SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 26, 1996
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BANCALABAMA, INC.
(Exact name of registrant as specified in its charter)
Delaware 33-14391 63-0945419
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(State or other jurisdiction (Commission File Number) IRS Employer
of incorporation) Identification No.
312 Clinton Avenue, Huntsville, Alabama 35801
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(Address, including zip code, of principal executive office)
(205) 533-5548
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
On April 26, 1996, BancAlabama, Inc. ("BA") and Union Planters
Corporation ("UPC") entered into an Agreement and Plan of Merger (the
"Agreement"), pursuant to which BA will be acquired by UPC. The Boards of
Directors of BA and UPC approved the Agreement and the transactions
contemplated thereby at separate meetings held on April 25, 1996.
In accordance with the terms of the Agreement, UPC will acquire BA
pursuant to the merger (the "Merger") of BA with and into BNF Bancorp,
Inc., a Delaware corporation and a wholly owned subsidiary of UPC ("BNF").
BNF will be the surviving entity resulting from the Merger.
Upon consummation of the Merger, each share of the $1.00 par value
common stock of BA ("BA Common Stock") (excluding shares held by any BA
company or by any UPC company, in each case other than in a fiduciary
capacity or as a result of debts previously contracted and excluding shares
held by shareholders who perfect their statutory appraisal rights) issued
and outstanding at the effective time of the Merger (as described in the
Agreement, the "Effective Time") shall cease to be outstanding and shall be
converted into and exchanged for the right to receive .5907 of a share
(subject to possible adjustment as described below, the "Exchange Ratio")
of the $5.00 par value common stock of UPC ("UPC Common Stock").
In addition, at the Effective Time, all rights with respect to BA
Common Stock, pursuant to stock options, stock appreciation rights, or
other rights granted by BA under the existing stock plans of BA, which are
outstanding at the Effective Time, whether or not exercisable, shall be
converted into and become rights with respect to UPC Common Stock on a
basis that reflects the Exchange Ratio.
The Merger is intended to constitute a tax-free transaction under the
Internal Revenue Code of 1986, as amended, and be accounted for as a
pooling of interests.
Consummation of the Merger is subject to various conditions,
including: (i) receipt of the approval by the stockholders of BA of
appropriate matters relating to the Agreement and the Merger required to be
approved under applicable law; (ii) receipt of certain regulatory approvals
from the Board of Governors of the Federal Reserve System and other
applicable regulatory authorities; (iii) receipt of an opinion of counsel
as to the tax-free nature of certain aspects of the Merger; (iv) receipt by
UPC of a letter from Price Waterhouse LLP to the effect that the Merger
will qualify for pooling-of-interests accounting treatment; and (v)
satisfaction of certain other conditions.
Under the Agreement, BA has the right to terminate the Agreement if
the Average Closing Price (as defined below) of UPC Common Stock (i) is
less than $24.245 AND (ii) reflects a decline of more than 15% below a
weighted index of the stock prices of a group of 16 bank holding companies
designated in the Agreement, on the later of the date on which the last
required consent of any regulatory authority required for the Merger is
received and the date on which approval of the Merger by the shareholders
of BA is received (the "Determination Date"). In the event that BA gives
notice of its intention to terminate the Agreement based on such provision,
UPC has the right, within five (5) days of UPC's receipt of such notice, to
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elect to adjust the Exchange Ratio in accordance with the terms of the
Agreement, and, thereby remove BA's right to terminate.
For purposes of the Agreement, the Average Closing Price shall mean
the average of the daily last sales prices of UPC Common Stock as reported
on the New York Stock Exchange, Inc. ("NYSE") - Composite Transactions List
(as reported by THE WALL STREET JOURNAL or, if not reported thereby,
another authoritative source as chosen by UPC) for the 10 consecutive full
trading days in which such shares are traded on the NYSE ending at the
close of trading on the Determination Date.
In connection with executing the Agreement, UPC and BA entered into a
stock option agreement (the "Stock Option Agreement") pursuant to which BA
granted to UPC an option to purchase, subject to certain limitations, up to
139,921 shares of BA Common Stock, at a purchase price of $10.29 per share,
upon certain terms and in accordance with certain conditions.
The Agreement and the Merger will be submitted for approval at a
meeting of the stockholders of BA. Prior to the stockholders' meeting, UPC
will file a registration statement with the Securities and Exchange
Commission registering under the Securities Act of 1933, as amended, the
shares of UPC Common Stock to be issued in exchange for the outstanding
shares of BA Common Stock. Such shares of stock of UPC will be offered to
the BA stockholders pursuant to a prospectus that will also serve as a
proxy statement for the meeting of the stockholders of BA to consider and
vote upon appropriate matters relating to the Agreement and the Merger.
For additional information regarding the Agreement and the Stock
Option Agreement, please refer to the copies of those documents which are
incorporated herein by reference and included as Exhibits to this Current
Report on Form 8-K. The foregoing discussion is qualified in its entirety
by reference to such documents.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
BANCALABAMA, INC.
(Registrant)
William R. Collins
By:____________________________________
William R. Collins,
Chief Executive Officer
and Chairman of the Board
Date: May 6, 1996
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INDEX TO EXHIBITS
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Exhibit
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2.1 Agreement and Plan of Merger, dated as of April 26, 1996,
by and between Union Planters Corporation, BancAlabama,
Inc., and BNF Bancorp, Inc.
2.2 Stock Option Agreement, dated as of April 26, 1996, issued
by BancAlabama, Inc. to Union Planters Corporation
99.1 Text of press release, dated April 29, 1996, issued by
BancAlabama, Inc.
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
BANCALABAMA, INC.,
UNION PLANTERS CORPORATION
AND
BNF BANCORP, INC.
DATED AS OF APRIL 26, 1996
<PAGE>
TABLE OF CONTENTS
PAGE
Parties 1
Preamble 1
ARTICLE 1 - TRANSACTIONS AND TERMS OF MERGER 2
1.1 Merger 2
1.2 Time and Place of Closing 2
1.3 Effective Time 2
1.4 Execution of Stock Option Agreement 2
1.5 UPC's Right to Revise the Structure of the Transaction 2
ARTICLE 2 - TERMS OF MERGER 3
2.1 Certificate of Incorporation 3
2.2 By-laws 3
2.3 Directors and Officers 3
ARTICLE 3 - MANNER OF CONVERTING SHARES 3
3.1 Conversion of Shares 3
3.2 Anti-Dilution Provisions 4
3.3 Shares Held by BancAlabama or UPC 4
3.4 Dissenting Shareholders 4
3.5 Fractional Shares 4
3.6 Conversion of Stock Options; Restricted Stock 5
ARTICLE 4 - EXCHANGE OF SHARES 6
4.1 Exchange Procedures 6
4.2 Rights of Former BancAlabama Shareholders 7
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF BANCALABAMA 7
5.1 Organization, Standing, and Power 7
5.2 Authority; No Breach By Agreement 8
5.3 Capital Stock 8
5.4 BancAlabama Subsidiaries 9
5.5 SEC Filings; Financial Statements 10
5.6 Absence of Undisclosed Liabilities 10
5.7 Absence of Certain Changes or Events 11
5.8 Tax Matters 11
5.9 Allowance for Possible Loan Losses 12
5.10 Assets 12
5.11 Intellectual Property 13
5.12 Environmental Matters 13
5.13 Compliance With Laws 14
5.14 Labor Relations 15
5.15 Employee Benefit Plans 15
5.16 Material Contracts 17
5.17 Legal Proceedings 17
5.18 Reports 18
5.19 Statements True and Correct 18
5.20 Accounting, Tax, and Regulatory Matters 19
5.21 State Takeover Laws 19
5.22 Charter Provisions 19
5.23 Support Agreements 19
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ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF UPC 19
6.1 Organization, Standing, and Power 19
6.2 Authority; No Breach By Agreement 20
6.3 Capital Stock 20
6.4 SEC Filings; Financial Statements 21
6.5 Absence of Undisclosed Liabilities 21
6.6 Absence of Certain Changes or Events 21
6.7 Tax Matters 22
6.8 Environmental Matters 22
6.9 Compliance With Laws 23
6.10 Legal Proceedings 23
6.11 Reports 24
6.12 Statements True and Correct 24
6.13 Accounting, Tax, and Regulatory Matters 24
6.14 Matters Relating to BNF 25
ARTICLE 7 - CONDUCT OF BUSINESS PENDING CONSUMMATION 25
7.1 Affirmative Covenants of BancAlabama 25
7.2 Negative Covenants of BancAlabama 25
7.3 Covenants of UPC 27
7.4 Adverse Changes in Condition 28
7.5 Reports 28
ARTICLE 8 - ADDITIONAL AGREEMENTS 28
8.1 Registration Statement; Proxy Statement; Shareholder Approval 28
8.2 Exchange Listing 29
8.3 Applications 29
8.4 Filings with State Offices 29
8.5 Agreement as to Efforts to Consummate 29
8.6 Investigation and Confidentiality 30
8.7 Press Releases 30
8.8 Certain Actions 30
8.9 Accounting and Tax Treatment 30
8.10 State Takeover Laws 31
8.11 Charter Provisions 31
8.12 Agreements of Affiliates 31
8.13 Employee Benefits and Contracts 31
8.14 Indemnification 32
ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE 33
9.1 Conditions to Obligations of Each Party 33
9.2 Conditions to Obligations of UPC 34
9.3 Conditions to Obligations of BancAlabama 36
ARTICLE 10 - TERMINATION 37
10.1 Termination 37
10.2 Effect of Termination 40
10.3 Non-Survival of Representations and Covenants 40
ARTICLE 11 - MISCELLANEOUS 40
11.1 Definitions 40
11.2 Expenses 49
11.3 Brokers and Finders 49
11.4 Entire Agreement 49
11.5 Amendments 49
11.6 Waivers 50
11.7 Assignment 50
11.8 Notices 50
11.9 Governing Law 51
<PAGE>
11.10 Counterparts 52
11.11 Captions 52
11.12 Interpretations 52
11.13 Enforcement of Agreement 52
11.14 Severability 52
Signatures 53
<PAGE>
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of April 26, 1996, by and between BANCALABAMA, INC.
("BancAlabama"), a Delaware corporation having its principal office located in
Huntsville, Alabama; UNION PLANTERS CORPORATION ("UPC"), a Tennessee
corporation having its principal office located in Memphis, Tennessee; and BNF
BANCORP, INC. ("BNF"), a Delaware corporation, a wholly-owned subsidiary of
UPC.
PREAMBLE
The Boards of Directors of BancAlabama and UPC are of the opinion
that the transactions described herein are in the best interests of the parties
and their respective shareholders. This Agreement provides for the acquisition
of BancAlabama by UPC pursuant to the merger of BancAlabama into and with BNF.
At the effective time of such merger, the outstanding shares of the common
stock of BancAlabama shall be converted into the right to receive shares of the
common stock of UPC (except as provided in Sections 3.3 and 3.5 of this
Agreement). As a result, shareholders of BancAlabama shall become shareholders
of UPC and each of the subsidiaries of BancAlabama shall continue to conduct
its business and operations as a wholly owned subsidiary of BNF. The
transactions described in this Agreement are subject to the approvals of the
shareholders of BancAlabama, the Board of Governors of the Federal Reserve
System, the Office of Thrift Supervision, the appropriate state regulatory
authorities, and the satisfaction of certain other conditions described in this
Agreement. It is the intention of the parties to this Agreement that the
Merger for federal income tax purposes shall qualify as a "reorganization"
within the meaning of Section 368(a) of the Internal Revenue Code, and for
accounting purposes shall qualify for treatment as a pooling of interests.
Simultaneously with the execution and delivery of this Agreement,
as a condition and inducement to UPC's willingness to enter into this
Agreement, BancAlabama and UPC are entering into a stock option agreement (the
"Stock Option Agreement"), in substantially the form of Exhibit 1 to this
Agreement pursuant to which BancAlabama is granting to UPC an option to
purchase shares of BancAlabama Common Stock. In addition, simultaneously with
the execution and delivery of this Agreement, as a condition and inducement to
UPC's willingness to consummate the transactions contemplated by this
Agreement, each of BancAlabama's directors will execute and deliver to UPC an
agreement (a "Support Agreement"), in substantially the form of Exhibit 2 to
this Agreement.
Certain terms used in this Agreement are defined in Section 11.1
of this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, the
parties agree as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 MERGER. Subject to the terms and conditions of this
Agreement, at the Effective Time, BancAlabama shall be merged with and into BNF
in accordance with the provisions of Section 251 of the DGCL and with the
effect provided in Section 259 of the DGCL (the "Merger"). BNF shall
be the Surviving Corporation resulting from the Merger and shall continue to
<PAGE>
be governed by the Laws of the State of Delaware. The Merger shall be con-
summated pursuant to the terms of this Agreement, which has been approved and
adopted by the respective Boards of Directors of BancAlabama and BNF.
1.2 TIME AND PLACE OF CLOSING. The Closing will take place at
9:00 A.M. on the date that the Effective Time occurs (or the immediately pre-
ceding day if the Effective Time is earlier than 9:00 A.M.), or at such other
time as the Parties, acting through their chief executive officers or chief
financial officers, may mutually agree. The Closing shall be held at such
place as may be mutually agreed upon by the Parties.
1.3 EFFECTIVE TIME. The Merger and other transactions
contemplated by this Agreement shall become effective on the date and at the
time the Certificate of Merger reflecting the Merger shall become effective
with the Secretary of State of the State of Delaware (the "Effective Time").
Subject to the terms and conditions hereof, unless otherwise mutually agreed
upon in writing by the chief executive officers or chief financial officers of
each Party, the Parties shall use their reasonable efforts to cause the
Effective Time to occur on such date as may be designated by UPC within 20
days following the last to occur of (i) the effective date (including
expiration of any applicable waiting period) of the last required Consent of
any Regulatory Authority having authority over and approving or exempting the
Merger, and (ii) the date on which the shareholders of BancAlabama approve
this Agreement to the extent such approval is required by applicable Law.
1.4 EXECUTION OF STOCK OPTION AGREEMENT. Simultaneously with
the execution of this Agreement by the Parties and as a condition thereto,
BancAlabama is executing and delivering to UPC the Stock Option Agreement
pursuant to which BancAlabama is granting to UPC an option to purchase shares
of BancAlabama Common Stock.
1.5 UPC'S RIGHT TO REVISE THE STRUCTURE OF THE TRANSACTION.
UPC shall, in its reasonable discretion, have the unilateral right to revise
the structure of the Merger contemplated by this Agreement in order to achieve
tax benefits or for any other reason which UPC may deem advisable; provided,
however, that UPC shall not have the right, without the approval of the Board
of Directors of BancAlabama, to make any revision to the structure of the
Merger which: (i) changes the amount of the consideration which the holders
of shares of BancAlabama Common Stock are entitled to receive (determined in
the manner provided in Section 3.1 of this Agreement); (ii) changes the
intended tax-free effects of the Merger to UPC, or the holders of shares of
BancAlabama Common Stock; (iii) would permit UPC to pay the consideration other
than by delivery of UPC Common Stock registered with the SEC (in the manner
described in Section 4.1 of this Agreement); (iv) would be materially adverse
to the interests of BancAlabama or holders of shares of BancAlabama Common
Stock; (v) would unreasonably impede or delay consummation of the Merger; or
(vi) would effect any of the provisions in Sections 8.13 or 8.14 of this Agree-
ment. UPC may exercise this right of revision by giving written notice to
BancAlabama in the manner provided in Section 11.8 of this Agreement which
notice shall be in the form of an amendment to this Agreement or in the form
of an Amended and Restated Agreement and Plan of Merger.
ARTICLE 2
TERMS OF MERGER
2.1 CERTIFICATE OF INCORPORATION. The Certificate of Incorpora-
tion of BNF in effect immediately prior to the Effective Time shall be the
<PAGE>
Certificate of Incorporation of the Surviving Corporation until otherwise
amended or repealed.
2.2 BY-LAWS. The By-laws of BNF in effect immediately prior to
the Effective Time shall be the By-laws of the Surviving Corporation until
otherwise amended or repealed.
2.3 DIRECTORS AND OFFICERS. The directors of BNF in office
immediately prior to the Effective Time, together with such additional persons
as may thereafter be elected, shall serve as the directors of the Surviving
Corporation from and after the Effective Time in accordance with the By-laws
of the Surviving Corporation. The officers of BNF in office immediately
prior to the Effective Time, together with such additional persons as may
thereafter be elected, shall serve as the officers of the Surviving Corporation
from and after the Effective Time in accordance with the By-laws of the Surviv-
ing Corporation.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 CONVERSION OF SHARES. Subject to the provisions of this
Article 3, at the Effective Time, by virtue of the Merger and without any
action on the part of UPC, BancAlabama, or the shareholders of either of the
foregoing, the shares of the constituent corporations shall be converted as
follows:
(a) Each share of UPC Capital Stock, including any associ-
ated UPC Rights, issued and outstanding immediately prior to the Effective
Time shall remain issued and outstanding from and after the Effective Time.
(b) Each share of BNF Common Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding
from and after the Effective Time.
(c) Each share of BancAlabama Common Stock (excluding shares
held by any BancAlabama Company or any UPC Company, in each case other than in
a fiduciary capacity or as a result of debts previously contracted and
excluding shares held by shareholders who perfect their statutory appraisal
rights as provided in Section 3.4 of this Agreement) issued and outstanding at
the Effective Time shall cease to be outstanding and shall be converted into
and exchanged for the right to receive .5907 of a share of UPC Common Stock
(as subject to possible adjustment as set forth in Section 10.1(h) of this
Agreement, the "Exchange Ratio"). Pursuant to the UPC Rights Agreement, each
share of UPC Common Stock issued in connection with the Merger upon conver-
sion of BancAlabama Common Stock shall be accompanied by a UPC Right.
<PAGE>
3.2 ANTI-DILUTION PROVISIONS. In the event UPC changes the number
of shares of UPC Common Stock issued and outstanding prior to the Effective
Time as a result of a stock split, stock dividend, or similar recapitaliza-
tion with respect to such stock and the record date therefor (in the case of a
stock dividend) or the effective date thereof (in the case of a stock split or
similar recapitalization for which a record date is not established) shall be
prior to the Effective Time, the Exchange Ratio shall be proportionately
adjusted.
3.3 SHARES HELD BY BANCALABAMA OR UPC. Each of the shares of Banc-
Alabama Common Stock held by any BancAlabama Company or by any UPC Company, in
each case other than in a fiduciary capacity or as a result of debts previously
contracted, shall be canceled and retired at the Effective Time and no
consideration shall be issued in exchange therefor.
3.4 DISSENTING SHAREHOLDERS. Any holder of shares of BancAlabama
Common Stock who perfects his or her appraisal rights in accordance with and
as contemplated by Section 262 of the DGCL shall be entitled to receive the
value of such shares in cash as determined pursuant to such provision of Law;
provided, that no such payment shall be made to any dissenting shareholder
unless and until such dissenting shareholder has complied with the applicable
provisions of the DGCL and surrendered to UPC the certificate or certificates
representing the shares for which payment is being made. In the event that
after the Effective Time a dissenting shareholder of BancAlabama fails to per-
fect, or effectively withdraws or loses, his or her right to appraisal and of
payment for his or her shares, UPC shall issue and deliver the consideration
to which such holder of shares of BancAlabama Common Stock is entitled under
this Article 3 (without interest) upon surrender by such holder of the certi-
ficate or certificates representing shares of BancAlabama Common Stock held by
such holder. BancAlabama will establish an escrow account with an amount
sufficient to satisfy the maximum aggregate payment that may be required to
be paid to dissenting shareholders. Upon satisfaction of all claims of dis-
senting shareholders, the remaining escrowed amount, reduced by payment of the
fees and expenses of the escrow agent, will be returned to the Surviving Corpo-
ration.
3.5 FRACTIONAL SHARES. Notwithstanding any other provision of
this Agreement, each holder of shares of BancAlabama Common Stock exchanged
pursuant to the Merger who would otherwise have been entitled to receive a
fraction of a share of UPC Common Stock (after taking into account all certifi-
cates delivered by such holder) shall receive, in lieu thereof, cash (without
interest) in an amount equal to such fractional part of a share of UPC Common
Stock multiplied by the market value of one share of UPC Common Stock at the
Effective Time. The market value of one share of UPC Common Stock at
the Effective Time shall be the closing price of such common stock on the
NYSE-Composite Transactions List (as reported by THE WALL STREET JOURNAL
or, if not reported thereby, any other authoritative source selected by UPC)
on the last trading day preceding the Effective Time. No such holder will be
entitled to dividends, voting rights, or any other rights as a shareholder in
respect of any fractional shares.
3.6 CONVERSION OF STOCK OPTIONS; RESTRICTED STOCK.
(a) At the Effective Time, each option to purchase or
other right with respect to shares of BancAlabama Common Stock pursuant to
stock options, stock appreciation rights or other rights, including stock
awards ("BancAlabama Options") granted by BancAlabama under the BancAlabama
Stock Plans, which are outstanding at the Effective Time, whether or
not exercisable, shall be converted into and become rights with respect to
<PAGE>
UPC Common Stock, and UPC shall assume each BancAlabama Option, in
accordance with the terms of the BancAlabama Stock Plan and stock option or
other agreement by which it is evidenced, except that from and after the
Effective Time, (i) UPC and its Salary and Benefits Committee shall be
substituted for BancAlabama and the Committee of BancAlabama's Board of
Directors (including, if applicable, the entire Board of Directors of Banc-
Alabama) administering such BancAlabama Stock Plan, (ii) each BancAlabama
Option assumed by UPC may be exercised solely for shares of UPC Common
Stock (or cash in the case of stock appreciation rights), (iii) the number
of shares of UPC Common Stock subject to such BancAlabama Option shall be
equal to the number of shares of BancAlabama Common Stock subject to
such BancAlabama Option immediately prior to the Effective Time multiplied
by the Exchange Ratio, and (iv) the per share exercise price under each such
BancAlabama Option shall be adjusted by dividing the per share exercise
price under each such BancAlabama Option by the Exchange Ratio and rounding up
to the nearest cent. Notwithstanding the provisions of clause (iii) of the
preceding sentence, UPC shall not be obligated to issue any fraction of
a share of UPC Common Stock upon exercise of BancAlabama Options and any
fraction of a share of UPC Common Stock that otherwise would be subject to a
converted BancAlabama Option shall represent the right to receive a cash
payment upon exercise of such converted BancAlabama Option equal to the pro-
duct of such fraction and the difference between the market value of one
share of UPC Common Stock at the time of exercise of such Option and the
per share exercise price of such Option. The market value of one share of
UPC Common Stock at the time of exercise of an Option shall be the closing
price of such common stock on the NYSE-Composite Transactions List (as
reported by THE WALL STREET JOURNAL or, if not reported thereby, any other
authoritative source selected by UPC) on the last trading day preceding the
date of exercise. UPC and BancAlabama agree to take all necessary steps to
effectuate the foregoing provisions of this Section 3.6.
