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STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is made and entered
into as of September 20, 2000, by and between Jefferson Savings Bancorp,
Inc., a Delaware corporation ("Issuer"), and Union Planters Corporation,
a Tennessee corporation ("Grantee").
WHEREAS, Grantee and Issuer have entered into that certain
Agreement and Plan of Reorganization, dated as of September 20, 2000
(the "Merger Agreement"), providing for, among other things, the merger
of Issuer with and into Union Planters Holding Corporation ("UPHC"), a
wholly-owned subsidiary of Grantee organized under the Laws of the State
of Tennessee, with UPHC as the surviving entity; and
WHEREAS, as a condition and inducement to Grantee's execution of
the Merger Agreement, Grantee has required that Issuer agree, and Issuer
has agreed, to grant Grantee the Option (as defined below);
NOW, THEREFORE, in consideration of the respective
representations, warranties, covenants and agreements set forth herein
and in the Merger Agreement, and intending to be legally bound hereby,
Issuer and Grantee agree as follows:
1. DEFINED TERMS. Capitalized terms which are used but not
defined herein shall have the meanings ascribed to such terms in the
Merger Agreement.
2. GRANT OF OPTION. Subject to the terms and conditions set
forth herein, Issuer hereby grants to Grantee an irrevocable option (the
"Option") to purchase up to 1,983,274 shares (as adjusted as set forth
herein, the "Option Shares," which shall include the Option Shares
before and after any transfer of such Option Shares) of common stock,
$.01 par value per share ("Issuer Common Stock"), of Issuer at a
purchase price per Option Share (subject to adjustment as set forth
herein, the "Purchase Price") equal to $10.8125; provided, however, that
in no event shall the number of shares of Issuer Common Stock for which
this Option is exercisable exceed the lesser of (i) 19.9% of the
Issuer's issued and outstanding shares of Issuer Common Stock without
giving effect to any shares subject to or issued pursuant to the Option
and (ii) that minimum number of shares of Issuer Common Stock which when
aggregated with any other shares of Issuer Common Stock beneficially
owned by Grantee or any Affiliate thereof would cause the provisions of
any Takeover Laws of the DGCL to be applicable to the Merger. Each
Option Share to be issued upon exercise of the Option shall be
accompanied by and be deemed to represent a Preferred Stock Purchase
Right.
3. EXERCISE OF OPTION.
(a) Provided that (i) Grantee or Holder (as hereinafter
defined), as applicable, shall not be in material breach of its
agreements or covenants contained in this Agreement or the Merger
Agreement, and (ii) no preliminary or permanent injunction or other
order against the delivery of shares covered by the Option issued by any
court of competent jurisdiction in the United States shall be in effect,
Holder may exercise the Option, in whole or in part, at any time
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and from time to time following the occurrence of a Purchase Event and
prior to the termination of the Option. The Option shall terminate and
be of no further force and effect upon the earliest to occur of (A) the
Effective Time, (B) termination of the Merger Agreement in accordance
with the terms thereof prior to the occurrence of a Purchase Event or a
Preliminary Purchase Event (as defined below) (other than a termination
of the Merger Agreement by Grantee pursuant to (i) Section 10.1(b)
thereof (but only if such termination was a result of a willful breach
by Issuer) or (ii) Section 10.1(c) thereof (each a "Default
Termination")), (C) 12 months after a Default Termination, and (D) 12
months after any termination of the Merger Agreement following the
occurrence of a Purchase Event or a Preliminary Purchase Event. Any
purchase of shares upon exercise of the Option shall be subject to
compliance with applicable law, including, without limitation, the Bank
Holding Company Act of 1956, as amended (the "BHC Act") and the Home
Owner's Loan Act (the "HOLA"). The term "Holder" shall mean the holder
or holders of the Option from time to time, and which initially is the
Grantee. The rights set forth in Section 8 shall terminate when the
right to exercise the Option terminates (other than as a result of a
complete exercise of the Option) as set forth herein.
(b) As used herein, a "Purchase Event" means any of the
following events subsequent to the date of this Agreement:
(i) without Grantee's prior written consent, Issuer
shall have authorized, recommended, publicly proposed or publicly
announced an intention to authorize, recommend or propose, or
entered into an agreement with any person (other than Grantee or
any Subsidiary of Grantee) to effect an Acquisition Transaction
(as defined below). As used herein, the term Acquisition
Transaction shall mean (A) a merger, consolidation or similar
transaction involving Issuer or any of its Subsidiaries (other
than transactions solely between Issuer's Subsidiaries and
transactions involving Issuer or any Subsidiary in which the
voting securities of Issuer outstanding immediately prior thereto
continue to represent (by either remaining outstanding or being
converted into securities of the surviving entity or the parent
thereof) at least 75% of the combined voting power of the voting
securities of the Issuer or the surviving entity or the parent
thereof outstanding immediately after the consummation of the
transaction), (B) the disposition, by sale, lease, exchange or
otherwise, of Assets of Issuer or any of its Subsidiaries
representing in either case 25% or more of the consolidated assets
of Issuer and its Subsidiaries, or (C) the issuance, sale or other
disposition of (including by way of merger, consolidation, share
exchange or any similar transaction) securities representing 25%
or more of the voting power of Issuer or any of its Subsidiaries
(any of the foregoing, an "Acquisition Transaction"); or
(ii) any person (other than Grantee or any Subsidiary
of Grantee) shall have acquired beneficial ownership (as such term
is defined in Rule 13d-3 promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), of or the right to
acquire beneficial ownership of, or any "group" (as such term is
defined under the Exchange Act), other than a group of which
Grantee or any of its Subsidiaries is a member, shall have been
formed which beneficially owns or has the right to acquire
beneficial ownership of, 25% or more of the then-outstanding
shares of Issuer Common Stock.
