of control of FFBS by any person;
h) Causing a class of securities of FFBS to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
i) A class of equity securities of FFBS becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934, as amended; or
j) Any action similar to any of those described above.
Item 5. Interest in Securities of the Issuer
(a) The aggregate number and percentage of shares of the Common Stock
beneficially owned by NBC and to which this Schedule 13D relates is 313,551
shares, representing 19.9% of the 1,575,635 shares issued and outstanding, as
reported by FFBS on December 31, 1998.
(b) Upon exercise of the Option, NBC would have the sole power to
vote and to dispose of the 313,551 Option Shares.
(c) Other than execution of the Agreement on February 3, 1999, NBC
has not acquired any shares of the Common Stock in the last 60 days.
(d) N/A
(e) N/A
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer
Stock Option Agreement
As an inducement and a condition to NBC entering into the Merger
Agreement, NBC and FFBS entered into the Agreement, under which FFBS granted NBC
the Option to purchase up to 313,551 shares of Common Stock, representing 19.9%
of the issued and outstanding shares of Common Stock. The Option is exercisable
only under the circumstances described below, at a
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CUSIP No. 30242P109 13D Page 5 of 8 pages
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cash price per share equal to $27.00, subject to possible adjustment in certain
circumstances. This description of the Agreement and the Option does not purport
to be complete and is qualified in its entirety by reference to the Agreement,
which is included as Exhibit A to Item 7, below.
Subject to applicable law and regulatory restrictions, NBC may exercise the
Option, in whole or in part, if, but only if, a "Purchase Event" (as defined
below) occurs prior to the Option's termination if NBC, at the time, is not in
material breach of the Agreement or the Merger Agreement. As defined in the
Agreement, Purchase Event means either of the following events:
(1) without NBC's written consent, FFBS's board authorizes, recommends,
publicly proposes or publicly announces an intention to authorize,
recommend, propose or enter into an agreement with any third party to
effect any of the following acquisition transactions:
. a merger, consolidation, or similar transaction involving FFBS or
any of its subsidiaries (other than transactions solely between
FFBS's subsidiaries);
. the disposition, by sale, lease, exchange or otherwise, of 30% or
more of the consolidated assets of FFBS and its subsidiaries; or
. the issuance, sale or other disposition (including by way of
merger, consolidation, share exchange or any similar transaction)
of securities representing 30% or more of the voting power of
FFBS or any of its subsidiaries; or
(2) any third party acquires beneficial ownership, or the right to acquire
beneficial ownership of, or any group is formed that beneficially owns
or has the right to acquire beneficial ownership of, 30% or more of
the outstanding shares of FFBS common stock.
The option will terminate upon the earliest of the following:
(1) the effective time of the merger;
(2) termination of the Merger Agreement in accordance with the terms
thereof prior to the occurrence of a Purchase Event or a "Preliminary
Purchase Event" (as defined below) (other than a termination of the
Merger Agreement under certain circumstances involving a breach by
NBC);
(3) 12 months after termination of the Merger Agreement as a result of
certain breaches by NBC; and
(4) 12 months after termination of the Merger Agreement following the
occurrence of a Purchase Event or a Preliminary Purchase Event.
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CUSIP No. 30242P109 13D Page 6 of 8 pages
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As defined in the stock option agreement, a Preliminary Purchase Event
includes either of the following events:
(1) any third party commencing or filing a registration statement
under the Securities Act of 1933 pertaining to a tender offer or
exchange offer to purchase any shares of FFBS common stock if,
upon consummation of that offer, that party would own or control
20% or more of the then-outstanding shares of FFBS common stock;
or
(2) the stockholders of FFBS failing to approve the Merger Agreement
at the special meeting, the failure to have the special meeting
or the cancellation of the meeting before the Merger Agreement is
terminated, or the withdrawal or modification by FFBS's board of
directors in a manner adverse to NBC of the recommendation of the
board of directors with respect to the Merger Agreement, in each
case after public announcement that a third party has done any of
the following:
. made, or disclosed an intention to make, a proposal to engage
in an acquisition transaction;
. commenced a tender offer or filed a registration statement
under the Securities Act of 1933 with respect to an exchange
offer; or
. filed an application or given a notice under certain federal
statutes for approval or consent to engage in an acquisition
transaction.
If FFBS common stock changes by reason of a stock dividend, stock split,
split-up, recapitalization, combination, exchange of shares, or similar
transaction, the type and number of securities subject to the option, then the
purchase price of the Option Shares would be adjusted appropriately. If FFBS
issues additional shares of common stock (other than pursuant to an event
described in the preceding sentence), the number of shares of FFBS common stock
subject to the Option will be adjusted so that, after such issuance, the Option,
together with any shares of FFBS common stock previously issued pursuant to the
Agreement, equals 19.9% of the number of shares then issued and outstanding,
without giving effect to any shares subject to or issued pursuant to the
option.
Upon the occurrence of a "Repurchase Event" (as defined below) that
occurs prior to the exercise or termination of the Option, at the request of
NBC, FFBS will, subject to regulatory restrictions, be obligated to repurchase
the Option and any shares of Common Stock purchased pursuant to the Agreement at
a specified price. NBC must deliver its request that FFBS repurchase the Option
within 12 months of the first occurrence of a Repurchase Event, or FFBS will not
be obligated to comply with the request.
As defined in the Agreement, a Repurchase Event occurs if:
(1) any person (other than NBC or any NBC subsidiary) acquires
beneficial ownership or the right to acquire beneficial ownership
of, or any "group" (as such term is defined under the Securities
Exchange Act of 1934) is formed which beneficially
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CUSIP No. 30242P109 13D Page 7 of 8 pages
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owns, or has the right to beneficially own, 50% or more of the
then-outstanding shares of FFBS common stock; or
(2) any of the following transactions is consummated;
. FFBS consolidates with or merges into any person, other
than NBC or one of NBC's subsidiaries, and is not the
continuing or surviving corporation of such consolidation or
merger;
. FFBS permits any person, other than NBC or one of NBC's
subsidiaries, to merge into FFBS and FFBS shall be the
continuing or surviving corporation, but, in connection with
such merger, the then-outstanding shares of Common Stock are
changed into or exchanged for stock or other securities of
FFBS or any other person or cash or any other property or the
outstanding shares of Common Stock immediately prior to such
merger shall after such merger represent less than 50% of the
outstanding shares and share equivalents of the merged
company; or
. FFBS sells or otherwise transfers all or substantially all of
its assets to any person, other than NBC or one of NBC's
subsidiaries.
If prior to the exercise or termination of the Option, FFBS enters into
an agreement to engage in any of the transactions described in clause (2) of the
definition of Repurchase Event above, then the agreement governing such
transaction must make proper provision so that NBC will receive for each share
of Common Stock subject to the option an amount of consideration that would be
received by a holder of Common Stock in such transaction, less the purchase
price of the option securities.
After the occurrence of a Purchase Event, NBC may assign its rights
under the Agreement in whole or in part.
Upon the occurrence of certain events, FFBS has agreed to file with the
SEC and to cause to become effective certain registration statements under the
Securities Act of 1933 with respect to dispositions by NBC and its assigns of
all or part of the Option or any shares of Common Stock into which the Option is
exercisable.
Item 7. Material to be Filed as an Exhibit
Exhibit A: Stock Option Agreement by and between NBC Capital
Corporation and FFBS Bancorp, Inc. dated as of February 3,
1999.
Exhibit B: Agreement and Plan of Merger by and between NBC Capital
Corporation and FFBS Bancorp, Inc. dated as of February 3,
1999.
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CUSIP No. 30242P109 13D Page 8 of 8 pages
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: April 14, 1999.
NBC CAPITAL CORPORATION
By: /s/ RICHARD T. HASTON
__________________________________
Richard T. Haston
Chief Financial Officer
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EXHIBIT A
STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT, dated as of the 3rd day of February, 1999
(the "Agreement"), is by and between FFBS BANCORP, INC., a Delaware corporation
("Issuer"), and NBC CAPITAL CORPORATION, a Mississippi corporation ("Grantee").
WHEREAS, Issuer and Grantee have entered into an Agreement and Plan of
Merger, (the "Merger Agreement"), which agreement has been executed by the
parties hereto immediately prior to this Stock Option Agreement (the
"Agreement"); and
WHEREAS, as a condition and inducement to Grantee's execution of the
Merger Agreement, Grantee has required that Issuer agree, and Issuer has
agreed, to grant Grantee the Option (as defined below);
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Merger Agreement, and intending to be legally bound hereby, Issuer and
Grantee agree as follows:
1. Defined Terms. Capitalized terms which are used but not defined herein
shall have the meanings ascribed to such terms in the Merger Agreement.
2. Grant of Option. Subject to the terms and conditions set forth herein,
Issuer hereby grants to Grantee an irrevocable option (the "Option") to
purchase up to 313,551 shares (the "Option Shares") of Common Stock of Issuer,
par value $.01 per share ("Issuer Common Stock"), at a purchase price per
Option Share (the "Purchase Price") equal to $27.00; provided, however, that in
no event shall the number of shares of Issuer Common Stock for which this
Option is exercisable exceed 19.9% of the Issuer's issued and outstanding
shares of Common Stock. The number of shares of Issuer Common Stock that may be
received upon the exercise of the Option and the Purchase Price are subject to
adjustment as herein set forth.
3. Exercise of Option.
(a) Provided that (i) Grantee shall not be in material breach of the
agreements or covenants contained in this Agreement or the Merger Agreement, or
(ii) no preliminary or permanent injunction or other order against the delivery
of the Option Shares issued by any court of competent jurisdiction in the
United States shall be in effect, Grantee may exercise the Option, in whole or
in part, at any time and from time to time, but only following the occurrence
of a Purchase Event (as defined below); provided that the Option shall
terminate and be of no further force or effect upon the earlier to occur of (A)
the Effective Time of the Merger, (B) the termination of the Merger Agreement
in accordance with the terms thereof before the occurrence of a Purchase Event
or a Preliminary Purchase Event (other than a termination of the Merger
Agreement by Grantee pursuant to Section 11.1(g) of the Merger Agreement (an
"Issuer Default Termination"); (C) the close of business on the 365th day after
the occurrence of a termination of the Merger Agreement by an Issuer Default
Termination; and (D) the close of business on the 365th day after termination
of the Merger Agreement following the occurrence of a Purchase Event or a
Preliminary Purchase Event (hereinafter sometimes referred to as the
"Termination Date"); provided that any purchase of Option Shares upon the
exercise of the Option shall be subject to compliance with applicable law,
including, without limitation, the Bank Holding Company Act of 1956 (the
"BHCA"), and any required consent of any regulatory authority. The rights set
forth in Section 8 of this Agreement shall terminate when the right to exercise
the Option terminates (other than as a result of a complete exercise of the
Option) as set forth herein.
(b) As used herein, a "Purchase Event" means any of the following events:
(i) without Grantee's prior written consent, Issuer shall have
authorized, recommended, publicly proposed or publicly announced an
intention to authorize, recommend or propose, or entered into an agreement
with any person (other than Grantee or any subsidiary of Grantee) to effect
an Acquisition Transaction (as defined below). As used herein, the term
"Acquisition Transaction" shall mean (A) a
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merger, consolidation or similar transaction involving Issuer or any of its
subsidiaries (other than transactions solely between Issuer's
subsidiaries), (B) the disposition, by sale, lease, exchange or otherwise,
of assets of Issuer or any of its subsidiaries representing in either case
30% or more of the consolidated assets of Issuer and its subsidiaries or
(C) the issuance, sale or other disposition of (including by way of merger,
consolidation, share exchange or any similar transaction) securities
representing 30% or more of the voting power of Issuer or any of its
significant subsidiaries; or
(ii) any person (other than Grantee or any subsidiary of Grantee)
shall have acquired beneficial ownership (as such term is defined in Rule
13d-3 promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) of, or the right to acquire beneficial ownership of,
or any "group" (as such term is defined under the Exchange Act) shall have
been formed which beneficially owns or has the right to acquire beneficial
ownership of, 30% or more (or, if such person or group is the beneficial
owner of 30% of more on the date hereof, such person or group acquires an
additional 5% or more) of the voting power of Issuer or any of its
significant subsidiaries.
(c) As used herein, a "Preliminary Purchase Event" means any of the
following events:
(i) any person (other than Grantee or any subsidiary of Grantee) shall
have commenced (as such term is defined in Rule 14d-2 under the Exchange
Act) or shall have filed a registration statement under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to a tender offer
or exchange offer to purchase any shares of Issuer Common Stock such that,
upon consummation of such offer, such person would own or control 20% or
more of the then outstanding shares of Issuer Common Stock (such an offer
being referred to herein as a "Tender Offer" or an "Exchange Offer,"
respectively); or
(ii) the holders of Issuer Common Stock shall not have approved the
Merger Agreement at the meeting of such shareholders held for the purpose
of voting on the Merger Agreement, such meeting shall not have been held or
shall have been canceled prior to termination of the Merger Agreement or
Issuer's Board of Directors shall have withdrawn or modified in a manner
adverse to Grantee the recommendation of Issuer's Board of Directors with
respect to the Merger Agreement, in each case, after it shall have been
publicly announced that any person (other than Grantee or any subsidiary of
Grantee) shall have (A) made, or disclosed an intention to make, a proposal
to engage in an Acquisition Transaction, (B) commenced a Tender Offer or
filed a registration statement under the Securities Act with respect to an
Exchange Offer or (C) filed an application (or given a notice), whether in
draft or final form, under banking or corporate law or any other applicable
law seeking, including, without limitation, the BHCA, approval to engage in
an Acquisition Transaction.
As used in this Agreement, "person" shall have the meaning specified in
Sections 3(a)(9) and 13(d)(3) of the Exchange Act.
(d) Notwithstanding the foregoing, the obligation of Issuer to issue
Option Shares upon exercise of the Option shall be deferred (but shall not be
terminated): (i) until the receipt of all required governmental or regulatory
approvals or consents necessary for Issuer to issue the Option Shares or Holder
to exercise the Option, or until the expiration or termination of any waiting
period required by law, or (ii) so long as any injunction or other order,
decree or ruling issued by any federal or state court of competent jurisdiction
is in effect which prohibits the sale or delivery of the Option Shares.
(e) Issuer shall notify Grantee promptly in writing of the occurrence of
any Preliminary Purchase Event or Purchase Event, it being understood that the
giving of such notice by Issuer shall not be a condition to the right of
Grantee to exercise the Option.
(f) In the event Grantee wishes to exercise the Option, it shall send to
Issuer a written notice (the date of which being herein referred to as the
"Notice Date") specifying (i) the total number of Option Shares it intends to
purchase pursuant to such exercise and (ii) subject to the next sentence, a
place and date not earlier than three (3) business days nor later than fifteen
(15) business days after the Notice Date for the closing (the "Closing") of
such purchase (the "Closing Date"). If prior notification to or consent of any
regulatory
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authority is required in connection with such purchase, then, notwithstanding
the prior occurrence of the Termination Date, the Closing Date shall be
extended for such period as shall be necessary to enable such prior
notification or consent to occur or to be obtained (and the expiration of any
mandatory waiting period). Issuer shall cooperate with Grantee in the filing of
any applications or documents necessary to obtain any required consent or in
connection with any required prior notification and the Closing shall occur not
earlier than three (3) business days nor later than fifteen (15) business days
following receipt of such consent (or the filing of any such prior notification
and the expiration of any mandatory waiting periods).
4. Payment and Delivery of Certificates.
(a) On each Closing Date, Grantee shall (i) pay to Issuer, in immediately
available funds by wire transfer to a bank account designated by Issuer, an
amount equal to the Purchase Price multiplied by the number of Option Shares to
be purchased on such Closing Date, and (ii) present and surrender this
Agreement to the Issuer at the address of the Issuer specified herein.
(b) At each Closing, simultaneously with the delivery of immediately
available funds and surrender of this Agreement as provided in Section 4(a)
above, (i) Issuer shall deliver to Grantee (A) a certificate or certificates
representing the Option Shares to be purchased at such Closing, which Option
Shares shall be free and clear of all liens, claims, charges and encumbrances
of any kind whatsoever and subject to no pre-emptive rights, and (B) if the
Option is exercised in part only, a new Stock Option Agreement, executed by
Issuer, with the same terms as this Agreement evidencing the right to purchase
the balance of the shares of Issuer Common Stock purchasable hereunder, and
(ii) Grantee shall deliver to Issuer a letter agreeing that Grantee shall not
offer to sell or otherwise dispose of such Option Shares in violation of
applicable federal and state law or of the provisions of this Agreement.
(c) In addition to any other legend that is required by applicable law,
certificates for the Option Shares delivered at each Closing shall be endorsed
with a restrictive legend which shall read substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND PURSUANT
TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF FEBRUARY 3, 1999. A COPY
OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF WITHOUT CHARGE UPON
RECEIPT BY THE ISSUER OF A WRITTEN REQUEST THEREFOR.
It is understood and agreed that (i) the references to the trade
restrictions of the Securities Act in the above legend shall be removed by
delivery of substitute certificate(s) without such legend if Grantee shall have
delivered to Issuer an opinion of counsel in form and substance reasonably
satisfactory to Issuer and its counsel, to the effect that such legend is not
required for purposes of the Securities Act; (ii) the references to the
provisions of this Agreement in the above legend shall be removed by delivery
of substitute certificate(s) without such reference if the shares have been
sold or transferred in compliance with the provisions of this Agreement and
under circumstances that do not require the retention of such reference; and
(iii) the legend shall be removed in its entirety if the conditions in the
preceding clauses (i) and (ii) are both satisfied. In addition, such
certificates shall bear any other legend as may be required by law.
(d) Upon the giving by Grantee to Issuer of the written notice of exercise
of the Option provided for under Section 3(e) of this Agreement, the tender of
the applicable Purchase Price in immediately available funds and the tender of
this Agreement to Issuer, Grantee shall be deemed to be the holder of record of
the shares of Issuer Common Stock issuable upon such exercise, notwithstanding
that the stock transfer books of Issuer shall then be closed or that
certificates representing such shares of Issuer Common Stock shall not then be
actually delivered to Grantee. Issuer shall pay all expenses, and any and all
United States federal, state, and local taxes and other charges that may be
payable in connection with the preparation, issuance and delivery of stock
certificates under this Section in the name of Grantee or its assignee,
transferee, or designee.