(b) As soon as practicable after the Effective Time, UPC
shall deliver to the participants in each BancAlabama Stock Plan an
appropriate notice setting forth such participant's rights pursuant thereto
and the grants subject to such BancAlabama Stock Plan shall continue in
effect on the same terms and conditions (subject to the adjustments required
by Section 3.6(a) after giving effect to the Merger). Within 30 days after the
Effective Time, UPC shall file a registration statement on Form S-3 or Form
S-8, as the case may be (or any successor or other appropriate forms), with
respect to the shares of UPC Common Stock subject to such options and shall
use its reasonable efforts to maintain the effectiveness of such registration
statements (and maintain the current status of the prospectus or prospectuses
contained therein) for so long as such options remain outstanding.
(c) All contractual restrictions or limitations on transfer
with respect to BancAlabama Common Stock awarded under the BancAlabama
Stock Plans or any other plan, program, or Contract of any BancAlabama Com-
pany, to the extent that such restrictions or limitations shall not have
already lapsed (whether as a result of the Merger or otherwise), and except
as otherwise expressly provided in such plan, program, or Contract, shall
remain in full force and effect with respect to shares of UPC Common
Stock into which such restricted stock is converted pursuant to Section
3.1 of this Agreement.
<PAGE>
ARTICLE 4
EXCHANGE OF SHARES
4.1 EXCHANGE PROCEDURES. Promptly after the Effective Time,
UPC and BancAlabama shall cause the exchange agent selected by UPC (the
"Exchange Agent") to mail to the former shareholders of BancAlabama appropr-
iate transmittal materials (which shall specify that delivery shall be
effected, and risk of loss and title to the certificates theretofore
representing shares of BancAlabama Common Stock shall pass, only upon proper
delivery of such certificates to the Exchange Agent). The Exchange Agent
may establish reasonable and customary rules and procedures in connection with
its duties. After the Effective Time, each holder of shares of BancAlabama
Common Stock (other than shares to be canceled pursuant to Section 3.3 or
as to which statutory dissenters' rights have been perfected as provided
in Section 3.4 of this Agreement) issued and outstanding at the Effective Time
shall surrender the certificate or certificates representing such shares to
the Exchange Agent and shall promptly upon surrender thereof receive in
exchange therefor the consideration provided in Section 3.1 of this Agreement,
together with all undelivered dividends or distributions in respect of
such shares (without interest thereon) pursuant to Section 4.2 of this
Agreement. To the extent required by Section 3.5 of this Agreement, each
holder of shares of BancAlabama Common Stock issued and outstanding at the
Effective Time also shall receive, upon surrender of the certificate or
certificates representing such shares, cash in lieu of any fractional share
of UPC Common Stock to which such holder may be otherwise entitled (without
interest). UPC shall not be obligated to deliver the consideration to
which any former holder of BancAlabama Common Stock is entitled as a result
of the Merger until such holder surrenders such holder's certificate or cert-
ificates representing the shares of BancAlabama Common Stock for exchange as
provided in this Section 4.1. The certificate or certificates of Banc-
Alabama Common Stock so surrendered shall be duly endorsed as the Exchange
Agent may require. Any other provision of this Agreement notwithstanding,
neither UPC nor the Exchange Agent shall be liable to a holder of BancAlabama
Common Stock for any amounts paid or property delivered in good faith to a
public official pursuant to any applicable abandoned property Law. Adop-
tion of this Agreement by the shareholders of BancAlabama shall constitute
ratification of the appointment of the Exchange Agent.
4.2 RIGHTS OF FORMER BANCALABAMA SHAREHOLDERS. At the Effective
Time, the stock transfer books of BancAlabama shall be closed as to holders
of BancAlabama Common Stock immediately prior to the Effective Time and no
transfer of BancAlabama Common Stock by any such holder shall thereafter be
made or recognized. Until surrendered for exchange in accordance with the pro-
visions of Section 4.1 of this Agreement, each certificate theretofore repre-
senting shares of BancAlabama Common Stock (other than shares to be canceled
pursuant to Section 3.3 and 3.4 of this Agreement) shall from and after the
Effective Time represent for all purposes only the right to receive the con-
sideration provided in Sections 3.1 and 3.5 of this Agreement in exchange
therefor, subject, however, to the Surviving Corporation's obligation to pay
any dividends or make any other distributions with a record date prior
to the Effective Time which have been declared or made by BancAlabama in
respect of such shares of BancAlabama Common Stock in accordance with
the terms of this Agreement and which remain unpaid at the Effective Time.
Whenever a dividend or other distribution is declared by UPC on the UPC
Common Stock, the record date for which is at or after the Effective Time,
the declaration shall include dividends or other distributions on all
shares of UPC Common Stock issuable pursuant to this Agreement, but no div-
idend or other distribution payable to the holders of record of UPC Common
<PAGE>
Stock as of any time subsequent to the Effective Time shall be delivered to
the holder of any certificate representing shares of BancAlabama Common Stock
issued and outstanding at the Effective Time until such holder surrenders
such certificate for exchange as provided in Section 4.1 of this Agreement.
However, upon surrender of such BancAlabama Common Stock certificate, both
the UPC Common Stock certificate (together with all such undelivered dividends
or other distributions without interest) and any undelivered dividends and cash
payments payable hereunder (without interest) shall be delivered and paid with
respect to each share represented by such certificate.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BANCALABAMA
BancAlabama hereby represents and warrants to UPC as follows:
5.1 ORGANIZATION, STANDING, AND POWER. BancAlabama is a corpora-
tion duly organized, validly existing, and in good standing under the Laws of
the State of Delaware, and has the corporate power and authority to carry
on its business as now conducted and to own, lease, and operate its Assets.
BancAlabama is duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of
its business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on BancAlabama.
5.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) BancAlabama has the corporate power and authority
necessary to execute, deliver, and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. The execu-
tion, delivery, and performance of this Agreement and the consummation
of the transactions contemplated herein, including the Merger, have
been duly and validly authorized by all necessary corporate action in
respect thereof on the part of BancAlabama, subject to the approval of
this Agreement by the holders of a majority of the outstanding shares of Banc-
Alabama Common Stock, which is the only shareholder vote required for
approval of this Agreement and consummation of the Merger by BancAlabama.
Subject to such requisite shareholder approval, this Agreement (which for pur-
poses of this sentence shall not include the Stock Option Agreement) repre-
sents a legal, valid, and binding obligation of BancAlabama, enforce-
able against BancAlabama in accordance with its terms (except in all cases
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, conservatorship, moratorium, or similar Laws
affecting the enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any pro-
ceeding may be brought).
(b) Neither the execution and delivery of this Agreement
by BancAlabama, nor the consummation by BancAlabama of the transactions
contemplated hereby, nor compliance by BancAlabama with any of the
provisions hereof, will (i) conflict with or result in a breach of any
provision of BancAlabama's Articles of Incorporation or By-laws, or (ii)
except as disclosed in Section 5.2 of the BancAlabama Disclosure Memorandum,
constitute or result in a Default under, or require any Consent pursuant to,
<PAGE>
or result in the creation of any Lien on any material Asset of any Banc-
Alabama Company under, any Contract or Permit of any BancAlabama Company,
or, (iii) subject to receipt of the requisite Consents referred to in
Section 9.1(b) of this Agreement, violate any Law or Order applicable to any
BancAlabama Company or any of their respective material Assets.
(c) Other than in connection or compliance with the pro-
visions of the Securities Laws, applicable state corporate and securities Laws,
and other than Consents required from Regulatory Authorities, and other than
notices to or filings with the Internal Revenue Service or the Pension
Benefit Guaranty Corporation with respect to any employee benefit plans, or
under the HSR Act, and other than Consents, filings, or notifications which,
if not obtained or made, are not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on BancAlabama, no notice to,
filing with, or Consent of, any public body or authority is necessary for
the consummation by BancAlabama of the Merger and the other transactions
contemplated in this Agreement.
5.3 CAPITAL STOCK.
(a) The authorized capital stock of BancAlabama consists of
(i) 2,000,000 shares of BancAlabama Common Stock, of which 703,122 shares
are issued and outstanding as of the date of this Agreement (exclusive of
treasury shares) and not more than 830,122 shares will be issued and outstand-
ing at the Effective Time, and (ii) 500,000 shares of preferred stock, $1.00
par value, of which no shares are, or will be, issued and outstanding as of
the date of this Agreement or at the Effective Time, respectively. All of
the issued and outstanding shares of capital stock of BancAlabama are duly
and validly issued and outstanding and are fully paid and nonassessable under
the DGCL. None of the outstanding shares of capital stock of BancAlabama has
been issued in violation of any preemptive rights of the current or past
shareholders of BancAlabama. BancAlabama has reserved 132,000 shares
of BancAlabama Common Stock for issuance under the BancAlabama Stock
Plans, pursuant to which options to purchase not more than 127,000 shares of
BancAlabama Common Stock are outstanding.
(b) Except as set forth in Section 5.3(a) of this Agreement,
or as provided in the Stock Option Agreement there are no shares of capital
stock or other equity securities of BancAlabama outstanding and no out-
standing Rights relating to the capital stock of BancAlabama.
5.4 BANCALABAMA SUBSIDIARIES. BancAlabama has disclosed in
Section 5.4 of the BancAlabama Disclosure Memorandum all of the BancAlabama
Subsidiaries that are corporations (identifying its jurisdiction of incorpora-
tion, each jurisdiction in which character of its Assets or the nature or con-
duct of its business requires it to be qualified and/or licensed to transact
business, and the number of shares owned and percentage ownership interest
represented by such share ownership) and all of the BancAlabama Subsidiaries
that are general or limited partnerships or other non-corporate entities
(identifying the Law under which such entity is organized, each jurisdiction
in which character of its Assets or the nature or conduct of its business
requires it to be qualified and/or licensed to transact business, and the
amount and nature of the ownership interest therein of all BancAlabama Com-
panies). BancAlabama or one of its wholly owned Subsidiaries owns all of the
issued and outstanding shares of capital stock (or other equity interests)
of each BancAlabama Subsidiary. No capital stock (or other equity interest)
of any BancAlabama Subsidiary are or may become required to be issued (other
than to another BancAlabama Company) by reason of any Rights, and there are no
Contracts by which any BancAlabama Subsidiary is bound to issue (other
<PAGE>
than to another BancAlabama Company) additional shares of its capital stock
(or other equity interests) or Rights or by which any BancAlabama Company is
or may be bound to transfer any shares of the capital stock (or other
equity interests) of any BancAlabama Subsidiary (other than to another
BancAlabama Company). There are no Contracts relating to the rights of any
BancAlabama Company to vote or to dispose of any shares of the capital stock
(or other equity interests) of any BancAlabama Subsidiary. All of the shares
of capital stock (or other equity interests) of each BancAlabama Subsidiary
held by a BancAlabama Company are fully paid and nonassessable under the
applicable corporation or similar Law of the jurisdiction in which such
Subsidiary is incorporated or organized and are owned by the BancAlabama
Company free and clear of any Lien. Each BancAlabama Subsidiary is either a
bank, a savings association, partnership, limited liability corporation, or a
corporation, and each such Subsidiary is duly organized, validly
existing, and (as to corporations) in good standing under the Laws of the
jurisdiction in which it is incorporated or organized, and has the corporate
power and authority necessary for it to own, lease, and operate its Assets
and to carry on its business as now conducted. Each BancAlabama Subsidiary is
duly qualified or licensed to transact business as a foreign corporation in
good standing in the States of the United States and foreign jurisdictions
where the character of its Assets or the nature or conduct of its business
requires it to be so qualified or licensed, except for such jurisdictions in
which the failure to be so qualified or licensed is not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Banc-
Alabama. The only BancAlabama Subsidiary that is a depository institution is
BankAlabama-Huntsville. BankAlabama-Huntsville is an "insured institution"
as defined in the Federal Deposit Insurance Act and applicable regulations
thereunder, and the deposits in which are insured by the Bank Insurance Fund.
The minute book and other organizational documents for each BancAlabama Sub-
sidiary have been made available to UPC for its review, and are true and
complete as in effect as of the date of this Agreement and accurately
reflect all amendments thereto and all proceedings of the Board of Directors
and shareholders thereof.
5.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) BancAlabama has filed and made available to UPC all
SEC Documents required to be filed by BancAlabama since December 31, 1992
(the "BancAlabama SEC Reports"). The BancAlabama SEC Reports (i) at the time
filed, complied in all material respects with the applicable requirements of
the Securities Laws and (ii) did not, at the time they were filed (or, if
amended or superseded by a filing prior to the date of this Agreement, then
on the date of such filing) contain any untrue statement of a material fact
or omit to state a material fact required to be stated in such BancAlabama
SEC Reports or necessary in order to make the statements in such BancAlabama
SEC Reports, in light of the circumstances under which they were made,
not misleading. None of BancAlabama's Subsidiaries is required to file any
SEC Documents.
(b) Each of the BancAlabama Financial Statements (includ-
ing, in each case, any related notes) contained in the BancAlabama SEC
Reports, including any BancAlabama SEC Reports filed after the date of this
Agreement until the Effective Time, complied as to form in all material
respects with the applicable published rules and regulations of the SEC with
respect thereto, was prepared in accordance with GAAP applied on a consis-
tent basis throughout the periods involved (except as may be indicated in the
notes to such financial statements or, in the case of unaudited interim
statements, as permitted by Form 10-Q of the SEC), and fairly presented
in all material respects the consolidated financial position of BancAlabama
<PAGE>
and its Subsidiaries as at the respective dates and the consolidated results
of its operations and cash flows for the periods indicated, except that
the unaudited interim financial statements were or are subject to normal
and recurring year-end adjustments which were not or are not expected to be
material in amount or effect and except as disclosed in Section 5.5(b) of the
BancAlabama Disclosure Memorandum.
5.6 ABSENCE OF UNDISCLOSED LIABILITIES. To the knowledge of
BancAlabama, no BancAlabama Company has any Liabilities that are reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
BancAlabama, except Liabilities which are accrued or reserved against in the
consolidated balance sheets of BancAlabama as of December 31, 1995, included
in the BancAlabama Financial Statements made available prior to the date
of this Agreement or reflected in the notes thereto. No BancAlabama Company
has incurred or paid any Liability since December 31, 1995, except for such
Liabilities incurred or paid (i) in the ordinary course of business
consistent with past business practice and which are not reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on Banc-
Alabama or (ii) in connection with the transactions contemplated by this
Agreement.
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31,
1995, except as disclosed in the BancAlabama Financial Statements made avail-
able prior to the date of this Agreement, (i) there have been no events,
changes, or occurrences which have had, or are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on BancAlabama,
and (ii) the BancAlabama Companies have not taken any action, or failed to
take any action, prior to the date of this Agreement, which action or failure,
if taken after the date of this Agreement, would represent or result in a
material breach or violation of any of the covenants and agreements of Banc-
Alabama contained in this Agreement.
5.8 TAX MATTERS.
(a) Except as set forth in Section 5.8 of the BancAlabama
Disclosure Memorandum, all Tax Returns required to be filed by or on behalf
of any of the BancAlabama Companies have been timely filed or requests for
extensions have been timely filed, granted, and have not expired for periods
ended on or before December 31, 1994, and on or before the date of the most
recent fiscal year end immediately preceding the Effective Time, and
all Tax Returns filed are materially complete and accurate. All Taxes shown
on filed Tax Returns have been paid. There is no audit examination,
deficiency, or refund Litigation with respect to any Taxes, except as
reserved against in the BancAlabama Financial Statements made available
prior to the date of this Agreement. All Taxes and other Liabilities due
with respect to completed and settled examinations or concluded Litigation
have been paid. There are no Liens with respect to Taxes upon any of the
Assets of the BancAlabama Companies.
(b) None of the BancAlabama Companies has executed an
extension or waiver of any statute of limitations on the assessment or
collection of any Tax due (excluding such statutes that relate to years
currently under examination by the Internal Revenue Service or other appli-
cable taxing authorities) that is currently in effect.
(c) Adequate provision for any Taxes due or to become due
for any of the BancAlabama Companies for the period or periods through and
including the date of the respective BancAlabama Financial Statements has
been made and is reflected on such BancAlabama Financial Statements.
<PAGE>
(d) Deferred Taxes of the BancAlabama Companies have been
provided for in accordance with GAAP.
(e) Each of the BancAlabama Companies is in compliance
with, and its records contain all information and documents (including prop-
erly completed IRS Forms W-9) necessary to comply with, all applicable inform-
ation reporting and Tax withholding requirements under federal, state, and
local Tax Laws, and such records identify with specificity all accounts
subject to backup withholding under Section 3406 of the Internal Revenue Code.
(f) Except as set forth in Section 5.8 of the BancAlabama
Disclosure Memorandum, none of the BancAlabama Companies has made any
payments, is obligated to make any payments, or is a party to any Contract
that could obligate it to make any payments that would be disallowed as a
deduction under Section 280G or 162(m) of the Internal Revenue Code.
(g) There has not been an ownership change, as defined in
Internal Revenue Code Section 382(g), of the BancAlabama Companies that
occurred during or after any Taxable Period in which the Companies incurred
a net operating loss that carries over to any Taxable Period ending after
December 31, 1994.
(h) Except as set forth in Section 5.8 of the BancAlabama
Disclosure Memorandum, none of the BancAlabama Companies is a party to any
tax allocation or sharing agreement and none of the BancAlabama Companies has
been a member of an affiliated group filing a consolidated federal income tax
return (other than a group the common parent of which was BancAlabama) has any
Liability for taxes of any Person (other than BancAlabama and its Subsidi-
aries) under Treasury Regulation Section 1.1502-6 (or any similar provision of
state, local, or foreign law) as a transferee or successor or by Contract or
otherwise.
5.9 ALLOWANCE FOR POSSIBLE LOAN LOSSES. The allowance for possi-
ble loan or credit losses (the "Allowance") shown on the consolidated balance
sheets of BancAlabama included in the most recent BancAlabama Financial
Statements dated prior to the date of this Agreement was, and the Allowance
shown on the consolidated balance sheets of BancAlabama included in the Banc-
Alabama Financial Statements as of dates subsequent to the execution of this
Agreement will be, as of the dates thereof, in the reasonable opinion of
management of BancAlabama adequate (within the meaning of GAAP and applicable
regulatory requirements or guidelines) to provide for all known and reasonably
anticipated losses relating to or inherent in the loan and lease portfolios
(including accrued interest receivables) of the BancAlabama Companies and
other extensions of credit (including letters of credit and commitments to
make loans or extend credit) by the BancAlabama Companies as of the dates
thereof.
5.10 ASSETS. Except as disclosed or reserved against in the Banc-
Alabama Financial Statements made available prior to the date of this Agree-
ment, the BancAlabama Companies have good and marketable title, free and
clear of all Liens, to all of their respective Assets. All tangible properties
which are material to BancAlabama's business on a consolidated basis are in
good condition, reasonable wear and tear excepted, and are usable in the ordi-
nary course of business consistent with BancAlabama's past practices. All
Assets which are material to BancAlabama's business on a consolidated basis,
held under leases or subleases by any of the BancAlabama Companies, are
held under valid Contracts enforceable in accordance with their respective
terms (except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other Laws affecting the
<PAGE>
enforcement of creditors' rights generally and except that the availabi-
lity of the equitable remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceedings may be
brought), and each such Contract is in full force and effect. The BancAlabama
Companies currently maintain insurance as set forth in Section 5.10 of the
BancAlabama Disclosure Memorandum. None of the BancAlabama Companies has
received notice from any insurance carrier that (i) such insurance will be
canceled or that coverage thereunder will be reduced or eliminated, or (ii)
premium costs with respect to such policies of insurance will be substanti-
ally increased. Except as set forth in Section 5.10 of the BancAlabama Dis-
closure Memorandum, there are presently no claims pending under any such
policies of insurance and no notices have been given by any BancAlabama Com-
pany under such policies.
5.11 INTELLECTUAL PROPERTY. All of the Intellectual Property
rights of the BancAlabama Companies are in full force and effect and consti-
tute legal, valid, and binding obligations of the respective parties thereto,
and there have not been, and, to the Knowledge of BancAlabama, there currently
are not, any Defaults thereunder by BancAlabama. A BancAlabama Company
owns or is the valid licensee of all such Intellectual Property rights
free and clear of all Liens or claims of infringement. Except as disclosed
in Section 5.11 of the BancAlabama Disclosure Memorandum, none of the Banc-
Alabama Companies or, to the Knowledge of BancAlabama, their respective pre-
decessors has misused the Intellectual Property rights of others and, to
the Knowledge of BancAlabama, none of the Intellectual Property rights as used
in the business conducted by any such BancAlabama Company infringes upon or
otherwise violates the rights of any Person, nor has any Person asserted a
claim of such infringement. Except as disclosed in Section 5.11 of the Banc-
Alabama Disclosure Memorandum, no BancAlabama Company is obligated to pay any
royalties to any Person with respect to any such Intellectual Property. To
the Knowledge of BancAlabama, each BancAlabama Company owns or has the
valid right to use all of the Intellectual Property rights which it is
presently using, or in connection with performance of any material Contract to
which it is a party. No officer, director, or employee of any BancAlabama
Company is party to any Contract which requires such officer, director or
employee to assign any interest in any Intellectual Property or keep confid-
ential any trade secrets, proprietary data, customer information, or other
business information or except as disclosed in Section 5.11 of the Banc-
Alabama Disclosure Memorandum, which restricts or prohibits such officer,
director, or employee from engaging in activities competitive with any
Person, including any BancAlabama Company.
5.12 ENVIRONMENTAL MATTERS. Except as set forth in Section 5.12
of the BancAlabama Disclosure Memorandum:
(a) To the Knowledge of BancAlabama, each BancAlabama Com-
pany, its Participation Facilities, and its Operating Properties are, and
have been, in compliance with all Environmental Laws, except for violations
which are not reasonably likely to have, individually or in the aggre-
gate, a Material Adverse Effect on BancAlabama.
(b) To the Knowledge of BancAlabama, there is no Litigation
pending or threatened before any court, governmental agency, or authority
or other forum in which any BancAlabama Company or any of its Operating Prop-
erties or Participation Facilities (or BancAlabama in respect of such Operat-
ing Property or Participation Facility) has been or, with respect to
threatened Litigation, may be named as a defendant (i) for alleged non-
compliance (including by any predecessor) with any Environmental Law or (ii)
relating to the release into the environment of any Hazardous Material,
<PAGE>
whether or not occurring at, on, under, adjacent to, or affecting (or
potentially affecting) a site owned, leased, or operated by any BancAlabama
Company or any of its Operating Properties or Participation Facilities,
except for such Litigation pending or threatened that is not reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on Banc-
Alabama, nor to its Knowledge is there any reasonable basis for any Litiga-
tion of a type described in this sentence.
