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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): May 1, 1999
FIRST FINANCIAL CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
Tennessee 33-42622 62-1474162
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
1691 North Mt. Juliet Road, Mt. Juliet, Tennessee 37122
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(Address of Principal Executive Offices) (Zip Code)
(615) 754-2265
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Registrant's Telephone Number
Including Area Code
N/A
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Former Name or Former Address, if Changed Since Last Report
The Exhibit Index is on Page -5-.
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ITEM 1. CHANGES OF CONTROL OF REGISTRANT
On May 1, 1999, the Registrant's Board of Directors approved one
certain Agreement and Plan of Merger ("Agreement") pursuant to which the
Registrant will merge with and into National Commerce Bancorporation ("NCBC"),
with NCBC to be the surviving corporation (the "Merger"). The directors and
officers of the Registrant are not expected to serve as directors or officers of
NCBC after the merger but the directors of the Registrant's principal
subsidiary, First Bank & Trust, are expected to continue as directors of First
Bank & Trust for an unspecified period of time. Under the terms of the
Agreement, each outstanding share of the Registrant's common stock, other rhan
Dissenting Shares (as defined in the Agreement) will be converted into the right
to receive that number of shares of NCBC common stock equal to:
(1) The quotient of (a) the Net Purchase Price (as defined below) and
(b) divided by the NCBC Market Price Per Share (as defined
below).
divided by
(2) The sum of the number of shares of the Registrant's common stock
outstanding at and as of the Effective Time and the number of
shares of the Registrant's common stock issuable pursuant to
options to purchase the Registrant's common stock to the extent
that such option are outstanding at and a of the Effective Time
(the "Exchange Ratio").
"Net Purchase Price" means $74,250,000, which is the Gross Purchase Price of
$75,000,000 less the Registrant's investment banker's fee of $750,000. "Market
Price Per Share" means $24.25, (as reported in the Wall Street Journal) on April
12, 1999. Based on the exchange Ratio calculation, the exchange ratio is
expected to be 2.8502 shares of NCBC common stock for each share of the
Registrant's common stock.
Under the terms of the Agreement, if as of the closing date of the
Merger, the consolidated shareholder's equity of the Registrant, exclusive of
any securities gains or losses in accordance with FAS 115, is less than
$18,885,000, which was the consolidated shareholders' equity as of December 31,
1998, NCBC may terminate the Agreement. If the Registrant effects any stock
splits, reverse stock splits, stock dividends or similar changes in its
respective capital accounts subsequent to the date of the Agreement but prior to
the effective time of the Merger, the Exchange Ratio shall be adjusted in such a
manner as the Board of Directors of NCBC shall deem in good faith to be fair and
reasonable in order to give effect to such changes. Each of the shares of the
Registrant's common stock held by the Registrant or any of its subsidiaries or
by NCBC or any of its subsidiaries, 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 of the Merger and no exchange or payment will be
made with respect to such shares.
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Each share of the Registrant's common stock held of record by a
Dissenting Shareholder (as defined in the Agreement) of the Registrant shall be
converted into the right to receive payment from NCBC with respect thereto in
accordance with the provisions of the Tennessee Code.
The Agreement is subject to the approval of the Registrant's
shareholders, to certain bank regulatory approvals and to other customary
conditions. The Agreement is expected to be consummated in late 1999, but no
assurance is given of final consummation.
Pursuant to the Agreement, and as set forth in a separate Stock Option
Agreement, the Registrant has granted NCBC an option to purchase, under certain
circumstances as specified in the Agreement, the number of authorized but
unissued shares of the Registrant's common stock such that immediately following
such purchase NCBC would own 19.5% of the then issued and outstanding shares of
the Registrant's common stock, subject to certain adjustments and giving effect
to the exercise by NCBC of its option.
A copy of the Agreement is filed as Exhibit 2.1 hereto and a copy of
the Stock Option Agreement is filed as Exhibit 4.1 to this Current Report on
Form 8-K and are incorporated herein by reference. The foregoing summary is not
intended to be complete and is qualified in its entirety by reference to such
exhibits.
ITEM 5. OTHER EVENTS
On May 3, 1999 the Registrant issued a press release, a copy of which
is attached as Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
2.1 Agreement and Plan of Merger by and between National Commerce
Bancorporation and First Financial Corporation
4.1 Stock Option Agreement by and between National Commerce
Bancorporation and First Financial Corporation (Incorporated
by reference to Exhibit 7.8(b) of the Agreement and Plan of
Merger included herewith as Exhibit 2.1)
99.1 Press Release issued May 3, 1999 by First Financial Corporation
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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 thereto duly authorized.
FIRST FINANCIAL CORPORATION
Date: May 12, 1999 By: /s/ David Major
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Name: David Major
Title: Chairman
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
2.1 Agreement and Plan of Merger by and
between National Commerce Bancorporation
and First Financial Corporation
4.1 Stock Option Agreement by and between
National Commerce Bancorporation and First
Financial Corporation
99.1 First Financial Corporation Press Release
(May 3, 1999)
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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
NATIONAL COMMERCE BANCORPORATION
AND
FIRST FINANCIAL CORPORATION
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AGREEMENT AND PLAN OF MERGER
DATED AS OF MAY 1, 1999
BY AND BETWEEN
NATIONAL COMMERCE BANCORPORATION
AND FIRST FINANCIAL CORPORATION
MT. JULIET, TENNESSEE
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TABLE OF CONTENTS
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R E C I T A L S..........................................................................1
ARTICLE 1. TERMS OF THE MERGER..........................................................2
1.1 Merger..............................................................2
1.2 Time and Place of Closing...........................................2
1.3 Effective Time......................................................2
1.4 Charter.............................................................2
1.5 Bylaws..............................................................2
1.6 Name................................................................3
1.7 Directors and Officers..............................................3
ARTICLE 2. MANNER OF CONVERTING SHARES AND OPTIONS;
EXCHANGE RATIO...............................................................3
2.1 Conversion; Cancellation and Exchange of Shares; Exchange Ratio.....3
2.2 Conversion of Stock Options.........................................6
2.3 Anti-Dilution Provisions............................................6
ARTICLE 3. EXCHANGE OF SHARES...........................................................7
3.1 Exchange Procedures.................................................7
3.2 Rights of Former FFC Record Holders.................................7
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF FFC........................................8
4.1 Organization, Standing and Power....................................8
4.2 Authority; No Breach of Agreement...................................8
4.3 Capital Stock.......................................................9
4.4 FFC Subsidiaries...................................................10
4.5 SEC Filings; FFC Financial Statements..............................10
4.6 Absence of Undisclosed Liabilities.................................12
4.7 Absence of Certain Changes or Events...............................12
4.8 Tax Matters........................................................13
4.9 Allowance for Possible Loan Losses.................................14
4.10 Assets.............................................................15
4.11 Intellectual Property..............................................15
4.12 Environmental Matters..............................................16
4.13 Compliance with Laws...............................................16
4.14 Labor Relations....................................................17
4.15 Employee Benefit Plans.............................................17
4.16 Material Contracts.................................................19
4.17 Legal Proceedings..................................................20
4.18 Reports............................................................20
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4.19 Statements True and Correct........................................20
4.20 Accounting, Tax and Regulatory Matters.............................21
4.21 State Takeover Laws................................................21
4.22 Articles of Incorporation Provisions...............................21
4.23 Charter Documents..................................................22
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF NCBC......................................22
5.1 Organization, Standing and Power...................................22
5.2 Authority; No Breach by Agreement..................................22
5.3 Capital Stock......................................................23
5.4 SEC Filings; Financial Statements..................................23
5.5 Absence of Undisclosed Liabilities.................................24
5.6 Absence of Certain Changes or Events...............................24
5.7 Compliance with Laws...............................................25
5.8 Legal Proceedings..................................................25
5.9 Reports............................................................25
5.10 Statements True and Correct........................................25
5.11 Accounting, Tax and Regulatory Matters.............................26
ARTICLE 6. CONDUCT OF BUSINESS PENDING CONSUMMATION....................................26
6.1 Affirmative Covenants of FFC ......................................26
6.2 Negative Covenants of FFC .........................................27
6.3 Covenants of NCBC..................................................29
6.4 Adverse Changes in Condition.......................................29
6.5 Reports............................................................29
ARTICLE 7. ADDITIONAL AGREEMENTS.......................................................30
7.1 Registration Statement; Proxy Statement; Shareholder Approvals.....30
7.2 Exchange Listing...................................................30
7.3 Applications.......................................................30
7.4 NCBC Filings with State Offices....................................31
7.5 Agreement as to Efforts to Consummate..............................31
7.6 Investigation and Confidentiality..................................31
7.7 Press Release......................................................32
7.8 Certain Actions....................................................32
7.9 Accounting and Tax Treatment.......................................34
7.10 State Takeover Laws................................................34
7.11 Articles of Incorporation Provisions...............................34
7.12 Agreement of Affiliates............................................34
7.13 Employee Benefits and Contracts....................................35
7.14 D&O Coverage.......................................................37
7.15. Indemnification....................................................37
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ARTICLE 8. CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE...........................38
8.1 Conditions to Obligations of Each Party............................38
8.2 Conditions to Obligations of NCBC..................................40
8.3 Conditions to Obligations of FFC...................................42
ARTICLE 9. TERMINATION.................................................................44
9.1 Termination........................................................44
9.2 Effect of Termination..............................................45
9.3 Non-Survival of Representations and Covenants......................45
ARTICLE 10. GENERAL PROVISIONS..........................................................45
10.1 Definitions........................................................45
10.2 Expenses...........................................................54
10.3 Brokers and Finders................................................54
10.4 Entire Agreement...................................................55
10.5 Amendments.........................................................55
10.6 Waivers............................................................55
10.7 Assignment.........................................................56
10.8 Notices............................................................56
10.9 Governing Law......................................................57
10.10 Counterparts.......................................................57
10.11 Captions...........................................................57
10.12 Interpretation.....................................................57
10.13 Enforcement of Agreement...........................................57
10.14 Attorneys' Fees....................................................57
10.15 Severability.......................................................57
10.16 Remedies Cumulative................................................57
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") dated as of this
day of May 1, 1999, by and between NATIONAL COMMERCE BANCORPORATION ("NCBC" or
"Surviving Corporation," as the context may require), a corporation chartered
and existing under the laws of the State of Tennessee which is registered both
as a bank holding company and as a savings and loan holding company and whose
principal offices are located at One Commerce Square, Memphis, Shelby County,
Tennessee 38150; and FIRST FINANCIAL CORPORATION ("FFC"), a corporation
chartered and existing under the laws of the State of Tennessee which is
registered as a bank holding company and whose principal offices are located at
1691 North Mt. Juliet Road, Mt. Juliet, Tennessee 37122.
Certain other capitalized terms used in this Agreement and in the Plan
of Merger are defined below in Section 10.1.
R E C I T A L S
A. FFC is the beneficial owner and holder of record of one hundred
percent (100%) of the issued and outstanding shares of capital stock of First
Bank and Trust, a state-chartered, non-member bank with its principal or mail
office in Mt. Juliet, Tennessee. FFC also owns indirectly 100% of the
outstanding common stock of First Bank and Trust's wholly owned title insurance
agency subsidiary, American Title and Escrow Company, and its wholly owned
inactive finance subsidiary, First Southern Finance, Inc. For the purpose of
this Agreement, First Bank and Trust, American Title and Escrow Company and
First Southern Finance, Inc., will hereinafter be referred to as the "FFC Bank
Subsidiary." FFC desires to be acquired by NCBC on the terms and subject to the
conditions set forth in this Agreement and the Plan of Merger annexed hereto as
Exhibit 1.1.
B. NCBC desires to acquire FFC on the terms and subject to the
conditions set forth in this Agreement and the Plan of Merger.
C. The Board of Directors of FFC deems it desirable and in the best
interests of FFC and the shareholders of FFC that FFC be merged with and into
NCBC (which would survive the merger as the Surviving Corporation, as defined
herein) on the terms and subject to the conditions set forth in this Agreement
and in the manner provided in this Agreement and the Plan of Merger (the
"Merger") and has directed that this Agreement and the Plan of Merger be
submitted to the shareholders of FFC with the recommendation that they be
approved by them.
D. The Board of Directors of NCBC deems it desirable and in the best
interests of NCBC and the shareholders of NCBC that FFC be merged with and into
NCBC on the terms and subject to the conditions set forth in this Agreement and
in the manner provided in this Agreement and the Plan of Merger.
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E. The respective Boards of Directors of NCBC and FFC have each adopted
resolutions setting forth and adopting this Agreement and the Plan of Merger,
and have directed that this Agreement and the annexed Plan of Merger and all
resolutions adopted by said Boards of Directors and by the FFC Shareholders
related to this Agreement, be submitted with appropriate applications to, and
filed with all applicable Regulatory Authorities as may be necessary in order to
obtain all Consents required to consummate the proposed Merger and the
transactions contemplated in this Agreement in accordance with this Agreement,
the Plan of Merger and applicable law.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual representations, warranties, covenants and agreements herein contained
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as follows:
ARTICLE 1
TERMS OF THE MERGER
1.1 Merger. Subject to the terms and conditions of this Agreement, at
the Effective Time FFC shall be merged with and into NCBC in accordance with the
provisions of Section 48-21-101, et seq. of the Tennessee Code, and with the
effect provided in Section 48-21-108 of the Tennessee Code (the "Merger"). NCBC
shall be the Surviving Corporation resulting from the Merger and shall continue
to be governed by the laws of the State of Tennessee. The Merger shall be
consummated pursuant to the terms of this Agreement, which has been approved and
adopted by the respective Boards of Directors of FFC and NCBC, and the Plan of
Merger, in substantially the form of Exhibit 1.1 which has been approved and
adopted by the Boards of Directors of FFC and NCBC.
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 preceding 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 the NCBC Board Room,
NCBC Executive Offices (Fourth Floor), One Commerce Square, Memphis, Shelby
County, Tennessee 38150, or at such other place as the Parties, acting through
their chief executive officers or chief financial officers, may mutually agree.
1.3 Effective Time. The Merger and other transactions contemplated by
this Agreement shall become effective on the date and at the time the Articles
of Merger reflecting the Merger shall become effective with the Secretary of
State of the State of Tennessee (the "Effective Time").
1.4 Charter. The Charter of NCBC in effect immediately prior to the
Effective Time shall be the Charter of the Surviving Corporation until otherwise
amended or repealed.
1.5 Bylaws. The Bylaws of NCBC in effect immediately prior to the
Effective Time
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shall be the Bylaws of the Surviving Corporation until otherwise amended or
repealed.
1.6 Name. The name of NCBC shall remain unchanged after the Effective
Time, unless and until otherwise renamed.
1.7 Directors and Officers. The directors and officers of NCBC in
office immediately prior to the Effective Time, together with such additional
persons as may thereafter be elected or appointed, shall serve as the directors
and officers of the Surviving Corporation from and after the Effective Time in
accordance with the Bylaws of the Surviving Corporation, unless and until their
successors shall have been elected or appointed and shall have qualified or
until they shall have been removed in the manner provided herein.
ARTICLE 2
MANNER OF CONVERTING SHARES AND OPTIONS; EXCHANGE RATIO
2.1 Conversion; Cancellation and Exchange of Shares; Exchange Ratio. At
the Effective Time, by virtue of the Merger becoming effective and without any
action on the part of NCBC, FFC, or the shareholders of either of the foregoing,
the shares of the constituent corporations shall be converted as follows:
(a) NCBC Capital Stock. Each share of NCBC Capital Stock issued and
outstanding immediately prior to the Effective Time shall remain issued and
outstanding from and after the Effective Time.
(b) FFC Common Stock. Each share of FFC Common Stock issued and
outstanding at the Effective Time shall cease to represent any interest (equity,
shareholder or otherwise) in FFC and shall, except for those shares (the
"Dissenting Shares") held by any FFC Record Holders who shall have properly
perfected such Record Holders' dissenters' rights and shall have maintained the
perfected status of such dissenters' rights through the Effective Time ("FFC
Dissenting Shareholders"), whose rights shall be governed by the provisions of
Sections 48-23-101 through 48-23-302 of the Tennessee Code, automatically be
converted exclusively into, and constitute only the right of each FFC Record
Holder to receive in exchange for such Record Holder's shares of FFC Common
Stock, the Consideration to which the FFC Record Holder is entitled as provided
in this Section 2.1(b).
(i) The Exchange Ratio Calculation. Subject to any adjustments
which may be required by an event described in Subsection 2.1(b)(iii) below, at
and as of the Effective Time:
(A) Each one (1) share of FFC Common Stock (other than
Dissenting Shares) outstanding at and as of the Effective Time shall be
converted into the right to receive that number of shares of NCBC Common Stock
equal to:
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(I) The quotient of (x) the Net Purchase Price (defined
below) and (y) divided by the NCBC "Market Price Per Share" (defined below),
divided by
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(II) The sum of number of shares of FFC Common Stock
outstanding at and as of the Effective Time and the number of shares of FFC
Common Stock issuable pursuant to options to purchase FFC Common Stock to the
extent that such options are outstanding at and as of the Effective Time.
(B) Each share of FFC Common Stock held of record by a FFC
Dissenting Shareholder shall be converted into the right to receive payment from
the Surviving Corporation with respect thereto in accordance with the provisions
of the Tennessee Code, and in particular, T.C.A. ss. 48-23-102.
(C) "Net Purchase Price" shall be $74,250,000 which is the
Gross Purchase Price of $75,000,000 less FFC's investment banker's fee of
$750,000.
(D) If as of the Closing Date the consolidated
stockholders' equity of FFC, exclusive of any securities gains or losses in
accordance with FAS 115, is less than $18,885,000, which was the consolidated
stockholders' equity as of December 31, 1998, NCBC reserves the right to
terminate this Agreement.
(E) No share of FFC Common Stock shall be deemed to be
outstanding or have any rights other than those set forth in this Section 2.1(b)
after the Effective Time. No fractional shares of NCBC Common Stock shall be
issued in the Merger and, if after aggregating all of the whole and fractional
shares of NCBC Common Stock to which a FFC Record Holder shall be entitled based
upon this Exchange Ratio Calculation, there should be a fractional share of NCBC
Common Stock remaining, such fractional share shall be settled by a cash payment
therefor pursuant to Article 3 of this Agreement, which cash settlement shall be
based upon the Market Price Per Share (as defined below) of one (1) full share
of NCBC Common Stock.
(ii) Definition of "Market Price Per Share". The "Market Price
Per Share" is $24.25 which was the closing price per share of NCBC Common Stock
on the NASDAQ (as reported by The Wall Street Journal) on April 12, 1999:
Therefore, by way of example, if as of the day immediately
prior to the Closing Date FFC(1) owns 100% of the authorized and outstanding
common stock of FFC Bank Subsidiary and (2) has consolidated stockholders'
equity not less than as described in (D) hereinabove, then:
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Net Purchase Price of $74,250,000
divided by
----------
NCBC Market Price Per Share of $24.25
equals
------
Number of NCBC Shares 3,061,856
divided by
----------
FFC Shares Outstanding 953,328
+ FFC Options 120,935
----------
1,074,263
equals
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NCBC Shares for Each 1 Share of FFC 2.8502
======
(iii) Effect of Stock Splits, Reverse Stock Splits, Stock
Dividends and Similar Changes in the Capital of FFC. Should FFC effect any stock
splits, reverse stock splits, stock dividends or similar changes in its
respective capital accounts subsequent to the date of this Agreement but prior
to the Effective Time, the Exchange Ratio shall be adjusted in such a manner as
the Board of Directors of NCBC shall deem in good faith to be fair and
reasonable in order to give effect to such changes. Notwithstanding the
foregoing, nothing in this subparagraph (iii) shall be deemed to be a waiver of
the inaccuracy of any representation or warranty or breach of any covenant by
FFC set forth herein.
(c) Shares Held by FFC or NCBC. Each of the shares of FFC Common
Stock held by any FFC Company or by any NCBC Company, in each case other than
(x) in a fiduciary capacity, or (y) 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.
(d) Dissenters' Rights of FFC Shareholders. Any FFC Dissenting
Shareholder who shall comply strictly with the provisions of Sections 48-23-101,
et seq. of the Tennessee Code shall be entitled to dissent from the Merger and
to seek those appraisal remedies afforded by the Tennessee Code. FFC
Shareholders who fail to strictly comply with such provisions shall be deemed
not to have dissented and shall not be treated as Dissenters.
(e) Payment to FFC Investment Banker. At the Effective Time, NCBC
shall pay Seven Hundred Fifty Thousand Dollars ($750,000.00) to FFC's investment
banker, which amount has been netted out of the Gross Purchase Price pursuant to
Section 2.1(b) (i) (C).
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2.2 Conversion of Stock Options. At the Effective Time, all options
with respect to FFC Common Stock pursuant to stock options ("FFC Options")
granted by FFC under the FFC Option Plans, which are outstanding at the
Effective Time, whether or not exercisable, shall be assumed by NCBC and
converted into options to purchase shares of NCBC Common Stock in accordance
with the following sentence and otherwise having the same duration and terms as
the FFC Option Plans. From and after the Effective Time, (i) each FFC Option
assumed by NCBC may be exercised solely for shares of NCBC Common Stock, (ii)
the number of shares of NCBC Common Stock subject to such FFC Option shall be
equal to the number of shares of FFC Common Stock subject to such FFC Option
immediately prior to the Effective Time multiplied by the Exchange Ratio, and
(iii) the per share exercise price under each such FFC Option shall be adjusted
by dividing the per share exercise price under each such FFC Option by the
Exchange Ratio and rounding down to the nearest cent. FFC shall take all
necessary steps to effectuate the foregoing provisions of this Section 2.2.