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(e) Issuer agrees (i) that it shall at all times maintain, free from pre-
emptive rights, sufficient authorized but unissued or treasury shares of Issuer
Common Stock so that the Option may be exercised without additional
authorization of Issuer Common Stock after giving effect to all other options,
warrants, convertible securities and other rights to purchase Issuer Common
Stock, (ii) that it will not, by amendment to its Articles of Incorporation or
Bylaws or through reorganization, consolidation, merger, dissolution or sale of
assets, or by any other voluntary act, avoid or seek to avoid the observance or
performance of any of the covenants, stipulations or conditions to be observed
or performed hereunder by Issuer, (iii) promptly to take all action as may from
time to time be required (including (A) complying (if applicable) with all
premerger notification, reporting and waiting period requirements specified in
15 U.S.C. (S) 18a and regulations promulgated thereunder and (B) in the event
under any federal or state law, prior notice to consent of any regulatory
authority is necessary before the Option may be exercised, cooperating fully
with Grantee in preparing any required application or notice and providing such
information to such regulatory authority as such regulatory authority may
require) in order to permit Grantee to exercise the Option and Issuer duly and
effectively to issue shares of Issuer Common Stock pursuant hereto, and (iv)
promptly to take all action provided herein to protect the rights of Grantee
against dilution.
5. Representations and Warranties of Issuer. Issuer hereby represents and
warrants to Grantee as follows:
(a) Due Authorization. Issuer has all requisite corporate power and
authority to enter into this Agreement and, subject to any approvals referred
to herein, to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of Issuer. This Agreement has been duly executed and delivered by
Issuer.
(b) Authorized Stock. Issuer has taken all necessary corporate and other
action to authorize and reserve and to permit it to issue, and, at all times
from the date hereof until the obligation to deliver Issuer Common Stock upon
the exercise of the Option terminates, will have reserved for issuance, upon
exercise of the Option, the number of shares of Issuer Common Stock necessary
for Grantee to exercise the Option, and Issuer will take all necessary
corporate action to authorize and reserve for issuance all additional shares of
Issuer Common Stock or other securities which may be issued pursuant to Section
7 of this Agreement upon exercise of the Option. The shares of Issuer Common
Stock to be issued upon due exercise of the Option, including all additional
shares of Issuer Common Stock or other securities which may be issuable
pursuant to Section 7 of this Agreement, upon issuance pursuant hereto, shall
be duly and validly issued, fully paid and nonassessable, and shall be
delivered free and clear of all liens, claims, charges and encumbrances of any
kind or nature whatsoever, including any pre-emptive right of any shareholder
of Issuer, but subject to the voting restrictions contained in the Certificate
of Incorporation of Issuer.
(c) No Violation. Except as disclosed pursuant to the Merger Agreement,
the execution and delivery of this Agreement does not, and the consummation of
the transactions contemplated hereby will not, conflict with, or result in any
violation pursuant to any provisions of the Certificate of Incorporation,
Charter or Bylaws of Issuer or any subsidiary of Issuer or, subject to
obtaining any approvals or consents contemplated hereby, result in any
violation of any loan or credit agreement, note, mortgage, indenture, lease,
plan or other agreement, obligation, instrument, permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Issuer or any subsidiary of Issuer or their respective properties
or assets which violation would have a material adverse effect on the condition
of Issuer on a consolidated basis.
6. Representations and Warrants of Grantee. Grantee hereby represents and
warrants to Issuer that:
(a) Due Authorization. Grantee has all requisite corporate power and
authority to enter into this Agreement and, subject to any approvals or
consents referred to herein, to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Grantee. This Agreement has been duly executed
and delivered by Grantee.
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(b) Purchase Not for Distribution. This Option is not being, and any
Option Shares or other securities acquired by Grantee upon exercise of the
Option will not be, acquired with a view to the public distribution thereof and
will not be transferred or otherwise disposed of except in a transaction
registered or exempt from registration under the Securities Act.
7. Adjustment Upon Changes in Capitalization, Etc.
(a) In the event of any change in Issuer Common Stock by reason of a stock
dividend stock split, split-up, recapitalization, combination, exchange of
shares or similar transaction, the type and number of shares or securities
subject to the Option, and the Purchase Price therefor, shall be adjusted
appropriately, and proper provision shall be made in the agreements governing
such transaction so that Grantee shall receive, upon exercise of the Option,
the number and class of shares or other securities or property that Grantee
would have received in respect of Issuer Common Stock if the Option had been
exercised immediately prior to such event, or the record date therefor, as
applicable. If any additional shares of Issuer Common Stock are issued after
the date of this Agreement (other than pursuant to an event described in the
first sentence of this Section 7(a)), the number of shares of Issuer Common
Stock subject to the Option shall be adjusted so that, after such issuance, the
Option, together with any shares of Issuer Common Stock previously issued
pursuant hereto, equals 19.9% of the number of shares of Issuer Common Stock
then issued and outstanding, without giving effect to any shares subject to or
issued pursuant to the Option.
(b) In the event that, prior to the Termination Date, Issuer shall enter
into an agreement: (i) to consolidate with or merge into any person, other than
Grantee or one of its subsidiaries, and shall not be the continuing or
surviving corporation of such consolidation or merger, (ii) to permit any
person, other than Grantee or one of its subsidiaries, to merge into Issuer
where Issuer shall be the continuing or surviving corporation, but, in
connection with such merger, the then outstanding shares of Issuer Common Stock
shall be changed into or exchanged for stock or other securities of Issuer or
any other person or cash or any other property or the outstanding shares of
Issuer Common Stock immediately prior to such merger shall after such merger
represent less than 50% of the outstanding shares and share equivalents of the
merged company, or (iii) to sell or otherwise transfer all or substantially all
of its assets to any person, other than Grantee or one of its subsidiaries,
then, and in each such case, the agreement governing such transaction shall
make proper provisions so that, upon the consummation of any such transaction
and upon the terms and conditions set forth herein, the Option, notwithstanding
the fact that as of the date of consummation of such transaction the
Termination Date shall have occurred, shall be converted into, or exchanged
for, an option (the "Substitute Option"), at the election of Grantee, of either
(x) the Acquiring Corporation (as defined below), (y) any person that controls
the Acquiring Corporation, or (z) in the case of a merger described in clause
(ii), the Issuer (in each case, such entity being referred to as the
"Substitute Option Issuer").
(c) The Substitute Option shall have the same terms as the Option,
provided that, if the terms of the Substitute Option cannot, because of the
applicability of any law or regulation, have the exact terms as the Option,
such terms shall be as similar as possible and in no event less advantageous to
Grantee. The Substitute Option Issuer shall also enter into an agreement with
the then-holder or holders of the Substitute Option in substantially the same
form as this Agreement, which shall be applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such number of shares
of the Substitute Common Stock (as hereinafter defined) as is equal to the
Assigned Value (as hereinafter defined) multiplied by the number of shares of
the Issuer Common Stock for which the Option was theretofore exercisable,
divided by the Average Price (as hereinafter defined). The exercise price of
each share of Substitute Common Stock subject to the Substitute Option (the
"Substitute Purchase Price") shall be equal to the Purchase Price multiplied by
a fraction in which the numerator is the number of shares of the Issuer Common
Stock for which the Option was theretofore exercisable and the denominator is
the number of shares for which the Substitute Option is exercisable.
(e) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean (x) the continuing or surviving
corporation of a consolidation or merger with (if other than Issuer), (y)
the Issuer in a consolidation or merger or in which
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the Issuer is the continuing or surviving corporation, and (z) the
transferee of all or any substantial part of the Issuer's assets (or the
assets of its subsidiaries).
(ii) "Assigned Value" shall mean the highest of (x) the price per
share of the Issuer Common Stock at which a Tender Offer or Exchange Offer
therefor has been made by any person (other than Grantee), (y) the price
per share of the Issuer Common Stock to be paid by any person (other than
the Grantee) pursuant to an agreement with Issuer, and (z) the highest last
sales price per share of Issuer Common Stock quoted on any national
securities exchange (including the NASDAQ--National Market System) (or if
Issuer Common Stock is not quoted on any such national securities exchange,
the highest bid price per share on any day as quoted on the principal
trading market or securities exchange on which such shares are traded as
reported by a recognized source chosen by Grantee) within the six-month
period immediately preceding the agreement described in Section 7(b) above;
provided, however, that in the event of a sale of less than all of Issuer's
assets, the Assigned Value shall be the sum of the price paid in such sale
for such assets and the current market value of the remaining assets of
Issuer as determined by a nationally recognized investment banking firm
selected by Grantee, divided by the number of shares of the Issuer Common
Stock outstanding at the time of such sale. In the event a Tender Offer or
Exchange Offer is made for the Issuer Common Stock or an agreement is
entered into for a merger or consolidation involving consideration other
than cash, the value of the securities or other property issuable or
deliverable in exchange for the Issuer Common Stock shall be determined by
a nationally recognized investment banking firm mutually selected by
Grantee and Issuer (or if applicable, Acquiring Corporation), provided that
if a mutual selection cannot be made as to such investment banking firm, it
shall be selected by Grantee.
(iii) "Average Price" shall mean the average last sales price of a
share of the Substitute Common Stock for the one year immediately preceding
the consolidation, merger or sale in question, as quoted on any national
securities exchange (including the NASDAQ National Market System), and if
the Substitute Common Stock is not quoted on any such national securities
exchange, the average of the bid price for the one year period described
above, as quoted on the principal trading market or securities exchange on
which such Substitute Common Stock is traded, as reported by a recognized
source, as chosen by Grantee, but in no event higher than the last sales
price or closing price or the bid price of the shares of the Substitute
Common Stock on the day preceding such consolidation, merger, or sale;
provided that if Issuer is the issuer of the Substitute Option, the Average
Price shall be computed with respect to a share of common stock issued by
Issuer, the person merging into Issuer or by any company which controls or
is controlled by such person, as Grantee may elect.
(iv) "Substitute Common Stock" shall mean the common stock issued by
the Substitute Option Issuer upon the exercise of the Substitute Option.
(f) In no event pursuant to any of the foregoing paragraphs shall the
Substitute Option be exercisable for more than 19.9% of the aggregate of the
shares of the Substitute Common Stock outstanding prior to exercise of the
Substitute Option. In the event that the Substitute Option would be exercisable
for more than 19.9% of the aggregate of the shares of the Substitute Common
Stock but for this clause (f), the Substitute Option Issuer shall make a cash
payment to Grantee equal to the amount of (i) the value of the Substitute
Option without giving effect to the limitation in this clause (f) in excess of
(ii) the value of the Substitute Option after giving effect to the limitation
in this clause (f). This difference in value shall be determined by a
nationally recognized investment banking firm selected by Grantee.
(g) Issuer shall not enter into any transaction described in subsection
(b) of this Section 7 unless the Acquiring Corporation and any person that
controls the Acquiring Corporation assumes in writing all of the obligations of
Issuer hereunder and takes all other actions that may be necessary so that the
provisions of this Section 7 are given full force and effect (including,
without limitation, any action that may be necessary so that the shares of
Substitute Common Stock are in no way distinguished from or have lesser
economic value (other than any diminution resulting from the fact that the
Substitute Common Stock is "restricted securities" within the meaning of Rule
144 under the Securities Act) than other shares of common stock issued by the
Substitute Option Issuer).
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(h) The provisions of Sections 8, 9 and 10 shall apply, with appropriate
adjustments, to any securities for which the Option becomes exercisable
pursuant to this Section 7 and, as applicable, references in such sections to
"Issuer," "Option," "Purchase Price," and "Issuer Common Stock" shall be deemed
to be references to "Substitute Option Issuer," "Substitute Option,"
"Substitute Purchase Price," and "Substitute Common Stock," respectively.
8. Repurchase at the Option of Grantee.
(a) Subject to the last sentence of Section 3(a) of this Agreement, at the
request of Grantee at any time commencing upon the first occurrence of a
Repurchase Event (as defined in Section 8(d)) and ending at the close of
business 365 days thereafter, Issuer shall repurchase from Grantee the Option
and all shares of Issuer Common Stock purchased by Grantee pursuant hereto with
respect to which Grantee then has beneficial ownership. The date on which
Grantee exercises its rights under this Section 8 is referred to as the
"Request Date." Such repurchase shall be at an aggregate price (the "Section 8
Repurchase Consideration") equal to the sum of:
(i) the aggregate Purchase Price paid by Grantee for any shares of
Issuer Common Stock acquired pursuant to complete or partial exercise of
the Option with respect to which Grantee then has beneficial ownership;
(ii) the excess, if any, of (x) the Applicable Price (as defined
below) for each share of Issuer Common Stock over (y) the Purchase Price
(subject to adjustment pursuant to Section 7), multiplied by the number of
shares of Issuer Common Stock with respect to which the Option has not been
exercised; and
(iii) the excess, if any, of the Applicable Price over the Purchase
Price (subject to adjustment pursuant to Section 7) paid (or, in the case
of Option Shares with respect to which the Option has been exercised but
the Closing Date has not occurred, payable) by Grantee for each share of
Issuer Common Stock with respect to which the Option has been exercised and
with respect to which Grantee then has beneficial ownership, multiplied by
the number of such shares.
(b) If Grantee exercises its rights under this Section 8, Issuer shall,
within ten (10) business days after the Request Date, pay the Section 8
Repurchase Consideration to Grantee in immediately available funds, and
contemporaneously with such payment Grantee shall surrender to Issuer the
Option and the certificates evidencing the shares of Issuer Common Stock
purchased thereunder with respect to which Grantee then has beneficial
ownership, and Grantee shall warrant that it has sole record and beneficial
ownership of such shares and that the same are then free and clear of all
liens, claims, charges and encumbrances of any kind whatsoever. Notwithstanding
the foregoing, to the extent that prior notification to or Consent of any
Regulatory Authority is required in connection with the payment of all or any
portion of the Section 8 Repurchase Consideration, or Issuer is prohibited
under applicable law or regulation, or as a consequence of administrative
policy, from repurchasing the Option and/or the Option Shares in full, Issuer
shall immediately so notify Grantee and thereafter deliver from time to time,
and as permitted by applicable law or regulation, that portion of the Section 8
Repurchase Consideration that it is not then so prohibited from paying within
five business days after the date on which Issuer is no longer prohibited;
provided, however, that if Issuer at any time is prohibited under applicable
law or regulation, or as a consequence of administrative policy, from
delivering to the Grantee the Section 8 Repurchase Consideration, in full (and
Issuer hereby undertakes to use its best efforts to obtain all required
consents of regulatory authorities and to file any required notices as promptly
as practicable in order to accomplish such repurchase), the Grantee may, at its
option, revoke its request that Issuer repurchase the Option or the Option
Shares either in whole or to the extent of the prohibition, whereupon, in the
latter case, Issuer shall promptly (i) deliver to the Grantee that portion of
the Section 8 Repurchase Consideration that Issuer is not prohibited from
delivering; and (ii) deliver, to the Grantee either (A) a new Stock Option
Agreement evidencing the right of Issuer to purchase that number of shares of
Common Stock obtained by multiplying the number of shares of Common Stock for
which the surrendered Stock Option Agreement was exercisable at the time of
delivery of the notice of repurchase by a fraction, the numerator of which is
the Section 8 Repurchase Consideration less the portion thereof theretofore
delivered to
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the Grantee and the denominator of which is the Section 8 Repurchase
Consideration, or (B) a certificate for the Option Shares it is then prohibited
from repurchasing.
Notwithstanding anything herein to the contrary, all of Grantee's rights
under this Section 8 shall terminate on the Termination Date of this Option
pursuant to Section 3(a) of this Agreement.
(c) For purposes of this Agreement, the "Applicable Price" means the
highest of: (i) the highest price per share of Issuer Common Stock paid for any
such share by the person or groups described in Section 8(d)(i) below; (ii) the
price per share of Issuer Common Stock received by holders of Issuer Common
Stock in connection with any merger or other business combination transaction
described in Section 7(b)(i), 7(b)(ii) or 7(b)(iii) above; or (iii) the highest
last sales price per share of Issuer Common Stock quoted on any national
securities exchange (including the NASDAQ--National Market System) (or if
Issuer Common Stock is not quoted on any such national securities exchange, the
highest bid price per share as quoted on the principal trading market or
securities exchange on which such shares are traded as reported by a recognized
source chosen by Grantee) during the sixty (60) business days preceding the
Request Date; provided, however, that in the event of a sale of less than all
of Issuer's assets, the Applicable Price shall be the sum of the price paid in
such sale for such assets and the current market value of the remaining assets
of Issuer as determined by a nationally recognized investment banking firm
selected by Grantee, divided by the number of shares of the Issuer Common Stock
outstanding at the time of such sale. If the consideration to be offered, paid
or received pursuant to either of the foregoing clauses (i) or (ii) shall be
other than in cash, the value of such consideration shall be determined in good
faith by an independent nationally recognized investment banking firm selected
by Grantee and reasonably acceptable to Issuer and reasonably acceptable to
Issuer, which determination shall be conclusive for all purposes of this
Agreement.
(d) As used herein, a "Repurchase Event" shall occur if (i) any person
(other than Grantee or any subsidiary of Grantee) shall have acquired
beneficial ownership of (as such term is defined in Rule 13d-3 promulgated
under the Exchange Act), or the right to acquire beneficial ownership of, or
any "group" (as such term is defined under the Exchange Act) shall have been
formed which beneficially owns or has the right to acquire beneficial ownership
of, 50% or more of the then outstanding shares of Issuer Common Stock, or (ii)
any of the transactions described in Section 7(b)(i), 7(b)(ii) or 7(b)(iii) of
this Agreement shall be consummated.
9. Registration Rights.
(a) Demand Registration Rights. Issuer shall, subject to the conditions of
subparagraph (c) below, if requested by Grantee, as expeditiously as possible
prepare and file a registration statement under the Securities Act if such
registration is necessary in order to permit the sale or other disposition of
any or all shares of Issuer Common Stock or other securities that have been
acquired by or are issuable to Grantee upon exercise of the Option in
accordance with the intended method of sale or other disposition stated by
Grantee in such request, including without limitation a "shelf" registration
statement under Rule 415 under the Securities Act or any successor provision,
and Issuer shall use its best efforts to qualify such shares or other
securities for sale under any applicable state securities laws.
(b) Additional Registration Rights. If Issuer at any time after the
exercise of the Option proposes to register any shares of Issuer Common Stock
under the Securities Act in connection with an underwritten public offering of
such Issuer Common Stock, Issuer will promptly give written notice to Grantee
(any permitted transferee) of its intention to do so and, upon the written
request of Grantee (or any such permitted transferee of Grantee) given within
30 days after receipt of any such notice (which request shall specify the
number of shares of Issuer Common Stock intended to be included in such
underwritten public offering by Grantee (or such permitted transferee)), Issuer
will cause all such shares, the holders of which shall have requested
participation in such registration, to be so registered and included in such
underwritten public offering; provided, that the Issuer may elect not to cause
all of the shares for which the Grantee has requested participation in such
registration to be registered and included in such underwritten public offering
(i) if the
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underwriters, for good business reasons and in good faith, object to such
inclusion or (ii) in the case of a registration solely to implement a dividend
reinvestment or similar plan, an employee benefit plan or a registration filed
on Form S-4 or any successor form, or a registration filed on a form which
does not permit registration of resales; provided further, that such election
pursuant to clause (i) may be made only one time. If some but not all the
shares of Issuer Common Stock, with respect to which Issuer shall have
received requests for registration pursuant to this subparagraph (b), shall be
excluded from such registration, Issuer shall make appropriate allocation of
shares to be registered among selling holders of Option Shares and any other
person (other than Issuer or any person exercising demand registration rights
in connection with such registration) who or which is permitted to register
their shares of Issuer Common Stock in connection with such registration pro
rata in the proportion that the number of shares requested to be registered by
each selling holder of Option Shares bears to the total number of shares
requested to be registered by all persons then desiring to have Issuer Common
Stock registered for sale.
