STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is made
and entered into as of July 2, 1998, by and between FIRST MUTUAL
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 July 2,
1998 (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 702,583 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, $0.10 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 $18.50; provided, however, that in no event
shall the number of shares of Issuer Common Stock for which this
Option is exercisable exceed 19.9% of the Issuer's issued and
outstanding shares of Issuer Common Stock without giving effect
to any shares subject to or issued pursuant to the Option.
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 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
(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) 18
months after a Default Termination, and (D) 18 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 ("BHC Act"). 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 20% 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 20% 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, 20% or more of the then-outstanding shares of
Issuer Common Stock.
c. As used herein, a "Preliminary Purchase Event" means
any of the following events:
i. any person (other than Grantee or any Subsidiary
of Grantee) shall have commenced (as such term is defined in Rule
14d-2 under the Exchange Act), or shall have filed a registration
statement under the Securities Act 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 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 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 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).
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.
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 JULY 2, 1998. 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.
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.
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, subject to
the voting limitations set forth in Article Fourth of Issuer's
Articles of Incorporation as in effect on the date hereof, 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.
c. Issuer has taken all action so that the entering into
of this Agreement and the consummation of the transactions
contemplated by this Agreement do not and will not result in the
grant of any rights to any Person under the Certificate of
Incorporation, Bylaws, or other governing instruments of any
Mutual Company or restrict or impair the ability of UPC or any of
its Subsidiaries to vote, or otherwise to exercise the rights of
a stockholder with respect to, shares of any Mutual Company that
may be directly or indirectly acquired or controlled by it.
d. Issuer has taken all necessary action to exempt the
transactions contemplated by this Agreement from any applicable
Takeover Laws.
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
19.9% of the number of shares of Issuer Common Stock then issued
and outstanding, without giving effect to any shares subject to
or issued pursuant to the Option.
b. In the event that Issuer shall enter 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
outstanding shares of Issuer Common Stock immediately prior to
such merger shall after such merger represent less than 50% of
the outstanding shares and share equivalents of the merged
company; or (iii) to sell or otherwise transfer all or
substantially all of its Assets to any person, other than Grantee
or one of its Subsidiaries, then, and in each such case, the
agreement governing such transaction shall make proper provisions
so that 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 theretofore exercisable, divided
by the Average Price (as hereinafter defined). The exercise
price of the Substitute Option per share of the Substitute Common
Stock (the "Substitute Purchase Price") shall then be equal to
the Purchase Price multiplied by a fraction in which the
numerator is the number of shares of the Issuer Common Stock for
which the Option was theretofore exercisable and the denominator
is the number of shares for which the Substitute Option is
exercisable.
e. The following terms have the meanings indicated:
i. "Acquiring Corporation" shall mean (x) the
continuing or surviving corporation of a consolidation or merger
with Issuer (if other than Issuer), (y) Issuer in a merger in
which Issuer is the continuing or surviving person, and (z) the
transferee of all or any substantial part of the Issuer's assets
(or the assets of its Subsidiaries).
ii. "Substitute Common Stock" shall mean the common
stock issued by the Substitute Option Issuer upon exercise of the
Substitute Option.
iii. "Assigned Value" shall mean the highest of (x) the
price per share of the Issuer Common Stock at which a Tender
Offer or Exchange Offer therefor has been made by any person
(other than Grantee), (y) the price per share of the Issuer
Common Stock to be paid by any person (other than the Grantee)
pursuant to an agreement with Issuer, and (z) the highest last
sale price per share of Issuer Common Stock quoted on the Nasdaq
National Market (or if Issuer Common Stock is not quoted on such
exchange, the highest bid price per share on any day as quoted on
the principal trading market or securities exchange on which such
shares are traded as reported by a recognized source chosen by
Grantee) within the six-month period immediately preceding the
agreement; 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.
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 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 18 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 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 National Market (or if Issuer Common
Stock is not quoted on such exchange, the highest bid price per
share as quoted on the principal trading market or securities
exchange on which such shares are traded as reported by a
recognized source chosen by 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.
d. As used herein, a "Repurchase Event" shall occur if (i)
any person (other than Grantee or any subsidiary of Grantee shall
have acquired beneficial ownership (as such term is defined in
Rule 13d-3 promulgated under the Exchange Act), or the right to
acquire beneficial ownership, or any "group" (as such term is
defined under the Exchange Act) shall have been formed which
beneficially owns or has the right to acquire beneficial
ownership of 50% or more of the
then-outstanding shares of Issuer Common Stock, or (ii) any of
the transactions described in Section 7(b)(i), 7(b)(ii), or
7(b)(iii) shall be consummated.
9. REGISTRATION RIGHTS.
a. Issuer shall, subject to the conditions of subparagraph
(c) below, if requested by 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 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 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 falls 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.
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 any 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 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 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.
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.
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: FIRST MUTUAL BANCORP, INC.
By: -------------------- By: ----------------------
G. Xxxx Xxxxxxxx Xxxx X. Xxxxxxxx
Secretary President and Chief Executive
Officer
ATTEST: UNION PLANTERS CORPORATION
By: -------------------- By: ----------------------
X. Xxxxx House, Jr. Xxxxxxx X. Xxxxx
Secretary President
[CORPORATE SEAL]