2.3 Anti-Dilution Provisions. In the event NCBC changes the number of
shares of NCBC Common Stock issued and outstanding prior to the Effective Time
as a result of a stock split, reorganization, stock dividend, or
recapitalization with respect to such stock and the record date therefor (in the
case of a stock dividend) or the effective date thereof (in the case of a stock
split or similar recapitalization for which a record date is not established)
shall be prior to the Effective Time, the Exchange Ratio shall be
proportionately adjusted.
ARTICLE 3
EXCHANGE OF SHARES
3.1 Exchange Procedures. Promptly after the Effective Time, NCBC and
FFC shall cause the Exchange Agent to mail to the FFC Record Holders appropriate
transmittal materials (which shall specify that delivery shall be effected, and
risk of loss and title to the certificates theretofore representing shares of
FFC 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 including its obligation to
deliver the Consideration to which any FFC Record Holder may receive for lost,
misplaced or destroyed FFC certificates. After the Effective Time, each FFC
Record Holder of FFC Common Stock (other than shares to be canceled pursuant to
Section 2.1(c) 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 2.1(b) of this Agreement,
together with all undelivered dividends or distributions in respect of such
shares (without interest thereon) pursuant to Section 3.2 of this Agreement. To
the extent required by Section 2.1(b) of this Agreement, each FFC Record Holder
also shall receive, upon surrender of the certificate or certificates
representing his or her shares of FFC Common Stock outstanding immediately prior
to the Effective Time, cash in lieu of any fractional share of NCBC Common Stock
to which such holder may be otherwise entitled (without interest). NCBC shall
not be obligated to deliver the Consideration to which any FFC Record Holder is
entitled as a result of the Merger until such FFC Record Holder surrenders
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such holder's certificate or certificates representing the shares of FFC Common
Stock for exchange as provided in this Section 3.1. The certificate or
certificates of FFC Common Stock so surrendered shall be duly endorsed as the
Exchange Agent may reasonably require. Any other provision of this Agreement
notwithstanding, neither NCBC nor the Exchange Agent shall be liable to a FFC
Record Holder for any amounts paid or properly delivered in good faith to a
public official pursuant to any applicable abandoned property Law. Adoption of
this Agreement by the shareholders of FFC shall constitute ratification of the
appointment of the Exchange Agent.
3.2 Rights of Former FFC Record Holders. At the Effective Time, the
stock transfer books of FFC shall be closed as to holders of FFC Common Stock
outstanding immediately prior to the Effective Time, and no transfer of FFC
Common Stock by any FFC Record Holder shall thereafter be made or recognized.
Until surrendered for exchange in accordance with the provisions of Section 3.1
of this Agreement, each certificate theretofore representing shares of FFC
Common Stock (other than shares to be cancelled pursuant to Section 2.1(c) of
this Agreement) shall from and after the Effective Time represent for all
purposes only the right to receive the Consideration provided in Section 2.1(b)
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 FFC in respect of such shares of FFC 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 NCBC on the NCBC 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 NCBC Common
Stock issuable pursuant to this Agreement, but beginning thirty (30) days after
the Effective Time no dividend or other distribution payable to the holders of
record of NCBC Common Stock as of any time subsequent to the Effective Time
shall be delivered to a FFC Record Holder until such FFC Record Holder
surrenders his or her certificate or certificates evidencing FFC Common Stock
for exchange as provided in Section 3.1 of this Agreement. However, upon
surrender of such FFC Common Stock certificate, both the NCBC Common Stock
certificate 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 4
REPRESENTATIONS AND WARRANTIES OF FFC
Except as disclosed on the FFC Disclosure Memorandum, and in SEC
Documents and in the regulatory filings made by FFC and FFC Bank Subsidiary, FFC
hereby represents and warrants to NCBC that the following matters are or will be
true and correct at the Effective Time, in all material respects:
4.1 Organization, Standing and Power. FFC 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 Assets. FFC is duly qualified or
licensed to transact business as a foreign corporation in good
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standing in the states of the United States and foreign jurisdictions where the
character of its Assets or the 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 FFC.
4.2 Authority; No Breach of Agreement.
(a) Subject to requisite FFC Shareholder approval and Consents
of Regulatory Authorities, FFC has the corporate power and authority necessary
to execute, deliver and perform its obligations under this Agreement and the
Plan of Merger and to consummate the transactions contemplated hereby and
thereby. The execution, delivery and performance of this Agreement and the Plan
of Merger, as appropriate, and the consummation of the transactions contemplated
herein and therein, including the Merger, have been duly and validly authorized
by all necessary corporate action in respect thereof on the part of FFC, subject
to the approval of this Agreement and the Plan of Merger by the holders of a
majority (or such greater percentage as may be required by the Articles of
Incorporation of FFC or other applicable law) of the outstanding shares of FFC
Common Stock, which is the only shareholder vote required for approval of this
Agreement and the Plan of Merger and consummation of the Merger by FFC. Subject
to the receipt of such requisite shareholder approval, this Agreement and the
Plan of Merger represent legal, valid and binding obligations of FFC,
enforceable against FFC in accordance with their respective terms (except in all
cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, conservatorship, moratorium or similar
laws affecting the enforce ment 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 or
the Plan of Merger, as appropriate, by FFC, nor the consummation by FFC of the
transactions contemplated hereby or thereby, nor compliance by FFC with any of
the provisions hereof or thereof will (i) conflict with or result in a breach of
any provision of FFC's Articles of Incorporation or Bylaws, or (ii) except as
disclosed in Section 4.2(b) of the FFC Disclosure Memorandum, constitute or
result in a Default under, or require any Consent (other than shareholder
approval) pursuant to, or result in the creation of any Lien on any material
Asset of any FFC Company under, any Contract or Permit of any FFC Company, or
(iii) subject to receipt of the requisite Consents referred to in Section 7.3 of
this Agreement, violate any Law or Order applicable to either FFC 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 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 FFC Employee Plans or, 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 FFC, no notice
to, filing with, or
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Consent of, any public body or authority is necessary for the consummation by
FFC of the Merger and the other transactions contemplated in this Agreement and
the Plan of Merger.
(d) Neither FFC Company is a party to, or subject to, or bound
by, any agreement or judgment, order, letter of understanding, writ,
prohibition, injunction or decree of any court or other governmental body of
competent jurisdiction, or any law which would prevent the execution and
delivery of this Agreement and the Plan of Merger by FFC, or the consummation of
the transactions contemplated hereby and thereby, and no action or proceeding is
pending against either FFC Company in which the validity of this Agreement, the
transactions contemplated hereby or any action which has been taken by any of
such Parties in connection herewith or in connection with the transaction
contemplated hereby is at issue.
4.3 Capital Stock.
(a) The authorized capital stock of FFC consists of (i)
5,000,000 shares of FFC Common Stock, $2.50 par value per share, of which
953,328 shares are issued and outstanding as of April 16, 1999, and (ii)
5,000,000 shares of FFC Preferred Stock of which no shares are issued,
outstanding or committed. All of the issued and outstanding shares of capital
stock of FFC are duly and validly issued and outstanding and are fully paid and
nonassessable under the Tennessee Code and FFC's Articles of Incorporation. None
of the outstanding shares of capital stock of FFC has been issued in violation
of any preemptive rights of the current or past shareholders of FFC. The number
of outstanding shares of FFC Common Stock is subject to increase as options
under the FFC Option Plans are exercised prior to the Effective Date.
(b) As of April 16, 1999, there were outstanding under the FFC
Option Plans options to purchase 120,935 shares of FFC Common Stock, which FFC
Options had a weighted average price of approximately $13.05 per share and for
which adequate shares of FFC Common Stock have been reserved for issuance under
the FFC Option Plans. The number of outstanding options for shares of FFC Common
Stock is subject to change as options under the FFC Option Plans lapse, are
exercised, or are forfeited prior to the Effective Date.
(c) Except as set forth in Section 4.3(a) and (b) of this
Agreement, there are no shares of capital stock or other equity securities of
FFC outstanding and no outstanding Rights relating to the capital stock of FFC.
However, FFC presently has shares of the FFC Common Stock reserved to its
dividend reinvestment plan
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4.4 FFC Subsidiaries.
(a) FFC has no Subsidiaries, direct or indirect, other than
FFC Bank Subsidiary. As set forth hereinabove at "Recitals," paragraph A, FFC
Bank Subsidiary shall include (i) First Bank and Trust; (ii) American Title and
Escrow Company, and (iii) First Southern Finance, Inc. FFC owns, directly or
indirectly, all of the issued and outstanding shares of capital stock (or other
equity interests) of FFC Bank Subsidiary. No capital stock (or other equity
interest) of FFC Bank Subsidiary is or may become required to be issued (other
than to FFC) by reason of any Rights, and there are no Contracts by which FFC
Bank Subsidiary is bound to issue (other than to FFC) additional shares of its
capital stock (or other equity interests) or Rights or by which FFC is or may be
bound to transfer any shares of the capital stock (or other equity interest) of
FFC Bank Subsidiary (other than to another FFC Company). There are no Contracts
relating to the rights of FFC to vote or to dispose of any shares of the capital
stock (or other equity interests) of FFC Bank Subsidiary. All of the shares of
capital stock (or other equity interests) of FFC Bank Subsidiary held by FFC are
fully paid and nonassessable under the applicable corporation or similar Law of
the jurisdiction in which FFC Bank Subsidiary is incorporated or organized and
are owned by FFC free and clear of any Lien, except as expressly set forth in
the FFC Disclosure Memorandum and noted in Section 4.4(b) of this Agreement .
FFC Bank Subsidiary is duly organized, validly existing, and 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, except as set forth in
Section 4.4(b) of the FFC Disclosure Memorandum . FFC Bank 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 FFC. FFC Bank Subsidiary 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, to the extent provided by law. The minute book and other
organizational documents and Records for FFC Bank Subsidiary have been made
available to NCBC 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.
(b) All shares of First Bank and Trust are currently pledged
to secure a line of credit, the balance of which is zero. FFC agrees that it is
a condition of this Agreement that all such shares of First Bank and Trust be
released and otherwise free of any Lien prior to the Effective Time.
4.5 SEC Filings; FFC Financial Statements.
(a) FFC has filed and made available to NCBC all SEC Documents
required to be filed by FFC since December 31, 1996. The FFC SEC Documents (i)
at the time filed,
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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 FFC SEC Documents or necessary in
order to make the statements in such FFC SEC Documents, in light of the
circumstances under which they were made, not materially misleading. FFC Bank
Subsidiary is not required to file any SEC Documents with the SEC as a separate
entity.
(b) Each of the FFC Financial Statements (including, in each
case, any related notes) contained in the FFC SEC Documents, including any FFC
SEC Documents 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 to be reported on Form 10-QSB of the
SEC), and fairly presented in all material respects the consolidated financial
position of FFC 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 statements were or are subject to normal
year-end adjustments which were not or are not expected to be material in amount
or effect.
(c) FFC has delivered to NCBC (or will deliver when available,
with respect to periods ended after the date of this Agreement to the Effective
Time) true, correct and complete copies of all Call Reports, FRY-6 Reports and
FRY-9C Reports, including any amendments thereto, filed with any Regulatory
Authorities by FFC and FFC Bank Subsidiary, respectively, for the years ended
December 31, 1997, and 1998, and thereafter, together with any correspondence
deemed material by FFC's management with any Regulatory Authorities concerning
any of the aforesaid financial statements and Reports (the "FFC Regulatory
Financial Statements"). Such FFC Regulatory Financial Statements (i) were (or
will be) prepared from the Records of FFC and/or each FFC Bank Subsidiary; (ii)
were (or will be) prepared in accordance with regulatory accounting principles
consistently applied; (iii) present (or, when prepared, will present) FFC and
FFC Bank Subsidiary's financial condition and the results of its operations,
changes in stockholders' equity and cash flows at the relevant dates thereof and
for the periods covered thereby; and (iv) contain or reflect (or, when prepared,
will contain and reflect) all necessary adjustments and accruals for an accurate
presentation of FFC's and FFC Bank Subsidiary's financial condition and the
results of FFC's and FFC Bank Subsidiary's operations and cash flows for the
periods covered by such financial statements (subject to any exceptions as to
consistency specified therein or as may be indicated in the notes thereto or, in
the case of interim financial statements, to normal recurring year-end
adjustments that are not material.)
4.6 Absence of Undisclosed Liabilities. No FFC Company has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on FFC, except Liabilities which are
accrued or reserved against in the FFC Financial Statements as of December 31,
1998, and the FFC Regulatory Financial Statements for the quarter ended March
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31, 1999, or reflected in the notes or schedules, if any, thereto, and delivered
with the FFC Disclosure Memorandum prior to the date of this Agreement. Neither
FFC Company has incurred or paid any Liability since the Balance Sheet Date,
except for such Liabilities incurred or paid in the ordinary course of business
consistent with past business practice and which are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on FFC or on
the transactions contemplated by this Agreement.
4.7 Absence of Certain Changes or Events. Except as described in
Section 4.7 of the FFC Disclosure Memorandum, since the Balance Sheet Date there
has not been:
(a) Any material transaction by either FFC Company which was
not undertaken in the ordinary course of business and in conformity with past
practice.
(b) Any loss of a key employee or any damage, destruction or
loss, whether or not covered by insurance, which has had or which may be
reasonably expected to have a Material Adverse Effect on either FFC Company.
(c) Any acquisition or disposition by either FFC Company of
any Asset having a fair market value, singularly or in the aggregate for each
FFC Company, in an amount greater than Fifty Thousand Dollars ($50,000.00),
except in the ordinary course of business and in conformity with past practice.
(d) Any mortgage, pledge or subjection to Lien, of any kind on
any of the Assets of either FFC Company, except to secure extensions of credit
in the ordinary course of business and in conformity with past practice.
(e) Any amendment, modification or termination of any Contract
relating to either FFC Company or to which either FFC Company is a party which
would or may be reasonably expected to have a Material Adverse Effect on FFC.
(f) Any increase in, or commitment to increase, the
compensation payable or to become payable to any officer, director, employee or
agent of either FFC Company, or any bonus payment or similar arrangement made to
or with any of such officers, directors, employees or agents, other than routine
increases made in the ordinary course of business not exceeding the greater of
ten percent (10%) per annum or Five Thousand Dollars ($5,000.00) for any of them
individually.
(g) Any incurring of, assumption of, or taking of, by either
FFC Company, any Asset subject to any Liability, except for Liabilities incurred
or assumed or Assets taken subsequent to the Balance Sheet Date in the ordinary
course of business and in conformity with past practice.
(h) Any material alteration in the manner of keeping the
books, accounts or
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Records of either FFC Company, or in the accounting policies or practices
therein reflected.
(i) Any release or discharge (or partial release or discharge)
of any obligation or Liability of any Person related to or arising out of any
loan made by either FFC Company, except in the ordinary course of business and
in conformity with past practice.
4.8 Tax Matters.
(a) Except as set forth in Section 4.8(a) of the FFC
Disclosure Memorandum, all Tax Returns required to be filed by or on behalf of
any of the FFC 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, 1998, and on or before the date of the most recent fiscal year end
immediately preceding the Effective Time, and all Tax returns filed are 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 fully reserved against in the FFC 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 FFC
Companies, except for taxes which constitute a Lien on Assets but which are not
delinquent.
(b) Neither of the FFC 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 applicable taxing authorities) that is
currently in effect.
(c) To the Knowledge of FFC, adequate provision for any Taxes
due or to become due for any of the FFC Companies for the period or periods
through and including the date of the respective FFC Financial Statements has
been made and is reflected on such FFC Financial Statements.
(d) To the Knowledge of FFC, each of the FFC Companies is in
compliance with, and its Records contain all information and documents
(including properly completed IRS Forms W-9) necessary to comply with, all
applicable information 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 IRC, except for
such instances of non-compliance and such omissions as are not reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on FFC.
(e) Except as set forth in Section 4.8(e) of the FFC
Disclosure Memorandum, neither of the FFC 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 IRC.
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(f) There has not been an ownership change, as defined in the
IRC Section 382(g), of either of the FFC 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, 1998.
(g) Except as set forth in Section 4.8(g) of the FFC
Disclosure Memorandum, neither of the FFC Companies is a party to any tax
allocation or sharing agreement and neither of the FFC 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 FFC) or has any Liability for
taxes of any Person (other than FFC and its Subsidiaries) under Treasury
Regulation Section 1.1502-6 (or any similar provision of Tennessee Law) as a
transferee or successor or by contract or otherwise.
4.9 Allowance for Possible Loan Losses. The allowance for possible
loan or credit losses, including any allowances or reserves for losses on ORE
and other collateral taken in satisfaction, or partial satisfaction of a debt
previously contracted shown on the consolidated balance sheets of FFC included
in the most recent FFC Regulatory Financial Statements dated prior to the date
of this Agreement was, and the Allowance shown on the consolidated balance
sheets of FFC included in the FFC Regulatory Financial Statements as of dates
subsequent to the execution of this Agreement and as of the Closing Date will
be, as of the dates thereof, in the reasonable opinion of management of FFC
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 and ORE reserves) of the FFC Companies and other extensions of
credit (including letters of credit and commitments to make loans or extend
credit) by the FFC Companies as of the dates thereof. Except as described in
Section 4.9 of the FFC Disclosure Memorandum (by loan type, loan number,
classification and outstanding balance), neither FFC Company has any Loan or
other extension of credit which has been (or should have been in management's
reasonable opinion) classified as "Other Assets Especially Mentioned,"
"Substandard," "Doubtful" or "Loss," or similar classifications, that were not
classified in either FFC Company's most recent report of examination. Section
4.9 of the FFC Disclosure Memorandum also lists all Loans or extensions of
credit which are included on any FFC Company's "watch list." The net book value
of either FFC Company's ORE is carried on the balance sheet of the FFC Financial
Statements at fair value at the time of acquisition less estimated selling costs
which approximate the net realizable value of the ORE in accordance with the
American Institute of Certified Public Accountants' Statement of Position 92-3.
4.10 Assets. Except as disclosed or reserved against in the FFC
Regulatory Financial Statements made available prior to the date of this
Agreement, the FFC Companies have good and marketable title, free and clear of
all Liens, to all of their respective Assets. All tangible Assets used in the
businesses of the FFC Companies are in good condition, reasonable wear and tear
excepted, and are usable in the ordinary course of business consistent with
FFC's past practices. All Assets which are material to FFC's business on a
consolidated basis, held under leases or
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subleases by either of the FFC Companies, are held under valid Contracts
enforceable in accordance with their respective terms (except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
or other laws affecting the enforcement of creditors' rights generally and
except that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceedings may be brought), and each such Contract is in full force and effect.
To the best of management's Knowledge, the FFC Companies currently maintain
insurance similar in amounts, scope, and coverage to that maintained by other
peer banking organizations. Neither of the FFC Companies has received notice
from any insurance carrier that (i) such insurance would be canceled or that
coverage thereunder will be reduced or eliminated, or (ii) premium costs with
respect to such policies of insurance will be substantially increased. Except as
set forth in Section 4.10 of the FFC Disclosure Memorandum, there are no
variations in the foregoing and presently no claims pending under any such
policies of insurance and no notices have been given by either FFC Company under
such policies.
4.11 Intellectual Property. All of the Intellectual Property rights
of the FFC Companies are in full force and effect and constitute legal, valid
and binding obligations of the respective parties thereto, and there have not
been, and, to the Knowledge of FFC, there currently are not, any defaults
thereunder by either FFC Company. An FFC Company owns or is the valid licensee
of all such Intellectual Property rights free and clear of all liens or claims
of infringement. Neither of the FFC Companies or, to the Knowledge of FFC, their
respective predecessors, has misused the Intellectual Property rights of others
and none of the Intellectual Property rights as used in the business conducted
by either such FFC 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 4.11 of the FFC Disclosure Memorandum, neither FFC Company
is obligated to pay any royalties to any Person with respect to any such
Intellectual Property. Each FFC 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 either FFC Company is party to any Contract
which requires such officer, director or employee to assign any interest in any
Intellectual Property or keep confidential any trade secrets, proprietary data,
customer information, or other business information except as disclosed in
Section 4.11 of the FFC Disclosure Memorandum, which restricts or prohibits such
officer, director or employee from engaging in activities competitive with any
person, including either FFC Company.
4.12 Environmental Matters. Except as set forth in Section 4.12
of the FFC Disclosure Memorandum:
(a) To the Knowledge of FFC, each FFC 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 FFC.
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(b) There is no litigation pending and served on FFC or, to
the Knowledge of FFC, threatened before any court, governmental agency or
authority or other forum in which any FFC Company or any of its Operating
Properties or Participation Facilities (or FFC 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, a
site owned, leased, or operated by either FFC 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 FFC, nor, to the knowledge of FFC, is
there any reasonable basis for any litigation of a type described in this
sentence. Any variation from the foregoing shall be set forth in Section 4.12(b)
of the FFC Disclosure Memorandum.