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(c) As used herein, a "Preliminary Purchase Event" means
any of the following events subsequent to the date of this Agreement:
(i) any person (other than Grantee or any Subsidiary
of Grantee) shall have commenced (as such term is defined in Rule
14d-2 under the Exchange Act), or shall have filed a registration
statement under the Securities Act of 1933, as amended (the
"Securities Act") with respect to, a tender offer or exchange
offer to purchase any shares of Issuer Common Stock such that,
upon consummation of such offer, such person would own or control
15% or more of the then-outstanding shares of Issuer Common Stock
(such an offer being referred to herein as a "Tender Offer" or an
"Exchange Offer," respectively); or
(ii) the holders of Issuer Common Stock shall not
have approved the Merger Agreement at the meeting of such
stockholders held for the purpose of voting on the Merger
Agreement, such meeting shall not have been held or shall have
been canceled prior to termination of the Merger Agreement, or
Issuer's Board of Directors shall have withdrawn or modified in a
manner adverse to Grantee the recommendation of Issuer's Board of
Directors with respect to the Merger Agreement, in each case after
it shall have been publicly announced that any person (other than
Grantee or any Subsidiary of Grantee) shall have (A) made a bona
fide proposal to engage in an Acquisition Transaction,
(B) commenced a Tender Offer or filed a registration statement
under the Securities Act with respect to an Exchange Offer, or
(C) filed an application (or given a notice), whether in draft or
final form, under any federal or state statute or regulation
(including a notice filed under the HSR Act and an application or
notice filed under the BHC Act, the HOLA, the Bank Merger Act, or
the Change in Bank Control Act of 1978) seeking the Consent to an
Acquisition Transaction from any federal or state governmental or
regulatory authority or agency.
As used in this Agreement, "person" shall have the meaning specified in
Sections 3(a)(9) and 13(d)(3) of the Exchange Act.
(d) In the event Holder is entitled to and wishes to
exercise the Option, it shall send to Issuer a written notice (the date
of which being herein referred to as the "Notice Date") specifying
(i) the total number of Option Shares it intends to purchase pursuant to
such exercise and (ii) a place and date not earlier than three business
days nor later than 30 business days from the Notice Date for the
closing (the "Closing") of such purchase (the "Closing Date"). If prior
Consent of any governmental or regulatory agency or authority is
required in connection with such purchase, Issuer shall cooperate with
Holder in the filing of the required notice or application for such
Consent and the obtaining of such Consent and the Closing shall occur
immediately following receipt of such Consents (and expiration of any
mandatory waiting periods).
(e) Notwithstanding any other provision of this Agreement
to the contrary, in no event shall:
(i) Holder's (taking into account all other Holders')
Total Profit (as defined below) exceed $5 million and, if it
otherwise would exceed such amount, Holder, at its sole
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election, shall either (A) reduce the number of shares of Issuer
Common Stock subject to the Option, (B) deliver to Issuer for
cancellation without consideration Option Shares previously
purchased by Holder, (C) pay cash to Issuer, or (D) any
combination of the foregoing, so that Holder's actually realized
Total Profit (together with the Total Profit realized by all other
Holders) shall not exceed $5 million after taking into account the
foregoing actions; and
(ii) the Option be exercised for a number of shares
of Issuer Common Stock as would, as of the date of exercise,
result in Holder's (taking into account all other Holders)
Notional Total Profit (as defined below) of more than $5 million;
provided, that nothing in this clause (ii) shall restrict any
exercise of the Option permitted hereby on any subsequent date.
As used in this Agreement, the term "Total Profit" shall mean the
aggregate sum (prior to the payment of taxes) of the following: (i) the
amount received by Holder pursuant to Issuer's repurchase of the Option
(or any portion thereof) pursuant to Section 8; (ii) (x) the amount
received by Holder pursuant to Issuer's repurchase of Option Shares
pursuant to Section 8, less (y) Holder's purchase price for such Option
Shares; (iii) (x) the net cash amounts received by Holder pursuant to
the sale of Option Shares (or any other securities into which such
Option Shares shall be converted or exchanged) to any unaffiliated
person, less (y) Holder's purchase price of such Option Shares; and (iv)
any amounts received by Grantee on the transfer of the Option (or any
portion thereof) to any unaffiliated person.
As used in this Agreement, the term "Notional Total Profit" with respect
to any number of shares of Issuer Common Stock as to which Holder may
propose to exercise the Option shall be the Total Profit determined as
of the date of such proposed exercise, assuming that the Option were
exercised on such date for such number of shares and assuming that such
shares, together with all other Option Shares held by Holder and its
affiliates as of such date, were sold for cash at the closing sale price
per share of Issuer Common Stock as quoted on the Nasdaq NMS (or, if
Issuer Common Stock is not then quoted on the Nasdaq NMS, the highest
bid price per share as quoted on the principal trading market or
securities exchange on which such shares are traded as reported by a
recognized source chosen by Holder) as of the close of business on the
preceding trading day (less customary brokerage commissions).
The provisions of this Section 3(e) shall apply to any
Substitute Option (as defined below).
4. PAYMENT AND DELIVERY OF CERTIFICATES.
(a) On each Closing Date, Holder shall (i) pay to Issuer,
in immediately available funds by wire transfer to a bank account
designated by Issuer, an amount equal to the Purchase Price multiplied
by the number of Option Shares to be purchased on such Closing Date, and
(ii) present and surrender this Agreement to the Issuer at the address
of the Issuer specified in Section 13(f) hereof.