(c) Conditions to Required Registration. Issuer shall use all reasonable
efforts to cause each registration statement referred to in subparagraph (a)
above to become effective and to obtain all consents or waivers of other
parties which are required therefor and to keep such registration statement
effective, provided, however, that Issuer may delay any registration of Option
Shares required pursuant to subparagraph (a) above for a period not exceeding
90 days in the event that Issuer shall in good faith determine that any such
registration would adversely affect an offering or contemplated offering of
other securities by Issuer, and Issuer shall not be required to register
Option Shares under the Securities Act pursuant to subparagraph (a) above:
(i) prior to the earliest of (a) termination of the Merger Agreement,
and (b) a Purchase Event;
(ii) on more than two occasions;
(iii) more than once during any calendar year; and
(iv) within 90 days after the effective date of a registration
referred to in subparagraph (b) above pursuant to which the holder or
holders of the Option Shares concerned were afforded the opportunity to
register such shares under the Securities Act and such shares were
registered as requested.
(v) unless a request therefor is made to Issuer by selling holders of
Option Shares holding at least 25% or more of the aggregate number of
Option Shares then outstanding.
In addition to the foregoing, Issuer shall not be required to maintain
the effectiveness of any registration statement after the expiration of 180
days from the effective date of such registration statement. Issuer shall use
all reasonable efforts to make any filings, and take all steps, under all
applicable state securities laws to the extent necessary to permit the sale or
other disposition of the Option Shares so registered in accordance with the
intended method of distribution for such shares, provided, that Issuer shall
not be required to consent to general jurisdiction or qualify to do business
in any state where it is not otherwise required to so consent to such
jurisdiction or to so qualify to do business.
(d) Expenses. Except where applicable state law prohibits such payments,
Issuer will pay all of its expenses (including, without limitation,
registration fees, qualification fees, blue sky fees and expenses, legal
expenses, printing expenses and the costs of special audits or "cold comfort"
letters, expenses of underwriters, excluding discounts and commissions but
including liability insurance if Issuer so desires or the underwriters so
require, and the reasonable fees and expenses of any necessary special
experts) in connection with each registration pursuant to subparagraph (a) or
(b) above (including the related offerings and sales by holders of Option
Shares) and all other qualifications, notifications or exemptions pursuant to
subparagraph (a) or (b) above; provided, however, that fees and expenses of
counsel to the selling holders of Option Shares and any other expenses
(including underwriting discounts and commissions relating to the sale of
Option Shares) incurred by the selling holders of Option Shares in connection
with such registration shall be borne by the selling holders of Option Shares.
(e) Indemnification. In connection with any registration under
subparagraph (a) or (b) above Issuer hereby indemnifies the holder of the
Option Shares, and each underwriter thereof, including each person, if any,
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who controls such holder or underwriter within the meaning of Section 15 of the
Securities Act, against all expenses, losses, claims, damages and liabilities
caused by any untrue, or alleged untrue, statement of a material fact contained
in any registration statement or prospectus or notification or offering
circular (including any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission, or alleged omission, to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such expenses, losses, claims,
damages or liabilities of such indemnified party are caused by any untrue
statement or alleged untrue statement that was included by Issuer in any such
registration statement or prospectus or notification or offering circular
(including any amendments or supplements thereto) in reliance upon and in
conformity with, information furnished in writing to Issuer by such indemnified
party expressly for use therein, and Issuer and each officer, director and
controlling person of Issuer shall be indemnified by such holder of the Option
Shares, or by such underwriter, as the case may be, for all such expenses,
losses, claims, damages and liabilities caused by any untrue, or alleged
untrue, statement, that was included by Issuer in any such registration
statement or prospectus or notification or offering circular (including any
amendments or supplements thereto) in reliance upon, and in conformity with,
information furnished in writing to Issuer by such holder or such underwriter,
as the case may be, expressly for such use.
Promptly upon receipt by a party indemnified under this subparagraph (e)
of notice of the commencement of any action against such indemnified party in
respect of which indemnity or reimbursement may be sought against any
indemnifying party under this subparagraph (e), such indemnified party shall
notify the indemnifying party in writing of the commencement of such action,
but the failure so to notify the indemnifying party shall not relieve it of any
liability which it may otherwise have to any indemnified party under this
subparagraph (e) provided such failure does not prejudice Issuer. In case
notice of commencement of any such action shall be given to the indemnifying
party as above provided, the indemnifying party shall be entitled to
participate in and, to the extent it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense of such action at
its own expense, with counsel chosen by it and satisfactory to such indemnified
party. The indemnified party shall have the right to employ separate counsel in
any such action and participate in the defense thereof, but the fees and
expenses of such counsel (other than reasonable costs of investigation) shall
be paid by the indemnified party unless (i) the indemnifying party either
agrees to pay the same, (ii) the indemnifying party fails to assume the defense
of such action with counsel satisfactory to the indemnified party, or (iii) the
indemnified party has been advised by counsel that one or more legal defenses
may be available to the indemnifying party that may be contrary to the interest
of the indemnified party, in which case the indemnifying party shall be
entitled to assume the defense of such action notwithstanding its obligation to
bear fees and expenses of such counsel. No indemnifying party shall be liable
for any settlement entered into without its consent, which consent may not be
unreasonably withheld.
If the indemnification provided for in this subparagraph (e) is
unavailable to a party otherwise entitled to be indemnified in respect of any
expenses, losses, claims, damages or liabilities referred to herein, then the
indemnifying party, in lieu of indemnifying such party otherwise entitled to be
indemnified, shall contribute to the amount paid or payable by such party to be
indemnified as a result of such expenses, losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative
benefits received by Issuer, the selling shareholders and the underwriters from
the offering of the securities and also the relative fault of Issuer, the
selling shareholders and the underwriters in connection with the statements or
omissions which resulted in such expenses, losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The amount
paid or payable by a party as a result of the expenses, losses, claims, damages
and liabilities referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim; provided, however, that in no
case shall the holders of the Option Shares be responsible, in the aggregate,
for any amount in excess of the net offering proceeds attributable to its
Option Shares included in the offering. No person guilty of fraudulent
misrepresentation (with the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Any obligation by any holder to indemnify shall
be several and not joint with other holders.
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In connection with any registration pursuant to subparagraph (a) or (b)
above, Issuer and each holder of any Option Shares (other than Grantee) shall
enter into an agreement containing the indemnification provisions of this
subparagraph (e).
(f) Miscellaneous Reporting. Issuer shall comply with all reporting
requirements and will do all such other things as may be necessary to permit
the expeditious sale at any time of any Option Shares by the holder thereof in
accordance with and to the extent permitted by any rule or regulation
promulgated by the SEC from time to time. Issuer shall at its expense provide
the holder of any Option Shares with any information necessary in connection
with the completion and filing of any reports or forms required to be filed by
them under the Securities Act or the Exchange Act, or required pursuant to any
state securities laws or the rules of any stock exchange.
10. Quotation; Listing. If Issuer Common Stock or any other securities to
be acquired upon exercise of the Option are then authorized for quotation or
trading or listing on the NASDAQ National Market or any other securities
exchange or any automated quotations system maintained by a self-regulatory
organization, Issuer will promptly file an application, if required, to
authorize for quotation or trading or listing the shares of Issuer Common Stock
or other securities to be acquired upon exercise of the Option on the NASDAQ
National Market or any other securities exchange or any automated quotations
system maintained by a self-regulatory organization and will use its best
efforts to obtain approval, if required, of such quotation or listing as soon
as practicable.
11. Division of Option. This Agreement (and the Option granted hereby) are
exchangeable, without expense, at the option of Grantee, upon presentation and
surrender of this Agreement at the principal office of Issuer for other
Agreements providing for Options of different denominations entitling the
holder thereof to purchase in the aggregate the same number of shares of Issuer
Common Stock purchasable hereunder. The terms "Agreement" and "Option" as used
herein include any other Agreements and related Options for which this
Agreement (and the Option granted hereby) may be exchanged. Upon receipt by
Issuer of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Agreement, and (in the case of loss, theft or
destruction) of reasonably satisfactory indemnification, and upon surrender and
cancellation of this Agreement, if mutilated, Issuer will execute and deliver a
new Agreement of like tenor and date. Any such new Agreement executed and
delivered shall constitute an additional contractual obligation on the part of
Issuer, whether or not the Agreement so lost, stolen, destroyed or mutilated
shall at any time be enforceable by anyone.
12. Miscellaneous.
(a) Expenses. Except as otherwise provided in Section 9 of this Agreement,
each of the parties hereto shall bear and pay all costs and expenses incurred
by it or on its behalf in connection with the transactions contemplated
hereunder, including fees and expenses of its own financial consultants,
investment bankers, accountants and counsel.
(b) Waiver and Amendment. Any provision of this Agreement may be waived at
any time by the party that is entitled to the benefits of such provision if
such waiver is in writing. This Agreement may not be modified, amended, altered
or supplemented except upon the execution and delivery of a written agreement
executed by the parties hereto.
(c) Entire Agreement; No Third-Party Beneficiary; Severability. This
Agreement, together with the Merger Agreement and the other documents and
instruments referred to herein and therein, between Grantee and Issuer (a)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof and (b) is not intended to confer upon any person other
than the parties hereto (other than any transferees of the Option Shares or any
permitted transferee of this Agreement pursuant to Section 12(h)) any rights or
remedies hereunder. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or a
A-11
<PAGE>
federal or state regulatory agency to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated. If for any reason such court or regulatory
agency determines that the Option does not permit Grantee to acquire, or does
not require Issuer to repurchase, the full number of shares of Issuer Common
Stock as provided in Sections 3 and 8 (as adjusted pursuant to Section 7), it
is the express intention of Issuer to allow Grantee to acquire or to require
Issuer to repurchase such lesser number of shares as may be permissible without
any amendment or modification hereof.
(d) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware without regard to any
applicable conflicts of law rules.
(e) Descriptive Headings. The descriptive headings contained herein are
for convenience of reference only and shall not affect in any way the meaning
or interpretation of this Agreement, except to the extent that federal law may
apply.
(f) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (with
confirmation) or mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
If to Issuer to:E. Frank Griffin, III
First Federal Bank for Savings
Post Office Box 152
Columbus MS 39703-0152
With a copy to:Charles E. Sloane
Malizia, Spidi, Sloane & Fisch, P.C.
One Franklin Square
1301 K. Street, N.W.
Suite 700 East
Washington, DC 20005
If to Grantee to:Lewis F. Mallory
National Bank of Commerce
Post Office Box 1187
Starkville MS 39760
With a copy to:Hunter M. Gholson
Gholson, Hicks & Nichols
Post Office Box 1111
Columbus MS 39703-1111
(g) Counterparts. This Agreement and any amendments hereto may be executed
in two counterparts, each of which shall be considered one and the same
agreement and shall become effective when both counterparts have been signed,
it being understood that both parties need not sign the same counterpart.
(h) Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder or under the Option shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other party, except that Grantee may assign this
Agreement to a wholly owned subsidiary of Grantee and Grantee may assign its
rights hereunder in whole or in part after the occurrence of a Purchase Event;
provided, however, that until the Federal Reserve has approved an application
by Grantee to acquire the shares of Issuer Common Stock subject to the Option,
Grantee may not assign its rights under the Option except in (i) a widely
dispersed public distribution, (ii) a private placement in which no one party
acquires the right to purchase in excess of 2% of the voting shares of Issuer,
(iii) an assignment to a
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single party (e.g., a broker or investment banker) for the purpose of
conducting a widely dispersed public distribution on Grantee's behalf or (iv)
any other manner approved by the Federal Reserve. Any such assignment shall be
in compliance with all applicable laws. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.
(i) Further Assurances. In the event of any exercise of the Option by
Grantee, Issuer and Grantee shall execute and deliver all other documents and
instruments and take all other action that may be reasonably necessary in order
to consummate the transactions provided for by such exercise.
(j) Specific Performance. The parties hereto agree that this Agreement may
be enforced by either party through specific performance, injunctive relief and
other equitable relief. Both parties further agree to waive any requirement for
the securing or posting of any bond in connection with the obtaining of any
such equitable relief and that this provision is without prejudice to any other
rights that the parties hereto may have for any failure to perform this
Agreement.
IN WITNESS WHEREOF, Issuer and Grantee have caused this Agreement to be
signed by their respective officers thereunto duly authorized, all as of the
day and year first written above.
FFBS BANCORP, INC., a Delaware
corporation
BY: /s/ E. Frank Griffin, III
-------------------------------------
NBC CAPITAL CORPORATION, a
Mississippi
corporation
BY: /s/ Lewis F. Mallory, Jr.
-------------------------------------
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<PAGE>
EXHIBIT B
AGREEMENT AND PLAN OF MERGER
----------------
BY AND BETWEEN
NBC CAPITAL CORPORATION
AND
FFBS BANCORP, INC.
DATED AS OF FEBRUARY 3rd, 1999
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<PAGE>
TABLE OF CONTENTS
<TABLE>
<C> <S> <C>
PARTIES................................................................... A-5
RECITALS.................................................................. A-5
ARTICLE I THE PARENT MERGER: EFFECTIVE TIME............................... A-5
1.1 The Merger....................................................... A-5
1.2 Effects of Parent Merger......................................... A-5
1.3 Effective Time................................................... A-6
1.4 Basic Terms...................................................... A-6
1.5 Exchange Procedures.............................................. A-6
1.6 No Fractional Shares............................................. A-7
1.7 Pooling of Interests............................................. A-7
1.8 Agreement........................................................ A-7
1.9 Subsequent Actions............................................... A-8
1.10 Anti-Dilution Adjustments........................................ A-8
1.11 Treatment of Stock Options....................................... A-8
1.12 Reservation of Right to Revise Transaction....................... A-8
ARTICLE II ARTICLES OF INCORPORATION AND BY-LAWS OF THE SURVIVING
CORPORATION.................................................... A-9
2.1 Articles of Incorporation........................................ A-9
2.2 By-Laws.......................................................... A-9
ARTICLE III THE BANK MERGER............................................... A-9
3.1 The Bank Merger.................................................. A-9
3.2 Liquidation Account.............................................. A-9
ARTICLE IV OFFICERS AND DIRECTORS OF THE SURVIVING CORPORATION............ A-9
4.1 Directors........................................................ A-9
4.2 Officers......................................................... A-10
ARTICLE V DISSENTING SHAREHOLDERS......................................... A-10
ARTICLE VI REPRESENTATION AND WARRANTIES OF FFBS.......................... A-10
6.1 Organization, Corporate Power and Qualification.................. A-10
6.2 Financial Statements............................................. A-10
6.3 Legal Proceedings................................................ A-10
6.4 Capitalization................................................... A-11
6.5 Authority; No Violation.......................................... A-11
6.6 Consents and Approvals........................................... A-11
6.7 Ownership of Subsidiary.......................................... A-11
6.8 Financial Statements and Reports................................. A-12
6.9 No Broker's or Finder's Fees..................................... A-12
6.10 Compliance with Law.............................................. A-12
6.11 Employee Benefits................................................ A-12
6.12 Information Furnished: Registration Statement.................... A-13
6.13 Agreements and Instruments....................................... A-13
6.14 Material Contract Defaults....................................... A-14
6.15 Tax Matters...................................................... A-14
6.16 Environmental Matters............................................ A-14
6.17 Insurance........................................................ A-14
6.18 Accounting and Tax Treatment..................................... A-15
6.19 Undisclosed Liabilities.......................................... A-15
6.20 Loans............................................................ A-15
6.21 Year 2000 Readiness.............................................. A-15
</TABLE>
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<TABLE>
<C> <S> <C>
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF NBC........................ A-15
7.1 Organization, Corporate Power and Qualification................. A-15
7.2 Authority; No Violation......................................... A-15
7.3 Consents and Approvals.......................................... A-16
7.4 Legal Proceedings............................................... A-16
7.5 SEC Documents................................................... A-16
7.6 Capitalization.................................................. A-16
7.7 Financial Statements and Reports................................ A-16
7.8 No Broker's or Finder's Fees.................................... A-17
7.9 Compliance with Law............................................. A-17
7.10 Employee Benefits............................................... A-17
7.11 Information Furnished; Registration Statement................... A-18
7.12 Material Contract Defaults...................................... A-18
7.13 Tax Matters..................................................... A-18
7.14 Environmental Matters........................................... A-19
7.15 Insurance....................................................... A-19
7.16 Accounting and Tax Treatment.................................... A-19
7.17 Undisclosed Liabilities......................................... A-19
7.18 Loans........................................................... A-19
7.19 Year 2000 Readiness............................................. A-19
ARTICLE VIII COVENANTS OF THE PARTIES.................................... A-20
8.1 Exclusive Dealings.............................................. A-20
8.2 Conduct of Business............................................. A-20
8.3 Current Information............................................. A-21
8.4 Access to Properties and Records; Confidentiality............... A-21
8.5 Interim Financial Statements.................................... A-21
8.6 Approval of Shareholders........................................ A-21
8.7 Cooperation..................................................... A-22
8.8 Unusual Events.................................................. A-22
8.9 FFBS Employees.................................................. A-22
8.10 Employee Benefit Plans.......................................... A-22
8.11 Directors....................................................... A-22
8.12 Registration Statement and Regulatory Filings................... A-23
8.13 Registration of Stock Options................................... A-23
8.14 Pooling-of-Interests and Tax-Free Treatment..................... A-23
8.15 Agreements of Affiliates........................................ A-23
ARTICLE IX CLOSING CONDITIONS............................................ A-23
9.1 Conditions to Each Party's Obligations Under this Agreement..... A-23
9.2 Conditions Precedent to the Obligations of NBC.................. A-24
9.3 Conditions Precedent to the Obligations of FFBS................. A-25
ARTICLE X CLOSING........................................................ A-25
10.1 Time and Place.................................................. A-25
10.2 Deliveries at Closing........................................... A-25
ARTICLE XI TERMINATION, AMENDMENT AND WAIVER............................. A-25
11.1 Termination..................................................... A-25
11.2 Effect of Termination........................................... A-26
11.3 Amendments and Waivers.......................................... A-26
</TABLE>
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<TABLE>
<C> <S> <C>
ARTICLE XII MISCELLANEOUS................................................. A-26
12.1 Expenses........................................................ A-26
12.2 Indemnification................................................. A-26
12.3 Breach/Specific Performance..................................... A-27
12.4 Disclosures..................................................... A-27
12.5 Parties in Interest............................................. A-27
12.6 Survival of Representations..................................... A-27
12.7 Waiver.......................................................... A-27
12.8 Counterparts.................................................... A-27
12.9 Notices......................................................... A-28
12.10 Section Headings................................................ A-28
12.11 Governing Law................................................... A-28
12.12 Entire Agreement................................................ A-28
</TABLE>
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<PAGE>
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger ("Agreement") is executed this 3rd day
of February, 1999, by and between NBC CAPITAL CORPORATION ("NBC" or "Surviving
Corporation"), a Mississippi Corporation and FFBS BANCORP, INC. ("FFBS"), a
Delaware Corporation, these companies being herein sometimes collectively
referred to as the "Constituent Corporations."