(c) To the Knowledge of FFC, during the period of (i) either
FFC Company's ownership or operation of any of their respective current
properties, (ii) either FFC Company's participation in the management of any
Participation Facility, or (iii) either FFC Company's holding of a security
interest in an Operating Property, there have been no releases of hazardous
material, except such as are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on FFC. To the Knowledge of FFC, prior
to the period of (i) either FFC Company's ownership or operation of any of their
respective current properties, (ii) either FFC Company's participation in the
management of any Participation Facility, or (iii) either FFC Company's holding
of a security interest in an Operating Property, to the Knowledge of FFC, there
were no releases of Hazardous Material in or affecting 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
FFC. Any variation from the foregoing shall be set forth in Section 4.12(c) of
the FFC Disclosure Memorandum.
4.13 Compliance with Laws. FFC is duly registered as a bank holding
company under the BHC Act. Each FFC Company has in effect all (i) Permits
required by any applicable state or federal bank regulatory authority
("Regulatory Permits") and (ii) all other Permits necessary for it to own, lease
or operate its material Assets and to carry on its business as now conducted,
except for those Permits the absence of which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on FFC, and there
has occurred (i) no default under any such Regulatory Permit and (ii) no Default
under any such other Permit other than Defaults which are not reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on FFC.
Except as set forth in Section 4.13 of the FFC Disclosure Memorandum, neither of
the FFC Companies:
(a) Is in violation of any (i) Laws, Orders or Permits
applicable to banks or bank holding companies; or (ii) any other Laws, Orders or
Permits applicable to its business or employees conducting its business except
for violations which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on FFC; and
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(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 either FFC 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 either FFC Company to enter into or consent to the issuance of a cease
and desist order, formal agreement, directive, 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.
4.14 Labor Relations. Neither FFC Company is the subject of any
Litigation asserting that it or the other FFC Company has committed 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 FFC Company to
bargain with any labor organization as to wages or conditions of employment, nor
is there any strike or other labor dispute involving either FFC Company, pending
or threatened, or to the Knowledge of FFC, is there any activity involving FFC
Company's employees seeking to certify a collective bargaining unit or engaging
in any other organization activity.
4.15 Employee Benefit Plans.
(a) FFC has disclosed in Section 4.15(a) of the FFC Disclosure
Memorandum, and has delivered or made available to NCBC prior to the date of
this Agreement copies in each case of, all pension, retirement, profit sharing,
deferred compensation, stock option, employee stock ownership, severance pay,
vacation, bonus or other incentive plans, all other written employee programs,
arrangement 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 FFC Company or ERISA Affiliate thereof for the
benefit of employees, retirees, dependents, spouses, directors, independent
contractors, or other beneficiaries and under which employees, retirees,
dependents, spouses, directors, independent contractors, or other beneficiaries
are eligible to participate (collectively the "FFC Benefit Plans"). Any of the
FFC 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 "FFC ERISA Plan."
Each FFC ERISA Plan which is also a "defined benefit plan" (as defined in IRC
Section 414(j)) is referred to herein as a "FFC Pension Plan." No FFC Pension
Plan is or has been a multi-employer plan within the meaning of Section 3(37) of
ERISA.
(b) All FFC Benefit Plans are in compliance with the
applicable terms of ERISA, the IRC and any other applicable laws the breach or
violation of which are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on FFC. Each FFC ERISA Plan which is
intended to be qualified under IRC Section 401(a) has received a favorable
determination letter from the Internal Revenue Service, and FFC is not aware of
any circumstances
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likely to result in revocation of any such favorable determination letter. No
FFC Company has engaged in a transaction with respect to any FFC Benefit Plan
that, assuming the taxable period of such plan expired as of the date hereof,
would subject any FFC Company to a tax imposed by either IRC Section 4975 or
Section 502(i) of ERISA.
(c) Neither FFC nor any entity which is considered one
employer with FFC under Section 4001 of ERISA or IRC Section 414 or Section 302
of ERISA (an "ERISA Affiliate") maintains, or has, or under any circumstances
might have, any obligation to make contributions to any plan which is a defined
benefit plan as defined in Section 3(35) of ERISA or IRC Section 414(j) or which
is subject to Title IV of ERISA.
(d) Except as disclosed in Section 4.15(d) of the FFC
Disclosure Memorandum, neither FFC Company has any liability for retiree health
and life benefits under any of the FFC Benefit Plans to former employees and
there are no restrictions on the rights of such FFC Company to amend or
terminate any such retiree health or benefit plan without incurring liability
thereunder.
(e) Except as disclosed in Section 4.15(e) of the FFC
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 FFC Company from
either FFC Company under any FFC Benefit Plan or otherwise, (ii) increase any
benefits otherwise payable under any FFC Benefit Plan, or (iii) result in any
acceleration of the time of payment or vesting of any such benefit.
(f) The assets of each FFC ERISA Plan which is intended to be
qualified under IRC Section 401(a) are held in trust, and the fair market value
of each such plan's assets are equal to the liabilities of each such plan. The
liabilities of each other FFC ERISA Plan are fully and properly reflected on the
FFC Financial Statements to the extent required by, and in accordance with,
GAAP. All contributions required under or premium payments due under each of the
other FFC Benefit Plans which calls for contributions or premium payments have
been made in full on a timely basis or are fully and properly accrued on the FFC
Financial Statements, and the liabilities of each of the other FFC Benefit Plans
which do not call for contributions or premium payments are fully and properly
accrued on the FFC Financial Statements.
(g) Prior to consummation of the Merger, FFC will take all
actions necessary to terminate FFC's 401(k) effective as of the Effective Time.
4.16 Material Contracts. Except as disclosed in Section 4.16 of the
FFC Disclosure Memorandum and in Section 10.3 of this Agreement, none of the FFC
Companies, nor any of their respective Assets, businesses or operations, is a
party to or, or is bound or affected by, or receives benefits under (i) any
employment, severance, termination, consulting or retirement contract or
contracts providing for aggregate payments (x) to any person in any calendar
year in
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excess of $10,000, or (y) to any one or more Persons in the aggregate in excess
of $50,000, (ii) any contract relating to the borrowing of money by either FFC
Company or the guarantee by either FFC Company of any such obligation (other
than contracts evidencing deposit liabilities, purchases of federal funds, fully
secured repurchase agreements and Federal Home Loan Bank advances to depository
institution subsidiaries, trade payables, and contracts relating to borrowings
or guarantees made in the ordinary course of business), (iii) any contracts
which prohibit or restrict either FFC 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 FFC 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 FFC Financial Statements delivered
prior to the date of this Agreement) which is a financial derivative contract
(including various combinations thereof), and (vi) any other material contract
or amendment thereto that would be required to be filed as an exhibit to a FFC
SEC Document filed by FFC with the SEC prior to the date of this Agreement
(together with all contracts referred to in Sections 4.10 and 4.15(a) of this
Agreement (the "FFC Contracts")). With respect to each FFC Contract: (i) to the
Knowledge of FFC, the Contract is in full force and effect; (ii) no FFC Company
is in Default thereunder, (iii) neither FFC 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 FFC, in Default in any respect or has
repudiated or waived any material provision thereunder. Except as set forth in
Section 4.16 of the FFC Disclosure Memorandum, all of the indebtedness of either
FFC Company for money borrowed is prepayable at any time by such FFC Company
without penalty or premium.
4.17 Legal Proceedings. Except as set forth in Section 4.17 of the FFC
Disclosure Memorandum, there is no Litigation pending (and as to which process
has been served or with respect to which FCC has otherwise received notice) or,
to the Knowledge of FFC, threatened (or unasserted but considered probable of
assertion and which if asserted would have at least a reasonable probability of
an unfavorable outcome) against either FFC 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 FFC, nor are
there any orders of any Regulatory Authorities, other governmental authorities,
or arbitrators outstanding against either FFC Company. Section 4.17 of the FFC
Disclosure Memorandum includes a report of all material Litigation as of the
date of this Agreement to which either FFC Company is a party and which names
any FFC Company as a defendant, cross-defendant or counter-defendant.
4.18 Reports. Since January 1, 1996, FFC 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, if applicable, including
Forms 10-KSB, Forms 10-QSB, Forms 8-K and proxy statements, and since January 1,
1996, each FFC 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, (ii) all other Regulatory Authorities, and (iii) any
applicable state securities or banking authorities (except failures to file
which applies only to (ii) and (iii) which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on FFC).
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As of their respective dates, each of such reports and documents, including the
financial statements, exhibits, and schedules thereto, complied in any material
respects with all applicable laws. As of its respective date, each such report
and document did not, in any material respect, 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 materially misleading.
4.19 Statements True and Correct. No statement, certificate, instrument
or other writing furnished or to be furnished by any FFC Company to NCBC
pursuant to this Agreement 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 materially misleading. None of the information supplied or to be supplied by
any FFC Company or (to FFC's Knowledge) any Affiliate thereof for inclusion in
the Registration Statement to be filed by NCBC with the SEC or for inclusion in
the Proxy Statement to be mailed to FFC's shareholders in connection with the
shareholders' meeting, and any other documents to be filed by a FFC Company or
any Affiliate thereof with the SEC or any other Regulatory Authority in
connection with the transactions contemplated thereby, will, at the respective
time such documents are filed or become effective, and with respect to the Proxy
Statement, when first mailed to the shareholders of FFC, 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 materially 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 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 FFC 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. FFC is relying on its Affiliates (other than
direct or indirect subsidiaries) as to the truth of their respective
representations to FFC.
4.20 Accounting, Tax and Regulatory Matters. No FFC Company or any
Affiliate thereof has taken any action or has any Knowledge of any fact or
circumstance relating to FFC 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 IRC, or (ii) materially impede or delay receipt
of any Consents of Regulatory Authorities referred to in Section 8.1(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.
4.21 State Takeover Laws. No FFC Company has taken any action designed
or intended to require the transactions contemplated by this Agreement and the
Plan of Merger to comply with any applicable "moratorium," "fair price,"
"business combination," "control share," or other anti-takeover laws
(collectively "Takeover Laws"), including Sections 48-103-201 through 312 of the
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Tennessee Code.
4.22 Articles of Incorporation Provisions. FFC has taken all action so
that the entering into of this Agreement and the Plan of Merger and the
consummation of the Merger and the other transactions contemplated by this
Agreement and the Plan of Merger do not and will not result in the grant of any
rights to any Person under the Articles of Incorporation, Bylaws or other
governing instruments of FFC (other than voting, dissenters' appraisal or other
similar rights) or otherwise restrict or impair the ability of NCBC or any of
its Subsidiaries to vote, or otherwise to exercise the rights of a shareholder
with respect to, shares of FFC or any FFC Company that may be directly or
indirectly acquired or controlled by it.
4.23 Charter Documents. FFC has previously provided NCBC true and
correct copies of the Articles of Incorporation and Bylaws of FFC and the
Articles of Incorporation and Bylaws of FFC Bank Subsidiary, as amended to date,
and each are in full force and effect.
4.24 Year 2000 Matters. The computer software operated by FFC which
is material to the conduct of its business is capable of providing or is being
adapted to provide uninterrupted millennium functionality to record, store,
process and present calendar dates falling on or after January 1, 2000, in
substantially the same manner and with the same functionality as such software
records, stores, processes and presents such calendar dates falling on or before
December 31, 1999, except as would not have a Material Adverse Effect. FFC has
not received and does not expect to receive a "Year 2000 Deficiency Notification
Letter" (as such term is employed in the Federal Reserve's Supervision and
Regulation Letter No. SR 98-3(SUP), dated March 4, 1998). FFC has disclosed to
NCBC a complete and accurate copy of FFC's plan for addressing the issues set
forth in the statements of the Federal Financial Institutions Examination
Council, dated May 5, 1997, entitled "Year 2000 Project Management Awareness,"
and December 1997, entitled "Safety and Soundness Guidelines Concerning the Year
2000 Business Risk," as such issues affect FFC. The costs of the adaptions and
compliance referred to in this Section 4.24 will not have a Material Adverse
Effect.
4.25 Board Action. The Board of Directors of FFC (at a meeting duly
called and held) has by requisite vote of all directors present (a) determined
that the Merger is advisable and in the best interests of FFC and it
shareholders, (b) approved this Agreement and the transactions contemplated
hereby, including the Merger, and (c) directed that the Merger be submitted for
consideration by FFC shareholders at a special meeting. FFC has taken or will
take commercially reasonable steps necessary to exempt (i) the execution of this
Agreement and the Option, (ii) the Merger and (iii) the transactions
contemplated hereby and thereby from any statute of the State of Tennessee that
purports to limit or restrict business combinations or the ability to acquire or
to vote shares, including, without limitation Tennessee Code Annotated Sections
48-103-201 through 48-103-312, and any applicable provision of FFC's Charter
containing change of control or anti-takeover provisions. Nothing in this
Section in the Agreement shall require any Director or officer of FFC to breach
his or her legal or fiduciary duties.
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4.26 Vote Required. The affirmative vote of holders of a majority
of the outstanding shares of FFC Common Stock entitled to vote thereon is the
only vote of the holders of any class or series of FFC capital stock necessary
to approve this Agreement and the transactions contemplated by this Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF NCBC
Except as disclosed in SEC Documents and in the regulatory filings
made by NCBC, NCBC hereby represents and warrants to FFC that the following
matters are or will be true and correct at the Effective Time, in all material
respects:
5.1 Organization, Standing and Power.
(a) NCBC 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. NCBC 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 NCBC.
(b) The securities to be issued by NCBC pursuant to the Plan
of Merger will be registered under the 1933 Act and will be part of a class of
securities registered under the 1934 Act under Section 12. NCBC meets all of the
requirements of Rule 144(c) and Rule 145 of the 1933 Act.
5.2 Authority; No Breach by Agreement.
(a) NCBC 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 Plan of Merger 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 NCBC. This Agreement represents a legal, valid and binding obligation of
NCBC, enforceable against NCBC 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
NCBC, nor the
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consummation by NCBC of the transactions contemplated hereby, nor compliance by
NCBC with any of the provisions hereof will (i) conflict with or result in a
breach of any provision of any NCBC Company's Charter (or similar governing
instrument) or Bylaws, or (ii) constitute or result in a Default under, or
require any Consent pursuant to, or result in the creation of any Lien on any
assets of any NCBC Company under any Contract or Permit of any NCBC Company, or
(iii) subject to receipt of the requisite approvals referred to in Section
8.1(b) of this Agreement, violate any Law or Order applicable to any NCBC
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 law and the rules of the
NASDAQ, 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 NCBC, no notice to, filing with, or
Consent of, any public body or authority is necessary for the consummation by
NCBC of the Merger and the other transactions contemplated in this Agreement and
the Plan of Merger.
(d) NCBC is not a party to, or subject to, or bound by, any
agreement or judgment, order, letter of understanding, writ, prohibition,
injunction or decree of any court or other governmental body of competent
jurisdiction, or any law which would prevent the execution and delivery of this
Agreement and the Plan of Merger by NCBC, or the consummation of the
transactions contemplated hereby and thereby, and no action or proceeding is
pending against NCBC in which the validity of this Agreement, the transactions
contemplated hereby or any action which has been taken by any of such Parties in
connection herewith or in connection with the transaction contemplated hereby is
at issue. Neither the execution or the delivery of this Agreement, nor the
consummation of the transactions described herein, will have a Materially
Adverse Effect on NCBC on a consolidated basis.
5.3 Capital Stock. The currently authorized capital stock of NCBC
consists of (i) 175,000,000 shares of NCBC Common Stock, of which 101,272,004
shares were issued and outstanding as of March 5, 1999, and (ii) 5,000,000
shares of NCBC Preferred Stock, of which no shares are issued and outstanding.
All of the issued and outstanding shares of NCBC Capital Stock are, and all of
the shares of NCBC Common Stock to be issued in exchange for shares of FFC
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 Tennessee Code and the NCBC Charter.
None of the outstanding shares of NCBC Capital Stock has been, and none of the
shares of NCBC Common Stock to be issued in exchange for shares of FFC Common
Stock upon consummation of the Merger will be, issued in violation of any
preemptive rights of the current or past shareholders of NCBC. NCBC has reserved
for issuance a sufficient number of shares of NCBC Common Stock for the purpose
of issuing shares of NCBC Common Stock in accordance with the provisions of
Section 2.1(b) and 2.2 of this Agreement.
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5.4 SEC Filings; Financial Statements.
(a) NCBC has filed and made available to FFC all SEC Documents
required to be filed by NCBC since December 31, 1995. The NCBC SEC Documents (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
NCBC SEC Documents or necessary in order to make the statements in such NCBC SEC
Documents, in light of the circumstances under which they were made, not
materially misleading. Except for NCBC Subsidiaries that are registered as a
broker, dealer or investment advisor, no NCBC Subsidiary is required to file any
SEC Documents.
(b) Each of the NCBC Financial Statements (including, in each
case, any related notes) contained in the NCBC SEC Reports, including any NCBC
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 NCBC
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 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.
(c) Nothing has come to the attention of NCBC that would
require a material change in its most recently filed SEC Documents since the
date of such filing.
5.5 Absence of Undisclosed Liabilities. No NCBC Company has any
liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on NCBC, except liabilities which are
accrued or reserved against in the consolidated balance sheets of NCBC as of
December 31, 1998, included in the NCBC Financial Statements made available
prior to the date of this Agreement or reflected in the notes thereto. No NCBC
Company has incurred or paid any liability since December 31, 1998, 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 NCBC or
(ii) on the transactions contemplated by this Agreement. To NCBC's Knowledge,
neither NCBC, any of its Operating Property, nor any of its Participation
Facilities are in material violation of any Environmental Laws.
5.6 Absence of Certain Changes or Events. Since December 31, 1998,
except as disclosed in the NCBC Financial Statements delivered prior to the date
of this Agreement or contemplated by pending federal legislation applicable to
financial institutions generally, (i) there
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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
NCBC, and (ii) the NCBC 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 NCBC provided in
Article 6 of this Agreement.
5.7 Compliance with Laws. NCBC is duly registered as a bank
holding company under the BHC Act and as a savings and loan holding company
under the HOLA. Each NCBC 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 NCBC
Company:
(a) Is in violation of any Laws, Orders or Permits applicable
to its business or employees conducting its business, except for violations
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on NCBC; 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 NCBC 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 NCBC Company to enter into or consent to the issuance of a cease
and desist order, formal agreement, directive, commitment or memorandum or
understanding, or to adopt any board resolution or similar undertaking, which,
in the case of clauses (i), (ii) or (iii), 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.
5.8 Legal Proceedings. There is no Litigation pending and as to
which process has been served or with respect to which NCBC has otherwise
received notice, or, to the Knowledge of NCBC, 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 NCBC Company, or
against any Asset, interest or right of any of them, and there are no orders of
any regulatory authorities, other than governmental authorities, or arbitrators
against any NCBC Company, in each case that is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on NCBC.
5.9 Reports. Since January 1, 1996, NCBC 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 and since January 1, 1996, each NCBC 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 all other Regulatory
Authorities and any applicable state securities or
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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 NCBC). As of their respective dates,
each of such reports and documents, including the financial statements, exhibits
and schedules thereto, complied in any material respects with all applicable
Laws. As of its respective date, each such report and document did not, in any
material respect, 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 materially misleading.
5.10 Statements True and Correct. No statement, certificate, instrument
or other writing furnished or to be furnished by any NCBC Company or any
Affiliate thereof to FFC 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 materially misleading. None of the information supplied or to be
supplied by any NCBC Company or any Affiliate thereof for inclusion in the
Registration Statement to be filed by NCBC 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 NCBC Company or any Affiliate thereof for inclusion in the Proxy
Statement to be mailed to FFC Shareholders in connection with the shareholders'
meetings, and any other documents to be filed by any NCBC 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 FFC, 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
materially misleading, or, in the case of the Proxy Statement or any amendment
thereof or supplement thereto, at the time of the shareholders' meetings, 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' meetings.
All documents that any NCBC 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.
5.11 Accounting, Tax and Regulatory Matters. No NCBC Company or any
Affiliate thereof has taken any action or has any knowledge of any fact or
circumstance relating to NCBC 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 IRC Section 368(a), or (ii) materially delay receipt of any Consents
of Regulatory Authorities referred to in Section 8.1(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.
5.12 Year 2000 Matters. The computer software operated by NCBC which
is material
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to the conduct of its business is capable of providing or is being adapted to
provide uninterrupted millennium functionality to record, store, process and
present calendar dates falling on or after January 1, 2000, in substantially the
same manner and with the same functionality as such software records, stores,
processes and presents such calendar dates falling on or before December 31,
1999, except as would not have a Material Adverse Effect. NCBC has not received
and does not expect to receive a "Year 2000 Deficiency Notification Letter" (as
such term is employed in the Federal Reserve's Supervision and Regulation Letter
No. SR 98-3(SUP), dated March 4, 1998). NCBC has disclosed to FFC a complete and
accurate copy of NCBC's plan for addressing the issues set forth in the
statements of the Federal Financial Institutions Examination Council, dated May
5, 1997, entitled "Year 2000 Project Management Awareness," and December 1997,
entitled "Safety and Soundness Guidelines Concerning the Year 2000 Business
Risk," as such issues affect NCBC. The costs of the adaptions and compliance
referred to in this Section 5.12 will not have a Material Adverse Effect.