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(b) At each Closing, simultaneously with the delivery of
immediately available funds and surrender of this Agreement as provided
in Section 4(a), (i) Issuer shall deliver to Holder (A) a certificate or
certificates representing the Option Shares to be purchased at such
Closing, which Option Shares shall be free and clear of all liens,
claims, charges and encumbrances of any kind whatsoever and subject to
no pre-emptive rights, and (B) if the Option is exercised in part only,
an executed new agreement with the same terms as this Agreement
evidencing the right to purchase the balance of the shares of Issuer
Common Stock purchasable hereunder, and (ii) Holder shall deliver to
Issuer a letter agreeing that Holder shall not offer to sell or
otherwise dispose of such Option Shares in violation of applicable
federal and state law or of the provisions of this Agreement.
(c) In addition to any other legend that is required by
applicable law, certificates for the Option Shares delivered at each
Closing shall be endorsed with a restrictive legend which shall read
substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND PURSUANT TO THE TERMS OF A STOCK OPTION AGREEMENT
DATED AS OF SEPTEMBER 20, 2000. A COPY OF SUCH AGREEMENT WILL BE
PROVIDED TO THE HOLDER HEREOF WITHOUT CHARGE UPON RECEIPT BY THE
ISSUER OF A WRITTEN REQUEST THEREFOR.
It is understood and agreed that: (i) the references in the above legend
to resale restrictions of the Securities Act shall be removed by
delivery of substitute certificate(s) without such reference if Holder
shall have delivered to Issuer a copy of a letter from the staff of the
SEC, or an opinion of counsel in form and substance reasonably
satisfactory to Issuer and its counsel, to the effect that such legend
is not required for purposes of the Securities Act; (ii) the references
in the above legend to the provisions of this Agreement shall be removed
by delivery of substitute certificate(s) without such reference if the
shares have been sold or transferred in compliance with the provisions
of this Agreement and under circumstances that do not require the
retention of such reference; and (iii) the legend shall be removed in
its entirety if the conditions in the preceding clauses (i) and (ii) are
both satisfied. In addition, such certificate shall bear any other
legend as may be required by law.
5. REPRESENTATIONS AND WARRANTIES OF ISSUER. Issuer hereby
represents and warrants to Grantee as follows:
(a) Issuer has all requisite corporate power and authority
to enter into this Agreement and, subject to any approvals
referred to herein, to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of
Issuer. This Agreement has been duly executed and delivered by
Issuer.
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(b) Issuer has taken all necessary corporate action to
authorize and reserve and to permit it to issue, and, at all times
from the date hereof until the obligation to deliver Issuer Common
Stock upon the exercise of the Option terminates, will have
reserved for issuance, upon exercise of the Option, the number of
shares of Issuer Common Stock necessary for Holder to exercise the
Option, and Issuer will take all necessary corporate action to
authorize and reserve for issuance all additional shares of Issuer
Common Stock or other securities which may be issued pursuant to
Section 7 upon exercise of the Option. The shares of Issuer
Common Stock to be issued upon due exercise of the Option,
including all additional shares of Issuer Common Stock or other
securities which may be issuable pursuant to Section 7, upon
issuance pursuant hereto, shall be duly and validly issued, fully
paid, and nonassessable, and shall be delivered free and clear of
all liens, claims, charges, and encumbrances of any kind or nature
whatsoever, including any preemptive rights of any stockholder of
Issuer.
6. REPRESENTATIONS AND WARRANTIES OF GRANTEE. Grantee hereby
represents and warrants to Issuer that:
(a) Grantee has all requisite corporate power and
authority to enter into this Agreement and, subject to any
approvals or consents referred to herein, to consummate the
transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of Grantee. This Agreement has been
duly executed and delivered by Grantee.
(b) This Option is not being, and any Option Shares or
other securities acquired by Grantee upon exercise of the Option
will not be, acquired with a view to the public distribution
thereof and will not be transferred or otherwise disposed of
except in a transaction registered or exempt from registration
under the Securities Laws.
7. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.
(a) In the event of any change in Issuer Common Stock by
reason of a stock dividend, stock split, split-up, recapitalization,
combination, exchange of shares or similar transaction, the type and
number of shares or securities subject to the Option, and the Purchase
Price therefor, shall be adjusted appropriately, and proper provision
shall be made in the agreements governing such transaction, if any, so
that Holder shall receive, upon exercise of the Option, the number and
class of shares or other securities or property that Holder would have
received in respect of Issuer Common Stock if the Option had been
exercised immediately prior to such event, or the record date therefor,
as applicable. If any additional shares of Issuer Common Stock are
issued after the date of this Agreement (other than pursuant to an event
described in the first sentence of this Section 7(a) or pursuant to this
Option), the number of shares of Issuer Common Stock subject to the
Option shall be adjusted so that, after such issuance, it, together with
any shares of Issuer Common Stock previously issued pursuant hereto,
shall not exceed the lesser of (i) 19.9% of the number of shares of
Issuer Common Stock then issued and outstanding, without giving effect
to any shares subject to or issued pursuant to the Option and (ii) that
minimum number of shares of Issuer Common Stock which when aggregated
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with any other shares of Issuer Common Stock beneficially owned by
Grantee or any Affiliate thereof would cause the provisions of any
Takeover Laws of the DGCL to be applicable to the Merger.
