OMB APPROVAL
UNITED STATES OMB Number: 3235-0145
SECURITIES AND EXCHANGE COMMISSION Expires: October 31, 1997
WASHINGTON, D.C. 20549 Estimated average burden
hours per form............14.90
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SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. ______________)*
1st United Bancorp
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(Name of Issuer)
1st United Bancorp Common Stock
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(Title of Class of Securities)
33740710-0
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(CUSIP Number)
Kenneth W. McAllister
Executive Vice President and General Counsel
P.O. Box 3099
Winston-Salem, North Carolina 27150
(910) 770-5000
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
August 6, 1997
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(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(b)(3) or (4), check the following box |_|.
Check the following box if a fee is being paid with the statement |_|. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7).
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*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 ("Act") 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).
SEC 1746(12-91)
<PAGE>
SCHEDULE 13D
CUSIP NO. 33740710-0 PAGE 2 OF 17 PAGES
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Wachovia Corporation
IRS #56-1473727
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) |_|
(B) |_|
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC*
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_|
6 CITIZENSHIP OR PLACE OF ORGANIZATION
North Carolina
NUMBER OF 7 SOLE VOTING POWER
SHARES 2,020,000*
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING
PERSON 9 SOLE DISPOSITIVE POWER
WITH 2,020,000*
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,020,000*
12 CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES* |_|
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.6%
14 TYPE OF REPORTING PERSON
CO
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*BENEFICIAL OWNERSHIP OF 2,020,000 SHARES OF COMMON STOCK REPORTED
HEREUNDER IS SO BEING REPORTED SOLELY AS A RESULT OF THE STOCK
OPTION AGREEMENT DESCRIBED IN ITEM 4 HEREOF. THE OPTION GRANTED
PURSUANT TO SUCH STOCK OPTION AGREEMENT HAS NOT YET BECOME
EXERCISABLE. WACHOVIA CORPORATION EXPRESSLY DISCLAIMS BENEFICIAL
OWNERSHIP OF SUCH SHARES.
<PAGE>
ITEM 1. SECURITY AND ISSUER.
This statement relates to the common stock, par value $0.01
per share ("Common Stock"), of 1st United Bancorp, a Florida corporation (the
"Company"), the principal executive offices of which are located at 980 N.
Federal Highway, Boca Raton, Florida 33432.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(c) and (f) This statement is being filed by Wachovia
Corporation, a North Carolina corporation registered as a bank holding company
under the Bank Holding Company Act of 1956, as amended ("Wachovia"). The
principal business offices of Wachovia are located at 100 North Main Street,
Winston-Salem, North Carolina 27101 and at 191 Peachtree Street, NE, Atlanta,
Georgia 30303. Wachovia has one principal banking subsidiary, Wachovia Bank,
National Association, the assets of which currently constitute substantially all
of the assets of Wachovia. Wachovia also has bank-related subsidiaries engaged
in large corporate and institutional relationship management and business
development, corporate leasing, remittance processing and discount brokerage
services. The names of the directors and executive officers of Wachovia and
their respective business addresses, citizenship and present principal
occupations or employment, as well as the names, principal businesses and
addresses of any corporations and other organizations in which such employment
is conducted, are set forth on Schedule I hereto, which Schedule is incorporated
herein by reference.
(d)-(e) Neither Wachovia, nor, to the best of its knowledge,
any of the persons listed in Schedule I hereto has during the last five years
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors). Neither Wachovia nor, to the best of its knowledge, any of the
persons listed in Schedule I hereto has during the last five years been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
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<PAGE>
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
As more fully described in Item 4, the Company has granted to
Wachovia an option pursuant to which Wachovia has the right, upon the occurrence
of certain events (none of which has occurred), to purchase up to 2,020,000
shares of Common Stock (subject to adjustment in certain circumstances) at a
price per share equal to $18.75 (the "Option"). Certain terms of the Option are
summarized in Item 4.
If the Option were exercisable and Wachovia were to exercise the Option
on the date hereof, the funds required to purchase the shares of Common Stock
issuable upon such exercise would be $37,875,000. It is currently anticipated
that such funds would be derived from working capital.
Subject to market conditions and developments with respect to
the Merger (as defined below) Wachovia may purchase shares of Common Stock in
the open market or in privately negotiated transactions. It is currently
anticipated that any funds used to make such purchases would be derived from
working capital.
ITEM 4. PURPOSE OF THE TRANSACTION.
(a)-(j) Wachovia is seeking to acquire the entire equity
interest in the Company pursuant to the Merger (as defined below). The
transactions reported hereunder are intended to assist in the achievement of
that purpose.
The Merger Agreement. The Company and Wachovia have entered
into an Agreement and Plan of Merger, dated as of August 6, 1997 (the "Merger
Agreement"), pursuant to which the Company will be merged with and into Wachovia
(the "Merger"), with Wachovia being the surviving corporation (the "Surviving
Company"). At the effective time of the Merger (the "Effective Time"), each
outstanding share of Common Stock will be converted into a number of shares (the
"Exchange Ratio") of common stock of Wachovia ("Wachovia Common Stock") equal to
$20.875 divided by the Wachovia Average Stock Price (as defined below) (rounded
to the nearest one-thousandth) provided that:
(i) if the Wachovia Average Stock Price exceeds
$69.64375, the Exchange Ratio will be 0.3; and
(ii) if the Wachovia Average Stock Price is less than
$56.98125, the Exchange Ratio will be 0.366.
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The "Wachovia Average Stock Price" means the average of the last sale
prices of Wachovia Common Stock, as reported by the NYSE Composite Transactions
Reporting System (as reported in The Wall Street Journal or, if not reported
therein, in another authoritative source), for the ten New York Stock Exchange
trading days immediately preceding the Effective Date.
In the event Wachovia changes (or establishes a record date for
changing) the number of shares of Wachovia Common Stock issued and outstanding
prior to the Effective Date as a result of a stock split, stock dividend,
recapitalization or similar transaction with respect to the outstanding Wachovia
Common Stock and the record date therefor shall be prior to the Effective Date,
the Exchange Ratio will be proportionately adjusted. As of the Effective Time,
each share of Common Stock held directly or indirectly by the Company, other
than shares held in a fiduciary capacity or in satisfaction of a debt previously
contracted, will be canceled, and no exchange or payment will be made with
respect thereto.
As a result of the Merger, the Company will cease to exist as a
separate legal entity.
The Merger is subject to various regulatory approvals, the approval of
the stockholders of the Company and the satisfaction of other terms and
conditions set forth in the Merger Agreement.
As a result of the Merger, Common Stock will be eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). In addition, Common Stock
will be eligible for delisting from the Nasdaq Stock Market's National Market
System, where it has been traded under the symbol "FUBC".
The Option Agreement. In connection with the Merger Agreement, Wachovia
and the Company entered into a Stock Option Agreement, dated as of August 6,
1997 (the "Option Agreement"). The Option Agreement is designed to enhance the
likelihood that the Merger will be successfully consummated in accordance with
the terms contemplated by the Merger Agreement. Pursuant to the Option
Agreement, the Company granted Wachovia an Option to purchase, subject to
adjustments in certain circumstances, up to 2,020,000 fully paid and
non-assessable shares of Common Stock (the "Option Shares") at a price per share
equal to $18.75.
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<PAGE>
Subject to applicable law and regulatory restrictions, Wachovia may
exercise the Option, in whole or in part, if, but only if, both an Initial
Triggering Event (as defined below) and a Subsequent Triggering Event (as
defined below) have occurred prior to the occurrence of an Exercise Termination
Event (as defined below), provided that written notice of such exercise as
required by the Option Agreement is provided within six months following such
Subsequent Triggering Event (or such later period as provided in the Option
Agreement).
As defined in the Option Agreement, "Initial Triggering Event" means
any of the following events or transactions occurring on or after the date of
signing the Option Agreement:
(i) The Company or its Significant Subsidiary (as defined in
Rule 1-02 of Regulation S-X promulgated by the Securities and Exchange
Commission (the "SEC")) (the "Company Subsidiary"), without having
received Wachovia's prior written consent, shall have entered into an
agreement to engage in an Acquisition Transaction (as hereinafter
defined) with any person (the term "person" for purposes of the Option
Agreement having the meaning assigned thereto in Sections 3(a)(9) and
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "1934
Act"), and the rules and regulations thereunder) other than Wachovia or
any of its Subsidiaries (each, a "Wachovia Subsidiary") or the Board of
Directors of the Company (the "Company Board") shall have recommended
that the shareholders of the Company approve or accept any Acquisition
Transaction other than as contemplated by the Merger Agreement. For
purposes of the Merger Agreement, (a) "Acquisition Transaction" shall
mean (x) a merger or consolidation, or any similar transaction,
involving the Company or the Company Subsidiary (other than mergers,
consolidations or similar transactions involving solely the Company
and/or one or more wholly-owned Subsidiaries of the Company, provided,
that any such transaction is not entered into in violation of the terms
of the Merger Agreement), (y) a purchase, lease or other acquisition of
all or any substantial part of the assets or deposits of the Company or
the Company Subsidiary, or (z) a purchase or other acquisition
(including by way of merger, consolidation, share exchange or
otherwise) of securities representing 10% or more of the voting power
of the Company or the
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<PAGE>
Company Subsidiary and (b) "Subsidiary" shall have the meaning set
forth in Rule 12b-2 under the 1934 Act;
(ii) Any person other than Wachovia or any Wachovia Subsidiary
shall have acquired beneficial ownership or the right to acquire
beneficial ownership of 10% or more of the outstanding shares of Common
Stock (the term "beneficial ownership" for purposes of the Merger
Agreement having the meaning assigned thereto in Section 13(d) of the
1934 Act, and the rules and regulations thereunder);
(iii) The shareholders of the Company shall have voted and
failed to approve the Merger Agreement and the Merger at a meeting
which has been held for that purpose or any adjournment or postponement
thereof, or such meeting shall not have been held in violation of the
Merger Agreement or shall have been canceled prior to termination of
the Merger Agreement if, prior to such meeting (or if such meeting
shall not have been held or shall have been canceled, prior to such
termination), it shall have been publicly announced that any person
(other than Wachovia or any of its Subsidiaries) shall have made, or
disclosed an intention to make, a proposal to engage in an Acquisition
Transaction;
(iv) The Company Board shall have withdrawn or modified (or
publicly announced its intention to withdraw or modify) in any manner
adverse in any respect to Wachovia its recommendation that the
shareholders of the Company approve the transactions contemplated by
the Merger Agreement, or the Company or the Company Subsidiary shall
have authorized, recommended, proposed (or publicly announced its
intention to authorize, recommend or propose) an agreement to engage in
an Acquisition Transaction with any person other than Wachovia or a
Wachovia Subsidiary;
(v) Any person other than Wachovia or any Wachovia Subsidiary
shall have made a proposal to the Company or its shareholders to engage
in an Acquisition Transaction and such proposal shall have been
publicly announced;
(vi) Any person other than Wachovia or any Wachovia Subsidiary
shall have filed with the SEC a registration statement or tender offer
materials with
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<PAGE>
respect to a potential exchange or tender offer that would constitute
an Acquisition Transaction (or filed a preliminary proxy statement with
the SEC with respect to a potential vote by its shareholders to approve
the issuance of shares to be offered in such an exchange offer);
(vii) The Company shall have willfully breached any covenant
or obligation contained in the Merger Agreement in anticipation of
engaging in an Acquisition Transaction, and following such breach
Wachovia would be entitled to terminate the Merger Agreement (whether
immediately or after the giving of notice or passage of time or both);
or
(viii) Any person other than Wachovia or any Wachovia
Subsidiary shall have filed an application or notice with the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board")
or other federal or state bank regulatory or antitrust authority, which
application or notice has been accepted for processing, for approval to
engage in an Acquisition Transaction.
As defined in the Option Agreement, "Subsequent Triggering
Event" means any of the following events or transactions occurring after the
date of signing the Option Agreement:
(i) The acquisition by any person (other than Wachovia or any
Wachovia Subsidiary) of beneficial ownership of 20% or more of the then
outstanding Common Stock; or
(ii) The occurrence of the Initial Triggering Event described
above, except that the percentage referred to in clause (z) of the
second sentence thereof shall be 20%.
As defined in the Option Agreement, "Exercise Termination
Event" means each of the following: (i) the Effective Time of the Merger; (ii)
termination of the Merger Agreement in accordance with the provisions thereof if
such termination occurs prior to the occurrence of an Initial Triggering Event
except a termination by Wachovia pursuant to Section 8.01(b) (breach of Merger
Agreement by either party entitles other party to terminate Merger Agreement) or
Section 8.01(e) (Wachovia may terminate Merger Agreement if the Company's board
of directors fails to recommend the
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<PAGE>
Merger Agreement to the Company's stockholders, or withdraws such
recommendation, or modifies or changes such recommendation in a manner adverse
in any respect to the interests of Wachovia) of the Merger Agreement or by
Wachovia or the Company pursuant to Section 8.01(d)(ii)(the Company's
stockholders fail to approve the Merger Agreement) of the Merger Agreement
(each, a "Listed Termination"); or (iii) the passage of eighteen (18) months (or
such longer period as provided in the Option Agreement) after termination of the
Merger Agreement if such termination follows the occurrence of an Initial
Triggering Event or is a Listed Termination.
As provided in the Option Agreement, in the event that
Wachovia is entitled to and wishes to exercise the Option, it is obligated to
send to the Company a written notice (the "Option Notice" and the date of which
being hereinafter referred to as the "Notice Date") specifying (i) the total
number of shares of Common Stock it will purchase pursuant to such exercise and
(ii) a place and date not earlier than three business days nor later than 60
business days from the Notice Date for the closing of such purchase (the
"Closing Date"); provided, that if prior notification to or approval of the
Federal Reserve Board or any other regulatory or antitrust agency is required in
connection with such purchase, Wachovia is obligated to promptly file the
required notice or application for approval, promptly notify the Company of such
filing, and expeditiously process the same and the period of time that otherwise
would run pursuant to this sentence will run instead from the date on which any
required notification periods have expired or been terminated or such approvals
have been obtained and any requisite waiting period or periods shall have
passed. Any exercise of the Option will be deemed to occur on the Notice Date
relating thereto.
Under applicable law, Wachovia may be required to obtain the
prior approval of the Federal Reserve Board prior to acquiring 5% or more of the
issued and outstanding shares of Common Stock. Certain other regulatory
approvals may also be required before such an acquisition could be completed.
Neither of the parties to the Option Agreement may assign any
of its rights or obligations under the Merger Agreement or the Option created
thereunder to any other person, without the express written consent of the other
party, except that in the event an Initial Triggering Event shall have occurred
prior to an Exercise Termination Event,
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Wachovia, subject to the express provisions the Stock Option Agreement, may
assign in whole or in part its rights and obligations thereunder; provided,
however, that until the date 15 days following the date on which the Federal
Reserve Board has approved an application by Wachovia to acquire the shares of
Common Stock subject to the Option, Wachovia 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 the Company, (iii) an assignment to a single party
(e.g., a broker or investment banker) for the purpose of conducting a widely
dispersed public distribution on Wachovia's behalf or (iv) any other manner
approved by the Federal Reserve Board.
In addition, any shares of Common Stock purchased upon the
exercise of the Option may be resold by Wachovia pursuant to registration rights
under the Option Agreement.
In the event of any change in, or distributions in respect of,
the Common Stock by reason of stock dividends, split-ups, mergers,
recapitalizations, combinations, subdivisions, conversions, exchanges of shares
or the like, the type and number of shares of Common Stock purchasable upon
exercise of the Option will be appropriately adjusted and proper provision will
be made so that, in the event that any additional shares of Common Stock are to
be issued or otherwise become outstanding as a result of any such change (other
than pursuant to an exercise of the Option), the number of shares of Common
Stock that remain subject to the Option shall be increased so that, after such
issuance and together with shares of Common Stock previously issued pursuant to
the exercise of the Option (as adjusted on account of any of the foregoing
changes in the Common Stock), it equals 19.9% of the number of shares of Common
Stock then issued and outstanding. Whenever the number of shares of Common Stock
purchasable upon exercise of the Option is adjusted as provided in the Stock
Option Agreement, the Option Price shall be adjusted by multiplying the Option
Price by a fraction, the numerator of which shall be equal to the number of
shares of Common Stock purchasable prior to the adjustment and the denominator
of which shall be equal to the number of shares of Common Stock purchasable
after the adjustment.
At any time after the occurrence of a Repurchase Event (as
defined below) (i) at the request of the Holder, delivered prior to an Exercise
Termination Event (or such later period as provided in Section 10 of the Option
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Agreement), the Company (or any successor thereto) must repurchase the Option
from the Holder at a price (the "Option Repurchase Price") equal to the amount
by which (A) the market/offer price (as defined below) exceeds (B) the Option
Price, multiplied by the number of shares for which the Option may then be
exercised and (ii) at the request of the owner of Option Shares from time to
time (the "Owner"), delivered prior to an Exercise Termination Event (or such
later period as provided in Section 10 of the Option Agreement), the Company (or
any successor thereto) must repurchase such number of the Option Shares from the
Owner as the Owner designates at a price (the "Option Share Repurchase Price")
equal to the market/offer price multiplied by the number of Option Shares so
designated.
A "Repurchase Event" will be deemed to have occurred upon the
occurrence of any of the following events or transactions after the date hereof:
(i) the acquisition by any person (other than Wachovia or any
Wachovia Subsidiary) of beneficial ownership of 50% or more of the then
outstanding Common Stock; or
(ii) the consummation of any Acquisition Transaction described
in subparagraph (i) under the definition of Initial Triggering Event,
except that the percentage referred to in clause (z) shall be 50%.
In the event that prior to an Exercise Termination Event, the
Company enters into an agreement (i) to consolidate with or merge into any
person, other than Wachovia or a Wachovia Subsidiary, or engage in a plan of
exchange with any person, other than Wachovia or a Wachovia Subsidiary, and the
Company is not the continuing or surviving corporation of such consolidation or
merger or the acquirer in such plan of exchange, (ii) to permit any person,
other than Wachovia or a Wachovia Subsidiary, to merge into the Company or be
acquired by the Company in a plan of exchange and the Company is the continuing
or surviving or acquiring corporation, but, in connection with such merger or
plan of exchange, the then outstanding shares of Common Stock are changed into
or exchanged for stock or other securities of any other person or cash or any
other property or the then outstanding shares of Common Stock after such merger
or plan of exchange represent less than 50% of the outstanding shares and share
equivalents of the merged or acquiring company, or (iii) to sell or otherwise
transfer all or a substantial part of its or the Company
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<PAGE>
Subsidiary's assets or deposits to any person, other than Wachovia or a Wachovia
Subsidiary, then, and in each such case, the agreement governing such
transaction must make proper provision so that the Option will, upon the
consummation of any such transaction and upon the terms and conditions set forth
in the Option Agreement, be converted into, or exchanged for, an option (the
"Substitute Option"), at the election of the Holder, of either (x) the Acquiring
Corporation (as defined in the Option Agreement) or (y) any person that controls
the Acquiring Corporation.
Wachovia may, at any time following a Repurchase Event and
prior to the occurrence of an Exercise Termination Event (or such later period
as provided in the Option Agreement), relinquish the Option (together with any
Option Shares issued to and then owned by Wachovia) to the Company in exchange
for a cash fee equal to the Surrender Price; provided, however, that Wachovia
may not exercise such right if the Company has repurchased the Option (or any
portion thereof) or any Option Shares as described above. The "Surrender Price"
will be equal to $5 million (i) plus, if applicable, Wachovia's purchase price
actually paid with respect to any Option Shares and (ii) minus, if applicable,
the excess of (A) the net cash amounts, if any, received by Wachovia pursuant to
the arms' length sale of Option Shares (or any other securities into which such
Option Shares were converted or exchanged) to any unaffiliated party, over (B)
Wachovia's purchase price of such Option Shares.
Copies of the Option Agreement and the Merger Agreement are
filed as exhibits to this Schedule 13D and are incorporated herein by reference.
The foregoing summary is not intended to be complete and is qualified in its
entirety by reference to such exhibits.