5.13 Board Action. The Board of Directors of NCBC (at a meeting duly
called and held) has by requisite vote of all directors present (a) determined
that the Merger is advisable and in the best interests of NCBC and it
shareholders, and (b) approved this Agreement and the transactions contemplated
hereby, including the Merger. NCBC has taken all steps necessary to exempt (i)
the execution of this Agreement and the Option, (ii) the Merger and (iii) the
transactions contemplated hereby and thereby from any statute of the State of
Tennessee that purports to limit or restrict business combinations or the
ability to acquire or to vote shares, including, without limitation Tennessee
Code Annotated Sections 48-103-201 through 48-103-312, and any applicable
provision of NCBC's Charter containing change of control or anti-takeover
provisions.
5.14 Vote Required. The affirmative vote of holders of a majority of
the outstanding shares of NCBC Common Stock entitled to vote thereon is the only
vote of the holders of any class or series of NCBC capital stock necessary to
approve this Agreement and the transactions contemplated by this Agreement.
ARTICLE 6
CONDUCT OF BUSINESS PENDING CONSUMMATION
6.1 Affirmative Covenants of FFC. (a) From the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement,
unless the prior written consent of NCBC shall have been obtained, and except as
otherwise expressly contemplated herein, FFC 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, (iii) take no action which would (x)
materially adversely affect the ability of any party to obtain any Consents
required for the transactions contemplated hereby without imposition of a
condition or restriction of the type referred to in the last sentence of Section
8.1(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 IRC
or (y) adversely affect in any material respect the ability of any Party to
perform
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its covenants and agreements under this Agreement, and (iv) provide NCBC with
First Bank & Trust financial statements as of the end of each month by the tenth
(10th) day following the close of said month.
(b) FFC shall deliver to NCBC within ten (10) days from the
execution of this Agreement the FFC Disclosure Memorandum described in Article 4
of this Agreement.
6.2 Negative Covenants of FFC. 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, FFC covenants and agrees
that it will not do or agree to 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
NCBC, which consent shall not be unreasonably withheld:
(a) Amend the Articles of Incorporation, Bylaws or other
governing instruments of any FFC Company; or
(b) Incur any additional debt obligation or other obligation
for borrowed money (other than indebtedness of a FFC Company to another FFC
Company) (i) pursuant to the line of credit agreement between FFC and an
unaffiliated commercial bank or (ii) in excess of an aggregate of $100,000 (for
the FFC Companies on a consolidated basis) except in the ordinary course of the
business of FFC Bank Subsidiary consistent with past practices (which shall
include creation of deposit liabilities, purchases of federal funds, advances
from the Federal Reserve Bank or Federal Home Loan Bank, and entry into
repurchase agreements fully secured by U.S. government or agency securities), or
impose, or suffer the imposition on any Asset of either FFC 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 FFC Disclosure Memorandum); or
(c) Repurchase, redeem or otherwise acquire or exchange (other
than exchanges in the ordinary course under employee benefit plans or under the
FFC Option Plans), directly or indirectly, any shares, or any securities
convertible into any shares, of the capital stock of any FFC Company, or declare
or pay any dividend or make any other distribution in respect of FFC capital
stock or take any other actions which would result in a total consolidated
stockholder's equity of FFC which would be less than $18,885,000.00; or
(d) Except pursuant to this Agreement or under the FFC Options
Plans, 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 FFC Common
Stock or any other capital stock of either FFC Company, or any stock
appreciation rights, or any option, warrant, conversion, or other right to
acquire any such stock,
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or any security convertible into any such stock or any stock equivalent type
rights; or
(e) Except under the FFC Option Plans or sales of repossessed
property, adjust, split, combine or reclassify any capital stock of either FFC
Company or issue or authorize the issuance of any other securities in respect of
or in substitution for shares of FFC Common Stock, or sell, lease, mortgage or
otherwise dispose of or otherwise encumber any shares of capital stock of FFC
Bank Subsidiary (unless any such shares of stock are sold or otherwise
transferred to another FFC Company) or any Asset having a book value in excess
of $25,000, 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 three (3)
years or less, purchase any securities or make any material investment, either
by purchase of stock or securities, contributions to capital, asset transfers,
or purchase of any assets, in any Person other than FFC Bank 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 Subsidiaries 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 FFC Company, except in accordance with past
practice disclosed in Section 6.2(g) of the FFC 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 6.2(g) of the FFC Disclosure Memorandum;
enter into or amend any severance agreements with officers of any FFC Company;
grant any material increase in fees or other increases in compensation or other
benefits to directors of either FFC Company, except in accordance with past
practice disclosed in Section 6.2(g) of the FFC 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 FFC); or
(h) Enter into or amend any employment contract between either
FFC Company and any Person (unless such amendment is required by law) that the
FFC 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 either FFC Company
or, except as provided in section 4.15(g), terminate or withdraw from, or make
any material change in or to, any existing employee benefit plans of either FFC
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
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(j) Make any significant change in any tax or accounting
methods or systems of internal accounting controls, except as may be appropriate
to conform to changes in tax laws or regulatory accounting requirements or GAAP;
or
(k) Commence any litigation other than in accordance with past
practice, settle any litigation involving any liability of either FFC Company
for material money damages or restrictions upon the operations of either FFC
Company; or
(l) Except in the ordinary course of business, enter into,
modify, amend or terminate any material Contract (excluding any loan contract)
or waive, release, compromise or assign any material rights or claims.
6.3 Covenants of NCBC.
(a) From the date of this Agreement until the earlier of the
Effective Time or the termination of this Agreement, NCBC 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 NCBC Common Stock and the business prospects of the NCBC
Companies, and (ii) take no action which would (x) materially adversely affect
the ability of any Party to obtain any Consents required for the transactions
contemplated hereby without imposition of a condition or restriction of the type
referred to in the last sentence of Section 8.1(b) of this Agreement or (y)
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 NCBC 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 NCBC, desirable in the conduct of the business of NCBC and
its Subsidiaries and would not, in the judgment of NCBC, likely delay the
Effective Time to a date subsequent to the date set forth in Section 9.1(e) of
this Agreement.
(b) From and after the date of this Agreement, NCBC (i) shall
continue to comply with the requirements of Rules 144 and 145 under the 1933 Act
to the extent that such Rules can provide a means of sale of NCBC's Shares
issued or committed pursuant to the Merger, including options for a period
ending not later than the date that any person receiving NCBC shares or options
pursuant to the Merger becomes eligible to sell all of such shares, and (ii)
shall take no action which would prevent the transactions contemplated hereby,
including the Merger, from qualifying for pooling-of-interests accounting
treatment or as a reorganization within the meaning of IRC Section 368(a).
(c) NCBC shall permit the participants of the FFC 401(k) Plan
to roll their plan assets into the NCBC 401(k) plan if, in the judgment of the
trustees of the FFC 401(k) Plan, the same would be appropriate unless, in the
judgment of the trustees of the NCBC 401(k) Plan, such a rollover would have
negative tax implications.
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6.4 Adverse Changes in Condition. Except to the extent prohibited by
Law, 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.
6.5 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 any Regulatory Authority pursuant to
the Securities Laws, 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
shareholders' equity, and cash flows for the periods then ended in accordance
with GAAP or regulatory accounting (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 any Regulatory Authorities
pursuant to the Securities Laws 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 materially 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 7
ADDITIONAL AGREEMENTS
7.1 Registration Statement; Proxy Statement; Shareholder Approvals.
NCBC shall file the Registration Statement with the SEC, and shall use its
reasonable effort 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
NCBC Common Stock upon consummation of the Merger. FFC shall furnish all
information concerning it and the holders of its capital stock as NCBC may
reasonably request in connection with such action. FFC 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 the Plan of Merger and such other
related matters as its deems appropriate. In connection with the shareholders'
meeting, (i) NCBC and FFC shall prepare a Proxy Statement (which shall be
included in the Registration Statement with the SEC) and mail such Proxy
Statement to the shareholders of FFC, (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 FFC shall
recommend (subject to compliance with their fiduciary duties as advised by
counsel) to their shareholders the approval of the matters submitted for
approval, and (iv) the Board of Directors and officers of FFC shall (subject to
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compliance with their fiduciary duties as advised by counsel) use all reasonable
effort to solicit and obtain such approval and adoption and shall not recommend
or present for shareholder consideration in any manner any other Acquisition
Proposal. FFC shall have no duty to disclose its Shareholder list to NCBC. FFC
shall have the right to mail the Proxy Statement to its Shareholders, except
that FFC agrees that the use of a commercial mailing service to mail the Proxy
Statement is acceptable to FFC unless the use thereof appears reasonably likely
to disclose the list of FFC's Shareholders to NCBC.
7.2 Exchange Listing. NCBC shall use its reasonable efforts to qualify,
prior to the Effective Time, for inclusion in the NASDAQ National Market System,
the shares of NCBC Common Stock to be issued to the holders of FFC Common Stock
or FFC Stock Options pursuant to the Merger, and NCBC shall give all notices and
make all filings with the NASDAQ required in connection with the transactions
contemplated herein. Notwithstanding this provision, NCBC's obligation to list
the shares of NCBC Common Stock remains a condition to FFC's obligation to close
the transactions described in this Agreement.
7.3 Applications. NCBC shall prepare and file, and FFC shall cooperate
in the preparation and, where applicable, 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. At least two business days prior to
filing, NCBC shall provide FFC and its counsel with copies of such applications
to review and approve with respect to information relating to FFC. The Parties
shall deliver to each other copies of all filings, correspondence and orders to
and from, all Regulatory Authorities in connection with the transactions
contemplated hereby as soon as practicable upon their becoming available. In
addition, each party shall advise the other promptly of any substantive verbal
communications with an such Regulatory Authorities concerning the transactions
described in this Agreement.
7.4 NCBC Filings with State Offices. Upon the terms and subject to the
conditions of this Agreement, NCBC and FFC shall execute and file the Articles
of Merger with the Tennessee Secretary of State in connection with the Closing.
7.5 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 transactions contemplated by
this Agreement, including using its reasonable efforts to lift or rescind any
order adversely affecting its ability to consummate the transactions
contemplated herein and to cause to be satisfied the conditions referred to in
Article 8 of this Agreement; provided, however, that nothing herein shall
preclude either Party from exercising its rights under this Agreement. Each
Party shall use, and shall cause each of its Subsidiaries to use, its reasonable
efforts to obtain all Consents necessary or desirable for the consummation of
the transactions contemplated by this Agreement; provided, however, that
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nothing in this Section 7.5 shall be construed to obligate NCBC to take any
action to meet any condition required for it to obtain any Consent if NCBC
shall, in its sole discretion, deem such condition to be unreasonable or to
constitute a significant impediment upon NCBC's ability to carry on its business
or acquisition programs or to require NCBC to increase its capital ratios to
amounts in excess of the Federal Reserve's minimum capital ratio guidelines
which may from time to time be in effect.
7.6 Investigation and Confidentiality.
(a) To the extent not prohibited by law, prior to the
Effective Time, each Party shall keep the other Party advised of all material
developments relevant to its business and to consummation of the Merger and
shall permit the other Party to make or cause to be made such investigation of
the business and properties of it and its Subsidiaries and of their respective
financial and legal conditions as the other Party reasonably requests, provided
that such investigation shall be reasonably related to the transactions
contemplated hereby and shall not interfere 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 such information for any purpose
except in furtherance of the transactions contemplated by this Agreement. If
this Agreement is terminated prior to the Effective Time, each Party shall
promptly return or certify the destruction of all documents and copies thereof,
and all work papers containing confidential information received from the other
Party. The Parties' Confidentiality Agreement dated April 22, 1999, remains in
full force and effect in accordance with its terms and shall not be deemed to
have merged into this Agreement.
(c) Each Party shall give the other Party notice as soon as
practicable after any determination by it of any fact or occurrence relating to
the other Party which it has discovered through the course of its investigation
and which represents either a material breach of any representation, warranty,
covenant or agreement of the other Party or which has had or is reasonably
likely to have a Material Adverse Effect on the other Party. Each Party shall be
afforded a reasonable time after such notice to cure any breach that is not or
was not done with the intent to breach this Agreement.
7.7 Press Release. The initial press release announcing this
Agreement shall be reviewed and approved prior to release and shall be released
at a time and date agreed to in advance by appropriate representatives of both
NCBC and FFC and with respect to any subsequent press releases, FFC and NCBC
shall consult with each other as to the form and substance of such press release
or other public disclosure materially related to this Agreement or any other
transaction contemplated hereby; provided, that nothing in this Section 7.7
shall be deemed to prohibit any Party from making any disclosure which its
counsel deems necessary or advisable in
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order to satisfy such Party's disclosure obligations imposed by law. FFC has
advised NCBC that it is likely that FFC will file a current report on Form 8-K
with the SEC in respect to this transaction, particularly in light of the Option
granted to NCBC in Section 7.8(b) of this Agreement.
7.8 Certain Actions.
(a) Except with respect to this Agreement and the Plan of
Merger and the transactions contemplated hereby and thereby, after the date of
this Agreement, neither FFC Company nor any Affiliate thereof nor any
representatives thereof retained by either FFC Company shall directly or
indirectly solicit or knowingly encourage any Acquisition Proposal by any
Person. Except to the extent necessary to comply with the fiduciary duties of
FFC Board of Directors as advised by counsel, neither FFC Company and no
Affiliate or representative of FFC or either FFC Company shall furnish any
non-public information that it is not legally obligated to furnish, negotiate
with respect to, or enter into, or agree to enter into any contract with respect
to any Acquisition Proposal, but FFC 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 obligations as advised by
counsel. FFC shall promptly notify NCBC in writing in the event that it receives
any inquiry or proposal relating to any such transaction. FFC 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.
(b) As a condition of and as an inducement to NCBC's entering
this Agreement and the Letter of Intent between the parties dated April 14,
1999, FFC is simultaneously with the execution of the Agreement issuing to NCBC
an option in the form attached hereto as Exhibit 7.8, the terms and conditions
of which are incorporated herein by reference.
(c) The requirements, conditions and obligations imposed by
this Section 7.8 shall continue in full force and effect from the date of this
Agreement until October 31, 1999, unless this Agreement shall have been extended
to November 30, 1999 pursuant to Section 9.1(e) or shall have been earlier
terminated (i) mutually by the Parties pursuant to Section 9.1(a) of this
Agreement; (ii) by FFC pursuant to Section 9.1(b) of this Agreement; (iii) by
either Party pursuant to Section 9.1(d)(i) of this Agreement; (iv) by FFC
pursuant to Section 9.1(f) of this Agreement, other than due to the failure to
satisfy Section 8.1(a); or (v) by FFC pursuant to Section 9.1(c) of this
Agreement, but in such event only on the basis of (a) material inaccuracy
(without waiver thereof) of representations and warranties of NCBC as
contemplated by the provisions of Section 8.3(a) of this Agreement; (b)
noncompliance by NCBC with its obligations as required by the provisions of
Section 8.3(b) of this Agreement; or (c) the failure of NCBC to deliver all
certificates as required by the provisions of Section 8.3(d) of this Agreement,
or (d) the failure of NCBC to satisfy the conditions set forth in Sections
8.3(b) and 8.3(e) of this Agreement.
7.9 Accounting and Tax Treatment. Each of the Parties undertakes
and agrees to use
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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 IRC Section 368(a) for
federal income tax purposes.
7.10 State Takeover Laws. Each FFC Company shall take all reasonable
steps to exempt the transactions contemplated by this Agreement from any
applicable Takeover Law.
7.11 Articles of Incorporation Provisions. Each FFC Company shall take
reasonable steps to ensure that the entering into of this Agreement and the Plan
of Merger 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 Articles of Incorporation, Bylaws, or other
governing instruments of any FFC Company (other than voting, dissenters'
appraisal and other similar rights) or restrict or impair the ability of NCBC or
any of its Subsidiaries to vote, or to exercise the rights of a shareholder with
respect to, shares of any FFC Company that may be directly or indirectly
acquired or controlled by it.
7.12 Agreement of Affiliates. FFC has disclosed in Section 7.12 of the
FFC Disclosure Memorandum all persons whom it reasonably believes is an
"affiliate" of FFC for purposes of Rule 145 under the 1933 Act. FFC shall use
its reasonable efforts to cause each such Person to deliver to NCBC not later
than thirty (30) days prior to the Effective Time, a written agreement,
substantially in the form of Exhibit 7.12, providing that such Person will not
sell, pledge, transfer, or otherwise dispose of the shares of FFC 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 NCBC Common Stock to be received by such Person upon consummation of the
Merger except in compliance with applicable provisions of the 1933 Act and the
rules and regulations thereunder and until such time as financial results
covering at least thirty (30) days of combined operations of NCBC and FFC 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 NCBC Common Stock issued to
such affiliates of FFC in exchange for shares of FFC Common Stock shall not be
transferable until such time as financial results covering at least thirty (30)
days of combined operations of NCBC and FFC 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 7.12 (and NCBC shall be entitled to place
customary restrictive legends upon certificates for shares of NCBC Common Stock
issued to affiliates of FFC pursuant to this Agreement and to enforce the
provisions of this Section 7.12). NCBC shall not be required to maintain the
effectiveness of the Registration Statement under the 1933 Act for the purposes
of resale of NCBC Common Stock by such affiliates. NCBC will not unreasonably
withhold its consent for the removal of such restrictive legends under
appropriate circumstances.
7.13 Employee Benefits and Contracts. Following the Effective Time,
NCBC shall provide to officers and employees of the FFC Companies employee
benefits under employee benefit and welfare plans, on terms and conditions which
when taken as a whole are substantially
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similar to those currently provided by the NCBC Companies to their similarly
situated officers and employees. For purposes of participation, vesting and
other benefit accrual, under any such NCBC employee benefit plans, the service
of the employees of the FFC Companies prior to the Effective Time shall be
treated as service with an NCBC Company participating in such employee benefit
plan. Nothing herein shall be deemed to have reduced, contracted, enlarged,
undertaken, authorized, approved or otherwise to have affected whatever
contractual rights the officers and employees of FFC may have under existing
documentation other than as expressly stated herein, and nothing herein shall be
deemed to be an employment contract, agreement or understanding, or offer of
employment by NCBC or any of its direct or indirect Subsidiaries after the
Effective Time. FFC hereby represents and covenants that it has accrued and will
continue to accrue pursuant to GAAP amounts sufficient to enable it to make the
foregoing payments. Following Closing, NCBC agrees to allow the current
directors of FFC to participate in its health insurance plans generally
available to employees of NCBC, subject to eligibility and any other
requirements of such plans.
7.14 D&O Coverage. At the Effective Time, NCBC will provide, errors
and omissions insurance coverage for FFC's directors and officers, at its
election, either (i) by purchasing continuation coverage under FFC's current
policy for a period not less than six (6) years after the Effective Time, or
(ii) obtain coverage under NCBC's current policy to provide coverage for FFC's
directors and officers on a prior acts basis for a period not less than six (6)
years prior to the Effective Time.
7.15. Indemnification.
(a) With respect to all claims brought during the period of
six (6) years and an additional one (1) year if a savings statute is properly
invoked after the Effective Time, NCBC shall indemnify, defend and hold harmless
present and former directors, officers, employees and agents of FFC and FFC
Companies (the "FFC Entities") (each an "Indemnification Party") against all
Liabilities or litigation arising out of actions or omissions arising out of the
Indemnified Party's service or services as directors, officers, employees or
agents of an FFC entity, or at the request of an FFC Entity, of another
corporation, partnership, joint venture, trust or other enterprise occurring at
or prior to the Effective Time (including transactions contemplated by this
Agreement) to the fullest extent permitted under Tennessee Law and the Articles
of Incorporation and Bylaws of FFC as in effect on the date hereof, including
provisions relating to advances of expenses incurred in the defense of any
Litigation and whether or not any FFC Company or NCBC is insured against any
such matter. Without limiting the foregoing, in any case in which approval by
the Surviving Corporation is required to effectuate any indemnification, the
Surviving Corporation 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 NCBC and the Indemnified Party.
(b) Any Indemnified Party wishing to claim indemnification
under paragraph (a) of this Section 7.15, upon learning of any such Liability or
Litigation, shall promptly notify
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NCBC thereof. In the event of any such Litigation (whether arising before or
after the Effective Time), (i) the Surviving Corporation shall have the right to
assume the defense thereof and the Surviving Corporation shall not be liable to
such Indemnified Parties for any legal expenses of other counsel or any other
expenses subsequently incurred by such Indemnified Parties in connection with
the defense thereof, except that if the Surviving Corporation elects not to
assume such defense or counsel for the Indemnified Parties advised that there
are substantive issues which raise conflicts of interest between the Surviving
Corporation and the Indemnified Parties, the Indemnified Parties may retain
counsel satisfactory to them, and the Surviving Corporation shall be obligated
pursuant to this paragraph (b) to pay for only one firm of counsel for all
Indemnified Parties in any jurisdiction (except that if there are conflicts of
interest among such Indemnified Parties, this limitation shall not apply), (ii)
the Indemnified Parties will cooperate in the defense of any such Litigation,
and (iii) the Surviving Corporation shall not be liable for any settlement
effected without its prior written consent; and provided further that the
Surviving Corporation shall not have any obligation thereunder to any
Indemnified Party when and if a court of competent jurisdiction shall determine,
and such determination shall have become final, that the indemnification of such
Indemnified Party in the manner contemplated hereby is prohibited by applicable
law.