(b) In the event that prior to the termination of this
Agreement, Issuer shall enter in an agreement: (i) to consolidate with
or merge into any person, other than Grantee or one of its Subsidiaries,
and shall not be the continuing or surviving corporation of such
consolidation or merger; (ii) to permit any person, other than Grantee
or one of its Subsidiaries, to merge into Issuer and Issuer shall be the
continuing or surviving corporation, but, in connection with such
merger, the then outstanding shares of Issuer Common Stock shall be
changed into or exchanged for stock or other securities of Issuer or any
other person or cash or any other property or the then outstanding
shares of Issuer Common Stock immediately prior to such merger shall
after such merger represent less than 50% of the outstanding shares and
share equivalents of the merged company; or (iii) to sell or otherwise
transfer all or substantially all of its and its Subsidiaries' Assets to
any person, other than Grantee or one of its Subsidiaries, then, and in
each such case, the agreement governing such transaction shall make
proper provisions so that the Option shall, upon the consummation of any
such transaction and upon the terms and conditions set forth herein, be
converted into, or exchanged for, an option (the "Substitute Option"),
at the election of Grantee, of either (x) the Acquiring Corporation (as
defined below) or (y) any person that controls the Acquiring Corporation
(in each case, such person being referred to as the "Substitute Option
Issuer").
(c) The Substitute Option shall have the same terms as the
Option, provided that, if the terms of the Substitute Option cannot, for
legal reasons, be the same as the Option, such terms shall be as similar
as possible and in no event less advantageous to Grantee. The
Substitute Option Issuer shall also enter into an agreement with the
then-holder or holders of the Substitute Option in substantially the
same form as this Agreement, which shall be applicable to the Substitute
Option.
(d) The Substitute Option shall be exercisable for such
number of shares of the Substitute Common Stock (as hereinafter defined)
as is equal to the Assigned Value (as hereinafter defined) multiplied by
the number of shares of the Issuer Common Stock for which the Option was
immediately theretofore exercisable, divided by the Average Price (as
hereinafter defined). The exercise price of the Substitute Option per
share of the Substitute Common Stock (the "Substitute Purchase Price")
shall then be equal to the Purchase Price multiplied by a fraction in
which the numerator is the number of shares of the Issuer Common Stock
for which the Option was immediately theretofore exercisable and the
denominator is the number of shares for which the Substitute Option is
exercisable.
(e) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean (x) the
continuing or surviving corporation of a consolidation or merger
with Issuer (if other than Issuer), (y) Issuer in a merger in
which Issuer is the continuing or surviving person, and (z) the
transferee of all or any substantial part of the Issuer's Assets
(or the Assets of its Subsidiaries).
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(ii) "Substitute Common Stock" shall mean the common
stock issued by the Substitute Option Issuer upon exercise of the
Substitute Option.
(iii) "Assigned Value" shall mean the highest of
(x) the price per share of the Issuer Common Stock at which a
Tender Offer or Exchange Offer therefor has been made after the
date hereof by any person (other than Grantee), (y) the price per
share of the Issuer Common Stock to be paid by any person (other
than the Grantee) pursuant to an agreement with Issuer, and
(z) the highest last sale price per share of Issuer Common Stock
quoted on the Nasdaq NMS (or if Issuer Common Stock is not quoted
on the Nasdaq NMS, the highest bid price per share on any day as
quoted on the principal trading market or securities exchange on
which such shares are traded as reported by a recognized source
chosen by Grantee) within the six-month period immediately
preceding the agreement; provided, that in the event of a sale of
less than all of Issuer's Assets, the Assigned Value shall be the
sum of the price paid in such sale for such Assets and the current
market value of the remaining Assets of Issuer as determined by a
nationally recognized investment banking firm selected by Grantee
(or by a majority in interest of the Grantees if there shall be
more than one Grantee (a "Grantee Majority")) and reasonably
acceptable to Issuer, divided by the number of shares of the
Issuer Common Stock outstanding at the time of such sale. In the
event that an exchange offer is made for the Issuer Common Stock
or an agreement is entered into for a merger or consolidation
involving consideration other than cash, the value of the
securities or other property issuable or deliverable in exchange
for the Issuer Common Stock shall be determined by a nationally
recognized investment banking firm selected by Grantee and
reasonably acceptable to Issuer (or if applicable, Acquiring
Corporation). (If there shall be more than one Grantee, any such
selection shall be made by a Grantee Majority.)
(iv) "Average Price" shall mean the average closing
price of a share of the Substitute Common Stock for the one year
immediately preceding the consolidation, merger or sale in
question, but in no event higher than the last sale price of the
shares of the Substitute Common Stock on the day preceding such
consolidation, merger or sale; provided that if Issuer is the
issuer of the Substitute Option, the Average Price shall be
computed with respect to a share of common stock issued by Issuer,
the person merging into Issuer or by any company which controls or
is controlled by such merger person, as Grantee may elect.
(f) In no event pursuant to any of the foregoing
paragraphs shall the Substitute Option be exercisable for more than
19.9% of the aggregate of the shares of the Substitute Common Stock
outstanding prior to exercise of the Substitute Option. In the event
that the Substitute Option would be exercisable for more than 19.9% of
the aggregate of the shares of Substitute Common Stock but for this
clause (f), the Substitute Option Issuer shall make a cash payment to
Grantee equal to the excess of (i) the value of the Substitute Option
without giving effect to the limitation in this clause (f) over (ii) the
value of the Substitute Option after giving effect to the limitation in
this clause (f). This difference in value shall be determined by a
nationally recognized investment banking firm selected by Grantee (or a
Grantee Majority) and reasonably acceptable to the Acquiring
Corporation.