Purchase of Common Stock. Subject to market conditions and
developments with respect to the Merger, Wachovia may purchase shares of Common
Stock in the open market or in privately negotiated transactions.
ITEM 5. INTEREST IN SECURITIES OF THE COMPANY.
(a) Wachovia may be deemed to be the beneficial owner of the
Option Shares. As provided in the Option Agreement, Wachovia may exercise the
Option only upon the happening of one or more events, none of which has
occurred. See Item 4 hereof. If the Option were exercised in full, the Option
Shares would represent approximately 16.6% of the currently outstanding Common
Stock (after giving effect to
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the issuance of such Option Shares). Wachovia has no right to vote or dispose of
the shares of Common Stock subject to the Option unless and until such time as
the Option is exercised. Wachovia expressly disclaims beneficial ownership of
such shares. To the best knowledge of Wachovia, none of the persons listed in
Schedule I hereto beneficially owns any shares of Common Stock.
(b) If Wachovia were to exercise the Option, it would have
sole power to vote and, subject to the terms of the Option Agreement, sole power
to direct the disposition of the shares of Common Stock covered thereby.
(c) Wachovia acquired the Option in connection
with the Merger Agreement. See Item 4 hereof.
To the best knowledge of Wachovia, none of the persons listed
in Schedule I hereto has effected any transactions in Common Stock during the
past 60 days.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE
COMPANY.
Except as described in Item 4 and Item 5 hereof, neither
Wachovia nor, to the best of its knowledge, any of the persons listed on
Schedule I hereto, has any contract, arrangement, understanding or relationship
with any other person with respect to any securities of the Company, including
the transfer or voting of any of the securities, finder's fees, joint ventures,
loan or option arrangements, puts or calls, guarantees of profits, division of
profits or losses, or the giving or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
2.1 Agreement and Plan of Merger, dated as of
August 6, 1997, by and among Wachovia
Corporation and 1st United Bancorp.
99.1 Stock Option Agreement, dated as of August 6,
1997, between Wachovia Corporation and 1st
United Bancorp.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I hereby certify that the information set forth in this statement is
true, complete and correct.
Dated: August 15, 1997
WACHOVIA CORPORATION
By: /s/ Kenneth W. McAllister
----------------------------
Name: Kenneth W. McAllister
Title: Executive Vice-President
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SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
WACHOVIA CORPORATION
The names, business addresses and present principal
occupations of the directors and executive officers of Wachovia Corporation are
set forth below. If no business address is given, the director's or officer's
business address is Post Office Box 3099, Winston-Salem, North Carolina, 27150.
The business address of each of the directors of Wachovia Corporation is also
the business address of such director's employer, if any. Directors of Wachovia
Corporation are identified by an asterisk. Unless otherwise indicated, all
directors and officers listed below are citizens of the United States.
<TABLE>
<CAPTION>
Name Present Principal Occupation or Employment and Address
- ---- ------------------------------------------------------
<S> <C>
*John L. Clendenin Chairman of the Board of BellSouth Corporation, a
telecommunications holding company. 1155 Peachtree
Street, N.E., Suite 2000, Atlanta, Georgia, 30309-3610.
*George W. Henderson, III President, Chief Executive Officer and a Director of
Burlington Industries, Inc., which manufactures
textiles and home furnishings. 3330 West Friendly
Avenue, Greensboro, North Carolina, 27410.
*Robert A. Ingram President and Chief Executive Officer of Glaxo
Wellcome Inc., a pharmaceutical company. Five Moore
Drive, Post Office Box 13398, Research Triangle Park,
North Carolina, 27709.
*John G. Medlin, Jr. Chairman of the Board of Wachovia.
*L. M. Baker, Jr. President and Chief Executive Officer of Wachovia.
*Lawrence M. Gressette, Jr. Chairman of the Executive Committee of SCANA
Corporation. 1400 Lady Street, Mail Code I-25,
Columbia, South Carolina, 29201.
*Thomas K. Hearn, Jr. President of Wake Forest University. 1834 Reynolds
Road, Room 211, Reynolds Hall, Winston-Salem, North Carolina, 27106.
*Herman J. Russell Chairman of H.J. Russell & Company, a management
services company. 504 Fair Street, SW, Atlanta, Georgia, 30313.
*John C. Whitaker, Jr. Chairman of the Board and Chief Executive Officer of
Inmar Enterprises, Inc., an information services and
transaction processing company. 2601 Pilgrim Court,
Winston-Salem, North Carolina, 27106.
*Hayne Hipp President and Chief Executive Officer of The Liberty
Corporation, an insurance and broadcasting holding
company. Post Office Box 789, Greenville, South Carolina, 29602.
</TABLE>
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<TABLE>
<S> <C>
*Robert M. Holder, Jr. Chairman of the Board of RMH Group, LLC. 3333
Cumberland Circle, Suite 400, Atlanta, Georgia, 30339.
*James W. Johnston President and Chief Executive Officer of Stonemarker
Enterprises, Inc., a consulting and investment
company. 380 Knollwood, Suite 570, Winston-Salem, North Carolina, 27103.
*Wyndham Robertson Writer and Retired Vice President Communications,
University of N.C. 520 Hooper Lane, Chapel Hill, North Carolina, 27514-3836.
*Sherwood H. Smith, Jr. Chairman of the Board of Carolina Power & Light
Company, a public utility. Post Office Box 1551,
Raleigh, North Carolina, 27602.
*Peter C. Browning President and Chief Operating Officer of Sonoco Products Company
One North Second Street, Hartsville, South Carolina 29550
Mickey W. Dry Executive Vice President and Chief Credit Officer of Wachovia.
Hugh M. Durden Executive Vice President of Wachovia.
Walter E. Leonard, Jr. Executive Vice President of Wachovia.
Kenneth W. McAllister Executive Vice President and General Counsel of
Wachovia.
Robert S. McCoy, Jr. Executive Vice President and Chief Financial Officer
of Wachovia.
G. Joseph Pendergrast Executive Vice President of Wachovia.
Richard B. Roberts Executive Vice President and Treasurer of Wachovia.
Donald K. Truslow Comptroller of Wachovia.
</TABLE>
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<PAGE>
Exhibit Index
2.1 Agreement and Plan of Merger, dated as of August 6,
1997, by and between Wachovia Corporation and 1st
United Bancorp.
99.1 Stock Option Agreement, dated as of August 6, 1997,
between Wachovia Corporation and 1st United Bancorp.
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CONFORMED COPY
================================================================================
AGREEMENT AND PLAN OF MERGER
dated as of August 6, 1997
by and between
Wachovia Corporation
and
1st United Bancorp
================================================================================
<PAGE>
TABLE OF CONTENTS
PAGE
RECITALS................................................................... 1
ARTICLE I
Certain Definitions........................................................ 1
1.01 Certain Definitions.......................................... 1
ARTICLE II
The Merger................................................................. 6
2.01 The Merger................................................... 6
2.02 Effective Date and Effective Time............................ 7
2.03 Plan of Merger............................................... 7
ARTICLE III
Consideration; Exchange Procedures......................................... 7
3.01 Merger Consideration......................................... 7
3.02 Rights as Stockholders; Stock Transfers...................... 8
3.03 Fractional Shares............................................ 8
3.04 Exchange Procedures.......................................... 9
3.05 Anti-Dilution Provisions..................................... 9
3.06 Options...................................................... 10
ARTICLE IV
Actions Pending Acquisition................................................ 11
4.01 Forebearances of 1st United.................................. 11
4.02 Forebearances of Wachovia.................................... 13
ARTICLE V
Representations and Warranties............................................. 14
5.01 Disclosure Schedules......................................... 14
5.02 Standard..................................................... 14
5.03 Representations and Warranties of 1st United................. 14
5.04 Representations and Warranties of Wachovia................... 24
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<PAGE>
PAGE
ARTICLE VI
Covenants.................................................................. 27
6.01 Reasonable Best Efforts...................................... 27
6.02 Stockholder Approvals........................................ 28
6.03 Registration Statement....................................... 28
6.04 Press Releases............................................... 29
6.05 Access; Information.......................................... 29
6.06 Acquisition Proposals........................................ 30
6.07 Affiliate Agreements......................................... 30
6.08 Shareholder Agreement........................................ 31
6.09 Takeover Laws................................................ 31
6.10 Certain Policies............................................. 31
6.11 NYSE Listing................................................. 31
6.12 Regulatory Applications...................................... 31
6.13 Indemnification.............................................. 32
6.14 Benefit Plans................................................ 33
6.15 Accountants' Letters......................................... 33
6.16 Notification of Certain Matters.............................. 34
6.17 Stock Plans.................................................. 34
6.18 Dividend Coordination........................................ 34
ARTICLE VII
Conditions to Consummation of the Merger................................... 34
7.01 Conditions to Each Party's Obligation to Effect the Merger... 34
7.02 Conditions to Obligation of 1st United....................... 35
7.03 Conditions to Obligation of Wachovia......................... 36
ARTICLE VIII
Termination................................................................ 37
8.01 Termination.................................................. 37
8.02 Effect of Termination and Abandonment........................ 38
ARTICLE IX
Miscellaneous.............................................................. 38
9.01 Survival..................................................... 38
9.02 Waiver; Amendment............................................ 38
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<PAGE>
PAGE
9.03 Counterparts................................................. 38
9.04 Governing Law................................................ 38
9.05 Expenses..................................................... 38
9.06 Notices...................................................... 38
9.07 Entire Understanding; No Third Party Beneficiaries........... 40
9.08 Interpretation; Effect....................................... 40
EXHIBIT A Form of Stock Option Agreement
EXHIBIT B Form of Shareholder Agreement
EXHIBIT C Form of Plan of Merger
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<PAGE>
AGREEMENT AND PLAN OF MERGER, dated as of August 6, 1997 (this "Agreement")
by and between 1st United Bancorp ("1st United") and Wachovia Corporation
("Wachovia").
RECITALS
A. 1st United Bancorp. 1st United is a Florida corporation, having its
principal place of business in Boca Raton, Florida.
B . Wachovia Corporation. Wachovia is a North Carolina corporation, having
its principal place of business in both Winston-Salem, North Carolina and
Atlanta, Georgia.
C. Stock Option Agreement. As a condition and an inducement to Wachovia's
entering into this Agreement, 1st United has granted to Wachovia an option
pursuant to a stock option agreement, in substantially the form of Exhibit A
(the "Stock Option Agreement").
D. Shareholder Agreement. As a further condition and inducement to the
willingness of Wachovia to enter into this Agreement, shareholders of 1st United
who are also directors of 1st United and who hold, in the aggregate in excess of
20% of the outstanding shares of 1st United Common Stock have entered into an
agreement with Wachovia, in the form of Exhibit B hereto (the "Shareholder
Agreement"), under which each such shareholders have agreed to vote in favor of
this Agreement.
E. Intentions of the Parties. It is the intention of the parties to this
Agreement that the business combination contemplated hereby be treated as a
"reorganization" under Section 368 of the Internal Revenue Code of 1986 (the
"Code").
F. Board Action. The respective Boards of Directors of each of Wachovia and
1st United have determined that it is in the best interests of their respective
companies and their stockholders to consummate the strategic business
combination transaction provided for herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements contained herein the
parties agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.01 Certain Definitions. The following terms are used in this Agreement
with the meanings set forth below:
"Acquisition Proposal" has the meaning set forth in Section 6.06.
<PAGE>
"Agreement" means this Agreement, as amended or modified from time to time
in accordance with Section 9.02.
"Code" means the Internal Revenue Code of 1986, as amended.
"Compensation and Benefit Plans" has the meaning set forth in Section
5.03(m).
"Costs" has the meaning set forth in Section 6.13(a).
"Disclosure Schedule" has the meaning set forth in Section 5.01.
"Effective Date" means the date on which the Effective Time occurs.
"Effective Time" means the effective time of the Merger, as provided for in
Section 2.02.
"Environmental Laws" means all applicable local, state and federal
environmental, health and safety laws and regulations, including, without
limitation, the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation, and Liability Act, the Clean Water Act,
the Federal Clean Air Act, and the Occupational Safety and Health Act, each as
amended, regulations promulgated thereunder, and state counterparts.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" has the meaning set forth in Section 5.03(m).
"ERISA Affiliate Plan" has the meaning set forth in Section 5.03(m).
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder.
"Exchange Agent" has the meaning set forth in Section 3.04.
"Exchange Ratio" has the meaning set forth in Section 3.01.
"FBCA" means the Florida 1989 Business Corporation Act.
"FDIC" means the Federal Deposit Insurance Corporation.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System.
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<PAGE>
"Governmental Authority" means any court, administrative agency or
commission or other federal, state or local governmental authority or
instrumentality.
"Indemnified Party" has the meaning set forth in Section 6.13(a).
"Insurance Amount" has the meaning set forth in Section 6.13(b).
"Insurance Policy" has the meaning set forth in Section 5.03(t).
"IRS" has the meaning set forth in Section 5.03(m).
"Lien" means any charge, mortgage, pledge, security interest, restriction,
claim, lien, or encumbrance.
"Material Adverse Effect" means, with respect to Wachovia, 1st United or the
Surviving Corporation, any effect that (i) is material and adverse to the
financial position, results of operations or business of Wachovia and its
Subsidiaries taken as a whole, 1st United and its Subsidiaries taken as a whole,
or the Surviving Corporation and its Subsidiaries taken as a whole,
respectively, or (ii) would materially impair the ability of either Wachovia or
1st United to perform its obligations under this Agreement or otherwise
materially threaten or materially impede the consummation of the Merger and the
other transactions contemplated by this Agreement; provided, however, that
Material Adverse Effect shall not be deemed to include the impact of (a) changes
in banking and similar laws of general applicability or interpretations thereof
by courts or governmental authorities, (b) changes in generally accepted
accounting principles or regulatory accounting requirements applicable to banks
and their holding companies generally, (c) any modifications or changes to
valuation policies and practices in connection with the Merger or restructuring
charges taken in connection with the Merger, in each case in accordance with
generally accepted accounting principles, (d) effects of any action taken by 1st
United with the prior written consent of Wachovia and (e) changes in conditions
or circumstances that affect the banking industry generally.
"Merger" has the meaning set forth in Section 2.01.
"Merger Consideration" has the meaning set forth in Section 2.01.
"Multiemployer Plans" has the meaning set forth in Section 5.03(m).
"NASDAQ" means The Nasdaq Stock Market, Inc.'s National Market System.
"NCBCA" means the North Carolina Business Corporation Act.
"New Certificate" has the meaning set forth in Section 3.04.
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<PAGE>
"North Carolina Secretary" has the meaning set forth in Section 2.01(b).
"NYSE" means the New York Stock Exchange, Inc.
"Old Certificate" has the meaning set forth in Section 3.04.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" has the meaning set forth in Section 5.03(m).
"Person" means any individual, bank, corporation, partnership, association,
joint-stock company, business trust or unincorporated organization.
"Plans" has the meaning set forth in Section 5.03(m).
"Previously Disclosed" by a party shall mean information set forth in its
Disclosure Schedule.
"Proxy Statement" has the meaning set forth in Section 6.03.
"Registration Statement" has the meaning set forth in Section 6.03.
"Regulatory Authorities" has the meaning set forth in Section 5.03(i).
"Replacement Option" has the meaning set forth in Section 3.06.
"Representatives" means, with respect to any Person, such Person's
directors, officers, employees, legal or financial advisors or any
representatives of such legal or financial advisors.
"Rights" means, with respect to any Person, securities or obligations
convertible into or exercisable or exchangeable for, or giving any person any
right to subscribe for or acquire, or any options, calls or commitments relating
to, or any stock appreciation right or other instrument the value of which is
determined in whole or in part by reference to the market price or value of,
shares of capital stock of such person.
"SEC" means the Securities and Exchange Commission.
"SEC Documents" has the meaning set forth in Section 5.03(g).
"Securities Act" means the Securities Act of 1933, as amended, and the rules
and regulations thereunder.
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<PAGE>
"Stock Option Agreement" has the meaning set forth in Recital C.
"Subsidiary" and "Significant Subsidiary" have the meanings ascribed to them
in Rule 1-02 of Regulation S-X of the SEC.
"Surviving Corporation" has the meaning set forth in Section 2.01.
"Takeover Laws" has the meaning set forth in Section 5.03 (o).
"Tax" and "Taxes" means all federal, state, local or foreign taxes, charges,
fees, levies or other assessments, however denominated, including, without
limitation, all net income, gross income, gross receipts, gains, sales, use, ad
valorem, goods and services, capital, production, transfer, franchise, windfall
profits, license, withholding, payroll, employment, disability, employer health,
excise, estimated, severance, stamp, occupation, property, environmental,
unemployment or other taxes, custom duties, fees, assessments or charges of any
kind whatsoever, together with any interest and any penalties, additions to tax
or additional amounts imposed by any taxing authority whether arising before, on
or after the Effective Date.
"Tax Returns" means any return, amended return or other report (including
elections, declarations, disclosures, schedules, estimates and information
returns) required to be filed with respect to any Tax.
"Treasury Stock" shall mean shares of 1st United Common Stock held by 1st
United or any of its Subsidiaries or by Wachovia or any of its Subsidiaries, in
each case other than in a fiduciary capacity or as a result of debts previously
contracted in good faith.
"Wachovia" has the meaning set forth in the preamble to this Agreement.
"Wachovia Average Stock Price" has the meaning set forth in Section 3.01.
"Wachovia Board" means the Board of Directors of Wachovia.
"Wachovia Common Stock" means the common stock, par value $5.00 per share,
of Wachovia.
"Wachovia Preferred Stock" means the preferred stock, par value $5.00 per
share, of Wachovia.
"Wachovia Stock" means, collectively, Wachovia Common Stock and Wachovia
Preferred Stock.
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<PAGE>
"X" has the meaning set forth in the preamble to this Agreement.
"1st United Affiliate" has the meaning set forth in Section 6.07(a).
"1st United Board" means the Board of Directors of 1st United.
"1st United By-Laws" means the Amended and Restated By-laws of 1st United.
"1st United Certificate" means the Amended and Restated Articles of
Incorporation of 1st United.
"1st United Common Stock" means the common stock, par value $0.01 per share,
of 1st United.
"1st United Meeting" has the meaning set forth in Section 6.02.
"1st United Preferred Stock" means the preferred stock, no par value, of 1st
United.
"1st United Stock Option" has the meaning set forth in Section 3.06.
"1st United Stock" means, collectively, 1st United Common Stock and 1st
United Preferred Stock.
"1st United Stock Plan" has the meaning set forth in Section 3.06.
ARTICLE II
THE MERGER
2.01 The Merger. (a) At the Effective Time, 1st United shall merge with and
into Wachovia(the "Merger"), the separate corporate existence of 1st United
shall cease and Wachovia shall survive and continue to exist as a North Carolina
corporation (Wachovia, as the surviving corporation in the Merger, sometimes
being referred to herein as the "Surviving Corporation"). Wachovia may at any
time prior to the Effective Time change the method of effecting the combination
with 1st United (including, without limitation, the provisions of this Article
II) if and to the extent it deems such change to be necessary or appropriate
after notification to and consultation with 1st United; provided, however, that
no such change shall (i) alter or change the amount or kind of consideration to
be issued to holders of 1st United Common Stock as provided for in this
Agreement (the "Merger Consideration"), (ii) adversely affect the tax treatment
of 1st United's stockholders as a result of receiving the Merger Consid-
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<PAGE>
eration or (iii) materially impede or delay consummation of the transactions
contemplated by this Agreement.
(b) Subject to the satisfaction or waiver of the conditions set forth in
Article VII, the Merger shall become effective upon the occurrence of the filing
in the office of the Florida Department of State of articles of merger in
accordance with Section 607.1105 of the FBCA and the filing in the Office of the
Secretary of State of the State of North Carolina (the "North Carolina
Secretary") of articles of merger in accordance with Section 55-11-05 of the
NCBCA or such later date and time as may be set forth in such articles. The
Merger shall have the effects prescribed in the NCBCA and the FBCA.
(c) Articles of Incorporation and By-Laws. The articles of incorporation and
by-laws of Wachovia immediately after the Merger shall be those of Wachovia as
in effect immediately prior to the Effective Time.