ARTICLE 8
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
8.1 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
10.6 of this Agreement:
(a) Shareholder Approval. The shareholders of FFC shall have
approved this Agreement and the Plan of Merger and the consummation of the
transactions contemplated hereby and thereby, including the Merger, as and to
the extent required by law and by the provisions of any governing instruments.
(b) Regulatory Approvals. All Consents of, filings and
registrations with, and notifications to, all Regulatory Authorities required
for consummation of the Merger shall have been obtained or made and shall be in
full force and effect and all waiting periods required by law shall have
expired. No Consent obtained from any Regulatory Authority which is necessary to
consummate the transactions contemplated hereby shall be conditioned or
restricted in a manner, which in the reasonable judgment of the Board of
Directors of either party 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, either party would not, in its
reasonable judgment, have entered into this Agreement.
(c) Consents. Each Party shall have obtained any and all
Consents required for consummation of the Merger (other than those referred to
in Sections 8.1(b) and 8.1(c) of this
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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 government 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 and the Plan of
Merger.
(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 approval under state Securities
Laws or the 1933 Act, or 1934 Act relating to the issuance or trading of the
shares of NCBC Common Stock pursuant to the Merger shall have been received.
(f) Exchange Listing. The shares of NCBC Common Stock issuable
pursuant to the Merger shall have been approved for inclusion on the NASDAQ
National Market System subject to official notice of issuance.
(g) Tax Matters. Each of the Parties shall have received an
opinion from King & Spalding in form and substance reasonably satisfactory to
such Party, dated the Effective Time, substantially to the effect that, on the
basis of facts, representations and assumptions set forth in such opinion which
are consistent with the state of facts existing at the Effective Time, for
federal income tax purposes:
(i) The Merger will be treated as a reorganization
within the meaning of Section 368(a) of the IRC;
(ii) No gain or loss will be recognized by NCBC or FFC
as a result of the Merger;
(iii) No gain or loss will be recognized by the
shareholders of FFC upon the exchange of FFC
Common Stock for NCBC Common Stock pursuant
to the Merger (except with respect to cash
received in lieu of a fractional share
interest in NCBC Common Stock) or by the
holders of FFC Options upon the conversion
of such options into rights with respect to
NCBC Common Stock;
(iv) The aggregate tax basis of NCBC Common Stock
received by a FFC shareholder pursuant to
the Merger will be the same as the aggregate
tax basis of the FFC Common Stock
surrendered in
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exchange therefor (excluding any basis allocable
to a fractional share of NCBC Common Stock for
which cash is received); and
(v) A FFC shareholder who perfects his
dissenters' rights under Tennessee law and
who receives payment in cash for the "fair
value" of his FFC Common Stock will be
treated as having exchanged such stock for
cash in a redemption subject to Section 302
of the IRC, and the FFC shareholder
generally will recognize capital gain or
loss in such exchange equal to the
difference between the cash received and the
tax basis of such stock.
In rendering such opinion, King & Spalding may
require and rely upon representations and covenants,
including those contained in certificates of officers
of NCBC, FFC, and others, reasonably satisfactory in
form and substance to such counsel.
(h) Retention Agreements. NCBC and FFC have agreed upon
mutually satisfactory retention contracts and bonuses
for key employees of the FFC Companies.
(i) Employment Agreements. NCBC and each of David Major
and James S. Short shall have entered into an
Employment Agreement having terms and conditions
reasonably satisfactory to each of the respective
parties.
(j) Accounting Treatment. FFC's external audit firm
shall provide FFC with a negative assurance letter
(the "FFC Pooling Letter") that the proposed
transaction will qualify for pooling of interest
accounting treatment based on the attributes of FFC
only.
8.2 Conditions to Obligations of NCBC. The obligations of NCBC to
perform this Agreement and the Plan of Merger and consummate the Merger and the
other transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by NCBC pursuant to Section 10.6(a) of this
Agreement:
(a) Representations and Warranties. For purposes of this
Section 8.2(a), the accuracy of the representations and warranties of FFC 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 FFC set forth
in Section 4.3 of this Agreement shall be true and correct (except for
inaccuracies which are de minimis in amount). The representations and warranties
of FFC set forth in Sections 4.20, 4.21 and 4.22 of this Agreement shall be true
and correct in all material respects. There shall not exist inaccuracies in the
representations and
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warranties of FFC set forth in this Agreement (including the representations and
warranties set forth in Sections 4.3, 4.20, 4.21 and 4.22), such that the
aggregate effect of such inaccuracies has, or is reasonably likely to have, a
Material Adverse Effect on FFC.
(b) No Material Adverse Effect. There shall have been no
Material Adverse Effect on FFC's or FFC Bank Subsidiary's financial condition
since March 31, 1999.
(c) Performance of Agreements and Covenants. Each and all of
the agreements and covenants of FFC 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.
(d) Certificates. FFC shall have delivered to NCBC (i) a
certificate, dated as of the Effective Time and signed on its behalf by its
President and the Chief Financial Officer of the FFC Bank Subsidiary, to the
effect that the conditions to its obligations set forth in Sections 8.2(a) and
8.2(b) of this Agreement have been satisfied, and (ii) certified copies of
resolutions duly adopted by FFC'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 Plan of Merger, and the
consummation of the transactions contemplated hereby and thereby, all in such
reasonable detail as NCBC and its counsel shall reasonably request.
(e) Affiliates Agreements. NCBC shall have received from each
affiliate of FFC the affiliates letter referred to in Section 7.12 of this
Agreement, to the extent necessary to assure in the reasonable judgment of NCBC
that the transactions contemplated hereby will qualify for pooling-of-interests
accounting treatment.
(f) Legal Opinion. FFC shall have delivered to NCBC an opinion
of Daniel W. Small, counsel to FFC, dated as of the Closing Date, addressed to
and in form and substance satisfactory to NCBC, to the effect that:
(i) FFC is a bank holding company duly organized, validly
existing and in good standing under the laws of the State of Tennessee with
corporate power and authority to conduct its business and to own and use its
Assets.
(ii) FFC Bank Subsidiary is a financial institution duly
organized, validly existing, and in good standing under the laws of the State of
Tennessee with corporate power and authority to conduct its business and own and
use its Assets.
(iii) The execution, delivery and performance of this
Agreement and the Plan of Merger, as appropriate, and the consummation of the
transactions contemplated herein and therein, including the Merger and the
Option Agreement attached hereto as Exhibit 7.8 have been duly and validly
authorized by all necessary corporate and shareholder action in respect thereof
on the part of FFC.
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(iv) The execution and delivery by FFC of this
Agreement and Option do not, and if FFC were now to perform its obligations
under this Agreement such performance would not, violate or contravene any
provision of the Articles of Incorporation or Bylaws of FFC or, to my knowledge
but without any independent investigation, result in any breach of, or default
or acceleration under any mortgage, agreement, lease, indenture, or other
instrument, order, judgment or decree to which FFC is a party or by which it is
bound.
(v) This Agreement, the Plan of Merger and the Option
have been duly and validly authorized, executed and delivered on behalf of FFC
by duly authorized officers, and (assuming valid authorization, execution and
delivery by NCBC) constitutes a valid and binding agreement of FFC enforceable
in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and subject to the application of equitable
principles and judicial discretion; provided, however, that no opinion is
expressed as to the availability of the equitable remedy of specific
performance.
Such opinion shall be rendered by counsel
reasonably acceptable to NCBC. NCBC agrees that Daniel W. Small is acceptable
counsel. In rendering such opinion, counsel for FFC shall be entitled to require
and shall be permitted to rely upon certificates of officers of FFC and upon
certificates of public officials as to factual matters relevant to such opinion,
which certificates shall be in form and substance reasonably satisfactory to
such counsel.
(g) Maintenance of Certain Covenants, Etc. At the time
of Closing,
(i) Exclusive of any securities gains or losses
pursuant to FAS 115, total consolidated stockholders' equity shall not be less
than $18,885,000.00.
(ii) FFC shall own, free and clear of any liens, not
less than 100% of the outstanding capital stock of FFC Bank Subsidiary; and
(iii) From and after the Balance Sheet Date, there
shall have been no extraordinary sale of assets, nor any material investment
portfolio restructuring by either FFC Company.
The financial criteria and calculations set forth
above shall be determined in accordance with GAAP consistently applied.
(h) Non-Compete Agreements. Each of David Major, James S.
Short and six of the other eight members of the FFC Board shall have entered
into a non-compete agreement with NCBC and FFC Bank Subsidiary substantially in
the form of the non-compete agreement which is annexed hereto as Exhibit 8.2.
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<PAGE> 47
8.3 Conditions to Obligations of FFC. The obligations of FFC to
perform this Agreement and the Plan of Merger and consummate the Merger and the
other transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by FFC pursuant to Section 10.6(b) of this
Agreement:
(a) Representations and Warranties. For purposes of this
Section 8.3(a), the accuracy of the representations and warranties of NCBC 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 NCBC set
forth in Section 5.3 of this Agreement shall be true and correct (except for
inaccuracies which are de minimis in amount). The representations and warranties
of NCBC set forth in Section 5.11 of this Agreement shall be true and correct in
all material respects. There shall not exist inaccuracies in the representations
and warranties of NCBC set forth in this Agreement (including the
representations and warranties set forth in Sections 5.3 and 5.11) such that the
aggregate effect of such inaccuracies has, or is reasonably likely to have, a
Material Adverse Effect on NCBC.
(b) No Material Adverse Effect. There shall have been no
Material Adverse Effect on NCBC's financial condition since March 31, 1999.
(c) Performance of Agreements and Covenants. Each and all of
the agreements and covenants of NCBC 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.
(d) Certificates. NCBC shall have delivered to FFC (i) a
certificate, dated as of the Effective Time and signed on its behalf by its
Chief Executive Officer and its Chief Financial Officer, to the effect that the
conditions of its obligations set forth in Sections 8.3(a) and 8.3(b) of this
Agreement have been satisfied, and (ii) certified copies of resolutions duly
adopted by NCBC's Board of Directors evidencing the taking of all corporate
action necessary to authorize the execution, delivery and performance of this
Agreement and the Plan of Merger, and the consummation of the transactions
contemplated hereby and thereby, all in such reasonable detail as FFC and its
counsel shall reasonably request.
(e) Legal Opinion. NCBC shall have delivered to FFC an opinion
of counsel, which may be in-house counsel of NCBC, dated as of the Closing Date,
addressed to and in form and substance satisfactory to FFC, to the effect that:
(i) NCBC is a bank holding company duly organized, validly
existing and in good standing under the laws of the State of Tennessee with
corporate power and authority to conduct its business and to own and use its
Assets;
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<PAGE> 48
(ii) This Agreement and the Plan of Merger have been duly
and validly authorized, executed and delivered on behalf of NCBC by duly
authorized officers or representatives thereof, and (assuming this Agreement is
a binding obligation of FFC) constitutes a valid and binding obligation of NCBC
enforceable in accordance with its terms, subject as to enforceability to
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and subject to the
application of equitable principles and judicial discretion;
(iii) The execution, delivery and performance of this
Agreement and the Plan of Merger, as appropriate, and the consummation of the
transactions contemplated herein and therein, including the Merger, have been
duly and validly authorized by all necessary corporate and shareholder action in
respect thereof on the part of NCBC; and
(iv) The execution and delivery by NCBC of this Agreement
do not, and if NCBC were now to perform its obligations under this Agreement
such performance would not, violate or contravene any provision of its Charter
or Bylaws or, to such counsel's knowledge but without any independent
investigation, result in any breach of, or default or acceleration under any
mortgage, agreement, lease, indenture, or other instrument, order, judgment or
decree to which NCBC is a party or by which it is bound.
(f) Fairness Opinion. FFC shall have received a "fairness
opinion" from its independent financial adviser dated as of the date of the
Proxy Statement and as of the Closing Date to the effect that, in the opinion of
such adviser, the consideration to be received by the FFC Record Holders
pursuant to the terms and conditions of this Agreement is fair to the
shareholders of FFC from a financial point of view, and such fairness opinion
shall not have been withdrawn on or prior to the Closing Date.
ARTICLE 9
TERMINATION
9.1 Termination. Notwithstanding any other provision of this
Agreement, and notwithstanding the approval of this Agreement by the
shareholders of NCBC or FFC, this Agreement and the Plan of Merger 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 NCBC and
the Board of Directors of FFC; 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
8.2 of this Agreement in the case of FFC and Section 8.3 in the case of NCBC 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
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<PAGE> 49
contained in this Agreement which cannot be or has not been cured within thirty
(30) days after the giving of written notice to breaching Party of such
inaccuracy and which inaccuracy would provide the terminating Party the ability
to terminate the Merger under the applicable standard set forth in Section 8.2
of this Agreement in the case of FFC and Section 8.3 of this Agreement in the
case of NCBC; 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
8.2of this Agreement in the case of FFC and Section 8.3 in the case of NCBC 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 thirty (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
shall have been denied by final nonappealable action of such Regulatory
Authority or if any action taken by such Regulatory Authority is not appealed
within the time limit for appeal or (ii) the shareholders of FFC fail to vote
their approval of this Agreement and the transactions contemplated hereby as
required by the Tennessee Code and FFC's Charter and Bylaws; or
(e) By the Board of Directors of either Party in the event
that the Merger shall not have been consummated by October 31, 1999, 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 9.1(e) and further, if NCBC shall have
filed all applications necessary to obtain the necessary Consents of banking
Regulatory Authorities within sixty (60) days of the date hereof, and if the
Closing shall not have occurred because of a delay caused by a bank Regulatory
Authority in its review of the application before it, or by the SEC in its
review of the Registration Statement to be filed by NCBC, then FFC shall, upon
NCBC's written request, extend the October 31, 1999, date for a reasonable time,
in no event less than thirty (30) days, in order for NCBC to obtain all Consents
of bank Regulatory Authorities required and/or all Consents of the SEC and any
other securities Regulatory Authorities, and for the expiration of any
stipulated waiting periods. Nothing shall require FFC to extend the Closing Date
beyond November 30, 1999; 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
8.2(a) of this Agreement in the case of FFC and Section 8.3(a) in the case of
NCBC 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 consummate the Merger cannot be satisfied or fulfilled by the
date specified in Section 9.1(e) of this Agreement as the same may be extended
pursuant to Section 9.1(e).
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If the FFC Disclosure Memorandum, as described in Article 4 of this
Agreement, (i) is not delivered within ten (10) days after the execution of this
Agreement as provided for in Section 6.1(b) of this Agreement; or (ii) if the
FFC Disclosure Memorandum is delivered within the time restrictions set forth
herein, but NCBC finds the FFC Disclosure Memorandum to be deficient in content;
or (iii) if the FFC Disclosure Memorandum is delivered in a timely manner, but
NCBC finds the FFC Disclosure Memorandum to contain disclosures that NCBC deems
unsatisfactory, NCBC has the following remedies. In the case of either
subsection (i) or (ii) of this Section 9.1(f), NCBC has the right to immediately
terminate this Agreement. In the case of subsection (iii) of this Section
9.1(f), NCBC has the right to terminate this Agreement if the disclosure deemed
unsatisfactory by NCBC cannot be or has not been cured by FFC to NCBC's
satisfaction within thirty (30) days from the date NCBC gives FFC written notice
thereof. Within ten (10) days of receipt of the FFC Disclosure Memorandum, NCBC
shall give FFC written notice of any deficiencies or unsatisfactory matters
disclosed in the FFC Disclosure Memorandum. Such notice shall state with
particularity the issues in question and if such issue is subject to cure, shall
set forth NCBC's description of what action or result is necessary to cure the
items. In addition, in the case of subsection (iii) of this Section 9.1(f), FFC
has the right to terminate this Agreement if NCBC demands that FFC remedy any
problems perceived by NCBC with the substance of the disclosures and if FFC is
unwilling or unable to remedy the such perceived problems. In the event of
termination by either Party pursuant to this second paragraph of Section 9.1(f),
the Option shall terminate and this Agreement, the Parties' Letter of Intent
dated April 16, 1999 shall terminate and, other than Section 7.6(b) and Article
10, this Agreement shall terminate. In the event of termination under this
second paragraph of Section 9.1(f), each Party shall be responsible for its own
fees and expenses and shall have no liability to the other except for wilful
violations of Section 7.6(b).
9.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 9.1 of this Agreement, this
Agreement and the Plan of Merger shall become void and have no effect, except
that (i) the provisions of this Section 9.2 and Article 10 and Sections 7.6(b)
and 7.8 of this Agreement shall survive any such termination and abandonment;
(ii) a termination pursuant to Sections 9.1(b), 9.1(c) or 9.1(f) of this
Agreement shall not relieve the breaching Party from liability for (x) an
uncured willful breach of a covenant or agreement or (y) a fraudulent act of
such Party, in either case to the extent giving rise to such termination; and
(iii) Section 7.8 of this Agreement shall be governed by its own terms.
9.3 Non-Survival of Representations and Covenants. The respective
representations, warranties, obligations, covenants and agreements of the
Parties shall not survive the Effective Time except this Section 9.3 and
Articles 1, 2, 3 and 10 and Sections 6.3(b), 7.6, 7.8, 7.12, 7.13, 7.14 and 7.15
of this Agreement.
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ARTICLE 10
GENERAL PROVISIONS
10.1 Definitions.
(a) Except as otherwise provided herein, the capitalized terms
set forth below shall have the following meanings:
"Acquisition Proposal" shall mean any exchange offer or
any proposal for a merger, consolidation, or acquisition of 9.9% or more of the
outstanding common stock of FFC.
"Affiliate" of a Party means any Person that, directly or
indirectly, through one or more intermediaries, controls or is controlled by or
is under common control with such Person.
"Agreement" shall mean this Agreement, the Plan of Merger
and the Exhibits delivered pursuant hereto and incorporated herein by reference.
"Allowances" shall mean the allowances for loan, lease and
other credit losses, including losses in connection with ORE, of any Person.
"Articles of Merger" shall mean the Articles of Merger to
be executed by NCBC and FFC and filed with the Secretary of State of the State
of Tennessee pursuant to Section 48-21-107 of the Tennessee Code relating to the
merger of FFC with and into NCBC as contemplated by this Agreement and the Plan
of Merger.
"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.
"Balance Sheet Date" shall mean December 31, 1998.
"BHC Act" shall mean the Bank Holding Company Act of 1956,
as amended.
"Business Day" shall mean any Monday, Tuesday, Wednesday,
Thursday or Friday that (i) is not a federal or state holiday generally
recognized or observed by banks in the State of Tennessee and (ii) is not a day
on which the principal executive office of either NCBC or FFC is closed for
business.
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"Closing" shall mean the consummation of the Merger.
"Closing Date" shall mean the date on which the Closing
occurs.
"Consent" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or affirmation by any Person pursuant to any
Contract, Law, Order or Permit.
"Consideration" shall mean the shares of NCBC Common Stock
and the cash settlement of any remaining fractional share of NCBC Common Stock
deliverable to the FFC Record Holders pursuant to Section 2.1(b) of this
Agreement.
"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 that is binding on any Person or its
capital stock, Assets, or business.
"Control" shall have the meaning assigned to such term in
Section 2(a)(2) of the Bank Holding Company Act of 1956, as amended.
"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 or any event that with or without the passage of time or the
giving of notice would give rise to a right to terminate or revoke, change the
current terms of or renegotiate, or to accelerate, increase or impose any
Liability under, any Contract, Order or Permit.
"Effective Date" shall mean that date on which the
Effective Time of the Merger shall have occurred.
"Effective Time" shall mean the date and time that the
Articles of Merger shall become effective with the Secretary of State of
Tennessee.
"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 any state and local agencies with jurisdiction over, and
including common law in respect of, pollution or protection of the environment,
including the Comprehensive Environmental Response Compensation and Liability
Act, as amended, 42 USC ss.9601, et seq. ("CERCLA"), the Resource Conservation
and Recovery Act, as amended, 42 USC ss.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.
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"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
"Exchange Agent" shall mean The Bank of New York.
"Exchange Ratio" shall mean the number of shares of NCBC
Common Stock, and fractions thereof, to be exchanged for each share of FFC
Common Stock pursuant to Section 2.1(b) of this Agreement, subject to such
adjustments as may be expressly provided in this Agreement and the Plan of
Merger.
"Exhibits" 1.1, 7.8, 7.12 and 8.2, 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 or thereto.
"FFC" shall mean First Financial Corporation, a Tennessee
corporation.
"FFC Bank Subsidiary" shall mean, collectively, First Bank
and Trust, a state non-member bank and its wholly owned subsidiaries, American
Title and Escrow Company and First Southern Finance, Inc.
"FFC Common Stock" shall mean the common stock of First
Financial Corporation, $2.50 par value per share.
"FFC Company(ies)" shall mean FFC and all of its
Subsidiaries, whether direct or indirect.