RECITALS
WHEREAS, the respective Boards of Directors of the Constituent
Corporations deem the merger of FFBS with and into NBC with NBC surviving, as
provided herein ("the Parent Merger") advisable and in the best interest of
their respective corporations and shareholders; and
WHEREAS, the Constituent Corporations are either bank or savings and loan
holding companies which have subsidiary banks, NBC's subsidiary bank being
National Bank of Commerce, a national banking corporation wholly owned by NBC
(the "Bank"), and FFBS's bank subsidiary being First Federal Bank for Savings,
Columbus, Mississippi, a federally chartered savings bank regulated by the
Office of Thrift Supervision ("OTS") of the Department of the Treasury of the
United States (the "Thrift"); and
WHEREAS, it is deemed by the parties to this Agreement to be appropriate
and necessary that Thrift be merged into and become a part of the Bank as a
part of the merger activity to be implemented pursuant to this Agreement;
WHEREAS, the respective Boards of Directors of NBC and FFBS have duly
adopted resolutions approving this Agreement and have directed that it be
submitted for required shareholder approval; and
WHEREAS, the Constituent Corporations parties desire and intend that the
Parent Merger qualify for federal income tax purposes as a tax-free
reorganization under Section 368 (a) of the Internal Revenue Code of 1986, as
Amended ("Code") and the regulations thereunder; and
WHEREAS, NBC and FFBS respectively desire to have certain representations,
warranties and covenants made with respect to the Parent Merger.
NOW, THEREFORE, in order to prescribe (a) the terms and conditions of the
Parent Merger, (b) the mode of carrying the same into effect, (c) the manner
and basis for converting and exchanging the common shares of FFBS into the
right to receive common shares of capital stock of NBC or cash to holders of
FFBS who validly demand dissenter's rights pursuant to applicable provisions of
law who do not vote in favor of the Parent Merger, and (d) such other
provisions as are deemed necessary, these parties hereby agree as follows:
ARTICLE I
The Parent Merger: Effective Time
1.1 The Mergers. Subject to the terms and conditions of this Agreement, at
the Effective Time (as defined in Section 1.3 hereof), FFBS shall be merged
with and into NBC and the separate corporate existence of FFBS shall then
cease. NBC shall be the surviving corporation in the Parent Merger and shall
continue to be governed by the laws of the State of Mississippi, and the
corporate existence of NBC shall continue with the effects specified by the
Mississippi Business Corporation Act ("MBCA"). Thrift will be merged into Bank
as soon as regulatory approval will permit and all compliance and operating
requirements are met after which Thrift shall cease to exist.
1.2 Effects of Parent Merger. On the closing, the corporate name and
existence of FFBS shall cease and all of its purposes, powers and objects, and
all of its rights, assets, liabilities and obligations, shall pass to and vest
in NBC as the Surviving Corporation without any conveyance or transfer, and NBC
as the Surviving
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<PAGE>
Corporation shall continue to be governed by the laws of the State of
Mississippi and shall also succeed to all rights, assets, liabilities and
obligations of FFBS in accordance with the MBCA. Upon the closing of the Parent
Merger, the separate existence and corporate organization of FFBS shall cease.
1.3 Effective Time. The Effective Time of the Parent Merger shall be the
time and date set forth in the certificate of merger issued by the Secretary of
State of the State of Mississippi pursuant to the MBCA and the related
certificate issued by the appropriate authorities of the State of Delaware
under the requirements of the Delaware General Corporate Law (the "DGCL").
1.4 Basic Terms. Each share of FFBS Common Stock issued and outstanding at
the Effective Time shall be converted into .7702 of a share of NBC Common Stock
(the "Exchange Ratio"); provided, however, that in the event the average per
share closing price of NBC Common Stock ("NBC Average Price"), as quoted by the
Over-the-Counter Bulletin Board, for the 20 trading day period ending one day
prior to the Effective Time is below $33.50, then the Exchange Ratio will be
adjusted upward such that the Exchange Ratio shall equal the quotient of
$25.802 divided by the NBC Average Price, rounded to four decimal places.
Each option for the purchase of FFBS Common Stock ("FFBS Stock Option")
will be converted into an option for the purchase of NBC Common Stock as set
forth in Section 1.11.
FFBS represents that, as of the date herein, 1,575,635 shares of FFBS
Common Stock and 65,966 FFBS Stock Options (with a weighted average exercise
price of $10.00) are outstanding.
Payment will be made in cash in lieu of issuance of fractional shares
based on the Exchange Ratio as herein established and determined at the
Effective Time.
1.5. Exchange Procedures. (a) At or prior to the Effective Time, NBC shall
deposit, or shall cause to be deposited, with SunTrust Bank, Atlanta (the
"Exchange Agent"), for the benefit of the holders of certificates of FFBS
Common Stock for exchange in accordance with this Article I, certificates
representing the shares of NBC Common Stock and an estimated amount of cash to
be paid in lieu of fractional shares to be paid pursuant to this Article I in
exchange for outstanding shares of FFBS Common Stock.
(b) Holders of record of certificates which immediately prior to the
Effective Time represented outstanding shares of FFBS Common Stock (the
"Certificates") shall be instructed to tender such Certificates to the Exchange
Agent pursuant to a letter of transmittal that NBC shall deliver or cause to be
delivered to such holders as promptly as practicable following the Effective
Time. Such letter of transmittal shall specify that risk of loss and title to
Certificates shall pass only upon delivery of such Certificates to the Exchange
Agent.
(c) Subject to Section 1.6, after the Effective Time, each holder of a
Certificate(s) that surrenders such Certificate(s) to the Exchange Agent, will,
upon acceptance thereof by the Exchange Agent, be entitled to (x) a certificate
or certificates representing the number of whole shares of NBC Common Stock
into which the shares represented by the Certificate(s) so surrendered
(aggregating all Certificates surrendered by such holder) shall have been
converted pursuant to this Agreement and (y) a check representing the amount of
any cash in lieu of fractional shares, if any, and dividends and distributions,
if any, which such holder has the right to receive hereunder with respect to
the Certificate(s) so surrendered, in each case after giving effect to any
required withholding tax.
(d) The Exchange Agent shall accept Certificates upon compliance with such
reasonable terms and conditions as NBC or the Exchange Agent may impose to
effect an orderly exchange thereof in accordance with customary exchange
practices. Certificates shall be appropriately endorsed or accompanied by such
instruments of transfer as the Exchange Agent may reasonably require.
(e) All shares of NBC Common Stock issued upon surrender of Certificates
in accordance with the terms hereof (including any cash paid pursuant to this
Article I) shall be deemed to have been in full satisfaction of all rights
pertaining to such shares of FFBS Common Stock represented thereby. After the
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<PAGE>
Effective Time, holders of Certificates shall cease to have rights with respect
to the shares previously represented by such Certificates, and their sole
rights shall be to exchange such Certificates for the consideration provided
for in this Agreement.
(f) After the Effective Time, there shall be no further transfer on the
records of FFBS of Certificates, and if such Certificates are presented to FFBS
for transfer, they shall be canceled against delivery of the consideration
provided therefor in this Agreement. NBC shall not be obligated to deliver the
consideration to which any former holder of FFBS Common Stock is entitled as a
result of the Parent Merger until such holder surrenders the Certificates as
provided herein. Certificates surrendered for exchange by any person
constituting an "affiliate" of FFBS for purposes of Rule 145 of the Securities
Act, shall not be exchanged for certificates representing NBC Common Stock
until NBC has received a written agreement from such person in the form
attached hereto as Exhibit 1.5(f). Neither the Exchange Agent nor any party to
this Agreement nor any Affiliate thereof shall be liable to any holder of stock
represented by any Certificate for any consideration paid to a public official
pursuant to applicable abandoned property, escheat or similar laws. NBC and the
Exchange Agent shall be entitled to rely upon the stock transfer books of FFBS
to establish the identity of those persons entitled to receive consideration
specified in this Agreement, which books shall be conclusive with respect
thereto. In the event of a dispute with respect to ownership of stock
represented by any Certificate, NBC and the Exchange Agent shall be entitled to
deposit any consideration represented thereby in escrow with an independent
third party and thereafter be relieved with respect to any claims thereto.
(g) Notwithstanding any other provisions of this Agreement, no dividends
or other distributions declared or made after the Effective Time with respect
to NBC Common Stock having a record date after the Effective Time shall be paid
to the holder of any unsurrendered Certificate, and no cash payment in lieu of
fractional shares shall be paid to any such holder, until the holder shall
surrender such Certificate as provided in this Section 1.5. Subject to the
effect of applicable laws, following surrender of any such Certificate, there
shall be paid to the holder of the certificates representing whole shares of
NBC Common Stock issued in exchange therefor, without interest, (i) at the time
of such surrender, the amount of dividends or other distributions with a record
date on or after the Effective Time theretofore payable with respect to such
whole shares of NBC Common Stock and not paid, less the amount of any
withholding taxes which may be required thereon, and (ii) at the appropriate
payment date subsequent to surrender, the amount of dividends or other
distributions with a record date on or after the Effective Time but prior to
surrender and a payment date subsequent to surrender payable with respect to
such whole shares of NBC Common Stock, less the amount of any withholding taxes
which may be required thereon.
1.6. No Fractional Shares. Notwithstanding any other provision of this
Agreement, neither certificates nor scrip for fractional shares of NBC Common
Stock shall be issued in the Parent Merger. Each holder who otherwise would
have been entitled to a fraction of a share of NBC Common Stock shall receive
in lieu thereof cash (without interest) in an amount determined by multiplying
the fractional share interest to which such holder would otherwise be entitled
by the average of the closing prices per share of NBC Common Stock for the 20
trading day period immediately preceding the Closing Date as reported on the
National Quotation Bureau pink sheets. No such holder shall be entitled to
dividends, voting rights or any other rights in respect of any fractional
share.
1.7 Pooling of Interests. The combination of such stock delivered to FFBS
shareholders and cash paid to satisfy dissenting shareholders and fractional
shareholders, and other requirements, shall be in accordance with the
requirements necessary for this transaction to be treated as a pooling of
interests transaction for accounting purposes, applying generally accepted
accounting principles.
1.8 Agreement. The parties shall diligently pursue, and as expeditiously
as possible, execute Articles of Merger consistent with the provisions of this
Agreement and shall use this Agreement and any amendments as provided for
herein as the required Plan of Merger and satisfy the filing requirements of
the State of Mississippi and other applicable law and regulations. Both parties
shall agree to and take such action as may be necessary to qualify this
transaction as a tax-free reorganization under Section 368 of the Internal
Revenue Code and the regulations thereunder. Appropriate filings shall be made
with regulatory agencies as required,
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<PAGE>
including the filing of an Interagency Application in the form set forth in OCC
Manual of April 1998, and/or such other forms and requirements as may be
directed by applicable regulatory authority.
1.9 Subsequent Actions. If, at any time after the Effective Time, NBC
shall deem that any documents or other actions are appropriate to confirm title
or rights with respect to any property of FFBS in connection with this Merger,
the Officers and Directors of NBC are authorized to execute and deliver such
documents in the name of NBC and/or FFBS and take all such other actions
considered appropriate to consummate this Agreement.
1.10. Anti-Dilution Adjustments. In the event that prior to the Effective
Time NBC shall (or shall establish a record date prior to the Effective Time
for the following) declare a stock dividend or other distribution payable in
NBC Common Stock or securities convertible into NBC Common Stock or a
distribution otherwise previously disclosed, or effect a stock split,
reclassification, combination or other change with respect to NBC Common Stock,
the Exchange Rate shall be appropriately adjusted to reflect such dividend,
distribution, stock split, reclassification, combination or other change, such
that the shareholders of FFBS shall be entitled to same as if the Effective
Time had occurred prior thereto.
1.11. Treatment of Stock Options. (a) At the Effective Time, each
outstanding option to purchase shares of FFBS Common Stock under the FFBS stock
option plans (each, an "FFBS Stock Option"), whether vested or unvested, shall
be converted into an option to acquire, on the same terms and conditions as
were applicable under such FFBS Stock Option, the number of shares of NBC
Common Stock equal to (a) the number of shares of FFBS Common Stock subject to
the FFBS Stock Option, multiplied by (b) the Exchange Rate (such product
rounded to the nearest whole number) (a "Replacement Option"), at the exercise
price per share (rounded down to the nearest whole cent) equal to (y) the per
share exercise price pursuant to such FFBS Stock Option divided by (z) the
Exchange Rate. For example, each FFBS Stock Option with an exercise price of
$10.00 shall be converted into an option to purchase .7702 shares of NBC Common
Stock with an exercise price of $12.98. Notwithstanding the foregoing, each
FFBS Stock Option which is intended to be an "incentive stock option" (as
defined in Section 422 of the Code) shall be adjusted in accordance with the
requirements of Section 424 of the Code. Accordingly, with respect to
"incentive stock options," fractional shares will be rounded down to the
nearest whole number of shares and where necessary the per share exercise price
shall be rounded up to the nearest cent. At or prior to the Effective Time,
FFBS shall use its best efforts, including its reasonable best efforts to
obtain any necessary consents from optionees, with respect to the FFBS stock
option plans to permit the replacement of the outstanding FFBS Stock Options by
NBC pursuant to this Section and to permit NBC to assume the FFBS stock option
plans. FFBS shall further take all action necessary to amend the FFBS stock
option plans to eliminate automatic grants or awards thereunder following the
Effective Time. At the Effective Time, NBC shall assume the FFBS stock option
plans; provided, that such assumption shall be only in respect of the
Replacement Options and that NBC shall have no obligation with respect to any
awards under the FFBS stock option plans other than the Replacement Options and
shall have no obligation to make any additional grants or awards under such
assumed FFBS stock option plans. As used herein, Exchange Rate shall mean the
Exchange Rate as it may be adjusted pursuant to Section 1.4 of this Agreement.
(b) At all time after the Effective Time, NBC shall reserve for issuance
such number of shares of NBC Common Stock as necessary so as to permit the
exercise of options granted under the FFBS stock option plans in the manner
contemplated by this Agreement and the instruments pursuant to which such
options were granted. NBC shall file with the SEC a registration statement on
an appropriate form under the Securities Act with respect to the shares of NBC
Common Stock subject to the options to acquire NBC Common Stock issued pursuant
to Section 1.11(a) hereof, and shall use its reasonable best efforts to
maintain the current status of the prospectus contained therein, as well as
comply with any applicable state securities or "blue sky" laws, for so long as
such options remain outstanding.
1.12 Reservation of Right to Revise Transaction. NBC may at any time
change the method of effecting the acquisition of FFBS or Thrift by NBC, and
FFBS shall cooperate in such efforts, if and to the extent NBC deems such
change to be desirable and subject to FFBS's approval (which approval shall not
be unreasonably withheld); provided, however, that no such change shall (A)
alter or change the amount or kind of
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consideration to be issued to holders of FFBS Common Stock as provided for in
this Agreement (the "Merger Consideration"), (B) adversely affect the tax
treatment to FFBS's shareholders as a result of receiving the Merger
Consideration, (C) adversely affect the qualification of the Parent Merger as a
pooling of interests for accounting and financial reporting purposes or (D)
materially delay the consummation of the transactions contemplated by this
Agreement.
ARTICLE II
Articles of Incorporation and By-Laws of the Surviving Corporation
2.1 Articles of Incorporation. The Articles of Incorporation of NBC, as in
effect immediately prior to the Effective Time, shall be the Articles of
Incorporation of the Surviving Corporation, unless and until duly amended in
accordance with the terms thereof and MBCA.
2.2 By-Laws. The By-Laws of NBC, as in effect immediately prior to the
Effective Time, shall be the By-Laws of the Surviving Corporation unless and
until duly amended in accordance with the terms thereof and the MBCA.
2.3 No amendments to the Articles or By-Laws are contemplated at the
present time.
ARTICLE III
The Bank Merger
3.1. The Bank Merger. As may be determined by NBC to be practicable
following the Effective Time, Thrift shall be merged with and into the Bank
("Bank Merger") pursuant to the terms and conditions set forth herein and in
the Plan of Reorganization and Merger attached hereto as Exhibit 3.1 (the "Bank
Agreement") and pursuant to 12 U.S.C. Sections 215c, 1815(d)(3) and 1828(c),
the separate existence of Thrift shall thereupon cease, the Bank shall be the
surviving institution in the Merger, all of the Bank's rights, privileges,
powers, immunities, purposes and franchises shall continue unaffected by the
Bank Merger, except to the extent impacted by the assumptions of all
obligations, rights, assets and liabilities of Thrift, and the Bank shall
continue at the effective time of the Bank Merger to be regulated by the Office
of the Comptroller of the Currency of the Department of the Treasury of the
United States ("OCC").
3.2. Liquidation Account. The liquidation account established by Thrift
pursuant to the plan of conversion adopted in connection with its conversion
from mutual to stock form shall, to the extent required by applicable law,
continue to be maintained by the Bank after the Effective Time for the benefit
of those persons and entities who were savings account holders of Thrift on the
eligibility and supplemental eligibility record dates for such conversion and
who continue from time to time to have rights therein. If required by the rules
and regulations of the OTS, the Bank shall amend its charter to specifically
provide for the continuation of the liquidation account previously established
by Thrift.
ARTICLE IV
Officers and Directors of the Surviving Corporation
4.1 Directors. The Directors of NBC, immediately prior to the Effective
Time shall be, from and after the Effective Time, the Directors of the
Surviving Corporation until their respective successors have been duly elected
or appointed and qualified or until their earlier death, resignation or
removal. Two presently serving directors of FFBS, shall be appointed by NBC and
become directors of NBC at the Effective Time in accordance with applicable
provisions of NBC By-Laws. The NBC Board of Directors agrees to nominate and
support such appointees for re-election to the NBC Board at its next annual
election of Directors provided such appointees are then serving on said Board
in good stead.
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4.2 Officers. The Officers of NBC, immediately prior to the Effective Time
shall become the Officers of the Surviving Corporation together with such
present officers of FFBS who may be duly appointed as additional officers of
the Surviving Corporation.
ARTICLE V
Dissenting Shareholders
5.1 Each FFBS shareholder who votes against the Parent Merger and demands
Dissenter's Rights or rights of appraisal pursuant to Delaware General
Corporate Law ("DGCL"), Section 262, ("Dissenting Shareholder") and who shall
not withdraw or lose such rights of appraisal shall not have such shares
exchanged for NBC Common Stock as provided for hereinabove, but shall be
treated as a Dissenting Shareholder.