(d) Directors and Officers of Wachovia. The directors and officers of
Wachovia immediately after the Merger shall be the directors and officers of
Wachovia immediately prior to the Effective Time, until such time as their
successors shall be duly elected and qualified.
2.02 Effective Date and Effective Time. Subject to the satisfaction or
waiver of the conditions set forth in Article VII, the parties shall cause the
effective date of the Merger (the "Effective Date") to occur on (i) the fifth
business day to occur after the last of the conditions set forth in Article VII
shall have been satisfied or waived in accordance with the terms of this
Agreement (or, at the election of Wachovia, a day within five business days of
such fifth business day) or (ii) such other date to which the parties may agree
in writing. The time on the Effective Date when the Merger shall become
effective is referred to as the "Effective Time."
2.03 Plan of Merger. Wachovia and 1st United shall enter into a separate
plan of merger, in substantially the form of Exhibit C, for purposes of any
filing requirement.
ARTICLE III
CONSIDERATION; EXCHANGE PROCEDURES
3.01 Merger Consideration. Subject to the provisions of this Agreement, at
the Effective Time, automatically by virtue of the Merger and without any action
on the part of any Person:
(a) Outstanding 1st United Common Stock. Each share, excluding Treasury
Stock, of 1st United Common Stock, issued and outstanding immediately prior
to the Effective Time shall become and be converted into the number of
shares of Wachovia Common Stock equal to the
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Exchange Ratio (as defined in the following sentence). The "Exchange Ratio"
shall mean a number equal to $20.875 divided by the Wachovia Average Stock
Price (as defined below) (rounded to the nearest one-thousandth) provided
that:
(i) if the Wachovia Average Stock Price exceeds $69.64375, the
Exchange Ratio shall be 0.3; and
(ii) if the Wachovia Average Stock Price is less than $56.98125, the
Exchange Ratio shall be 0.366.
The "Wachovia Average Stock Price" shall mean the average of the last sale
prices of Wachovia Common Stock, as reported by the NYSE Composite Transactions
Reporting System (as reported in The Wall Street Journal or, if not reported
therein, in another authoritative source), for the ten NYSE trading days
immediately preceding the Effective Date. The Exchange Ratio and the
determination thereof shall be subject to adjustment as set forth in Section
3.05.
(b) Outstanding Wachovia Stock. Each share of Wachovia Stock issued and
outstanding immediately prior to the Effective Time shall remain issued and
outstanding and unaffected by the Merger.
(c) Treasury Shares. Each share of 1st United Stock held as Treasury Stock
immediately prior to the Effective Time shall be canceled and retired at the
Effective Time and no consideration shall be issued in exchange therefor.
3.02 Rights as Stockholders; Stock Transfers. At the Effective Time, holders
of 1st United Stock shall cease to be, and shall have no rights as, stockholders
of 1st United, other than to receive any dividend or other distribution with
respect to such 1st United Stock with a record date occurring prior to the
Effective Time and the consideration provided under this Article III. After the
Effective Time, there shall be no transfers on the stock transfer books of 1st
United or the Surviving Corporation of shares of 1st United Stock.
3.03 Fractional Shares. Notwithstanding any other provision hereof, no
fractional shares of Wachovia Common Stock and no certificates or scrip
therefor, or other evidence of ownership thereof, will be issued in the Merger;
instead, Wachovia shall pay to each holder of 1st United Common Stock who would
otherwise be entitled to a fractional share of Wachovia Common Stock (after
taking into account all Old Certificates delivered by such holder) an amount in
cash (without interest) determined by multiplying such fraction by the Wachovia
Average Stock Price.
3.04 Exchange Procedures. (a) As promptly as practicable after the Effective
Date and in any event within 10 business days thereof, Wachovia or Wachovia
Bank, N.A. (in such
-8-
<PAGE>
capacity, the "Exchange Agent"), shall send or cause to be sent to each former
holder of record of shares of 1st United Common Stock immediately prior to the
Effective Time transmittal materials for use in exchanging such stockholder's
certificates formerly representing shares of 1st United Common Stock ("Old
Certificates") for the consideration set forth in this Article III. Wachovia
shall cause the certificates representing the shares of Wachovia Common Stock
("New Certificates") into which shares of a stockholder's 1st United Common
Stock are converted on the Effective Date and/or any check in respect of any
fractional share interests or dividends or distributions which such person shall
be entitled to receive to be delivered to such stockholder upon delivery to the
Exchange Agent of Old Certificates representing such shares of 1st United Common
Stock (or indemnity reasonably satisfactory to Wachovia and the Exchange Agent,
if any of such certificates are lost, stolen or destroyed) owned by such
stockholder. No interest will be paid on any cash to be paid in lieu of
fractional share interests or in respect of dividends or distributions which any
such person shall be entitled to receive pursuant to this Article III upon such
delivery. 1st United shall have the right to review and comment on the
transmittal materials before the Effective Date.
(b) Notwithstanding the foregoing, neither the Exchange Agent nor any party
hereto shall be liable to any former holder of 1st United Common Stock for any
amount properly delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws.
(c) At the election of Wachovia, no dividends or other distributions with
respect to Wachovia Common Stock with a record date occurring after the
Effective Time shall be paid to the holder of any unsurrendered Old Certificate
representing shares of 1st United Common Stock converted in the Merger into the
right to receive shares of such Wachovia Common Stock until the holder thereof
shall be entitled to receive New Certificates in exchange therefor in accordance
with the procedures set forth in this Section 3.04, and no such shares of 1st
United Common Stock shall be eligible to vote until the holder of Old
Certificates is entitled to receive New Certificates in accordance with the
procedures set forth in this Section 3.04. After becoming so entitled in
accordance with this Section 3.04, the record holder thereof also shall be
entitled to receive any such dividends or other distributions, without any
interest thereon, which theretofore had become payable with respect to shares of
Wachovia Common Stock such holder had the right to receive upon surrender of the
Old Certificate.
3.05 Anti-Dilution Provisions. In the event Wachovia changes (or establishes
a record date for changing) the number of shares of Wachovia Common Stock issued
and outstanding prior to the Effective Date as a result of a stock split, stock
dividend, recapitalization reorganization, reclassification, reverse stock split
or similar transaction (collectively the "Recapitalization") with respect to the
outstanding Wachovia Common Stock and the record date therefor shall be prior to
the Effective Date, the Exchange Ratio and the calculation thereof shall be
proportionately adjusted so that each holder of 1st United Common Stock shall
receive the number of shares of Wachovia Common Stock that such holder would
have received if the Recapitalization had occurred immediately after the
Effective Time.
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<PAGE>
3.06 Options. (a) Unless an Optionee shall provide 1st United with the
notice contemplated by Section 3.06(b) below, then, at the Effective Time, each
outstanding option to purchase shares of 1st United Common Stock (each, a "1st
United 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 1st United Stock Option, the number of shares of Wachovia Common Stock
equal to (i) the number of shares of 1st United Common Stock subject to the 1st
United Stock Option, multiplied by (ii) the Exchange Ratio (such product rounded
down to the nearest whole number) (a "Replacement Option"), at an exercise price
per share (rounded up to the nearest whole cent) equal to (A) the aggregate
exercise price for the shares of 1st United Common Stock which were purchasable
pursuant to such 1st United Stock Option divided by (B) the number of full
shares of Wachovia Common Stock subject to such Replacement Option in accordance
with the foregoing. Notwithstanding the foregoing, each 1st United 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. At or prior to the Effective Time, 1st United shall take all
action necessary, including obtaining any necessary consents from holders of 1st
United Stock Options, to permit the replacement of the outstanding 1st United
Stock Options by Wachovia pursuant to this Section. Wachovia shall cause any
shares to be issued pursuant to the Replacement Options to be subject to a
registration statement under the Securities Act.
(b) If an Optionee shall provide written notice to 1st United within at
least 10 business days prior to the Effective Time of its election to treat 1st
United Stock Options in accordance with the provisions of this Section 3.06(b),
then, at the Effective Time, each then outstanding 1st United Stock Option,
whether or not vested, shall be canceled and the Optionee shall be entitled to
receive an amount of cash equal to the product of (i) the amount, if any, by
which the Merger Consideration Value (as defined below) exceeds the exercise
price per share subject to such 1st United Stock Option (whether or not vested)
and (ii) the number of shares issuable pursuant to the unexercised portion of
such 1st United Stock Option, less any required withholding taxes (the "Option
Consideration"). "Merger Consideration Value" shall be equal to the Exchange
Ratio multiplied by the Wachovia Average Stock Price. The Option Consideration
shall be paid promptly following the Effective Time. Prior to the Effective
Time, 1st United shall take such actions as may be necessary to effectuate the
foregoing, including obtaining all applicable consents from the Optionees.
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ARTICLE IV
ACTIONS PENDING ACQUISITION
4.01 Forebearances of 1st United. From the date hereof until the Effective
Time, except as expressly contemplated by this Agreement, without the prior
written consent of Wachovia, 1st United will not, and will cause each of its
Subsidiaries not to:
(a) Ordinary Course. Conduct the business of 1st United and its
Subsidiaries other than in the ordinary and usual course or fail to use
reasonable efforts to preserve intact their business organizations and
assets and maintain their rights, franchises and existing relations with
customers, suppliers, employees and business associates, or take any action
reasonably likely to have an adverse affect upon 1st United's ability to
perform any of its material obligations under this Agreement.
(b) Capital Stock. Other than pursuant to Rights Previously Disclosed
and outstanding on the date hereof, (A) issue, sell or otherwise permit to
become outstanding, or authorize the creation of, any additional shares of
1st United Common Stock or any Rights, (B) enter into any agreement with
respect to the foregoing, or (C) permit any additional shares of 1st United
Common Stock to become subject to new grants of employee or director stock
options, other Rights or similar stock-based employee rights.
(c) Dividends, Etc. (a) Make, declare, pay or set aside for payment any
dividend (other than (A) quarterly cash dividends on 1st United Common
Stock in an amount not to exceed $0.11 per share (the "Permitted Dividend
Amount") with record and payment dates consistent with past practice and
(B) dividends from wholly owned Subsidiaries to 1st United or another
wholly owned Subsidiary of 1st United) on or in respect of, or declare or
make any distribution on any shares of, 1st United Common Stock or (b)
directly or indirectly adjust, split, combine, redeem, reclassify, purchase
or otherwise acquire, any shares of its capital stock; provided, however,
if Wachovia shall increase its regular quarterly dividend to an amount in
excess of $0.40 per share, then the Permitted Dividend Amount may be
increased by 1st United at its option for all simultaneous and future
dividends in an amount proportionate to the increase in the Wachovia
dividend.
(d) Compensation; Employment Agreements; Etc. Enter into or amend or
renew any employment, consulting, severance or similar agreements or
arrangements with any director, officer or employee of 1st United or its
Subsidiaries, or grant any salary or wage increase or increase any employee
benefit (including incentive or bonus payments), except (i) for normal
individual increases in compensation to employees in the ordinary course of
business consistent with past practice, (ii) for other changes that are
required by applicable law, (iii) to satisfy Previously Disclosed
contractual obligations existing as of the date hereof, or (iv) for grants
of awards to newly hired employees consistent with past practice.
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<PAGE>
(e) Benefit Plans. Enter into, establish, adopt or amend (except (i) as
may be required by applicable law or (ii) to satisfy Previously Disclosed
contractual obligations existing as of the date hereof) any pension,
retirement, stock option, stock purchase, savings, profit sharing, deferred
compensation, consulting, bonus, group insurance or other employee benefit,
incentive or welfare contract, plan or arrangement, or any trust agreement
(or similar arrangement) related thereto, in respect of any director,
officer or employee of 1st United or its Subsidiaries, or take any action
to accelerate the vesting or exercisability of stock options, restricted
stock or other compensation or benefits payable thereunder.
(f) Dispositions. Except as Previously Disclosed, sell, transfer,
mortgage, encumber or otherwise dispose of or discontinue any of its
assets, deposits, business or properties except in the ordinary course of
business and in a transaction that is not material to it and its
Subsidiaries taken as a whole.
(g) Acquisitions. Except as Previously Disclosed, acquire (other than
by way of foreclosures or acquisitions of control in a bona fide fiduciary
capacity or in satisfaction of debts previously contracted in good faith,
in each case in the ordinary and usual course of business consistent with
past practice) all or any portion of, the assets, business, deposits or
properties of any other entity except in the ordinary course of business
and in a transaction that is not material to it and its Subsidiaries taken
as a whole and in which no capital stock or Rights are issued.
(h) Governing Documents. Amend the 1st United Certificate, 1st United
By-laws or the certificate of incorporation or by-laws (or similar
governing documents) of any of 1st United's Subsidiaries.
(i) Accounting Methods. Implement or adopt any change in its accounting
principles, practices or methods, other than as may be required by
generally accepted accounting principles.
(j) Contracts. Except in the ordinary course of business consistent
with past practice, enter into or terminate any material contract (as
defined in Section 5.03(k)) or amend or modify in any material respect any
of its existing material contracts.
(k) Claims. Settle any claim, action or proceeding, except for any
claim, action or proceeding involving solely money damages in an amount,
individually or in the aggregate for all such settlements, that is not
material to 1st United and its Subsidiaries taken as a whole.
(l) Adverse Actions. (a) Knowingly take any action reasonably likely to
prevent or impede the Merger from qualifying as a reorganization within the
meaning of Section 368 of the Code; or (b) knowingly take any action that
is intended or is reasonably likely to result in
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(i) any of its representations and warranties set forth in this Agreement
being or becoming untrue in any material respect at any time at or prior to
the Effective Time, (ii) any of the conditions to the Merger set forth in
Article VII not being satisfied or (iii) a material violation of any
provision of this Agreement except, in each case, as may be required by
applicable law or regulation.
(m) Risk Management. Except as required by applicable law or
regulation, (i) implement or adopt any material change in its interest rate
and other risk management policies, proce dures or practices; (ii) fail to
follow its existing policies or practices with respect to managing its
exposure to interest rate and other risk; or (iii) fail to use commercially
reasonable means to avoid any material increase in its aggregate exposure
to interest rate risk.
(n) Indebtedness. Incur any indebtedness for borrowed money other than
in the ordinary course of business.
(o) Commitments. Agree or commit to do any of the foregoing.
4.02 Forebearances of Wachovia. From the date hereof until the Effective
Time, except as expressly contemplated by this Agreement, without the prior
written consent of 1st United, Wachovia will not, and will cause each of its
Subsidiaries not to:
(a) Extraordinary Dividends. Make, declare, pay or set aside for
payment any extraordinary dividend.
(b) Adverse Actions. (i) Take any action which would materially
adversely affect its ability to consummate the Merger; (ii) take any action
reasonably likely to prevent or impede the Merger from qualifying as a
reorganization within the meaning of Section 368 of the Code; or (iii)
knowingly take any action that is intended or is reasonably likely to
result in (A) any of its representations and warranties set forth in this
Agreement being or becoming untrue in any material respect at any time at
or prior to the Effective Time, (B) any of the conditions to the Merger set
forth in Article VII not being satisfied; or (C) a material violation of
any provision of this Agreement except, in each case, as may be required by
applicable law.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01 Disclosure Schedules. On or prior to the date hereof, Wachovia has
delivered to 1st United a schedule and 1st United has delivered to Wachovia
schedule (respectively, its "Disclosure Schedule") setting forth, among other
things, items the disclosure of which is necessary or appropriate either in
response to an express disclosure requirement contained in a provision hereof or
as an exception to one or more representations or warranties contained in
Section 5.03 or 5.04 or to one or more of its covenants contained in Article IV;
provided, that (a) no such item is required to be set forth in a Disclosure
Schedule as an exception to a representation or warranty if its absence would
not be reasonably likely to result in the related representation or warranty
being deemed untrue or incorrect under the standard established by Section 5.02,
and (b) the mere inclusion of an item in a Disclosure Schedule as an exception
to a representation or warranty shall not be deemed an admission by a party that
such item represents a material exception or fact, event or circumstance or that
such item is reasonably likely to result in a Material Adverse Effect.
5.02 Standard. No representation or warranty of 1st United or Wachovia
contained in Section 5.03 or 5.04 shall be deemed untrue or incorrect, and no
party hereto shall be deemed to have breached a representation or warranty, as a
consequence of the existence of any fact, event or circumstance unless such
fact, circumstance or event, individually or taken together with all other
facts, events or circumstances inconsistent with any representation or warranty
contained in Section 5.03 or 5.04, has had or is reasonably likely to have a
Material Adverse Effect.
5.03 Representations and Warranties of 1st United. Subject to Sections 5.01
and 5.02 and except as Previously Disclosed in a paragraph of its Disclosure
Schedule referring to the relevant paragraph below, 1st United hereby represents
and warrants to Wachovia:
(a) Organization, Standing and Authority. 1st United is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Florida. 1st United is duly qualified to do business and is in
good standing in the states of the United States and any foreign
jurisdictions where its ownership or leasing of property or assets or the
conduct of its business requires it to be so qualified.
(b) 1st United Stock. As of the date hereof, the authorized capital
stock of 1st United consists solely of 20,000,000 shares of 1st United
Common Stock, of which not more than 10,160,000 shares were outstanding as
of the date hereof and 5,000,000 shares of 1st United Preferred Stock, of
which no shares were outstanding as of the date hereof. As of the date
hereof, no shares of 1st United Common Stock were held in treasury by 1st
United or otherwise owned by 1st United or its Subsidiaries ("Treasury
Stock"). The outstanding
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shares of 1st United Common Stock have been duly authorized and are validly
issued and outstanding, fully paid and nonassessable, and subject to no
preemptive rights (and were not issued in violation of any preemptive
rights). As of the date hereof, there are no shares of 1st United Common
Stock authorized and reserved for issuance, 1st United does not have any
Rights issued or outstanding with respect to 1st United Stock, and 1st
United does not have any commitment to authorize, issue or sell any 1st
United Common Stock or Rights, except pursuant to this Agreement and the
Stock Option Agreement. The number of shares of 1st United Common Stock
which are issuable and reserved for issuance upon exercise of 1st United
Stock Options as of the date hereof, and the exercise prices and other
terms thereof, are Previously Disclosed in 1st United's Disclosure
Schedule.
(c) Subsidiaries. (i)(A) 1st United has Previously Disclosed a list of
all of its Subsidiaries together with the jurisdiction of organization of
each such Subsidiary, (B) it owns, directly or indirectly, all the issued
and outstanding equity securities of each of its Subsidiaries, (C) no
equity securities of any of its Subsidiaries are or may become required to
be issued (other than to it or its wholly-owned Subsidiaries) by reason of
any Right or otherwise, (D) there are no contracts, commitments,
understandings or arrangements by which any of such Subsidiaries is or may
be bound to sell or otherwise transfer any equity securities of any such
Subsidiaries (other than to it or its wholly-owned Subsidiaries), (E) there
are no contracts, commitments, understandings, or arrangements relating to
its rights to vote or to dispose of such securities and (F) all the equity
securities of each Subsidiary held by 1st United or its Subsidiaries are
fully paid and nonassessable and are owned by 1st United or its
Subsidiaries free and clear of any Liens.
(ii) 1st United does not own beneficially, directly or indirectly, any
equity securities or similar interests of any Person, or any interest in a
partnership or joint venture of any kind, other than its Subsidiaries.
(iii) Each of 1st United's Subsidiaries has been duly organized and is
validly existing in good standing under the laws of the jurisdiction of its
organization, and is duly qualified to do business and in good standing in
the jurisdictions where its ownership or leasing of property or the conduct
of its business requires it to be so qualified.
(d) Corporate Power. 1st United and each of its Subsidiaries has the
corporate power and authority to carry on its business as it is now being
conducted and to own all its properties and assets; and 1st United has the
corporate power and authority to execute, deliver and perform its
obligations under this Agreement and the Stock Option Agreement and to
consummate the transactions contemplated hereby and thereby.