(c) During the period of (i) any BancAlabama Company's
ownership or operation of any of their respective current properties,
(ii) any BancAlabama Company's participation in the management of any Parti-
cipation Facility, or (iii) any BancAlabama Company's holding of a
security interest in a Operating Property, to the Knowledge of BancAlabama,
there have been no releases of Hazardous Material in, on, under, adjacent to,
or affecting (or potentially affecting) such properties, except such as are
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on BancAlabama. Prior to the period of (i) any BancAlabama
Company's ownership or operation of any of their respective current proper-
ties, (ii) any BancAlabama Company's participation in the management of
any Participation Facility, or (iii) any BancAlabama Company's holding
of a security interest in a Operating Property, to the Knowledge of Banc-
Alabama, there were no releases of Hazardous Material in, on, under, or
affecting any such property, Participation Facility or Operating Property,
except such as are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on BancAlabama.
5.13 COMPLIANCE WITH LAWS. BancAlabama is duly registered as a
bank holding company under the BHC Act. Each BancAlabama Company has in
effect all Permits necessary for it to own, lease, or operate its material
Assets and to carry on its business as now conducted, and there has occurred
no Default under any such Permit. Except as set forth in Section 5.13 of the
BancAlabama Disclosure Memorandum, none of the BancAlabama Companies:
(a) is in violation of any Laws, Orders, or Permits applic-
able to its business or employees conducting its business except where such
violations are not likely to have a Material Adverse Effect; and
(b) has received any notification or communication from
any agency or department of federal, state, or local government or any
Regulatory Authority or the staff thereof (i) asserting that any BancAlabama
Company is not in compliance with any of the Laws or Orders which
such governmental authority or Regulatory Authority enforces, (ii) threatening
to revoke any Permits, or (iii) requiring any BancAlabama Company to enter
into or consent to the issuance of a cease and desist order, formal
agreement, directive, commitment, or memorandum of understanding, or to
adopt any Board resolution or similar undertaking, which restricts
materially the conduct of its business, or in any manner relates to its
capital adequacy, its credit or reserve policies, its management, or the
payment of dividends.
5.14 LABOR RELATIONS. No BancAlabama Company is the subject of
any Litigation asserting that it or any other BancAlabama Company has com-
mitted an unfair labor practice (within the meaning of the National
Labor Relations Act or comparable state law) or seeking to compel it or any
other BancAlabama Company to bargain with any labor organization as to wages
or conditions of employment, nor is there any strike or other labor dispute
involving any BancAlabama Company, pending or, to the Knowledge of Banc-
Alabama, threatened, or to the Knowledge of BancAlabama, is there any activity
<PAGE>
involving any BancAlabama Company's employees seeking to certify a collective
bargaining unit or engaging in any other organization activity.
5.15 EMPLOYEE BENEFIT PLANS.
(a) BancAlabama has disclosed in Section 5.15 of the Banc-
Alabama Disclosure Memorandum, and has delivered or made available to UPC
prior to the execution of this Agreement copies in each case of, all pen-
sion, retirement, profit-sharing, deferred compensation, stock option,
employee stock ownership, severance pay, vacation, bonus, or other incentive
plan, all other written employee programs, arrangements, or agreements, all
medical, vision, dental, or other health plans, all life insurance plans,
and all other employee benefit plans or fringe benefit plans, including
"employee benefit plans" as that term is defined in Section 3(3) of
ERISA, currently adopted, maintained by, sponsored in whole or in part by,
or contributed to by any BancAlabama Company or ERISA Affiliate thereof for
the benefit of employees, retirees, dependents, spouses, directors, indepen-
dent contractors, or other beneficiaries and under which employees, retirees,
dependents, spouses, directors, independent contractors, or other benefici-
aries are eligible to participate (collectively, the "BancAlabama Benefit
Plans"). Any of the BancAlabama Benefit Plans which is an "employee pension
benefit plan," as that term is defined in Section 3(2) of ERISA, is
referred to herein as a "BancAlabama ERISA Plan." Each BancAlabama
ERISA Plan which is also a "defined benefit plan" (as defined in Section
414(j) of the Internal Revenue Code) is referred to herein as a
"BancAlabama Pension Plan." No BancAlabama Pension Plan is or has been
a multiemployer plan within the meaning of Section 3(37) of ERISA.
(b) To the Knowledge of BancAlabama, all BancAlabama
Benefit Plans are in compliance with the applicable terms of ERISA, the
Internal Revenue Code, and any other applicable Laws the breach or viola-
tion of which are reasonably likely to have, individually or in the aggre-
gate, a Material Adverse Effect on BancAlabama. Each BancAlabama ERISA
Plan which is intended to be qualified under Section 401(a) of the
Internal Revenue Code has received a favorable determination letter from
the Internal Revenue Service, and BancAlabama is not aware of any circum-
stances likely to result in revocation of any such favorable determination
letter. No BancAlabama Company has engaged in a transaction with respect
to any BancAlabama Benefit Plan that, assuming the taxable period of such
transaction expired as of the date hereof, would subject any BancAlabama
Company to a Tax imposed by either Section 4975 of the Internal Revenue Code
or Section 502(i) of ERISA.
(c) No BancAlabama Pension Plan has any "unfunded current
liability," as that term is defined in Section 302(d)(8)(A) of ERISA, and
the fair market value of the assets of any such plan exceeds the plan's "bene-
fit liabilities," as that term is defined in Section 4001(a)(16) of ERISA,
when determined under actuarial factors that would apply if the plan termi-
nated in accordance with all applicable legal requirements. Since the date
of the most recent actuarial valuation, there has been (i) no material change
in the financial position of any BancAlabama Pension Plan, (ii) no change in
the actuarial assumptions with respect to any BancAlabama Pension Plan, and
(iii) no increase in benefits under any BancAlabama Pension Plan as a result
of plan amendments or changes in applicable Law which is reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on
BancAlabama or materially adversely affect the funding status of any such
plan. Neither any BancAlabama Pension Plan nor any "single-employer plan,"
within the meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by any BancAlabama Company, or the single-employer plan of any
<PAGE>
entity which is considered one employer with BancAlabama under Section
4001 of ERISA or Section 414 of the Internal Revenue Code or Section 302 of
ERISA (whether or not waived) (an "ERISA Affiliate") has an "accumulated
funding deficiency" within the meaning of Section 412 of the Internal Revenue
Code or Section 302 of ERISA. No BancAlabama Company has provided, or
is required to provide, security to a BancAlabama Pension Plan or to any
single-employer plan of an ERISA Affiliate pursuant to Section 401(a)(29) of
the Internal Revenue Code.
(d) To the Knowledge of BancAlabama, within the six-year
period preceding the Effective Time, no Liability under Subtitle C or D of
Title IV of ERISA has been or, to the Knowledge of BancAlabama, is expected
to be incurred by any BancAlabama Company with respect to any ongoing, frozen,
or terminated single-employer plan or the single-employer plan of any
ERISA Affiliate. No BancAlabama Company has incurred any withdrawal Liabi-
lity with respect to a multiemployer plan under Subtitle B of Title IV of
ERISA (regardless of whether based on contributions of an ERISA Affiliate).
No notice of a "reportable event," within the meaning of Section 4043 of
ERISA for which the 30-day reporting requirement has not been waived,
has been required to be filed for any BancAlabama Pension Plan or by any
ERISA Affiliate within the 12-month period ending on the date hereof.
(e) Except as disclosed in Section 5.15 of the BancAlabama
Disclosure Memorandum, no BancAlabama Company has any Liability for retiree
health and life benefits under any of the BancAlabama Benefit Plans and
there are no restrictions on the rights of such BancAlabama Company to
amend or terminate any such retiree health or benefit Plan without incurring
Liability thereunder.
(f) Except as disclosed in Section 5.15 of the BancAlabama
Disclosure Memorandum, neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will (i) result
in any payment (including severance, unemployment compensation, golden
parachute, or otherwise) becoming due to any director or any employee of
any BancAlabama Company from any BancAlabama Company under any BancAlabama
Benefit Plan or otherwise, (ii) increase any benefits otherwise payable
under any BancAlabama Benefit Plan, or (iii) result in any acceleration of
the time of payment or vesting of any such benefit.
(g) The actuarial present values of all accrued deferred
compensation entitlements (including entitlements under any executive
compensation, supplemental retirement, or employment agreement) of
employees and former employees of any BancAlabama Company and their respec-
tive beneficiaries, other than entitlements accrued pursuant to funded retire-
ment plans subject to the provisions of Section 412 of the Internal Revenue
Code or Section 302 of ERISA, have been fully reflected on the BancAlabama
Financial Statements to the extent required by and in accordance with GAAP.
5.16 MATERIAL CONTRACTS. Except as disclosed in the
BancAlabama SEC Reports or as disclosed in Section 5.16 of the BancAlabama
Disclosure Memorandum, to the Knowledge of BancAlabama, none of the
BancAlabama Companies, nor any of their respective Assets, businesses, or
operations, is a party to, or is bound or affected by, or receives benefits
under, (i) any employment, severance, termination, consulting, or retirement
Contract providing for aggregate payments to any Person in any calendar year
in excess of $100,000, (ii) any Contract relating to the borrowing of
money by any BancAlabama Company or the guarantee by any BancAlabama
Company of any such obligation (other than Contracts evidencing deposit
liabilities, purchases of federal funds, fully-secured repurchase agreements,
<PAGE>
and Federal Home Loan Bank advances of depository institution Subsidiaries,
trade payables, and Contracts relating to borrowings or guarantees made in the
ordinary course of business, including letters of credit), (iii) any
Contracts which prohibit or restrict any BancAlabama Company from engaging in
any business activities in any geographic area, line of business, or
otherwise in competition with any other Person, (iv) any Contracts
between or among BancAlabama Companies, (v) any exchange-traded or
over-the-counter swap, forward, future, option, cap, floor, or collar
financial Contract, or any other interest rate or foreign currency protection
Contract (not disclosed in the BancAlabama Financial Statements delivered
prior to the date of this Agreement) which is a financial derivative
Contract (including various combinations thereof), and (vi) any other Contract
or amendment thereto that would be required to be filed as an exhibit to a
BancAlabama SEC Report filed by BancAlabama with the SEC prior to the date
of this Agreement that has not been filed as an exhibit to a BancAlabama SEC
Report (together with all Contracts referred to in Sections 5.10 and 5.15(a)
of this Agreement, the "BancAlabama Contracts"). With respect to each
BancAlabama Contract: (i) the Contract is in full force and effect; (ii)
no BancAlabama Company is in material Default thereunder; (iii) no BancAlabama
Company has repudiated or waived any material provision of any such
Contract; and (iv) no other party to any such Contract is, to the Knowledge of
BancAlabama, in material Default in any respect or has repudiated or waived
any material provision thereunder. Except as set forth in Section 5.16
of the BancAlabama Disclosure Memorandum, all of the indebtedness of any
BancAlabama Company for money borrowed is prepayable at any time by such
BancAlabama Company without penalty or premium.
5.17 LEGAL PROCEEDINGS. To the Knowledge of BancAlabama, there is
no Litigation instituted, pending, or threatened (or unasserted but considered
probable of assertion and which if asserted would have at least a reasonable
probability of an unfavorable outcome) against any BancAlabama Company, or
against any Asset, employee benefit plan, interest, or right of any of
them, that is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on BancAlabama, nor are there any Orders of any
Regulatory Authorities, other governmental authorities, or arbitrators
outstanding against any BancAlabama Company. Section 5.17 of the BancAlabama
Disclosure Memorandum includes a summary report of all material Litigation as
of the date of this Agreement to which any BancAlabama Company is a party
and which names a BancAlabama Company as a defendant or cross-defendant.
5.18 REPORTS. Since January 1, 1992, or the date of organization
if later, each BancAlabama Company has timely filed all reports and
statements, together with any amendments required to be made with respect
thereto, that it was required to file with (i) the SEC, including, but not
limited to, Forms 10-K, Forms 10-Q, Forms 8-K, and proxy statements, (ii)
other Regulatory Authorities, and (iii) any applicable state securities or
banking authorities (except, in the case of state securities authorities,
failures to file which are not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on BancAlabama). As of
their respective dates, each of such reports and documents, including the
financial statements, exhibits, and schedules thereto, complied in all
material respects with all applicable Laws. As of its respective date, each
such report and document did not, in all material respects, contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading.
<PAGE>
5.19 STATEMENTS TRUE AND CORRECT. To the Knowledge of Banc-
Alabama, no statement, certificate, instrument, or other writing furnished or
to be furnished by any BancAlabama Company or any Affiliate thereof to UPC
pursuant to this Agreement or any other document, agreement, or instrument
referred to herein contains or will contain any untrue statement of material
fact or will omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. To the Knowledge of BancAlabama, none of the information supplied
or to be supplied by any BancAlabama Company or any Affiliate thereof for
inclusion in the Registration Statement to be filed by UPC with the SEC will,
when the Registration Statement becomes effective, be false or misleading with
respect to any material fact, or omit to state any material fact necessary to
make the statements therein not misleading. None of the information supplied
or to be supplied by any BancAlabama Company or any Affiliate thereof for
inclusion in the Proxy Statement to be mailed to BancAlabama's shareholders in
connection with the Shareholders' Meeting, and any other documents to be
filed by a BancAlabama Company or any Affiliate thereof with the SEC or any
other Regulatory Authority in connection with the transactions contemplated
hereby, will, at the respective time such documents are filed, and with
respect to the Proxy Statement, when first mailed to the shareholders of
BancAlabama, be false or misleading with respect to any material fact, or
omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, or, in
the case of the Proxy Statement or any amendment thereof or supplement thereto,
at the time of the Shareholders' Meeting, be false or misleading with respect
to any material fact, or omit to state any material fact necessary to correct
any statement in any earlier communication with respect to the solicitation of
any proxy for the Shareholders' Meeting. All documents that any BancAlabama
Company or any Affiliate thereof is responsible for filing with any Regulatory
Authority in connection with the transactions contemplated hereby will comply
as to form in all material respects with the provisions of applicable Law.
5.20 ACCOUNTING, TAX, AND REGULATORY MATTERS. No BancAlabama
Company or any Affiliate thereof has taken any action or has any Knowledge
of any fact or circumstance relating to BancAlabama that is reasonably likely
to (i) prevent the transactions contemplated hereby, including the
Merger, from qualifying for pooling-of-interests accounting treatment or as
a reorganization within the meaning of Section 368(a) of the Internal Revenue
Code, or (ii) materially impede or delay receipt of any Consents of
Regulatory Authorities referred to in Section 9.1(b) of this Agreement or
result in the imposition of a condition or restriction of the type referred
to in the last sentence of such section.
5.21 STATE TAKEOVER LAWS. Each BancAlabama Company has taken all
necessary action to exempt the transactions contemplated by this Agreement
from, or if necessary challenge the validity or applicability of, any
applicable "moratorium," "fair price," "business combination," "control
share," or other anti-takeover Laws of the State of Delaware (collec-
tively, "Takeover Laws"), including Section 203 of the DGCL.
5.22 CHARTER PROVISIONS. Each BancAlabama Company has taken
all action so that the entering into of this Agreement and the consummation of
the Merger and the other transactions contemplated by this Agreement do
not and will not result in the grant of any rights to any Person under the
Charter, By-laws or other governing instruments of any BancAlabama Company or
restrict or impair the ability of UPC or any of its Subsidiaries to vote, or
otherwise to exercise the rights of a shareholder with respect to, shares of
any BancAlabama Company that may be directly or indirectly acquired or
controlled by it.
<PAGE>
5.23 SUPPORT AGREEMENTS. Each of the directors of BancAlabama
has executed and delivered to UPC an agreement in substantially the form of
Exhibit 2 to this Agreement.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF UPC
Except as disclosed in the UPC Disclosure Memorandum, UPC
hereby represents and warrants to BancAlabama as follows:
6.1 ORGANIZATION, STANDING, AND POWER. UPC is a corporation
duly organized, validly existing, and in good standing under the Laws of the
State of Tennessee, and has the corporate power and authority to carry on its
business as now conducted and to own, lease and operate its material Assets.
UPC is duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of
its business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on UPC.
6.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) UPC has the corporate power and authority
necessary to execute, deliver and perform its obligations under this Agreement
and to consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated herein, including the Merger, have been duly and
validly authorized by all necessary corporate action in respect thereof on
the part of UPC. Subject to such requisite shareholder approval, this
Agreement (which for purposes of this sentence shall not include the Stock
Option Agreement) represents a legal, valid, and binding obligation of
UPC, enforceable against UPC in accordance with its terms (except in all cases
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by
UPC, nor the consummation by UPC of the transactions contemplated hereby,
nor compliance by UPC with any of the provisions hereof, will (i) conflict
with or result in a breach of any provision of UPC's Restated Charter of
Incorporation or By-laws, or (ii) constitute or result in a Default under,
or require any Consent pursuant to, or result in the creation of any
Lien on any Asset of any UPC Company under, any Contract or Permit of any UPC
Company, or (iii) subject to receipt of the requisite approvals referred
to in Section 9.1(b) of this Agreement, violate any Law or Order applicable
to any UPC Company or any of their respective material Assets.
(c) Other than in connection or compliance with the
provisions of the Securities Laws, applicable state corporate and
securities Laws, and rules of the NYSE, and other than Consents required from
Regulatory Authorities, and other than notices to or filings with the
Internal Revenue Service or the Pension Benefit Guaranty Corporation with
respect to any employee benefit plans, or under the HSR Act, and other
than Consents, filings, or notifications which, if not obtained or made, are
not reasonably likely to have, individually or in the aggregate, a Material
<PAGE>
Adverse Effect on UPC, no notice to, filing with, or Consent of, any public
body or authority is necessary for the consummation by UPC of the
Merger and the other transactions contemplated in this Agreement.
6.3 CAPITAL STOCK. The authorized capital stock of UPC
consists of (i) 100,000,000 shares of UPC Common Stock, of which 45,565,914
shares are issued and outstanding as of February 29, 1996, and (ii)
10,000,000 shares of UPC Preferred Stock, of which no shares of UPC Series A
Preferred Stock, 44,000 shares of UPC Series B Preferred Stock, and
3,496,419 shares of UPC Series E Preferred Stock are issued and outstanding
as of February 29,1996. All of the issued and outstanding shares of UPC
Capital Stock are, and all of the shares of UPC Common Stock to be issued
in exchange for shares of BancAlabama Common Stock upon consummation of the
Merger, when issued in accordance with the terms of this Agreement,
will be, duly and validly issued and outstanding and fully paid and
nonassessable under the TBCA. None of the outstanding shares of UPC Capital
Stock has been, and none of the shares of UPC Common Stock to be issued in
exchange for shares of BancAlabama Common Stock upon consummation of the
Merger will be, issued in violation of any preemptive rights of the current or
past shareholders of UPC. UPC has reserved for issuance a sufficient number
of shares of UPC Common Stock for the purpose of issuing shares of UPC
Common Stock in accordance with the provisions of Sections 3.1 and 3.6 of
this Agreement.
6.4 SEC FILINGS; FINANCIAL STATEMENTS.
(a) UPC has filed and made available to BancAlabama all
SEC Documents required to be filed by UPC since December 31, 1992 (the
"UPC SEC Reports"). The UPC SEC Reports (i) at the time filed, complied in
all material respects with the applicable requirements of the Securities
Laws and (ii) did not, at the time they were filed (or, if amended or
superseded by a filing prior to the date of this Agreement, then on the date
of such filing) contain any untrue statement of a material fact or omit
to state a material fact required to be stated in such UPC SEC Reports or
necessary in order to make the statements in such UPC SEC Reports, in light of
the circumstances under which they were made, not misleading. Except for
UPC Subsidiaries that are registered as a broker, dealer, or investment
advisor, none of UPC's Subsidiaries is required to file any SEC Documents.
(b) Each of the UPC Financial Statements (including, in
each case, any related notes) contained in the UPC SEC Reports, including any
UPC SEC Reports filed after the date of this Agreement until the Effective
Time, complied as to form in all material respects with the applicable
published rules and regulations of the SEC with respect thereto, was
prepared in accordance with GAAP applied on a consistent basis throughout
the periods involved (except as may be indicated in the notes to such
financial statements or, in the case of unaudited interim statements, as
permitted by Form 10-Q of the SEC), and fairly presented in all material
respects the consolidated financial position of UPC and its Subsidiaries as
at the respective dates and the consolidated results of its operations and
cash flows for the periods indicated, except that the unaudited interim
financial statements were or are subject to normal and recurring
year-end adjustments which were not or are not expected to be material
in amount or effect.
6.5 ABSENCE OF UNDISCLOSED LIABILITIES. No UPC Company has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on UPC, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of UPC as of
<PAGE>
December 31, 1995, included in the UPC Financial Statements made available
prior to the date of this Agreement or reflected in the notes thereto. No UPC
Company has incurred or paid any Liability since December 31, 1995, except
for such Liabilities incurred or paid (i) in the ordinary course of business
consistent with past business practice and which are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on UPC or
(ii) in connection with the transactions contemplated by this Agreement.
6.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31,
1995, except as disclosed in the UPC Financial Statements delivered prior to
the date of this Agreement or contemplated by pending federal
legislation applicable to financial institutions generally, (i) there have
been no events, changes, or occurrences which have had, or are reasonably
likely to have, individually or in the aggregate, a Material Adverse
Effect on UPC, and (ii) the UPC Companies have not taken any action, or failed
to take any action, prior to the date of this Agreement, which action or
failure, if taken after the date of this Agreement, would represent or result
in a material breach or violation of any of the covenants and agreements of
UPC provided in Article 7 of this Agreement.
6.7 TAX MATTERS.
(a) All Tax Returns required to be filed by or on behalf of
any of the UPC Companies have been timely filed or requests for extensions
have been timely filed, granted, and have not expired for periods ended on
or before December 31, 1994, and on or before the date of the most recent
fiscal year end immediately preceding the Effective Time, and all Tax
Returns filed are materially complete and accurate. All Taxes shown on
filed Tax Returns have been paid. There is no audit examination, defici-
ency, or refund Litigation with respect to any Taxes, except as reserved
against in the UPC Financial Statements delivered prior to the date of this
Agreement. All Taxes and other Liabilities due with respect to completed and
settled examinations or concluded Litigation have been paid. There are no
Liens with respect to Taxes upon any of the Assets of the UPC Companies.
(b) Adequate provision for any Taxes due or to become due
for any of the UPC Companies for the period or periods through and including
the date of the respective UPC Financial Statements has been made and is
reflected on such UPC Financial Statements.
(c) Deferred Taxes of the UPC Companies have been
provided for in accordance with GAAP.
6.8 ENVIRONMENTAL MATTERS.
(a) To the Knowledge of UPC, each UPC Company, its
Participation Facilities, and its Operating Properties are, and have been, in
compliance with all Environmental Laws, except for violations which are not
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on UPC.