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(g) Issuer shall not enter into any transaction described
in subsection (b) of this Section 7 unless the Acquiring Corporation and
any person that controls the Acquiring Corporation assume in writing all
the obligations of Issuer hereunder and take all other actions that may
be necessary so that the provisions of this Section 7 are given full
force and effect (including, without limitation, any action that may be
necessary so that the shares of Substitute Common Stock are in no way
distinguishable from or have lesser economic value than other shares of
common stock issued by the Substitute Option Issuer).
(h) The provisions of Sections 8, 9, 10, and 11 shall
apply, with appropriate adjustments, to any securities for which the
Option becomes exercisable pursuant to this Section 7 and, as
applicable, references in such sections to "Issuer," "Option," "Purchase
Price" and "Issuer Common Stock" shall be deemed to be references to
"Substitute Option Issuer," "Substitute Option," "Substitute Purchase
Price" and "Substitute Common Stock," respectively.
8. REPURCHASE AT THE OPTION OF HOLDER.
(a) Subject to Section 3(e) and to the last sentence of
Section 3(a), at the request of Holder at any time commencing upon the
first occurrence of a Repurchase Event (as defined in Section 8(d)) and
ending 12 months immediately thereafter, Issuer shall repurchase from
Holder the Option and all shares of Issuer Common Stock purchased by
Holder pursuant hereto with respect to which Holder then has beneficial
ownership. The date on which Holder exercises its rights under this
Section 8 is referred to as the "Request Date." Such repurchase shall
be at an aggregate price (the "Section 8 Repurchase Consideration")
equal to the sum of:
(i) the aggregate Purchase Price paid by Holder for
any shares of Issuer Common Stock acquired by Holder pursuant to
the Option with respect to which Holder then has beneficial
ownership;
(ii) the excess, if any, of (x) the Applicable Price
(as defined below) for each share of Issuer Common Stock over
(y) the Purchase Price (subject to adjustment pursuant to Section
7), multiplied by the number of shares of Issuer Common Stock with
respect to which the Option has not been exercised; and
(iii) the excess, if any, of the Applicable Price over
the Purchase Price (subject to adjustment pursuant to Section 7)
paid (or, in the case of Option Shares with respect to which the
Option has been exercised but the Closing Date has not occurred,
payable) by Holder for each share of Issuer Common Stock with
respect to which the Option has been exercised and with respect to
which Holder then has beneficial ownership, multiplied by the
number of such shares.
(b) If Holder exercises its rights under this Section 8,
Issuer shall, within ten business days after the Request Date, pay the
Section 8 Repurchase Consideration to Holder in immediately available
funds, and contemporaneously with such payment Holder shall surrender to
Issuer the Option and the certificates evidencing the shares of Issuer
Common Stock purchased thereunder with respect to which Holder then has
beneficial ownership, and Holder shall warrant that it has sole record
and beneficial ownership of such shares and that the same are
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then free and clear of all liens, claims, charges and encumbrances of
any kind whatsoever. Notwithstanding the foregoing, to the extent that
prior notification to or Consent of any governmental or regulatory
agency or authority is required in connection with the payment of all or
any portion of the Section 8 Repurchase Consideration, Holder shall have
the ongoing option to revoke its request for repurchase pursuant to
Section 8, in whole or in part, or to require that Issuer deliver from
time to time that portion of the Section 8 Repurchase Consideration that
it is not then so prohibited from paying and promptly file the required
notice or application for Consent and expeditiously process the same
(and each party shall cooperate with the other in the filing of any such
notice or application and the obtaining of any such Consent). If any
governmental or regulatory agency or authority disapproves of any part
of Issuer's proposed repurchase pursuant to this Section 8, Issuer shall
promptly give notice of such fact to Holder. If any governmental or
regulatory agency or authority prohibits the repurchase in part but not
in whole, then Holder shall have the right (i) to revoke the repurchase
request or (ii) to the extent permitted by such agency or authority,
determine whether the repurchase should apply to the Option and/or
Option Shares and to what extent to each, and Holder shall thereupon
have the right to exercise the Option as to the number of Option Shares
for which the Option was exercisable at the Request Date less the sum of
the number of shares covered by the Option in respect of which payment
has been made pursuant to Section 8(a)(ii) and the number of shares
covered by the portion of the Option (if any) that has been repurchased.
Holder shall notify Issuer of its determination under the preceding
sentence within five business days of receipt of notice of disapproval
of the repurchase.
Notwithstanding anything herein to the contrary, all
of Holder's rights under this Section 8 shall terminate on the date of
termination of this Option pursuant to Section 3(a).
(c) For purposes of this Agreement, the "Applicable Price"
means the highest of (i) the highest price per share of Issuer Common
Stock paid for any such share by the person or groups described in
Section 8(d)(i), (ii) the price per share of Issuer Common Stock
received by holders of Issuer Common Stock in connection with any merger
or other business combination transaction described in Section 7(b)(i),
7(b)(ii) or 7(b)(iii), or (iii) the highest last sale price per share of
Issuer Common Stock quoted on the Nasdaq NMS (or if Issuer Common Stock
is not quoted on the Nasdaq NMS, the highest bid price per share as
quoted on the principal trading market or securities exchange on which
such shares are traded as reported by a recognized source chosen by
Holder) during the 60 business days preceding the Request Date;
provided, however, that in the event of a sale of less than all of
Issuer's Assets, the Applicable Price shall be the sum of the price paid
in such sale for such Assets and the current market value of the
remaining Assets of Issuer as determined by an independent nationally
recognized investment banking firm selected by Holder and reasonably
acceptable to Issuer (which determination shall be conclusive for all
purposes of this Agreement), divided by the number of shares of the
Issuer Common Stock outstanding at the time of such sale. If the
consideration to be offered, paid or received pursuant to either of the
foregoing clauses (i) or (ii) shall be other than in cash, the value of
such consideration shall be determined in good faith by an independent
nationally recognized investment banking firm selected by Holder and
reasonably acceptable to Issuer, which determination shall be conclusive
for all purposes of this Agreement.