"FFC Disclosure Memorandum" shall mean the written
information entitled "First Financial Corporation Disclosure Memorandum"
delivered prior to the date of this Agreement to NCBC describing in reasonable
detail the matters contained therein. Disclosure of a specific state of facts on
one schedule shall be deemed to be disclosed with respect to other relevant
schedules so long as such disclosure is made with such detail and such
specificity that it is clear that the information disclosed relates to the
subject matter of the schedule.
"FFC Employee Plans" shall mean any pension plans, profit
sharing plans, deferred compensation plans, stock option plans, cafeteria plans,
and any other such or related benefit plans or arrangements offered or funded by
FFC or any FFC Bank Subsidiary, to or for the benefit of the officers,
directors, employees, independent contractors or consultants of FFC or any FFC
Bank Subsidiary.
"FFC Financial Statements" shall mean (i) the unaudited
consolidated balance sheets (including related notes and schedules, if any) of
FFC as of March 31, 1999, and 1998, and the related unaudited consolidated
statements of earnings, changes in shareholders'
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<PAGE> 54
equity and cash flows (including related notes and schedules, if any) for the
three months ended March 31, 1999; (ii) the audited consolidated balance sheets
(including related notes and schedules) of FFC as of December 31, 1998, 1997 and
1996, and the related audited consolidated statements of earnings, changes in
shareholders' equity and cash flows (including related notes and schedules) for
the years then ended; and (iii) the consolidated financial statements of FFC
(including related notes and schedules, if any) with respect to periods
subsequent to March 31, 1999, in each case as filed by FFC in SEC Documents.
"FFC Option Plans" means those options to acquire FFC
Common Stock under (i) FFC's non-qualified stock option plans; (ii) FFC's
employment agreement with its president; and (iii) FFC's incentive stock option
plan.
"FFC Preferred Stock" means the no par value preferred
stock of FFC, no shares of which are currently outstanding.
"FFC Record Holders" means those Persons who shall be the
holders of record of any of the issued and outstanding shares of FFC Common
Stock immediately prior to the Effective Time.
"FDIC" shall mean the Federal Deposit Insurance
Corporation.
"Federal Reserve" shall mean the Board of Governors of the
Federal Reserve System and shall include the Federal Reserve Bank of St. Louis
when acting under delegated authority.
"GAAP" shall mean generally accepted accounting principles
as in effect from time to time, consistently applied.
"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, 12 USC
Section 1461 et seq.
"Intellectual Property" shall mean copyrights, patents,
trademarks, 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.
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"IRC" 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
references to such Person being aware of a particular matter) shall mean those
facts that are known by the Chairman, Chief Executive Officer, President, Chief
Administrative Officer, Chief Financial Officer, Chief Accounting Officer, Chief
Credit Officer or General Counsel of such Person, or such other officer of such
Person, regardless of title, charged with or responsible for the oversight of a
particular area, department or function to which the subject matter relates. As
used in this Agreement, ther term "Knowledge" does not mean or include
constructive knowledge.
"Law" shall mean any code, law, ordinance, regulation,
reporting or licensing requirement, rule or statute applicable to a Person or
its Assets, Liabilities or business, including those promulgated, interpreted or
enforced by any Regulatory Authority.
"Liability" shall mean any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost or expense
(including costs of investigation, collection and defense), claim, deficiency,
guaranty or endorsement of or by any Person (other than endorsements of notes,
bills, checks, and drafts presented for collection or deposit in the ordinary
course of business) of any type, whether accrued, absolute or contingent,
liquidated or unliquidated, matured or unmatured, or otherwise.
"Lien" shall mean any conditional sale agreement, default
of title, easement, encroachment, encumbrance, hypothecation, infringement,
lien, mortgage, pledge, reservation, restriction, security interest, title
retention, or other security arrangement, or any adverse right or interest,
charge, or claim of any nature whatsoever of, on, or with respect to any
property or property interest, other than (i) Liens for current property 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 written notice 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 routine examinations of
depository institutions and their Affiliates by Regulatory Authorities.
"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
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Agreement. With respect to NCBC, a decline in the price of a share of NCBC
Common Stock shall not, in and of itself, be deemed to be or to be evidence of
the occurrence of a Material Adverse Effect with respect to NCBC.
"Merger" shall mean the merger of FFC with and into NCBC,
as described in Section 1.1 of this Agreement.
"NASDAQ" shall mean the NASDAQ Stock Market or NASDAQ
National Market, or its successor, upon which shares of NCBC Common Stock are
listed for trading.
"NCBC" shall mean National Commerce Bancorporation, a
corporation chartered and existing under the laws of the State of Tennessee
which is registered both as a bank holding company and as a savings and loan
holding company and whose principal offices are located at One Commerce Square,
Memphis, Shelby County, Tennessee 38150.
"NCBC Capital Stock" shall mean, collectively, the NCBC
Common Stock, the NCBC Preferred Stock and any other class or series of capital
stock of NCBC.
"NCBC Common Stock" shall mean the $2.00 par value common
stock of NCBC.
"NCBC Companies" shall mean, collectively, NCBC and all
NCBC Subsidiaries.
"NCBC Financial Statements" shall mean (i) the
consolidated balance sheets (including related notes and schedules, if any) of
NCBC as of March 31, 1999, and as of March 31, 1998, and March 31, 1997, the
related statements of earnings, changes in shareholders' equity, and cash flows
(including related notes and schedules, if any) for the three months ended March
31, 1999, and for each of the three years ended December 31, 1998, 1997, and
1996, as filed by NCBC in SEC Documents and (ii) the consolidated balance sheet
of NCBC (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 March 31, 1999.
"NCBC Preferred Stock" shall mean the no par value
preferred stock of NCBC authorized but none of which is currently outstanding.
"NCBC Subsidiaries" shall mean the Subsidiaries of NCBC.
"1933 Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"1934 Act" shall mean the Securities Exchange Act of
1934, as amended,
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<PAGE> 57
and the rules and regulations promulgated thereunder.
"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.
"ORE" shall mean real estate and other property acquired
through foreclosure, deed in lieu of foreclosure, or similar procedures.
"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. A Party shall not be deemed to participate in the management of a
facility or property by reason of the existence of covenants in loan agreements
or similar instruments between such Party and the owner of such facility or
property.
"Party" shall mean either NCBC, on the one hand, or FFC on
the other hand, and "Parties" shall mean NCBC and FFC.
"Pension Plan" shall mean any employee pension benefit
plan as such term is defined in Section 3(2) of ERISA which is maintained by
the referenced Party.
"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.
"Plan of Merger" shall mean the plan of merger providing
for the Merger, in substantially the form of Exhibit 1.1.
"Proxy Statement" shall mean the proxy statement to be
used by FFC to solicit proxies with a view to securing the approval of the FFC
shareholders of this Agreement and
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<PAGE> 58
the Plan of Merger.
"Records" means all available records, minutes of meetings
of the Board of Directors, committees and shareholders of a Party; original
instruments and other documentation (or true and correct copies thereof),
pertaining to a Party or any of its Subsidiaries or assets (including plans and
specifications relating to any realty), Liabilities, Deposits, Contracts,
capital stock, and loans; and all other business and financial records which are
necessary or customary for use in the conduct of such Person or any of such
Person's Subsidiary businesses on or after the Effective Time as it was
conducted prior to the Effective Time.
"Registration Statement" shall mean the Registration
Statement on Form S-4, or other appropriate form, including any pre-effective or
post-effective amendments or supplements thereto, filed with the SEC by NCBC
under the 1933 Act with respect to the issuance of the shares of NCBC Common
Stock to the shareholders of FFC in connection with the transactions
contemplated by this Agreement.
"Regulatory Authorities" shall mean, collectively, the
United States Department of Justice, the Federal Reserve, the Office of Thrift
Supervision (including its predecessor, the Federal Home Loan Bank Board), the
Office of the Comptroller of the Currency, the FDIC, all state regulatory
agencies having jurisdiction over the Parties and their respective Subsidiaries,
the NASDAQ, the National Association of Securities Dealers and the SEC, or any
respective successor thereto.
"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 which derive their value in whole or in part from shares of the
capital stock of a Person, including stock appreciation rights and phantom
stock, or by which a Person is or may be bound to issue additional shares of its
capital stock or other Rights.
"SEC" shall mean the United States Securities and Exchange
Commission, or any successor thereto.
"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 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 the SEC promulgated
53
<PAGE> 59
thereunder, as well as any similar state securities laws and any similar rules
and regulations promulgated by the applicable federal or state bank Regulatory
Authorities.
"Shareholders' Meeting" shall mean the Special Meeting of
the shareholders of FFC to be held pursuant to Section 7.1 of this Agreement,
including any adjournment or adjournments or postponement or postponements
thereof.
"Subsidiaries" shall mean all of those Persons of which
the entity in question owns or controls 5% or more of the outstanding voting
equity securities or equity interest, either directly or through an unbroken
chain of entities as to each of which 5% or more of the outstanding equity
securities or equity interest is owned directly or indirectly by its parent;
provided, however, that there shall not be included any Person acquired through
foreclosure or in satisfaction of a debt previously contracted in good faith,
any such entity that owns or operates an automatic teller machine interchange
network, or any such Person the equity securities or equity interest of which
are owned or controlled in a fiduciary capacity or through a small business
development corporation.
"Surviving Corporation" shall mean NCBC, as the
corporation resulting from and surviving the consummation of the Merger as set
forth in Section 1.1 of this Agreement.
"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.
"Tennessee Code" shall mean the Tennessee Code Annotated,
as amended.
(b) 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."
10.2 Expenses.
(a) Except as otherwise provided in Section 7.8 and this
Section 10.2, each of the Parties shall bear and pay all direct costs and
expenses incurred by it or on its behalf in connection with the costs
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 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 based on the
relative Asset sizes of the Parties at December 31, 1998. No such amounts shall
affect or serve to reduce the Gross Purchase Price or the Net Purchase Price.
54
<PAGE> 60
(b) Nothing contained in this Section 10.2 shall constitute or
shall be deemed to constitute liquidated damages with respect to any liability
of a Party pursuant to this Agreement or otherwise limit the rights of the
non-breaching Party. This paragraph shall not be deemed to limit or to enlarge
the agreed remedies for breach of this Agreement set forth in Section 9.2.
10.3 Brokers and Finders. Other than the engagement of Morgan
Keegan & Company, Inc. by FFC, the fees of which solely shall be the
responsibility of FFC, 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,
investments bankers fees, brokerage fees, commissions, or finders fees in
connection with this Agreement or the ones 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 FFC or NCBC, each of
FFC and NCBC, 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.
10.4 Entire Agreement. Except as otherwise expressly provided
herein, this Agreement (including the other documents and instruments referred
to herein) constitutes the entire agreement between the Parties with respect to
the transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral. 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. Notwithstanding the foregoing,
this Agreement does not supersede that certain Confidentiality Agreement, dated
as of April 22, 1999, between the Parties. The Parties acknowledge and agree
that such Confidentiality Agreement shall remain in full force and effect,
notwithstanding the execution of this Agreement, until the earlier of the
Effective Time or the expiration of such Confidentiality Agreement in accordance
with its terms.
10.5 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 and the Plan of Merger has been
obtained; provided, that after any such approval by the holders of FFC Common
Stock, there shall be made no amendment that modifies in any material respect
the Consideration to be received by the FFC Record Holders.
10.6 Waivers.
(a) Prior to or at the Effective Time, NCBC, 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 FFC, to waive or extend the time for the compliance or fulfillment
by FFC of any and all of its obligations under this Agreement, and to waive any
or all of the conditions precedent to the obligations of NCBC 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 NCBC.
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<PAGE> 61
(b) Prior to or at the Effective Time, FFC, 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 NCBC, to waive or extend the time for the compliance or fulfillment
by NCBC of any and all of its obligations under this Agreement, and to waive any
or all of the conditions precedent to the obligations of FFC 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 FFC.
(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.
10.7 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; provided, however, NCBC
may assign all of its rights hereunder to any other wholly owned Subsidiary
whether now existing or hereafter acquired or organized (but NCBC may not
delegate any of its duties, including the duty to issue and list the shares of
NCBC Common Stock to be issued pursuant to the Merger to the FFC Record Holders.
Notwithstanding 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.
10.8 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
prepaid, 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:
If to NCBC: National Commerce Bancorporation
One Commerce Square
Memphis, TN 38150
Fax: (901) 523-3170
Telephone: (901) 523-3320
Attention: Lewis E. Holland
Vice Chairman and CFO
and Charles A. Neale
Vice President and General Counsel
Fax: (901) 523-3303
Telephone: (901) 523-3371
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<PAGE> 62
If to FFC: First Financial Corporation
1691 North Mt. Juliet Road
Mt. Juliet, TN 37122
Fax: (615) 758-8645
Telephone: (615) 754-2265
Attention: David Major, President and
Chief Executive Officer
With a copy to: Daniel W. Small
Attorney at Law
323 Union Street, Suite 300
P. O. Box 190608
Nashville, TN 37219-0608
Fax: (615) 252-6001
Telephone: (615) 252-6000
10.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Tennessee, without regard
to any applicable conflicts of Laws.
10.10 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 document.
10.11 Captions. The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.
10.12 Interpretation. 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.
10.13 Enforcement of Agreement.
(a) The Parties hereto agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were 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.
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(b) The beneficiaries of the provisions set forth in Sections
7.13, 7.14 and 7.15 may enforce their respective rights, under said sections of
this Agreement and any other applicable sections of this Agreement including
Section 10.14.
10.14 Attorneys' Fees. If any Party hereto shall bring any action at
law or in equity to enforce its rights under this Agreement (including an action
based upon a misrepresentation or the breach of any warranty, covenant,
agreement or obligation contained herein), the prevailing Party in such action
shall be entitled to recover from the other Party its reasonable costs and
expenses necessarily incurred in connection with such action (including fees,
disbursements and expenses of attorneys and costs of investigation).
10.15 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability, without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
10.16 Remedies Cumulative. All remedies provided in this Agreement,
by Law or otherwise, shall be cumulative and not alternative.
IN WITNESS WHEREOF, each of the Parties hereto has duly executed and
delivered this Agreement or has caused this Agreement to be executed and
delivered in its name and on behalf by its representatives thereunto duly
authorized, all as of the date first written above.
FIRST FINANCIAL CORPORATION
By: /s/ David Major
-------------------------------------
David Major
President and Chief Executive Officer
ATTEST:
/s/ James S. Short
- ----------------------------------------
James S. Short, Executive Vice President
(This corporation has no seal)
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<PAGE> 64
NATIONAL COMMERCE BANCORPORATION
By: /s/ William R. Reed, Jr.
----------------------------
William R. Reed, Jr.
Vice Chairman
ATTEST:
/s/ Gus B. Denton
- ----------------------------------
Gus B. Denton, Secretary
(This corporation has no seal)
CAN/ps
04-29-99
59
<PAGE> 65
Exhibit 1.1
(Plan of Merger)
Exhibit 7.8
(Form of 19.5% Option Agreement)
Exhibit 7.12
(Agreement of Affiliates)
Exhibit 8.2
(Non-Competition Agreement)
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<PAGE> 66
EXHIBIT 1.1
PLAN OF MERGER
OF
FIRST FINANCIAL CORPORATION
MT. JULIET, TENNESSEE
WITH AND INTO
NATIONAL COMMERCE BANCORPORATION
MEMPHIS, TENNESSEE
Pursuant to this Plan of Merger ("Plan of Merger") dated _______, 1999,
FIRST FINANCIAL CORPORATION ("FFC"), a corporation organized and existing under
the laws of the State of Tennessee, shall be merged with and into NATIONAL
COMMERCE BANCORPORATION ("NCBC"), a corporation organized and existing under the
laws of the State of Tennessee.
ARTICLE 1
TERMS OF THE MERGER
1.1 Merger. Subject to the terms and conditions of that certain
Agreement and Plan of Merger dated as of the 1st day of May, 1999, between FFC
and NCBC (the Merger Agreement") and this Plan of Merger, at the Effective Time
FFC shall be merged with and into NCBC in accordance with the provisions of
Section 48-21-101, et seq. of the Tennessee Code, and with the effect provided
in Section 48-21-108 of the Tennessee Code (the "Merger"). NCBC shall be the
Surviving Corporation resulting from the Merger and shall continue to be
governed by the laws of the State of Tennessee. The Merger shall be consummated
pursuant to the terms of the Merger Agreement and this Plan of Merger.
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 preceding 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 the NCBC Board Room,
NCBC Executive Offices (Fourth Floor), One Commerce Square, Memphis, Shelby
County, Tennessee 38150, or at such other place as the Parties, acting through
their chief executive officers or chief financial officers, may mutually agree.
1.3 Effective Time. The Merger and other transactions contemplated by
this Agreement shall become effective on the date and at the time the Articles
of Merger reflecting the Merger shall become effective with the Secretary of
State of the State of Tennessee (the "Effective Time").
1.4 Charter. The Charter of NCBC in effect immediately prior to the
Effective Time shall be the Charter of the Surviving Corporation until otherwise
amended or repealed.
1.5 Bylaws. The Bylaws of NCBC in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation until otherwise
amended or repealed.
<PAGE> 67
1.6 Name. The name of NCBC shall remain unchanged after the Effective
Time, unless and until otherwise renamed.
1.7 Directors and Officers. The directors and officers of NCBC in
office immediately prior to the Effective Time, together with such additional
persons as may thereafter be elected or appointed, shall serve as the directors
and officers of the Surviving Corporation from and after the Effective Time in
accordance with the Bylaws of the Surviving Corporation, unless and until their
successors shall have been elected or appointed and shall have qualified or
until they shall have been removed in the manner provided herein.
ARTICLE 2
MANNER OF CONVERTING SHARES AND OPTIONS; EXCHANGE RATIO
2.1 Conversion; Cancellation and Exchange of Shares; Exchange Ratio. At
the Effective Time, by virtue of the Merger becoming effective and without any
action on the part of NCBC, FFC, or the shareholders of either of the foregoing,
the shares of the constituent corporations shall be converted as follows:
(a) NCBC Capital Stock. Each share of NCBC Capital Stock issued
and outstanding immediately prior to the Effective Time shall remain issued and
outstanding from and after the Effective Time.
(b) FFC Common Stock. Each share of FFC Common Stock issued and
outstanding at the Effective Time shall cease to represent any interest (equity,
shareholder or otherwise) in FFC and shall, except for those shares (the
"Dissenting Shares") held by any FFC Record Holders who shall have properly
perfected such Record Holders' dissenters' rights and shall have maintained the
perfected status of such dissenters' rights through the Effective Time ("FFC
Dissenting Shareholders"), whose rights shall be governed by the provisions of
Sections 48-23-101 through 48-23-302 of the Tennessee Code, automatically be
converted exclusively into, and constitute only the right of each FFC Record
Holder to receive in exchange for such Record Holder's shares of FFC Common
Stock, the Consideration to which the FFC Record Holder is entitled as provided
in this Section 2.1(b).
(i) The Exchange Ratio Calculation. Subject to any adjustments
which may be required by an event described in Subsection 2.1(b)(iii) below, at
and as of the Effective Time:
(A) Each one (1) share of FFC Common Stock (other than
Dissenting Shares) outstanding at and as of the Effective Time shall be
converted into the right to receive that number of shares of NCBC Common Stock
equal to:
(I) The quotient of (x) the Net Purchase Price (defined
below) and (y) divided by the NCBC "Market Price Per Share" (defined below),
divided by
----------
<PAGE> 68
(II) The sum of number of shares of FFC Common Stock
outstanding at and as of the Effective Time and the number of shares of FFC
Common Stock issuable pursuant to options to purchase FFC Common Stock to the
extent that such options are outstanding at and as of the Effective Time.
(B) Each share of FFC Common Stock held of record by a FFC
Dissenting Shareholder shall be converted into the right to receive payment from
the Surviving Corporation with respect thereto in accordance with the provisions
of the Tennessee Code, and in particular, T.C.A. ss. 48-23-102.
(C) "Net Purchase Price" shall be $74,250,000 which is the
Gross Purchase Price of $75,000,000 less FFC's investment banker's fee of
$750,000.
(D) If as of the Closing Date the consolidated
stockholders' equity of FFC, exclusive of any securities gains or losses in
accordance with FAS 115, is less than $18,885,000, which was the consolidated
stockholders' equity as of December 31, 1998, NCBC reserves the right to
terminate this Agreement.
(E) No share of FFC Common Stock shall be deemed to be
outstanding or have any rights other than those set forth in this Section 2.1(b)
after the Effective Time. No fractional shares of NCBC Common Stock shall be
issued in the Merger and, if after aggregating all of the whole and fractional
shares of NCBC Common Stock to which a FFC Record Holder shall be entitled based
upon this Exchange Ratio Calculation, there should be a fractional share of NCBC
Common Stock remaining, such fractional share shall be settled by a cash payment
therefor pursuant to Article 3 of this Agreement, which cash settlement shall be
based upon the Market Price Per Share (as defined below) of one (1) full share
of NCBC Common Stock.