(b) To the Knowledge of UPC, there is no Litigation pending
or threatened before any court, governmental agency, or authority or other
forum in which any UPC Company or any of its Operating Properties or
Participation Facilities (or UPC in respect of such Operating Property or
Participation Facility) has been or, with respect to threatened Litigation,
may be named as a defendant (i) for alleged noncompliance (including by any
predecessor) with any Environmental Law or (ii) relating to the release into
the environment of any Hazardous Material, whether or not occurring at,
<PAGE>
on, under, adjacent to, or affecting (or potentially affecting) a site
owned, leased, or operated by any UPC Company or any of its Operating
Properties or Participation Facilities, except for such Litigation pending
or threatened that is not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on UPC, nor to its Knowledge is
there any reasonable basis for any Litigation of a type described in this
sentence.
(c) During the period of (i) any UPC Company's ownership or
operation of any of their respective current properties, (ii) any
UPC Company's participation in the management of any Participation Facility,
or (iii) any UPC Company's holding of a security interest in a Operating
Property, to the Knowledge of UPC, there have been no releases of
Hazardous Material in, on, under, adjacent to, or affecting (or potentially
affecting) such properties, except such as are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on UPC.
Prior to the period of (i) any UPC Company's ownership or operation of any
of their respective current properties, (ii) any UPC Company's participation
in the management of any Participation Facility, or (iii) any UPC
Company's holding of a security interest in a Operating Property, to the
Knowledge of UPC, there were no releases of Hazardous Material in, on,
under, or affecting any such property, Participation Facility or Operating
Property, except such as are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on UPC.
6.9 COMPLIANCE WITH LAWS. UPC is duly registered as a bank
holding company under the BHC Act and as a savings and loan holding company
under the HOLA. Each UPC Company has in effect all Permits necessary for
it to own, lease, or operate its material Assets and to carry on its business
as now conducted, and there has occurred no Default under any such Permit. No
UPC Company:
(a) is in violation of any Laws, Orders, or Permits applic-
able to its business or employees conducting its business except where such
violations are not likely to have a Material Adverse Effect; and
(b) has received any notification or communication from
any agency or department of federal, state, or local government or any
Regulatory Authority or the staff thereof (i) asserting that any UPC Company
is not in compliance with any of the Laws or Orders which such
governmental authority or Regulatory Authority enforces, (ii) threatening to
revoke any Permits, or (iii) requiring any UPC Company to enter into or
consent to the issuance of a cease and desist order, formal agreement,
directive, commitment or memorandum of understanding, or to adopt any
Board resolution or similar undertaking, which restricts materially the
conduct of its business, or in any manner relates to its capital adequacy,
its credit or reserve policies, its management, or the payment of dividends.
6.10 LEGAL PROCEEDINGS. There is no Litigation instituted or
pending, or, to the Knowledge of UPC, threatened (or unasserted but considered
probable of assertion and which if asserted would have at least a reasonable
probability of an unfavorable outcome) against any UPC Company, or against any
Asset, interest, or right of any of them, that is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on UPC, nor are
there any Orders of any Regulatory Authorities, other governmental authorities,
or arbitrators outstanding against any UPC Company.
<PAGE>
6.11 REPORTS. Since January 1, 1992, or the date of organiza-
tion if later, each UPC Company has filed all reports and statements,
together with any amendments required to be made with respect thereto,
that it was required to file with (i) the SEC, including, but not limited
to, Forms 10-K, Forms 10-Q, Forms 8-K, and proxy statements, (ii) other
Regulatory Authorities, and (iii) any applicable state securities or banking
authorities (except, in the case of state securities authorities, failures to
file which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on UPC). As of their respective dates,
each of such reports and documents, including the financial statements,
exhibits, and schedules thereto, complied in all material respects with all
applicable Laws. As of its respective date, each such report and document did
not, in all material respects, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
6.12 STATEMENTS TRUE AND CORRECT. To the Knowledge of UPC, no
statement, certificate, instrument or other writing furnished or to be
furnished by any UPC Company or any Affiliate thereof to BancAlabama pursuant
to this Agreement or any other document, agreement, or instrument referred
to herein contains or will contain any untrue statement of material fact or
will omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
To the Knowledge of UPC, none of the information supplied or to be supplied
by any UPC Company or any Affiliate thereof for inclusion in the
Registration Statement to be filed by UPC with the SEC, will, when the
Registration Statement becomes effective, be false or misleading with respect
to any material fact, or omit to state any material fact necessary to make
the statements therein not misleading. None of the information supplied or to
be supplied by any UPC Company or any Affiliate thereof for inclusion in the
Proxy Statement to be mailed to BancAlabama's shareholders in connection
with the Shareholders' Meeting, and any other documents to be filed by
any UPC Company or any Affiliate thereof with the SEC or any other Regulatory
Authority in connection with the transactions contemplated hereby, will, at
the respective time such documents are filed, and with respect to the Proxy
Statement, when first mailed to the shareholders of BancAlabama, be false or
misleading with respect to any material fact, or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, or, in the case of the Proxy
Statement or any amendment thereof or supplement thereto, at the time of the
Shareholders' Meeting, be false or misleading with respect to any material
fact, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of
any proxy for the Shareholders' Meeting. All documents that any UPC
Company or any Affiliate thereof is responsible for filing with any
Regulatory Authority in connection with the transactions contemplated hereby
will comply as to form in all material respects with the provisions
of applicable Law.
6.13 ACCOUNTING, TAX, AND REGULATORY MATTERS. No UPC Company or
any Affiliate thereof has taken any action or has any Knowledge of any
fact or circumstance relating to UPC that is reasonably likely to (i)
prevent the transactions contemplated hereby, including the Merger,
from qualifying for pooling-of-interests accounting treatment or as a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code, or (ii) materially impede or delay receipt of any Consents of Regulatory
Authorities referred to in Section 9.1(b) of this Agreement or result in the
<PAGE>
imposition of a condition or restriction of the type referred to in the last
sentence of such Section.
6.14 MATTERS RELATING TO BNF. BNF is a corporation duly orga-
nized, validly existing, and in good standing under the Laws of the State of
Delaware, and has the corporate power and authority to carry on its business as
now conducted and to own, lease, and operate its material Assets. BNF has the
corporate power and authority necessary to execute, deliver, and perform its
obligations under this Agreement and to consummate the transactions contem-
plated hereby. The execution, delivery, and performance of this Agreement and
the consummation of the transactions contemplated herein, including the
Merger, have been duly and validly authorized by all necessary corporate
action in respect thereof on the part of BNF, subject to the approval of
this Agreement by UPC as the sole shareholder of BNF, which is the only
shareholder vote required for approval of this Agreement, and the consummation
of the Merger by BNF.
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 AFFIRMATIVE COVENANTS OF BANCALABAMA. Unless the prior
written consent of UPC shall have been obtained, which consent shall not be
unreasonably withheld and which consent will be given or denied within 10
business days of receipt of written request for such consent, and except
as otherwise expressly contemplated herein, BancAlabama shall and shall cause
each of its Subsidiaries to (i) operate its business only in the
usual, regular, and ordinary course, (ii) preserve intact its business
organization and Assets and maintain its rights and franchises, and (iii)
take no action which would (a) materially adversely affect the ability of
any Party to obtain any Consents required for the transactions contemplated
hereby without imposition of a condition or restriction of the type
referred to in the last sentence of Section 9.1(b) of this Agreement or
prevent the transactions contemplated hereby, including the Merger, from
qualifying for pooling-of-interests accounting treatment or as a reorganiza-
tion within the meaning of Section 368(a) of the Internal Revenue Code, or
(b) materially adversely affect the ability of any Party to perform its
covenants and agreements under this Agreement.
7.2 NEGATIVE COVENANTS OF BANCALABAMA. Except as specifically
permitted by this Agreement, from the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement, Banc-
Alabama covenants and agrees that it will not do or agree or commit to do, or
permit any of its Subsidiaries to do or agree or commit to do, any of the
following without the prior written consent of the chief executive officer,
president, or chief financial officer of UPC, which consent shall not be
unreasonably withheld and which consent will be given or denied within 10
business days of receipt of written request for such consent:
(a) amend the Charter, By-laws, or other governing instru-
ments of any BancAlabama Company, or
(b) incur any additional debt obligation or other obliga-
tion for borrowed money (other than indebtedness of a BancAlabama Company
to another BancAlabama Company) in excess of an aggregate of $100,000
(for the BancAlabama Companies on a consolidated basis) except in the
ordinary course of the business of BancAlabama Subsidiaries consistent with
past practices including refinancing existing obligations (which shall
include, for BancAlabama Subsidiaries that are depository institutions,
<PAGE>
creation of deposit liabilities, purchases of federal funds, advances from the
Federal Reserve Bank or Federal Home Loan Bank, and entry into repur-
chase agreements fully secured by U.S. government or agency securities),
or impose, or suffer the imposition, on any Asset of any BancAlabama Company
of any Lien or permit any such Lien to exist (other than in connection with
deposits, repurchase agreements, bankers acceptances, "treasury tax and loan"
accounts established in the ordinary course of business, the satisfaction of
legal requirements in the exercise of trust powers, and Liens in effect as
of the date hereof that are disclosed in the BancAlabama Disclosure
Memorandum); or
(c) repurchase, redeem, or otherwise acquire or
exchange (other than exchanges in the ordinary course under employee benefit
plans), directly or indirectly, any shares, or any securities convertible into
any shares, of the capital stock of any BancAlabama Company, or declare or
pay any dividend or make any other distribution in respect of
BancAlabama's capital stock; or
(d) except for this Agreement, or pursuant to the
exercise of stock options outstanding as of the date hereof and pursuant
to the terms thereof in existence on the date hereof, or pursuant to the
Stock Option Agreement, issue, sell, pledge, encumber, authorize the issuance
of, enter into any Contract to issue, sell, pledge, encumber, or authorize
the issuance of, or otherwise permit to become outstanding, any additional
shares of BancAlabama Common Stock or any other capital stock of any
BancAlabama Company, or any stock appreciation rights, or any option,
warrant, conversion, or other right to acquire any such stock, or any
security convertible into any such stock; or
(e) adjust, split, combine or reclassify any capital
stock of any BancAlabama Company or issue or authorize the issuance of
any other securities in respect of or in substitution for shares of
BancAlabama Common Stock, or sell, lease, mortgage or otherwise dispose
of or otherwise encumber any shares of capital stock of any Banc-
Alabama Subsidiary (unless any such shares of stock are sold or other-
wise transferred to another BancAlabama Company) or any Asset having a book
value in excess of $200,000 other than in the ordinary course of business for
reasonable and adequate consideration; or
(f) except for purchases of U.S. Treasury securities or
U.S. Government agency securities, which in either case have maturities of
five years or less or Federal Home Loan Bank Stock, purchase any securities
or make any material investment, either by purchase of stock or
securities, contributions to capital, Asset transfers, or purchase of any
Assets, in any Person other than a wholly owned BancAlabama Subsidiary, or
otherwise acquire direct or indirect control over any Person, other
than in connection with (i) foreclosures in the ordinary course of
business, (ii) acquisitions of control by a depository institution Subsidiary
in its fiduciary capacity, or (iii) the creation of new wholly owned Subsidi-
aries organized to conduct or continue activities otherwise permitted by this
Agreement; or
(g) grant any increase in compensation or benefits to
the employees or officers of any BancAlabama Company, except in accordance
with past practice disclosed in Section 7.2(g) of the BancAlabama
Disclosure Memorandum or as required by Law; pay any severance or termination
pay or any bonus other than pursuant to written policies or written Contracts
in effect on the date of this Agreement and disclosed in Section 7.2(g) of
<PAGE>
the BancAlabama Disclosure Memorandum; and enter into or amend any
severance agreements with officers of any BancAlabama Company; grant any
material increase in fees or other increases in compensation or other
benefits to directors of any BancAlabama Company except in accordance with
past practice disclosed in Section 7.2(g) of the BancAlabama Disclosure
Memorandum; or voluntarily accelerate the vesting of any stock options or
other stock-based compensation or employee benefits (other than the
acceleration of vesting which occurs under a benefit plan upon a change of
control of BancAlabama); or
(h) enter into or amend any employment Contract between
any BancAlabama Company and any Person (unless such amendment is required by
Law) that the BancAlabama Company does not have the unconditional right to
terminate without Liability (other than Liability for services already
rendered), at any time on or after the Effective Time; or
(i) adopt any new employee benefit plan of any Banc-
Alabama Company or terminate or withdraw from, or make any material
change in or to, any existing employee benefit plans of any BancAlabama
Company other than any such change that is required by Law or that, in the
opinion of counsel, is necessary or advisable to maintain the tax qualified
status of any such plan, or make any distributions from such employee
benefit plans, except as required by Law, the terms of such plans or
consistent with past practice; or
(j) make any significant change in any Tax or account-
ing methods or systems of internal accounting controls, except as may be
appropriate to conform to changes in Tax Laws or regulatory accounting
requirements or GAAP; or
(k) commence any Litigation other than in accordance with
past practice, settle any Litigation involving any Liability of any
BancAlabama Company for material money damages or restrictions upon the
operations of any BancAlabama Company; or
(l) enter into, modify, amend, or terminate any
material Contract (excluding any loan Contract or other Contract
specifically addressed in (a) through (k), above) or waive, release,
compromise, or assign any material rights or claims.
7.3 COVENANTS OF UPC. From the date of this Agreement until
the earlier of the Effective Time or the termination of this Agreement, UPC
covenants and agrees that it shall (i) continue to conduct its business and
the business of its Subsidiaries in a manner designed in its reasonable
judgment, to enhance the long-term value of the UPC Common Stock and the
business prospects of the UPC Companies, and (ii) take no action which
would (a) materially adversely affect the ability of any Party to obtain any
Consents required for the transactions contemplated hereby without
imposition of a condition or restriction of the type referred to in the last
sentence of Section 9.1(b) of this Agreement or prevent the transactions
contemplated hereby, including the Merger, from qualifying for pooling-
of-interests accounting treatment or as a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code, or (b) materially adversely
affect the ability of any Party to perform its covenants and agreements under
this Agreement; provided, that the foregoing shall not prevent any UPC
Company from acquiring any other Assets or businesses or from discontinuing or
disposing of any of its Assets or business if such action is, in the
judgment of UPC, desirable in the conduct of the business of UPC and its
Subsidiaries.
<PAGE>
7.4 ADVERSE CHANGES IN CONDITIONS. Each Party agrees to give
written notice promptly to the other Party upon becoming aware of the
occurrence or impending occurrence of any event or circumstance relating to
it or any of its Subsidiaries which (i) is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on it or (ii)
would cause or constitute a material breach of any of its representations,
warranties, or covenants contained herein, and to use its reasonable
efforts to prevent or promptly to remedy the same.
7.5 REPORTS. Each Party and its Subsidiaries shall file all
reports required to be filed by it with Regulatory Authorities between the
date of this Agreement and the Effective Time and shall deliver to the
other Party copies of all such reports promptly after the same are filed. If
financial statements are contained in any such reports filed with the
SEC, such financial statements will fairly present the consolidated
financial position of the entity filing such statements as of the dates
indicated and the consolidated results of operations, changes in share-
holders' equity, and cash flows for the periods then ended in accordance with
GAAP (subject in the case of interim financial statements to normal
recurring year-end adjustments that are not material). As of their respective
dates, such reports filed with the SEC will comply in all material respects
with the Securities Laws and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Any financial
statements contained in any other reports to another Regulatory Authority
shall be prepared in accordance with Laws applicable to such reports.
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 REGISTRATION STATEMENT; PROXY STATEMENT; SHAREHOLDER
APPROVAL. UPC shall file the Registration Statement with the SEC, and shall
use its reasonable efforts to cause the Registration Statement to become
effective under the 1933 Act and take any action required to be taken under
the applicable state Blue Sky or securities Laws in connection with the
issuance of the shares of UPC Common Stock upon consummation of the
Merger. BancAlabama shall furnish all information concerning it and the
holders of its capital stock as UPC may reasonably request in connection
with such action. BancAlabama shall call a Shareholders' Meeting, to be
held as soon as reasonably practicable after the Registration Statement is
declared effective by the SEC, for the purpose of voting upon approval of
this Agreement and such other related matters as it deems appropriate.
In connection with the Shareholder's Meeting, (i) BancAlabama shall
prepare and file with the SEC a Proxy Statement and mail such Proxy
Statement to its shareholders, (ii) the Parties shall furnish to each other
all information concerning them that they may reasonably request in
connection with such Proxy Statement, (iii) the Board of Directors
of BancAlabama shall recommend (subject to compliance with its fiduciary
duties as advised by counsel) to its shareholders the approval of the
matters submitted for approval, and (iv) the Board of Directors and officers
of BancAlabama shall (subject to compliance with their fiduciary duties as
advised by counsel) use their reasonable efforts to obtain such
shareholders' approval.
8.2 EXCHANGE LISTING. UPC shall use its reasonable efforts to
list, prior to the Effective Time, on the NYSE, subject to official notice of
issuance, the shares of UPC Common Stock to be issued to the holders of
<PAGE>
BancAlabama Common Stock or BancAlabama Options pursuant to the Merger, and
UPC shall give all notices and make all filings with the NYSE required
in connection with the transactions contemplated herein.
8.3 APPLICATIONS. UPC shall prepare and file, and BancAlabama
shall cooperate in the preparation and, where appropriate, filing of,
applications with all Regulatory Authorities having jurisdiction over the
transactions contemplated by this Agreement seeking the requisite Consents
necessary to consummate the transactions contemplated by this Agreement.
8.4 FILINGS WITH STATE OFFICES. Upon the terms and subject to
the conditions of this Agreement, UPC and BancAlabama shall execute and file
the Articles of Merger with the Secretary of State of the State of Tennessee
and the Certificate of Merger with the Secretary of State of the State of
Delaware in connection with the Closing.
8.5 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the terms
and conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, all things necessary,
proper, or advisable under applicable Laws to consummate and make effective,
as soon as practicable after the date of this Agreement, the transac-
tions contemplated by this Agreement, including using its reasonable efforts
to lift or rescind any Order adversely affecting its ability to consummate
the transactions contemplated herein and to cause to be satisfied the condi-
tions referred to in Article 9 of this Agreement; provided, that nothing
herein shall preclude either Party from exercising its rights under this
Agreement or the Stock Option Agreement. Each Party shall use, and shall
cause each of its Subsidiaries to use, its reasonable efforts to obtain all
Consents necessary or desirable for the consummation of the transactions
contemplated by this Agreement.
8.6 INVESTIGATION AND CONFIDENTIALITY.
(a) Prior to the Effective Time, each Party shall keep
the other Party advised of all material developments relevant to its
business and to consummation of the Merger and shall permit the other Party
to make or cause to be made such investigation of the business and proper-
ties of it and its Subsidiaries and of their respective financial and
legal conditions as the other Party reasonably requests, provided that such
investigation shall be reasonably related to the transactions contemplated
hereby and shall not interfere unnecessarily with normal operations. No
investigation by a Party shall affect the representations and warranties of
the other Party.
(b) Each Party shall, and shall cause its advisers and
agents to, maintain the confidentiality of all confidential information
furnished to it by the other Party concerning its and its Subsidiaries'
businesses, operations, and financial positions and shall not use or dis-
close such information for any purpose except in furtherance of the
transactions contemplated by this Agreement. If this Agreement is termi-
nated prior to the Effective Time, each Party shall promptly return or
certify the destruction of all documents and copies thereof, and all work
papers containing confidential information received from the other Party.
8.7 PRESS RELEASES. Prior to the Effective Time, BancAlabama
and UPC shall consult with each other as to the form and substance of any
press release or other public disclosure materially related to this Agreement
or any other transaction contemplated hereby; provided, that nothing in this
<PAGE>
Section 8.7 shall be deemed to prohibit any Party from making any disclo-
sure which its counsel deems necessary or advisable in order to satisfy such
Party's disclosure obligations imposed by Law.
8.8 CERTAIN ACTIONS. Except with respect to this Agreement and
the transactions contemplated hereby, after the date of this Agreement, no
BancAlabama Company nor any Affiliate thereof nor any Representatives thereof
retained by any BancAlabama Company shall directly or indirectly solicit any
Acquisition Proposal by any Person. Except to the extent necessary to comply
with the fiduciary duties of BancAlabama's Board of Directors as advised by
counsel, no BancAlabama Company or any Affiliate or Representative thereof
shall furnish any non-public information that it is not legally obligated
to furnish, negotiate with respect to, or enter into any Contract with respect
to, any Acquisition Proposal, but BancAlabama may communicate information
about such an Acquisition Proposal to its shareholders if and to the extent
that it is required to do so in order to comply with its legal obliga-
tions as advised by counsel. BancAlabama shall promptly notify UPC orally and
in writing in the event that it receives any inquiry or proposal relating to
any such transaction. BancAlabama shall (i) immediately cease and cause to
be terminated any existing activities, discussions, or negotiations with
any Persons conducted heretofore with respect to any of the foregoing, and
(ii) direct and use its reasonable efforts to cause all of its Representatives
not to engage in any of the foregoing.
8.9 ACCOUNTING AND TAX TREATMENT. Each of the Parties
undertakes and agrees to use its reasonable efforts to cause the Merger, and
to take no action which would cause the Merger not, to qualify for
pooling-of-interests accounting treatment and treatment as a "reorganization"
within the meaning of Section 368(a) of the Internal Revenue Code for
federal income tax purposes.
8.10 STATE TAKEOVER LAWS. Each BancAlabama Company shall take
all necessary steps to exempt the transactions contemplated by this
Agreement from, or if necessary challenge the validity or applicability
of, any applicable Takeover Law.
8.11 CHARTER PROVISIONS. Each BancAlabama Company shall take
all necessary action to ensure that the entering into of this Agreement and
the consummation of the Merger and the other transactions contemplated hereby
and thereby do not and will not result in the grant of any rights to any
Person under the Charter, By-laws, or other governing instruments of any
BancAlabama Company or restrict or impair the ability of UPC or any of its
Subsidiaries to vote, or otherwise to exercise the rights of a shareholder
with respect to, shares of any BancAlabama Company that may be directly or
indirectly acquired or controlled by it.
8.12 AGREEMENT OF AFFILIATES. BancAlabama has disclosed in
Section 8.12 of the BancAlabama Disclosure Memorandum all Persons whom it
reasonably believes is an "affiliate" of BancAlabama for purposes of Rule
145 under the 1933 Act. BancAlabama shall use its reasonable efforts to cause
each such Person to deliver to UPC not later than 30 days prior to the
Effective Time, a written agreement, substantially in the form of Exhibit 3,
providing that such Person will not sell, pledge, transfer, or otherwise
dispose of the shares of BancAlabama Common Stock held by such Person except
as contemplated by such agreement or by this Agreement and will not
sell, pledge, transfer, or otherwise dispose of the shares of UPC Common Stock
to be received by such Person upon consummation of the Merger except in
compliance with applicable provisions of the 1933 Act and the rules and
regulations thereunder and until such time as financial results covering at
<PAGE>
least 30 days of combined operations of UPC and BancAlabama have been
published within the meaning of Section 201.01 of the SEC's Codification of
Financial Reporting Policies. If the Merger will qualify for pooling-of-
interests accounting treatment, shares of UPC Common Stock issued to such
affiliates of BancAlabama in exchange for shares of BancAlabama Common
Stock shall not be transferable until such time as financial results covering
at least 30 days of combined operations of UPC and BancAlabama have been
published within the meaning of Section 201.01 of the SEC's Codification of
Financial Reporting Policies, regardless of whether each such affiliate has
provided the written agreement referred to in this Section 8.12 (and UPC shall
be entitled to place restrictive legends upon certificates for shares of UPC
Common Stock issued to affiliates of BancAlabama pursuant to this Agreement to
enforce the provisions of this Section 8.12). UPC shall not be required to
maintain the effectiveness of the Registration Statement under the 1933 Act
for the purposes of resale of UPC Common Stock by such affiliates.