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(d) As used herein, a "Repurchase Event" shall occur if
after the date hereof (i) any person (other than Grantee or any
subsidiary of Grantee) shall have acquired beneficial ownership (as such
term is defined in Rule 13d-3 promulgated under the Exchange Act), or
the right to acquire beneficial ownership, or any "group" (as such term
is defined under the Exchange Act) shall have been formed which
beneficially owns or has the right to acquire beneficial ownership of
50% or more of the then-outstanding shares of Issuer Common Stock, or
(ii) any of the transactions described in Section 7(b)(i), 7(b)(ii), or
7(iii) shall be consummated.
9. REGISTRATION RIGHTS.
(a) Issuer shall, subject to the conditions of
subparagraph (c) below, if requested by any Holder, including Grantee
and any permitted transferee ("Selling Holder"), as expeditiously as
possible prepare and file a registration statement under the Securities
Laws if necessary in order to permit the sale or other disposition of
any or all shares of Issuer Common Stock or other securities that have
been acquired by or are issuable to Selling Holder upon exercise of the
Option in accordance with the intended method of sale or other
disposition stated by Holder in such request (it being understood and
agreed that any such sale or other disposition shall be effected on a
widely distributed basis so that, upon consummation thereof, no
purchaser or transferee shall beneficially own more than 5% of the
shares of Issuer Common Stock then outstanding), including, without
limitation, a "shelf" registration statement under Rule 415 under the
Securities Act or any successor provision, and Issuer shall use its best
efforts to qualify such shares or other securities for sale under any
applicable state securities laws. Each such Holder shall provide all
information reasonably requested by Issuer for inclusion in any
registration statement to be filed hereunder.
(b) If Issuer at any time after the exercise of the
Option, but prior to the termination of the Option, proposes to register
any shares of Issuer Common Stock under the Securities Laws in
connection with an underwritten public offering of such Issuer Common
Stock, Issuer will promptly give written notice to Holder of its
intention to do so and, upon the written request of Holder given within
30 days after receipt of any such notice (which request shall specify
the number of shares of Issuer Common Stock intended to be included in
such underwritten public offering by Selling Holder), Issuer will use
all reasonable efforts to cause all such shares, the holders of which
shall have requested participation in such registration, to be so
registered and included in such underwritten public offering; provided,
that Issuer may elect to not cause any such shares to be so registered
(i) if the underwriters in good faith determine that the inclusion of
such shares would interfere with the successful marketing of the shares
of Issuer Common Stock for the account of Issuer, or (ii) in the case of
a registration solely to implement a dividend reinvestment or similar
plan, an employee benefit plan or a registration filed on Form S-4 or
any successor form, or a registration filed on a form which does not
permit registrations of resales; provided, further, that such election
pursuant to clause (i) may only be made once. If some but not all the
shares of Issuer Common Stock, with respect to which Issuer shall have
received requests for registration pursuant to this subparagraph (b),
shall be excluded from such registration, Issuer shall make appropriate
allocation of shares to be registered among Selling Holders and any
other person (other than Issuer or any person exercising demand
registration rights in connection with such registration) who or which
is permitted to register their shares of Issuer Common Stock in
connection with such registration pro rata in the proportion that the
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number of shares requested to be registered by each Selling Holder bears
to the total number of shares requested to be registered by all persons
then desiring to have Issuer Common Stock registered for sale (other
than Issuer or any person exercising demand registration rights in
connection with such registration).
(c) Issuer shall use all reasonable efforts to cause the
registration statement referred to in subparagraph (a) above to become
effective and to obtain all consents or waivers of other parties which
are required therefor and to keep such registration statement effective,
provided, that Issuer may delay any registration of Option Shares
required pursuant to subparagraph (a) above for a period not exceeding
90 days, provided Issuer shall in good faith determine that any such
registration would adversely affect an offering or contemplated offering
of other securities by Issuer. Notwithstanding anything to the contrary
contained herein, Issuer shall not be required to register Option Shares
under the Securities Laws pursuant to subparagraph (a) above:
(i) prior to the occurrence of a Purchase Event and
following the termination of the Option;
(ii) more than twice;
(iii) within 90 days after the effective date of a
registration referred to in subparagraph (b) above pursuant to
which the Selling Holders concerned were afforded the opportunity
to register such shares under the Securities Laws and such shares
were registered as requested; and
(iv) unless a request therefor is made to Issuer by
Selling Holders holding at least 15% or more of the aggregate
number of Option Shares then outstanding or the right to acquire
at least 15% of the Option Shares.
In addition to the foregoing, Issuer shall not be
required to maintain the effectiveness of any registration statement
after the expiration of 120 days from the effective date of such
registration statement. Issuer shall use all reasonable efforts to make
any filings, and take all steps, under all applicable state securities
laws to the extent necessary to permit the sale or other disposition of
the Option Shares so registered in accordance with the intended method
of distribution for such shares, provided, that Issuer shall not be
required to consent to general jurisdiction or qualify to do business in
any state where it is not otherwise required to so consent to such
jurisdiction or to so qualify to do business.