(ii) Definition of "Market Price Per Share". The "Market Price
Per Share" is $24.25 which was the closing price per share of NCBC Common Stock
on the NASDAQ (as reported by The Wall Street Journal) on April 12, 1999:
Therefore, by way of example, if as of the day immediately
prior to the Closing Date FFC(1) owns 100% of the authorized and outstanding
common stock of FFC Bank Subsidiary and (2) has consolidated stockholders'
equity not less than as described in (D) hereinabove, then:
Net Purchase Price of $74,250,000
divided by
----------
NCBC Market Price Per Share of $24.25
equals
------
<PAGE> 69
Number of NCBC Shares 3,061,856
divided by
----------
FFC Shares Outstanding 953,328
+ FFC Options 120,935
----------
1,074,263
equals
------
NCBC Shares for Each 1 Share of FFC 2.8502
======
(iii) Effect of Stock Splits, Reverse Stock Splits, Stock
Dividends and Similar Changes in the Capital of FFC. Should FFC effect any stock
splits, reverse stock splits, stock dividends or similar changes in its
respective capital accounts subsequent to the date of this Agreement but prior
to the Effective Time, the Exchange Ratio shall be adjusted in such a manner as
the Board of Directors of NCBC shall deem in good faith to be fair and
reasonable in order to give effect to such changes. Notwithstanding the
foregoing, nothing in this subparagraph (iii) shall be deemed to be a waiver of
the inaccuracy of any representation or warranty or breach of any covenant by
FFC set forth herein.
(c) Shares Held by FFC or NCBC. Each of the shares of FFC Common
Stock held by any FFC Company or by any NCBC Company, in each case other than
(x) in a fiduciary capacity, or (y) 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.
(d) Dissenters' Rights of FFC Shareholders. Any FFC Dissenting
Shareholder who shall comply strictly with the provisions of Sections 48-23-101,
et seq. of the Tennessee Code shall be entitled to dissent from the Merger and
to seek those appraisal remedies afforded by the Tennessee Code. FFC
Shareholders who fail to strictly comply with such provisions shall be deemed
not to have dissented and shall not be treated as Dissenters.
(e) Payment to FFC Investment Banker. At the Effective Time,
NCBC shall pay Seven Hundred Fifty Thousand Dollars ($750,000.00) to FFC's
investment banker, which amount has been netted out of the Gross Purchase Price
pursuant to Section 2.1(b) (i) (C).
2.2 Conversion of Stock Options. At the Effective Time, all options
with respect to FFC Common Stock pursuant to stock options ("FFC Options")
granted by FFC under the FFC Option Plans, which are outstanding at the
Effective Time, whether or not exercisable, shall be assumed by NCBC and
converted into options to purchase shares of NCBC Common Stock in accordance
with the following sentence and otherwise having the same duration and terms as
the FFC Option Plans. From and after the Effective Time, (i) each FFC Option
assumed by NCBC may be exercised solely for shares of NCBC Common Stock, (ii)
the number of shares of NCBC Common Stock subject to such FFC Option shall be
equal to the number of shares of FFC Common Stock subject to such FFC Option
immediately prior to the Effective Time multiplied
<PAGE> 70
by the Exchange Ratio, and (iii) the per share exercise price under each such
FFC Option shall be adjusted by dividing the per share exercise price under each
such FFC Option by the Exchange Ratio and rounding down to the nearest cent. FFC
shall take all necessary steps to effectuate the foregoing provisions of this
Section 2.2.
2.3 Anti-Dilution Provisions. In the event NCBC changes the number of
shares of NCBC Common Stock issued and outstanding prior to the Effective Time
as a result of a stock split, reorganization, stock dividend, or
recapitalization with respect to such stock and the record date therefor (in the
case of a stock dividend) or the effective date thereof (in the case of a stock
split or similar recapitalization for which a record date is not established)
shall be prior to the Effective Time, the Exchange Ratio shall be
proportionately adjusted.
ARTICLE 3
EXCHANGE OF SHARES
3.1 Exchange Procedures. Promptly after the Effective Time, NCBC and
FFC shall cause the Exchange Agent to mail to the FFC Record Holders appropriate
transmittal materials (which shall specify that delivery shall be effected, and
risk of loss and title to the certificates theretofore representing shares of
FFC 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 including its obligation to
deliver the Consideration to which any FFC Record Holder may receive for lost,
misplaced or destroyed FFC certificates. After the Effective Time, each FFC
Record Holder of FFC Common Stock (other than shares to be canceled pursuant to
Section 2.1(c) 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 2.1(b) of this Agreement,
together with all undelivered dividends or distributions in respect of such
shares (without interest thereon) pursuant to Section 3.2 of this Agreement. To
the extent required by Section 2.1(b) of this Agreement, each FFC Record Holder
also shall receive, upon surrender of the certificate or certificates
representing his or her shares of FFC Common Stock outstanding immediately prior
to the Effective Time, cash in lieu of any fractional share of NCBC Common Stock
to which such holder may be otherwise entitled (without interest). NCBC shall
not be obligated to deliver the Consideration to which any FFC Record Holder is
entitled as a result of the Merger until such FFC Record Holder surrenders such
holder's certificate or certificates representing the shares of FFC Common Stock
for exchange as provided in this Section 3.1. The certificate or certificates of
FFC Common Stock so surrendered shall be duly endorsed as the Exchange Agent may
reasonably require. Any other provision of this Agreement notwithstanding,
neither NCBC nor the Exchange Agent shall be liable to a FFC Record Holder for
any amounts paid or properly delivered in good faith to a public official
pursuant to any applicable abandoned property Law. Adoption of this Agreement by
the shareholders of FFC shall constitute ratification of the appointment of the
Exchange Agent.
3.2 Rights of Former FFC Record Holders. At the Effective Time, the
stock transfer books of FFC shall be closed as to holders of FFC Common Stock
outstanding immediately prior to the Effective Time, and no transfer of FFC
Common Stock by any FFC Record Holder shall
<PAGE> 71
thereafter be made or recognized. Until surrendered for exchange in accordance
with the provisions of Section 3.1 of this Agreement, each certificate
theretofore representing shares of FFC Common Stock (other than shares to be
cancelled pursuant to Section 2.1(c) of this Agreement) shall from and after
the Effective Time represent for all purposes only the right to receive the
Consideration provided in Section 2.1(b) 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 FFC in respect of such shares of FFC 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
NCBC on the NCBC 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 NCBC Common Stock issuable pursuant to this Agreement, but
beginning thirty (30) days after the Effective Time no dividend or other
distribution payable to the holders of record of NCBC Common Stock as of any
time subsequent to the Effective Time shall be delivered to a FFC Record Holder
until such FFC Record Holder surrenders his or her certificate or certificates
evidencing FFC Common Stock for exchange as provided in Section 3.1 of this
Agreement. However, upon surrender of such FFC Common Stock certificate, both
the NCBC Common Stock certificate 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 4
MISCELLANEOUS
4.1 Conditions Precedent. Consummation of the Merger by NCBC shall be
conditioned on the satisfaction of or waiver by NCBC of the conditions precedent
to the Merger set forth in Sections 8.1 and 8.2 of the Merger Agreement.
Consummation of the Merger by FFC shall be conditioned on the satisfaction, or
waiver by FFC, of the conditions precedent to the Merger set forth in Sections
8.1 and 8.3 of the Merger Agreement.
4.2 Termination. This Plan of Merger may be terminated at any time
prior to the Effective Time by the Parties hereto as provided in Article 9 of
the Merger Agreement.
4.3 Amendments. To the extent permitted by Law, this Plan of Merger 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 the Merger Agreement and this Plan of Merger has
been obtained; provided, that after any such approval by the holders of FFC
Common Stock, there shall be made no amendment that modifies in any material
respect the Consideration to be received by the FFC Record Holders.
4.4 Assignment. Except as expressly contemplated hereby, neither this
Plan of Merger nor the Merger Agreement, nor any of the rights, interests, or
obligations hereunder or thereunder shall be assigned by any Party hereto
(whether by operation of Law or otherwise) without the prior written consent of
the other Party; provided, however, that NCBC may assign all of its rights
hereunder to any other wholly owned Subsidiary whether now existing or hereafter
acquired or organized but NCBC may not delegate any of its duties, including the
duty to issue and list the
<PAGE> 72
shares of NCBC Common Stock to be issued pursuant to the Merger to the FFC
Record Holders. Notwithstanding to the preceding sentence, the Merger Agreement
and this Plan of Merger will be binding upon, inure to the benefit of and be
enforceable by the Parties and their respective successors and assigns.
4.5 Governing Law. This Plan of Merger shall be governed by and
construed in accordance with the Laws of the State of Tennessee, without regard
to any applicable conflicts of Law.
4.6 Counterparts. This Plan of Merger may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same document.
4.7 Captions. The captions contained in this Plan of Merger are for
reference purposes only and are not part of this Plan of Merger.
4.8 Definitions. Except as otherwise specifically provided herein,
capitalized terms used herein have the meanings set forth in the Merger
Agreement.
IN WITNESS WHEREOF, each of the Parties hereto has duly executed and
delivered this Plan of Merger or has caused this Plan of Merger to be executed
and delivered in its name and on its behalf by its representative thereunto duly
authorized, all as of the date first written above.
<PAGE> 73
FIRST FINANCIAL CORPORATION
By:
--------------------------------
David Major, President and
Chief Executive Officer
ATTEST:
- --------------------------------------
Robert L. Callis, Secretary
NATIONAL COMMERCE BANCORPORATION
By:
--------------------------------
Thomas M. Garrott, Chairman and
Chief Executive Officer
ATTEST:
- --------------------------------------
Gus B. Denton, Secretary
CAN/ps
04-29-99
<PAGE> 74
Exhibit 7.8(b)
(Form of 19.5% Option Agreement)
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement"), dated as of May 1, 1999, is
between National Commerce Bancorporation ("NCBC") and First Financial
Corporation ("FFC").
RECITALS
FFC and NCBC have executed an Agreement and Plan of Merger ("Merger
Agreement"), of even date with this Agreement, under which FFC will be merged
into NCBC upon completion of the merger ("Merger") contemplated in the Merger
Agreement.
By negotiating and executing the Merger Agreement and by taking actions
necessary or appropriate to effect the transactions contemplated by the Merger
Agreement, NCBC has incurred and will incur substantial direct and indirect
costs (including, without limitation, the costs and management and employee
time) and will forgo the pursuit of certain alternative investments and
transactions.
AGREEMENT
THEREFORE, in consideration of the promises set forth in this Agreement
and in the Merger Agreement, the parties agree as follows:
1. Grant of Option. Subject to the terms and conditions set forth in
this Agreement, FFC irrevocably grants an option ("Option") to NCBC to purchase
that number of authorized but unissued shares of FFC's common stock, $2.50 par
value per share ("FFC Common Stock"), such that immediately following such
purchase NCBC would own 19.5% of the then issued and outstanding shares (as
adjusted as set forth herein) of FFC Common Stock after giving effect to the
exercise of the Option at a per share price in cash (or immediately available
funds) equal to two times the book value of a share of FFC Common Stock as of
March 31, 1999 ("Option Price").
2. Exercise of Option. Subject to the provisions of this Section 2 and
of Section 13(a) of this Agreement, this Option may be exercised by NCBC as set
forth in Section 5 of this Agreement, in whole only, at any time, in any of the
following circumstances:
(a) FFC or its board of directors enters into an agreement or
recommends to FFC shareholders an agreement (other than the
Merger Agreement) under which any entity, person or group
(collectively "Person"), within the meaning of Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended ("Exchange
Act"), would: (1) merge or consolidate with, acquire 9.9% or more
of the assets or liabilities of, or enter into any similar
transaction with FFC, or (2) purchase or otherwise acquire
(including by merger, reorganization, consolidation, share
exchange or any similar transaction) securities representing 9.9%
or more of FFC's voting shares;
<PAGE> 75
(b) any Person (other than NCBC or any of its subsidiaries) acquires
the beneficial ownership or the right to acquire beneficial
ownership of securities which, when aggregated with other such
securities owned by such Person, represents 25% or more of the
voting shares of FFC (the term "beneficial ownership" for
purposes of this Agreement has the meaning set forth in Section
13(d) of the Exchange Act, and the regulations promulgated under
the Exchange Act);
(c) after having received a fairness opinion from its financial
advisor that the transaction is fair to FFC shareholders from a
financial point of view, failure of the board of directors of FFC
to recommend the Merger to the shareholders at the time of the
calling of the special meeting of the shareholders pursuant to
the Merger Agreement; or
(d) failure of the shareholders to approve by the earliest of (1) the
termination of the Merger Agreement or (2) November 30, 1999, the
Merger by the required affirmative vote at a meeting of the
shareholders, because a third Person (other than NCBC or a
subsidiary of NCBC) announces publicly or communicates, in
writing, to FFC a proposal to (1) acquire FFC (by merger,
reorganization, consolidation, the purchase of 9.9% or more of
its assets or liabilities, or any other similar transaction), (2)
purchase or otherwise acquire securities representing 9.9% or
more of the voting shares of FFC or (3) change the composition of
the board of directors of FFC.
It is understood and agreed that the Option will become
exercisable on the occurrence of any of the above-described circumstances even
though the circumstance occurred as a result, in part or in whole, of the board
of FFC complying with its fiduciary duties.
Notwithstanding the foregoing, the Option may not be exercised
if either (1) any applicable and required governmental approvals have not been
obtained with respect to such exercise or if such exercise would violate any
applicable regulatory restrictions, or (2) at the time of exercise, NCBC is
failing in any material respect to perform or observe its material covenants or
conditions under the Merger Agreement, unless the reason for such failure is
that FFC is failing to perform or observe its covenants or conditions under the
Merger Agreement.
3. Notice, Time and Place of Exercise. When NCBC wishes to exercise
the Option, NCBC will give written notice of its intention to exercise the
Option and the place and date for the closing of the exercise (which date may
not be later than ten business days from the date such notice is mailed). If any
law, regulation or other restriction will not permit such exercise to be
consummated during this ten-day period, the date for the closing of such
exercise will be within five days following the cessation of the restriction on
consummation.
4. Payment and Delivery of Certificate(s). At the closing for the
exercise of the Option or any portion thereof, (a) NCBC and FFC will each
deliver to the other certificates as to the accuracy, as of the closing date, of
their respective representations and warranties under this Agreement, (b) NCBC
will pay the aggregate purchase price for the shares of FFC Common Stock to be
purchased by delivery of a certified or bank cashier's check in immediately
available funds
<PAGE> 76
payable to the order of FFC, and (c) FFC will deliver to NCBC a certificate or
certificates representing the shares so purchased.
5. Transferability of the Option and Option Shares. Before the
Option, or a portion of the Option, becomes exercisable in accordance with the
provisions of Section 2 of this Agreement, neither the Option nor any portion of
the Option will be transferable.
6. Representations, Warranties and Covenants of FFC. FFC represents
and warrants to NCBC as follows:
(a) Due Authorization. This Agreement has been duly authorized by all
necessary corporate action on the part of FFC, has been duly
executed by a duly authorized officer of FFC and constitutes a
valid and binding obligation of FFC. No shareholder approval by
FFC shareholders is required by applicable law or otherwise
before the exercise of the Option in whole or in part.
(b) Option Shares. FFC 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 of this Agreement to such time as the
obligation to deliver shares under this Agreement terminates,
will have reserved for issuance, at the closing(s) upon exercise
of the Option, the Option Shares (subject to adjustment, as
provided in Section 8 below), all of which, upon issuance under
this Agreement, will be duly and validly issued, fully paid and
nonassessable, and will be delivered free and clear of all
claims, liens, encumbrances and security interests, including any
preemptive right of any of the shareholders of FFC.
(c) No Conflicts. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated
by it will violate or result in any violation of or be in
conflict with or constitute a default under any term of the
charter or bylaws of FFC or any agreement, instrument, judgment,
decree, law, rule or order applicable to FFC or any subsidiary of
FFC or to which FFC or any such subsidiary is a party.
(d) Notification of Record Date. At any time from and after the date
of this Agreement until the Option is no longer exercisable, FFC
will give NCBC 30 days prior written notice before setting the
record date for determining the holders of record of the FFC
Common Stock entitled to vote on any matter, to receive any
dividend or distribution or to participate in any rights offering
or other matters, or to receive any other benefit or right, with
respect to the FFC Common Stock.
7. Representations, Warranties and Covenants of NCBC. NCBC
represents and warrants to FFC as follows:
(a) Due Authorization. This Agreement has been duly authorized by all
necessary corporate action on the part of NCBC, has been duly
executed by a duly authorized
<PAGE> 77
officer of NCBC and constitutes a valid and binding obligation
of NCBC.
(b) Transfers of Common Stock. No shares of FFC Common Stock acquired
upon exercise of the Option will be transferred except in a
transaction registered or exempt from registration under any
applicable securities laws.
(c) No Conflicts. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated
by it will violate or result in any violation of or be in
conflict with or constitute a default under any term of the
charter or bylaws of NCBC or any agreement, instrument, judgment,
decree, law, rule or order applicable to NCBC or any subsidiary
of NCBC or to which NCBC or any such subsidiary is a party.
8. Adjustment Upon Changes in Capitalization. In the event of any
change in the FFC Common Stock by reason of stock dividends, split-ups, mergers,
reorganizations, recapitalizations, combinations, exchanges of shares or the
like, the number and kind of shares or securities subject to the Option and the
purchase price per share of Common Stock will be appropriately adjusted. If,
before the Option terminates or is exercised, FFC is acquired by another party,
consolidates with or merges into another corporation or liquidates, NCBC will
thereafter receive, upon exercise of the Option, the securities or properties to
which a holder of the number of shares of Common Stock then deliverable upon the
exercise thereof would have been entitled upon such acquisition, consolidation,
merger, reorganization or liquidation, and FFC will take all steps in connection
with such acquisition, consolidation, merger, reorganization or liquidation as
may be necessary to assure that the provisions of this Agreement will thereafter
be applicable, as nearly as reasonably may be practicable, in relation to any
securities or property thereafter deliverable upon exercise of the Option.
9. Nonassignability. This Agreement binds and inures to the benefit
of the parties and their successors. This Agreement is not assignable by either
party.
10. Regulatory Restrictions. FFC will use its best efforts to obtain
or to cooperate with NCBC in obtaining all necessary regulatory consents,
approvals, waivers or other action (whether regulatory, corporate or other) to
permit the acquisition of any or all Option Shares by NCBC.
11. Remedies. For the purposes of this Agreement, NCBC's sole remedy
hereunder shall be limited to the exercise of the option herein granted.
12. No Rights as Shareholder. This Option, before it is exercised,
will not entitle its holder to any rights as a shareholder of FFC at law or in
equity. Specifically, this Option, before it is exercised, will not entitle the
holder to vote on any matter presented to the shareholders of FFC or, except as
provided in this Agreement, to any notice of any meetings of shareholders or any
other proceedings of FFC.
<PAGE> 78
13. Miscellaneous.
(a) Termination. This Agreement and the Option will terminate upon the
earliest of (1) the mutual agreement of the parties to this Agreement; (2) the
30th day following the termination of the Merger Agreement for any reason other
than a material noncompliance or default by NCBC with respect to its obligations
under it; or (3) the date of termination of the Merger Agreement if the
termination is due to a material noncompliance or default by NCBC with respect
to its obligations under it; but if the Option has been exercised before the
termination of this Agreement, then the exercise will close under Section 4 of
this Agreement, even though that closing date is after the termination of this
Agreement. The option granted under this Agreement shall only be exercisable one
(1) time.
(b) Amendments. This Agreement may not be modified, amended, altered or
supplemented, except upon the execution and delivery of a written agreement
executed by the parties.
(c) Severability of Terms. Any provision of this Agreement that is
invalid, illegal or unenforceable is ineffective only to the extent of the
invalidity, illegality or unenforceability without affecting in any way the
remaining provisions or rendering any other provisions of this Agreement
invalid, illegal or unenforceable. Without limiting the generality of the
foregoing, if the right of NCBC to exercise the Option in full for the total
number of shares of FFC Common Stock or other securities or property issuable
upon the exercise of the Option is limited by applicable law, or otherwise, NCBC
may, nevertheless, exercise the Option to the fullest extent permissible.
(d) Notices. All notices, requests, claims, demands and other
communications under this Agreement must be in writing and must be given (and
will be deemed to have been duly received if so given) by delivery, by cable,
telecopies or telex, or by registered or certified mail, postage prepaid, return
receipt requested, to the respective parties at the addresses below, or to such
other address as either party may furnish to the other in writing. Change of
address notices will be effective upon receipt.
If to FFC to: First Financial Corporation
1691 Mt. Juliet Road
Mt. Juliet, TN 37122
Attn: David Major, President
and Chief Executive Officer
Fax: (615) 758-8645
Phone: (615) 754-2265
with a copy to: Daniel W. Small
Attorney at Law
323 Union Street, Suite 300
Nashville, TN 37219-0608
Fax: (615) 252-6001
Phone: (615) 252-6000
<PAGE> 79
If to NCBC to: National Commerce Bancorporation
One Commerce Square
Memphis, TN 38150
Attn: Lewis E. Holland
Fax: (901) 523-3170
Phone: (901) 523-3320
and
Charles A. Neale
Vice President and General Counsel
Fax: (901) 523-3303
Phone: (901) 523-3371
(a) Governing Law and Venue. The parties intend this Agreement and
the Option, in all respects, including all matters of
construction, validity and performance, to be governed by the
laws of the State of Tennessee, without giving effect to
conflicts of law principles. Any actions brought by either party
against the other arising under this Agreement must be filed in
Wilson County, Tennessee, and each party consents to personal
jurisdiction in Wilson County.