(e) Corporate Authority. Subject in the case of this Agreement to
receipt of the requisite approval of the agreement of merger set forth in
this Agreement by the holders of a majority of the outstanding shares of
1st United Common Stock entitled to vote thereon (which is the
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only shareholder vote required thereon), this Agreement, the Stock Option
Agreement and the transactions contemplated hereby and thereby have been
authorized by all necessary corporate action of 1st United and the 1st
United Board prior to the date hereof. This Agreement is a valid and
legally binding obligation of 1st United, enforceable in accordance with
its terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar laws of general applicability relating to or affecting creditors'
rights or by general equity principles). The 1st United Board of Directors
has received the opinion of Hoeffer & Arnett, Inc. to the effect that as of
the date hereof the Merger Consideration is fair to the holders of 1st
United Common Stock from a financial point of view.
(f) Regulatory Filings; No Defaults. (i) No consents or approvals of,
or filings or registrations with, any Governmental Authority or with any
third party are required to be made or obtained by 1st United or any of its
Subsidiaries in connection with the execution, delivery or performance by
1st United of this Agreement or the Stock Option Agreement or to consummate
the Merger except for (A) the filing of a notice under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act"), (B)
filings of applications or notices with federal and Florida banking
authorities, (C) filings with the SEC and state securities authorities, and
(D) the filing of articles of merger with the North Carolina Secretary
pursuant to the NCBCA and the Florida Department of State pursuant to the
FBCA. As of the date hereof, 1st United is not aware of any reason why the
approvals set forth in Section 7.01(b) will not be received without the
imposition of a condition, restriction or requirement of the type described
in Section 7.01(b).
(ii) Subject to receipt of the regulatory approvals referred to in the
preceding paragraph, and expiration of related waiting periods, and
required filings under federal and state securities laws, the execution,
delivery and performance of this Agreement and the Stock Option Agreement
and the consummation of the transactions contemplated hereby and thereby do
not and will not (A) constitute a breach or violation of, or a default
under, or give rise to any Lien, any acceleration of remedies or any right
of termination under, any law, rule or regulation or any judgment, decree,
order, governmental permit or license, or agreement, indenture or
instrument of 1st United or of any of its Subsidiaries or to which 1st
United or any of its Subsidiaries or properties is subject or bound, (B)
constitute a breach or violation of, or a default under, the 1st United
Certificate or the 1st United By-Laws, or (C) require any consent or
approval under any such law, rule, regulation, judgment, decree, order,
governmental permit or license, agreement, indenture or instrument.
(g) Financial Reports and SEC Documents; No Material Adverse Effect.
(i) 1st United's Annual Reports on Form 10-K or 10-KSB for the fiscal years
ended December 31, 1994, 1995 and 1996, and all other reports, registration
statements, definitive proxy statements or information statements filed or
to be filed by it or any of its Subsidiaries subsequent to December 31,
1994 under the Securities Act, or under Section 13(a), 13(c), 14 or 15(d)
of the
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Exchange Act, in the form filed or to be filed (collectively, 1st United's
"SEC Documents") with the SEC, as of the date filed or to be filed, (A)
complied or will comply in all material respects as to form with the
applicable requirements under the Securities Act or the Exchange Act, as
the case may be, and (B) did not and will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and each of the
balance sheets contained in or incorporated by reference into any such SEC
Document (including the related notes and schedules thereto) fairly
presents, or will fairly present, the financial position of 1st United and
its Subsidiaries as of its date, and each of the statements of income and
changes in stockholders' equity and cash flows or equivalent statements in
such SEC Documents (including any related notes and schedules thereto)
fairly presents, or will fairly present, the results of operations, changes
in stockholders' equity and changes in cash flows, as the case may be, of
1st United and its Subsidiaries for the periods to which they relate, in
each case in accordance with generally accepted accounting principles
consistently applied during the periods involved, except in each case as
may be noted therein, subject to normal year-end audit adjustments in the
case of unaudited statements.
(ii) Since December 31, 1996, 1st United and its Subsidiaries have not
incurred any liability other than in the ordinary course of business
consistent with past practice.
(iii) Since December 31, 1996, (A) 1st United and its Subsidiaries have
conducted their respective businesses in the ordinary and usual course
consistent with past practice (excluding the incurrence of expenses related
to this Agreement and the transactions contemplated hereby) and (B) no
event has occurred or circumstance arisen that, individually or taken
together with all other facts, circumstances and events (described in any
paragraph of Section 5.03 or otherwise), is reasonably likely to have a
Material Adverse Effect with respect to 1st United.
(h) Litigation. No litigation, claim or other proceeding before any
court or governmental agency is pending against 1st United or any of its
Subsidiaries and, to 1st United's knowledge, no such litigation, claim or
other proceeding has been threatened.
(i) Regulatory Matters. (i) Neither 1st United nor any of its
Subsidiaries or properties is a party to or is subject to any order,
decree, agreement, memorandum of understanding or similar arrangement with,
or a commitment letter or similar submission to, or extraordinary
supervisory letter from, any federal or state governmental agency or
authority charged with the supervision or regulation of financial
institutions or issuers of securities or engaged in the insurance of
deposits (including, without limitation, the Federal Reserve Board and the
FDIC) or the supervision or regulation of it or any of its Subsidiaries
(collectively, the "Regulatory Authorities").
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(ii) Neither 1st United nor any of its Subsidiaries has been
advised by any Regulatory Authority that such Regulatory Authority is
contemplating issuing or requesting (or is considering the appropriateness
of issuing or requesting) any such order, decree, agreement, memorandum of
understanding, commitment letter, supervisory letter or similar arrangement
or submission.
(j) Compliance with Laws. 1st United and each of its Subsidiaries:
(i) is in compliance with all applicable federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments,
orders or decrees applicable thereto or to the employees conducting
such businesses, including, without limitation, the Equal Credit
Opportunity Act, the Fair Housing Act, the Community Reinvestment Act,
the Home Mortgage Disclosure Act and all other applicable fair lending
laws and other laws relating to discriminatory business practices;
(ii) has all permits, licenses, authorizations, orders and
approvals of, and has made all filings, applications and registrations
with, all Governmental Authorities that are required in order to permit
them to own or lease their properties and to conduct their businesses
as presently conducted; all such permits, licenses, certificates of
authority, orders and approvals are in full force and effect and, to
1st United's knowledge, no suspension or cancellation of any of them is
threatened; and
(iii) has received no notification or communication from any
Governmental Authority (A) asserting that 1st United or any of its
Subsidiaries is not in compliance with any statute, regulation, or
ordinance or (B) threatening to revoke any license, franchise, permit,
or governmental authorization (nor, to 1st United's knowledge, do any
grounds for any of the foregoing exist).
(k) Material Contracts; Defaults. Except for those agreements and other
documents filed as exhibits to its SEC Documents, neither 1st United nor
any of its Subsidiaries is a party to, bound by or subject to any
agreement, contract, arrangement, commitment or understanding (whether
written or oral) (i) that is a "material contract" within the meaning of
Item 601(b)(10) of the SEC's Regulation S-K or (ii) that restricts the
conduct of business by it or any of its Subsidiaries. Neither it nor any of
its Subsidiaries is in default under any contract, agreement, commitment,
arrangement, lease, insurance policy or other instrument to which it is a
party, 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, 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.
(l) No Brokers. No action has been taken by 1st United that would give
rise to any valid claim against any party hereto for a brokerage
commission, finder's fee or other like payment
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with respect to the transactions contemplated by this Agreement, excluding
a Previously Disclosed fee to be paid to Hoeffer & Arnett, Inc.
(m) Employee Benefit Plans. (i) Section 5.03(m)(i) of 1st United's
Disclosure Schedule contains a complete and accurate list of all existing
bonus, incentive, deferred compensation, pension, retirement,
profit-sharing, thrift, savings, employee stock ownership, stock bonus,
stock purchase, restricted stock, stock option, severance, welfare and
fringe benefit plans, employment or severance agreements and all similar
practices, policies and arrangements in which any employee or former
employee (the "Employees"), consultant or former consultant (the
"Consultants") or director or former director (the "Directors") of 1st
United or any of its Subsidiaries participates or to which any such
Employees, Consultants or Directors are a party (the "Compensation and
Benefit Plans"). Neither 1st United nor any of its Subsidiaries has any
commitment to create any additional Compensation and Benefit Plan or to
modify or change any existing Compensation and Benefit Plan.
(ii) Each Compensation and Benefit Plan has been operated and
administered in all material respects in accordance with its terms and with
applicable law, including, but not limited to, ERISA, the Code, the
Securities Act, the Exchange Act, the Age Discrimination in Employment Act,
and any regulations or rules promulgated thereunder, and all filings,
disclosures and notices required by ERISA, the Code, the Securities Act,
the Exchange Act, the Age Discrimination in Employment Act or any other
applicable law have been timely made. Each Compensation and Benefit Plan
which is an "employee pension benefit plan" within the meaning of Section
3(2) of ERISA (a "Pension Plan") and which is intended to be qualified
under Section 401(a) of the Code has received a favorable determination
letter (including a determination that the related trust under such
Compensation and Benefit Plan is exempt from tax under Section 501(a) of
the Code) from the Internal Revenue Service ("IRS") for "TRA" (as defined
in Rev. Proc. 93-39), or will file for such determination letter prior to
the expiration of the remedial amendment period for such Compensation and
Benefit Plan, and 1st United is not aware of any circumstances likely to
result in revocation of any such favorable determination letter. There is
no material pending or, to the knowledge of 1st United, threatened legal
action, suit or claim relating to the Compensation and Benefit Plans, other
than routine claims for benefits. Neither 1st United nor any of its
Subsidiaries has engaged in a transaction, or omitted to take any action,
with respect to any Compensation and Benefit Plan that would reasonably be
expected to subject 1st United or any of its Subsidiaries to a tax or
penalty imposed by either Section 4975 of the Code or Section 502 of ERISA,
assuming for purposes of Section 4975 of the Code that the taxable period
of any such transaction expired as of the date hereof.
(iii) No liability (other than for payment of premiums to the PBGC
which have been made or will be made on a timely basis) under Title IV of
ERISA has been or is expected to be incurred by 1st United or any of its
Subsidiaries with respect to any ongoing, frozen or terminated
"single-employer plan", within the meaning of Section 4001(a)(15) of ERISA,
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currently or formerly maintained by any of them, or any single-employer
plan of any entity (an "ERISA Affiliate") which is considered one employer
with 1st United under Section 4001(a)(14) of ERISA or Section 414(b) or (c)
of the Code (an "ERISA Affiliate Plan"). None of 1st United, any of its
Subsidiaries or any ERISA Affiliate has contributed, or has been obligated
to contribute, to a multiemployer plan under Subtitle E of Title IV of
ERISA at any time since September 26, 1980. No notice of a "reportable
event", within the meaning of Section 4043 of ERISA, for which the 30-day
reporting requirement has not been waived, has been required to be filed
for any Compensation and Benefit Plan or by any ERISA Affiliate Plan within
the 12-month period ending on the date hereof, and to the knowledge of 1st
United no such notice will be required to be filed as a result of the
transactions contemplated by this Agreement. The PBGC has not instituted
proceedings to terminate any Pension Plan or ERISA Affiliate Plan and, to
1st United's knowledge, no condition exists that presents a material risk
that such proceedings will be instituted. To the knowledge of 1st United,
there is no pending investigation or enforcement action by the PBGC, the
Department of Labor (the "DOL") or IRS or any other governmental agency
with respect to any Compensation and Benefit Plan. Under each Pension Plan
and ERISA Affiliate Plan, as of the date of the most recent actuarial
valuation performed prior to the date of this Agreement, the actuarially
determined present value of all "benefit liabilities", within the meaning
of Section 4001(a)(16) of ERISA (as determined on the basis of the
actuarial assumptions contained in such actuarial valuation of such Pension
Plan or ERISA Affiliate Plan), did not exceed the then current value of the
assets of such Pension Plan or ERISA Affiliate Plan and since such date
there has been neither an adverse change in the financial condition of such
Pension Plan or ERISA Affiliate Plan nor any amendment or other change to
such Pension Plan or ERISA Affiliate Plan that would increase the amount of
benefits thereunder which reasonably could be expected to change such
result.
(iv) All contributions required to be made under the terms of any
Compensation and Benefit Plan or ERISA Affiliate Plan or any employee
benefit arrangements under any collective bargaining agreement to which 1st
United or any of its Subsidiaries is a party have been timely made or have
been reflected on 1st United's financial statements. Neither any Pension
Plan nor any ERISA Affiliate Plan has an "accumulated funding deficiency"
(whether or not waived) within the meaning of Section 412 of the Code or
Section 302 of ERISA and all required payments to the PBGC with respect to
each Pension Plan or ERISA Affiliate Plan have been made on or before their
due dates. None of 1st United, any of its Subsidiaries or any ERISA
Affiliate (x) has provided, or would reasonably be expected to be required
to provide, security to any Pension Plan or to any ERISA Affiliate Plan
pursuant to Section 401(a)(29) of the Code, and (y) has taken any action,
or omitted to take any action, that has resulted, or would reasonably be
expected to result, in the imposition of a lien under Section 412(n) of the
Code or pursuant to ERISA.
(v) Neither 1st United nor any of its Subsidiaries has any obligations
to provide retiree health and life insurance or other retiree death
benefits under any Compensation and Benefit
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Plan, other than benefits mandated by Section 4980B of the Code, and each
such Compensation and Benefit Plan may be amended or terminated without
incurring liability thereunder. There has been no communication to
Employees by 1st United or any of its Subsidiaries that would reasonably be
expected to promise or guarantee such Employees retiree health or life
insurance or other retiree death benefits on a permanent basis.
(vi) With respect to each Compensation and Benefit Plan, if applicable,
1st United has provided, or made available to Wachovia, true and complete
copies of existing: (A) Compensation and Benefit Plan documents and
amendments thereto; (B) trust instruments and insurance contracts; (C) two
most recent Forms 5500 filed with the IRS; (D) most recent actuarial report
and financial statement; (E) the most recent summary plan description; (F)
forms filed with the PBGC (other than for premium payments); (G) most
recent deter mination letter issued by the IRS; (H) any Form 5310 or Form
5330 filed with the IRS; and (I) most recent nondiscrimination tests
performed under ERISA and the Code (including 401(k) and 401(m) tests).
(vii) The consummation of the transactions contemplated by this
Agreement would not, directly or indirectly (including, without limitation,
as a result of any termination of employment prior to or following the
Effective Time) reasonably be expected to (A) entitle any Employee,
Consultant or Director to any payment (including severance pay or similar
compensation) or any increase in compensation, (B) result in the vesting or
acceleration of any benefits under any Compensation and Benefit Plan or (C)
result in any material increase in benefits payable under any Compensation
and Benefit Plan.
(viii) Neither 1st United nor any of its Subsidiaries maintains any
compensation plans, programs or arrangements the payments under which would
not reasonably be expected to be deductible as a result of the limitations
under Section 162(m) of the Code and the regulations issued thereunder.
(ix) As a result, directly or indirectly, of the transactions
contemplated by this Agreement (including, without limitation, as a result
of any termination of employment prior to or following the Effective Time),
none of Wachovia, 1st United or the Surviving Corporation, or any of their
respective Subsidiaries will be obligated to make a payment that would be
characterized as an "excess parachute payment" to an individual who is a
"disqualified individual" (as such terms are defined in Section 280G of the
Code), without regard to whether such payment is reasonable compensation
for personal services performed or to be performed in the future.
(n) Labor Matters. Neither 1st United nor any of its Subsidiaries is a
party to or is bound by any collective bargaining agreement, contract or
other agreement or understanding with a labor union or labor organization,
nor is 1st United or any of its Subsidiaries the subject of a proceeding
asserting that it or any such Subsidiary has committed an unfair labor
practice
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(within the meaning of the National Labor Relations Act) or seeking to
compel 1st United or any such Subsidiary to bargain with any labor
organization as to wages or conditions of employment, nor is there any
strike or other labor dispute involving it or any of its Subsidiaries
pending or, to 1st United's knowledge, threatened, nor is 1st United aware
of any activity involving its or any of its Subsidiaries' employees seeking
to certify a collective bargaining unit or engaging in other organizational
activity.
(o) Takeover Laws; Dissenters Rights. 1st United has taken all action
required to be taken by it in order to exempt this Agreement, the Stock
Option Agreement and the transactions contemplated hereby and thereby from,
and this Agreement, the Stock Option Agreement and the transactions
contemplated hereby and thereby are exempt from, the requirements of any
"moratorium", "control share", "fair price" "affiliate transaction",
"business combination" or other antitakeover laws and regulations of any
state (collectively, "Takeover Laws"), including, without limitation, the
State of Florida, and including, without limitation, Sections 607.0901 and
607.0902 of the FBCA. Holders of 1st United Common Stock do not have
dissenters rights in connection with the Merger.
(p) Environmental Matters. To the knowledge of 1st United and its
Subsidiaries, neither the conduct nor operation of 1st United or its
Subsidiaries nor any condition of any property presently or previously
owned, leased or operated by any of them (including, without limitation, in
a fiduciary or agency capacity), or on which any of them holds a Lien,
violates or violated Environmental Laws and no condition has existed or
event has occurred with respect to any of them or any such property that,
with notice or the passage of time, or both, is reasonably likely to result
in liability under Environmental Laws. Neither 1st United nor any of its
Subsidiaries has received any notice from any person or entity that 1st
United or its Subsidiaries or the operation or condition of any property
ever owned, leased, operated, or held as collateral or in a fiduciary or
agency capacity by any of them are or were in violation of or otherwise are
alleged to have liability under any Environmental Law, including, but not
limited to, responsibility (or potential responsibility) for the cleanup or
other remediation of any pollutants, contaminants, or hazardous or toxic
wastes, substances or materials at, on, beneath, or originating from any
such property.
(q) Tax Matters. (i) All Tax Returns that are required to be filed by
or with respect to 1st United and its Subsidiaries have been duly filed,
(ii) all Taxes shown to be due on the Tax Returns referred to in clause (i)
have been paid in full or are being disputed in good faith, (iii) the Tax
Returns referred to in clause (i) have been examined by the Internal
Revenue Service or the appropriate state, local or foreign taxing authority
or the period for assessment of the Taxes in respect of which such Tax
Returns were required to be filed has expired, (iv) all deficiencies
asserted or assessments made as a result of such examinations have been
paid in full or are being disputed in good faith, (v) no issues that have
been raised by the relevant taxing authority in connection with the
examination of any of the Tax Returns referred to in clause (i) are
currently pending, and (vi) no waivers of statutes of limitation have been
given
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by or requested with respect to any Taxes of 1st United or its
Subsidiaries. 1st United has made available to Wachovia true and correct
copies of the United States federal income Tax Returns filed by 1st United
and its Subsidiaries for each of the three most recent fiscal years ended
on or before December 31, 1993. Neither 1st United nor any of its
Subsidiaries has any liability with respect to income, franchise or similar
Taxes that accrued on or before the end of the most recent period covered
by 1st United's SEC Documents filed on or prior to the date hereof in
excess of the amounts accrued with respect thereto that are reflected in
the financial statements included in 1st United's SEC Documents filed prior
to the date hereof. As of the date hereof, neither 1st United nor any of
its Subsidiaries has any reason to believe that any conditions exist that
might prevent or impede the Merger from qualifying as a reorganization
within the meaning of Section 368(a) of the Code.
(r) Derivatives and Similar Instruments. All interest rate swaps, caps,
floors, option agreements, futures and forward contracts and other similar
arrangements, whether entered into for 1st United's own account, or for the
account of one or more of 1st United's Subsidiaries or their customers
(all of which are listed on 1st United's Disclosure Schedule), were entered
into (i) in accordance with prudent business practices and all applicable
laws, rules, regulations and regulatory policies and (ii) with
counterparties believed to be financially responsible at the time; and each
of them constitutes the valid and legally binding obligation of 1st United
or one of its Subsidiaries, enforceable in accordance with its terms
(except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and similar
laws of general applicability relating to or affecting creditors' rights or
by general equity principles), and are in full force and effect. Neither
1st United nor its Subsidiaries, nor to 1st United's knowledge any other
party thereto, is in breach of any of its obligations under any such
agreement or arrangement.
(s) Books and Records. The books and records of 1st United and its
Subsidiaries have been fully, properly and accurately maintained in all
material respects, and there are no material inaccuracies or discrepancies
of any kind contained or reflected therein, and they fairly present the
financial position of 1st United and its Subsidiaries.