5.2 Each Dissenting Shareholder shall be entitled only to those rights
granted by DGCL Section 262 or other applicable law. FFBS shall give NBC prompt
written notice upon receipt by FFBS of any written demands for Dissenter's
Rights, and withdrawal of demands for Dissenter's Rights. FFBS shall not,
except with prior written consent of NBC, make any payment with respect to, or
settle or offer to settle, any such demands. Each Dissenting Shareholder who
becomes entitled to payment for FFBS Dissenting Shares, shall receive payment
of the estimated fair value of each share of FFBS Common Stock from NBC and
such shares of FFBS Common Stock shall be canceled.
5.3 If any FFBS shareholder who demands Dissenter's Rights shall
effectively withdraw or lose such Dissenter's Right, each such FFBS share shall
be converted to shares of NBC at the conversion rate set out in Section 1.4
hereof.
ARTICLE VI
Representation and Warranties of FFBS
FFBS hereby makes the following representations and warranties to NBC
except as previously disclosed or set forth in a schedule hereto:
6.1 Organization, Corporate Power and Qualification. FFBS and its
subsidiary are validly existing and in good standing with all applicable
authorities and are duly qualified to do business as a foreign corporation in
each jurisdiction in which such corporation conducts business and in which
qualification is necessary under applicable law, except to the extent that any
failure to do so would not, in the aggregate, have a material adverse effect on
the business, financial condition or result of operations of FFBS and its
subsidiary taken as a whole. FFBS has the requisite power and authority to
enter into and carry out the transactions contemplated by this Agreement,
subject to obtaining shareholder and regulatory approval as provided herein.
6.2 Financial Statements. At the request of NBC, FFBS has previously
delivered to NBC copies of the consolidated balance sheet of FFBS as of June
30, 1998, and each year for the previous two fiscal years, and the related
consolidated statements of income, changes in shareholders equity, and changes
in financial position, for the periods then ended, in each case accompanied by
the audit report of T. E. Lott & Company, independent certified public
accountants. These financial documents fairly represent the consolidated
financial position of FFBS and its subsidiary as of the date thereof, and
fairly present the results of the consolidated operations and changes in
shareholder equity and the consolidated financial position of FFBS and its
subsidiary for the respective fiscal periods or as of the respective dates
therein set forth. Each of the financial statements above is true and correct
in all material respects, and has been prepared in accordance with GAAP applied
on a basis consistent with other periods, except as otherwise noted.
6.3 Legal Proceedings. Except as set forth in Schedule 6.3 to this
Agreement: (i) neither FFBS nor its subsidiary is a party to any, and there are
no pending or, to the best of FFBS's knowledge, threatened material
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legal, administrative, arbitration or other proceedings, claims or actions or
governmental investigations of any nature challenging the validity or propriety
of the transaction contemplated in this Agreement, and to the best of FFBS's
knowledge, there is no reasonable basis for any such objection; and (ii)
neither FFBS, nor its subsidiary is a party to any order, judgment or decree
which will, or might reasonably be expected to, materially adversely affect
their business, operations, properties, assets or financial condition or their
ability to acquire any property or conduct business in any area in which they
presently do business.
6.4 Capitalization. The authorized capital stock of FFBS consists of
2,000,000 shares of common stock and 500,000 shares of preferred stock (none of
which are issued and outstanding). At the close of business on August 31, 1998,
there were 1,575,635 shares of such stock issued and outstanding (excluding 100
shares of treasury stock issued but not outstanding) and there were outstanding
FFBS director and incentive stock options for individuals to acquire 65,966
additional shares of FFBS common stock. There are existing Recognition and
Retention Plans with stock rights calling for the issuance of 10,580 shares of
FFBS common stock which number is included in the 1,575,635 shares shown above
to be outstanding. All issued and outstanding shares of FFBS common stock have
been duly authorized and validly issued and are fully paid, non-assessable and
free of preemptive rights with no personal liability attached to the ownership
thereof. Except as set forth in Schedule 6.4 hereto, FFBS has not issued any
shares of FFBS stock in excess of the shares set forth above, and does not have
and is not bound by any outstanding subscription, option, warrant, cause,
commitment or other agreements of any character calling for the purchase or
issuance of any shares of FFBS stock or any security representing the right to
purchase or otherwise receive any FFBS stock except as set forth in this
paragraph.
6.5 Authority; No Violation.
(a) FFBS has full corporate power and authority to execute and deliver
this Agreement, and subject to obtaining approval of its shareholders as
provided herein, to consummate the transactions contemplated hereby. These
actions have been duly and validly approved by the Board of Directors of FFBS.
The Board has directed that this Agreement and the transaction contemplated
hereby be submitted to the FFBS shareholders for approval at a meeting to be
duly convened, and, except for such shareholder approval, no other corporate
proceedings on the part of FFBS are necessary to consummate the transaction so
contemplated.
(b) Neither the execution and delivery of this Agreement by FFBS nor the
consummation by FFBS of the transaction contemplated hereby, nor compliance by
FFBS with any provision hereof, will (i) violate any provision of the
Certificate of Incorporation or By-Laws of FFBS or (ii) violate any statute,
code, ordinance, rule, regulation, judgment, order, writ, decree or injunction
applicable to FFBS of its subsidiary or affecting their respective properties
or assets, or (iii) violate, conflict with, result in a breach of any provision
of, constitute a default under, result in the termination of, accelerate the
performance required by, or result in the creation of any lien, security
interest, charge or other encumbrance upon any such asset of FFBS or its
subsidiary, except to the extent that such collectively are not material and
adverse.
6.6 Consent and Approvals. Except as set forth in Schedule 6.6 hereto, to
the best of the knowledge of the FFBS officers and board, no permit, consent,
approval or authorization of, or declaration, filing or registration with, any
public body or authority, or to the knowledge of FFBS is necessary in
connection with this Agreement, its consummation, the transfer of FFBS assets
to NBC and the conduct by NBC of all business now conducted by FFBS and its
subsidiary.
6.7 Ownership of Subsidiary. All the outstanding shares of the capital
stock or other ownership interests in Thrift are validly issued, fully paid,
nonassessable and owned beneficially and of record by FFBS or Thrift free and
clear of any Encumbrance. There are no outstanding rights to purchase or
acquire any capital stock of any FFBS subsidiary and no oral or written
agreement, contract, arrangement, understanding, plan or instrument of any kind
to which any of FFBS or any of its affiliates is subject with respect to the
issuance, voting or sale of issued or unissued shares of the capital stock of
Thrift. Except as disclosed in Schedule 6.7 hereto, neither FFBS nor Thrift
owns any of the capital stock or other equity securities (including any rights
with respect to such securities) of or profit participation in any person or
"company" (as defined in Section 10(a)(1)(C) of the HOLA) other than the
Federal Home Loan Bank of Dallas and Thrift.
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6.8 Financial Statements and Reports. For the past three years, FFBS and
the Thrift have timely filed all regulatory documents required to be filed by
them, except to the extent that all failures to so file, in the aggregate,
would not have a material adverse effect on FFBS; and all such documents, as
finally amended, complied in all material respects with applicable requirements
of applicable law and, as of their respective date or the date as amended, did
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
Except to the extent stated therein, all financial statements and schedules
included in the documents referred to in the preceding sentences (i) are in
accordance with FFBS's books and records and those of Thrift, which books and
records are complete and accurate in all material respects and have been
maintained in all material respects in accordance with applicable law, and (ii)
present fairly the consolidated financial position and the consolidated results
of operations and cash flows of FFBS as of the dates and for the periods
indicated in accordance with GAAP consistently applied during the periods
involved (except for the omission of notes to unaudited statements, year-end
adjustments to interim results normal in nature and amount and changes in GAAP
and except where regulatory reporting requirements provide otherwise). The
audited consolidated financial statements of FFBS as of June 30, 1998 and for
the two years then ended last filed by FFBS as part of a publicly available
regulatory document disclose all liabilities (whether accrued, absolute,
contingent, unliquidated or otherwise, whether due or to become due and
regardless of when asserted), as of their respective dates, of FFBS and Thrift
required to be reflected in such financial statements according to GAAP, other
than liabilities which are not, in the aggregate, material to FFBS and Thrift,
taken as a whole, and contain in the opinion of management, adequate reserves
for losses on loans and properties acquired in settlement of loans, taxes and
all other material accrued liabilities and for all reasonably anticipated
material losses in accordance with GAAP, if any, as of such date. Except for
(i) those liabilities that are fully reflected or reserved against on FFBS's
audited consolidated balance sheet last filed by FFBS as part of a publicly
available regulatory document and (ii) liabilities incurred in the ordinary
course of business since the date of such audited consolidated balance sheet
and which would not have, individually or in the aggregate, a material adverse
effect on FFBS, FFBS has no liabilities or obligations of any nature, whether
absolute, accrued, contingent or otherwise and whether due or to become due,
which are or would be required by GAAP to be shown on its consolidated balance
sheet.
6.9 No Broker's or Finder's Fees. No agent, broker, investment banker,
person or firm acting on behalf or under authority of FFBS or Thrift is or will
be entitled to any broker's or finder's fee or any other commission or similar
fee directly or indirectly in connection with the Parent Merger or any other
transaction contemplated hereby, except FFBS has engaged Trident Financial
Corporation, an investment banking firm, to provide financial advisory
services.
6.10 Compliance with Law. FFBS and Thrift have been in compliance in all
respects with all applicable laws, except where such non-compliance would not
have, in the aggregate, a material adverse effect on FFBS, and neither FFBS nor
Thrift has received notice from any governmental authority of any material
violation of, and does not know of any material violations of, any applicable
law.
6.11 Employee Benefits. (a) Except as disclosed on Schedule 6.11 hereto,
neither FFBS nor Thrift maintains, contributes to or sponsors any funded
deferred compensation plans (including profit sharing, pension, savings or
stock bonus plans), unfunded deferred compensation arrangements or employee
benefit plans as defined in Section 3(3) of ERISA ("FFBS Employee Benefit
Plans") (true and correct copies of which have been delivered to NBC). Except
as disclosed on Schedule 6.11 hereto, neither FFBS nor Thrift (i) provides
health, medical, death or survivor benefits to any former employee or
beneficiary thereof, or (ii) maintains any form of current (exclusive of base
salary and base wages) or deferred compensation, bonus, stock option, stock
appreciation right, severance pay, retirement, incentive, group or individual
health insurance, welfare or similar plan or arrangement for the benefit of any
single or class of directors, officers or employees, whether active or retired
(collectively "Benefit Arrangements").
(b) Except as previously disclosed, all FFBS Employee Benefit Plans and
Benefit Arrangements were in effect for substantially all of calendar year 1998
and, there has been no material amendment thereof (other
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than amendments required to comply with applicable law) and, except as
disclosed in publicly available regulatory documents filed by FFBS prior to the
date of this Agreement, there will be no material increase in the cost thereof
or benefits payable thereunder on or after January 1, 1999.
(c) To the knowledge of FFBS, with respect to all FFBS Employee Benefit
Plans and Benefit Arrangements, FFBS and Thrift are in substantial compliance
with the requirements prescribed by any and all Applicable Laws currently in
effect, including but not limited to ERISA and the Code, applicable to such
FFBS Employee Benefit Plans or Benefit Arrangements. None of the FFBS Employee
Benefit Plans which are defined benefit pension plans have incurred any
"accumulated funding deficiency" (whether or not waived) as that term is
defined in Section 412 of the Code and the fair market value of the assets of
each such plan equals or exceeds the accrued liabilities of such plan. To the
best knowledge of FFBS and Thrift, there are not now nor have there been any
non-exempt "prohibited transactions," as such term is defined in Section 4975
of the Code or Section 406 of ERISA, involving the FFBS Employee Benefit Plans
which could subject FFBS or Thrift to the penalty or Tax imposed under Section
502(i) of ERISA or Section 4975 of the Code. No FFBS Employee Benefit Plan
which is subject to Title IV of ERISA has been completely or partially
terminated; no proceedings to completely or partially terminate any FFBS
Employee Benefit Plan have been instituted within the meaning of Subtitle C of
said Title IV of ERISA; and no reportable event, within the meaning of Section
4043(c) of said Subtitle C for which the 30-day notice requirement of ERISA has
not been waived, has occurred with respect to any FFBS Employee Benefit Plan.
Neither FFBS nor Thrift has engaged in any transaction described in Section
4069 of ERISA within the last five years. Neither FFBS nor Thrift has failed to
make any contribution or pay any amount due and owing as required by the terms
of any FFBS Employee Benefit Plan or Benefit Arrangement. Neither FFBS nor
Thrift has incurred or reasonably expects to incur any liability to the Pension
Benefit Guaranty Corporation except for required premium payments which, to the
extent due and payable, have been paid. To the knowledge of FFBS, the FFBS
Employee Benefit Plans intended to be qualified under Section 401(a) of the
Code are so qualified, and FFBS is not aware of any fact which would adversely
affect the qualified status of such plans.
6.12 Information Furnished: Registration Statement. (a) To the best
knowledge of FFBS, no statement contained in any schedule, certificate or other
document furnished or to be furnished in writing by or on behalf of FFBS or any
of its affiliates to NBC pursuant to this Agreement (whether prior to or
subsequent to the date of this Agreement) contains or will contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) None of the information provided by FFBS or Thrift for inclusion in
the registration statement on Form S-4 to be filed with the SEC by NBC under
the Securities Act of 1933, as amended ("Securities Act") relating to shares of
NBC Common Stock to be issued in the Parent Merger, including the prospectus
(the "Prospectus") relating to such issuance and the joint proxy statement and
forms of proxy relating to the vote of NBC shareholders and FFBS shareholders
with respect to the Parent Merger (as amended, supplemented or modified, the
"Proxy Statement") contained therein (such registration statement as amended,
supplemented or modified, the "Registration Statement"), at the time the
Registration Statement becomes effective or, in the case of the Proxy
Statement, at the date of mailing, will contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading.
6.13 Agreements and Instruments. Except as previously disclosed, neither
FFBS nor Thrift is a party to (a) any material contract, (b) any contract
relating to the borrowing of money by FFBS or Thrift or the guarantee by FFBS
or Thrift of any such obligation (other than Federal Home Loan Bank advances),
(c) any contract to make loans or for the provision, purchase or sale of goods,
services or property between FFBS or Thrift and any director or officer of FFBS
or Thrift, or any member of the immediate family or affiliate of any of the
foregoing (other than loans or deposits made on an arm's-length basis in the
ordinary course of business), (d) any contract with or concerning any labor or
employee organization, (e) any contract between FFBS or Thrift and any
affiliate thereof (other than contracts solely between FFBS and Thrift, (f) any
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agreements, directives, orders, or similar arrangements between or involving
FFBS or Thrift and any governmental authority, (g) any contract with respect to
the employment, retention or severance of any directors, officers, employees or
consultants, (h) any contract which materially restricts the conduct of any
line of business by FFBS or any current or future affiliates thereof or (i) any
contract pursuant to which FFBS or is or may become obligated to invest in or
contribute capital to Thrift.
6.14 Material Contract Defaults. Neither FFBS nor Thrift nor, to the
knowledge of FFBS and Thrift, the other party thereto is in default in any
respect under any contract to which any of FFBS or Thrift is a party or by
which its respective assets, business, or operations may be bound or affected
or under which it or its respective assets, business, or operations receives
benefits, other than any such default or defaults which would not have, in the
aggregate, a material adverse effect on FFBS, and there has not occurred any
event that, with the lapse of time or the giving of notice or both, would
constitute such a default. All material contracts to which FFBS or Thrift is a
party are valid, binding and in full force and effect.
6.15 Tax Matters. (a) FFBS, Thrift and any affiliated group (within the
meaning of Section 1504(a) of the Code) of which FFBS or Thrift is a member
have duly and properly filed all federal, state, local and other tax returns
required to be filed by them and have made timely payments of all taxes due and
payable, whether disputed or not; such tax returns are true, correct and
complete in all material respects; the current status of audits of such tax
returns by the IRS and other applicable agencies has been previously disclosed;
and there is no agreement by FFBS or Thrift for the waiver or extension of time
for the assessment or payment of any taxes payable. Neither the IRS nor any
other taxing authority is now asserting or, to the best knowledge of FFBS and
Thrift, threatening to assert any deficiency or claim for additional taxes, nor
to the knowledge of FFBS or Thrift is there any basis for any such assertion or
claim. FFBS and Thrift has complied in all material respects with applicable
IRS backup withholding requirements and have filed all appropriate information
reporting returns for all tax years for which the statute of limitations has
not closed. FFBS and FFBS subsidiary have complied with all applicable state
law sales and use tax collection and reporting requirements.
(b) Adequate provision for any federal, state or local taxes due or to
become due for FFBS or Thrift for any period or periods through and including
September 30, 1998, has been made and is reflected on the September 30, 1998,
consolidated financial statements last filed by FFBS as part of a publicly
available regulatory document and has been or will be made with respect to
periods ending after September 30, 1998.
6.16 Environmental Matters. To the knowledge of FFBS, neither FFBS nor
Thrift owns or leases any properties affected by toxic waste. Neither FFBS nor
Thrift has knowledge of, nor has FFBS or Thrift received written notice from
any governmental authority of, any conditions, activities, practices or
incidents which are reasonably likely to interfere with or prevent compliance
or continued compliance by FFBS or Thrift with hazardous substance laws or any
regulation, order, decree, judgment or injunction, issued, entered, promulgated
or approved thereunder, or which may give rise to any common law or legal
liability on the part of FFBS or Thrift, or otherwise form the basis of any
claim, action, suit, proceeding, hearing or investigation against or of FFBS or
Thrift, based on or related to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling, or the emission,
discharge, release or threatened release into the environment, of any
pollutant, contaminant or chemical, or industrial, toxic or hazardous substance
or waste. There is no civil, criminal or administrative claim, action, suit,
proceeding, hearing or investigation pending or, to the best knowledge of FFBS
and Thrift, threatened against FFBS or Thrift relating in any way to such
hazardous substance laws or any regulation, order, decree, judgment or
injunction issued, entered, promulgated or approved thereunder. To the
knowledge of FFBS and Thrift, neither FFBS nor Thrift has made or participated
in any loan to any Person who is subject to any civil, criminal or
administrative claim, action, suit, proceeding, hearing or investigation
relating in any way to such hazardous substance laws or any regulation, order,
decree, judgment or injunction issued, entered, promulgated or approved
thereunder and relating to the property secured by such loan.