8.13 EMPLOYEE BENEFITS AND CONTRACTS. Subject to the terms of
the Supplemental Letter following the Effective Time, UPC shall provide
generally to officers and employees of the BancAlabama Companies employee
benefits under employee benefit plans (other than stock option or other plans
involving the potential issuance of UPC Common Stock), on terms and conditions
which when taken as a whole are substantially similar to those currently
provided by the UPC Companies to their similarly situated officers and
employees. For purposes of participation and vesting (but not benefit
accrual) under such employee benefit plans, the service of the employees
of the BancAlabama Companies prior to the Effective Time shall be treated as
service with a UPC Company participating in such employee benefit plans. The
Surviving Corporation shall, and shall cause its Subsidiaries to, honor in
accordance with their terms all employment, severance, consulting, and
other compensation Contracts disclosed in Section 5.15 of the BancAlabama
Disclosure Memorandum to UPC between any BancAlabama Company and any current
or former director, officer, or employee thereof, and all provisions for
vested benefits or other vested amounts earned or accrued through the
Effective Time under the BancAlabama Benefit Plans.
8.14 INDEMNIFICATION.
(a) After the Effective Time, UPC shall indemnify,
defend and hold harmless the present and former directors, officers, employ-
ees, and agents of the BancAlabama Companies (each, an "Indemnified Party")
(including any person who becomes a director, officer, employee, or agent
prior to the Effective Time) against all Liabilities (including reasonable
attorneys' fees and amounts paid in settlement or incurred in connection with
investigations) arising out of or in connection with actions or omissions
occurring at or prior to the Effective Time (including the transactions
contemplated by this Agreement and the Stock Option Agreement) to the full
extent permitted under Delaware Law and by BancAlabama's Certificate of
Incorporation and By-laws or to the full extent covered by existing insurance
policies of BancAlabama, as in effect on the date hereof, including provi-
sions relating to advances of expenses incurred in the defense of any Litiga-
tion. Without limiting the foregoing, in any case in which approval by
UPC is required to effectuate any indemnification, UPC shall direct, at the
election of the Indemnified Party, that the determination of any such approval
shall be made by independent counsel mutually agreed upon between UPC and the
Indemnified Party.
(b) Any Indemnified Party wishing to claim indemnification under
paragraph (a) of this Section 8.14, upon learning of any such Liability or
Litigation, shall promptly notify UPC thereof, provided that the failure so to
<PAGE>
notify shall not affect the obligations of UPC under this Section 8.14
unless and to the extent such failure materially increases UPC's liability
under this Section 8.14. In the event of any such Litigation (whether
arising before or after the Effective Time), (i) UPC or the Surviving
Corporation shall have the right to assume the defense thereof and UPC shall
not be liable to such Indemnified Parties for any legal expenses of
other counsel or any other expenses subsequently incurred by such
Indemnified Parties in connection with such matters thereof, except that
if UPC or the Surviving Corporation elects not to assume the defense of such
matters, or counsel for the Indemnified Parties advises that there are
substantive issues which raise conflicts of interest between UPC or the
Surviving Corporation and the Indemnified Parties, the Indemnified
Parties may retain counsel satisfactory to them, and UPC or the Surviving
Corporation shall pay all reasonable fees and expenses of such counsel
for the Indemnified Parties promptly as statements therefor are
received; provided, that UPC shall be obligated pursuant to this paragraph
(b) to pay for only one firm of counsel for all Indemnified Parties
in any jurisdiction, (ii) the Indemnified Parties will cooperate in the
defense of any such Litigation, and (iii) UPC shall not be liable for any
settlement effected without its prior written consent which shall not be
unreasonably withheld; and provided further that the UPC or the Surviving
Corporation shall not have any obligation hereunder to any Indemnified Party
when and if a court of competent jurisdiction shall determine, and such
determination shall have become final, that the indemnification of such
Indemnified Party in the manner contemplated hereby is prohibited by
applicable Law.
(c) If the Surviving Corporation or any of its successors
or assigns shall consolidate with or merge into any other Person and shall not
be the continuing or surviving Person of such consolidation or merger or
shall transfer all or substantially all of its assets to any Person, then and
in each case, proper provision shall be made so that the successors and
assigns of the Surviving Corporation shall assume the obligations set forth in
this Section 8.14.
(d) UPC shall pay all reasonable costs, including
attorneys' fees, that may be incurred by any Indemnified Party in enforcing
the indemnity and other obligations provided for in this Section 8.14. The
rights of each Indemnified Party hereunder shall be in addition to any other
rights such Indemnified Party may have under applicable Law.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective
obligations of each Party to perform this Agreement and consummate the
Merger and the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by both Parties
pursuant to Section 11.6 of this Agreement:
(A) SHAREHOLDER APPROVAL. The shareholders of Banc-
Alabama shall have approved this Agreement, and the consummation of
the transactions contemplated hereby, including the Merger, as and to
the extent required by Law or by the provisions of any governing
instruments. UPC, as the sole shareholder of BNF, shall have approved
this Agreement, and the consummation of the transactions
contemplated hereby, including the Merger, as and to the extent
required by Law or by the provisions of any governing instruments.
<PAGE>
(B) REGULATORY APPROVALS. All Consents of, filings and
registrations with, and notifications to, all Regulatory Authorities
required for consummation of the Merger shall have been obtained or
made and shall be in full force and effect and all waiting periods
required by Law shall have expired. No Consent obtained from any
Regulatory Authority which is necessary to consummate the trans-
actions contemplated hereby shall be conditioned or restricted in a
manner (other than matters relating to the raising of additional
capital or the disposition of Assets or deposit Liabilities) which in
the reasonable judgment of the Board of Directors of UPC would so
materially adversely impact the financial or economic benefits of
the transactions contemplated by this Agreement that, had such condition
or requirement been known, UPC would not, in its reasonable
judgment, have entered into this Agreement.
(C) CONSENTS AND APPROVALS. Each Party shall have
obtained any and all Consents required for consummation of the
Merger (other than those referred to in Section 9.1(b) of this
Agreement) or for the preventing of any Default under any Contract
or Permit of such Party which, if not obtained or made, is reasonably
likely to have, individually or in the aggregate, a Material Adverse
Effect on such Party.
(D) LEGAL PROCEEDINGS. No court or governmental or
regulatory authority of competent jurisdiction shall have enacted,
issued, promulgated, enforced, or entered any Law or Order (whether
temporary, preliminary, or permanent) or taken any other action which
prohibits, restricts, or makes illegal consummation of the transactions
contemplated by this Agreement.
(E) REGISTRATION STATEMENT. The Registration Statement
shall be effective under the 1933 Act, no stop orders suspending the
effectiveness of the Registration Statement shall have been
issued, no action, suit, proceeding, or investigation by the SEC to
suspend the effectiveness thereof shall have been initiated and be
continuing, and all necessary approvals under state securities Laws or
the 1933 Act or 1934 Act relating to the issuance or trading of the
shares of UPC Common Stock issuable pursuant to the Merger shall
have been received.
(F) EXCHANGE LISTING. The shares of UPC Common Stock
issuable pursuant to the Merger shall have been approved for listing on
the NYSE, subject to official notice of issuance.
(G) POOLING LETTERS. Each of the Parties shall have
received copies of the letters, dated as of the date of filing of the
Registration Statement with the SEC and as of the Effective Time,
addressed to UPC, from Price Waterhouse LLP to the effect that the
Merger will qualify for pooling-of- interests accounting treatment.
(H) TAX MATTERS. Each Party shall have received a
written opinion of counsel from Alston & Bird, in form reasonably
satisfactory to such Parties (the "Tax Opinion"), to the effect that
(i) the Merger will constitute a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code, (ii) the exchange in
the Merger of BancAlabama Common Stock for UPC Common Stock will not give
rise to gain or loss to the shareholders of BancAlabama with respect to
such exchange (except to the extent of any cash received), and
(iii) none of BancAlabama or UPC will recognize gain or loss as a
<PAGE>
consequence of the Merger (except for the inclusion in income any amounts
resulting from any required change in accounting methods and any
income and deferred gain recognized pursuant to Treasury regulations
issued under Section 1502 of the Internal Revenue Code). In rendering
such Tax Opinion, such counsel shall be entitled to rely upon
representations of officers of BancAlabama and UPC reasonably
satisfactory in form and substance to such counsel.
9.2 CONDITIONS TO OBLIGATIONS OF UPC. The obligations of UPC to
perform this Agreement and consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by UPC pursuant to Section 11.6(a) of this
Agreement:
(A) REPRESENTATIONS AND WARRANTIES. For purposes of this
Section 9.2(a), the accuracy of the representations and warranties of
BancAlabama set forth in this Agreement shall be assessed as of
the date of this Agreement and as of the Effective Time with the same
effect as though all such representations and warranties had been
made on and as of the Effective Time (provided that representations
and warranties which are confined to a specified date shall speak
only as of such date). The representations and warranties of
BancAlabama set forth in Section 5.3 of this Agreement shall be true
and correct (except for inaccuracies which are de minimus in amount).
The representations and warranties of BancAlabama set forth in
Sections 5.20, 5.21, and 5.22 of this Agreement shall be true and correct
in all material respects. There shall not exist inaccuracies in the
representations and warranties of BancAlabama set forth in this
Agreement (including the representations and warranties set forth in
Sections 5.3, 5.20, 5.21, and 5.22) such that the aggregate effect
of such inaccuracies has, or is reasonably likely to have, a
Material Adverse Effect on BancAlabama; provided that, for purposes
of this sentence only, those representations and warranties which
are qualified by references to "material" or "Material Adverse Effect"
shall be deemed not to include such qualifications.
(B) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each
and all of the agreements and covenants of BancAlabama to be
performed and complied with pursuant to this Agreement and the other
agreements contemplated hereby prior to the Effective Time shall have
been duly performed and complied with in all material respects.
(C) CERTIFICATES. BancAlabama shall have delivered to
UPC (i) a certificate, dated as of the Effective Time and signed on
its behalf by its chief executive officer and its chief financial
officer in their corporate capacities, not as individuals, to the
effect that the conditions of its obligations set forth in Section
9.2(a) and 9.2(b) of this Agreement have been satisfied, and (ii)
certified copies of resolutions duly adopted by BancAlabama's Board
of Directors and shareholders evidencing the taking of all corporate
action necessary to authorize the execution, delivery, and performance
of this Agreement, and the consummation of the transactions contemplated
hereby, all in such reasonable detail as UPC and its counsel shall
request.
(D) AFFILIATES AGREEMENTS. UPC shall have received from
each affiliate of BancAlabama the affiliates letter referred to in
Section 8.12 of this Agreement, to the extent necessary to assure in the
<PAGE>
reasonable judgment of UPC that the transactions contemplated hereby will
qualify for pooling-of- interests accounting treatment.
(E) CONSOLIDATED ASSETS. On the last business day prior
to the Effective Time, the total consolidated assets of BancAlabama,
as determined in accordance with GAAP, shall be not less than $95
million at the Effective Time.
(F) SHAREHOLDERS' EQUITY. On the last business day prior
to the Effective Time, the shareholders' equity of BancAlabama, as
determined in accordance with GAAP, shall be no less than $7,241,211.
9.3 CONDITIONS TO OBLIGATIONS OF BANCALABAMA. The obligations
of BancAlabama to perform this Agreement and consummate the Merger and the
other transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by BancAlabama pursuant to Section 11.6(b)
of this Agreement:
(A) REPRESENTATIONS AND WARRANTIES. For purposes of this
Section 9.3(a), the accuracy of the representations and warranties of
UPC set forth in this Agreement shall be assessed as of the date of
this Agreement and as of the Effective Time with the same effect
as though all such representations and warranties had been made on
and as of the Effective Time (provided that representations and
warranties which are confined to a specified date shall speak only as of
such date). The representations and warranties of UPC set forth in
Section 6.3 of this Agreement shall be true and correct (except for
inaccuracies which are de minimus in amount). The representations and
warranties of UPC set forth in Section 6.13 of this Agreement shall be
true and correct in all material respects. There shall not exist
inaccuracies in the representations and warranties of UPC set forth in
this Agreement (including the representations and warranties set forth
in Sections 6.3 and 6.13) such that the aggregate effect of such
inaccuracies has, or is reasonably likely to have, a Material
Adverse Effect on UPC; provided that, for purposes of this sentence
only, those representations and warranties which are qualified by
references to "material" or "Material Adverse Effect" shall be deemed
not to include such qualifications.
(B) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each
and all of the agreements and covenants of UPC to be performed and
complied with pursuant to this Agreement and the other agreements
contemplated hereby prior to the Effective Time shall have been duly
performed and complied with in all material respects.
(C) CERTIFICATES. UPC shall have delivered to
BancAlabama (i) a certificate, dated as of the Effective Time and
signed on its behalf by its chief executive officer and its chief
financial officer in their corporate capacities, not as
individuals, to the effect that the conditions of its obligations
set forth in Section 9.3(a) and 9.3(b) of this Agreement have been
satisfied, and (ii) certified copies of resolutions duly adopted by
UPC's Board of Directors evidencing the taking of all corporate action
necessary to authorize the execution, delivery, and performance of this
Agreement, and the consummation of the transactions contemplated
hereby, all in such reasonable detail as BancAlabama and its
counsel shall request.
<PAGE>
ARTICLE 10
TERMINATION
10.1 TERMINATION. Notwithstanding any other provision of this
Agreement, and notwithstanding the approval of this Agreement by the
shareholders of BancAlabama, this Agreement may be terminated and the
Merger abandoned at any time prior to the Effective Time:
(a) By mutual consent of the Board of Directors of UPC
and the Board of Directors of BancAlabama; or
(b) By the Board of Directors of either Party (provided
that the terminating Party is not then in breach of any representation or
warranty contained in this Agreement under the applicable standard set
forth in Section 9.2(a) of this Agreement in the case of BancAlabama and
Section 9.3(a) in the case of UPC or in material breach of any covenant or
other agreement contained in this Agreement) in the event of an inaccuracy
of any representation or warranty of the other Party contained in this
Agreement which cannot be or has not been cured within 30 days after the
giving of written notice to the breaching Party of such inaccuracy and
which inaccuracy would provide the terminating Party the ability to refuse to
consummate the Merger under the applicable standard set forth in Section
9.2(a) of this Agreement in the case of BancAlabama and Section 9.3(a) of
this Agreement in the case of UPC; or
(c) By the Board of Directors of either Party
(provided that the terminating Party is not then in breach of any
representation or warranty contained in this Agreement under the
applicable standard set forth in Section 9.2(a) of this Agreement in the
case of BancAlabama and Section 9.3(a) in the case of UPC or in material
breach of any covenant or other agreement contained in this Agreement) in the
event of a material breach by the other Party of any covenant or
agreement contained in this Agreement which cannot be or has not been cured
within 30 days after the giving of written notice to the breaching Party of
such breach; or
(d) By the Board of Directors of either Party in the event
(i) any Consent of any Regulatory Authority required for consummation of the
Merger and the other transactions contemplated hereby shall have been denied
by final nonappealable action of such authority or if any action taken by
such authority is not appealed within the time limit for appeal, or (ii) the
shareholders of BancAlabama fail to vote their approval of this Agreement and
the transactions contemplated hereby as required by the DGCL at the
Shareholders' Meeting; or
(e) By the Board of Directors of either Party in the event
that the Merger shall not have been consummated by March 1, 1997, if
the failure to consummate the transactions contemplated hereby on or before
such date is not caused by any willful breach of this Agreement by the Party
electing to terminate pursuant to this Section 10.1(e); or
(f) By the Board of Directors of either Party
(provided that the terminating Party is not then in breach of any
representation or warranty contained in this Agreement under the applicable
standard set forth in Section 9.2(a) of this Agreement in the case of
BancAlabama and Section 9.3(a) in the case of UPC or in material breach of
any covenant or other agreement contained in this Agreement) in the
event that any of the conditions precedent to the obligations of such Party to
<PAGE>
consummate the Merger cannot be satisfied or fulfilled by the date
specified in Section 10.1(e) of this Agreement; or
(g) By UPC, if a "Purchase Event" as such term is
defined in the Stock Option Agreement, shall have occurred or by BancAlabama,
if UPC (or its assignee) exercises the Stock Option Agreement pursuant
to Section 3 thereof or exercises its repurchase rights pursuant to Section
8 thereof; or
(h) By the Board of Directors of BancAlabama, if it
determines by a vote of a majority of the members of its entire Board, at any
time during the ten-day period commencing two days after the Determination
Date, if both of the following conditions are satisfied:
(1) the Average Closing Price shall be less than
$24.245; and
(2) (i) the quotient obtained by dividing the Average
Closing Price by $30.306 (such number being referred to herein as
the "UPC Ratio") shall be less than (ii) the quotient obtained
by dividing the Index Price on the Determination Date by the Index
Price on the Starting Date and subtracting 0.15 from the quotient
in this clause (2)(ii) (such number being referred to herein
as the "Index Ratio");
SUBJECT, HOWEVER, to the following three sentences. If Banc-
Alabama refuses to consummate the Merger pursuant to this Section
10.1(h), it shall give prompt written notice thereof to UPC;
provided, that such notice of election to terminate may be withdrawn
at any time within the aforementioned ten-day period. During the
five-day period commencing with its receipt of such notice, UPC shall
have the option to elect to increase the Exchange Ratio to equal the
lesser of (i) the quotient obtained by dividing (1) the product of
$24.00 and the Exchange Ratio (as then in effect) by (2) the Average
Closing Price, and (ii) the quotient obtained by dividing (1) the
product of the Index Ratio and the Exchange Ratio (as then in effect)
by (2) the UPC Ratio. If UPC makes an election contemplated by
the preceding sentence, within such five-day period, it shall give
prompt written notice to BancAlabama of such election and the revised
Exchange Ratio, whereupon no termination shall have occurred
pursuant to this Section 10.1(h) and this Agreement shall remain in
effect in accordance with its terms (except as the Exchange Ratio shall
have been so modified), and any references in this Agreement to
"Exchange Ratio" shall thereafter be deemed to refer to the Exchange
Ratio as adjusted pursuant to this Section 10.1(h).
For purposes of this Section 10.1(h), the following terms
shall have the meanings indicated:
"Average Closing Price" shall mean the average of the
daily last sales prices of UPC Common Stock as reported on the
NYSE (as reported by THE WALL STREET JOURNAL or, if not
reported thereby, another authoritative source as chosen by UPC) for
the 10 consecutive full trading days in which such shares are traded
on the NYSE ending at the close of trading on the Determination
Date.
"Determination Date" shall mean the later of the date on which
the last required Consent of any Regulatory Authority required for the
<PAGE>
Merger shall be received and the date on which approval of the Merger
by the shareholders of BancAlabama shall be received.
"Index Group" shall mean the 16 bank holding companies
listed below, the common stocks of all of which shall be publicly traded
and as to which there shall not have been, since the Starting Date and
before the Determination Date, any public announcement of a proposal for
such company to be acquired or for such company to acquire another
company or companies in transactions with a value exceeding 25% of
the acquiror's market capitalization. In the event that any such
company or companies are removed from the Index Group, the weights
(which shall be determined based upon the number of outstanding
shares of common stock) shall be redistributed proportionately for
purposes of determining the Index Price. The 16 bank holding companies
and the weights attributed to them are as follows:
BANK HOLDING COMPANIES Weighting
---------------------- ---------
AmSouth Bancorporation 7.66%
Central Fidelity Banks, Inc. 5.25
Compass Bancshares, Inc. 4.99
Crestar Financial Corporation 4.93
Deposit Guaranty Corporation 2.56
Fifth Third Bancorp 13.14
First American Corporation 3.65
First Commerce Corporation 4.95
First Tennessee National Corporation 4.53
First Virginia Banks, Inc. 4.44
Mercantile Bancorporation, Inc. 7.24
Mercantile Bancshares Corporation 6.14
National Commerce Bancorp 3.24
Regions Financial Corporation 6.03
Signet Banking Corporation 7.73
Southern National Corporation 13.52
Total 100.00%
"Index Price" on a given date shall mean the weighted average
(weighted in accordance with the factors listed above) of the closing
prices of the companies composing the Index Group.
"Starting Date" shall mean the date of this Agreement.
If any company belonging to the Index Group or UPC declares
or effects a stock dividend, reclassification, recapitalization,
split-up, combination, exchange of shares, or similar transaction
between the date of this Agreement and the Determination Date, the
prices for the common stock of such company or UPC shall be
appropriately adjusted for the purposes of applying this Section
10.1(h).
10.2 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to Section 10.1 of this Agreement, this
Agreement and the Supplemental Letter shall become void and have no effect,
except that (i) the provisions of this Section 10.2 and Article 11 and Section
8.6(b) of this Agreement shall survive any such termination and abandonment,
and (ii) a termination pursuant to Sections 10.1(b), 10.1(c) or 10.1(f) of
this Agreement shall not relieve the breaching Party from Liability for an
uncured willful breach of a representation, warranty, covenant, or agreement
<PAGE>
giving rise to such termination. The Stock Option Agreement shall be
governed by its own terms as to its termination.
10.3 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS. The respec-
tive representations, warranties, obligations, covenants, and agreements of
the Parties shall not survive the Effective Time except this Section 10.3 and
Articles 2, 3, 4, and 11 and Sections 8.12, 8.13, and 8.14 of this Agreement
and the provisions of the Supplemental Letter.
ARTICLE 11
MISCELLANEOUS
11.1 DEFINITIONS.
(a) Except as otherwise provided herein, the capitalized
terms set forth below shall have the following meanings:
"ACQUISITION PROPOSAL" with respect to a Party shall mean any
tender offer or exchange offer or any proposal for a merger, acquisition
of all of the stock or assets of, or other business combination
involving such Party or any of its Subsidiaries or the acquisition
of a substantial equity interest in, or a substantial portion of the
assets of, such Party or any of its Subsidiaries.
"AFFILIATE" of a Person shall mean: (i) any other Person
directly, or indirectly through one or more intermediaries, controlling,
controlled by, or under common control with such Person; (ii) any
officer, director, partner, employer, or direct or indirect
beneficial owner of any 10% or greater equity or voting interest of such
Person; or (iii) any other Person for which a Person described
in clause (ii) acts in any such capacity.