(t) Insurance. 1st United's Disclosure Schedule sets forth all of the
insurance policies, binders, or bonds maintained by 1st United or its
Subsidiaries or under which 1st United pays the premiums ("Insurance
Policies"). 1st United and its Subsidiaries are insured with reputable
insurers against such risks and in such amounts as the management of 1st
United reasonably has determined to be prudent in accordance with industry
practices. All the Insurance Policies are in full force and effect; 1st
United and its Subsidiaries are not in material default thereunder; and all
claims thereunder have been filed in due and timely fashion.
(u) Asset Classification. 1st United has Previously Disclosed a list,
accurate and complete in all material respects, of the aggregate amounts
of loans, extensions of credit or
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other assets of it and its Subsidiaries that have been classified by it as
of June 30, 1997 (the "Asset Classification"); and no amounts of loans,
extensions of credit or other assets that have been classified as of June
30, 1997 by any Regulatory Authority as "Other Loans Specially Mentioned" ,
"Substandard", "Doubtful", "Loss", or words of similar import are excluded
from the amounts disclosed in the Asset Classification, other than amounts
of loans, extensions of credit or other assets that were charged off by it
or a Subsidiary prior to June 30, 1997.
(v) Disclosure. The representations and warranties contained in this
Section 5.03 do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements and
information contained in this Section 5.03 not misleading.
5.04 Representations and Warranties of Wachovia. Subject to Sections 5.01
and 5.02 and except as Previously Disclosed in a paragraph of its Disclosure
Schedule referring to the relevant paragraph below, Wachovia hereby represents
and warrants to 1st United as follows:
(a) Organization, Standing and Authority. Wachovia is duly organized,
validly existing and in good standing under the laws of the State of North
Carolina. Wachovia is duly qualified to do business and is in good standing
in the states of the United States and foreign jurisdictions where its
ownership or leasing of property or assets or the conduct of its business
requires it to be so qualified. Wachovia has in effect all federal, state,
local, and foreign governmental authorizations necessary for it to own or
lease its properties and assets and to carry on its business as it is now
conducted.
(b) Wachovia Stock. (i) As of the date hereof, the authorized capital
stock of Wachovia consists solely of 500,000,000 shares of Wachovia Common
Stock, of which no more than 160,000,000 shares were outstanding as of the
date hereof and 50,000,000 shares of Wachovia Preferred Stock, of which no
shares were outstanding as of the date hereof. As of the date hereof,
except in connection with its publicly disclosed acquisitions, or as
previously disclosed, Wachovia does not have any Rights issued or
outstanding with respect to Wachovia Stock, and Wachovia does not have any
commitment to authorize, issue or sell any Wachovia Stock or Rights, except
pursuant to this Agreement.
(ii) The shares of Wachovia Common Stock to be issued in exchange for
shares of 1st United Common Stock in the Merger, when issued in accordance
with the terms of this Agreement, will be duly authorized, validly issued,
fully paid and nonassessable.
(c) Subsidiaries. Each of Wachovia's Significant Subsidiaries has been
duly organized and is validly existing in good standing under the laws of
the jurisdiction of its organization, and is duly qualified to do business
and in good standing in the jurisdictions where its ownership or leasing of
property or the conduct of its business requires it to be so qualified
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and it owns, directly or indirectly, all the issued and outstanding equity
securities of each of its Significant Subsidiaries.
(d) Corporate Power. Wachovia and each of its Significant Subsidiaries
has the corporate power and authority to carry on its business as it is
now being conducted and to own all its properties and assets; and Wachovia
has the corporate power and authority to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions
contemplated hereby.
(e) Corporate Authority. This Agreement and the transactions
contemplated hereby have been authorized by all necessary corporate action
of Wachovia and its Board of Directors and does not require any vote of
stockholders. This Agreement is a valid and legally binding agreement of
Wachovia enforceable in accordance with its terms (except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and similar laws of general applicability
relating to or affecting creditors' rights or by general equity
principles).
(f) Regulatory Approvals; No Defaults. No consents or approvals of, or
filings or registrations with, any court, administrative agency or
commission or other governmental authority or instrumentality or with any
third party are required to be made or obtained by Wachovia or any of its
Subsidiaries in connection with the execution, delivery or performance by
Wachovia of this Agreement or to consummate the Merger except for (A) the
filing of a notice under the Hart-Scott-Rodino Antitrust Improvement Act of
1976 (the "HSR Act"); (B) the filing of applications and notices, as
applicable, with federal and Florida banking authorities; (C) approval of
the listing on the NYSE of Wachovia Common Stock to be issued in the
Merger; (D) the filing and declaration of effectiveness of the Registration
Statement; (E) the filing of articles of merger with the North Carolina
Secretary pursuant to the NCBCA and the Florida Department of State
pursuant to the FBCA; (F) such filings as are required to be made or
approvals as are required to be obtained under the securities or "Blue Sky"
laws of various states in connection with the issuance of Wachovia Stock in
the Merger; and (G) receipt of the approvals set forth in Section 7.01(b).
As of the date hereof, Wachovia is not aware of any reason why the
approvals set forth in Section 7.01(b) will not be received without the
imposition of a condition, restriction or requirement of the type described
in Section 7.01(b).
(ii) Subject to receipt of the regulatory approvals referred to in
the preceding paragraph and expiration of the related waiting periods, and
required filings under federal and state securities laws, the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby do not and will not (A) constitute a
breach or violation of, or a default under, or give rise to any Lien, any
acceleration of remedies or any right of termination under, any law, rule
or regulation or any judgment, decree, order, governmental permit or
license, or agreement, indenture or instrument of
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Wachovia or of any of its Subsidiaries or to which Wachovia or any of its
Subsidiaries or properties is subject or bound, (B) constitute a breach or
violation of, or a default under, the certificate of incorporation or
by-laws (or similar governing documents) of Wachovia or any of its
Subsidiaries, or (C) require any consent or approval under any such law,
rule, regulation, judgment, decree, order, governmental permit or license,
agreement, indenture or instrument.
(g) Financial Reports and SEC Documents; Material Adverse Effect. (i)
Wachovia's SEC Documents, as of the date filed, (A) complied or will comply
in all material respects as to form with the applicable requirements under
the Securities Act or the Exchange Act, as the case may be, and (B) did not
and will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; and each of the balance sheets contained in or
incorporated by reference into any such SEC Document (including the related
notes and schedules thereto) fairly presents, or will fairly present, the
financial position of Wachovia and its Subsidiaries as of its date, and
each of the statements of income and changes in stockholders' equity and
cash flows or equivalent statements in such SEC Documents (including any
related notes and schedules thereto) fairly presents, or will fairly
present, the results of operations, changes in stockholders' equity and
changes in cash flows, as the case may be, of Wachovia and its Subsidiaries
for the periods to which they relate, in each case in accordance with
generally accepted accounting principles consistently applied during the
periods involved, except in each case as may be noted therein, subject to
normal year-end audit adjustments in the case of unaudited statements.
(ii) Since December 31, 1996, no event has occurred or circumstance
arisen that, individually or taken together with all other facts,
circumstances and events (described in any paragraph of Section 5.04 or
otherwise), is reasonably likely to have a Material Adverse Effect with
respect to Wachovia.
(h) Litigation; Regulatory Action. (i) Other than as set forth in its
SEC Documents filed on or before the date hereof, no litigation, claim or
other proceeding before any Governmental Authority is pending against
Wachovia or any of its Subsidiaries and, to the best of Wachovia's
knowledge, no such litigation, claim or other proceeding has been
threatened.
(ii) Neither Wachovia nor any of its Subsidiaries or properties is a
party to or is subject to any order, decree, agreement, memorandum of
understanding or similar arrangement with, or a commitment letter or
similar submission to, or extraordinary supervisory letter from a
Regulatory Authority, nor has Wachovia or any of its Subsidiaries been
advised by a Regulatory Authority that such agency is contemplating
issuing or requesting (or is considering the appropriateness of issuing or
requesting) any such order, decree, agreement, memorandum of understanding,
commitment letter, supervisory letter or similar submission or arrangement.
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(i) Compliance with Laws. Wachovia and each of its Subsidiaries:
(i) in the conduct of its business, is in compliance with all
applicable federal, state, local and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders or decrees applicable
thereto or to the employees conducting such businesses, including,
without limitation, the Equal Credit Opportunity Act, the Fair Housing
Act, the Com munity Reinvestment Act, the Home Mortgage Disclosure Act
and all other applicable fair lending laws and other laws relating to
discriminatory business practices;
(ii) has all permits, licenses, authorizations, orders and
approvals of, and has made all filings, applications and registrations
with, all Governmental Authorities that are required in order to permit
them to conduct their businesses substantially as presently conducted;
all such permits, licenses, certificates of authority, orders and
approvals are in full force and effect and, to the best of its
knowledge, no suspension or cancellation of any of them is threatened;
and
(iii) as of the date hereof, has received no notification or
communication from any Governmental Authority (A) asserting that
Wachovia or any of its Subsidiaries is not in compliance with any
statute, regulation, or ordinance or (B) threatening to revoke any
license, franchise, permit, or governmental authorization (nor, to
Wachovia's knowledge, do any grounds for any of the foregoing exist).
(j) No Brokers. No action has been taken by Wachovia that would give
rise to any valid claim against any party hereto for a brokerage
commission, finder's fee or other like payment with respect to the
transactions contemplated by this Agreement.
(k) Tax Matters. As of the date hereof, neither Wachovia nor any of its
Subsidiaries has any reason to believe that any conditions exist that might
prevent or impede the Merger from qualifying as a reorganization within the
meaning of Section 368(a) of the Code.
(l) Disclosure. The representations and warranties contained in this
Section 5.04 do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements and
information contained in this Section 5.04 not misleading.
ARTICLE VI
COVENANTS
6.01 Reasonable Best Efforts. Subject to the terms and conditions of this
Agreement, each of 1st United and Wachovia agrees to use its reasonable best
efforts in good faith to take, or cause to be taken, all actions, and to do, or
cause to be done, all things necessary, proper
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or desirable, or advisable under applicable laws, so as to permit consummation
of the Merger as promptly as practicable and otherwise to enable consummation of
the transactions contemplated hereby and shall cooperate fully with the other
party hereto to that end.
6.02 Stockholder Approvals. 1st United agrees to take, in accordance with
applicable law or NASDAQ rules and its articles of incorporation and by-laws,
all action necessary to convene an appropriate meeting of stockholders of 1st
United to consider and vote upon the approval and adoption of this Agreement and
any other matters required to be approved by 1st United's stockholders for
consummation of the Merger (including any adjournment or postponement, the "1st
United Meeting") as promptly as practicable after the Registration Statement is
declared effective. Except to the extent legally required for the discharge by
the 1st United Board of its fiduciary duties as advised in writing by its
counsel, the 1st United Board shall recommend such approval, and 1st United
shall take all reasonable, lawful action to solicit such approval by its
stockholders. At the request of Wachovia, 1st United will utilize a professional
proxy solicitation firm to assist it in procuring the necessary stockholder
vote. The 1st United Board in discharging its fiduciary duties in connection
with the foregoing, may request and take into consideration a letter from
Hoeffer & Arnett, Inc., regarding whether or not the Merger Consideration to be
received by 1st United's shareholders in connection with the Merger is fair to
such shareholders from a financial point of view.
6.03 Registration Statement. (a) Wachovia agrees to prepare a registration
statement on Form S-4 (the "Registration Statement") to be filed by Wachovia
with the SEC in connection with the issuance of Wachovia Stock in the Merger
(including the proxy statement and prospectus and other proxy solicitation
materials of 1st United constituting a part thereof (the "Proxy Statement") and
all related documents). Each of the parties hereto agrees to cooperate, and to
cause its Subsidiaries to cooperate, with the other, its counsel and its
accountants, in preparation of the Registration Statement and the Proxy
Statement; and provided that 1st United and its Subsidiaries have cooperated as
required above, Wachovia agrees to file the Proxy Statement in preliminary form
with the SEC as promptly as reasonably practicable, and to file the Registration
Statement with the SEC as soon as reasonably practicable after any SEC comments
with respect to the preliminary Proxy Statement are resolved. Each of 1st United
and Wachovia agrees to use all reasonable efforts to cause the Registration
Statement to be declared effective under the Securities Act as promptly as
reasonably practicable after filing thereof. Wachovia also agrees to use all
reasonable efforts to obtain all necessary state securities law or "Blue Sky"
permits and approvals required to carry out the transactions contemplated by
this Agreement. 1st United agrees to furnish to Wachovia all information
concerning 1st United, its Subsidiaries, officers, directors and stockholders as
may be reasonably requested in connection with the foregoing.
(b) Each of 1st United and Wachovia agrees, as to itself and its
Subsidiaries, that none of the information supplied or to be supplied by it for
inclusion or incorporation by reference in (i) the Registration Statement will,
at the time the Registration Statement and each amendment or
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supplement thereto, if any, becomes effective under the Securities Act, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, and (ii) the Proxy Statement and any amendment or supplement thereto
will, at the date of mailing to stockholders and at the time of the 1st United
Meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading or any statement which, in the light of the circumstances
under which such statement is made, will be false or misleading with respect to
any material fact, or which will omit to state any material fact necessary in
order to make the statements therein not false or misleading or necessary to
correct any statement in any earlier statement in the Proxy Statement or any
amendment or supplement thereto. Each of 1st United and Wachovia further agrees
that if it shall become aware prior to the Effective Date of any information
furnished by it that would cause any of the statements in the Proxy Statement to
be false or misleading with respect to any material fact, or to omit to state
any material fact necessary to make the statements therein not false or
misleading, to promptly inform the other party thereof and to take the necessary
steps to correct the Proxy Statement.
(c) Wachovia agrees to advise 1st United, promptly after Wachovia receives
notice thereof, of the time when the Registration Statement has become effective
or any supplement or amendment has been filed, of the issuance of any stop order
or the suspension of the qualification of Wachovia Stock for offering or sale in
any jurisdiction, of the initiation or threat of any proceeding for any such
purpose, or of any request by the SEC for the amendment or supplement of the
Registration Statement or for additional information.
6.04 Press Releases. Each of 1st United and Wachovia agrees that it will
not, without the prior approval of the other party (which will not unreasonably
be withheld), issue any press release or written statement for general
circulation relating to the transactions contemplated hereby, except as
otherwise required by applicable law or regulation or NYSE rules.
6.05 Access; Information. (a) Each of 1st United and Wachovia agrees that
upon reasonable notice and subject to applicable laws relating to the exchange
of information, it shall afford the other party and the other party's officers,
employees, counsel, accountants and other authorized representatives, such
access during normal business hours throughout the period prior to the Effective
Time to the books, records (including, without limitation, tax returns and work
papers of independent auditors), properties, personnel and to such other
information as any party may reasonably request and, during such period, it
shall furnish promptly to such other party (i) a copy of each material report,
schedule and other document filed by it pursuant to the requirements of federal
or state securities or banking laws, and (ii) all other information concerning
the business, properties and personnel of it as the other may reasonably
request.
(b) Each agrees that it will not, and will cause its representatives not to,
use any information obtained pursuant to this Section 6.05 (as well as any
other information obtained prior to the
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date hereof in connection with the entering into of this Agreement) for any
purpose unrelated to the consummation of the transactions contemplated by this
Agreement. Subject to the requirements of law, each party will keep
confidential, and will cause its representatives to keep confidential, all
information and documents obtained pursuant to this Section 6.05 (as well as any
other information obtained prior to the date hereof in connection with the
entering into of this Agreement) unless such information (i) was already known
to such party, (ii) becomes available to such party from other sources not known
by such party to be bound by a confidentiality obligation, (iii) is disclosed
with the prior written approval of the party to which such information pertains
or (iv) is or becomes readily ascertainable from published information or trade
sources. In the event that this Agreement is terminated or the transactions
contemplated by this Agreement shall otherwise fail to be consummated, each
party shall promptly cause all copies of documents or extracts thereof
containing information and data as to another party hereto to be returned to the
party which furnished the same. No investigation by either party of the business
and affairs of the other shall affect or be deemed to modify or waive any
representation, warranty, covenant or agreement in this Agreement, or the
conditions to either party's obligation to consummate the transactions
contemplated by this Agreement.
6.06 Acquisition Proposals. 1st United agrees that neither it nor any of its
Subsidiaries nor any of the respective officers and directors of 1st United or
its Subsidiaries shall, and 1st United shall direct and use its reasonable best
efforts to cause its employees, agents and representatives (including, without
limitation, any investment banker, attorney or accountant retained by it or any
of its Subsidiaries) not to, initiate, solicit or encourage, directly or
indirectly, any enquiries or the making of any proposal or offer (including,
without limitation, any proposal or offer to stockholders of 1st United) with
respect to a merger, consolidation or similar transaction involving, or any
purchase of all or any significant portion of the assets or any equity
securities of, 1st United or its Significant Subsidiary (any such proposal or
offer being hereinafter referred to as an "Acquisition Proposal") or, except to
the extent legally required for the discharge by the 1st United Board of its
fiduciary duties as advised in writing by its counsel, engage in any
negotiations concerning, or provide any confidential information or data to, or
have any discussions with, any person relating to an Acquisition Proposal, or
otherwise facilitate any effort or attempt to make or implement an Acquisition
Proposal. 1st United shall immediately cease and cause to be terminated any
activities, discussions or negotiations conducted prior to the date of this
Agreement with any parties other than Wachovia with respect to any of the
foregoing and shall use its reasonable best efforts to enforce any
confidentiality or similar agreement relating to an Acquisition Proposal. 1st
United shall promptly (within 24 hours) advise Wachovia following the receipt by
1st United of any Acquisition Proposal and the substance thereof (including the
identity of the person making such Acquisition Proposal), and advise Wachovia of
any developments of significance with respect to such Acquisition Proposal
immediately upon the occurrence thereof.
6.07 Affiliate Agreements. (a) Not later than the 15th day prior to the
mailing of the Proxy Statement, 1st United shall deliver to Wachovia, a schedule
of each person that, to its
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knowledge, is or is reasonably likely to be, as of the date of the 1st United
Meeting, deemed to be an "affiliate" of it (each, a "1st United Affiliate") as
that term is used in Rule 145 under the Securities Act.
(b) 1st United shall use its reasonable best efforts to cause each person
who may be deemed to be a 1st United Affiliate to execute and deliver to
Wachovia on or before the date of mailing of the Proxy Statement an "affiliates
agreement" in form and substance reasonably satisfactory to Wachovia.
6.08 Shareholder Agreements. 1st United shall use its best efforts to cause
any shareholder of 1st United who is also a director of 1st United and who has
not entered into an agreement with Wachovia, in the form of Exhibit B hereto,
prior to the date hereof, to enter into such an agreement within five business
days of the date hereof.
6.09 Takeover Laws. No party hereto shall take any action that would cause
the transactions contemplated by this Agreement or the Stock Option Agreement to
be subject to requirements imposed by any Takeover Law and each of them shall
take all necessary steps within its control to exempt (or ensure the continued
exemption of) the transactions contemplated by this Agreement from, or if
necessary challenge the validity or applicability of, any applicable Takeover
Law, as now or hereafter in effect.
6.10 Certain Policies. Prior to the Effective Date, 1st United shall,
consistent with generally accepted accounting principles and on a basis mutually
satisfactory to it and Wachovia, modify and change its loan, litigation and real
estate valuation policies and practices (including loan classifications and
levels of reserves) so as to be applied on a basis that is consistent with those
of Wachovia; provided, however, that 1st United shall not be obligated to take
any such action pursuant to this Section 6.09 unless and until Wachovia
acknowledges that all conditions to its obligation to consummate the Merger have
been satisfied.
6.11 NYSE Listing. Wachovia agrees to use its reasonable best efforts to
list, prior to the Effective Date, on the NYSE, subject to official notice of
issuance, the shares of Wachovia Common Stock to be issued to the holders of 1st
United Common Stock in the Merger.