6.17 Insurance. FFBS and Thrift have in effect insurance coverage with
reputable insurers which, in respect of amounts, types and risks insured, is
reasonably adequate for the business in which FFBS and Thrift are engaged. A
schedule of all insurance policies in effect as to FFBS and Thrift (the
"Insurance Policies") has
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been previously disclosed (other than policies pertaining to secured loans made
in the ordinary course of business). All insurance policies are in full force
and effect, all premiums with respect thereto covering all periods up to and
including the date of this Agreement have been paid, such premiums covering all
periods from the date hereof up to and including the Effective Date shall have
been paid on or before the Effective Date, to the extent then due and payable
(other than retrospective premiums which may be payable with respect to
worker's compensation insurance policies, adequate reserves for which are
reflected in FFBS's financial statements last filed by FFBS as part of a
publicly available regulatory document). The Insurance Policies are valid,
outstanding and enforceable in accordance with their respective terms and will
not in any way be affected by, or terminated or lapsed solely by reason of, the
transactions contemplated by this Agreement. To the knowledge of FFBS, neither
FFBS nor Thrift has been refused any insurance with respect to any material
properties, assets or operations, nor has any coverage been limited or
terminated by any insurance carrier to which it has applied for any such
insurance or with which it has carried insurance during the last three (3)
years.
6.18 Accounting and Tax Treatment. Neither FFBS nor any of its affiliates
has taken or agreed to take any action that or has failed to take any action
the result of which would (but without giving effect to any actions taken or
agreed to be taken by NBC or any of its Affiliates) (i) prevent NBC from
accounting for the Parent Merger as a pooling of interests for accounting and
financial reporting purposes or (ii) prevent the Merger from qualifying as a
"reorganization" under Section 368(a) of the Code.
6.19 Undisclosed Liabilities. Except as set forth in Schedule 6.19,
neither FFBS nor Thrift has any material liabilities other than those
liabilities disclosed on or provided for in the balance sheet as of June 30,
1998, and liabilities incurred since such date in the ordinary course of
business consistent with past practices.
6.20 Loans. All of the loans on the books of FFBS and Thrift are valid and
properly documented and were made in the ordinary course of business.
6.21 Year 2000 Readiness. FFBS and the FFBS subsidiary have taken all
reasonable steps necessary to address the computer software, accounting and
record keeping issues raised in order for the data processing systems used in
the business conducted by them to be substantially Year 2000 compliant on or
before the end of 1999 and, except as set forth in the Schedule 6.21, FFBS does
not expect the future cost of addressing such issues to be material.
ARTICLE VII
Representations and Warranties of NBC
NBC represents and warrants to FFBS as follows:
7.1 Organization, Corporate Power and Qualification. NBC and its
subsidiaries are validly existing and in good standing with all applicable
authorities and are duly qualified to do business in each jurisdiction in which
such corporation and its subsidiaries conduct business. NBC has the corporate
power and authority and has received all appropriate regulatory authorizations
to own or lease all of its properties and to carry on its businesses as they
are now being conducted.
7.2 Authority; No Violation. (a) NBC has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby upon valid approval of its shareholders and
receipt of regulatory approvals. The Board of Directors of NBC has duly and
validly approved and adopted this Agreement and approved the transaction
contemplated hereby, and has authorized execution and delivery of this
Agreement, which (subject to appropriate shareholder approval) constitutes a
valid and binding obligation of NBC, enforceable in accordance with its terms.
(b) Neither the execution and delivery of this Agreement by NBC nor the
consummation by NBC of the transaction contemplated hereby, nor compliance by
NBC with any provision hereof, will (i) violate any provision of the Articles
of Incorporation or By-Laws of NBC or (ii) violate any statute, code,
ordinance, rule, regulation, judgment, order, writ, decree or injunction
applicable to NBC or any of its subsidiaries or any of
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their respective properties or assets, or (iii) violate, conflict with, result
in a breach of any provisions of, constitute a default under, result in the
termination of, accelerate the performance required by, or result in the
creation of any lien, security interest, charge or other encumbrance upon any
of the respective properties or assets of NBC, or any of its subsidiaries
except to the extent that such collectively are not material and adverse.
7.3 Consents and Approvals. Consents, approvals, filings, or registrations
with the following governmental entities or third parties are necessary in
connection with the consummation of the Merger contemplated hereby:
(a) the filing by NBC of an Application with the Board of Governors of
the Federal Reserve under The Bank Holding Company Act and approval or such
application, or the obtaining of an appropriate waiver thereof.
(b) the filing with the Securities and Exchange Commission ("SEC") of
the Proxy Statement/Prospectus in definitive form relating to the meeting
of FFBS shareholders to be held in connection with this Agreement and the
transaction contemplated hereby, together with registration statements on
SEC Form S-4 and other required SEC compliance.
(c) the filing of the Articles of Merger with the Secretary of State
of the State of Mississippi under the MBCA and the Certificate of Merger
with the Secretary of State of Delaware.
(d) such filings and approvals as are required under the Securities or
"Blue Sky" laws of various states in connection with the issuance of shares
of NBC common stock pursuant to this Agreement, and
(e) such other filings, approvals, or consents as may be required by
applicable federal and state law and regulations promulgated thereunder;
including appropriate filings with the OCC and the OTS.
7.4 Legal Proceedings. Except as set forth in Schedule 7.4 to this
Agreement: (i) neither NBC or any subsidiary is a party to any, and there are
no pending or, to the best of NBC's knowledge, threatened material legal,
administrative, arbitration or other proceedings, claims or actions or
governmental investigations of any nature challenging the validity or propriety
of the transaction contemplated in this Agreement, and to the best of NBC's
knowledge, there is no reasonable basis for any such objection; and (ii)
neither NBC, nor any subsidiary is a party to any order, judgment or decree
which will, or might reasonably be expected to, materially adversely affect
their business, operations, properties, assets or financial condition or their
ability to acquire any property or conduct business in any area in which they
presently do business.
7.5 SEC Documents. NBC will make available to FFBS a true and complete
copy of each report, schedule, registration statement, and proxy statement and
amendment filed by NBC with the SEC since December 31, 1994. These constitute
all such documents that NBC was required to file with the SEC and they complied
in all material respects with the requirements of all applicable law and
regulations. They were prepared in accordance with GAAP, were true, complete
and correct and they fairly present the financial position of NBC and its
subsidiaries as of their respective dates.
7.6 Capitalization. The authorized capital stock of NBC consists of
10,000,000 shares of common stock. At the close of business on January 28,
1998, there were 5,664,736 shares of such stock issued and outstanding. All
issued and outstanding shares of NBC common stock have been duly authorized and
validly issued and are fully paid, non-assessable and free of preemptive rights
with no personal liability attached to the ownership thereof. NBC has not
issued any shares of NBC stock in excess of the shares set forth above, and
does not have and is not bound by any outstanding subscription, option,
warrant, cause, commitment or other agreements of any character calling for the
purchase or issuance of any shares of NBC stock or any security representing
the right to purchase or otherwise receive any NBC stock except as set forth in
this paragraph.
7.7 Financial Statements and Reports. For the past three years, NBC and
the NBC subsidiaries have timely filed all regulatory documents required to be
filed by them, except to the extent that all failures to so file, in the
aggregate, would not have a material adverse effect on NBC; and all such
documents, as finally amended, complied in all material respects with
applicable requirements of applicable law and, as of their
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respective date or the date as amended, did not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. Except to the extent stated
therein, all financial statements and schedules included in the documents
referred to in the preceding sentences (i) are in accordance with NBC's books
and records and those of the NBC subsidiaries, which books and records are
complete and accurate in all material respects and have been maintained in all
material respects in accordance with applicable law, and (ii) present fairly
the consolidated financial position and the consolidated results of operations
and cash flows of NBC as of the dates and for the periods indicated in
accordance with GAAP consistently applied during the periods involved (except
for the omission of notes to unaudited statements, year-end adjustments to
interim results normal in nature and amount and changes in GAAP and except
where regulatory reporting requirements provide otherwise). The audited
consolidated financial statements of NBC as of December 31, 1997, and for the
two years then ended last filed by NBC as part of a publicly available
regulatory document disclose all liabilities (whether accrued, absolute,
contingent, unliquidated or otherwise, whether due or to become due and
regardless of when asserted), as of their respective dates, of NBC and the NBC
subsidiaries required to be reflected in such financial statements according to
GAAP, other than liabilities which are not, in the aggregate, material to NBC
and the NBC subsidiaries, taken as a whole, and contain in the opinion of
management, adequate reserves for losses on loans and properties acquired in
settlement of loans, taxes and all other material accrued liabilities and for
all reasonably anticipated material losses in accordance with GAAP, if any, as
of such date. Except for (i) those liabilities that are fully reflected or
reserved against on NBC's audited consolidated balance sheet last filed by NBC
as part of a publicly available regulatory document and (ii) liabilities
incurred in the ordinary course of business since the date of such audited
consolidated balance sheet and which would not have, individually or in the
aggregate, a material adverse effect on NBC, NBC has no liabilities or
obligations of any nature, whether absolute, accrued, contingent or otherwise
and whether due or to become due, which are or would be required by GAAP to be
shown on its consolidated balance sheet.
7.8 No Broker's or Finder's Fees. No agent, broker, investment banker,
person or firm acting on behalf or under authority of NBC or the NBC
subsidiaries is or will be entitled to any broker's or finder's fee or any
other commission or similar fee directly or indirectly in connection with the
Parent Merger or any other transaction contemplated hereby.
7.9 Compliance with Law. NBC and the NBC subsidiaries have been in
compliance in all respects with all applicable laws, except where such non-
compliance would not have, in the aggregate, a material adverse effect on NBC,
and neither NBC nor any NBC subsidiary has received notice from any
governmental authority of any material violation of, and does not know of any
material violations of, any applicable law.
7.10 Employee Benefits. To the knowledge of NBC, with respect to all NBC
Employee Benefit Plans and NBC Benefit Arrangements, NBC and the NBC
subsidiaries are in substantial compliance with the requirements prescribed by
any and all Applicable Laws currently in effect, including but not limited to
ERISA and the Code, applicable to such NBC Employee Benefit Plans or NBC
Benefit Arrangements. None of the NBC Employee Benefit Plans which are defined
benefit pension plans have incurred any "accumulated funding deficiency"
(whether or not waived) as that term is defined in Section 412 of the Code and
the fair market value of the assets of each such plan equals or exceeds the
accrued liabilities of such plan. To the best knowledge of NBC and Bank, there
are not now nor have there been any non-exempt "prohibited transactions," as
such term is defined in Section 4975 of the Code or Section 406 of ERISA,
involving the NBC Employee Benefit Plans which could subject NBC or the NBC
subsidiaries to the penalty or Tax imposed under Section 502(i) of ERISA or
Section 4975 of the Code. No NBC Employee Benefit Plan which is subject to
Title IV of ERISA has been completely or partially terminated; no proceedings
to completely or partially terminate any NBC Employee Benefit Plan have been
instituted within the meaning of Subtitle C of said Title IV of ERISA; and no
reportable event, within the meaning of Section 4043(c) of said Subtitle C for
which the 30-day notice requirement of ERISA has not been waived, has occurred
with respect to any NBC Employee Benefit Plan. No NBC Employee Benefit Plan or
NBC Benefit Arrangement is a "multi-employer plan" within the meaning of
Section 4001(a)(3) of ERISA or a plan that has two or more contributing
sponsors at least two of whom are not under common control, within the meaning
of Section 4063 of ERISA. Neither NBC nor any
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NBC subsidiary has engaged in any transaction described in Section 4069 of
ERISA within the last five years. Neither NBC nor any NBC subsidiary has failed
to make any contribution or pay any amount due and owing as required by the
terms of any NBC Employee Benefit Plan or NBC Benefit Arrangement. Neither NBC
nor any NBC subsidiary has incurred or reasonably expects to incur any
liability to the Pension Benefit Guaranty Corporation except for required
premium payments which, to the extent due and payable, have been paid. To the
knowledge of NBC, the NBC Employee Benefit Plans intended to be qualified under
Section 401(a) of the Code are so qualified, and FFBS is not aware of any fact
which would adversely affect the qualified status of such plans.
7.11 Information Furnished; Registration Statement. (a) To the best
knowledge of NBC, no statement contained in any schedule, certificate or other
document furnished or to be furnished in writing by or on behalf of NBC or any
of its affiliates to FFBS pursuant to this Agreement (whether prior to or
subsequent to the date of this Agreement) contains or will contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) None of the information provided by NBC or any NBC subsidiary for
inclusion in the registration statement on Form S-4 to be filed with the SEC by
NBC under the Securities Act of 1933, as amended ("Securities Act") relating to
shares of NBC Common Stock to be issued in the Parent Merger, including the
prospectus (the "Prospectus") relating to such issuance and the joint proxy
statement and forms of proxy relating to the vote of NBC shareholders with
respect to the Parent Merger (as amended, supplemented or modified, the "Proxy
Statement") contained therein (such registration statement as amended,
supplemented or modified, the "Registration Statement"), at the time the
Registration Statement becomes effective or, in the case of the Proxy
Statement, at the date of mailing, will contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading.
7.12 Material Contract Defaults. Neither NBC nor any NBC subsidiary nor,
to the knowledge of NBC and Bank, the other party thereto is in default in any
respect under any contract to which any of NBC or any NBC subsidiary is a party
or by which its respective assets, business, or operations may be bound or
affected or under which it or its respective assets, business, or operations
receives benefits, other than any such default or defaults which would not
have, in the aggregate, a material adverse effect on NBC, and there has not
occurred any event that, with the lapse of time or the giving of notice or
both, would constitute such a default. All material contracts to which NBC and
the NBC subsidiaries are parties are valid, binding and in full force and
effect.
7.13 Tax Matters. (a) NBC, the NBC subsidiaries and any affiliated group
(within the meaning of Section 1504(a) of the Code) of which NBC or any NBC
subsidiary is a member have duly and properly filed all federal, state, local
and other tax returns required to be filed by them and have made timely
payments of all taxes due and payable, whether disputed or not; such tax
returns are true, correct and complete in all material respects; the current
status of audits of such tax returns by the IRS and other applicable agencies
has been previously disclosed; and there is no agreement by NBC or the NBC
subsidiaries for the waiver or extension of time for the assessment or payment
of any taxes payable. Neither the IRS nor any other taxing authority is now
asserting or, to the best knowledge of NBC and Bank, threatening to assert any
deficiency or claim for additional taxes, nor to the knowledge of NBC or Bank
is there any basis for any such assertion or claim. NBC and the NBC
subsidiaries have complied in all material respects with applicable IRS backup
withholding requirements and have filed all appropriate information reporting
returns for all tax years for which the statute of limitations has not closed.
NBC and NBC subsidiaries have complied with all applicable state law sales and
use tax collection and reporting requirements.
(b) Adequate provision for any federal, state or local taxes due or to
become due for NBC or the NBC subsidiaries for any period or periods through
and including December 31, 1997, has been made and is reflected on the December
31, 1997, consolidated financial statements last filed by NBC as part of a
publicly available regulatory document and has been or will be made with
respect to periods ending after December 31, 1997.
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7.14 Environmental Matters. To the knowledge of NBC, neither NBC nor any
NBC subsidiary owns or leases any properties affected by toxic waste. Neither
NBC nor any NBC subsidiary has knowledge of, nor has NBC or any NBC subsidiary
received written notice from any governmental authority of, any conditions,
activities, practices or incidents which are reasonably likely to interfere
with or prevent compliance or continued compliance by NBC or any NBC subsidiary
with hazardous substance laws or any regulation, order, decree, judgment or
injunction, issued, entered, promulgated or approved thereunder, or which may
give rise to any common law or legal liability on the part of NBC or any NBC
subsidiary, or otherwise form the basis of any claim, action, suit, proceeding,
hearing or investigation against or of NBC or any NBC subsidiary, based on or
related to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling, or the emission, discharge, release or
threatened release into the environment, of any pollutant, contaminant or
chemical, or industrial, toxic or hazardous substance or waste. There is no
civil, criminal or administrative claim, action, suit, proceeding, hearing or
investigation pending or, to the best knowledge of NBC and Bank, threatened
against NBC or any NBC subsidiary relating in any way to such hazardous
substance laws or any regulation, order, decree, judgment or injunction issued,
entered, promulgated or approved thereunder. To the knowledge of NBC and Bank,
neither NBC nor any NBC subsidiary has made or participated in any loan to any
person who is subject to any civil, criminal or administrative claim, action,
suit, proceeding, hearing or investigation relating in any way to such
hazardous substance laws or any regulation, order, decree, judgment or
injunction issued, entered, promulgated or approved thereunder and relating to
the property secured by such loan.
7.15 Insurance. NBC and the NBC subsidiaries have in effect insurance
coverage with reputable insurers which, in respect of amounts, types and risks
insured, is reasonably adequate for the business in which NBC and the NBC
subsidiaries are engaged. A schedule of all insurance policies in effect as to
NBC and the NBC subsidiaries (the "Insurance Policies") has been previously
disclosed (other than policies pertaining to secured loans made in the ordinary
course of business). All insurance policies are in full force and effect, all
premiums with respect thereto covering all periods up to and including the date
of this Agreement have been paid, such premiums covering all periods from the
date hereof up to and including the Effective Date shall have been paid on or
before the Effective Date, to the extent then due and payable (other than
retrospective premiums which may be payable with respect to worker's
compensation insurance policies, adequate reserves for which are reflected in
NBC's financial statements last filed by NBC as part of a publicly available
regulatory document). The Insurance Policies are valid, outstanding and
enforceable in accordance with their respective terms and will not in any way
be affected by, or terminated or lapsed solely by reason of, the transactions
contemplated by this Agreement. To the knowledge of NBC, neither NBC nor the
NBC subsidiaries have been refused any insurance with respect to any material
properties, assets or operations, nor has any coverage been limited or
terminated by any insurance carrier to which it has applied for any such
insurance or with which it has carried insurance during the last three (3)
years.
7.16 Accounting and Tax Treatment. Neither NBC nor any of its affiliates
has taken or agreed to take any action that or has failed to take any action
the result of which would (i) prevent NBC from accounting for the Parent Merger
as a pooling of interests for accounting and financial reporting purposes or
(ii) prevent the Merger from qualifying as a "reorganization" under Section
368(a) of the Code.
7.17 Undisclosed Liabilities. Neither NBC nor the NBC subsidiaries have
any material liabilities other than those liabilities disclosed on or provided
for in the balance sheet as of June 30, 1998, and liabilities incurred since
such date in the ordinary course of business consistent with past practices.
7.18 Loans. All of the loans on the books of NBC and the NBC subsidiaries
are valid and properly documented and were made in the ordinary course of
business.
7.19 Year 2000 Readiness. NBC and the NBC subsidiaries have instituted and
are conducting a program to assess and correct Year 2000 issues and, to the
best of knowledge of NBC and NBC subsidiaries, NBC and NBC subsidiaries have
met all targeted goals to be substantially Year 2000 compliant.