"AGREEMENT" shall mean this Agreement and Plan of Merger,
including the Stock Option Agreement and the Exhibits delivered pursuant
hereto and incorporated herein by reference.
"ASSETS" of a Person shall mean all of the assets,
properties, businesses, and rights of such Person of every kind, nature,
character and description, whether real, personal or mixed, tangible
or intangible, accrued or contingent, or otherwise relating to or
utilized in such Person's business, directly or indirectly, in whole or
in part, whether or not carried on the books and records of such
Person, and whether or not owned in the name of such Person or any
Affiliate of such Person and wherever located.
"BANCALABAMA COMMON STOCK" shall mean the $1.00 par value common
stock of BancAlabama.
"BANCALABAMA COMPANIES" shall mean, collectively, BancAlabama and
all BancAlabama Subsidiaries.
"BANCALABAMA DISCLOSURE MEMORANDUM" shall mean the written
information entitled "BancAlabama, Inc. Disclosure Memorandum" delivered
prior to the date of this Agreement to UPC describing in reasonable
detail the matters contained therein and, with respect to each
disclosure made therein, specifically referencing each Section of this
Agreement under which such disclosure is being made. Information
disclosed with respect to one Section shall not be deemed to be
<PAGE>
disclosed for purposes of any other Section not specifically
referenced with respect thereto.
"BANCALABAMA FINANCIAL STATEMENTS" shall mean (i) the
consolidated statements of financial position (including related notes
and schedules, if any) of BancAlabama as of December 31, 1995, 1994 and
1993, and the related statements of operations, stockholders'
equity, cash flows (including related notes and schedules, if any)
for each of the three fiscal years ended December 31, 1995, 1994
and 1993, as filed by BancAlabama in SEC Documents, and (ii) the
consolidated statements of financial position of BancAlabama
(including related notes and schedules, if any) and related statements of
operations, stockholders' equity, and cash flows (including related
notes and schedules, if any) included in SEC Documents filed with respect
to periods ended subsequent to December 31, 1995.
"BANCALABAMA STOCK PLANS" shall mean the existing non-statutory
stock option plan of BancAlabama.
"BANCALABAMA SUBSIDIARIES" shall mean the Subsidiaries of
BancAlabama, which shall include the BancAlabama Subsidiaries described
in Section 5.4 of the BancAlabama Disclosure Memorandum and any
corporation, bank, savings association, or other organization acquired
as a Subsidiary of BancAlabama in the future and owned by BancAlabama
at the Effective Time.
"BANKALABAMA-HUNTSVILLE" shall mean BankAlabama-Huntsville, a
wholly-owned subsidiary of BancAlabama.
"BHC ACT" shall mean the federal Bank Holding Company Act of 1956,
as amended.
"BNF COMMON STOCK" shall mean the common stock of BNF.
"CERTIFICATE OF MERGER" shall mean the Certificate of Merger
to be executed by BNF and filed with the Secretary of State of the
State of Delaware relating to the Merger contemplated by Section 1.1
of this A greement.
"CLOSING DATE" shall mean the date on which the Closing occurs.
"CONSENT" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person
pursuant to any Contract, Law, Order, or Permit.
"CONTRACT" shall mean any written or oral agreement,
arrangement, authorization, commitment, contract, indenture,
instrument, lease, obligation, plan, practice, restriction,
understanding, or undertaking of any kind or character, or other document
to which any Person is a party or that is binding on any Person or its
capital stock, Assets, or business.
"DEFAULT" shall mean (i) any breach or violation of or default
under any Contract, Order, or Permit, (ii) any occurrence of any event
that with the passage of time or the giving of notice or both would
constitute a breach or violation of or default under any Contract,
Order, or Permit, or (iii) any occurrence of any event that with or
without the passage of time or the giving of notice would give rise
to a right to terminate or revoke, change the current terms of, or
<PAGE>
renegotiate, or to accelerate, increase, or impose any Liability under,
any Contract, Order or Permit.
"DGCL" shall mean the Delaware General Corporation Law.
"ENVIRONMENTAL LAWS" shall mean all Laws relating to pollution
or protection of human health or the environment (including ambient
air, surface water, ground water, land surface or subsurface strata) and
which are administered, interpreted or enforced by the United
States Environmental Protection Agency and state and local agenc-
ies with jurisdiction over, and including common law in respect of,
pollution or protection of the environment, including the Compre-
hensive Environmental Response Compensation and Liability Act, as
amended, 42 U.S.C. 9601 ET SEQ. ("CERCLA"), the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. 6901 ET SEQ. ("RCRA"), and other
Laws relating to emissions, discharges, releases, or threatened releases
of any Hazardous Material, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
or handling of any Hazardous Material.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"EXHIBITS" 1 through 4, inclusive, shall mean the Exhibits so
marked, copies of which are attached to this Agreement. Such Exhibits
are hereby incorporated by reference herein and made a part hereof,
and may be referred to in this Agreement and any other related instrument
or document without being attached hereto.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"HAZARDOUS MATERIAL" shall mean (i) any hazardous substance,
hazardous material, hazardous waste, regulated substance, or toxic
substance (as those terms are defined by any applicable Environmental
Laws) and (ii) any chemicals, pollutants, contaminants, petroleum,
petroleum products, or oil (and specifically shall include asbestos
requiring abatement, removal, or encapsulation pursuant to the
requirements of governmental authorities and any polychlorinated
biphenyls).
"HOLA" shall mean the Home Owners' Loan Act of 1933, as amended.
"HSR ACT" shall mean Section 7A of the Clayton Act, as added by
Title II of the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"INTELLECTUAL PROPERTY" shall mean copyrights, patents, trade-
marks, service marks, service names, trade names, applications
therefor, technology rights and licenses, computer software (including
any source or object codes therefor or documentation relating thereto),
trade secrets, franchises, know-how, inventions, and other intellectual
property rights.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of
1986, as amended, and the rules and regulations promulgated thereunder.
"KNOWLEDGE" as used with respect to a Person (including refer-
ences to such Person being aware of a particular matter) shall mean
<PAGE>
those facts that are known by the Chairman, President, Chief Financial
Officer, Chief Accounting Officer, Chief Credit Officer, or General
Counsel of such Person.
"LAW" shall mean any code, law, ordinance, regulation, reporting
or licensing requirement, rule, or statute applicable to a Person or
its Assets, Liabilities or business, including those promulgated, inter-
preted, or enforced by any Regulatory Authority.
"LIABILITY" shall mean any direct or indirect, primary or secon-
dary, liability, indebtedness, obligation, penalty, cost, or expense
(including costs of investigation, collection, and defense), claim,
deficiency, guaranty, or endorsement of or by any Person (other than
endorsements of notes, bills, checks, and drafts presented for
collection or deposit in the ordinary course of business) of any type,
whether accrued, absolute or contingent, liquidated or unliquidated,
matured or unmatured, or otherwise.
"LIEN" shall mean any conditional sale agreement, default of
title, easement, encroachment, encumbrance, hypothecation, infringe-
ment, lien, mortgage, pledge, reservation, restriction, security
interest, title retention, or other security arrangement, or any
adverse right or interest, charge, or claim of any nature
whatsoever of, on, or with respect to any property or property interest,
other than (i) Liens for current property Taxes not yet due and
payable, and (ii) for depository institution Subsidiaries of a Party,
pledges to secure deposits and other Liens incurred in the ordinary
course of the banking business.
"LITIGATION" shall mean any action, arbitration, cause of
action, claim, complaint, criminal prosecution, demand letter,
governmental or other examination or investigation, hearing, inquiry,
administrative or other proceeding, or notice (written or oral) by any
Person alleging potential Liability or requesting information relating
to or affecting a Party, its business, its Assets (including Contracts
related to it), or the transactions contemplated by this Agreement,
but shall not include regular, periodic examinations of depository
institutions and their Affiliates by Regulatory Authorities.
"MATERIAL" for purposes of this Agreement shall be determined in
light of the facts and circumstances of the matter in question;
provided that any specific monetary amount stated in this Agreement
shall determine materiality in that instance.
"MATERIAL ADVERSE EFFECT" on a Party shall mean an event,
change, or occurrence which, individually or together with any other
event, change, or occurrence, has a material adverse impact on
(i) the financial position, business, or results of operations of
such Party and its Subsidiaries, taken as a whole, or (ii) the
ability of such Party to perform its obligations under this Agreement
or to consummate the Merger or the other transactions contemplated by
this Agreement, provided that "Material Adverse Effect" and "material
adverse impact" shall not be deemed to include the impact of (a)
changes in banking and similar Laws of general applicability or interpre-
tations thereof by courts or governmental authorities (b) changes in
GAAP or regulatory accounting principles generally applicable to
banks, savings associations, and their holding companies, (c)
actions and omissions of a Party (or any of its Subsidiaries)
taken with the prior informed written consent of the other Party in
<PAGE>
contemplation of the transaction contemplated hereby, and (d) the
direct effects of compliance with this Agreement on the operating
performance of the Parties, including expenses incurred by the Parties
in consummating the transactions contemplated by the Agreement.
"NASD" shall mean the National Association of Securities Dealers,
Inc.
"NYSE" shall mean the New York Stock Exchange, Inc.
"1933 ACT" shall mean the Securities Act of 1933, as amended.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"OPERATING PROPERTY" shall mean any property owned by the
Party in question or by any of its Subsidiaries or in which such Party
or Subsidiary holds a security interest, and, where required by the
context, includes the owner or operator of such property, but only with
respect to such property.
"ORDER" shall mean any administrative decision or award,
decree, injunction, judgment, order, quasi-judicial decision or award,
ruling, or writ of any federal, state, local, or foreign or other court,
arbitrator, mediator, tribunal, administrative agency, or Regulatory
Authority.
"PARTICIPATION FACILITY" shall mean any facility or property in
which the Party in question or any of its Subsidiaries participates
in the management and, where required by the context, said term means
the owner or operator of such facility or property, but only with
respect to such facility or property.
"PARTY" shall mean either BancAlabama, UPC, or BNF, and
"PARTIES" shall mean BancAlabama, UPC, and BNF.
"PERMIT" shall mean any federal, state, local, and
foreign governmental approval, authorization, certificate, easement,
filing, franchise, license, notice, permit, or right to which any
Person is a party or that is or may be binding upon or inure to the
benefit of any Person or its securities, Assets or business.
"PERSON" shall mean a natural person or any legal,
commercial, or governmental entity, such as, but not limited to, a
corporation, general partnership, joint venture, limited partnership,
limited liability company, trust, business association, group acting
in concert, or any person acting in a representative capacity.
"PROXY STATEMENT" shall mean the proxy statement used by
BancAlabama to solicit the approval of its shareholders of the
transactions contemplated by this Agreement, which shall include the
prospectus of UPC relating to the issuance of the UPC Common Stock to
holders of BancAlabama Common Stock.
"REGISTRATION STATEMENT" shall mean the Registration Statement on
Form S-4, including any pre-effective or post-effective
amendments or supplements thereto, filed with the SEC by UPC under the
1933 Act with respect to the shares of UPC Common Stock to be issued to
<PAGE>
the shareholders of BancAlabama in connection with the transactions
contemplated by this Agreement.
"REGULATORY AUTHORITIES" shall mean, collectively, the Federal
Trade Commission, the United States Department of Justice, the Board
of the Governors of the Federal Reserve System, the Office of Thrift
Supervision (including its predecessor, the Federal Home Loan Bank
Board), the Office of the Comptroller of the Currency, the Federal
Deposit Insurance Corporation, all state regulatory agencies having
jurisdiction over the Parties and their respective Subsidiaries, the
NYSE, the NASD, and the SEC.
"REPRESENTATIVE" shall mean any investment banker, financial
advisor, attorney, accountant, consultant, or other representative of a
Person.
"RIGHTS" shall mean all arrangements, calls, commitments,
Contracts, options, rights to subscribe to, scrip, understandings,
warrants, or other binding obligations of any character whatsoever
relating to, or securities or rights convertible into or exchangeable
for, shares of the capital stock of a Person or by which a Person
is or may be bound to issue additional shares of its capital stock or
other Rights.
"SEC DOCUMENTS" shall mean all forms, proxy statements,
registration statements, reports, schedules, and other documents filed,
or required to be filed, by a Party or any of its Subsidiaries with
any Regulatory Authority pursuant to the Securities Laws.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act,
the Investment Company Act of 1940, as amended, the Investment Advisors
Act of 1940, as amended, the Trust Indenture Act of 1939, as amended,
and the rules and regulations of any Regulatory Authority promulgated
thereunder.
"SHAREHOLDERS' MEETING" shall mean the meeting of the
shareholders of BancAlabama to be held pursuant to Section 8.1 of
this Agreement, including any adjournment or adjournments thereof.
"STOCK OPTION AGREEMENT" shall mean the Stock Option Agreement of
even date herewith issued to UPC by BancAlabama, substantially in the
form of Exhibit 1.
"SUBSIDIARIES" shall mean all those corporations, banks,
associations, or other entities of which the entity in question owns or
controls 10% or more of the outstanding equity securities either
directly or through an unbroken chain of entities as to each of
which 10% or more of the outstanding equity securities is owned
directly or indirectly by its parent; provided, there shall not be
included any such entity acquired through foreclosure or any such
entity the equity securities of which are owned or controlled in a
fiduciary capacity.
"SUPPLEMENTAL LETTER" shall mean the supplemental letter of even
date herewith relating to certain understandings and agreements in
addition to those included in this Agreement, substantially in the form
of Exhibit 4.
<PAGE>
"SURVIVING CORPORATION" shall mean BNF as the surviving
corporation resulting from the Merger.
"TAX" or "TAXES" shall mean any federal, state, county, local,
or foreign income, profits, franchise, gross receipts, payroll,
sales, employment, use, property, withholding, excise, occupancy,
and other taxes, assessments, charges, fares, or impositions,
including interest, penalties, and additions imposed thereon or with
respect thereto.
"TBCA" shall mean the Tennessee Business Corporation Act.
"UPC CAPITAL STOCK" shall mean, collectively, the UPC Common
Stock, the UPC Preferred Stock and any other class or series of capital
stock of UPC.
"UPC COMMON STOCK" shall mean the $5.00 par value common stock of
UPC.
"UPC COMPANIES" shall mean, collectively, UPC and all
UPC Subsidiaries.
"UPC DISCLOSURE MEMORANDUM" shall mean the written
information entitled "Union Planters Corporation Disclosure
Memorandum" delivered prior to the date of this Agreement to
BancAlabama describing in reasonable detail the matters contained
therein and, with respect to each disclosure made therein, specifically
referencing each Section of this Agreement under which such
disclosure is being made. Information disclosed with respect to one
Section shall be deemed to be disclosed for purposes of any other Section
not specifically referenced with respect thereto.
"UPC FINANCIAL STATEMENTS" shall mean (i) the consolidated
balance sheets (including related notes and schedules, if any) of UPC
as of December 31, 1995, 1994 and 1993, and the related statements of
earnings, changes in shareholders' equity, and cash flows (including
related notes and schedules, if any) for each of the three years
ended December 31, 1995, 1994 and 1993, as filed by UPC in SEC
Documents, (ii) the consolidated balance sheets of UPC (including
related notes and schedules, if any) and related statements of
earnings, changes in shareholders' equity, and cash flows (including
related notes and schedules, if any) included in SEC Documents
filed with respect to periods ended subsequent to December 31, 1995, and
(iii) the pro forma consolidated balance sheet (including related notes
and schedules, if any) of UPC as of December 31, 1995 and the related
pro forma statements of earnings, changes in shareholders' equity,
and cash flows (including related notes and schedules, if any) and
for each of the three years ended December 31, 1995, 1994 and 1993,
as filed by UPC in the Current Report on Form 8-K filed with the SEC
on April 2, 1996.
"UPC PREFERRED STOCK" shall mean the no par value preferred
stock of UPC and shall include the (i) Series A Preferred Stock, (ii)
Series B, $8.00 Nonredeemable, Cumulative, Convertible Preferred Stock
("UPC Series B Preferred Stock"), and (iii) Series E, 8%
Cumulative, Convertible Preferred Stock, of UPC ("UPC Series E Preferred
Stock").
<PAGE>
"UPC RIGHTS" shall mean the preferred stock purchase rights
issued pursuant to the UPC Rights Agreement.
"UPC RIGHTS AGREEMENT" shall mean that certain Rights Agreement,
dated January 19, 1989, between UPC and UPNB, as Rights Agent.
"UPC SUBSIDIARIES" shall mean the Subsidiaries of UPC.
(b) The terms set forth below shall have the meanings
ascribed thereto in the referenced sections:
Allowance Section 5.9
Average Closing Price Section 10.1(i)
Bank Merger Section 1.5
Closing Section 1.2
Determination Date Section 10.1(i)
Effective Time Section 1.3
ERISA Affiliate Section 5.15(c)
Exchange Agent Section 4.1
Exchange Ratio Section 3.1(c)
Indemnified Party Section 8.14(a)
Index Group Section 10.1(i)
Index Price Section 10.1(i)
Index Ratio Section 10.1(i)
BancAlabama Benefit Plans Section 5.15(a)
BancAlabama Contracts Section 5.16
BancAlabama ERISA Plan Section 5.15(a)
BancAlabama Options Section 3.6(a)
BancAlabama Pension Plan Section 5.15(a)
BancAlabama SEC Reports Section 5.5(a)
Merger Section 1.1
Starting Date Section 10.1(i)
Starting Price Section 10.1(i)
Takeover Laws Section 5.21
Tax Opinion Section 9.1(h)
UPC Ratio Section 10.1(i)
UPC SEC Reports Section 6.4(a)
(c) Any singular term in this Agreement shall be deemed
to include the plural, and any plural term the singular. Whenever the
words "include," "includes," or "including" are used in this Agreement, they
shall be deemed followed by the words "without limitation."
11.2 EXPENSES.
(a) Except as otherwise provided in this Section 11.2,
each of the Parties shall bear and pay all direct costs and expenses incurred
by it or on its behalf in connection with the transactions contemplated
hereunder, including filing, registration and application fees, printing
fees, and fees and expenses of its own financial or other consultants,
investment bankers, accountants, and counsel, except that each of the
Parties shall bear and pay one-half of the filing fees payable in
connection with the Registration Statement and the Proxy Statement and
printing costs incurred in connection with the printing of the Registration
Statement and the Proxy Statement.
(b) Nothing contained in this Section 11.2 shall constitute
or shall be deemed to constitute liquidated damages for the willful breach by
<PAGE>
a Party of the terms of this Agreement or otherwise limit the rights of
the nonbreaching Party.
11.3 BROKERS AND FINDERS. Except for Alex Sheshunoff & Co. as to
BancAlabama, each of the Parties represents and warrants that neither it nor
any of its officers, directors, employees, or Affiliates has employed any
broker or finder or incurred any Liability for any financial advisory fees,
investment bankers' fees, brokerage fees, commissions, or finders' fees in
connection with this Agreement or the transactions contemplated hereby. In
the event of a claim by any broker or finder based upon his or its
representing or being retained by or allegedly representing or being retained
by BancAlabama or UPC, each of BancAlabama and UPC, as the case may be,
agrees to indemnify and hold the other Party harmless of and from any
Liability in respect of any such claim.
11.4 ENTIRE AGREEMENT. Except as otherwise expressly provided
herein, this Agreement and the Supplemental Letter (including the other
documents and instruments referred to herein) constitute the entire
agreement between the Parties with respect to the transactions contemplated
hereunder and supersedes all prior arrangements or understandings with respect
thereto, written or oral. Nothing in this Agreement expressed or implied, is
intended to confer upon any Person, other than the Parties or their
respective successors, any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, other than as provided in Section 8.14 of
this Agreement.
11.5 AMENDMENTS. To the extent permitted by Law, this Agreement
may be amended by a subsequent writing signed by each of the Parties upon the
approval of the Boards of Directors of each of the Parties, whether before
or after shareholder approval of this Agreement has been obtained; provided,
that after any such approval by the holders of BancAlabama Common Stock,
there shall be made no amendment that modifies in any material respect the
consideration to be received by the holders of BancAlabama Common Stock
without the further approval of such shareholders.
11.6 WAIVERS.
(a) Prior to or at the Effective Time, UPC, acting through
its Board of Directors, chief executive officer, or other authorized
officer, shall have the right to waive any Default in the performance of any
term of this Agreement by BancAlabama, to waive or extend the time for the
compliance or fulfillment by BancAlabama of any and all of its
obligations under this Agreement, and to waive any or all of the
conditions precedent to the obligations of UPC under this Agreement, except
any condition which, if not satisfied, would result in the violation of
any Law. No such waiver shall be effective unless in writing signed by a
duly authorized officer of UPC.
(b) Prior to or at the Effective Time, BancAlabama, acting
through its Board of Directors, chief executive officer, or other
authorized officer, shall have the right to waive any Default in the
performance of any term of this Agreement by UPC, to waive or extend the
time for the compliance or fulfillment by UPC of any and all of its
obligations under this Agreement, and to waive any or all of the conditions
precedent to the obligations of BancAlabama under this Agreement, except any
condition which, if not satisfied, would result in the violation of any Law.
No such waiver shall be effective unless in writing signed by a duly
authorized officer of BancAlabama.
<PAGE>
(c) The failure of any Party at any time or times to
require performance of any provision hereof shall in no manner affect the
right of such Party at a later time to enforce the same or any other
provision of this Agreement. No waiver of any condition or of the
breach of any term contained in this Agreement in one or more instances shall
be deemed to be or construed as a further or continuing waiver of such
condition or breach or a waiver of any other condition or of the
breach of any other term of this Agreement. The Closing of the Merger
will constitute a waiver of all outstanding conditions to the Closing.
11.7 ASSIGNMENT. Except as expressly contemplated hereby,
neither this Agreement nor any of the rights, interests, or obligations
hereunder shall be assigned by any Party hereto (whether by operation of
Law or otherwise) without the prior written consent of the other Party.
Subject to the preceding sentence, this Agreement will be binding upon, inure
to the benefit of and be enforceable by the Parties and their respective
successors and assigns.
11.8 NOTICES. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if
delivered by hand, by facsimile transmission, by registered or certified mail,
postage pre-paid, or by courier or overnight carrier, to the persons at
the addresses set forth below (or at such other address as may be provided
hereunder), and shall be deemed to have been delivered as of the date so
delivered:
BancAlabama: BancAlabama, Inc.
312 Clinton Avenue
Huntsville, Alabama 35801
Telecopy Number: (205) 551-9462
Attention: W.R. Collins
Chairman and Chief Executive Officer
Copy to Counsel: Lanier Ford Shaver & Payne P.C.
200 West Court Square, Suite 5000
Huntsville, Alabama 35801
Telecopy Number: (205) 533-9322
Attention: John R. Wynn
UPC: Union Planters Corporation
7130 Goodlett Farms Parkway
Memphis, Tennessee 38018
Telecopy Number: (901) 383-2877
Attention: Jackson W. Moore, President
Copy to Counsel: Union Planters Corporation
7130 Goodlett Farms Parkway
Memphis, Tennessee 38018
Telecopy Number: (901) 383-2877
Attention: E.J. House, Jr.