6.12 Regulatory Applications. (a) Wachovia and 1st United and their
respective Subsidiaries shall cooperate and use their respective reasonable best
efforts to prepare all documentation, to effect all filings and to obtain all
permits, consents, approvals and authorizations of all third parties and
Governmental Authorities necessary to consummate the transactions contemplated
by this Agreement. Each of Wachovia and 1st United shall have the right to
review in advance, and to the extent practicable each will consult with the
other, in each case subject to applicable laws relating to the exchange of
information, with respect to, all material written information submitted to any
third party or any Governmental Authority in connection with the transactions
contemplated by this Agreement. In exercising the foregoing right, each of
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the parties hereto agrees to act reasonably and as promptly as practicable. Each
party hereto agrees that it will consult with the other party hereto with
respect to the obtaining of all material permits, consents, approvals and
authorizations of all third parties and Governmental Authorities necessary or
advisable to consummate the transactions contemplated by this Agreement and each
party will keep the other party appraised of the status of material matters
relating to completion of the transactions contemplated hereby.
(b) Each party agrees, upon request, to furnish the other party with all
information concerning itself, its Subsidiaries, directors, officers and
stockholders and such other matters as may be reasonably necessary or advisable
in connection with any filing, notice or application made by or on behalf of
such other party or any of its Subsidiaries to any third party or Governmental
Authority.
6.13 Indemnification. (a) Following the Effective Date and for a period of
six years thereafter, Wachovia shall indemnify, defend and hold harmless the
past and present directors and officers of 1st United and its Subsidiaries
(each, an "Indemnified Party") against all costs or expenses (including
reasonable attorneys' fees), judgments, fines, losses, claims, damages or
liabilities (collectively, "Costs") incurred in connection with any claim,
action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of actions or omissions occurring
at or prior to the Effective Time (including, without limitation, the
transactions contemplated by this Agreement) to the fullest extent that 1st
United is permitted to indemnify (and advance expenses to) its directors and
officers under the laws of the State of Florida, the 1st United Certificate and
the 1st United By-Laws as in effect on the date hereof; provided that any
determination required to be made with respect to whether an officer's or
director's conduct complies with the standards set forth under Florida law, the
1st United Certificate and the 1st United By-Laws shall be made by independent
counsel (which shall not be counsel that provides material services to Wachovia)
selected by Wachovia and reasonably acceptable to such officer or director; and
provided, further, that in the absence of applicable judicial precedent to the
contrary, such counsel, in making such determination, shall presume such
officer's or director's conduct complied with such standard and Wachovia shall
have the burden to demonstrate that such officer's or director's conduct failed
to comply with such standard.
(b) For a period of three years from the Effective Time, Wachovia shall use
its reasonable best efforts to provide that portion of director's and officer's
liability insurance that serves to reimburse the present and former officers and
directors of 1st United or any of its Subsidiaries (determined as of the
Effective Time) (as opposed to 1st United) with respect to claims against such
directors and officers arising from facts or events which occurred before the
Effective Time, which insurance shall contain at least the same coverage and
amounts, and contain terms and conditions no less advantageous, as that coverage
currently provided by 1st United; provided, however, that in no event shall
Wachovia be required to expend more than 200 percent of the current amount
expended by 1st United (the "Insurance Amount") to maintain or procure such
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directors and officers insurance coverage; provided, further, that if Wachovia
is unable to maintain or obtain the insurance called for by this Section
6.12(b), Wachovia shall use its reasonable best efforts to obtain as much
comparable insurance as is available for the Insurance Amount; provided,
further, that officers and directors of 1st United or any Subsidiary may be
required to make application and provide customary representations and
warranties to Wachovia's insurance carrier for the purpose of obtaining such
insurance.
(c) Any Indemnified Party wishing to claim indemnification under Section
6.12(a), upon learning of any claim, action, suit, proceeding or investigation
described above, shall promptly notify Wachovia thereof; provided that the
failure so to notify shall not affect the obligations of Wachovia under Section
6.12(a) unless and to the extent that Wachovia is actually prejudiced as a
result of such failure.
(d) If Wachovia or any of its successors or assigns shall consolidate with
or merge into any other entity and shall not be the continuing or surviving
entity of such consolidation or merger or shall transfer all or substantially
all of its assets to any entity, then and in each case, proper provision shall
be made so that the successors and assigns of Wachovia shall assume the
obligations set forth in this Section 6.12.
6.14 Benefit Plans. As soon as practicable following the Effective Time (but
in no event later than April 1, 1998 if the Effective Time occurs prior to April
1, 1998) (i) Wachovia will provide employees of 1st United who become employees
of Wachovia with employee benefit plans no less favorable in the aggregate than
those provided to similarly situated employees of Wachovia; (ii) any such
employees will receive credit for service with 1st United or any of its
Subsidiaries or predecessors prior to the Effective Time for the purpose of
determining eligibility and vesting; (iii) Wachovia shall cause any and all
pre-existing condition limitations (to the extent such limitations did not apply
to a pre-existing condition under the 1st United Compensation and Benefit Plans)
and eligibility waiting periods under group health plans to be waived with
respect to such participants and their eligible dependents ; and (iv) Wachovia
shall extend its Retirement Medical Plan to employees of 1st United who become
employees of Wachovia and retire following December 31, 1997 or the Effective
Date, if later; and would qualify for retirement under the Wachovia Retirement
Income Plan and; provided, further, that a maximum or of 20 years of service
with 1st United shall be recognized for benefit accrual purposes under the
Retirement Medical Plan. All discretionary awards and benefits under any
employee benefit plans of Wachovia shall be subject to the discretion of the
persons or committee administering such plans. Wachovia shall honor, pursuant to
the terms of the 1st United Compensation and Benefit Plans Previously Disclosed,
all employee benefit obligations to current and former employees of 1st United
under such Plans.
6.15 Accountants' Letters. Each of 1st United and Wachovia shall use its
reasonable best efforts to cause to be delivered to the other party, and to
Wachovia's directors and officers who sign the Registration Statement, letters
of Ernst & Young, LLP, independent auditors, dated
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(i) the date on which the Registration Statement shall become effective and (ii)
a date shortly prior to the Effective Date, and addressed to such other party,
and such directors and officers, in form and substance customary for "comfort"
letters delivered by independent accountants in accordance with Statement of
Accounting Standards No. 72.
6.16 Notification of Certain Matters. Each of 1st United and Wachovia shall
give prompt notice to the other of any fact, event or circumstance known to it
that (i) is reasonably likely, individually or taken together with all other
facts, events and circumstances known to it, to result in any Material Adverse
Effect with respect to it or (ii) would cause or constitute a material breach of
any of its representations, warranties, covenants or agreements contained
herein.
6.17 Stock Plans. 1st United shall at or prior to the Effective Time cause
to be terminated any obligation to issue shares of 1st United Common Stock under
any dividend reinvestment plan and any other plan or arrangement pursuant to
which it issues 1st United Common Stock or rights thereto, except for its stock
option plans with respect to issued options Previously Disclosed.
6.18 Dividend Coordination. The Board of Directors of 1st United shall cause
its regular quarterly dividend record dates and payment dates for 1st United
Common Stock to be the same as Wachovia's regular quarterly dividend record
dates and payment dates for Wachovia Common Stock, and 1st United shall not
thereafter change its regular dividend payment dates and record dates.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
7.01 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each of Wachovia and 1st United to consummate the
Merger is subject to the fulfillment or written waiver by Wachovia and 1st
United prior to the Effective Time of each of the following conditions:
(a) Stockholder Approval. This Agreement shall have been duly adopted
by the affirmative vote of the holders of a majority of the outstanding
shares of 1st United Common Stock entitled to vote thereon in accordance
with Section 607.1103 of the FBCA, other applicable law and the 1st United
Certificate and the 1st United By-Laws.
(b) Regulatory Approvals. All regulatory approvals required to
consummate the transactions contemplated hereby, shall have been obtained
and shall remain in full force and effect and all statutory waiting periods
in respect thereof shall have expired and no such approvals shall contain
any conditions, restrictions or requirements which the Wachovia
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Board reasonably determines in good faith would (i) following the Effective
Time, have a Material Adverse Effect on the Surviving Corporation and its
Subsidiaries taken as a whole or (ii) reduce the benefits of the
transactions contemplated hereby to such a degree that Wachovia would not
have entered into this Agreement had such conditions, restrictions or
requirements been known at the date hereof.
(c) No Injunction. No Governmental Authority of competent jurisdiction
shall have enacted, issued, promulgated, enforced or entered any statute,
rule, regulation, judgment, decree, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and prohibits
consummation of the transactions contemplated by this Agreement.
(d) Registration Statement. The Registration Statement shall have
become effective under the Securities Act and 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 threatened by the
SEC.
(e) Blue Sky Approvals. All permits and other authorizations under
state securities laws necessary to consummate the transactions contemplated
hereby and to issue the shares of Wachovia Common Stock to be issued in the
Merger shall have been received and be in full force and effect.
(f) Listing. The shares of Wachovia Common Stock to be issued in the
Merger shall have been approved for listing on the NYSE, subject to
official notice of issuance.
7.02 Conditions to Obligation of 1st United. The obligation of 1st United to
consummate the Merger is also subject to the fulfillment or written waiver by
1st United prior to the Effective Time of each of the following conditions:
(a) Representations and Warranties. The representations and warranties
of Wachovia set forth in this Agreement, after giving effect to Sections
5.01 and 5.02, shall be true and correct as of the date of this Agreement
and as of the Effective Date as though made on and as of the Effective Date
(except that representations and warranties that by their terms speak as of
the date of this Agreement or some other date shall be true and correct as
of such date), and 1st United shall have received a certificate, dated the
Effective Date, signed on behalf of Wachovia by the Chief Executive Officer
and the Chief Financial Officer of Wachovia to such effect.
(b) Performance of Obligations of Wachovia. Wachovia shall have
performed in all material respects all obligations required to be performed
by them under this Agreement at or prior to the Effective Time, and 1st
United shall have received a certificate, dated the Effective Date, signed
on behalf of Wachovia by the Chief Executive Officer and the Chief
Financial Officer of Wachovia to such effect.
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(c) Opinion of 1st United's Counsel. 1st United shall have received an
opinion of Akerman, Senterfitt & Eidson, P.A., counsel to 1st United, to
the effect that, on the basis of facts, representations and assumptions set
forth in such opinion, (i) the Merger constitutes a "reorganization" within
the meaning of Section 368 of the Code and (ii) no gain or loss will be
recognized by stockholders of 1st United who receive shares of Wachovia
Common Stock in exchange for shares of 1st United Common Stock, except that
gain or loss may be recognized as to cash received in lieu of fractional
share interests. In rendering its opinion, Akerman, Senterfitt & Eidson,
P.A. may require and rely upon representations contained in letters from
1st United and others.
(d) Accountants' Letters. 1st United shall have received the letters
referred to in Section 6.14 from Ernst & Young, LLP, Wachovia's
independent auditors.
7.03 Conditions to Obligation of Wachovia. The obligation of Wachovia to
consummate the Merger is also subject to the fulfillment or written waiver by
Wachovia prior to the Effective Time of each of the following conditions:
(a) Representations and Warranties. The representations and warranties
of 1st United set forth in this Agreement, after giving effect to Sections
5.01 and 5.02, shall be true and correct as of the date of this Agreement
and as of the Effective Date as though made on and as of the Effective Date
(except that representations and warranties that by their terms speak as of
the date of this Agreement or some other date shall be true and correct as
of such date) and Wachovia shall have received a certificate, dated the
Effective Date, signed on behalf of 1st United by the Chief Executive
Officer and the Chief Financial Officer of 1st United to such effect.
(b) Performance of Obligations of 1st United. 1st United shall have
performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Effective Time, and Wachovia
shall have received a certificate, dated the Effective Date, signed on
behalf of 1st United by the Chief Executive Officer and the Chief Financial
Officer of 1st United to such effect.
(c) Opinion of Wachovia's Counsel. Wachovia shall have received an
opinion of Sullivan & Cromwell, special counsel to Wachovia, dated the
Effective Date, to the effect that, on the basis of facts, representations
and assumptions set forth in such opinion, the Merger constitutes a
reorganization under Section 368 of the Code. In rendering its opinion,
Sullivan & Cromwell may require and rely upon representations contained in
letters from Wachovia and others.
(d) Accountants' Letters. Wachovia and its directors and officers who
sign the Registration Statement shall have received the letters referred to
in Section 6.14 from Ernst & Young, LLP, 1st United's independent auditors.
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<PAGE>
ARTICLE VIII
TERMINATION
8.01 Termination. This Agreement may be terminated, and the Acquisition may
be abandoned:
(a) Mutual Consent. At any time prior to the Effective Time, by the
mutual consent of Wachovia and 1st United, if the Board of Directors of
each so determines by vote of a majority of the members of its entire
Board.
(b) Breach. At any time prior to the Effective Time, by Wachovia or 1st
United, if its Board of Directors so determines by vote of a majority of
the members of its entire Board, in the event of either: (i) a breach by
the other party of any representation or warranty contained herein (subject
to the standard set forth in Section 5.02), which breach cannot be or has
not been cured within 30 days after the giving of written notice to the
breaching party of such breach; or (ii) a breach by the other party of any
of the covenants or agreements contained herein, which breach cannot be or
has not been cured within 30 days after the giving of written notice to the
breaching party of such breach, provided that such breach (whether under
(i) or (ii)) would be reasonably likely, individually or in the aggregate
with other breaches, to result in a Material Adverse Effect.
(c) Delay. At any time prior to the Effective Time, by Wachovia or 1st
United, if its Board of Directors so determines by vote of a majority of
the members of its entire Board, in the event that the Acquisition is not
consummated by March 31, 1998, except to the extent that the failure of the
Acquisition then to be consummated arises out of or results from the
knowing action or inaction of the party seeking to terminate pursuant to
this Section 8.01(c).
(d) No Approval. By 1st United or Wachovia, if its Board of Directors
so determines by a vote of a majority of the members of its entire Board,
in the event (i) the approval of any Governmental Authority required for
consummation of the Merger and the other transactions contemplated by this
Agreement shall have been denied by final nonappealable action of such
Governmental Authority or (ii) the stockholder approval required by Section
7.01(a) herein is not obtained at the 1st United Meeting.
(e) Failure to Recommend, Etc. At any time prior to the 1st United
Meeting, by Wachovia if 1st United Board shall have failed to make its
recommendation referred to in Section 6.02, withdrawn such recommendation
or modified or changed such recommendation in a manner adverse in any
respect to the interests of Wachovia.
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<PAGE>
8.02 Effect of Termination and Abandonment. In the event of termination of
this Agreement and the abandonment of the Acquisition pursuant to this Article
VIII, no party to this Agreement shall have any liability or further obligation
to any other party hereunder except (i) as set forth in Section 9.01 and (ii)
that termination will not relieve a breaching party from liability for any
willful breach of this Agreement giving rise to such termination. In the event
of the termination of this Agreement, Wachovia agrees that, until March 31,
1998, it will not, directly or indirectly, solicit to employ any person known by
it to be a current senior officer of 1st United, so long as they are employed by
1st United, or directly or indirectly solicit or encourage any such officers or
employees to leave 1st United's employ (other than pursuant to general
advertisements of employment in publications not specifically targeted at 1st
United's employees), in either case, without obtaining the prior written consent
of 1st United.
ARTICLE IX
MISCELLANEOUS
9.01 Survival. No representations, warranties, agreements and covenants
contained in this Agreement shall survive the Effective Time (other than Section
6.13 and this Article IX which shall survive the Effective Time) or the
termination of this Agreement if this Agreement is terminated prior to the
Effective Time (other than Sections 6.03(b), 6.04, 6.05, 8.02 and this Article
IX which shall survive such termination).
9.02 Waiver; Amendment. Prior to the Effective Time, any provision of this
Agreement may be (i) waived by the party benefitted by the provision, or (ii)
amended or modified at any time, by an agreement in writing between the parties
hereto executed in the same manner as this Agreement, except that, after the 1st
United Meeting, this Agreement may not be amended if it would violate the FBCA.
9.03 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original.
9.04 Governing Law. This Agreement shall be governed by, and interpreted in
accordance with, the laws of the State of North Carolina applicable to contracts
made and to be performed entirely within such State (except to the extent that
mandatory provisions of Federal law or of the FBCA are applicable).
9.05 Expenses. Each party hereto will bear all expenses incurred by it in
connection with this Agreement and the transactions contemplated hereby, except
that printing expenses and SEC fees shall be shared equally between 1st United
and Wachovia.
9.06 Notices. All notices, requests and other communications hereunder to a
party shall be in writing and shall be deemed given if personally delivered,
telecopied (with confirma-
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tion) or mailed by registered or certified mail (return receipt requested) to
such party at its address set forth below or such other address as such party
may specify by notice to the parties hereto.
If to 1st United, to:
1st United Bancorp
180 Royal Palm Way
Palm Beach, Florida 33480
Attention: Warren Orlando
Telephone: (561) 832-7766
Facsimile: (561) 832-5778
With a copy to:
1st United Bancorp
980 N. Federal Highway
Boca Raton, Florida 33432
Attention: Thomas Kamradt
Telephone: (561) 659-5990
Facsimile: (561) 659-6313
With a copy to:
Akerman, Senterfitt & Eidson, P.A.
Phillips Point - East Tower
Suite 900
777 South Flagler Drive
West Palm Beach, FL 33401
Attention:
Telephone:
Facsimile:
If to Wachovia, to:
Wachovia Corporation
301 North Main Street
Winston-Salem, North Carolina 27101
Attention: Chairman of the Board
Telephone: (910) 770-5000
Facsimile: (910) 770-5959
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With a copy to:
Wachovia Corproation
301 North Main Street
Winston-Salem, North Carolina 27101
Attention: Kenneth W. McAllister
Telephone: (910) 732-5141
Facsimile: (910) 732-5959
With a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: H. Rodgin Cohen, Esq.
Mark J. Menting, Esq.
Telephone: (212) 558-4000
Facsimile: (212) 558-3588
9.07 Entire Understanding; No Third Party Beneficiaries. This Agreement and
the Stock Option Agreement entered into represent the entire understanding of
the parties hereto with reference to the transactions contemplated hereby and
thereby and this Agreement supersedes any and all other oral or written
agreements heretofore made (other than the Stock Option Agreement). Except for
Section 6.13, nothing in this Agreement expressed or implied, is intended to
confer upon any person, other than the parties hereto or their respective
successors, any rights, remedies, obligations or liabilities under or by reason
of this Agreement.
9.08 Interpretation; Effect. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of, or
Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and are not part of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation."
* * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in counterparts by their duly authorized officers, all as of the day
and year first above written.
1ST UNITED BANCORP
By: /S/ WARREN S. ORLANDO
------------------------
Name: Warren S. Orlando
Title: President & CEO
WACHOVIA CORPORATION
By: /S/ L.M. BAKER, JR.
------------------------
Name: L.M. Baker, Jr.
Title: President & CEO
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CONFORMED COPY
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of August 6, 1997, between Wachovia
Corporation, a North Carolina corporation ("Grantee"), and 1st United Bancorp, a
Florida corporation ("Issuer").
W I T N E S S E T H:
WHEREAS, Grantee and Issuer have entered into an Agreement and Plan of
Merger (the "Merger Agreement");
WHEREAS, as a condition and an inducement to Grantee's entering into the
Merger Agreement, Issuer is granting Grantee the Option (as hereinafter
defined); and
WHEREAS, a majority of the Board of Directors of Issuer has approved the
grant of the Option and the Merger Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements set forth herein and in the Merger Agreement, the parties hereto
agree as follows:
1. (a) Issuer hereby grants to Grantee an unconditional, irrevocable option
(the "Option") to purchase, subject to the terms hereof, up to an aggregate of
2,020,000 fully paid and nonassessable shares of the common stock, par value
$0.01 per share, of Issuer ("Common Stock") at a price per share of $18.75;
provided, however, that in the event Issuer issues or agrees to issue any shares
of Common Stock (other than shares of Common Stock issued pursuant to stock
options granted pursuant to any employee benefit plan prior to the date hereof)
at a price less $18.75 (as adjusted pursuant to subsection (b) of Section 5),
such price shall be equal to such lesser price (such price, as adjusted if
applicable, the "Option Price"); provided, further, that in no event shall the
number of shares for which this Option is exercisable exceed 19.9% of the issued
and outstanding shares of Common Stock. The number of shares of Common Stock
that may be received upon the exercise of the Option and the Option Price are
subject to adjustment as herein set forth.