(b) Counterparts. This Agreement may be executed in several
counterparts, including facsimile counterparts, each of which is
an original, and all of which together constitute one and the
same agreement.
(c) Effects of Headings. The section headings in this Agreement are
for convenience only and do not affect the meaning of its
provisions.
NATIONAL COMMERCE BANCORPORATION
By: /s/ William R. Reed, Jr.
-------------------------------------
William R. Reed, Jr
Vice Chairman
FIRST FINANCIAL CORPORATION.
By: /s/ David Major
-------------------------------------
David Major
President and Chief Executive Officer
CAN/ps
04-29-99
<PAGE> 80
EXHIBIT 7.12
AFFILIATE AGREEMENT
(Date)
National Commerce Bancorporation
One Commerce Square
Memphis, TN 38150
Attention: Thomas M. Garrott
Chairman and Chief Executive Officer
Dear Mr. Garrott:
The undersigned is a shareholder of FIRST FINANCIAL CORPORATION
("FFC"), a corporation organized and existing under the laws of the State of
Tennessee, and will become a shareholder of the NATIONAL COMMERCE BANCORPORATION
("NCBC") pursuant to the transactions described in the Agreement and Plan of
Merger, dated as of ________ , 1999, (the "Agreement"), by and between NCBC and
FFC. Under the terms of the Agreement, FFC will be merged with and into NCBC
(the "Merger"), and the shares of the $2.50 par value common stock of FFC ("FFC
Common Stock") will be converted into and exchanged for shares of the $2.00 par
value common stock of NCBC ("NCBC Common Stock"). This Affiliate Agreement
represents an agreement between the undersigned and NCBC regarding rights and
obligations of the undersigned in connection with the shares of NCBC to be
received by the undersigned as a result of the Merger.
In consideration of the Merger and the mutual covenants contained
herein, the undersigned and NCBC hereby agree as follows:
1. Affiliate Status. The undersigned understands and agrees that the
undersigned is an "affiliate" under Rule 145(c) as defined in Rule 405 of the
Rules and Regulations of the Securities and Exchange Commission ("SEC") under
the Securities Act of 1933, as amended ("1933 Act"), and the undersigned
anticipates that the undersigned will be such an "affiliate" at the time of the
Merger.
2. Initial Restriction on Disposition. The undersigned agrees that the
undersigned will not sell, transfer, or otherwise dispose of the undersigned's
interests in or reduce the undersigned's risk relative to, any of the shares of
NCBC Common Stock into which the undersigned's shares of FFC Common Stock are
converted upon consummation of the Merger until such time as the requirements of
SEC Accounting Series Release Nos. 130 and 135 ("ASR 130 and 135") have been
met. The undersigned understands that ASR 130 and 135 relate to publication of
financial results of post-Merger combined operations of NCBC and FFC. NCBC
agrees that it will publish such results within 45 days after the end of the
first fiscal quarter of NCBC containing the required period of post-Merger
combined operations.
<PAGE> 81
3. Covenants and Warranties of Undersigned. The undersigned
represents, warrants, and agrees that:
(a) During the 30 days immediately preceding the Effective Time of the
Merger, the undersigned has not sold, transferred, or otherwise disposed of the
undersigned's interests in, or reduced the undersigned's risk relative to, any
of the shares of FFC Common Stock beneficially owned by the undersigned as of
the date of the Shareholder's Meeting of FFC held to approve the Merger.
(b) The NCBC Common Stock received by the undersigned as a result of
the Merger will be taken for the undersigned's own account and not for others,
directly or indirectly, in whole or part.
(c) NCBC has informed the undersigned that any distribution by the
undersigned of NCBC Common Stock has not been registered under the 1933 Act and
that shares of NCBC Common Stock received pursuant to the Merger can only be
sold by the undersigned (1) following registration under the 1933 Act, or (2) in
conformity with the volume and other requirements of Rule 145(d) promulgated by
the SEC as the same now exists or may hereafter be amended, or (3) to the extent
some other exemption from registration under the 1933 Act might be available.
(d) The undersigned will, and will cause each of the other parties
whose shares are deemed to be beneficially owned by the undersigned pursuant to
Section 8 hereof to have all shares of FFC Common Stock beneficially owned by
the undersigned registered in the name of the undersigned or such parties, as
applicable, prior to the Effective Date of the Merger and not in the name of any
banker, broker-dealer, nominee, or clearinghouse.
(e) The undersigned is aware that NCBC intends to treat the Merger as a
tax-free reorganization under Section 368 of the Internal Revenue Code ("Code")
for federal income tax purposes. The undersigned agrees to treat the transaction
in the same manner as NCBC for federal income tax purposes. The undersigned
acknowledged that Section 1.368-1(b) of the Income Tax Regulations requires
"continuity of interest" in order for the Merger to be treated as tax-free under
Section 368 of the Code. This requirement is satisfied if, taking into account
those FFC shareholders who receive cash in exchange for their stock, who receive
cash in lieu of fractional shares, or who dissent from the Merger, there is not
plan, or intention on the part of the FFC shareholders to sell or otherwise
dispose of the NCBC Common Stock to be received in the Merger. The undersigned
has no prearrangement, plan or intention to sell or otherwise dispose of an
amount of his NCBC Common Stock to be received in the Merger which would cause
the foregoing requirement not to be satisfied.
4. Restrictions on Transfer. The undersigned understands and agrees
that stop order instructions with respect to the shares of NCBC Common Stock
received by the undersigned pursuant to the Merger will be given to NCBC's
Transfer Agent and that there will be placed on the certificates of such shares,
or shares issued in substitution thereof, a legend stating in substance:
<PAGE> 82
"The shares represented by this certificate were issued pursuant to a
business combination to which is accounted for as a "pooling of
interests" and many not be sold, nor may the owner thereof reduce his
risks relative thereto in any way, until such time as National Commerce
Bancorporation ("NCBC") has published the financial results covering at
least 30 days of combined operations after the effective date of the
merger through which the business combination was effected. In
addition, the shares represented by this certificate may not be sold,
transferred, or otherwise disposed of except or unless (1) covered by
an effective registration statement under the Securities Act of 1933,
as amended, (2) in accordance with (i)Rule 145(d) (in the case of
shares issued to an individual who is not an affiliate of NCBC) or (H)
Rule 144 (in the case of shares issued to an individual who is an
affiliate of NCBC) of the Rules and Regulations of such Act, or (3) in
accordance with a legal opinion satisfactory to counsel for NCBC that
such sale or offer is otherwise exempt from the registration
requirements of such Act."
Such legend will also be placed on any certificate representing NCBC
securities issued subsequent to the original issuance of the NCBC Common Stock
pursuant to the Merger as a result of any offer of such shares or any stock
dividend, stock split, or other recapitalization as long as the NCBC Common
Stock issued to the undersigned pursuant to the Merger has not been transferred
in such a manner to justify the removal of the legend therefrom. Upon the
request of the undersigned, NCBC shall cause the certificates representing the
shares of NCBC Common Stock issued to the undersigned in connection with the
Merger to be reissued free of any legend relating to restrictions on transfer by
virtue of ASR 130 and 135 as soon as practicable after the requirements of ASR
130 and 135 have been met. In addition, if the provisions of Rules 144 and 145
are amended to delete restrictions applicable to the NCBC Common Stock received
by the undersigned pursuant to the Merger, or upon the expiration of the
restrictive period set forth in Rule 145(d), NCBC, upon the request of the
undersigned, will cause the certificates representing the shares of NCBC Common
Stock issued to the undersigned in connection with the Merger to be reissued
free of any legend relating to the restrictions set forth in Rules 144 and 145
(d) upon receipt by NCBC of an opinion of its counsel to the effect that such
legend may be removed.
5. Understanding of Restrictions on Dispositions. The undersigned has
carefully read the Agreement and this Affiliate Agreement and discussed their
requirements and impact upon his ability to sell, transfer, or otherwise dispose
of the shares of NCBC Common Stock received by the undersigned, to the extent he
believes necessary, with his counsel or counsel or FFC.
6. Filing of Reports by NCBC. NCBC agrees, for a period of two (2)
years after the Effective Time of the Merger, to file on a timely basis all
reports required to be filed by it pursuant to Section 13 of the Securities
Exchange Act of 1934, as amended, so that the public information provision or
Rule 145(d) promulgated by the SEC as the same are presently in effect will be
available to the undersigned in the event the undersigned desires to transfer
any shares of NCBC Common Stock issued to the undersigned pursuant to the
Merger.
7. Transfer Under Rule 145(d). If the undersigned desires to sell or
otherwise transfer the shares of NCBC Common Stock received by him in connection
with the Merger at any time
<PAGE> 83
during the restrictive period set forth in Rule 145(d), the undersigned will
provide the necessary representation letter to the transfer agent for NCBC
Common Stock together with such additional information as the transfer agent may
reasonably request. If NCBC's counsel concludes that such proposed sale or
transfer complies with the requirements of Rule 145(d), NCBC shall cause such
counsel to provide such opinions as may be necessary to NCBC's transfer agent so
that the undersigned may complete the proposed sale or transfer.
8. Acknowledgments. The undersigned recognizes and agrees that the
foregoing provisions also apply to all shares of the capital stock of FFC and
NCBC that are deemed to be beneficially owned by the undersigned pursuant to
applicable federal securities laws, which the undersigned agrees may include
without limitation, shares owned or held in the name of (i) the undersigned's
spouse, (ii) any relative of the undersigned or of the undersigned's spouse who
has the same home as the undersigned, (iii) any trust or estate in which the
undersigned, the undersigned's spouse, and any such relative collectively own at
least 10% of any class of equity securities or of the equity interest. The
undersigned further recognizes that, in the event that the undersigned is a
director or officer of NCBC or becomes a director or officer of NCBC upon
consummation of the Merger, among other things, any sale of NCBC Common Stock by
the undersigned within a period of less that six months following the Effective
Time of the Merger may subject the undersigned to liability pursuant to Section
16(b) of the Securities Exchange Act of 1934, as amended.
9. Miscellaneous. This Affiliate Agreement is the complete agreement
between NCBC and the undersigned concerning the subject matter hereof. Any
notice required to be sent to any party hereunder shall be sent by registered or
certified mail, return receipt requested, using the addresses set forth here in
or such other address as shall be furnished in writing by the parties.
This Affiliate Agreement shall be governed by the laws of the State of
Tennessee.
This Affiliate Agreement is executed as of the ____ day of ____________, 1999.
Very truly yours,
By:
------------------------
<PAGE> 84
Address:
- ---------------------------
- ---------------------------
- ---------------------------
[Add below the signatures of all registered owners
of shares deemed beneficially owned by the Affiliate.]
Name:
- ---------------------------
Name:
- ---------------------------
Name:
- ---------------------------
AGREED TO AND ACCEPTED as of this _______ day of ____________________, 1999.
NATIONAL COMMERCE BANCORPORATION
By:
------------------------------------
Thomas M. Garrott
Chairman and Chief Executive Officer
CAN/ps
04-29-99
<PAGE> 85
EXHIBIT 8.2
NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT made and entered into as of the __ day
of __________, 1999, by and between FIRST FINANCIAL CORPORATION ("FFC"), a
Tennessee corporation having its principal office located in Mt. Juliet,
Tennessee; FIRST BANK AND TRUST, a Tennessee-chartered bank having its principal
office in Mt. Juliet, Tennessee, and a wholly owned subsidiary of FFC (the
"Bank"); NATIONAL COMMERCE BANCORPORATION ("NCBC"), a Tennessee corporation
having is principal office located in Memphis, Tennessee, and _______, an adult
resident citizen of the state of Tennessee and who serves as an officer or
director of FFC and/or the Bank ("Person").
WHEREAS, NCBC and FFC have entered into that certain Agreement and Plan
of Merger dated as of April __, 1999 (the "Merger Agreement"), providing for the
acquisition by NCBC of all of the outstanding common stock of FFC, $2.50 par
value per share ("FFC Common Stock") through the merger of FFC into NCBC, with
NCBC surviving the merger (the "Merger"); and
WHEREAS, Person is a shareholder, as well as a director or executive
officer of FFC and/or Bank and has long been associated with FFC and Bank and
has developed a relationship with the customer base of FFC and Bank and
possesses confidential information regarding the direct and indirect business
operation of FFC and Bank; and
WHEREAS, as a condition precedent to NCBC's agreement to entering into
the Merger Agreement, NCBC has required, and Person has agreed to enter into
this Non-Competition Agreement.
NOW, THEREFORE, for and in consideration of NCBC's agreement to acquire
FFC pursuant to the Merger Agreement and Ten Dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which as consideration
for this Non-Competition Agreement are hereby acknowledged by Person, the
parties thereto intending to be legally bound hereby agree as follows:
(1) Covenant Not to Compete/Term. NCBC, FFC, Bank and Person
acknowledge and agree that: (1) various business connections, clientele and
customers of NCBC and subsidiaries and affiliates of NCBC, including, but not
limited to, NCBC and Bank (collectively for purposes hereof the "NCBC
Companies"), have been established and are maintained at a great expense to the
NCBC Companies; (ii) by virtue of his or her close relationship with, and
service as a member of the Board of Directors or executive officer of FFC and/or
Bank, and in connection with the Merger, Person has become familiar with the
names and lists, and the business needs of the customers and clientele of
certain of the NCBC Companies, including, but not limited to, Bank; (iii)
Person, through his or her presentation of or association with FFC and Bank and
his or her business dealings with NCBC, FFC or Bank has become personally
acquainted with such customers and prospective customers of the NCBC Companies;
and (iv) NCBC, Bank and the other NCBC Companies will sustain great loss and
damage if Person violates the covenants and
<PAGE> 86
agreements hereinafter set forth, for which loss and damages none of the NCBC
Companies has an adequate remedy by law.
Based on the foregoing, Person hereby expressly covenants and
agrees, which covenants and agreement are the essence of this Non-Competition
Agreement, that for a period of one (1) year from the later of the date hereof
or the date Person ceases to serve on the Board of Directors of, or as an
officer of, or as a consultant or advisory director for any of the NCBC
Companies, including, but not limited to, NCBC, Bank or FFC, Person shall not,
unless acting with the prior written consent of NCBC, directly or indirectly,
for himself or herself or on behalf of or in connection with any other person,
firm, corporation or entity, own, management, operate, join, control, finance or
participate in the ownership, management operation or control of, or be
connected with as a director, officer, employee, consultant, partner,
stockholder (other than to the extent he is a stockholder therein as of the date
of the Merger Agreement, and further excepting any ownership, solely as an
investment and through market purchases, of securities of any issuer that are
registered under Section 12(b) or 12 (g) of the Securities Exchange Act of 1934,
as amended, and that are listed or admitted for trading on any United States
national securities exchange or that are quoted on the National Association of
Securities Dealers Automated Quotations System, or any similar system for
automated dissemination of quotations of securities prices in common use, so
long as Person is not a member of any control group (within the meaning of the
rules and regulations of the Securities and Exchange Commission or the Federal
Reserve Board) of any such issue, of any business engaged in the business of
banking or that of managing or controlling a bank or banks (which term shall
include, but is not limited to, savings and loan associations production
entities), in each county in which FFC or Bank has a principal office or branch,
on the date immediately preceding the effective date of the Merger, or as an
officer of, or as a consultant or advisory director for any of the NCBC
Companies, including, but not limited to Bank, whichever is the later date,
without regard to state lines.
Person further acknowledges and agrees that during his or her
employment with and service on the Board of Directors or as an officer of FFC
and/or Bank prior to the date hereof, as well as both prior to and after the
Effective Time of the Merger with or for any of the NCBC Companies, including
but not limited to NCBC, FFC, and/or Bank, that certain highly confidential
information, including, but not being limited to, customer lists, individual
customer habits, and other confidential customer and corporate information has
been, and will be in the event of continued employment of service, imparted to
him or her. Due to the highly confidential nature of said information, covenants
and agrees that he or she will not, during or for a period of two (2) years
after the term of his or her employment or service with or for any of the NCBC
Companies, disclose any such confidential information to any person or entity
not employed by NCBC, or any of the NCBC Companies, and authorized by NCBC to
receive such information.
Person acknowledges and agrees that any violation by him or
her of the covenants set forth in this Non-Competition Agreement, whether before
the Effective Time or, should the merger become effective after the Effective
Time, would cause irreparable injury to FFC, Bank, and the other NCBC Companies.
Person further acknowledges and agrees that in the event of a breach of
threatened breach of the provisions of this confidentiality covenant, NCBC or
NCBC shall be entitled to injunctive relief against him or her by any court of
competent jurisdiction
<PAGE> 87
having the authority to grant such relief. Nothing herein, however, shall be
construed as prohibiting any of the NCBC Companies from pursuing any other
remedies which may be available to them for such a breach or threatened breach,
including the recovery of damages from Person to any other person or entity.
3. Successors and Assigns. This Non-Competition Agreement shall inure
to the benefit of NCBC, FFC, Bank, and their respective successors and assigns,
including, without limitation, any corporation or agency which may acquire all
or substantially all of NCBC's, NCBC's, FFC's or Bank's assets and businesses or
with which NCBC, FFC or Bank may be consolidated or merged.
4. Entire Agreement. This Non-Competition Agreement contains the entire
understanding of the parties. It may not be changed orally but only by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, notification or discharge is sought.
5. Severability. The invalidity or unenforceability of any provision
hereof in no way affects the validity or enforceability of any other provision.
6. Waiver of Breach. Failure to insist upon strict compliance with any
terms, covenants, or conditions hereof shall not be deemed a waiver or
relinquishment of such right or power at any other time or times.
7. Agreement Void if Proposed Merger Not Consummated. This
Non-Competition Agreement shall be null and void should the proposed Merger fail
to be consummated on or before November 30, 1999.
8. Applicable Law. This Non-Competition Agreement shall be governed by
the laws of the State of Tennessee.
NATIONAL COMMERCE BANCORPORATION
By:
--------------------------------
Thomas M. Garrott, Chairman and
Chief Executive Officer
FIRST FINANCIAL CORPORATION
By:
-------------------------------
David Major, President and
Chief Executive Officer
<PAGE> 88
FIRST BANK AND TRUST
By:
------------------------------
David Major
PERSON
----------------------------------
CAN/ps
04-29-99
<PAGE> 1
EXHIBIT 4.1
STOCK OPTION AGREEMENT
BY AND BETWEEN
NATIONAL COMMERCE BANCORPORATION
AND
FIRST FINANCIAL CORPORATION
(Incorporated by reference to Exhibit 7.8(b) of the Agreement and Plan of Merger
attached hereto as Exhibit 2.1.)
<PAGE> 1
EXHIBIT 99.1
FIRST FINANCIAL CORPORATION
PRESS RELEASE
ISSUED MAY 3, 1999
<PAGE> 2
David Major, President and CEO of First Financial Corporation along with
National Commerce Bancorporation announced today an agreement whereby NCBC will
acquire First Bank through an exchange of stock. The transaction, to close in
the third quarter, is subject to shareholder and regulatory approval.
David Major will serve as Regional President of Wilson and Rutherford Counties
while the branch officers and staff will serve in the capacities. All of the
First Bank branches will continue to be under Major's guidance. "These locations
will operate as a community bank, but will offer the expanded products and
services that NBC can provide. The partnership with NBC will allow us to have a
combined branch network of 28 banking locations and 31 ATM's throughout the
greater Nashville area," stated Major.
David Major, FB & T President stated, "I am very excited about the new products
and services this alliance will allow us to provide to our community. Customers
will continue to be served by the same staff members they have come to know and
trust over the past ten years. We truly believe that this transaction will
result in an expanded product and service offering that will provide added value
and convenience for our customers."
"We are pleased to welcome the shareholders, employees and customers of First
Bank & Trust into our organization. First Bank & Trust is a fine company, which
will add significantly to our perseverance in the rapidly growing communities of
east Davidson, Wilson and Rutherford counties," said Thomas M. Garrott, NCBC
Chairman and Chief Executive Officer.
First Bank & Trust is a wholly owned subsidiary of First Financial Corporation.
The local bank, established January 10, 1989, currently has an asset base of
$260 million. Full-service branches are located in Mt. Juliet, Hermitage,
Lebanon, Smyrna, and Donelson with an additional loan production office in
Murfreesboro. First Bank also provides mortgage products through its First Bank
Mortgage Division and title insurance products through its subsidiary, American
Title & Escrow.
National Commerce Bancorporation is a $6 billion-asset sales and marketing
organization that provides select financial services and consulting activities
through a national network of banking affiliates and non-banking subsidiaries.
Consistently ranked as one of the nation's top performing financial
institutions, NCBC's financial performance and earnings per share growth has
been highlighted recently by analysts at Lehman Brothers; Morgan Stanley Dean
Witter; Salomon Smith Barney; Keefe, Bruyette and Woods, Inc.; Fox-Pitt, Kelton
and CS First Boston.