General Counsel and Corporate Secretary
<PAGE>
Alston & Bird
601 Pennsylvania Avenue
North Building, Suite 250
Washington, D.C. 20004
Telecopy Number: (202) 508-3333
Attention: Frank M. Conner III
11.9 GOVERNING LAW. This Agreement shall be governed by and con-
strued in accordance with the Laws of the State of Tennessee, without regard
to any applicable conflicts of Laws, except to the extent the Laws of the
State of Delaware apply.
11.10 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
11.11 CAPTIONS. The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.
11.12 INTERPRETATIONS. Neither this Agreement nor any uncertainty
or ambiguity herein shall be construed or resolved against any party, whether
under any rule of construction or otherwise. No Party to this Agreement shall
be considered the draftsman. The Parties acknowledge and agree that this
Agreement has been reviewed, negotiated, and accepted by all Parties and their
attorneys and shall be construed and interpreted according to the ordinary
meaning of the words used so as fairly to accomplish the purposes and
intentions of all parties hereto.
11.13 ENFORCEMENT OF AGREEMENT. The Parties hereto agree that
irreparable damage would occur in the event that any of the provisions of
this Agreement was not performed in accordance with its specific terms or
was otherwise breached. It is accordingly agreed that the Parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of
the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
11.14 SEVERABILITY. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or unenforce-
ability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability
of any of the terms or provisions of this Agreement in any other jurisdiction.
If any provision of this Agreement is so broad as to be unenforceable,
the provision shall be interpreted to be only so broad as is enforceable.
<PAGE>
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf and its corporate seal to be hereunto affixed and
attested by officers thereunto as of the day and year first above written.
ATTEST: BANCALABAMA, INC.
Jean D. Snead W.R. Collins
By:_______________________________ By:_____________________________________
Jean D. Snead W.R. Collins
Corporate Secretary Chairman and Chief Executive Officer
[CORPORATE SEAL]
ATTEST: UNION PLANTERS CORPORATION
E.J. House, Jr. Jackson W. Moore, President
By:_______________________________ By:____________________________________
E.J. House, Jr., Secretary Jackson W. Moore, President
[CORPORATE SEAL]
ATTEST: BNF BANCORP, INC.
Miles A. Wright William D. Powell
By:______________________________ By:____________________________________
Miles A. Wright, Secretary William D. Powell, President
[CORPORATE SEAL]
<PAGE>
LIST OF EXHIBITS
EXHIBIT NUMBER DESCRIPTION
1. Form of Stock Option Agreement. (Sections 1.4, 11.1).
2. Form of Support Agreement. (Sections 5.23, 11.1).
3. Form of agreement of affiliates of BancAlabama.
(Sections 8.12, 9.2(d)).
4. Form of Supplemental Letter. (Sections 7.2, 11.1).
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of April 26, 1996 (the "Agreement"),
by and between BancAlabama, Inc., a Delaware corporation ("Issuer"), and
Union Planters Corporation, a Tennessee corporation ("Grantee").
WHEREAS, Grantee and Issuer have entered into that certain Agreement
and Plan of Merger, dated as of April 26, 1996 (the "Merger Agreement"),
providing for, among other things, the merger of Issuer with a subsidiary
of Grantee, with Grantee as the surviving entity; and
WHEREAS, as a condition and inducement to Grantee's execution of the
Merger Agreement, Grantee has required that Issuer agree, and Issuer has
agreed, to grant Grantee the Option (as defined below);
NOW, THEREFORE, in consideration of the respective representations,
warranties, covenants and agreements set forth herein and in the Merger
Agreement, and intending to be legally bound hereby, Issuer and Grantee
agree as follows:
1. DEFINED TERMS. Capitalized terms which are used but not defined
herein shall have the meanings ascribed to such terms in the Merger
Agreement.
2. GRANT OF OPTION. Subject to the terms and conditions set forth
herein, Issuer hereby grants to Grantee an irrevocable option (the
"Option") to purchase up to 139,921 shares (as adjusted as set forth
herein) (the "Option Shares," which shall include the Option Shares before
and after any transfer of such Option Shares) of Common Stock, par value
$1.00 per share ("Issuer Common Stock"), of Issuer at a purchase price per
Option Share (the "Purchase Price") equal to $10.29.
3. EXERCISE OF OPTION.
(a) Provided that (i) Grantee shall not be in material breach of
the agreements or covenants contained in this Agreement or the Merger
Agreement, and (ii) no preliminary or permanent injunction or other order
against the delivery of shares covered by the Option issued by any court of
competent jurisdiction in the United States shall be in effect, Grantee may
exercise the Option, in whole or in part, at any time and from time to time
following the occurrence of a Purchase Event; PROVIDED that the Option
shall terminate and be of no further force and effect upon the earliest to
occur of (A) the Effective Time, (B) termination of the Merger Agreement in
accordance with the terms thereof prior to the occurrence of a Purchase
Event or a Preliminary Purchase Event (other than a termination of the
Merger Agreement (i) by Grantee pursuant to Section 10.1(b), but only if
such termination was a result of a willful breach by Issuer, or (ii) by
Grantee pursuant to Section 10.1(c) thereof or (iii) by Grantee and Issuer
pursuant to Section 10.1(a) thereof if Grantee shall at that time have been
entitled to terminate the Merger Agreement pursuant to Section 10.1(b), but
only if such termination was a result of a willful breach by Issuer, or
Section 10.1(c) thereof (each a "Default Termination"), (C) 12 months after
the termination of the Merger Agreement by Grantee pursuant to a Default
Termination, and (D) 12 months after termination of the Merger Agreement
(other than pursuant to a Default Termination) following the occurrence of
a Purchase Event or a Preliminary Purchase Event; and PROVIDED, FURTHER,
that any purchase of shares upon exercise of the Option shall be subject to
compliance with applicable law, including, without limitation, the Bank
Holding Company Act of 1956, as amended (the "BHC Act"), and the Home
<PAGE>
Owners' Loan Act of 1933, as amended (the "HOLA"). The rights set forth in
Section 8 shall terminate when the right to exercise the Option terminates
(other than as a result of a complete exercise of the Option) as set forth
herein.
(b) As used herein, a "Purchase Event" means any of the
following events subsequent to the date of this Agreement:
(i) without Grantee's prior written consent, Issuer shall
have authorized, recommended, publicly proposed or publicly announced
an intention to authorize, recommend or propose, or entered into an
agreement with any person (other than Grantee or any subsidiary of
Grantee) to effect an Acquisition Transaction (as defined below). As
used herein, the term Acquisition Transaction shall mean (A) a merger,
consolidation or similar transaction involving Issuer or any of its
subsidiaries (other than transactions solely between Issuer's
subsidiaries), (B) except as permitted pursuant to Section 7.1 of the
Merger Agreement, the disposition, by sale, lease, exchange or
otherwise, of assets of Issuer or any of its subsidiaries representing
in either case 35% or more of the consolidated assets of Issuer and
its subsidiaries, or (C) the issuance, sale or other disposition of
(including by way of merger, consolidation, share exchange or any
similar transaction) securities representing 35% or more of the voting
power of Issuer or any of its subsidiaries (any of the foregoing an
"Acquisition Transaction"); or
(ii) any person (other than Grantee or any subsidiary of
Grantee) shall have acquired beneficial ownership (as such term is
defined in Rule 13d-3 promulgated under the Exchange Act) of or the
right to acquire beneficial ownership of, or any "group" (as such
term is defined under the Exchange Act) shall have been formed which
beneficially owns or has the right to acquire beneficial ownership of,
35% or more of the then-outstanding shares of Issuer Common Stock.
(c) As used herein, a "Preliminary Purchase Event" means any of
the following events:
(i) any person (other than Grantee or any subsidiary of
Grantee) shall have commenced (as such term is defined in Rule 14d-2
under the Exchange Act), or shall have filed a registration statement
under the Securities Act with respect to, a tender offer or exchange
offer to purchase any shares of Issuer Common Stock such that, upon
consummation of such offer, such person would own or control 15% or
more of the then-outstanding shares of Issuer Common Stock (such an
offer being referred to herein as a "Tender Offer" or an "Exchange
Offer," respectively); or
(ii) the holders of Issuer Common Stock shall not have
approved the Merger Agreement at the meeting of such shareholders held
for the purpose of voting on the Merger Agreement, such meeting shall
not have been held or shall have been canceled prior to termination of
the Merger Agreement, or Issuer's Board of Directors shall have
withdrawn or modified in a manner adverse to Grantee the
recommendation of Issuer's Board of Directors with respect to the
Merger Agreement, in each case after it shall have been publicly
announced that any person (other than Grantee or any subsidiary of
Grantee) shall have (A) made, or disclosed an intention to make, a
proposal to engage in an Acquisition Transaction, (B) commenced a
Tender Offer or filed a registration statement under the Securities
<PAGE>
Act with respect to an Exchange Offer, or (C) filed an application (or
given a notice), whether in draft or final form, under the BHC Act,
the HOLA, the Bank Merger Act, or the Change in Bank Control Act of
1978, for approval to engage in an Acquisition Transaction.
As used in this Agreement, "person" shall have the meaning specified in
Sections 3(a)(9) and 13(d)(3) of the Exchange Act.
(d) In the event Grantee wishes to exercise the Option, it shall
send to Issuer a written notice (the date of which being herein referred to
as the "Notice Date") specifying (i) the total number of Option Shares it
intends to purchase pursuant to such exercise and (ii) a place and date not
earlier than three business days nor later than 15 business days from the
Notice Date for the closing (the "Closing") of such purchase (the "Closing
Date"). If prior notification to or approval of the Board of Governors of
the Federal Reserve System (the "Federal Reserve Board") or any other
regulatory authority is required in connection with such purchase, Issuer
shall cooperate with Grantee in the filing of the required notice or
application for approval and the obtaining of such approval and the Closing
shall occur immediately following such regulatory approvals (and any
mandatory waiting periods).
(e) Notwithstanding any other provision of this Agreement to the
contrary, in no event shall Grantee (together with any other holders of the
Option) purchase under the terms of this Agreement that number of Option
Shares which have a "Spread Value" in excess of $550,000. For purposes of
this Agreement, "Spread Value" shall mean the difference between (i) the
product of (1) the sum of the total number of Option Shares Grantee
(x) intends to purchase at the Closing Date pursuant to the exercise of the
Option and (y) previously purchased pursuant to the prior exercise of the
Option, and (2) the closing price of Issuer Common Stock as quoted on the
Nasdaq National Market on the last trading day immediately preceding the
Closing Date, and (ii) the product of (1) the total number of Option Shares
Grantee (x) intends to purchase at the Closing Date pursuant to the
exercise of the Option and (y) previously purchased pursuant to the prior
exercise of the Option and (2) the applicable Purchase Price of such Option
Shares. In the event the Spread Value exceeds $550,000 the number of
Option Shares which Grantee (together with any other holders of the Option)
is entitled to purchase at the Closing Date shall be reduced to that number
of shares necessary such that the Spread Value equals or is less than
$550,000.
4. PAYMENT AND DELIVERY OF CERTIFICATES.
(a) On each Closing Date, Grantee shall (i) pay to Issuer, in
immediately available funds by wire transfer to a bank account designated
by Issuer, an amount equal to the Purchase Price multiplied by the number
of Option Shares to be purchased on such Closing Date, and (ii) present and
surrender this Agreement to the Issuer at the address of the Issuer
specified in Section 12(f) hereof.
(b) At each Closing, simultaneously with the delivery of
immediately available funds and surrender of this Agreement as provided in
Section 4(a), (i) Issuer shall deliver to Grantee (A) a certificate or
certificates representing the Option Shares to be purchased at such
Closing, which Option Shares shall be free and clear of all liens, claims,
charges and encumbrances of any kind whatsoever and subject to no pre-
emptive rights, and (B) if the Option is exercised in part only, an
executed new agreement with the same terms as this Agreement evidencing the
<PAGE>
right to purchase the balance of the shares of Issuer Common Stock
purchasable hereunder, and (ii) Grantee shall deliver to Issuer a letter
agreeing that Grantee shall not offer to sell or otherwise dispose of such
Option Shares in violation of applicable federal and state law or of the
provisions of this Agreement.
(c) In addition to any other legend that is required by
applicable law, certificates for the Option Shares delivered at each
Closing shall be endorsed with a restrictive legend which shall read
substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND PURSUANT TO THE TERMS OF A STOCK OPTION AGREEMENT
DATED AS OF APRIL 26, 1996. A COPY OF SUCH AGREEMENT WILL BE
PROVIDED TO THE HOLDER HEREOF WITHOUT CHARGE UPON RECEIPT BY THE
ISSUER OF A WRITTEN REQUEST THEREFOR.
It is understood and agreed that the above legend shall be removed by
delivery of substitute certificate(s) without such legend if Grantee 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 and its counsel, to the effect that such legend is not required for
purposes of the Securities Act.
5. REPRESENTATIONS AND WARRANTIES OF ISSUER. Issuer hereby
represents and warrants to Grantee as follows:
(a) Issuer has all requisite corporate power and authority to
enter into this Agreement and, subject to any approvals referred to
herein, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Issuer. This Agreement has
been duly executed and delivered by Issuer. The execution and delivery
of this Agreement, the consummation of the transactions contemplated
hereby and compliance by Issuer with any of the provisions hereof will
not (i) conflict with or result in a breach of any provision of its
Articles of Incorporation or By-laws or a default (or give rise to any
right of termination, cancellation or acceleration) under any of the
terms, condition or provisions of any material note, bond, debenture,
mortgage, indenture, license, material agreement or other material
instrument or obligation to which Issuer is bound, or (ii) violate any
order, writ, injunction, decree, statute, rule or regulation applicable
to Issuer or any of its properties or assets. No consent or approval
by any governmental authority, other than compliance with applicable
federal and state securities and banking laws, and regulations of the
Federal Reserve Board, is required of Issuer in connection with the
execution and delivery by Issuer of this Agreement or the consummation
by Issuer of the transactions contemplated hereby.
(b) Issuer has taken all necessary corporate and other action to
authorize and reserve and to permit it to issue, and, at all times from
the date hereof until the obligation to deliver Issuer Common Stock
upon the exercise of the Option terminates, will have reserved for
issuance, upon exercise of the Option, the number of shares of Issuer
Common Stock necessary for Grantee to exercise the Option, and Issuer
will take all necessary corporate action to authorize and reserve for
issuance all additional shares of Issuer Common Stock or other
<PAGE>
securities which may be issued pursuant to Section 7 upon exercise of
the Option. The shares of Issuer Common Stock to be issued upon due
exercise of the Option, including all additional shares of Issuer
Common Stock or other securities which may be issuable pursuant to
Section 7, upon issuance pursuant hereto, shall be duly and validly
issued, fully paid, and nonassessable, and shall be delivered free and
clear of all liens, claims, charges, and encumbrances of any kind or
nature whatsoever, including any preemptive rights of any stockholder
of Issuer.
6. REPRESENTATIONS AND WARRANTS OF GRANTEE. Grantee hereby
represents and warrants to Issuer that:
(a) Grantee has all requisite corporate power and authority to
enter into this Agreement and, subject to any approvals or consents
referred to herein, to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Grantee. This Agreement has
been duly executed and delivered by Grantee.
(b) This Option is not being, and any Option Shares or other
securities acquired by Grantee upon exercise of the Option will not be,
acquired with a view to the public distribution thereof and will not be
transferred or otherwise disposed of except in a transaction registered
or exempt from registration under the Securities Laws.
7. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.
(a) In the event of any change in Issuer Common Stock by reason
of a stock dividend, stock split, split-up, recapitalization, combination,
exchange of shares or similar transaction, the type and number of shares or
securities subject to the Option, and the Purchase Price therefor, shall be
adjusted appropriately, and proper provision shall be made in the
agreements governing such transaction so that Grantee shall receive, upon
exercise of the Option, the number and class of shares or other securities
or property that Grantee would have received in respect of Issuer Common
Stock if the Option had been exercised immediately prior to such event, or
the record date therefor, as applicable. If any additional shares of
Issuer Common Stock are issued after the date of this Agreement (other
than pursuant to an event described in the first sentence of this Section
7(a)), the number of shares of Issuer Common Stock subject to the Option
shall be adjusted so that, after such issuance, it, together with any
shares of Issuer Common Stock previously issued pursuant hereto, equals
19.9% of the number of shares of Issuer Common Stock then issued and
outstanding, without giving effect to any shares subject to or issued
pursuant to the Option.
(b) In the event that Issuer shall enter into an agreement:
(i) to consolidate with or merge into any person, other than Grantee or one
of its Subsidiaries, and shall not be the continuing or surviving
corporation of such consolidation or merger; (ii) to permit any person,
other than Grantee or one of its Subsidiaries, to merge into Issuer and
Issuer shall be the continuing or surviving corporation, but, in connection
with such merger, the then outstanding shares of Issuer Common Stock shall
be changed into or exchanged for stock or other securities of Issuer or any
other person or cash or any other property or the outstanding shares of
Issuer Common Stock immediately prior to such merger shall after such
merger represent less than 50% of the outstanding shares and share
<PAGE>
equivalents of the merged company; or (iii) to sell or otherwise transfer
all or substantially all of its Assets to any person, other than Grantee or
one of its Subsidiaries, then, and in each such case, the agreement
governing such transaction shall make proper provisions so that 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 Grantee, of either (x) the
Acquiring Corporation (as defined below), (y) any person that controls the
Acquiring Corporation, or (z) in the case of a merger described in clause
(ii), the Issuer (in each case, such person being referred to as the
"Substitute Option Issuer").
(c) The Substitute Option shall have the same terms as the
Option, PROVIDED that, if the terms of the Substitute Option cannot, for
legal reasons, be the same as the Option, such terms shall be as similar as
possible and in no event less advantageous to Grantee. The Substitute
Option Issuer shall also enter into an agreement with the then-holder or
holders of the Substitute Option in substantially the same form as this
Agreement, which shall be applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such number
of shares of the Substitute Common Stock (as hereinafter defined) as is
equal to the Assigned Value (as hereinafter defined) multiplied by the
number of shares of the Issuer Common Stock for which the Option was
theretofore exercisable, divided by the Average Price (as hereinafter
defined). The exercise price of the Substitute Option per share of the
Substitute Common Stock (the "Substitute Purchase Price") shall then be
equal to the Purchase Price multiplied by a fraction in which the numerator
is the number of shares of the Issuer Common Stock for which the Option was
theretofore exercisable and the denominator is the number of shares for
which the Substitute Option is exercisable.
(e) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean (x) the continuing
or surviving corporation of a consolidation or merger with Issuer (if
other than Issuer), (y) Issuer in a merger in which Issuer is the
continuing or surviving person, and (z) the transferee of all or any
substantial part of the Issuer's assets (or the assets of its
Subsidiaries).
(ii) "Substitute Common Stock" shall mean the common stock
issued by the Substitute Option Issuer upon exercise of the Substitute
Option.
(iii) "Assigned Value" shall mean the highest of (x) the
price per share of the Issuer Common Stock at which a Tender Offer or
Exchange Offer therefor has been made by any person (other than
Grantee), (y) the price per share of the Issuer Common Stock to be
paid by any person (other than the Grantee) pursuant to an agreement
with Issuer, and (z) the highest closing sales price per share of
Issuer Common Stock quoted on the Nasdaq National Market (or if Issuer
Common Stock is not quoted on the Nasdaq National Market, the highest
bid price per share on any day as quoted on the principal trading
market or securities exchange on which such shares are traded as
reported by a recognized source chosen by Grantee) within the
six-month period immediately preceding the agreement; PROVIDED, that
in the event of a sale of less than all of Issuer's assets, the
Assigned Value shall be the sum of the price paid in such sale for
<PAGE>
such assets and the current market value of the remaining assets of
Issuer as determined by a nationally recognized investment banking
firm selected by Grantee (or by a majority in interest of the Grantees
if there shall be more than one Grantee (a "Grantee Majority")),
divided by the number of shares of the Issuer Common Stock outstanding
at the time of such sale. In the event that an exchange offer is made
for the Issuer Common Stock or an agreement is entered into for a
merger or consolidation involving consideration other than cash, the
value of the securities or other property issuable or deliverable in
exchange for the Issuer Common Stock shall be determined by a
nationally recognized investment banking firm mutually selected by
Grantee and Issuer (or if applicable, Acquiring Corporation), provided
that if a mutual selection cannot be made as to such investment
banking firm, it shall be selected by Grantee. (If there shall be
more than one Grantee, any such selection shall be made by a Grantee
Majority.)
(iv) "Average Price" shall mean the average closing price
of a share of the Substitute Common Stock for the one year immediately
preceding the consolidation, merger or sale in question, but in no
event higher than the closing price of the shares of the Substitute
Common Stock on the day preceding such consolidation, merger or sale;
PROVIDED that if Issuer is the issuer of the Substitute Option, the
Average Price shall be computed with respect to a share of common
stock issued by Issuer, the person merging into Issuer or by any
company which controls or is controlled by such merger person, as
Grantee may elect.
(f) In no event pursuant to any of the foregoing paragraphs
shall the Substitute Option be exercisable for more than 19.9% of the
aggregate of the shares of the Substitute Common Stock outstanding prior to
exercise of the Substitute Option. In the event that the Substitute Option
would be exercisable for more than 19.9% of the aggregate of the shares of
Substitute Common Stock but for this clause (f), the Substitute Option
Issuer shall make a cash payment to Grantee equal to the excess of (i) the
value of the Substitute Option without giving effect to the limitation in
this clause (f) over (ii) the value of the Substitute Option after giving
effect to the limitation in this clause (f). This difference in value
shall be determined by a nationally recognized investment banking firm
selected by Grantee (or a Grantee Majority).
(g) Issuer shall not enter into any transaction described in
subsection (b) of this Section 7 unless the Acquiring Corporation and any
person that controls the Acquiring Corporation assume in writing all the
obligations of Issuer hereunder and take all other actions that may be
necessary so that the provisions of this Section 7 are given full force and
effect (including, without limitation, any action that may be necessary so
that the shares of Substitute Common Stock are in no way distinguishable
from or have lesser economic value than other shares of common stock issued
by the Substitute Option Issuer).
(h) The provisions of Sections 8, 9, and 10 shall apply, with
appropriate adjustments, to any securities for which the Option becomes
exercisable pursuant to this Section 7 and, as applicable, references in
such sections to "Issuer," "Option," "Purchase Price" and "Issuer Common
Stock" shall be deemed to be references to "Substitute Option Issuer,"
"Substitute Option," "Substitute Purchase Price" and "Substitute Common
Stock," respectively.