(d) Except where applicable state law prohibits such
payments, Issuer will pay all expenses (including without limitation
registration fees, qualification fees, blue sky fees and expenses
(including the fees and expenses of Issuer's counsel), accounting
expenses, printing expenses, expenses of underwriters, excluding
discounts and commissions but including liability insurance if Issuer so
desires or the underwriters so require, and the reasonable fees and
expenses of any necessary special experts) in connection with each
registration pursuant to subparagraph (a) or (b) above (including the
related offerings and sales by Selling Holders) and all other
qualifications, notifications or exemptions pursuant to subparagraph (a)
or (b) above. Underwriting discounts and commissions relating to Option
Shares and any other expenses
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incurred by such Selling Holders in connection with any such
registration (including expenses of Selling Holders' counsel) shall be
borne by such Selling Holders.
(e) In connection with any registration under subparagraph
(a) or (b) above Issuer hereby agrees to indemnify the Selling Holders,
and each underwriter thereof, including each person, if any, who
controls such holder or underwriter within the meaning of Section 15 of
the Securities Act, against all expenses, losses, claims, damages and
liabilities caused by any untrue statement of a material fact contained
in any registration statement or prospectus (including any amendments or
supplements thereto) or any preliminary prospectus, or caused by any
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except insofar
as such expenses, losses, claims, damages or liabilities of such
indemnified party are caused by any untrue statement or alleged untrue
statement or any omission or alleged omission made in reliance upon and
in conformity with, information furnished in writing to Issuer by such
indemnified party expressly for use therein, and Issuer and each
officer, director and controlling person of Issuer shall be indemnified
by such Selling Holder, or by such underwriter, as the case may be, for
all such expenses, losses, claims, damages and liabilities caused by any
untrue, or alleged untrue, statement or omission made in reliance upon,
and in conformity with, information furnished in writing to Issuer by
such holder or such underwriter, as the case may be, expressly for such
use.
Promptly upon receipt by a party indemnified under
this subparagraph (e) of notice of the commencement of any action
against such indemnified party in respect of which indemnity or
reimbursement may be sought against any indemnifying party under this
subparagraph (e), such indemnified party shall notify the indemnifying
party in writing of the commencement of such action, but the failure so
to notify the indemnifying party shall not relieve it of any liability
which it may otherwise have to any indemnified party under this
subparagraph (e), except to the extent such failure to notify materially
prejudices the indemnifying party. In case notice of commencement of
any such action shall be given to the indemnifying party as above
provided, the indemnifying party shall be entitled to participate in
and, to the extent it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense of such action at its
own expense, with counsel chosen by it and reasonably satisfactory to
such indemnified party. The indemnified party shall have the right to
employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel (other than
reasonable costs of investigation) shall be paid by the indemnified
party unless (i) the indemnifying party either agrees to pay the same,
(ii) the indemnifying party fails to assume the defense of such action
with counsel satisfactory to the indemnified party, or (iii) the
indemnified party has been advised by counsel that one or more legal
defenses may be available to the indemnifying party that may be contrary
to the interest of the indemnified party, in which case the indemnifying
party shall be entitled to assume the defense of such action
notwithstanding its obligation to bear fees and expenses of such
counsel; provided, however, that the indemnifying party shall not be
liable for the expenses of more than one firm of counsel for all
indemnified parties in any jurisdiction. No indemnifying party shall be
liable for any settlement entered into without its consent, which
consent may not be unreasonably withheld.
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If the indemnification provided for in this
subparagraph (e) is unavailable to a party otherwise entitled to be
indemnified in respect of any expenses, losses, claims, damages or
liabilities referred to herein, then the indemnifying party, in lieu of
indemnifying such party otherwise entitled to be indemnified, shall
contribute to the amount paid or payable by such party to be indemnified
as a result of such expenses, losses, claims, damages or liabilities in
such proportion as is appropriate to reflect the relative benefits
received by Issuer, all Selling Holders and the underwriters from the
offering of the securities and also the relative fault of Issuer, all
Selling Holders and the underwriters in connection with the statements
or omissions which resulted in such expenses, losses, claims, damages or
liabilities, as well as any other relevant equitable considerations.
The amount paid or payable by a party as a result of the expenses,
losses, claims, damages and liabilities referred to above shall be
deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any
action or claim; provided, that in no case shall any Selling Holder be
responsible, in the aggregate, for any amount in excess of the net
offering proceeds attributable to its Option Shares included in the
offering. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. Any obligation by any holder to indemnify shall be
several and not joint with other holders.
In connection with any registration pursuant to
subparagraph (a) or (b) above, Issuer and each Selling Holder (other
than Grantee) shall enter into an agreement containing the
indemnification provisions of this subparagraph (e).
(f) Issuer shall use its best efforts to comply with all
reporting requirements and will do all such other things as may be
necessary to permit the expeditious sale at any time of any Option
Shares by Holder in accordance with and to the extent permitted by any
rule or regulation promulgated by the SEC from time to time, including,
without limitation, Rules 144 and 144A.
(g) Issuer will pay all stamp taxes in connection with the
issuance and the sale of the Option Shares and in connection with the
exercise of the Option, and will save Holder harmless, without
limitation as to time, against any and all liabilities, with respect to
all such taxes.
10. QUOTATION; LISTING. If Issuer Common Stock or any other
securities to be acquired upon exercise of the Option are then
authorized for quotation or trading or listing on the Nasdaq NMS or any
other securities exchange or any automated quotations system maintained
by a self-regulatory organization, Issuer, upon the request of Holder,
will promptly file an application, if required, to authorize for
quotation or trading or listing the shares of Issuer Common Stock or
other securities to be acquired upon exercise of the Option on the
Nasdaq NMS or any other securities exchange or any automated quotations
system maintained by a self-regulatory organization and will use its
best efforts to obtain approval, if required, of such quotation or
listing as soon as practicable.