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ARTICLE VIII
Covenants of the Parties
8.1 Exclusive Dealings. FFBS shall not authorize or permit any of its
officers, directors, employees or agents to directly or indirectly solicit,
initiate, facilitate or encourage any inquiries relating to, or the making of
any proposal which constitutes a tender or exchange offer, proposal for merger,
consolidation or any other business combination involving FFBS or any of its
subsidiaries, or any proposal or offer to inquire in any manner a substantial
equity interest in, or a substantial portion of the assets of FFBS other than
the transaction contemplated or permitted by this Agreement, or participate in
any discussions or negotiations, or provide third parties with any non-public
information, relating to any inquiry or proposal or otherwise facilitate any
effort or attempt to make a takeover proposal, unless FFBS is advised by legal
counsel that such communication is required under applicable law or that the
failure to do so would cause the members of the Board of Directors to be in
breach of their fiduciary duties under applicable laws. FFBS will immediately
cease and cause to be terminated any existing activities, discussions or
negotiations previously conducted with any parties other than NBC with respect
to any of the foregoing.
8.2 Conduct of Business. During the period from the date of this Agreement
to the Effective Time, FFBS, and its subsidiary, will conduct their business
and engage in transactions only in the ordinary course and consistent with
prudent banking practices. FFBS and its subsidiary will operate their business
in substantially the same manner as before this Agreement, and will maintain
and keep their property in good repair and properly insured. FFBS will not,
without the prior express consent of NBC (which will not be unreasonably
withheld):
(a) Pay any dividends prior to the Effective Time other than regular
anticipated semi-annual dividends of 30 cents per share to its shareholders
payable in January 1999 and July 1999;
(b) Except as set forth in Schedule 8.2(b), lend an amount exceeding
$200,000.00 to an individual or entity or lend an amount, which when
aggregated with other loans to the same individual or entity or related
interests, would exceed $300,000.00;
(c) Hire new, additional or replacement employees;
(d) Grant promotions to current employees except for planned
promotions as set forth on Schedule 8.2(d) to this Agreement;
(e) Except as set forth in Schedule 8.2(e), make, incur, or agree to
incur, any single capital expenditure which alone exceeds $10,000.00 or
enter into any lease agreement with total rental payments exceeding
$10,000.00;
(f) Pay, or agree to pay, any bonus to any employee, officer or
director, other than payments of scheduled bonuses as set forth in Schedule
8.2(f) to this Agreement;
(g) Grant any raise or salary increase to any employee, officer, or
director except anticipated raises as set forth in Schedule 8.2(g) to this
Agreement;
(h) Enter into any contracts, contract renewals or extensions except
such contracts which will not obligate FFBS to pay more than $5,000.00;
(i) Purchase, lease or sell any assets outside the normal course of
business unless such anticipated transactions are set forth in Schedule
8.2(i) to this Agreement;
(j) Purchase or sell investment securities;
(k) Issue any additional capital stock or declare any stock dividend
or stock split;
(l) Establish any employee benefits in addition to those in effect on
the date of this Agreement, as disclosed heretofore to NBC; and
(m) Grant additional options to purchase shares of FFBS Common Stock
other than as may be issued pursuant to the Stock Option Agreement between
NBC and FFBS of even date herewith.
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8.3 Current Information. During the period from the date of this Agreement
to the Effective Time, FFBS will cause designated representatives to confer on
a regular and frequent basis with representatives of NBC to report the general
status of its ongoing operations. FFBS will promptly notify NBC of any material
change in the normal course of its business or in the operation of its
properties and of any governmental complaints, investigations or hearings or
any indication that such may be contemplated, or the institution or threat of
litigation, and will keep NBC fully informed with respect to all such events.
8.4 Access to Properties and Records; Confidentiality. (a) For purposes of
allowing NBC and its counsel to prepare regulatory submissions, FFBS shall
permit NBC reasonable access to its property, and shall disclose and make
available to NBC all documents relating to the assets, stock ownership,
operations, obligations and liabilities of FFBS and its subsidiary including
all books of accounts, ledgers, tax records, minutes, corporate documents,
contracts, regulatory filings, litigation files, compensation plans and any
other materials pertaining to matters in which NBC may have a reasonable
interest in light of the proposed Parent Merger. No disclosure will be required
which would violate any law, legal ruling or attorney-client privilege, nor
will disclosure be required of any materials prepared by Trident Financial
Corporation and/or Trident Securities for FFBS in connection with negotiations
which were consummated by this Agreement, nor with respect to such materials or
communications prepared for or received from third parties concerning a
possible merger acquisition or affiliation with FFBS, nor with respect to
references in FFBS minutes to such possible transactions;
(b) NBC shall afford to FFBS and its authorized agents and representatives
reasonable access, upon reasonable notice to an executive officer of NBC and
during normal business hours, to all contracts, documents and information of or
relating to the assets, liabilities, business, operations, personnel and other
aspects of relevance, in the reasonable judgment of NBC, to the transactions
contemplated hereby. NBC shall cause its personnel, attorneys and accountants
to provide assistance to FFBS in FFBS's investigation of matters relating to
the Parent Merger, including allowing FFBS and its authorized agents and
representatives access to its operating sites and facilities; provided,
however, that FFBS's investigation shall be conducted in a manner which does
not unreasonably interfere with NBC's normal operations, customers, and
employee relations; provided further, however, that, in providing the foregoing
access, NBC shall not be required to jeopardize its attorney-client privilege
(NBC hereby agreeing to use all reasonable efforts to make appropriate
alternative disclosure arrangements in such circumstances).
(c) All information furnished by a party to another pursuant hereto shall
be treated as the sole property of the party furnishing such information until
consummation of the proposed Parent Merger and, if such Parent Merger shall not
occur, the party receiving such information shall return all materials relating
to such information, and shall use its best efforts to keep all such
information confidential, and shall not directly or indirectly use such
information for any competitive or commercial purpose. The obligation to keep
such information confidential shall continue if this Parent Merger is abandoned
and shall apply only to such information not available to the party from any
other source; nor shall it apply to information which must be disclosed in
accordance with a valid court order.
8.5 Interim Financial Statements. When interim quarterly financial
statements are completed by each party, each party will deliver to the other a
copy of such interim financial statements.
8.6 Approval of Shareholders. The respective Boards of Directors of FFBS
and NBC will take all steps necessary to duly call, give notice of, convene and
hold a special meeting of its shareholders as soon as practicable for the
purpose of approving and adopting this Agreement and the transaction
contemplated hereby and for such other purposes as may be needed. The Boards of
Directors of FFBS and NBC will recommend approval of all such actions to their
respective shareholders, cooperate fully in securing regulatory approval and
consummating the Parent Merger and use their best efforts to obtain all
necessary approvals of this transaction; provided, that the Board of Directors
of FFBS may withdraw or refuse to make such recommendation only if the Board of
Directors shall determine in good faith that such recommendation should not be
made in view of its fiduciary duty to FFBS's shareholders following (i) the
consideration of advice of legal counsel that making such recommendation or the
failure to withdraw or modify such recommendation would, more likely than not,
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constitute a breach of the fiduciary duties of such Board to shareholders of
FFBS, or (ii) the withdrawal by FFBS's financial advisor of its opinion
referred to in Section 9.3(e) or the delivery to the FFBS Board of Directors of
advice from its financial advisor that the Merger Consideration is not fair or
is inadequate to the shareholders of FFBS from a financial point of view.
8.7 Cooperation. These parties shall cooperate in joint efforts to obtain
unconditional regulatory approval of the Parent Merger, and the obligation of
each party to consummate the Parent Merger is contingent upon the receipt of
all regulatory and U. S. Department of Justice approvals without conditions
which are unacceptable to either party. FFBS shall use its best efforts to
cause its officers, directors and employees to support the actions and
objectives contemplated by this Agreement.
8.8 Unusual Events. Until the Effective Time, FFBS and NBC shall
supplement or amend all relevant schedules with respect to any matter arising
or discovered, which if existing or known at this date would have been required
to be disclosed; provided, however, that subsequent disclosure shall not
necessarily be deemed to have cured any misrepresentation or breach by
concealment thereof.
8.9 FFBS Employees. All FFBS employees will continue to serve at the
discretion of NBC. The FFBS employees set forth in Schedule 8.9 will be offered
a "pay to stay" benefit of 25% of their current annual base salary to continue
to serve from the date of this Agreement through the actual consolidation of
operating and accounting systems of Thrift and Bank, to be paid in a lump sum
immediately following successful consolidation of the two systems or December
31, 1999, whichever occurs first. NBC will pay severance benefits of one week's
base pay for each year or fraction thereof of service for a minimum of four
weeks pay and up to a total of eight weeks pay for each non-officer employee
and up to twelve weeks pay for each officer in the event of termination within
twelve months of closing, except terminations for cause. NBC recognizes FFBS
Employment Agreements dated April 14, 1994, with officers listed on Schedule
8.9 with three year terms which have been renewed annually and now extend
through April 2001. These will not be further extended and will terminate in
April 2001, unless a covered officer waives rights, claims or payments due
under such agreements or enters into a replacement agreement with NBC, whether
prior to or subsequent to the execution of this Agreement. Until such time each
such covered officer will be entitled to the protection of the Section 5
provisions thereof, and any change in control payments required by such
agreements, as set forth in Schedule 8.9, will be made by NBC as required.
8.10 Employee Benefit Plans. The FFBS ESOP will be terminated on or before
closing, in which case the loan will be paid in full and the shares will be
fully allocated among FFBS participants. FFBS plans other than the ESOP will be
discontinued and the participants enrolled in NBC plans as permitted by ERISA.
The FFBS employees will be offered dental and health insurance now available to
NBC employees on the same terms and conditions as then available to NBC
employees. Accrued vacation (not exceeding three weeks)and sick leave (not
exceeding 90 days) for FFBS employees will be transferred and honored by NBC,
but any such accrued vacation time must be used entirely by the end of the
calendar year in which the merger is consummated. On or before the Effective
Time, FFBS and E. Frank Griffin, III shall enter into a supplemental executive
retirement plan providing benefits as set forth in Schedule 8.10. The present
FFBS pension plan shall be terminated, and such plan benefits may be amended
provided that the amendments shall not increase any plan funding requirements
in excess of plan assets, net of termination expenses, determined on a
termination basis, and FFBS employees shall participate in the NBC pension plan
to the same extent as similarly situated NBC employees. Upon entry into the NBC
plans, FFBS employees shall be credited with the number of years of service as
credited under the FFBS plans for vesting, and such service shall also apply
for purposes of satisfying any waiting periods, evidence of insurability
requirements, or the application of any pre-existing condition or limitations
as permitted by the respective NBC plans or providers. Funding for FFBS
employees will commence upon entry into NBC plans with no funding for prior
participation.
8.11 Directors. Two present directors of FFBS shall become directors of
NBC in accordance with Section 4.1 of this Agreement.
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8.12 Registration Statement and Regulatory Filings. (a) NBC shall file
with the SEC as soon as reasonably practical after the execution of this
Agreement, a Registration Statement complying with all SEC and other regulatory
requirements and will amend and supplement the same as may be required or
appropriate. The Proxy Statement/Prospectus (to be delivered to shareholders of
each party) in connection therewith must be reasonably acceptable to FFBS and
will be used in connection with the meetings of the shareholders of FFBS and
NBC. NBC will also prepare and file all documents appropriate to comply with
securities laws of the State of Mississippi and the State of Delaware and other
applicable laws and regulations. In advance of the filing of such Registration
Statement and other documents, NBC will furnish copies thereof to FFBS and its
counsel and subsequent to the filings shall promptly advise them of any
material communication received from SEC or any state securities commission
relating thereto. No information contained in any such documents shall be false
or misleading with respect to any material fact or shall omit to state any
material fact. FFBS will provide to NBC any information with respect to FFBS
requested by NBC to be included in the Registration Statement.
(b) NBC will use its best reasonable efforts to obtain the regulatory
approvals described herein and FFBS will cooperate fully in the process of
obtaining such approvals. The obligation to take all reasonable actions in this
regard shall not be construed as including an obligation to accept any terms or
conditions to a consent or approval that are not acceptable either to NBC or to
FFBS, provided that such unacceptable conditions would cause material adverse
economic results or would require NBC to change its present business practices
or that of any subsidiary. NBC shall provide FFBS with copies of all
applications filed and all responses when received.
8.13 Registration of Stock Options. NBC will register the issuance of all
shares of NBC Common Stock to be issued upon exercise of the exchange stock
options, and will take such action as may be necessary to cause such shares of
NBC Common Stock not to be "restricted securities" within the meaning of Rule
144 under the Securities Act of 1993, as amended.
8.14 Pooling-of-Interests and Tax-Free Treatment. Each of the parties
hereto shall use its reasonable best efforts (i) to cause the Parent Merger to
qualify for pooling-of-interests accounting treatment and (ii) to cause the
Parent Merger to constitute a "reorganization" under Section 368(a) of the
Code.
8.15 Agreements of Affiliates. FFBS shall use its best efforts to cause
each person who may be at the Effective Time or was on the date hereof an
"affiliate" of FFBS for purposes of Rule 145 under the Securities Act or of
determining the qualification of the Parent Merger as a pooling of interests
for accounting and financial reporting purposes, to execute and deliver to NBC,
no less than 45 days prior to the date of the meeting of FFBS shareholders to
approve the Parent Merger, the written undertakings in the form attached hereto
as Exhibit 1.5(f). On or prior to such delivery date, FFBS shall provide NBC
with a letter specifying, to the best of its knowledge, all of the persons who
may be deemed to be "affiliates" of FFBS under the preceding sentence.
ARTICLE IX
Closing Conditions
9.1 Conditions to Each Party's Obligations Under this Agreement. The
respective obligations of each party under this Agreement shall be subject to
the fulfillment at or prior to the Effective Time of the following conditions:
(a) This Agreement and the transaction contemplated hereby shall have
been approved and adopted by the affirmative vote of the holders of the
outstanding shares of FFBS and NBC at the meetings of the shareholders of
FFBS and NBC pursuant to Section 8.6 hereof, in accordance with the
respective Certificate of Incorporation of FFBS, the Articles of
Incorporation of NBC, and the respective By-Laws of each and the laws of
the states of Delaware and Mississippi.
(b) Neither party hereto shall be subject to any order, decree, or
injunction of a court or agency of competent jurisdiction which enjoins or
prohibits the consummation of the Parent Merger.
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(c) NBC and FFBS shall have received an opinion of special tax
advisor, T. E. Lott & Company, to the effect that the transaction will be
treated, and will qualify, as a tax-free reorganization within the meaning
of Section 368 of the Code; that NBC and FFBS will each be a "party to the
reorganization" within the meaning of Section 368(b); that no gain or loss
will be recognized by FFBS on account of the conversion of its stock into
NBC stock; and that the combination of such stock delivered to FFBS
shareholders and cash paid to satisfy requirements described herein shall
be in accordance with the requirements necessary for this transaction to be
treated and qualify as a Pooling of Interests Transaction for accounting
purposes applying GAAP.
(d) The SEC shall have declared the Registration Statement effective;
and on the Closing Date and at the Effective time, no stop order suspending
the effectiveness of the Registration Statement shall have been issued and
no proceedings for that purpose shall have been initiated or then
threatened by the SEC.
(e) All permits, consents, waivers, clearances, approvals, and
authorizations of all third parties and federal and state governmental
bodies shall have been obtained in a form which is unconditional or which
provides no conditions which would be unacceptable to either party, and all
statutory waiting periods shall have expired.
9.2 Conditions Precedent to the Obligations of NBC. The obligations of NBC
under this Agreement shall be further subject to the satisfaction, at or prior
to the Effective Time of the following conditions, any one or more of which may
be waived by NBC:
(a) Each of the obligations of FFBS required to be performed by it at
or prior to the closing pursuant to the terms of this Agreement shall have
been duly performed and complied with and the representations and
warranties of FFBS contained in this Agreement shall be true and correct in
all material respects as of the Effective Time as though made at the
Effective Time (except as otherwise contemplated herein) AND NBC shall have
received a Certificate to that effect signed by the President and Secretary
of FFBS.
(b) All action required to be taken by, or on the part of, FFBS and
its shareholders to authorize the execution, delivery, and performance of
this Agreement by FFBS and the consummation of the transaction contemplated
hereby shall have been duly and validly taken by the Board of Directors of
FFBS and its shareholders and NBC shall have received certified copies of
the resolutions evidencing such authorization.
(c) NBC shall have received an opinion from counsel to FFBS, dated as
of the Effective Time, and in form an substance satisfactory to counsel for
NBC. In rendering such opinion, counsel may rely as to matters of fact,
upon such FFBS officers or governmental officials as counsel deems
appropriate.
(d) The net worth of FFBS at the time of closing shall be no less than
$22,500,000 as determined under GAAP excluding the effect of any actions
taken pursuant to subparagraph (e) below.
(e) The loan and lease loss reserves of FFBS at the Effective Time
shall be an amount not less than one per cent (1%) of gross loans
outstanding immediately prior to the Effective Time after any charge-offs
taken by FFBS in the ordinary course of its business after the date of this
Agreement and prior to the Effective Time and after any additional charge
offs directed by NBC as a result of additional loan portfolio due diligence
done by it after this date, or $1,035,000 whichever is greater. FFBS will
not adjust its loan loss reserves until after receipt of all regulatory and
stockholder approvals, and just prior to the Effective Time.
(f) The officers listed on Schedule 9.2(f) shall have entered into
Employment Agreements with NBC in the form set forth in Schedule 9.2(f)
hereto, and none of such officers shall have terminated employment with
FFBS prior to the Effective Time unless such termination is because of
death or disability.
FFBS shall furnish NBC such certificates sufficient to evidence
fulfillment of the conditions set forth in this Section 9.2 as NBC may
reasonably request.
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9.3 Conditions Precedent to the Obligations of FFBS under this Agreement.
The obligations, conditions, covenants and agreements of FFBS under this
Agreement shall be further subject to the satisfactions, at or prior to the
Effective Time, of the following conditions, any one or more of which may be
waived by FFBS:
(a) Each of the obligations of NBC required to be performed by it at
or prior to the closing, pursuant to the terms of this Agreement shall have
been duly performed and complied with and the representations and
warranties of NBC contained in this Agreement shall be true and correct in
all material respects as of the date of the Agreement and as of the
Effective Time as though made at the Effective Time (except as otherwise
contemplated herein) and FFBS shall have received a certificate to that
effect signed by the Chief Executive Officer and Chief Financial Officer of
NBC.
(b) All action required to be taken by, or on behalf of NBC to
authorize the execution, delivery, and performance of this Agreement of NBC
and consummation of the transaction contemplated hereby shall have been
duly and validly taken by the Board of Directors and shareholders of NBC
and FFBS and NBC and FFBS shall have received certified copies of the
resolutions evidencing such authorization. In order to complete such a due
diligence review of NBC, FFBS shall have access to all appropriate NBC
books, records and other documents.
(c) All permits, consents, waivers, clearances, approvals and
authorizations of all third parties and governmental bodies shall have been
obtained by NBC which are necessary in connection with the consummation of
the Parent Merger and the transaction contemplated hereby and which by the
terms herein are to be obtained by NBC.