(b) In the event that any additional shares of Common Stock are issued or
otherwise become outstanding after the date of this Agreement (other than
pursuant to this Agreement and other than pursuant to an event described in
Section 5(a) hereof), the number of shares of Common Stock subject to the Option
shall be increased so that, after such issuance, such number together with any
shares of Common Stock previously issued pursuant hereto, equals 19.9% of the
number of shares of Common Stock then issued and outstanding without giving
effect to any shares subject or issued pursuant to the Option. Nothing contained
in this Section l(b) or elsewhere in this Agreement shall be deemed to authorize
Issuer to issue shares in breach of any provision of the Merger Agreement.
2. (a) The Holder (as hereinafter defined) may exercise the Option, in whole
or part, if, but only if, both an Initial Triggering Event (as hereinafter
defined) and a Subsequent Triggering Event (as hereinafter defined) shall have
occurred prior to the occurrence of an Exercise Termination Event (as
hereinafter defined), provided that the Holder shall have sent the written
notice of such exercise (as provided in subsection (e) of this Section 2) within
six (6) months following such Subsequent
<PAGE>
Triggering Event (or such later period as provided in Section 10). Each of the
following shall be an Exercise Termination Event: (i) the Effective Time of the
Merger; (ii) termination of the Merger Agreement in accordance with the
provisions thereof if such termination occurs prior to the occurrence of an
Initial Triggering Event except a termination by Grantee pursuant to Section
8.01(b) or Section 8.01(e) of the Merger Agreement or by Grantee or Issuer
pursuant to Section 8.01(d)(ii) of the Merger Agreement (each, a "Listed
Termination"); or (iii) the passage of eighteen (18) months (or such longer
period as provided in Section 10) after termination of the Merger Agreement if
such termination follows the occurrence of an Initial Triggering Event or is a
Listed Termination. The term "Holder" shall mean the holder or holders of the
Option. Notwithstanding anything to the contrary contained herein, (i) the
Option may not be exercised at any time when Grantee shall be in material breach
of any of its covenants or agreements contained in the Merger Agreement such
that Issuer shall be entitled to terminate the Merger Agreement pursuant to
Section 8.01(b) thereof and (ii) this Agreement shall automatically terminate
upon the proper termination of the Merger Agreement by Issuer pursuant to
Section 8.01(b) thereof as a result of the material breach by Grantee of its
covenants or agreements contained in the Merger Agreement.
(b) The term "Initial Triggering Event" shall mean any of the following
events or transactions occurring on or after the date hereof:
(i) Issuer or its Significant Subsidiary (as defined in Rule 1-02 of
Regulation S-X promulgated by the Securities and Exchange Commission (the
"SEC")) (the "Issuer Subsidiary"), without having received Grantee's prior
written consent, shall have entered into an agreement to engage in an
Acquisition Transaction (as hereinafter defined) with any person (the term
"person" for purposes of this Agreement having the meaning assigned thereto
in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the "1934 Act"), and the rules and regulations thereunder) other
than Grantee or any of its Subsidiaries (each a "Grantee Subsidiary") or the
Board of Directors of Issuer (the "Issuer Board") shall have recommended
that the shareholders of Issuer approve or accept any Acquisition
Transaction other than as contemplated by the Merger Agreement. For purposes
of this Agreement, (a) "Acquisition Transaction" shall mean (x) a merger or
consolidation, or any similar transaction, involving Issuer or the Issuer
Subsidiary (other than mergers, consolidations or similar transactions
involving solely Issuer and/or one or more wholly-owned Subsidiaries of the
Issuer, provided, any such transaction is not entered into in violation of
the terms of the Merger Agreement), (y) a purchase, lease or other
acquisition of all or any substantial part of the assets or deposits of
Issuer or the Issuer Subsidiary, or (z) a purchase or other acquisition
(including by way of merger, consolidation, share exchange or otherwise) of
securities representing 10% or more of the voting power of Issuer or the
Issuer Subsidiary and (b) "Subsidiary" shall have the meaning set forth in
Rule 12b-2 under the 1934 Act;
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(ii) Any person other than the Grantee or any Grantee Subsidiary shall
have acquired beneficial ownership or the right to acquire beneficial
ownership of 10% or more of the outstanding shares of Common Stock (the term
"beneficial ownership" for purposes of this Agreement having the meaning
assigned thereto in Section 13(d) of the 1934 Act, and the rules and
regulations thereunder);
(iii) The shareholders of Issuer shall have voted and failed to approve
the Merger Agreement and the Merger at a meeting which has been held for
that purpose or any adjournment or postponement thereof, or such meeting
shall not have been held in violation of the Merger Agreement or shall have
been cancelled prior to termination of the Merger Agreement if, prior to
such meeting (or if such meeting shall not have been held or shall have been
cancelled, prior to such termination), it shall have been publicly announced
that any person (other than Grantee or any of its Subsidiaries) shall have
made, or disclosed an intention to make, a proposal to engage in an
Acquisition Transaction;
(iv) The Issuer Board shall have withdrawn or modified (or publicly
announced its intention to withdraw or modify) in any manner adverse in any
respect to Grantee its recommendation that the shareholders of Issuer
approve the transactions contemplated by the Merger Agreement, or Issuer or
the Issuer Subsidiary shall have authorized, recommended, proposed (or
publicly announced its intention to authorize, recommend or propose) an
agreement to engage in an Acquisition Transaction with any person other than
Grantee or a Grantee Subsidiary;
(v) Any person other than Grantee or any Grantee Subsidiary shall have
made a proposal to Issuer or its shareholders to engage in an Acquisition
Transaction and such proposal shall have been publicly announced;
(vi) Any person other than Grantee or any Grantee Subsidiary shall have
filed with the SEC a registration statement or tender offer materials with
respect to a potential exchange or tender offer that would constitute an
Acquisition Transaction (or filed a preliminary proxy statement with the SEC
with respect to a potential vote by its shareholders to approve the issuance
of shares to be offered in such an exchange offer);
(vii) Issuer shall have willfully breached any covenant or obligation
contained in the Merger Agreement in anticipation of engaging in an
Acquisition Transaction, and following such breach Grantee would be entitled
to terminate the Merger Agreement (whether immediately or after the giving
of notice or passage of time or both); or
(viii) Any person other than Grantee or any Grantee Subsidiary shall
have filed an application or notice with the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board") or other federal or
state bank regulatory or antitrust authority, which
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<PAGE>
application or notice has been accepted for processing, for approval to
engage in an Acquisition Transaction.
(c) The term "Subsequent Triggering Event" shall mean any of the following
events or transactions occurring after the date hereof:
(i) The acquisition by any person (other than Grantee or any Grantee
Subsidiary) of beneficial ownership of 20% or more of the then outstanding
Common Stock; or
(ii) The occurrence of the Initial Triggering Event described in clause
(i) of subsection (b) of this Section 2, except that the percentage referred
to in clause (z) of the second sentence thereof shall be 20%.
(d) Issuer shall notify Grantee promptly in writing of the occurrence of any
Initial Triggering Event or Subsequent Triggering Event (together, a "Triggering
Event"), it being understood that the giving of such notice by Issuer shall not
be a condition to the right of the Holder to exercise the Option.
(e) In the event the Holder is entitled to and wishes to exercise the Option
(or any portion thereof), 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 shares it will purchase pursuant to such exercise and (ii) a place and
date not earlier than three business days nor later than 60 business days from
the Notice Date for the closing of such purchase (the "Closing Date"); provided,
that if prior notification to or approval of the Federal Reserve Board or any
other regulatory or antitrust agency is required in connection with such
purchase, the Holder shall promptly file the required notice or application for
approval, shall promptly notify Issuer of such filing, and shall expeditiously
process the same and the period of time that otherwise would run pursuant to
this sentence shall run instead from the date on which any required notification
periods have expired or been terminated or such approvals have been obtained and
any requisite waiting period or periods shall have passed. Any exercise of the
Option shall be deemed to occur on the Notice Date relating thereto.
(f) At the closing referred to in subsection (e) of this Section 2, the
Holder shall (i) pay to Issuer the aggregate purchase price for the shares of
Common Stock purchased pursuant to the exercise of the Option in immediately
available funds by wire transfer to a bank account designated by Issuer and (ii)
present and surrender this Agreement to Issuer at its principal executive
offices, provided that the failure or refusal of the Issuer to designate such a
bank account or accept surrender of this Agreement shall not preclude the Holder
from exercising the Option.
(g) At such closing, simultaneously with the delivery of immediately
available funds as provided in subsection (f) of this Section 2, Issuer shall
deliver to the Holder a certificate or certificates representing the number of
shares of Common Stock purchased by the Holder and,
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<PAGE>
if the Option should be exercised in part only, a new Option evidencing the
rights of the Holder thereof to purchase the balance of the shares purchasable
hereunder.
(h) Certificates for Common Stock delivered at a closing hereunder may be
endorsed with a restrictive legend that shall read substantially as follows:
"The transfer of the shares represented by this certificate is subject
to certain provisions of an agreement, dated as of _________, 199__, between
the registered holder hereof and Issuer and to resale restrictions arising
under the Securities Act of 1933, as amended. A copy of such agreement is on
file at the principal office of Issuer and will be provided to the holder
hereof without charge upon receipt by Issuer of a written request therefor."
It is understood and agreed that: (i) the reference to the resale restrictions
of the Securities Act of 1933, as amended (the "1933 Act") in the above legend
shall be removed by delivery of substitute certificate(s) without such reference
if the Holder shall have delivered to Issuer a copy of a letter from the staff
of the SEC, or an opinion of counsel, in form and substance reasonably
satisfactory to Issuer, to the effect that such legend is not required for
purposes of the 1933 Act; (ii) the reference to the provisions of this Agreement
in the above legend shall be removed by delivery of substitute certificate(s)
without such reference if the shares have been sold or transferred in compliance
with the provisions of this Agreement and under circumstances that do not
require the retention of such reference in the opinion of Counsel to the Holder;
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.
(i) Upon the giving by the Holder to Issuer of the written notice of
exercise of the Option provided for under subsection (e) of this Section 2 and
the tender of the applicable purchase price in immediately available funds, the
Holder shall be deemed to be the holder of record of the shares of Common Stock
issuable upon such exercise, notwithstanding that the stock transfer books of
Issuer shall then be closed or that certificates representing such shares of
Common Stock shall not then be actually delivered to the Holder. Issuer shall
pay all expenses, and any and all United States federal, state and local taxes
and other charges that may be payable in connection with the preparation, issue
and delivery of stock certificates under this Section 2 in the name of the
Holder or its assignee, transferee or designee.
3. Issuer agrees: (i) that it shall at all times maintain, free from
preemptive rights, sufficient authorized but unissued or treasury shares of
Common Stock so that the Option may be exercised without additional
authorization of Common Stock after giving effect to all other options,
warrants, convertible securities and other rights to purchase Common Stock; (ii)
that it will not, by charter amendment or through reorganization, consolidation,
merger, dissolution or sale of assets, or by any other voluntary act, avoid or
seek to avoid the observance or performance of any of the covenants,
stipulations or conditions to be observed or performed hereunder by Issuer;
(iii) promptly to take all action as may from time to time be required
(including (x) complying with all applicable premerger
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notification, reporting and waiting period requirements specified in 15 U.S.C.
Section 18a and regulations promulgated thereunder and (y) in the event, under
the Bank Holding Company Act of 1956, as amended (the "BHCA"), or the Change in
Bank Control Act of 1978, as amended, or any state or other federal banking law,
prior approval of or notice to the Federal Reserve Board or to any state or
other federal regulatory authority is necessary before the Option may be
exercised, cooperating fully with the Holder in preparing such applications or
notices and providing such information to the Federal Reserve Board or such
state or other federal regulatory authority as they may require) in order to
permit the Holder to exercise the Option and Issuer duly and effectively to
issue shares of Common Stock pursuant hereto; and (iv) promptly to take all
action provided herein to protect the rights of the Holder against dilution.
4. This Agreement (and the Option granted hereby) are exchangeable, without
expense, at the option of the Holder, upon presentation and surrender of this
Agreement at the principal office of Issuer, for other Agreements providing for
Options of different denominations entitling the holder thereof to purchase, on
the same terms and subject to the same conditions as are set forth herein, in
the aggregate the same number of shares of Common Stock purchasable hereunder.
The terms "Agreement" and "Option" as used herein include any Agreements and
related Options for which this Agreement (and the Option granted hereby) may be
exchanged. Upon receipt by Issuer of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Agreement, and (in the case
of loss, theft or destruction) of reasonably satisfactory indemnification, and
upon surrender and cancellation of this Agreement, if mutilated, Issuer will
execute and deliver a new Agreement of like tenor and date. 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.
5. In addition to the adjustment in the number of shares of Common Stock
that are purchasable upon exercise of the Option pursuant to Section 1 of this
Agreement, the number of shares of Common Stock purchasable upon the exercise of
the Option and the Option Price shall be subject to adjustment from time to time
as provided in this Section 5.
(a) In the event of any change in, or distributions in respect of, the
Common Stock by reason of stock dividends, split-ups, mergers,
recapitalizations, combinations, subdivisions, conversions, exchanges of shares
or the like, the type and number of shares of Common Stock purchasable upon
exercise hereof shall be appropriately adjusted and proper provision shall be
made so that, in the event that any additional shares of Common Stock are to be
issued or otherwise become outstanding as a result of any such change (other
than pursuant to an exercise of the Option), the number of shares of Common
Stock that remain subject to the Option shall be increased so that, after such
issuance and together with shares of Common Stock previously issued pursuant to
the exercise of the Option (as adjusted on account of any of the foregoing
changes in the Common Stock), it equals 19.9% of the number of shares of Common
Stock then issued and outstanding.
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(b) Whenever the number of shares of Common Stock purchasable upon exercise
hereof is adjusted as provided in this Section 5, the Option Price shall be
adjusted by multiplying the Option Price by a fraction, the numerator of which
shall be equal to the number of shares of Common Stock purchasable prior to the
adjustment and the denominator of which shall be equal to the number of shares
of Common Stock purchasable after the adjustment.
6. Upon the occurrence of a Subsequent Triggering Event that occurs prior to
an Exercise Termination Event, Issuer shall, at the request of Grantee delivered
within twelve (12) months (or such later period as provided in Section 10) of
such Subsequent Triggering Event (whether on its own behalf or on behalf of any
subsequent holder of this Option (or part thereof) or any of the shares of
Common Stock issued pursuant hereto), promptly prepare, file and keep current a
registration statement under the 1933 Act covering any shares issued and
issuable pursuant to this Option and shall use its reasonable best efforts to
cause such registration statement to become effective and remain current in
order to permit the sale or other disposition of any shares of Common Stock
issued upon total or partial exercise of this Option ("Option Shares") in
accordance with any plan of disposition requested by Grantee. Issuer will use
its reasonable best efforts to cause such registration statement promptly to
become effective and then to remain effective for such period not in excess of
180 days from the day such registration statement first becomes effective or
such shorter time as may be reasonably necessary to effect such sales or other
dispositions. Grantee shall have the right to demand two such registrations. The
Issuer shall bear the costs of such registrations (including, but not limited
to, Issuer's attorneys' fees, printing costs and filing fees, except for
underwriting discounts or commissions, brokers' fees and the fees and
disbursements of Grantee's counsel related thereto). The foregoing
notwithstanding, if, at the time of any request by Grantee for registration of
Option Shares as provided above, Issuer is in registration with respect to an
underwritten public offering by Issuer of shares of Common Stock, and if in the
good faith judgment of the managing underwriter or managing underwriters, or, if
none, the sole underwriter or underwriters, of such offering the offer and sale
of the Option Shares would interfere with the successful marketing of the shares
of Common Stock offered by Issuer, the number of Option Shares otherwise to be
covered in the registration statement contemplated hereby may be reduced;
provided, however, that after any such required reduction the number of Option
Shares to be included in such offering for the account of the Holder shall
constitute at least 25% of the total number of shares to be sold by the Holder
and Issuer in the aggregate; and provided further, however, that if such
reduction occurs, then Issuer shall file a registration statement for the
balance as promptly as practicable thereafter as to which no reduction pursuant
to this Section 6 shall be permitted or occur and the Holder shall thereafter be
entitled to one additional registration and the twelve (12) month period
referred to in the first sentence of this section shall be increased to
twenty-four (24) months. Each such Holder shall provide all information
reasonably requested by Issuer for inclusion in any registration statement to be
filed hereunder. If requested by any such Holder in connection with such
registration, Issuer shall become a party to any underwriting agreement relating
to the sale of such shares, but only to the extent of obligating itself in
respect of representations, warranties, indemnities and other agreements
customarily included in such underwriting agreements for Issuer. Upon receiving
any request under this Section 6 from any Holder, Issuer agrees to send a copy
thereof to any other person known to
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Issuer to be entitled to registration rights under this Section 6, in each case
by promptly mailing the same, postage prepaid, to the address of record of the
persons entitled to receive such copies. Notwithstanding anything to the
contrary contained herein, in no event shall the number of registrations that
Issuer is obligated to effect be increased by reason of the fact that there
shall be more than one Holder as a result of any assignment or division of this
Agreement.
7. (a) At any time after the occurrence of a Repurchase Event (as defined
below), (i) at the request of the Holder, delivered prior to an Exercise
Termination Event (or such later period as provided in Section 10), Issuer (or
any successor thereto) shall repurchase the Option from the Holder at a price
(the "Option Repurchase Price") equal to the amount by which (A) the
market/offer price (as defined below) exceeds (B) the Option Price, multiplied
by the number of shares for which this Option may then be exercised and (ii) at
the request of the owner of Option Shares from time to time (the "Owner"),
delivered prior to an Exercise Termination Event (or such later period as
provided in Section 10), Issuer (or any successor thereto) shall repurchase such
number of the Option Shares from the Owner as the Owner shall designate at a
price (the "Option Share Repurchase Price") equal to the market/offer price
multiplied by the number of Option Shares so designated. The term "market/offer
price" shall mean the highest of (i) the price per share of Common Stock at
which a tender or exchange offer therefor has been made, (ii) the price per
share of Common Stock to be paid by any third party pursuant to an agreement
with Issuer, (iii) the highest closing price for shares of Common Stock within
the six-month period immediately preceding the date the Holder gives notice of
the required repurchase of this Option or the Owner gives notice of the required
repurchase of Option Shares, as the case may be, or (iv) in the event of a sale
of all or any substantial part of Issuer's assets or deposits, the sum of the
net price paid in such sale for such assets or deposits and the current market
value of the remaining net assets of Issuer as determined by a nationally
recognized investment banking firm selected by the Holder or the Owner, as the
case may be, and reasonably acceptable to Issuer, divided by the number of
shares of Common Stock of Issuer outstanding at the time of such sale. In
determining the market/offer price, the value of consideration other than cash
shall be determined by a nationally recognized investment banking firm selected
by the Holder or Owner, as the case may be, and reasonably acceptable to Issuer.
(b) The Holder and the Owner, as the case may be, may exercise its right to
require Issuer to repurchase the Option and any Option Shares pursuant to this
Section 7 by surrendering for such purpose to Issuer, at its principal office, a
copy of this Agreement or certificates for Option Shares, as applicable,
accompanied by a written notice or notices stating that the Holder or the Owner,
as the case may be, elects to require Issuer to repurchase this Option and/or
the Option Shares in accordance with the provisions of this Section 7. As
promptly as practicable, and in any event within five business days after the
surrender of the Option and/or certificates representing Option Shares and the
receipt of such notice or notices relating thereto, Issuer shall deliver or
cause to be delivered to the Holder the Option Repurchase Price and/or to the
Owner the Option Share Repurchase Price therefor or the portion thereof that
Issuer is not then prohibited under applicable law and regulation from so
delivering.