11. DIVISION OF OPTION. This Agreement (and the Option granted
hereby) are exchangeable, without expense, at the option of Holder, upon
presentation and surrender of this
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Agreement at the principal office of Issuer for other Agreements
providing for Options of different denominations entitling the holder
thereof to purchase in the aggregate the same number of shares of Issuer
Common Stock purchasable hereunder. The terms "Agreement" and "Option"
as used herein include any other Agreements and related Options for
which this Agreement (and the Option granted hereby) may be exchanged.
Upon receipt by Issuer of evidence reasonably satisfactory to it of the
loss, theft, destruction or mutilation of this Agreement, and (in the
case of loss, theft or destruction) of reasonably satisfactory
indemnification, and upon surrender and cancellation of this Agreement,
if mutilated, Issuer will execute and deliver a new Agreement of like
tenor and date. Any such new Agreement executed and delivered shall
constitute an additional contractual obligation on the part of Issuer,
whether or not the Agreement so lost, stolen, destroyed or mutilated
shall at any time be enforceable by anyone.
12. MISCELLANEOUS.
(a) EXPENSES. Except as otherwise provided in Section 9,
each of the parties hereto shall bear and pay all costs and expenses
incurred by it or on its behalf in connection with the transactions
contemplated hereunder, including fees and expenses of its own financial
consultants, investment bankers, accountants and counsel.
(b) WAIVER AND AMENDMENT. Any provision of this Agreement
may be waived at any time by the party that is entitled to the benefits
of such provision. This Agreement may not be modified, amended, altered
or supplemented except upon the execution and delivery of a written
agreement executed by the parties hereto.
(c) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARY;
SEVERABILITY. This Agreement, together with the Merger Agreement and
the other documents and instruments referred to herein and therein,
between Grantee and Issuer (a) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof and
(b) is not intended to confer upon any person other than the parties
hereto (other than any transferees of the Option Shares or any permitted
transferee of this Agreement pursuant to Section 12(h) and other than as
provided in the Merger Agreement) any rights or remedies hereunder. If
any term, provision, covenant or restriction of this Agreement is held
by a court of competent jurisdiction or a federal or state governmental
or regulatory agency or authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no way
be affected, impaired or invalidated. If for any reason such court or
regulatory agency determines that the Option does not permit Holder to
acquire, or does not require Issuer to repurchase, the full number of
shares of Issuer Common Stock as provided in Sections 3 and 8 (as
adjusted pursuant to Section 7), it is the express intention of Issuer
to allow Holder to acquire or to require Issuer to repurchase such
lesser number of shares as may be permissible without any amendment or
modification hereof.
(d) GOVERNING LAW. This Agreement shall be governed and
construed in accordance with the laws of the State of Tennessee without
regard to any applicable conflicts of law rules.
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(e) DESCRIPTIVE HEADINGS. The descriptive headings
contained herein are for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
(f) NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally, telecopied (with confirmation) or mailed by registered or
certified mail (return receipt requested) to the parties at the
addresses set forth in the Merger Agreement (or at such other address
for a party as shall be specified by like notice).
(g) COUNTERPARTS. This Agreement and any amendments
hereto may be executed in two counterparts, each of which shall be
considered one and the same agreement and shall become effective when
both counterparts have been signed, it being understood that both
parties need not sign the same counterpart.
(h) ASSIGNMENT. Neither this Agreement nor any of the
rights, interests or obligations hereunder or under the Option shall be
assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other party, except
that Grantee may assign this Agreement to a wholly owned Subsidiary of
Grantee and Grantee may assign its rights hereunder in whole or in part
after the occurrence of a Purchase Event. Subject to the preceding
sentence, this Agreement shall be binding upon, inure to the benefit of
and be enforceable by the parties and their respective successors and
assigns.
(i) FURTHER ASSURANCES. In the event of any exercise of
the Option by Holder, Issuer and Holder shall execute and deliver all
other documents and instruments and take all other action that may be
reasonably necessary in order to consummate the transactions provided
for by such exercise.
(j) SPECIFIC PERFORMANCE. The parties hereto agree that
this Agreement may be enforced by either party through specific
performance, injunctive relief and other equitable relief. Both parties
further agree to waive any requirement for the securing or posting of
any bond in connection with the obtaining of any such equitable relief
and that this provision is without prejudice to any other rights that
the parties hereto may have for any failure to perform this Agreement.
(k) CONFIDENTIALITY AGREEMENTS. The parties hereto agree
that this Agreement supersedes any provision of the Confidentiality
Agreements that could be interpreted to preclude the exercise of any
rights or the fulfillment of any obligations under this Agreement, and
that none of the provisions included in the Confidentiality Agreements
will act to preclude Holder from exercising the Option or exercising any
other rights under this Agreement or act to preclude Issuer from
fulfilling any of its obligations under this Agreement.
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IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock
Option Agreement to be signed by their respective officers thereunto
duly authorized, all as of the day and year first written above.
ATTEST: JEFFERSON SAVINGS BANCORP, INC.
By: By:
-------------------------------- ------------------------------------
Paul J. Milano David V. McCay
Secretary Chairman and Chief Executive Officer
[CORPORATE SEAL]
ATTEST: UNION PLANTERS CORPORATION
By: By:
-------------------------------- ------------------------------------
E. James House, Jr. Jackson W. Moore
Secretary Chairman and Chief Executive Officer
[CORPORATE SEAL]