(d) FFBS shall have completed a due diligence review of NBC, and its
subsidiaries, to its sole satisfaction, and prior to the closing, nothing
shall have come to the attention of FFBS with respect to the operations,
assets, financial conditions or business of NBC, or any of its
subsidiaries, which has or may have a material adverse effect on the
condition of NBC as determined by FFBS.
(e) FFBS has received from a financial advisor a fairness opinion in a
form and substance satisfactory to it to the effect that the Parent Merger
is fair from a financial point of view to the shareholders of FFBS, and
such fairness opinion shall be satisfactorily updated at the date of the
mailing of the prospectus/proxy statement and again at closing.
(f) FFBS shall have received an opinion from counsel to NBC, dated as
of the Effective Time, and in form and substance satisfactory to counsel
for FFBS. In rendering such opinion, counsel may rely as to matters of
fact, upon such NBC officers or governmental officials as counsel deems
appropriate.
ARTICLE X
Closing
10.1 Time and Place. Subject to the provisions of Articles VIII and X
hereof, the closing of the transaction contemplated hereby shall take place at
the offices of NBC. 301 East Main Street, Starkville, Mississippi 39759, at
9:00 a.m. local time, on the last business day of the month in which all
conditions precedent to closing are met or at such other date as NBC and FFBS
may agree.
10.2 Deliveries at Closing. Subject to the provisions of Article VIII and
X hereof, at the closing there shall be delivered to NBC and FFBS the opinions,
certificates, and other documents required under the provisions of this
agreement.
ARTICLE XI
Termination, Amendment and Waiver
11.1 Termination. This Agreement may be terminated at any time prior to
the Effective Time, under the following conditions:
(a) The mutual consent of NBC and FFBS;
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(b) By either party upon denial of shareholder or regulatory approval
in a form which provides conditions which would be unacceptable to either
party as provided for herein;
(c) By NBC in the event that prior to the Effective Time the proposed
Merger is determined by applicable regulatory authority to be disqualified
as a pooling of interest in accordance with GAAP;
(d) By FFBS in the event that prior to the Effective Time it is
determined that the Parent Merger will not qualify as a tax-free
reorganization and exchange under Section 368(a) of the Internal Revenue
Code as determined by special tax counsel;
(e) By either party, if at the time of such determination there shall
be a material adverse change in the financial condition of the other party
from that set forth in the financial statements for the period ending June
30, 1998;
(f) By either party if the Parent Merger shall not have been completed
by September 30, 1999, unless that date is extended by mutual consent of
both parties;
(g) By the non-breaching party in the event of a material breach in
the provisions of this Agreement, and said breach has not been cured within
30 days of written notice by the non-breaching party to the other party
setting out in specific detail the nature of the claimed material breach.
(h) By FFBS if NBC fails to increase the Exchange Rate as required by
Section 1.4 hereof.
11.2 Effect of Termination. In the event of termination of this Agreement
as provided herein, this Agreement shall forthwith become void and except as
provided in Section 12.3 hereof there shall be no further liability on the part
of NBC or FFBS, or their respective officers or directors, other than liability
for any default or breach hereunder occurring prior to such termination, to the
extent permitted by applicable law.
11.3 Amendments and Waivers. Subject to applicable law, at any time prior
to the consummation of the Parent Merger, whether before or after approval by
the respective shareholders of the parties, by action taken by the respective
Boards of Directors, the parties may (a) amend this Agreement, (b) extend the
time of the performance of any of the obligations or other acts of the other
parties hereto, (c) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto, or
(d) waive compliance with any of the agreements and conditions contained in
Articles VIII and IX. Provided, however, after approval hereto by the
respective shareholders, there may not be, without further approval of such
shareholders, any amendment, extension or waiver which changes the amount or
form of the consideration to be delivered to FFBS and its shareholders. This
Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.
ARTICLE XII
Miscellaneous
12.1 Expenses. NBC shall pay all reasonable expenses subsequent to the
Effective Time of the Parent Merger, including reasonable counsel fees for
present counsel to FFBS in consultation with NBC, in connection with this
Agreement and the transactions hereunder, to the extent NBC deems such services
appropriate. All expenses, including, but not limited to, investment advisor
fees, brokers' fee, commission, finder's fees, and legal fees incurred in
connection with the merger and up to the Effective Time shall be paid by the
party incurring such costs; provided, however, NBC shall pay the cost of
printing and mailing the Prospectus/Proxy Statement to FFBS shareholders.
12.2 Indemnification. After the Effective Time, NBC shall indemnify,
defend and hold harmless the directors, officers, employees, and agents of FFBS
and its subsidiary (each a "FFBS indemnified party") against all liabilities,
including reasonable attorney fees, expenses, judgments, fines and amounts paid
in settlement, arising out of actions or omissions occurring at or prior to the
Effective Time, including the Parent Merger and transactions contemplated by
this Agreement, to the full extent permitted by Delaware law and as would have
been permitted by the Certificate of Incorporation and By-Laws of FFBS prior to
the Parent
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<PAGE>
Merger. FFBS and the indemnified parties may retain counsel reasonably
satisfactory to such party after consultation with NBC; provided, however,
that:
(1) NBC shall have the right to assume the defense thereof and upon
such assumption, NBC shall not be liable to any FFBS indemnified party for
any legal expenses subsequently incurred except that if NBC elects not to
assume such defense or if counsel for the FFBS indemnified party reasonably
advises that there are issues which raise conflicts of interest between NBC
and the FFBS indemnified party, such party may retain separate counsel
after consultation with NBC, in which case NBC shall bear reasonable
expenses thereof.
(2) An FFBS indemnified party shall consult and obtain the approval of
NBC prior to affecting any settlement, which said approval shall not be
unreasonably withheld; and
(3) NBC shall have no obligation hereunder to any indemnified party
when and if a court of competent jurisdiction shall ultimately determine,
and such determination shall have become final, that indemnification of
such FFBS indemnified party in the manner contemplated hereby is prohibited
by applicable law.
Prior to the Effective Time, NBC and FFBS shall cooperate in obtaining
extensions of directors' and officers' liability coverage maintained by FFBS
for a period of five (5) years from the Effective Time, or at its option, NBC
may substitute similar coverage with another insurance carrier therefor. NBC
shall pay premiums for such insurance coverage provided for herein.
12.3 Breach/Specific Performance. (a) In the event either party breaches
any of the terms and conditions of this Agreement, and the other party is
required to employ legal counsel, or institute legal action, in order to
enforce its rights under the terms and conditions of this agreement, the
successful party shall be entitled to recover from the breaching party all
expenses, attorney fees, court costs and other expenses incidental to said
action.
(b) In the event either party fails or refuses to carry out the terms and
conditions of this Agreement in any respect, or to complete the transactions
contemplated hereunder, the other party shall have the right, in addition to
the recovery of all damages, incidental or consequential, as a result of said
breach or failure, to obtain an order of specific performance of this Agreement
in any court of competent jurisdiction.
12.4 Disclosures. Upon the execution of this Agreement, the Parent Merger
shall be announced by these parties in a mutually agreed upon manner, with such
other disclosures to the shareholders and public as may be required or agreed
upon.
12.5 Parties in Interest. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns, provided, however, that neither this Agreement nor any rights or
obligations hereunder may be assigned by either party without prior written
consent of the other.
12.6 Survival of Representations. None of the representations, warranties,
covenants and agreements contained in this Agreement shall survive the
Effective Time or termination of this Agreement, except for those contained
herein which by their terms apply in whole or in part after the Effective Time
or termination of this Agreement. Representations, warranties covenants and
agreements contained herein with respect to exchange procedures, rights of
former FFBS shareholders, Dissenting Shareholders, subsequent actions required
after the Effective Time, confidentiality, expenses, indemnification, exchange
of stock options, officer positions, board seats, and employee benefits shall
all survive the Effective Time and termination of this Agreement.
12.7 Waiver. No delay or omission on the part of any party hereto in
exercising any right hereunder shall operate as a waiver of such right or any
other right under this Agreement.
12.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall comprise one and the same instrument.
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<PAGE>
12.9 Notices. All notices and other communications between the parties
shall be in writing and shall be deemed to have been duly given if delivered in
person or by certified or registered mail, or by prepaid overnight delivery
service:
To NBC:Lewis F. Mallory, Jr.
National Bank of Commerce
P. O. Box 1187
Starkville, MS 39760
To FFBS:E. Frank Griffin III
First Federal Bank for Savings
1121 Main Street
Columbus, MS 39701
or such other address as either party may designate by notice to the other.
12.10 Section Headings. The section headings are for reference only and
shall not limit or control the mean of any provision of this agreement.
12.11 Governing Law. This Agreement shall be governed by the laws of the
State of Mississippi and where necessary with respect to the incorporation of
FFBS in Delaware by the corporate laws of Delaware to the extent that federal
law does not apply.
12.12 Entire Agreement. This Agreement, with any schedules and exhibits
hereto, constitutes the entire agreement between these parties and is executed
on behalf of and at the direction of the Boards of Directors of the respective
parties. It is intended that this agreement constitute a binding agreement
between the parties notwithstanding that there may be other matters unresolved
and subject to negotiation at the time of its execution and the fact that its
final consummation is conditioned and contingent upon the approvals set forth
herein. Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto, and their respective successors,
any rights, remedies, obligations or liabilities, except for rights of
directors, officers and employees of FFBS and Thrift to enforce rights set
forth herein applicable to them.
IN WITNESS WHEREOF, the Boards of Directors of NBC Capital Corporation and
FFBS Bancorp, respectively, have each executed this Agreement and directed the
authorized signature of the undersigned duly authorized officers as of this 3rd
day of February, 1999.
NBC CAPITAL CORPORATION
BY: /s/ LEWIS F. MALLORY
-------------------------------------
LEWIS F. MALLORY, Chairman of the
Board
and Chief Executive Officer
ATTEST:
/s/
- -------------------------------
SECRETARY
FFBS BANCORP, INC.
BY: /s/ E. FRANK GRIFFIN, III
-------------------------------------
E. FRANK GRIFFIN, III, President and
Chief Executive Officer
ATTEST:
/s/
- -------------------------------
SECRETARY
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<PAGE>
PLAN OF REORGANIZATION AND MERGER
By and Between
NATIONAL BANK OF COMMERCE
AND
FIRST FEDERAL BANK FOR SAVINGS
THIS PLAN OF REORGANIZATION AND MERGER (the "Bank Merger Agreement"),
dated as of the 3rd day of February, 1999, by and between NATIONAL BANK OF
COMMERCE, a wholly owned national banking subsidiary of NBC CAPITAL
CORPORATION, and FIRST FEDERAL BANK FOR SAVINGS, a wholly owned federally
chartered savings bank subsidiary of FFBS BANCORP, INC., organized under the
laws of the United States.
RECITALS
WHEREAS, on the 3rd day of February, 1999, NBC Capital Corporation, a
Mississippi corporation ("NBC"), and FFBS Bancorp, Inc., a Delaware corporation
("FFBS"), executed an Agreement and Plan of Merger (the "Merger Agreement"),
through which FFBS will be merged with and into NBC (the "Parent Merger"); and
WHEREAS, First Federal Bank for Savings ("Thrift") is a wholly owned
subsidiary of FFBS, and National Bank of Commerce ("Bank") is a wholly owned
subsidiary of NBC; and
WHEREAS, the respective Boards of Directors deem the merger of Thrift with
and into Bank as provided herein (the "Bank Merger") advisable and in the best
interest of their respective corporations and shareholders; and
WHEREAS, the respective Boards of Directors of Bank and Thrift, by
resolutions duly adopted, have approved this Merger Agreement and the
contemplated Bank Merger; and
WHEREAS, Bank and Thrift respectively desire to have certain
representations made with respect to the Bank Merger.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties agree that Thrift shall be merged with and into
Bank, and that the terms and conditions of the Bank Merger and the method of
carrying the Bank Merger into effect and certain other provisions relating
thereto shall be as hereinafter set forth.
ARTICLE I
1.1 The Bank Merger. In accordance with the provisions of this Bank Merger
Agreement and the laws of the United States, and after the Effective Time of
the Parent Merger (as defined in the Parent Merger Agreement) (the "Effective
Time"), Thrift shall be merged with and into Bank under the charter of Bank.
The Bank Merger shall be consummated (i) upon notice to the Office of Thrift
Supervision of the Department of the Treasury of The United States ("OTS")
pursuant to 12 C.F.R. 563.22(b); (ii) at the time specified in the Certificate
Approving Bank Merger issued by the Office of the Comptroller of the Currency
("OCC"); and (iii) shall occur after the Parent Merger pursuant to 12 U.S.C.
Section 215c, 1815(d)(3) and 1828(c).
1.2 Surviving Bank. Bank shall continue to exist under the laws of the
United States as a wholly owned subsidiary of NBC. At the Effective Time, the
separate existence and organization of Thrift shall cease. Bank will continue
to operate as a national banking association titled National Bank of Commerce
with its principal office located at 301 East Main Street, Starkville,
Mississippi, 39759, and at the legally established branches of Bank and Thrift.
1.3 Capital Structure. Upon consummation of the Bank Merger, each share of
common stock of Thrift shall be canceled, and no cash, securities or other
property shall be issued in the Bank Merger in respect thereof.
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As of the time of the Bank Merger, the amount of capital stock of Bank
shall be $1,200,000 divided into 1,200,000 shares of common stock, each of
$1.00 par value, and shall have a surplus determined as of June 30, 1998 of
$33,000,000 and undivided profits, including capital reserves of $27,809,000,
adjusted, however, for normal earnings and expenses between June 30, 1998 and
the date of the Bank Merger.
1.4 Effect of the Bank Merger; Tax Consequences. All assets of Thrift as
they exist at the Effective Time, shall pass to and vest in the Bank without
any conveyance or other transfer; and Bank shall be responsible for all of the
liabilities of Bank and Thrift of every kind and description. For federal
income tax purposes, the Bank Merger shall constitute a tax-free reorganization
pursuant to Section 368 of the Internal Revenue Code of 1986, as amended (the
"Code"), and the Bank Merger shall constitute a "Plan of Reorganization" for
purposes of the Rules and Regulations governing Code Section 368.
1.5 Directors and Officers. After the Bank Merger, the present officers of
Bank together with such present officers of Thrift who may be duly appointed as
additional officers shall serve as the officers of the Bank, and shall serve in
such capacities until the next annual meeting or until such time as their
successors have been elected and have been qualified. The directors of Bank,
immediately prior to the Effective Time shall be, from and after the Effective
Time, the directors of the Surviving Corporation, and two presently serving
directors of FFBS shall be appointed and become directors of Bank.
1.6 Articles of Association; Bylaws. After the Bank Merger, the Articles
of Association of Bank shall be the Articles of Association of the Bank. The
Bylaws of Bank, as in effect immediately prior to the Bank Merger, shall be the
Bylaws of the Surviving Bank until amended as therein provided.
1.7 Dividends and Conduct of Business. To the extent permitted by the
Merger Agreement, Bank and Thrift may each continue to declare and pay
dividends to their respective shareholders and may dispose of any assets in any
manner in the normal course of business and for adequate value.
1.8 Liquidation Account. The liquidation account established by the Thrift
pursuant to the plan of conversion adopted in connection with its conversion
from mutual to stock form shall, to the extent required by applicable law,
continue to be maintained by the Bank after the Effective Time for the benefit
of those persons and entities who were savings account holders of the Thrift on
the eligibility and supplemental eligibility record dates for such conversion
and who continue from time to time to have rights therein. If required by the
rules and regulations of the OTS, the Bank shall amend its charter to
specifically provide for the continuation of the liquidation account previously
established by Thrift.
ARTICLE II
Representations and Warranties of Bank and Thrift
2.1 Corporate Organization. Bank and Thrift are validly existing and in
good standing under the laws of the United States and have the power and
authority to own or lease all of their properties and assets and to carry on
their business as it is now being conducted.
2.2 Authority; No Violation. Bank and Thrift have the full corporate power
and authority to execute and deliver this Merger Agreement and to consummate
the transactions contemplated thereby. The execution and delivery of this Bank
Merger Agreement and the consummation of the transactions contemplated will
have been duly and validly approved by the Boards of Directors of the Bank and
Thrift and by the Boards of Directors of NBC and FFBS as the sole shareholders
of Bank and Thrift.
2.3 Consents and Approvals. The parties hereto will cooperate in the
preparation and filing of all documents necessary to obtain the consent and
approval of the OCC and such other filings, approvals or consents as may be
required by applicable federal and state laws or regulations.
2.4 Parent Merger. The Bank Merger and all provisions of this Bank Merger
Agreement are contingent upon appropriate shareholder and regulatory approval
of the Merger Agreement, and all necessary consents or permits from all
applicable regulatory authorities shall have been obtained prior to
consummation
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<PAGE>
of the Bank Merger. This Bank Merger and the transactions contemplated hereby
shall have been approved by the OCC and all other applicable federal and state
authorities in a form acceptable to Bank and Thrift.
ARTICLE III
Closing
3.1 Closing. Subject to the provisions contained herein and all
appropriate provisions of the Merger Agreement, the Closing of the Bank Merger
shall take place following the closing of the Parent Merger.
3.2 Termination. This Agreement shall automatically terminate upon the
termination of the Merger Agreement or on September 30, 1999, unless extended
in writing and upon the same terms and conditions as provided for in the Merger
Agreement.
3.3 Conditions. The consummation of the transactions contemplated herein
is expressly conditioned upon (a) the ratification and confirmation of the
contemplated transactions by the affirmative vote of the shareholders, (b) the
procurement of consents and approvals, including but not limited to the
approval of the OCC, and the satisfaction of all other requirements prescribed
by applicable law that are necessary for the consummation of the transactions
contemplated herein, and (c) no litigation or proceeding initiated by any
governmental authority shall be pending before any court or agency which
presents a claim to restrain, prohibit, or invalidate the transactions
contemplated herein and no order of any court or agency shall restrain or
prohibit the transactions contemplated herein.
ARTICLE IV
4.1 Incorporation by Reference. The Merger Agreement is hereby
incorporated by reference, and the parties hereto acknowledge that all
provisions of that document applicable to representations, warranties,
covenants, conditions, conduct of business, disclosures, termination and
closing contained in said Merger Agreement shall be binding upon and inure to
the benefit of the parties hereto.
IN WITNESS WHEREOF, the Boards of Directors of Bank and Thrift have
approved this Merger Agreement and directed the authorized signatures and seal
of each respective corporation to be set hereunto by its Chairman of the Board
and attested to by a duly authorized officer, and the Boards of Directors of
Bank and Thrift have caused this Merger Agreement to be executed by their duly
authorized officers, all as of the day and year first above written.
FIRST FEDERAL BANK FOR SAVINGS
(S E A L)
BY: /s/ E. FRANK GRIFFIN, III
-------------------------------------
ATTEST:
- -------------------------------
SECRETARY
NATIONAL BANK OF COMMERCE
(S E A L)
BY: /s/ LEWIS F. MALLORY, JR.
-------------------------------------
ATTEST:
- -------------------------------
SECRETARY
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