<PAGE>
8. REPURCHASE AT THE OPTION OF GRANTEE.
(a) Subject to the last sentence of Section 3(a), at the request
of Grantee at any time commencing upon the first occurrence of a Repurchase
Event (as defined in Section 8(d)) and ending 12 months immediately
thereafter, Issuer shall repurchase from Grantee the Option and all shares
of Issuer Common Stock purchased by Grantee pursuant hereto with respect to
which Grantee then has beneficial ownership. The date on which Grantee
exercises its rights under this Section 8 is referred to as the "Request
Date." Such repurchase shall be at an aggregate price (the "Section 8
Repurchase Consideration") equal to the sum of:
(i) the aggregate Purchase Price paid by Grantee for any
shares of Issuer Common Stock acquired pursuant to the Option with
respect to which Grantee then has beneficial ownership;
(ii) the excess, if any, of (x) the Applicable Price (as
defined below) for each share of Issuer Common Stock over (y) the
Purchase Price (subject to adjustment pursuant to Section 7),
multiplied by the number of shares of Issuer Common Stock with respect
to which the Option has not been exercised; and
(iii) the excess, if any, of the Applicable Price over the
Purchase Price (subject to adjustment pursuant to Section 7) paid (or,
in the case of Option Shares with respect to which the Option has been
exercised but the Closing Date has not occurred, payable) by Grantee
for each share of Issuer Common Stock with respect to which the Option
has been exercised and with respect to which Grantee then has
beneficial ownership, multiplied by the number of such shares;
provided, that the amount calculated pursuant to clause (ii) and (iii)
of this Section 8(a) shall not exceed $550,000.
(b) If Grantee exercises its rights under this Section 8, Issuer
shall, within ten business days after the Request Date, pay the Section 8
Repurchase Consideration to Grantee in immediately available funds, and
contemporaneously with such payment Grantee shall surrender to Issuer the
Option and the certificates evidencing the shares of Issuer Common Stock
purchased thereunder with respect to which Grantee then has beneficial
ownership, and Grantee shall warrant that it has sole record and beneficial
ownership of such shares and that the same are then free and clear of all
liens, claims, charges and encumbrances of any kind whatsoever.
Notwithstanding the foregoing, to the extent that prior notification to or
approval of the Federal Reserve Board or other regulatory authority is
required in connection with the payment of all or any portion of the
Section 8 Repurchase Consideration, Grantee shall have the ongoing option
to revoke its request for repurchase pursuant to Section 8, in whole or in
part, or to require that Issuer deliver from time to time that portion of
the Section 8 Repurchase Consideration that it is not then so prohibited
from paying and promptly file the required notice or application for
approval and expeditiously process the same (and each party shall cooperate
with the other in the filing of any such notice or application and the
obtaining of any such approval). If the Federal Reserve Board or any other
regulatory authority disapproves of any part of Issuer's proposed
repurchase pursuant to this Section 8, Issuer shall promptly give notice of
such fact to Grantee. If the Federal Reserve Board or other agency
prohibits the repurchase in part but not in whole, then Grantee shall have
the right (i) to revoke the repurchase request or (ii) to the extent
permitted by the Federal Reserve Board or other agency, determine whether
the repurchase should apply to the Option and/or Option Shares and to what
extent to each, and Grantee shall thereupon have the right to exercise the
<PAGE>
Option as to the number of Option Shares for which the Option was
exercisable at the Request Date less the sum of the number of shares
covered by the Option in respect of which payment has been made pursuant to
Section 8(a)(ii) and the number of shares covered by the portion of the
Option (if any) that has been repurchased. Grantee shall notify Issuer of
its determination under the preceding sentence within five business days of
receipt of notice of disapproval of the repurchase.
Notwithstanding anything herein to the contrary, all of Grantee's
rights under this Section 8 shall terminate on the date of termination of
this Option pursuant to Section 3(a).
(c) For purposes of this Agreement, the "Applicable Price" means
the highest of (i) the highest price per share of Issuer Common Stock paid
for any such share by the person or groups described in Section 8(d)(i),
(ii) the price per share of Issuer Common Stock received by holders of
Issuer Common Stock in connection with any merger or other business
combination transaction described in Section 7(b)(i), 7(b)(ii) or
7(b)(iii), or (iii) the highest closing sales price per share of Issuer
Common Stock quoted on the Nasdaq National Market (or if Issuer Common
Stock is not quoted on the Nasdaq National Market, the highest bid price
per share as quoted on the principal trading market or securities exchange
on which such shares are traded as reported by a recognized source chosen
by Grantee) during the 60 business days preceding the Request Date;
PROVIDED, HOWEVER, that in the event of a sale of less than all of Issuer's
assets, the Applicable Price shall be the sum of the price paid in such
sale for such assets and the current market value of the remaining assets
of Issuer as determined by an independent nationally recognized investment
banking firm selected by Grantee and reasonably acceptable to Issuer (which
determination shall be conclusive for all purposes of this Agreement),
divided by the number of shares of the Issuer Common Stock outstanding at
the time of such sale. If the consideration to be offered, paid or
received pursuant to either of the foregoing clauses (i) or (ii) shall be
other than in cash, the value of such consideration shall be determined in
good faith by an independent nationally recognized investment banking firm
selected by Grantee and reasonably acceptable to Issuer, which
determination shall be conclusive for all purposes of this Agreement.
(d) As used herein, "Repurchase Event" shall occur if (i) any
person (other than Grantee or any subsidiary of Grantee) shall have
acquired beneficial ownership (as such term is defined in Rule 13d-3
promulgated under the Exchange Act), or the right to acquire beneficial
ownership, or any "group" (as such term is defined under the Exchange Act)
shall have been formed which beneficially owns or has the right to acquire
beneficial ownership, of 50% or more of the then-outstanding shares of
Issuer Common Stock, or (ii) any of the transactions described in Section
7(b)(i), 7(b)(ii) or 7(b)(iii) shall be consummated.
9. REGISTRATION RIGHTS.
(a) Issuer shall, subject to the conditions of subparagraph (c)
below, if requested by Grantee (or if applicable, a Grantee Majority), as
expeditiously as possible prepare and file a registration statement under
the Securities Laws if necessary in order to permit the sale or other
disposition of any or all shares of Issuer Common Stock or other securities
that have been acquired by or are issuable to Grantee upon exercise of the
Option in accordance with the intended method of sale or other disposition
stated by Grantee in such request, including, without limitation, a "shelf"
registration statement under Rule 415 under the Securities Act or any
<PAGE>
successor provision, and Issuer shall use its best efforts to qualify such
shares or other securities for sale under any applicable state securities
laws.
(b) If Issuer at any time after the exercise of the Option
proposes to register any shares of Issuer Common Stock under the Securities
Laws in connection with an underwritten public offering of such Issuer
Common Stock, Issuer will promptly give written notice to Grantee (and any
permitted transferee) of its intention to do so and, upon the written
request of Grantee (or any such permitted transferee of Grantee) given
within 30 days after receipt of any such notice (which request shall
specify the number of shares of Issuer Common Stock intended to be included
in such underwritten public offering by Grantee (or such permitted
transferee)), Issuer will cause all such shares, the holders of which shall
have requested participation in such registration, to be so registered and
included in such underwritten public offering; PROVIDED, that Issuer may
elect to not cause any such shares to be so registered (i) if the
underwriters in good faith object for valid business reasons, or (ii) in
the case of a registration solely to implement a dividend reinvestment or
similar plan, an employee benefit plan or a registration filed on Form S-4;
PROVIDED, FURTHER, that such election pursuant to clause (i) may only be
made one time. If some but not all the shares of Issuer Common Stock, with
respect to which Issuer shall have received requests for registration
pursuant to this subparagraph (b), shall be excluded from such
registration, Issuer shall make appropriate allocation of shares to be
registered among Grantee (and any such permitted transferee desiring to
register their shares) and any other person (other than Issuer) who or
which is permitted to register their shares of Issuer Common Stock in
connection with such registration PRO RATA in the proportion that the
number of shares requested to be registered by each such holder bears to
the total number of shares requested to be registered by all such holders
then desiring to have Issuer Common Stock registered for sale.
(c) Issuer shall use all reasonable efforts to cause each
registration statement referred to in subparagraph (a) above to become
effective and to obtain all consents or waivers of other parties which are
required therefor and to keep such registration statement effective,
PROVIDED, that Issuer may delay any registration of Option Shares required
pursuant to subparagraph (a) above for a period not exceeding 90 days
PROVIDED Issuer shall in good faith determine that any such registration
would adversely affect an offering or contemplated offering of other
securities by Issuer, and Issuer shall not be required to register Option
Shares under the Securities Laws pursuant to subparagraph (a) above:
(i) prior to the earliest of (a) termination of the Merger
Agreement pursuant to Section 10.1 thereof, (b) failure to obtain the
requisite stockholder approval pursuant to Section 9.1(a) of the
Merger Agreement, and (c) a Purchase Event or a Preliminary Purchase
Event;
(ii) on more than two occasions;
(iii) more than once during any calendar year;
(iv) within 90 days after the effective date of a registration
referred to in subparagraph (b) above pursuant to which the holder or
holders of the Option Shares concerned were afforded the opportunity to
register such shares under the Securities Laws and such shares were
registered as requested; and
<PAGE>
(v) unless a request therefor is made to Issuer by the
holder or holders of at least 25% or more of the aggregate number of
Option Shares then outstanding.
In addition to the foregoing, Issuer shall not be required to
maintain the effectiveness of any registration statement after the
expiration of nine months from the effective date of such registration
statement. Issuer shall use all reasonable efforts to make any filings,
and take all steps, under all applicable state securities laws to the
extent necessary to permit the sale or other disposition of the Option
Shares so registered in accordance with the intended method of distribution
for such shares, PROVIDED, that Issuer shall not be required to consent to
general jurisdiction or qualify to do business in any state where it is not
otherwise required to so consent to such jurisdiction or to so qualify to
do business.
(d) Except where applicable state law prohibits such payments,
Issuer will pay all expenses (including without limitation registration
fees, qualification fees, blue sky fees and expenses (including the fees
and expenses of counsel), accounting expenses, legal expenses including the
reasonable fees and expenses of one counsel to the holders whose Option
Shares are being registered, printing expenses, expenses of underwriters,
excluding discounts and commissions but including liability insurance if
Issuer so desires or the underwriters so require, and the reasonable fees
and expenses of any necessary special experts) in connection with each
registration pursuant to subparagraph (a) or (b) above (including the
related offerings and sales by holders of Option Shares) and all other
qualifications, notifications or exemptions pursuant to subparagraph (a) or
(b) above. Underwriting discounts and commissions relating to Option
Shares, fees and disbursements of counsel to the holders of Option Shares
being registered and any other expenses incurred by such holders in
connection with any such registration shall be borne by such holders.
(e) In connection with any registration under subparagraph (a)
or (b) above Issuer hereby indemnifies the holder of the Option Shares, and
each underwriter thereof, including each person, if any, who controls such
holder or underwriter within the meaning of Section 15 of the Securities
Act, against all expenses, losses, claims, damages and liabilities caused
by any untrue, or alleged untrue, statement of a material fact contained in
any registration statement or prospectus or notification or offering
circular (including any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission, or alleged omission, to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such
expenses, losses, claims, damages or liabilities of such indemnified party
are caused by any untrue statement or alleged untrue statement that was
included by Issuer in any such registration statement or prospectus or
notification or offering circular (including any amendments or supplements
thereto) in reliance upon and in conformity with, information furnished in
writing to Issuer by such indemnified party expressly for use therein, and
Issuer and each officer, director and controlling person of Issuer shall be
indemnified by such holder of the Option Shares, or by such underwriter, as
the case may be, for all such expenses, losses, claims, damages and
liabilities caused by any untrue, or alleged untrue, statement, that was
included by Issuer in any such registration statement or prospectus or
notification or offering circular (including any amendments or supplements
thereto) in reliance upon, and in conformity with, information furnished in
writing to Issuer by such holder or such underwriter, as the case may be,
expressly for such use.
<PAGE>
Promptly upon receipt by a party indemnified under this
subparagraph (e) of notice of the commencement of any action against such
indemnified party in respect of which indemnity or reimbursement may be
sought against any indemnifying party under this subparagraph (e), such
indemnified party shall notify the indemnifying party in writing of the
commencement of such action, but the failure so to notify the indemnifying
party shall not relieve it of any liability which it may otherwise have to
any indemnified party under this subparagraph (e). In case notice of
commencement of any such action shall be given to the indemnifying party as
above provided, the indemnifying party shall be entitled to participate in
and, to the extent it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense of such action at its own
expense, with counsel chosen by it and reasonably satisfactory to such
indemnified party. The indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof,
but the fees and expenses of such counsel (other than reasonable costs of
investigation) shall be paid by the indemnified party unless (i) the
indemnifying party either agrees to pay the same, (ii) the indemnifying
party fails to assume the defense of such action with counsel' satisfactory
to the indemnified party, or (iii) the indemnified party has been advised
by counsel that one or more legal defenses may be available to the
indemnifying party that may be contrary to the interest of the indemnified
party, in which case the indemnifying party shall be entitled to assume the
defense of such action notwithstanding its obligation to bear fees and
expenses of such counsel. No indemnifying party shall be liable for any
settlement entered into without its consent, which consent may not be
unreasonably withheld.
If the indemnification provided for in this subparagraph (e) is
unavailable to a party otherwise entitled to be indemnified in respect of
any expenses, losses, claims, damages or liabilities referred to herein,
then the indemnifying party, in lieu of indemnifying such party otherwise
entitled to be indemnified, shall contribute to the amount paid or payable
by such party to be indemnified as a result of such expenses, losses,
claims, damages or liabilities in such proportion as is appropriate to
reflect the relative benefits received by Issuer, the selling shareholders
and the underwriters from the offering of the securities and also the
relative fault of Issuer, the selling shareholders and the underwriters in
connection with the statements or omissions which resulted in such
expenses, losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The amount paid or payable by a party
as a result of the expenses, losses, claims, damages and liabilities
referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such party in connection with investigating
or defending any action or claim; PROVIDED, that in no case shall the
holders of the Option Shares be responsible, in the aggregate, for any
amount in excess of the net offering proceeds attributable to its Option
Shares included in the offering. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. Any obligation by any holder to
indemnify shall be several and not joint with other holders.
In connection with any registration pursuant to subparagraph (a)
or (b) above, Issuer and each holder of any Option Shares (other than
Grantee) shall enter into an agreement containing the indemnification
provisions of this subparagraph (e).
(f) Issuer shall comply with all reporting requirements and will
do all such other things as may be necessary to permit the expeditious sale
<PAGE>
at any time of any Option Shares by the holder thereof in accordance with
and to the extent permitted by any rule or regulation promulgated by the
SEC from time to time, including, without limitation, Rules 144 and 144A.
Issuer shall at its expense provide the holder of any Option Shares with
any information necessary in connection with the completion and filing of
any reports or forms required to be filed by them under the Securities
Laws, or required pursuant to any state securities laws or the rules of any
stock exchange.
(g) Issuer will pay all stamp taxes in connection with the
issuance and the sale of the Option Shares and in connection with the
exercise of the Option, and will save Grantee harmless, without limitation
as to time, against any and all liabilities, with respect to all such
taxes.
10. QUOTATION; LISTING. If Issuer Common Stock or any other
securities to be acquired upon exercise of the Option are then authorized
for quotation or trading or listing on the Nasdaq National Market or any
securities exchange, Issuer, upon the request of Grantee, will promptly
file an application, if required, to authorize for quotation or trading or
listing the shares of Issuer Common Stock or other securities to be
acquired upon exercise of the Option on the Nasdaq National Market or any
securities exchange and will use its best efforts to obtain approval, if
required, of such quotation or listing as soon as practicable.
11. DIVISION OF OPTION. This Agreement (and the Option granted
hereby) are exchangeable, without expense, at the option of Grantee, upon
presentation and surrender of this Agreement at the principal office of
Issuer for other Agreements providing for Options of different
denominations entitling the holder thereof to purchase in the aggregate
the same number of shares of Issuer Common Stock purchasable hereunder.
The terms "Agreement" and "Option" as used herein include any other
Agreements and related Options for which this Agreement (and the Option
granted hereby) may be exchanged. Upon receipt by Issuer of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation
of this Agreement, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification, and upon surrender and
cancellation of this Agreement, if mutilated, Issuer will execute and
deliver a new Agreement of like tenor and date. Any such new Agreement
executed and delivered shall constitute an additional contractual
obligation on the part of Issuer, whether or not the Agreement so lost,
stolen, destroyed or mutilated shall at any time be enforceable by anyone.
12. MISCELLANEOUS.
(A) EXPENSES. Except as otherwise provided in Section 10, each
of the parties hereto shall bear and pay all costs and expenses incurred by
it or on its behalf in connection with the transactions contemplated
hereunder, including fees and expenses of its own financial consultants,
investment bankers, accountants and counsel.
(B) WAIVER AND AMENDMENT. Any provision of this Agreement may
be waived at any time by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement
executed by the parties hereto.
<PAGE>
(C) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARY; SEVERABILITY.
This Agreement, together with the Merger Agreement and the other documents
and instruments referred to herein and therein, between Grantee and Issuer
(a) constitutes the entire agreement and supersedes all prior agreements
and understandings, both written and oral, between the parties with respect
to the subject matter hereof and (b) is not intended to confer upon any
person other than the parties hereto (other than any transferees of the
Option Shares or any permitted transferee of this Agreement pursuant to
Section 13(h)) any rights or remedies hereunder. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction or a federal or state regulatory agency to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated. If for any reason
such court or regulatory agency determines that the Option does not permit
Grantee to acquire, or does not require Issuer to repurchase, the full
number of shares of Issuer Common Stock as provided in Sections 3 and 8 (as
adjusted pursuant to Section 7), it is the express intention of Issuer to
allow Grantee to acquire or to require Issuer to repurchase such lesser
number of shares as may be permissible without any amendment or
modification hereof.
(D) GOVERNING LAW. This Agreement shall be governed and
construed in accordance with the laws of the State of Tennessee without
regard to any applicable conflicts of law rules.
(E) DESCRIPTIVE HEADINGS. The descriptive headings contained
herein are for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement.
(F) NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (with confirmation) or mailed by registered or certified mail
(return receipt requested) to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice):
If to Issuer to: BancAlabama, Inc.
312 Clinton Avenue
Huntsville, Alabama 35801
Telecopy Number: (205) 551-9462
Attention: W.R. Collins
Chairman and Chief Executive Officer
with a copy to: Lanier Ford Shaver & Payne P.C.
200 West Court Square, Suite 5000
Huntsville, Alabama 35801
Telecopy Number: (205) 533-9322
Attention: John R. Wynn
If to Grantee to: Union Planters Corporation
7130 Goodlett Farms Parkway
Memphis, Tennessee 38108
Telecopy Number: (901) 383-2877
Attention: Jackson W. Moore, President
<PAGE>
with a copy to: Union Planters Corporation
7130 Goodlett Farms Parkway
Memphis, Tennessee 38108
Telecopy Number: (901) 383-2877
Attention: E. J. House, Jr.
General Counsel and Corporate Secretary
Alston & Bird
601 Pennsylvania Avenue, N.W.
North Building, Suite 250
Washington, D.C. 20004-2601
Telecopy Number: (202) 508-3333
Attention: Frank M. Conner III
(G) COUNTERPARTS. This Agreement and any amendments hereto may
be executed in two counterparts, each of which shall be considered one and
the same agreement and shall become effective when both counterparts have
been signed, it being understood that both parties need not sign the same
counterpart.
(H) ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder or under the Option shall be assigned by
any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other party, except that Grantee
may assign this Agreement to a wholly owned subsidiary of Grantee and
Grantee may assign its rights hereunder in whole or in part after the
occurrence of a Purchase Event. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns.
(I) FURTHER ASSURANCES. In the event of any exercise of the
Option by Grantee, Issuer and Grantee shall execute and deliver all other
documents and instruments and take all other action that may be reasonably
necessary in order to consummate the transactions provided for by such
exercise.
(J) SPECIFIC PERFORMANCE. The parties hereto agree that this
Agreement may be enforced by either party through specific performance,
injunctive relief and other equitable relief. Both parties further agree
to waive any requirement for the securing or posting of any bond in
connection with the obtaining of any such equitable relief and that this
provision is without prejudice to any other rights that the parties hereto
may have for any failure to perform this Agreement.
<PAGE>
IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock Option
Agreement to be signed by their respective officers thereunto duly
authorized, all as of the day and year first written above.
ATTEST: BANCALABAMA, INC.
Jean D. Snead W.R. Collins
By:_____________________________ By:______________________________
Jean D. Snead W.R. Collins, Chairman and
Corporate Secretary Chief Executive Officer
[CORPORATE SEAL]
ATTEST: UNION PLANTERS CORPORATION
E.J. House, Jr. Jackson W. Moore
By:____________________________ By:______________________________
E.J. House, Jr., Secretary Jackson W. Moore, President
[CORPORATE SEAL]
BANKALABAMA
For Immediate Release
HUNTSVILLE, ALABAMA - April 29, 1996 - BancAlabama, INC., a bank holding
company based in Huntsville, Alabama and parent company to BankAlabama,
announced today that it has signed a definitive merger agreement with Union
Planters Corporation (NYSE:UPC), a Memphis based financial services
company. This announcement follows an April 12, 1996 release by
BancAlabama that the two companies were in merger negotiations. The merger
is subject to normal shareholder and regulatory approval, among other
conditions, and is expected to be completed by the fourth quarter of 1996.
BankAlabama serves the Huntsville trade area with nine locations and
reported total assets at year end of $98 million. William Collins,
Chairman of the Board of the BancAlabama reiterated his belief that the
affiliation with Union Planters will be positive for the customers,
shareholders and employees of BankAlabama. He further stated, "Now that we
are at the definitive agreement stage, we can really start making plans for
the additional products, services and locations that will be at our
customers' disposal as a result of our affiliation with Union Planters."
Jackson W. Moore, President and Chief Operating Officer of Union Planters
Corporation, also announced the following alignment of the Union Planters
franchise in north Alabama, as well as the proposed resulting management
structure. Union Planters Corporation presently owns BankFirst, the $250
million total asset financial institution serving Athens, Decatur,
Hartselle and Moulton. As previously announced on November 1, Union
Planters is also scheduled to affiliate with Valley Federal Savings Bank in
the third quarter of 1996. Valley Federal serves the Sheffield, Florence,
Muscle Shoals and Tuscumbia markets and recently reported total assets of
$119 million. The company plans, subject to regulatory approval, to
consolidate the three financial institutions into one charter called Union
Planters Bank of Alabama. The resulting institution would have almost $500
million in total assets and would be the largest separately chartered
financial institution in north Alabama.
Executive management for the consolidated company will be William D.
Powell, Chairman and Chief Executive Officer. Powell presently serves as
President and Chief Executive Officer of BankFirst. William Collins will
serve as Vice Chairman while Billy Don Anderson, presently President of
Valley Federal, will lead the new financial institution as President.
Union Planters Corporation is a $11.3 billion financial services company
with locations in Tennessee, Mississippi, Arkansas, Louisiana, Alabama and
Kentucky.