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(c) To the extent that Issuer is prohibited under applicable law or
regulation, or as a consequence of administrative policy, from repurchasing the
Option and/or the Option Shares in full, Issuer shall immediately so notify the
Holder and/or the Owner and thereafter deliver or cause to be delivered, from
time to time, to the Holder and/or the Owner, as appropriate, the portion of the
Option Repurchase Price and the Option Share Repurchase Price, respectively,
that it is no longer prohibited from delivering, within five business days after
the date on which Issuer is no longer so prohibited; provided, however, that if
Issuer at any time after delivery of a notice of repurchase pursuant to
paragraph (b) of this Section 7 is prohibited under applicable law or
regulation, or as a consequence of administrative policy, from delivering to the
Holder and/or the Owner, as appropriate, the Option Repurchase Price and the
Option Share Repurchase Price, respectively, in full (and Issuer hereby
undertakes to use its reasonable best efforts to obtain all required regulatory
and legal approvals and to file any required notices as promptly as practicable
in order to accomplish such repurchase), the Holder or Owner may revoke its
notice of repurchase of the Option and/or the Option Shares whether in whole or
to the extent of the prohibition, whereupon, in the latter case, Issuer shall
promptly (i) deliver to the Holder and/or the Owner, as appropriate, that
portion of the Option Repurchase Price and/or the Option Share Repurchase Price
that Issuer is not prohibited from delivering; and (ii) deliver, as appropriate,
either (A) to the Holder, a new Agreement evidencing the right of the Holder to
purchase that number of shares of Common Stock obtained by multiplying the
number of shares of Common Stock for which the surrendered Agreement was
exercisable at the time of delivery of the notice of repurchase by a fraction,
the numerator of which is the Option Repurchase Price less the portion thereof
theretofore delivered to the Holder and the denominator of which is the Option
Repurchase Price, and/or (B) to the Owner, a certificate for the Option Shares
it is then so prohibited from repurchasing. If an Exercise Termination Event
shall have occurred prior to the date of the notice by Issuer described in the
first sentence of this subsection (c), or shall be scheduled to occur at any
time before the expiration of a period ending on the thirtieth day after such
date, the Holder shall nonetheless have the right to exercise the Option until
the expiration of such 30-day period.
(d) For purposes of this Section 7, a "Repurchase Event" shall be deemed to
have occurred upon the occurrence of any of the following events or transactions
after the date hereof:
(i) the acquisition by any person (other than Grantee or any Grantee
Subsidiary) of beneficial ownership of 50% or more of the then outstanding
Common Stock; or
(ii) the consummation of any Acquisition Transaction described in
Section 2(b)(i) hereof, except that the percentage referred to in clause
(z) shall be 50%.
8. (a) In the event that prior to an Exercise Termination Event, Issuer
shall enter into an agreement (i) to consolidate with or merge into any person,
other than Grantee or a Grantee Subsidiary, or engage in a plan of exchange with
any person, other than Grantee or a Grantee Subsidiary and Issuer shall not be
the continuing or surviving corporation of such consolidation or merger or the
acquirer in such plan of exchange, (ii) to permit any person, other than Grantee
or a
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Grantee Subsidiary, to merge into Issuer or be acquired by Issuer in a plan of
exchange and Issuer shall be the continuing or surviving or acquiring
corporation, but, in connection with such merger or plan of exchange, the then
outstanding shares of Common Stock shall be changed into or exchanged for stock
or other securities of any other person or cash or any other property or the
then outstanding shares of Common Stock shall after such merger or plan of
exchange represent less than 50% of the outstanding shares and share equivalents
of the merged or acquiring company, or (iii) to sell or otherwise transfer all
or a substantial part of its or the Issuer Subsidiary's assets or deposits to
any person, other than Grantee or a Grantee Subsidiary, then, and in each such
case, the agreement governing such transaction shall make proper provision so
that the Option shall, upon the consummation of any such transaction and upon
the terms and conditions set forth herein, be converted into, or exchanged for,
an option (the "Substitute Option"), at the election of the Holder, of either
(x) the Acquiring Corporation (as hereinafter defined) or (y) any person that
controls the Acquiring Corporation.
(b) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean (i) the continuing or
surviving person of a consolidation or merger with Issuer (if other than
Issuer), (ii) the acquiring person in a plan of exchange in which Issuer
is acquired, (iii) the Issuer in a merger or plan of exchange in which
Issuer is the continuing or surviving or acquiring person, and (iv) the
transferee of all or a substantial part of Issuer's assets or deposits (or
the assets or deposits of the Issuer Subsidiary).
(ii) "Substitute Common Stock" shall mean the common stock issued by
the issuer of the Substitute Option upon exercise of the Substitute
Option.
(iii) "Assigned Value" shall mean the market/offer price, as defined
in Section 7.
(iv) "Average Price" shall mean the average closing price of a share
of the Substitute Common Stock for one year immediately preceding the
consolidation, merger or sale in question, but in no event higher than the
closing price of the shares of Substitute Common Stock on the day
preceding such consolidation, merger or sale; provided that if Issuer is
the issuer of the Substitute Option, the Average Price shall be computed
with respect to a share of common stock issued by the person merging into
Issuer or by any company which controls or is controlled by such person,
as the Holder may elect.
(c) The Substitute Option shall have the same terms as the Option, provided that
if the terms of the Substitute Option cannot, for legal reasons, be the same as
the Option, such terms shall be as similar as possible and in no event less
advantageous to the Holder. The issuer of the Substitute Option shall also enter
into an agreement with the then Holder or Holders of the Substitute Option in
substantially the same form as this Agreement (after giving effect for such
purpose to the provisions of Section 9), which agreement shall be applicable to
the Substitute Option.
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(d) The Substitute Option shall be exercisable for such number of shares of
Substitute Common Stock as is equal to the Assigned Value multiplied by the
number of shares of Common Stock for which the Option was exercisable
immediately prior to the event described in the first sentence of Section 8(a),
divided by the Average Price. The exercise price of the Substitute Option per
share of Substitute Common Stock shall then be equal to the Option Price
multiplied by a fraction, the numerator of which shall be the number of shares
of Common Stock for which the Option was exercisable immediately prior to the
event described in the first sentence of Section 8(a) and the denominator of
which shall be the number of shares of Substitute Common Stock for which the
Substitute Option is exercisable.
(e) In no event, pursuant to any of the foregoing paragraphs, shall the
Substitute Option be exercisable for more than 19.9% of the shares of Substitute
Common Stock outstanding prior to exercise of the Substitute Option. In the
event that the Substitute Option would be exercisable for more than 19.9% of the
shares of Substitute Common Stock outstanding prior to exercise but for this
clause (e), the issuer of the Substitute Option (the "Substitute Option Issuer")
shall make a cash payment to Holder equal to the excess of (i) the value of the
Substitute Option without giving effect to the limitation in this clause (e)
over (ii) the value of the Substitute Option after giving effect to the
limitation in this clause (e). This difference in value shall be determined by a
nationally recognized investment banking firm selected by the Holder.
(f) Issuer shall not enter into any transaction described in subsection (a)
of this Section 8 unless the Acquiring Corporation and any person that controls
the Acquiring Corporation assume in writing all the obligations of Issuer
hereunder.
9. (a) At the request of the holder of the Substitute Option (the
"Substitute Option Holder"), the issuer of the Substitute Option (the
"Substitute Option Issuer") shall repurchase the Substitute Option from the
Substitute Option Holder at a price (the "Substitute Option Repurchase Price")
equal to the amount by which (i) the Highest Closing Price (as hereinafter
defined) exceeds (ii) the exercise price of the Substitute Option, multiplied by
the number of shares of Substitute Common Stock for which the Substitute Option
may then be exercised, and at the request of the owner (the "Substitute Share
Owner") of shares of Substitute Common Stock (the "Substitute Shares"), the
Substitute Option Issuer shall repurchase the Substitute Shares at a price (the
"Substitute Share Repurchase Price") equal to the Highest Closing Price
multiplied by the number of Substitute Shares so designated. The term "Highest
Closing Price" shall mean the highest closing price for shares of Substitute
Common Stock within the six-month period immediately preceding the date the
Substitute Option Holder gives notice of the required repurchase of the
Substitute Option or the Substitute Share Owner gives notice of the required
repurchase of the Substitute Shares, as applicable.
(b) The Substitute Option Holder and the Substitute Share Owner, as the case
may be, may exercise its respective rights to require the Substitute Option
Issuer to repurchase the Substitute Option and the Substitute Shares pursuant to
this Section 9 by surrendering for such purpose to the Substitute Option Issuer,
at its principal office, the agreement for such Substitute Option (or, in the
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absence of such an agreement, a copy of this Agreement) and/or certificates for
Substitute Shares accompanied by a written notice or notices stating that the
Substitute Option Holder or the Substitute Share Owner, as the case may be,
elects to require the Substitute Option Issuer to repurchase the Substitute
Option and/or the Substitute Shares in accordance with the provisions of this
Section 9. As promptly as practicable and in any event within five business days
after the surrender of the Substitute Option and/or certificates representing
Substitute Shares and the receipt of such notice or notices relating thereto,
the Substitute Option Issuer shall deliver or cause to be delivered to the
Substitute Option Holder the Substitute Option Repurchase Price and/or to the
Substitute Share Owner the Substitute Share Repurchase Price therefor or the
portion thereof which the Substitute Option Issuer is not then prohibited under
applicable law and regulation from so delivering.
(c) To the extent that the Substitute Option Issuer is prohibited under
applicable law or regulation, or as a consequence of administrative policy, from
repurchasing the Substitute Option and/or the Substitute Shares in part or in
full, the Substitute Option Issuer shall immediately so notify the Substitute
Option Holder and/or the Substitute Share Owner and thereafter deliver or cause
to be delivered, from time to time, to the Substitute Option Holder and/or the
Substitute Share Owner, as appropriate, the portion of the Substitute Option
Repurchase Price and/or the Substitute Share Repurchase Price, respectively,
which it is no longer prohibited from delivering, within five (5) business days
after the date on which the Substitute Option Issuer is no longer so prohibited;
provided, however, that if the Substitute Option Issuer is at any time after
delivery of a notice of repurchase pursuant to subsection (b) of this Section 9
prohibited under applicable law or regulation, or as a consequence of
administrative policy, from delivering to the Substitute Option Holder and/or
the Substitute Share Owner, as appropriate, the Substitute Option Repurchase
Price and the Substitute Share Repurchase Price, respectively, in full (and the
Substitute Option Issuer shall use its reasonable best efforts to receive all
required regulatory and legal approvals as promptly as practicable in order to
accomplish such repurchase), the Substitute Option Holder and/or Substitute
Share Owner may revoke its notice of repurchase of the Substitute Option or the
Substitute Shares either in whole or to the extent of prohibition, whereupon, in
the latter case, the Substitute Option Issuer shall promptly (i) deliver to the
Substitute Option Holder or Substitute Share Owner, as appropriate, that portion
of the Substitute Option Repurchase Price or the Substitute Share Repurchase
Price that the Substitute Option Issuer is not prohibited from delivering; and
(ii) deliver, as appropriate, either (A) to the Substitute Option Holder, a new
Substitute Option evidencing the right of the Substitute Option Holder to
purchase that number of shares of the Substitute Common Stock obtained by
multiplying the number of shares of the Substitute Common Stock for which the
surrendered Substitute Option was exercisable at the time of delivery of the
notice of repurchase by a fraction, the numerator of which is the Substitute
Option Repurchase Price less the portion thereof theretofore delivered to the
Substitute Option Holder and the denominator of which is the Substitute Option
Repurchase Price, and/or (B) to the Substitute Share Owner, a certificate for
the Substitute Option Shares it is then so prohibited from repurchasing. If an
Exercise Termination Event shall have occurred prior to the date of the notice
by the Substitute Option Issuer described in the first sentence of this
subsection (c), or shall be scheduled to occur at any time before the expiration
of a
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period ending on the thirtieth day after such date, the Substitute Option Holder
shall nevertheless have the right to exercise the Substitute Option until the
expiration of such 30-day period.
10. The 30-day, 6-month, 12-month, 18-month or 24-month periods for exercise
of certain rights under Sections 2, 6, 7, 9, 12 and 14 shall be extended: (i) to
the extent necessary to obtain all regulatory approvals for the exercise of such
rights (for so long as the Holder, Owner, Substitute Option Holder or Substitute
Share Owner, as the case may be, is using commercially reasonable efforts to
obtain such regulatory approvals), and for the expiration of all statutory
waiting periods; and (ii) to the extent necessary to avoid liability under
Section 16(b) of the 1934 Act by reason of such exercise.
11. (a) Issuer hereby represents and warrants to Grantee as follows:
(i) Issuer has full corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Issuer Board prior to the date hereof and no other corporate proceedings on the
part of Issuer are necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly and validly executed
and delivered by Issuer.
(ii) Issuer has taken all necessary corporate action to authorize and
reserve and to permit it to issue, and at all times from the date hereof through
the termination of this Agreement in accordance with its terms will have
reserved for issuance upon the exercise of the Option, that number of shares of
Common Stock equal to the maximum number of shares of Common Stock at any time
and from time to time issuable hereunder, and all such shares, upon issuance
pursuant thereto, will be duly authorized, validly issued, fully paid,
nonassessable, and will be delivered free and clear of all claims, liens,
encumbrance and security interests and not subject to any preemptive rights.
(b) Grantee hereby represents and warrants to Issuer as follows:
(i) Grantee has corporate power and authority to execute and deliver
this Agreement and to perform its obligations hereunder. The execution and
delivery of this Agreement by the Grantee and the performance of its obligations
hereunder by the Grantee have been duly and validly authorized by the Board of
Directors of Grantee and no other corporate proceedings on the part of the
Grantee are necessary to authorize this Agreement or for Grantee to perform its
obligations hereunder. This Agreement has been duly and validly executed and
delivered by Grantee.
(ii) 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
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thereof and will not be transferred or otherwise disposed of except in a
transaction registered or exempt from registration under the 1933 Act.
12. Neither of the parties hereto may assign any of its rights or
obligations under this Agreement or the Option created hereunder to any other
person, without the express written consent of the other party, except that in
the event an Initial Triggering Event shall have occurred prior to an Exercise
Termination Event, Grantee, subject to the express provisions hereof, may assign
in whole or in part its rights and obligations hereunder; provided, however,
that until the date 15 days following the date on which the Federal Reserve
Board has approved an application by Grantee to acquire the shares of Common
Stock subject to the Option, Grantee may not assign its rights under the Option
except in (i) a widely dispersed public distribution, (ii) a private placement
in which no one party acquires the right to purchase in excess of 2% of the
voting shares of Issuer, (iii) an assignment to a single party (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 Board.
13. Each of Grantee and Issuer will use its reasonable best efforts to make
all filings with, and to obtain consents of, all third parties and governmental
authorities necessary to the consummation of the transactions contemplated by
this Agreement, including, without limitation, applying to the Federal Reserve
Board under the BHCA for approval to acquire the shares issuable hereunder, but
Grantee shall not be obligated to apply to state banking authorities for
approval to acquire the shares of Common Stock issuable hereunder until such
time, if ever, as it deems appropriate to do so.
14. (a) Grantee may, at any time following a Repurchase Event and prior to
the occurrence of an Exercise Termination Event (or such later period as
provided in Section 10), relinquish the Option (together with any Option Shares
issued to and then owned by Grantee) to Issuer in exchange for a cash fee equal
to the Surrender Price; provided, however, that Grantee may not exercise its
rights pursuant to this Section 14 if Issuer has repurchased the Option (or any
portion thereof) or any Option Shares pursuant to Section 7. The "Surrender
Price" shall be equal to $5.0 million (i) plus, if applicable, Grantee's
purchase price actually paid with respect to any Option Shares and (ii) minus,
if applicable, the excess of (A) the net cash amounts, if any, received by
Grantee pursuant to the arms' length sale of Option Shares (or any other
securities into which such Option Shares were converted or exchanged) to any
unaffiliated party, over (B) Grantee's purchase price of such Option Shares.
(b) Grantee may exercise its right to relinquish the Option and any Option
Shares pursuant to this Section 14 by surrendering to Issuer, at its principal
office, a copy of this Agreement together with certificates for Option Shares,
if any, accompanied by a written notice stating (i) that Grantee elects to
relinquish the Option and Option Shares, if any, in accordance with the
provisions of this Section 14 and (ii) the Surrender Price. The Surrender Price
shall be payable in immediately available funds on or before the second business
day following receipt of such notice by Issuer.
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(c) To the extent that Issuer is prohibited under applicable law or
regulation, or as a consequence of administrative policy, from paying the
Surrender Price to Grantee in full, Issuer shall immediately so notify Grantee
and thereafter deliver or cause to be delivered, from time to time, to Grantee,
the portion of the Surrender Price that it is no longer prohibited from paying,
within five business days after the date on which Issuer is no longer so
prohibited; provided, however, that if Issuer at any time after delivery of a
notice of surrender pursuant to paragraph (b) of this Section 14 is prohibited
under applicable law or regulation, or as a consequence of administrative
policy, from paying to Grantee the Surrender Price in full, (i) Issuer shall (A)
use its reasonable best efforts to obtain all required regulatory and legal
approvals and to file any required notices as promptly as practicable in order
to make such payments, (B) within five days of the submission or receipt of any
documents relating to any such regulatory and legal approvals, provide Grantee
with copies of the same, and (c) keep Grantee advised of both the status of any
such request for regulatory and legal approvals, as well as any discussions with
any relevant regulatory or other third party reasonably related to the same and
(ii) Grantee may revoke such notice of surrender by delivery of a notice of
revocation to Issuer and, upon delivery of such notice of revocation, the
Exercise Termination Date shall be extended to a date six months from the date
on which the Exercise Termination Date would have occurred if not for the
provisions of this Section 14(c) (during which period Grantee may exercise any
of its rights hereunder, including any and all rights pursuant to this Section
14).
15. The parties hereto acknowledge that damages would be an inadequate
remedy for a breach of this Agreement by either party hereto and that the
obligations of the parties hereto shall be enforceable by either party hereto
through injunctive or other equitable relief. In connection therewith both
parties waive the posting of any bond or similar requirement.
16. If any term, provision, covenant or restriction contained in this
Agreement is held by a court or a federal or state regulatory agency of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions and covenants and restrictions contained in this Agreement
shall remain in full force and effect, and shall in no way be affected, impaired
or invalidated. If for any reason such court or regulatory agency determines
that the Holder is not permitted to acquire, or Issuer is not permitted to
repurchase pursuant to Section 7, the full number of shares of Common Stock
provided in Section l(a) hereof (as adjusted pursuant to Section l(b) or Section
5 hereof), it is the express intention of Issuer to allow the Holder to acquire
or to require Issuer to repurchase such lesser number of shares as may be
permissible, without any amendment or modification hereof.
17. All notices, requests, claims, demands and other communications
hereunder shall be deemed to have been duly given when delivered in person, by
fax, telecopy, or by registered or certified mail (postage prepaid, return
receipt requested) at the respective addresses of the parties set forth in the
Merger Agreement.
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<PAGE>
18. This Agreement shall be governed by and construed in accordance with the
laws of the State of North Carolina, without regard to the conflict of law
principles thereof (except to the extent that mandatory provisions of Federal
law or of the FBCA are applicable).
19. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which shall constitute one
and the same agreement.
20. Except as otherwise expressly provided herein, each of the parties
hereto shall bear and pay all costs and expenses incurred by it or on its behalf
in connection with the transactions contemplated hereunder, including fees and
expenses of its own financial consultants, investment bankers, accountants and
counsel.
21. Except as otherwise expressly provided herein or in the Merger
Agreement, this Agreement contains the entire agreement between the parties with
respect to the transactions contemplated hereunder and supersedes all prior
arrangements or understandings with respect thereof, written or oral. The terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted assignees.
Nothing in this Agreement, expressed or implied, is intended to confer upon any
party, other than the parties hereto, and their respective successors except as
assignees, any rights, remedies, obligations or liabilities under or by reason
of this Agreement, except as expressly provided herein.
22. Capitalized terms used in this Agreement and not defined herein shall
have the meanings assigned thereto in the Merger Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
date first above written.
1ST UNITED BANCORP
By: /S/ WARREN S. ORLANDO
---------------------------
Name: Warren S. Orlando
Title: President & CEO
WACHOVIA CORPORATION
By: /S/ L.M. BAKER, JR.
---------------------------
Name: L.M. Baker, Jr.
Title: President & CEO
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